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Bitcoin HYIP, Best monitored BTC Investments 2017

Bitcoin HYIPs

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HYIPs Overview

List of Bitcoin HYIPs

Paying HYIPs

Insurance active | Insurance expired | Paying | Awaiting payment | Not paying

Everything you need to know about Bitcoin HYIPs

Bitcoin high yield investment programs, also brief Bitcoin HYIPs, may pay you high comes back for a puny amount you invest in them. These programs get the profits by trading forex, stocks and bonds, sports betting and other. HYIPs pay hourly, daily, weekly or monthly. The daily income rates depend on the HYIP itself and range from 0.5% to 6%.

The response is yes, you can do profit by investing in Bitcoin hyips. However you must know, that most high yield investment programs will sooner or later turn into a scam and run away with your investment. You can imagine the way a hyip like a gaussian curve, see picture below:

Explanation of the Grafik: We can divide the lifespan of the HYIP in three parts.

Phase 1: The Launch. Admin launches a HYIP platform. Investors invest Bitcoin, Admin pays the promised percentage. Admin is essentially paying from his own pocket and is making losses.

Phase Two: The Upswing. The HYIP is thriving, many people are signing in and investing. The potential profit of the admin grows swifter than the amount he needs to pay daily to the investors.

Phase Trio: The Fall. Only fewer people proceed investing in the platform. This means, that the potential earning is getting less, due to the fact that the admin needs to pay out a profit daily. Admin determines, that now is the point of maximum earnings for him. Very first, he stops all the payments out of the website, yet you can proceed invest. Later he runs away and closes the website.

This is why the next question is very significant:

How to minimize the risk?

As seen in the upper graphic, the periods you are going to earn are phase one and Two. This means you need to join as early as possible, equivalently, you need not join too late. To find out if the HYIP is in the beginning of phase two or at the end is not effortless.

Therefore our rule of thumb on joining hyips:

  • If the hyip is paying more than 5% daily, then don’t join it after it has been there for more than two weeks.
  • If the hyip is paying inbetween 5% and Two.5%, then don’t join it after it has been there for more than four weeks.
  • If the hyip is paying less than 1.5%, then the choice is hard. The website might pay for a very long time like HashOcean (more than a year), or stop like Business Angels (less than three months).
  • Don’t leave behind to request by hand your daily withdraw.

Insurance: Bitcoin Investment

Significant NOTICE: OUR INSURANCE PROGRAM HAS BEEN HALTED AS OF 1.6.2017! RESEASON BEHIND THIS DECISION IS, THAT THERE WAS NO CLEAR WAY TO Detect WHO Truly JOINED THE INSURANCE PROGRAM, AND WHO IS JUST FAKING IT. IF YOU HAVE BETTER IDEAS ON HOW TO IMPROVE THIS, PLEASE FEEL FREE TO CONTACT US.

Insurances have been around for decades. The very first ones beeing made by the Chinese and Babylonian (

2000 BC) in case a shipment got stolen. So basically, an insurance is a way to protect one from a financial loss.

But why are there no good insurances for our financial decisions as Bitcoin investors? Why don’t the big platforms care about the puny people? We determined to pack this gap since TOGETHER we are stronger!

Insurance for your Bitcoin Investment

Since all of us are attempting to make some money over Bitcoin investments, we found a way to reduce the risk of the investors by making an insurance! Normally insurances cost, but in our case, those are going to be free for us coin investors. So let us demonstrate showcase you how the Bitcoin insurance will work.

How does the Bitcoin Insurance function?

The easiest way to understand this is by making an example.

So let us assume:

  • insurance amount is one BTC – so in case of a claim, the amount to be distributed to our community will be one BTC.
  • insurance period is twenty days – if the bitcoin investment program stops paying before the end of this period, the insurance amount will be paid out to the investors. Each ivnestment chance with an insurance will have a counter demonstrating when the period is going to end.
  • Investors: one invested 0.Five BTC, three invested 0.Two BTC, five invested 0.1 BTC, ten invested 0.05 BTC, twenty invested 0.01 BTC, two invested 0.005 BTC

If the investment program stops paying on the 21st day, the insurance expires and nobody gets paid.

If the investment program stops paying before the 21st day, the insurance amount is distributed to all of the investors. To calculate who gets how much, we use the amount each user invested and weight it to the total amount.

The formula for each person is: (Own Investment/ Total Investment)* Insurance Amount

It is significant to say, that the maximum amount taken into this calculation is 0.1 BTC per user. The minimum is 0.01 BTC.

In this example, the total amount of invested is: 1*0.1 + Trio*0.1 + Five*0.1 + Ten*0.05 + 20*0.01 = 1.6 BTC.

The 0.1 BTC investor will get for example: (0.1/1.6)*1 = 0.0625 BTC back.

Bitcoin HYIP, Best monitored BTC Investments two thousand seventeen

Bitcoin HYIPs

Which content would you like to leap to?

HYIPs Overview

List of Bitcoin HYIPs

Paying HYIPs

Insurance active | Insurance expired | Paying | Awaiting payment | Not paying

Everything you need to know about Bitcoin HYIPs

Bitcoin high yield investment programs, also brief Bitcoin HYIPs, may pay you high comes back for a puny amount you invest in them. These programs get the profits by trading forex, stocks and bonds, sports betting and other. HYIPs pay hourly, daily, weekly or monthly. The daily income rates depend on the HYIP itself and range from 0.5% to 6%.

The reaction is yes, you can do profit by investing in Bitcoin hyips. However you must know, that most high yield investment programs will sooner or later turn into a scam and run away with your investment. You can imagine the way a hyip like a gaussian curve, see picture below:

Explanation of the Grafik: We can divide the lifespan of the HYIP in three parts.

Phase 1: The Launch. Admin launches a HYIP platform. Investors invest Bitcoin, Admin pays the promised percentage. Admin is essentially paying from his own pocket and is making losses.

Phase Two: The Upswing. The HYIP is thriving, many people are signing in and investing. The potential profit of the admin grows quicker than the amount he needs to pay daily to the investors.

Phase Trio: The Fall. Only fewer people proceed investing in the platform. This means, that the potential earning is getting less, due to the fact that the admin needs to pay out a profit daily. Admin determines, that now is the point of maximum earnings for him. Very first, he stops all the payments out of the website, yet you can proceed invest. Later he runs away and closes the website.

This is why the next question is very significant:

How to minimize the risk?

As seen in the upper graphic, the periods you are going to earn are phase one and Two. This means you need to join as early as possible, equivalently, you need not join too late. To find out if the HYIP is in the beginning of phase two or at the end is not effortless.

Therefore our rule of thumb on joining hyips:

  • If the hyip is paying more than 5% daily, then don’t join it after it has been there for more than two weeks.
  • If the hyip is paying inbetween 5% and Two.5%, then don’t join it after it has been there for more than four weeks.
  • If the hyip is paying less than 1.5%, then the choice is hard. The website might pay for a very long time like HashOcean (more than a year), or stop like Business Angels (less than three months).
  • Don’t leave behind to request by hand your daily withdraw.

Insurance: Bitcoin Investment

Significant NOTICE: OUR INSURANCE PROGRAM HAS BEEN HALTED AS OF 1.6.2017! RESEASON BEHIND THIS DECISION IS, THAT THERE WAS NO CLEAR WAY TO Detect WHO Truly JOINED THE INSURANCE PROGRAM, AND WHO IS JUST FAKING IT. IF YOU HAVE BETTER IDEAS ON HOW TO IMPROVE THIS, PLEASE FEEL FREE TO CONTACT US.

Insurances have been around for decades. The very first ones beeing made by the Chinese and Babylonian (

2000 BC) in case a shipment got stolen. So basically, an insurance is a way to protect one from a financial loss.

But why are there no good insurances for our financial decisions as Bitcoin investors? Why don’t the big platforms care about the petite people? We determined to pack this gap since TOGETHER we are stronger!

