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Bargeld: Bitcoin statt Euro, ZEIT ONLINE

Bargeld : Bitcoin statt Euro

  1. Seite 1 — Bitcoin statt Euro
  2. Seite Two — Wie sicher die Digitalwährungen sind, ist umstritten

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An U-Bahnhöfen und einigen Parkautomaten funktioniert es längst: Einfach Bankkarte einstecken, schon wird das Geld abgebucht und das Ticket ausgedruckt. Auch im Supermarkt oder im Klamottenshop wird bereits häufig mit Kreditkarte bezahlt. Nur beim Bäcker und beim Zeitungskiosk muss man noch nach Kleingeld kramen, und der Kellner im Café ärgert sich, wenn man nicht wenigstens ein paar Münzen für ihn liegen lässt. Ansonsten funktioniert unser Leben schon ganz gut ohne Bargeld. Und vielleicht werden wir uns schon bald daran gewöhnen müssen, dass es gar keine Scheine und Münzen mehr gibt. Den 500-Euro-Schein will die Europäische Zentralbank ab two thousand eighteen nicht mehr drucken. Außerdem prüfen einige Zentralbanken bereits, wie eine Zukunft mit rein elektronischem Geld aussehen könnte.

Aber was wäre die Folge? Geben die Zentralbanken künftig nur noch virtuelles Geld aus, in Form von Nullen und Einsen? Die würden dann von den Zentralbankrechnern zu den Bankrechnern tickern und von dort auf die Girokonten der Bankkunden gebeamt. Wer künftig am Geldautomaten steht, bekäme dann keine Banknoten mehr, sondern eine Ladung Bits und Bytes auf seine Karte gespeichert, die er von den Läden dieser Welt wieder heruntersaugen lassen kann. Die Zentralbanken müssten keine Scheine mehr drucken und mit Lastwagen im ganzen Land verteilen. Der Kunde hätte vielleicht auch weniger Arbeit und könnte seine Bankkarte womöglich sogar am heimischen Computer mit Kryptogeld aufladen, oder sein Handy, oder seine Smartwatch.

Es könnte ähnlich funktionieren wie beim Bitcoin, den es als Computerwährung seit sieben Jahren gibt. Rechner in aller Welt generieren Bitcoins mit einer speziellen Software. Indem sie eine komplizierte mathematische Aufgabe lösen, schicken sie ständig neue Einheiten dieser Digitalwährung in die Welt. Nur mit enormer Rechenpower lassen sich neue Bitcoins schürfen, und nach rund twenty one Millionen Bitcoins ist Schluss, das haben die Entwickler festgelegt. Derzeit sind rund fifteen Millionen Bitcoins im Umlauf mit einem Wert von umgerechnet gut sechs Milliarden Dollar.

Der Bitcoin ist nicht preisstabil

Jeder, der den Gegenwert laut aktuellem Umtauschkurs dafür bezahlt, kann sich ein paar Bitcoins auf seinen Rechner laden und damit in vielen Läden und Onlineshops weltweit bezahlen. Was die Digitalwährung für viele so interessant macht: Jede Transaktion wird über ein großes Rechnernetzwerk abgewickelt. Im Moment der Datenübertragung (also auch der Geldübertragung) tauschen alle Rechner anhand der winzigen Datenpakete, die auf ihnen abgelegt sind, Informationen aus und bestätigen, dass der Bezahlvorgang seine Richtigkeit hat. So ist garantiert, dass der Bezahlende über das nötige Geld verfügt und der Empfänger es auch bekommt. Blockchain heißt die zugrundeliegende Technologie – eine Art dezentrales, praktisch fälschungssicheres Logbuch aller jemals getätigten Transaktionen. Anders als oft behauptet ist Bitcoin kein anonymes Zahlungssystem. Aber immerhin ist es unabhängig von staatlichen Stellen.

Das wäre ein Euro-Bitcoin natürlich nicht, denn der würde von Zentralbanken ausgegeben. Eine wirkliche “virtuelle Währung” wäre er damit nicht, sagt ein Sprecher der Bundesbank. Den Euro gebe es ja auch ganz real. Konkrete Pläne für eine digitale Währung existieren bei der Bundesbank noch nicht: “Sie dürfte auch in naher Zukunft nicht zu erwarten sein”, so der Sprecher. Sollte allerdings künftig ein Digital-Euro auf Basis der Blockchaintechnologie angedacht werden, wären noch viele Fragen offen:

Wer sendet die digitalen Daten auf die vielen Rechner? Wer hätte Zugriff auf die Rechnerkette – wäre sie für alle offen und damit manipulationsanfällig, oder kämen nur ausgewählte Nutzer dran? Wer verwaltet die Daten und pflegt Änderungen ein? An solchen Fragen arbeitet man in Frankfurt: “Die Bundesbank befasst sich derzeit vor allem mit der zugrunde liegenden Blockchain- und Distributed-Ledger-Technologie, um eine mögliche Anwendung im heutigen Zahlungsverkehr besser bewerten zu können”, sagt der Sprecher. Mit der Technologie können Zahlungen sehr schnell abgewickelt werden – ohne Intermediäre wie Banken oder Börsenhandelsplätze.