Insurance for your Bitcoin Investment

Since all of us are attempting to make some money over Bitcoin investments, we found a way to reduce the risk of the investors by making an insurance! Normally insurances cost, but in our case, those are going to be free for us coin investors. So let us display showcase you how the Bitcoin insurance will work.

How does the Bitcoin Insurance function?

The easiest way to understand this is by making an example.

So let us assume:

  • insurance amount is one BTC – so in case of a claim, the amount to be distributed to our community will be one BTC.
  • insurance period is twenty days – if the bitcoin investment program stops paying before the end of this period, the insurance amount will be paid out to the investors. Each ivnestment chance with an insurance will have a counter demonstrating when the period is going to end.
  • Investors: one invested 0.Five BTC, three invested 0.Two BTC, five invested 0.1 BTC, ten invested 0.05 BTC, twenty invested 0.01 BTC, two invested 0.005 BTC

If the investment program stops paying on the 21st day, the insurance expires and nobody gets paid.

If the investment program stops paying before the 21st day, the insurance amount is distributed to all of the investors. To calculate who gets how much, we use the amount each user invested and weight it to the total amount.

The formula for each person is: (Own Investment/ Total Investment)* Insurance Amount

It is significant to say, that the maximum amount taken into this calculation is 0.1 BTC per user. The minimum is 0.01 BTC.

In this example, the total amount of invested is: 1*0.1 + Three*0.1 + Five*0.1 + Ten*0.05 + 20*0.01 = 1.6 BTC.

The 0.1 BTC investor will get for example: (0.1/1.6)*1 = 0.0625 BTC back.

Bitcoin HYIP, Best monitored BTC Investments two thousand seventeen

Bitcoin HYIPs

Which content would you like to hop to?

HYIPs Overview

List of Bitcoin HYIPs

Paying HYIPs

Insurance active | Insurance expired | Paying | Awaiting payment | Not paying

Everything you need to know about Bitcoin HYIPs

Bitcoin high yield investment programs, also brief Bitcoin HYIPs, may pay you high comebacks for a puny amount you invest in them. These programs get the profits by trading forex, stocks and bonds, sports betting and other. HYIPs pay hourly, daily, weekly or monthly. The daily income rates depend on the HYIP itself and range from 0.5% to 6%.

The reaction is yes, you can do profit by investing in Bitcoin hyips. Tho’ you must know, that most high yield investment programs will sooner or later turn into a scam and run away with your investment. You can imagine the way a hyip like a gaussian curve, see picture below:

Explanation of the Grafik: We can divide the lifespan of the HYIP in three parts.

Phase 1: The Launch. Admin launches a HYIP platform. Investors invest Bitcoin, Admin pays the promised percentage. Admin is essentially paying from his own pocket and is making losses.

Phase Two: The Upswing. The HYIP is flourishing, many people are signing in and investing. The potential profit of the admin grows swifter than the amount he needs to pay daily to the investors.

Phase Three: The Fall. Only fewer people proceed investing in the platform. This means, that the potential earning is getting less, due to the fact that the admin needs to pay out a profit daily. Admin determines, that now is the point of maximum earnings for him. Very first, he stops all the payments out of the website, yet you can proceed invest. Later he runs away and closes the website.

This is why the next question is very significant:

How to minimize the risk?

As seen in the upper graphic, the periods you are going to earn are phase one and Two. This means you need to join as early as possible, equivalently, you need not join too late. To find out if the HYIP is in the beginning of phase two or at the end is not effortless.

Therefore our rule of thumb on joining hyips:

  • If the hyip is paying more than 5% daily, then don’t join it after it has been there for more than two weeks.
  • If the hyip is paying inbetween 5% and Two.5%, then don’t join it after it has been there for more than four weeks.
  • If the hyip is paying less than 1.5%, then the choice is hard. The website might pay for a very long time like HashOcean (more than a year), or stop like Business Angels (less than three months).
  • Don’t leave behind to request by hand your daily withdraw.

Insurance: Bitcoin Investment

Significant NOTICE: OUR INSURANCE PROGRAM HAS BEEN HALTED AS OF 1.6.2017! RESEASON BEHIND THIS DECISION IS, THAT THERE WAS NO CLEAR WAY TO Detect WHO Truly JOINED THE INSURANCE PROGRAM, AND WHO IS JUST FAKING IT. IF YOU HAVE BETTER IDEAS ON HOW TO IMPROVE THIS, PLEASE FEEL FREE TO CONTACT US.

Insurances have been around for decades. The very first ones beeing made by the Chinese and Babylonian (

2000 BC) in case a shipment got stolen. So basically, an insurance is a way to protect one from a financial loss.

But why are there no good insurances for our financial decisions as Bitcoin investors? Why don’t the big platforms care about the puny people? We determined to pack this gap since TOGETHER we are stronger!

Insurance for your Bitcoin Investment

Since all of us are attempting to make some money over Bitcoin investments, we found a way to reduce the risk of the investors by making an insurance! Normally insurances cost, but in our case, those are going to be free for us coin investors. So let us display showcase you how the Bitcoin insurance will work.

How does the Bitcoin Insurance function?

The easiest way to understand this is by making an example.

So let us assume:

  • insurance amount is one BTC – so in case of a claim, the amount to be distributed to our community will be one BTC.
  • insurance period is twenty days – if the bitcoin investment program stops paying before the end of this period, the insurance amount will be paid out to the investors. Each ivnestment chance with an insurance will have a counter demonstrating when the period is going to end.
  • Investors: one invested 0.Five BTC, three invested 0.Two BTC, five invested 0.1 BTC, ten invested 0.05 BTC, twenty invested 0.01 BTC, two invested 0.005 BTC

If the investment program stops paying on the 21st day, the insurance expires and nobody gets paid.

If the investment program stops paying before the 21st day, the insurance amount is distributed to all of the investors. To calculate who gets how much, we use the amount each user invested and weight it to the total amount.

The formula for each person is: (Own Investment/ Total Investment)* Insurance Amount

It is significant to say, that the maximum amount taken into this calculation is 0.1 BTC per user. The minimum is 0.01 BTC.

In this example, the total amount of invested is: 1*0.1 + Three*0.1 + Five*0.1 + Ten*0.05 + 20*0.01 = 1.6 BTC.

The 0.1 BTC investor will get for example: (0.1/1.6)*1 = 0.0625 BTC back.

Related video:

Bitcoin Doesn’t Make Remittances Cheaper – Cryptonight – Medium

Bitcoin Doesn’t Make Remittances Cheaper

When I parted ways with Rebit.ph in August, we were most likely doing twice as much monthly volume as any other seed-stage Bitcoin remittance startup anywhere in the world.

It had been a wild rail: we didn’t invent the concept of using Bitcoin as a remittance medium, but we were certainly one of its most successful examples. Many similar companies were being referred to in the press as “rebittance” companies, and we were being invited to speak at international conferences alongside established remittance companies like Western Union and WorldRemit, instead of fledgling Bitcoin businesses.

Here’s what I’ve learned over the last eighteen months living and breathing this subsection of the Bitcoin space.

Bitcoin Doesn’t Actually Make Remittances Cheaper

Some of the industry has woken up to this already, and albeit Reddit resumes to salivate over crypto-money-transfer, it’s hard to argue with the numbers actually generated by real-world use. Rebit’s model (and the model of several other companies like it) was to eliminate Bitcoin from the end-user’s perspective. Rebit worked with on-the-ground kiosks that accepted hard cash from migrant workers overseas, and then paid out in hard cash to their beneficiaries in the Philippines. Bitcoin was used invisibly behind the scenes to lodge the debt inbetween the kiosk (in Hong Kong, Korea, Canada, etc) and the Rebit offices in the Philippines.

On the face of it, it sounds like a sturdy settlement process, because the blockchain-powered transfer of funds inbetween the two companies is free, and confirmed within ten minutes. But because we were mimicking the traditional remittance process so closely, we were also mimicking its costs.

The Very first and Last Miles Are Where All the Costs Are

There are obviously big expenses involved in operating the kiosk on the sending side: customer acquisition costs, physical costs, and big hairy issues like licensing and compliance.

Every country treats this differently, but with a little bit of math you could make some practical guesses regarding these respective costs. The average remittance shop at the average unwrap mall does no more than two hundred transactions a day, and we know from our own practice and World Bank estimates that the average transaction size is somewhere inbetween $50 and $100. The fees that the kiosk must charge its customers therefore need to match up against whatever costs they’d normally expect to incur over their very first year or so. In districts with Filipino migrant populations in Canada, Hong Kong, Singapore, these economics have resulted in a vapid fee of US$3–5 and an FX spread inbetween 1–1.5% per remittance transaction.

Once the money has made its way to the receiving country, things get even hairier. The Philippines is an archipelago with ninety million people spread out across Two,000 islands, 75% of which are unbanked. But traditional remittances are a yam-sized industry here, and the main reason is because the pawnshops have collectively built a domestic backbone through which $60B flow through annually.

The pawnshops are the last mile, and no one, not even the banks, are close to touching their aggregate dominance. As such, they can charge whatever they want for their services, and the oligopolistic nature of the industry ensures that there is very little difference in price inbetween one provider and another.

As a prime example, to send the equivalent of $Ten (about a day’s minimum wage in the Philippines) from one city to another, all the pawnshop networks charge 6-7%. When a Bitcoin company, acting on the behest of its sending customer, wants to transfer $Ten from one city to another, it needs to pay that same fee.

If the beneficiary is fortunate enough to have a bank account, the costs become plane fees, but banks have traditionally never been good at moving puny amounts. (At the $Ten range, their plane fees are 10–20% of the principal amount.)

All told, the costs of a Bitcoin-powered remittance and that of a transaction powered by Moneygram or any other traditional provider are markedly similar, because the local currency needs to flow through the same physical channels.

So is there any benefit at all to using Bitcoin?

Bitcoin Makes Beginning a Remittance Business Cheaper

As evidenced by the proliferation of “rebittance” startups, there is one thing that Bitcoin does enable: instant settlement across borders.

The implications of this are originally hard to discern. From the customer’s point of view, all digital money shows up to be instantly lodged. But from an infrastructure standpoint, whenever a customer uses Paypal to “instantly” pay a merchant across the world, a complicated series of clearing-house and correspondent-bank settlements have to take place in order to compensate the local bank that eventually makes hard currency available at withdrawal.

So when Western Union promises to make your money available to your beneficiary within an hour’s time, how do they actually do it? Elementary. By having a enormous cash reserve already sitting in the receiving country, ready to be paid out to beneficiaries at any time.

This “prefunding” strategy is the main thing that youthful Bitcoin remittance startups are now able to circumvent. Instead of advancing $100,000 to each country that you want to do business in, you lodge each transaction in real-time with Bitcoin. From a cost perspective, it’s the difference inbetween building a big server farm versus pay-as-you-go hosting on Amazon AWS, and is a true game-changer.

But if the cost of capital is lowered, shouldn’t the overall cost to the customer be lowered as well? Not indeed. What the blockchain has permitted us to do is circumvent the SWIFT network, but as soon as we hit the ground and go back to local currency, all the same strictures are then re-applied.

You Can’t Make Remittances Cheaper without Switching the Last Mile

Remittances can only become cheaper by reworking the last mile itself, and there are a handful of startups focusing on this problem. Remittance darling Abra has been attempting to establish partnerships with logistics providers and airtime top-up vendors, essentially anyone with a large footprint and decent amounts of liquidity. The fresh strategy is a marked difference from the original “human ATM” pitch that got so much flack from industry pundits earlier this year. Meantime, local startup Ayannah is aggregating the pawnshops themselves under a single web-service umbrella. In both cases, it’s likely that the existing oligopoly will keep fees at the same level it always was.

Outside of Bitcoin, what other solutions exist? Mobile money seems to be most practical candidate. It substitutes the dependency on a physical last mile with that of an over-the-air, good-as-cash technology. Unluckily, it’s rough to find a indeed successful implementation of mobile money outside of Kenya’s MPesa, and perhaps Zimbabwe’s EcoCash. Even in the Philippines — where mobile money was very first invented in two thousand one — the cold war inbetween our two largest telco’s and their respective mobile money services make a unified solution unlikely.

The ideal solution emerges to be a hybrid inbetween the current Bitcoin remittance startups and the ubiquitous mobile-money network that presently exists only in our desires. If we can use Bitcoin to substitute SWIFT during the international part of the journey, and employ the local mobile money network as our domestic transport, then we’ve truly got something. Until then, associating Bitcoin so directly with cheaper remittances is perhaps missing the point: the cryptocurrency has illuminated an even larger problem that it simply cannot solve on its own.

Related video:

Announcing the Thunder Network Alpha Release – Blockchain Blog

Announcing the Thunder Network Alpha Release

At Blockchain, we’re on a mission to create an open, accessible, and equitable financial future. Since our inception, we have focused on building products that make it effortless for everyday people to use bitcoin to store and transfer value all over the world. We make Bitcoin usable and useful. We’ve been able to do that because we develop with a user-focused mandate.

A swifter, cheaper, and more functional network would produce real value to our users, so we were excited by the growth of research into payment channel technology on the bitcoin network and innovative uses of this technology . We were particularly interested in the idea of using brainy contracts to build what are basically super-charged payments networks, as outlined in a white paper by the lightning.network team . Last year, we hired a talented engineer, Mats Jerratsch, who had been pioneering innovation in this vertical to work with our engineering team and lead research and development on a network based around these ideas.

Lightning networks have been purely conceptual, research based, and only in test nets and labs – until now. Today, we release the alpha version of our Thunder Network, the very first usable implementation of the Lightning network for off chain bitcoin payments that lodges back to the main bitcoin blockchain.

Thunder has the potential to facilitate secure, trustless, and instant payments. It has the capability to let out the power of microtransactions, to permit the bitcoin network to treat intense fountains, and to increase user privacy. In this Alpha version, we prove that it can be done. From a feature perspective, there is both a knot and a wallet (with GUI) present. Even more importantly:

  • Settlement to the bitcoin blockchain
  • Scale: According to our tests so far, we can achieve better-than-Visa scale (100,000 TPS) with only a few thousand knots on the network
  • Enormously cheap payments: fees will develop naturally, due to the free market in an open and permissionless network and will fundamentally be lower than on-chain payments
  • Encryption and Authentication: All communications inbetween all knots and wallets are encrypted using AES-CTR and take place only after completing authentication.
  • Seed Peers and automatically provide them with network topology using a basic gossip protocol similar to the one used in the bitcoin network, which permits sophisticated routes over numerous hops
  • Payment Channels can be opened and closed at will, with transactions lodging onto the bitcoin blockchain
  • Payment Debate: Across the route each hop will renegotiate a fresh status with the next hop, as a payment makes its way through the network with cryptography in place to prevent fraud
  • Relaying Payments: TN will relay payments over numerous knots in the network automatically, using encrypted routing. No one knows who made a payment, permitting for more privacy
  • Lodge payments automatically, no manual intervention needed. The settlement will ripple back through the network to provide proof-of-payment
  • Instant Payments that are irrevocable the moment you see them

Until both CSV and SegWit are implemented on the bitcoin blockchain, transactions are not enforceable at the bitcoin protocol level. So, the current Thunder prototype is best suited for transactions among a trusted network of users. Attempt this amongst your dev team or amongst your trusted internet friends, but don’t use it for real payments. Reminisce: this is alpha testing software.

So why release this now? We believe it is critical to get something in the forearms of users as soon as possible to build up feedback that will enable us to be ready when the network is. So review it, test it out, open an issue on GitHub, or send us an email. If you want to work on tech like this total time, head here and apply to join our team.

Related video:

A Brief History of Bitcoin, Virtual Currency Before Bitcoin, InformIT

A Brief History of Bitcoin

This chapter is from the book

This chapter is from the book 

Albeit Bitcoin is the best-known virtual currency, it wasn’t the very first. In fact, Bitcoin is just the latest of a multitude of schemes designed to supplement or substitute traditional money.

One of the very first virtual currencies was E-gold, founded in 1996. E-gold was unique in that its virtual currency was backed by real, honest-to-goodness gold bullion. In essence, trading E-gold was basically the same as interchanging gold ownership, but anonymously.

At its peak, in 2008, E-gold claimed more than five million user accounts. However, the anonymous nature of the currency made the service very attractive to crime syndicates looking to launder their dirty dollars into cleaner cash. Powerless security systems also contributed to an influx of hacking and fraud from these same crime syndicates.

All of this led the U.S. government to get involved, and in two thousand eight the company’s management pleaded guilty to money laundering and operating an unlicensed money transfer business. The Feds froze all user accounts, amounting to more than $86 million in E-gold. The company itself closed its doors the following year.

By the way, E-gold was just one of several similar virtual gold payment systems back in the day. Competitors included GoldMoney and e-Bullion, which appeared identically shady. (E-Bullion’s possessor was eventually arrested on charges of running an illegal money transfer business and of paying three hit dudes to stab his wifey to death. Good folks there.)

Beenz and Flooz

In 1998, an interesting fresh website called Beenz.com was launched. The idea behind Beenz.com is that you could earn virtual currency (called Beenz) for performing a multitude of online activities, such as visiting certain websites or shopping online. The Beenz you earned could then be spent on various online goods and services.

The site attempted to position itself as “the web’s currency” that would challenge the world’s traditional currencies. That it didn’t succeed is now evident. In fact, Beenz had a very brief life, closing its virtual doors in 2001. It never got past the challenge of persuading governments around the world that it truly wasn’t establishing a fresh currency, or of persuading users that it wasn’t all a big scam.

Similar to Beenz was Flooz, which was promoted by none other than comedian Whoopi Goldberg. Flooz was as big a joke as Beenz was, and operated in much the same style, attempting to establish a unique online currency for use with Internet merchants. Flooz launched in one thousand nine hundred ninety nine and closed in 2001, never having attracted much of a user base.

Q Coins

The Chinese Internet service provider Tencent has a very successful instant messaging service called QQ. Back in 2002, QQ developed its own internal virtual currency, called Q Coins, that customers could use to purchase various virtual goods and services, such as extra storage space, virtual pets, and online game avatars.

Over the next few years, various non-QQ online merchants began accepting Q Coins for real-world goods and services. More than one hundred million Chinese ended up using Q Coins, generating a trading volume in Q Coins of several billion yuan a year. Eventually, Q Coins ended up being so popular that they were being traded on China’s black market for whatever it is that the Chinese trade on the black market. This so worried the Chinese government that it eventually cracked down on the real-world trading of Q Coins—albeit they’re still used today within the QQ service.

(China’s practice with Q Coins no doubt led to their latest crackdown in Bitcoin trading. They’ve been through all this before.)

Linden Dollars

The concept of virtual currency makes a lot of sense within online virtual worlds. Case in point, the virtual world of 2nd Life and its very popular virtual currency, Linden Dollars.

For those unacquainted with virtual worlds, these are online communities that take the form of interactive simulated environments—kind of like a massive multiplayer movie game. Users inhabit the world’s graphical three-dimensional environment and interact with one another via cartoon-like avatars, often participating in virtual activities and—this is significant—economies.

The economy part comes in when users want to buy things within the virtual world, such as virtual clothing for their avatars, virtual housing, virtual entertainment, you name it. For this reason, most virtual worlds have their own unique virtual currencies that can be spent only within the restricts of the online world.

Thus it was with 2nd Life, which was one of the—if not the—most popular virtual worlds. 2nd Life was developed by a company called Linden Lab back in 2003, and its proprietary virtual currency was dubbed Linden Dollar. Users could purchase Linden Dollars (abbreviated L$) using U.S. dollars and other real-world currency on 2nd Life’s LindeX exchange, or from other users or independent brokers.

Buying Linden Dollars in 2nd Life.

2nd Life and its Linden Dollar currency became so popular that tons of real-world companies, including American Apparel, Reebok, and Ford, established presences within 2nd Life. These companies accepted payment for both virtual and real-world goods and services in Linden Dollars.

The growth in 2nd Life and its virtual currency eventually led serious investors to speculate in Linden Dollars. In fact, virtual investment banks arose to facilitate 2nd Life currency trading.

All good things come to an end, however. In 2007, 2nd Life virtual investment bank Ginko Financial collapsed, leaving users incapable to retrieve approximately $750,000 worth of Linden Dollars that had been invested. This led to Linden Labs officially banning all virtual banks in 2nd Life, as well as removing all objects related to in-world virtual banking.

Over the next several years, interest in 2nd Life began to wane. 2nd Life is still around, but it’s a shadow of its former self. You can still trade Linden Dollars for U.S. dollars (and other currency), but you’d be hard-pressed to find many buyers.

Facebook Credits

In-world virtual currencies are not the foot province of online games and virtual worlds. Many bit-time social media sites have at least experimented with the concept of their own proprietary virtual currencies.

Take Facebook, for example. In two thousand nine Facebook began testing the concept of Facebook Credits, which could be used to pay for in-game goods and services on the Facebook site. Facebook Credits went live in January 2011, and users could purchase ten Facebook Credits for one U.S. dollar.

Purchasing Facebook Credits in 2011.

Much to Facebook’s chagrin, Facebook Credits never truly took off. Facebook killed the project in June of 2012, converting all remaining Facebook Credits into standard dollar (or other currency) credits to users’ accounts.

And More.

As you can see, a plethora of various virtual currency schemes have been floated (and mainly drowned) over the past fifteen years or so. In addition to the currencies already mentioned, you run across others such as Dexit, DigiCash, eCache, eCash, InternetCash, Pecunix, and WebMoney. (Google them if you’re interested.) What all these virtual currencies have in common is that they are failures. For one reason or another, none of these virtual currencies managed to make it into the mainstream; at best, some existed within their own virtual worlds, but that’s the extent of it.

That doesn’t mean that all virtual currencies are destined to fail, however. Which brings us to the next stage in our history lesson: the birth of Bitcoin.

The concept of in-world or in-game virtual currencies is an interesting one—especially when you layer in the capability to trade online goods for real-world currency. Here’s what happens.

Game players want to buy virtual things in their virtual worlds, but don’t want to (or can’t) build up the currency via normal in-world means. So they pay other players real-world cash for the in-game currency that the other players have built up by playing the game. In other words, if you want to level up, you can pay for some other player’s tokens that get you to that level.

The problem comes when individuals or groups of individuals commence doing this for a profit—that is, selling their in-game credits for real money. This is called gold farming, and it’s a real thing. (And a big enough deal that many games ban the practice.)

It’s also a source of something resembling gimp labor. Evidently, work camp inmates in China have been compelled to play online games to accumulate online goods and credits that are then sold for real-world currency. It’s kind of a virtual sweatshop, when you think about it.

A Brief History of Bitcoin, Virtual Currency Before Bitcoin, InformIT

A Brief History of Bitcoin

This chapter is from the book

This chapter is from the book 

Albeit Bitcoin is the best-known virtual currency, it wasn’t the very first. In fact, Bitcoin is just the latest of a multitude of schemes designed to supplement or substitute traditional money.

One of the very first virtual currencies was E-gold, founded in 1996. E-gold was unique in that its virtual currency was backed by real, honest-to-goodness gold bullion. In essence, trading E-gold was basically the same as interchanging gold ownership, but anonymously.

At its peak, in 2008, E-gold claimed more than five million user accounts. However, the anonymous nature of the currency made the service very attractive to crime syndicates looking to launder their dirty dollars into cleaner cash. Powerless security systems also contributed to an influx of hacking and fraud from these same crime syndicates.

All of this led the U.S. government to get involved, and in two thousand eight the company’s management pleaded guilty to money laundering and operating an unlicensed money transfer business. The Feds froze all user accounts, amounting to more than $86 million in E-gold. The company itself closed its doors the following year.

By the way, E-gold was just one of several similar virtual gold payment systems back in the day. Competitors included GoldMoney and e-Bullion, which appeared identically shady. (E-Bullion’s holder was eventually arrested on charges of running an illegal money transfer business and of paying three hit boys to stab his wifey to death. Good folks there.)

Beenz and Flooz

In 1998, an interesting fresh website called Beenz.com was launched. The idea behind Beenz.com is that you could earn virtual currency (called Beenz) for performing a multitude of online activities, such as visiting certain websites or shopping online. The Beenz you earned could then be spent on various online goods and services.

The site attempted to position itself as “the web’s currency” that would challenge the world’s traditional currencies. That it didn’t succeed is now demonstrable. In fact, Beenz had a very brief life, closing its virtual doors in 2001. It never got past the challenge of coaxing governments around the world that it indeed wasn’t establishing a fresh currency, or of persuading users that it wasn’t all a big scam.

Similar to Beenz was Flooz, which was promoted by none other than comedian Whoopi Goldberg. Flooz was as big a joke as Beenz was, and operated in much the same style, attempting to establish a unique online currency for use with Internet merchants. Flooz launched in one thousand nine hundred ninety nine and closed in 2001, never having attracted much of a user base.

Q Coins

The Chinese Internet service provider Tencent has a very successful instant messaging service called QQ. Back in 2002, QQ developed its own internal virtual currency, called Q Coins, that customers could use to purchase various virtual goods and services, such as extra storage space, virtual pets, and online game avatars.

Over the next few years, various non-QQ online merchants began accepting Q Coins for real-world goods and services. More than one hundred million Chinese ended up using Q Coins, generating a trading volume in Q Coins of several billion yuan a year. Eventually, Q Coins ended up being so popular that they were being traded on China’s black market for whatever it is that the Chinese trade on the black market. This so worried the Chinese government that it eventually cracked down on the real-world trading of Q Coins—albeit they’re still used today within the QQ service.

(China’s practice with Q Coins no doubt led to their latest crackdown in Bitcoin trading. They’ve been through all this before.)

Linden Dollars

The concept of virtual currency makes a lot of sense within online virtual worlds. Case in point, the virtual world of 2nd Life and its very popular virtual currency, Linden Dollars.

For those unacquainted with virtual worlds, these are online communities that take the form of interactive simulated environments—kind of like a massive multiplayer movie game. Users inhabit the world’s graphical three-dimensional environment and interact with one another via cartoon-like avatars, often participating in virtual activities and—this is significant—economies.

The economy part comes in when users want to buy things within the virtual world, such as virtual clothing for their avatars, virtual housing, virtual entertainment, you name it. For this reason, most virtual worlds have their own unique virtual currencies that can be spent only within the restricts of the online world.

Thus it was with 2nd Life, which was one of the—if not the—most popular virtual worlds. 2nd Life was developed by a company called Linden Lab back in 2003, and its proprietary virtual currency was dubbed Linden Dollar. Users could purchase Linden Dollars (abbreviated L$) using U.S. dollars and other real-world currency on 2nd Life’s LindeX exchange, or from other users or independent brokers.

Buying Linden Dollars in 2nd Life.

2nd Life and its Linden Dollar currency became so popular that tons of real-world companies, including American Apparel, Reebok, and Ford, established presences within 2nd Life. These companies accepted payment for both virtual and real-world goods and services in Linden Dollars.

The growth in 2nd Life and its virtual currency eventually led serious investors to speculate in Linden Dollars. In fact, virtual investment banks arose to facilitate 2nd Life currency trading.

All good things come to an end, however. In 2007, 2nd Life virtual investment bank Ginko Financial collapsed, leaving users incapable to retrieve approximately $750,000 worth of Linden Dollars that had been invested. This led to Linden Labs officially banning all virtual banks in 2nd Life, as well as removing all objects related to in-world virtual banking.

Over the next several years, interest in 2nd Life began to wane. 2nd Life is still around, but it’s a shadow of its former self. You can still trade Linden Dollars for U.S. dollars (and other currency), but you’d be hard-pressed to find many buyers.

Facebook Credits

In-world virtual currencies are not the foot province of online games and virtual worlds. Many bit-time social media sites have at least experimented with the concept of their own proprietary virtual currencies.

Take Facebook, for example. In two thousand nine Facebook began testing the concept of Facebook Credits, which could be used to pay for in-game goods and services on the Facebook site. Facebook Credits went live in January 2011, and users could purchase ten Facebook Credits for one U.S. dollar.

Purchasing Facebook Credits in 2011.

Much to Facebook’s chagrin, Facebook Credits never truly took off. Facebook killed the project in June of 2012, converting all remaining Facebook Credits into standard dollar (or other currency) credits to users’ accounts.

And More.

As you can see, a plethora of various virtual currency schemes have been floated (and mainly submerged) over the past fifteen years or so. In addition to the currencies already mentioned, you run across others such as Dexit, DigiCash, eCache, eCash, InternetCash, Pecunix, and WebMoney. (Google them if you’re interested.) What all these virtual currencies have in common is that they are failures. For one reason or another, none of these virtual currencies managed to make it into the mainstream; at best, some existed within their own virtual worlds, but that’s the extent of it.

That doesn’t mean that all virtual currencies are destined to fail, however. Which brings us to the next stage in our history lesson: the birth of Bitcoin.

The concept of in-world or in-game virtual currencies is an interesting one—especially when you layer in the capability to trade online goods for real-world currency. Here’s what happens.

Game players want to buy virtual things in their virtual worlds, but don’t want to (or can’t) build up the currency via normal in-world means. So they pay other players real-world cash for the in-game currency that the other players have built up by playing the game. In other words, if you want to level up, you can pay for some other player’s tokens that get you to that level.

The problem comes when individuals or groups of individuals begin doing this for a profit—that is, selling their in-game credits for real money. This is called gold farming, and it’s a real thing. (And a big enough deal that many games ban the practice.)

It’s also a source of something resembling sub labor. Evidently, work camp inmates in China have been coerced to play online games to accumulate online goods and credits that are then sold for real-world currency. It’s kind of a virtual sweatshop, when you think about it.

Related video:

7 regulatory challenges facing blockchain – BBVA NEWS

seven regulatory challenges facing blockchain

MarГ­a Tena

When the subject of blockchain is addressed, it is usually to hail it as a technology that will overhaul entire industries. “It is a revolution because blockchains can record identities, financial transactions and all kinds of legal operations”, says tech guru Chris Skinner. Nonetheless, the technology and its applications are still subject to explore, and remain in a very nascent stage, particularly in the banking sector where regulators are charged with coordinating and assuring industry stability.

With this in mind, BBVA Research has ready a report entitled “Blockchain in Financial Services: Regulatory Landscape and Future Challenges for its Commercial Application”, in which Javier SebastiГЎn, Digital Regulation Manager at BBVA, evaluates the regulatory challenges that the technology still needs to overcome before it can be used in the world of financial services.

Banks in lead as various players jockey for position on blockchain, BBVA’s Sieber says

1.- Legal framework regarding the legal nature of blockchains and collective distributed ledgers. This includes territoriality (issues of jurisdiction and applicable law) and liability should something go wrong. By definition, collective distributed ledgers (or DLT) have no specific location. In terms of jurisdiction and applicable law, territoriality constitutes a problem, as each network knot may be subject to different legal requirements, and there is no “central administration” responsible for each distributed ledger, the nationality of which might act as an “anchor” in terms of regulation. Following this same reasoning, liability also represents a concern, as there may be no party ultimately responsible for the functioning of distributed ledgers and the information contained therein.

Two.- Legal framework for recognition of blockchains as immutable and tamper-proof knots, ensuring the veracity of information contained therein. A legal framework is required for using blockchains as unique and trusted sources of identity. Before this is possible, standardized regulation is necessary on data protection and authenticating the identity of legal persons.

While there is broad consensus among the cryptographic and IT community regarding the practical immutability of blocks in a well-defined blockchain, either because it is technically unlikely to modify blocks in “work test” systems or other kinds of controls linked to consensus mechanisms, there is as yet no legal recognition of this aspect of blockchains, and therefore it could not be wielded as a legal argument in court.

At present no tribunal has issued any ruling recognizing blockchains as tamper-proof and immutable ensures of veracity.

Three.- Regulation regarding interpretation of the “right to be forgotten”, as the “tamper-proof” characteristic of blockchains “clashes” with said right, granted under European regulation to protect individual data. The fact that a blockchain is immutable may represent a problem, as it might conflict with other rights recognized by politicians, governments and/or regulators. One example is the “right to be forgotten” granted to each citizen under European regulation, which permits any European citizen the right to have information stored in outer databases, either on paper or in electronic format, deleted should they so wish.

The only solution to reconcile such rights with the very nature of blockchains may be to substitute the right to have information “deleted” with a right to “prohibit the use” of private information by third parties. This could be achieved by a combination of automatic data encrypting when certain conditions are in place (which could mean use of wise contracts) or alternative solutions to prevent said information being accessed when an individual determines to exercise their right.

Four.- Legal framework regarding the legal validity of documents stored in blockchains as evidence of possession or existence. Similar to the recognition of blockchains as unique immutable sources of veracity, a 2nd level of recognition is required before blockchains can be used in certain businesses. This regards not only recognition that the information cannot be modified, but also recognition that inclusion in a blockchain of a deed proclaiming ownership or the existence of an asset represents genuine proof of ownership or the real existence of said asset.

However, assuming that the verification process regarding the property/existence prior to inclusion of the document in the blockchain is reasonably sound, and we are certain of the efficacy of the cryptographic mechanisms used in blockchain technology, then recognition of blockchains as immutable sources of trust implies that documents located in blockchains truly can be used as proof of existence or ownership. However, it is another matter whether the courts of a given country might accept this. Again, there is no jurisprudence for us to fall back on.

Five.- Legal framework regarding the legal validity of financial instruments issued in blockchains. When blockchains are used as a platform to define “native” financial instruments, such as bonds or derivatives, recognition is required of the legal validity of said financial instruments by regulators and supervisors. Obviously, one key financial instrument that could be issued in blockchains is money. Native money issued in blockchains could have serious implications for monetary policy and macroeconomics, and warrants a deeper analysis that goes beyond the remit of this document.

6.- Legal framework for wise contracts generally speaking, and for international trade in particular, including applicability in the real world, territoriality and liability. В The issues mentioned in point one regarding territoriality and liability are likewise applicable to wise contracts, but require a series of extra considerations:

Clever contracts: blockchain-based contracts that don’t require lawyers

As far as jurisdictional issues are worried, there is not only the issue of whether the distributed ledger itself has a specific location, but also the issue of signatories to the contract being subject to different laws under their respective jurisdictions. Regarding liabilities, numerous parties are involved in brainy contracts: not only the parties to the contract, but also the creator of the same (usually some kind of encoder) and the custodian of the contract (ideally there would be no need for the latter party). As well as the evident possibility of one of the contracting parties breaching the contract, there is a chance that the contract itself may be flawed, either due to coding errors or design errors. Thus, when a brainy contract fails to work as expected, which party would be liable?

7.- Regulation on the use of blockchains as a valid regulatory registry for the Internet of Things. It has been said that blockchains could be particularly useful for the Internet of Things. In the Internet of Things all connected devices have an identity. It would therefore be truly useful to establish a collective registry storing the “identity” and details of each connected thing, while permitting them to conduct transactions inbetween each other, including M2M (machine-to-machine) payments.

The idea of having one or several “collective distributed ledgers” for the Internet of Things seems to be gaining traction, and would require a legal framework recognizing distributed ledgers as valid regulatory registries. All of the above challenges regarding territoriality, liability and the applicability of wise contracts are, of course, also pertinent to any blockchain associated with the functioning of the Internet of things.

Javier SebastiГЎn

Javier SebastiГЎn CermeГ±o, Digital Regulation Manager at BBVA, identifies and evaluates digital trends and their influence on financial services. His work concentrates primarily on fresh business models and regulatory requirements. LinkedIn

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Why the blockchain belongs on the CXO roadmap – Tech Pro Research

Why the blockchain belongs on the CXO roadmap

The blockchain is not fully mature, but corporate leaders should consider finding a place for it in their technology strategies.

Most CEOs and CIOs agree that implementing more agile and intelligent business processes is central to a company’s profitability and its capability to execute daily work effectively. Accordingly, billions of dollars have been invested into business process reengineering–an effort that has been ongoing in businesses for centuries.

As these businesses transformed themselves, they looked to the technologies of their times to facilitate the switches they desired to make in their operations. This brings us to today’s environment, where the latest technology that could be a real game changer for business processes could be the blockchain–a data structure that makes it possible to create a digital ledger of transactions, with each participant manipulating the ledger in a secure way without the need for a central authority.

SEE: IT leader’s guide to the blockchain

The blockchain is best known for its role as a digital financial ledger that verifies and captures a series of transactions at each transactional “block” to facilitate nontraditional but very secure “value exchanges” for electronic currencies like Bitcoin.

Beyond currency

The blockchain, with its capability to verify the “truthfulness” of any block entered into its chain and then assemble the chain of blocks in chronological sequence, can be applied to virtually any business process–not just currency. For example, blockchain technology can identify and use existing documents and records stored in a mortgage company’s numerous systems of record, such as mortgage applications and applicant financial statements.

Use cases

IBM provides several use cases that demonstrate how early adopters of the blockchain are relying on it to redefine business processes. Here are two examples.

In June 2016, French bank Credit Mutuel finished its very first blockchain project, which focused on improving the business process of verifying a customer’s identity. In a banking environment, verifying customer identity is significant, whether a customer is opening an account, applying for a loan or a credit card, getting documents notarized, or signing up for a safe deposit box. Like most banks, Credit Mutuel had an assortment of business functions and systems that all contained lumps of a customer’s 360-degree identity, but not the total picture. This stymied internal business units because of the siloed nature of departments and systems that coerced bank employees to by hand assemble a total set of documents from different sources to verify a customer’s identity.

By applying blockchain technology, Credit Mutuel was able to assemble records and documents from disparate systems and departments into a single chain of total identity documentation for a customer, available to everyone who was authorized to access the chain. The blockchain application sidestepped what would have been a lengthy IT integration process. It also sped up the identity verification process and improved customer satisfaction.

In Japan, Mizuho Financial Group, a bank holding company, is testing the potential of the blockchain for use in settlements with virtual currency. The objective is to investigate how the blockchain can facilitate the instantaneous exchanges of payments, which could potentially open up fresh financial offerings that the company could make available to its customers.

SEE: Cybersecurity spotlight: The ransomware battle

Hyperledger

A major impasse from an enterprise standpoint is that the blockchain is a product of the open source community. There are few controls over a worldwide blockchain development corps that operates with fierce independence and is federating its work into a blockchain code base–albeit in a seemingly random and undisciplined way. In an attempt to bring together all these independent efforts into a coordinated framework, high profile companies like Accenture, BNY Mellon, Cisco, The Depository Trust & Clearing Corporation (DTCC), Fujitsu, Hitachi, IBM, Intel, J.P. Morgan, Crimson Hat, and VMware, among others founded Hyperledger. The HyperLedger project won’t reach its purpose overnight, but major technology companies have a vested interest in its success. All the more reason why corporate CEOs and CIOs should find a place for the blockchain in their technology strategies.

More CXO resources

About Mary Shacklett

Mary E. Shacklett is president of Transworld Data, a technology research and market development rigid. Prior to founding the company, Mary was Senior V.

Related video:

Why is bitcoin so expensive right now? Money Badger

How is a single bitcoin worth thousands of dollars?

In March of 2010, an enterprising early Bitcoin adoptee named “SmokeTooMuch” suggested to sell Ten,000 bitcoins for $50. No one took them up on their suggest. At the time, Bitcoin was worth almost nothing for more than a year. No markets existed to exchange bitcoins. Few people actually knew about or used the cryptocurrency. Bitcoin existed as little more than a truly cool idea and nothing more.

Around May and June of the same year, the cryptocurrency became worth around one U.S. cent. As more people learned about the technology behind cryptocurrencies, Bitcoin’s value grew until it was worth one U.S. dollar in Spring of 2011.

Now, Bitcoin is worth harshly $2700. SmokeTooMuch’s $50 suggest would be worth $27 million today. The cryptocurrency has seen rises, crashes, and everything in inbetween. Yet in the last month, the cryptocurrency enlargened by a whopping $600+ in value.

But how did this fresh currency grow so rapid in such a brief amount of time. Better yet, why is it presently more valuable than gold?

1. Cryptocurrency adoption is up.

Thanks to apps and exchanges like Coinbase, cryptocurrencies are lighter to buy now than ever before. These services also increase the profile of cryptocurrencies as viable, tradable assets, not unlike other currencies and securities. With an increase in accessibility and popularity comes an increase in request, which the current supply of bitcoins can’t seem to keep up with.

Two. Other cryptocurrencies are up.

Bitcoin isn’t the only cryptocurrency around. Fresh rules governing Litecoin make it quicker and lighter to exchange. Ethereum, another popular cryptocurrency, recently split into two different currencies, raising its profile and lowering its price of entry. As Bitcoin grew in popularity, so did all cryptocurrencies, which are cheaper than one BTC.

Three. Politics causes people leave traditional currencies.

The U.S. election, the British “Brexit” vote, and heightened regulations on Chinese money made people consider alternatives to their country’s currency. Since Bitcoin is decentralized and not governed by any one country, it’s not susceptible to major switches in valuation should a country do something that could make their money less valuable. Many people are using the cryptocurrency to keep their money safe from devaluation, or even to use it as they would paper money.

These are far from the only reasons for Bitcoin’s surge.

Like stocks, there are a million different factors that could influence Bitcoin’s price. For example, popular cryptocurrency exchange Bitfinex is having trouble moving money from its Taiwanese based bank. Experts actually believe this is causing the cryptocurrency to increase in value instead of drop. This and many other related news items contribute to the rapid switch in Bitcoin’s price.

Should you invest in Bitcoin?

Bitcoin is at all-time highs right now. Many cryptocurrency investors feel that it could come crashing down, as it has in the past. If that’s true, investing in cryptocurrencies now could mean losing a good chunk of your original investment. At the same time, the cryptocurrency could keep rising without fail, which would make your investment worth significantly more than before.

If you want to play it safe, you could wait for Bitcoin to come down in price, or invest in another, more affordable cryptocurrency. If you indeed want to invest in the cryptocurrency and think it might keep violating records, you could always buy some ‘coins through Coinbase.

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What is Blockchain? A Primer on Distributed Ledger Technology

What is blockchain? A primer on distributed ledger technology

Published on January Four, two thousand seventeen / Updated on August 28, 2017

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You’ve most likely heard of blockchain. It’s hard to navigate much of the web today without running across some kind of reference to it. After a while I thought, “Could I truly explain blockchain to someone if asked?” and if you’re in the same boat as I was, this post is for you.

The Problem

Any technology is useful only if it solves some business problem, and blockchain is no exception. There are several problems blockchain solves.

When two parties execute an agreement, there are several moving parts. But what makes the transaction efficient is trust. If you agree to buy X number of widgets from me at a certain price, and we have established trust, the transaction goes slickly. If not, then it gets complicated at best, and litigious at worst. There are many factors that establish an inherent trust like

Reputation – If you are a reputable vendor, I am more likely to trust you.

History – If we’ve been able to trust each other in the past, we are more likely to trust each other in the future.

Establishing trust inbetween two parties can be very difficult, time consuming, and largely subjective (you can’t truly quantify “reputation,” for example), and the larger the network involved in a transaction, the more difficult it is.

In our fictional deal, you have your ledger to record various aspects of the transaction and I have mine. But I don’t see your ledger and you don’t see mine. Thus, by its nature, the deal is opaque, so we will most likely have a contract to govern the terms of the deal. And other than the terms of the contract, that’s as see-through as the deal gets.

Since there is no transparency, it’s difficult to tell how things are going until the deal is done.

What happens if something goes wrong? Let’s say I don’t hold up my end of the deal (or vice-versa)?

To ensure the deal goes sleekly, you and I will very likely deal with middlemen:

Lawyers – To draw up a contract, and if necessary, to provide legal services should things get litigious.

Accountants – To keep the ledgers, and ensure the exchange of goods (and money) goes according to the contract, and is decently recorded.

Government – In some industries, there are government regulations and oversight mandates and other guidelines that have to be followed.

What blockchain is NOT

If you’re like me, the very first time you ever heard about a “block chain” it was in the context of Bitcoin. Bitcoin is the very first implementation of blockchain technology. Bitcoin is an electronic currency that was created to solve the problems of trust, transparency, and accountability inbetween two parties in exchanging money for goods and services over the internet.

The bitcoin blockchain is a public, distributed ledger of all Bitcoin transactions that have ever taken place. This ensures that everyone who participates in the Bitcoin network has access to all transactions, and thus everyone agrees on how every one of those transactions took place. Furthermore, the ledger (blockchain) is immutable, so nobody can switch it.

Since the Bitcoin blockchain is distributed among all participants in the Bitcoin network, it relies on no centralized authority. And through the use of cryptographic technology, all transactions are anonymous.

The Solution

Bitcoin is a disruptive – and arguably revolutionary – technology that relies on blockchain technology. But the blockchain we are hearing about nowadays takes it much further. While Bitcoin is a crypto-currency ensuring transparency and accountability of financial transactions, blockchain technology can be applied to many other types of transactions to solve the problems inherent in any transaction.

Blockchain technology is used in a peer-to-peer network of parties, who all participate in a given transaction.

At its core, blockchain technology uses a distributed ledger that is visible to all parties involved in the transaction. Through a consensus mechanism, the ledger is ensured to be consistent. Because the ledger is distributed, everyone involved can see the “world state” at any point in time and can monitor the progress of the transaction.

Through the use of cryptographic technology, the ledger is encrypted so that only parties permitted to view it may do so.

By its very nature, Blockchain tackles all of the problems inherent in a business transaction:

Trust – Through the use of blockchain, all the parties involved in a transaction only have to trust the technology.

Transparency – Because the ledger is distributed, all peers involved in the transaction network can view it (subject to security rights, of course).

Accountability – Since all parties in the transaction can view the distributed ledger, everyone can agree on how the transaction is progressing while it is ongoing, and how it went once it is finish.

Hyperledger

Primarily, blockchain technology was more concept than reality. Inject Hyperledger!

The Hyperledger is an open source, collaborative effort hosted by the Linux Foundation, to advance cross-industry blockchain technologies. Its community is composed of leaders across many industries including finance, Internet-of-Things, technology, and more.

One of its community-based projects is Hyperledger Fabric, a blockchain framework for business applications, to which IBM contributes code. Hyperledger Fabric uses container technology to enable “smart contracts,” which are implemented in “chaincode” that permit network members to create and manage assets involved in business transactions, and to create and manage the transactions as well.

The Bottom Line on Blockchain Technology

Blockchain technology has the potential to revolutionize the way business networks operate. By establishing trust, and providing transparency and accountability, blockchain makes the network and transactions more efficient. More efficient means quicker turnaround, enhanced profits, and more satisfied customers.

Related video:

What Are Blockchain Forks? Admiral Markets

What Are Blockchain Forks?

If you’ve been keeping up to date with your Bitcoin news recently, you’ve very likely heard a lot of talk about ‘forks’. Here we’ll explain what they mean and how they can influence their respective cryptocurrency.

A Blockchain ‘fork’ generally refers to the event in a project which sees it spin off into another project, by copying the source code and modifying it for the creation of another blockchain. For example, the cryptocurrency Litecoin (LTCUSD) is a fork of Bitcoin (BTCUSD), as its developers copied Bitcoin’s code, made a number of alterations to it and launched a fresh project.

A fork of the Bitcoin software is tricky, because every user running a Bitcoin knot needs to maintain compatibility with the network, or miners may begin mining the wrong blockchain.

Why Do Blockchain Forks Happen?

The Blockchain solutions of the cryptocurrencies are typically open source, which means that the code is free and available for all to view and make use of. As the currencies evolve and switch over time, some switches need to be made to their protocols. Such switches can range from the puny addition of a fresh feature, to massive switches, such as enhancing the maximum block size. Sometimes the switches of the Blockchain are viewed differently inwards the miners community. Some accept the switch and others do not. Such splits in the network infrastructure may also result in the creation of fresh Blockchains and fresh cryptocurrencies, as we explain further.

A hard fork is a switch in the cryptocurrency protocol that is not rearwards compatible with older versions of the currency. For example, everyone running a knot in the Bitcoin network would certainly need to upgrade their software in order to recognise fresh blocks.

A hard fork is a situation where knots running the fresh software are separated from the previous version of the cryptocurrency. If half of the knots are running the fresh version and mining blocks, and the other half are running the old version and mining a different set of blocks, then you effectively have two different chains – which is where the term ‘fork’ comes in.

A soft fork is a switch in the cryptocurrency protocol, where only previously valid blocks are made invalid. This switch is backward-compatible, because older versions of the software will recognise fresh blocks.

While the hard fork requires all miners to upgrade and enforce the fresh rules, the soft fork requires only the majority of the knots to upgrade and agree on the fresh version. This means that a soft fork has less of a chaotic effect on the network, because both old and upgraded knots will keep recognising fresh blocks and maintain consensus on the blockchain.

Some Examples of Forks in Activity.

Soft forks have been the most common way to upgrade the Bitcoin’s blockchain, because allegedly they carry a lower risk of splitting the network. Some examples of successful soft forks are software upgrades, such as BIP sixty six – which dealt with signature validation, and P2SH – which switched Bitcoin’s address formatting.

The most prominent example of the hard fork is with Ethereum. This happened following the hack of the DAO (the digital Decentralised Autonomous Organisation), which was an ambitious project for the humanless venture capital rigid, built exclusively on the brainy contracts on the Ethereum platform. Soon after the record crowdfunding of $150 million, someone began siphoning money from the project and it lost around $50 million worth of Ether, which resulted in a decision to ‘hack the hacker’ – i.e. the Ethereum Foundation had to intervene and just fork the entire blockchain, resulting in splitting it into two cryptocurrencies – Ether and Ethereum Classic.

Admiral Markets offers trading CFDs on the top four cryptocurrencies – Bitcoin (BTCUSD), Ether (ETHUSD), Litecoin (LTCUSD) and Ripple (XRPUSD). Contrary to trading with unregulated cryptocurrency exchanges, with our cryptocurrency CFD contracts you’re still trading with your trusted broker and no hackers can directly access your funds. Additionally, you can benefit from the cryptocurrency price fluctuations with enlargened buying power, as we’re suggesting these instruments with the leverage of up to 1:Five. These instruments are undoubtedly the greatest on the planet right now, why not give trading them a attempt? MetaTrader four is the world’s most popular trading platform. Download it for free and embark your cryptocurrency trading venture today

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Welcome To E-Estonia, The Little Nation That – s Leading Europe In Digital Innovation, HuffPost

Welcome To E-Estonia, The Little Nation That’s Leading Europe In Digital Innovation

Big Brother does “just wants to help” – in Estonia, at least. In this puny nation of 1.Trio million people, citizens have overcome fears of an Orwellian dystopia with ubiquitous surveillance to become a very digital society.

The government took almost all its services online in two thousand three with the e-Estonia State Portal. The country’s innovative digital governance was not the result of a cautiously crafted master plan, it was a pragmatic and cost-efficient response to budget limitations.

It helped that citizens trusted their politicians after Estonia regained independence in 1991. And, in turn, politicians trusted the country’s engineers, who had no commitment to legacy hardware or software systems, to build something fresh.

This proved to be a winning formula that can now benefit all the European countries.

The once-only principle

In other words, if you give your address or a family member’s name to the census bureau, the health insurance provider will not later ask you for it again. No department of any government agency can make citizens repeat information already stored in their database or that of some other agency.

Tech-savvy former prime minister and current Vice President of the European Commission Andrus Ansip oversaw the transformation.

The once-only principle has been such a big success that, based on Estonia’s common-sense innovation, the EU enacted a digital Once Only Principle and Initiative early this year. It ensures that “citizens and businesses supply certain standard information only once, because public administration offices take act to internally share this data, so that no extra cargo falls on citizens and businesses.”

Asking for information only once is an efficient strategy to go after, and several countries have embarked to implement this principle (including Poland and Austria).

But this by itself does not address the fact that merely asking for information can still be a bother to citizens and business. The once-only principle does not assure that the collected data was necessary to request, nor that it will be used to its utter potential.

‘Twice-mandatory’ principle

Governments should always be brainstorming, asking themselves, for example, if one government agency needs this information, who else might benefit from it? And beyond need, what insights could we glean from this data?

Financier Vernon Hill introduced an interesting “One to Say YES, Two to Say NO” rule when founding Metro Bank UK: “It takes only one person to make a yes decision, but it requires two people to say no. If you’re going to turn away business, you need a 2nd check for that.”

Imagine how ordinary and powerful a policy it would be if governments learnt this lesson. What if every bit of information collected from citizens or businesses had to be used for two purposes (at least!) or by two agencies in order to merit requesting it?

The Estonian Tax and Customs Board is, perhaps unexpectedly given the reputation of tax offices, an example of the potential for such a paradigm shift. In 2014, it launched a fresh strategy to address tax fraud, requiring every business transaction of over €1,000 to be proclaimed monthly by the entities involved.

To minimise the administrative cargo of this, the government introduced an application-programming interface that permits information to be automatically exchanged inbetween the company’s accounting software and the state’s tax system.

However there was some negative thrust back in the media at the beginning by companies and former president Toomas Hendrik Ilves even vetoed the initial version of the act, the system was a spectacular success. Estonia surpassed its original estimate of €30 million in diminished tax fraud by more than twice.

Latvia, Spain, Belgium, Romania, Hungary and several others have taken a similar path for controlling and detecting tax fraud. But analysing this data beyond fraud is where the real potential is hidden.

Analytics and predictive models

Big data, analytics and predictive models will play the main role in the next wave of e-government innovation. For example, if single-transaction information puzzle chunks are put together to form a map of the broader national business context, it might be possible to understand the kind of complicated interdependencies inbetween companies visualised below.

But this also raises an interesting question: could a national government use this same digital tracking system to glean insights about the economy’s health and general economic trends?

Visualization of interdependencies inbetween sectors in Estonia.

The Estonian Tax and Customs Board seems to be moving in this direction. Its two thousand twenty Strategic Plan (in Estonian here) demonstrates a shift in mindset, from tasking itself solely with controlling and penalizing people to envisioning providing advice to taxpayers.

Might tax offices be transformed into management consultancy-type agencies that advise companies on how to capture growth in related sectors, mitigate risk from peers’ bankruptcies or improve profits – all based on analysis of the vast amount of data it has collected?

Presently, dozens of people collect, analyse and clean such data about the business sector, but it’s possible this job could be done automatically using tax data. In this screenplay, taxes could be considered a service fee paid in exchange for valuable business insights.

The key problem with Estonia’s good idea is privacy. It’s effortless to imagine that providing industry-specific advice (or advice spanning several industries) based on business-transaction data might break the trust of the companies being monitored.

Indeed, one of the core founding principles of OECD Guidelines on the Protection of Privacy is that data should only be used for the purpose stated and not for any other reasons. So-called “purpose limitation” has since made its way into most modern data protection acts, including to EU data protection rules.

But as the “ask information only once, but use at least twice” idea demonstrates, data not only can and should be used for more than its original purpose, it should never be processed solely for a single aim. Some legal experts agree, stipulating that “within cautiously balanced limits” data may be used for purposes beyond its original intent.

An innovative, visionary tax office that serves, rather than controls, society’s business sector is a big ask. But if any country can do it, e-Estonia can.

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