Einen Knackpunkt sieht die Bundesbank aber bereits: “Notenbanken geben grundsätzlich Zentralbankgeld aus und zwar in Form von Bargeld (derzeit sind im Eurosystem knapp 1,1 Billion Euro in Umlauf) sowie in Form von Buchgeld (die Guthaben von Kreditinstituten bei den Eurosystem-Zentralbanken betragen quick six hundred Milliarden Euro).” Wenn die Notenbanken das Zentralbankgeld ausgeben, sind sie an die Regelungen des EU-Vertrages gebunden. Sie müssen unter anderem Preisstabilität gewährleisten, dazu haben sie sich verpflichtet. “Dieses konnte in den zurückliegenden Jahren auch erreicht werden. Im Gegensatz dazu zeichnen sich virtuelle Währungen – wie Bitcoin – durch starke Kursschwankungen aus, die eben keine stabile Wertentwicklung bedeuten”, schränkt die Notenbank ein. Die fehlende Stabilität ist die große Schwäche des Bitcoins, dessen Umtauschwert seit two thousand fourteen zwischen one hundred eighty und six hundred seventy Dollar schwankte. Für Deutschlands Notenbanker gibt es daher nur eine Schlussfolgerung: Eine digitale Währung auf Basis der Blockchaintechnologie könne nur eine digitale Variante der herkömmlichen Währung sein. Ein digital verarbeiteter Euro sozusagen.

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Banks are sold on blockchain, worried about collaboration, American Banker

Banks are sold on blockchain, worried about collaboration

Several ideas are emerging about the adoption of blockchain in the financial services industry that are fairly different than what anyone would have predicted two or three years ago.

The choices banks are making are steering financial blockchains in a direction that is far from the mysterious Satoshi Nakamoto’s conception of it, and closer to more traditional technologies out there today — a Google Docs of sorts for banks with immutability and security built in.

1. Things are moving quicker than expected; blockchain technology should be ready for broad use by banks within a year.

Only last spring, analysts were proclaiming that mainstream adoption of blockchain technology was ten years away. Following the fever pitch of blockchain chatter in 2015, observers expected two thousand sixteen to be the year where expectations were tempered.

But bankers and several other financial blockchain experts at a conference hosted by the Depository Trust and Clearing Corp. Wednesday referred to two thousand seventeen as the year of the blockchain pilot, and two thousand eighteen as the year blockchain technology will be used in production in financial services.

"To use a flying analogy, we’ve got the landing gear out and we’re preparing the final descent," said Emmanuel Aidoo, head of blockchain and distributed ledger strategy at Credit Suisse.

"All of us are focused on making this real in 2017," said Todd McDonald, co-founder and chief operating officer of R3, a bank consortium that has developed a “blockchain inspired” platform called Corda. “We all need to make this real this year into next.”

The list of financial blockchains in or close to prime time is growing.

Digital Asset Holdings, the blockchain technology company founded by former JPMorgan Pursue executive Blythe Masters, plans to have a blockchain product ready for banks to use by the end of 2017, said Chris Church, its chief business development officer.

Northern Trust recently went live with a blockchain for private equity funds, based on technology from the Linux Foundation Hyperledger Project and IBM.

“I believe two thousand seventeen is the year we see live networks versus proof of concepts,” said Jerry Cuomo, fellow and vice president of blockchain technologies at IBM. “I think we’re eyeing the real evidence that blockchain is not going to come, it’s here.”

Microsoft’s Blockchain as a Service, a set of blockchain building blocks that runs on the Azure cloud, is also market ready. Bank of America has been using it to create a blockchain to automate trade finance.

JPMorgan Pursue has developed a blockchain called Quorum that’s based on Ethereum.

In February, the DTCC ended a distributed ledger proof of concept with Digital Asset to better manage the netting process for repurchase agreement transactions. The DTCC also plans to shift its Trade Information Warehouse, which keeps records on derivatives contracts, to a distributed ledger in collaboration with IBM, R3 and other fucking partners.

Two. Bankers see blockchain technology mainly as a way to save money.

It’s not surprising that bankers would want to save money. Most have to reduce their cost and efficiency ratios to get through and stay in regulators’ good graces. But when you think about the original premise of the blockchain — a means of recording anonymous digital currency transactions that would circumvent the traditional payment system and pass under the radar of the government, this is a leap.

Credit Suisse, for one, has conducted ten proofs of concept with blockchain startups to achieve cost reductions.

"We tend to look at projects that can give us, if I’m being fair, 50% or greater cost reductions," Aidoo said. "If I’m being more pragmatic, it’s more like 35%. Anything less than that doesn’t warrant execution."

Northern Trust, which has done twenty proofs of concept for blockchain technology and recently went public with its blockchain for private equity funds, also concentrates on streamlining, which would lead to cost cuts.

“We determined to embark on a mission to improve efficiency,” said Justin Chapman, global head of market advocacy and innovation research at Northern Trust.

During its earlier stages, there was hope that blockchain could be a way to to suggest fresh products and services and automate certain things, like supply chains and international remittances, that in the past couldn’t be digitized with one technology. While some are still pondering revenue opportunities on blockchain, the promise of efficiency is what is driving bankers’ interest today.

Three. The idea of "permissionless" blockchains has pretty much been dropped by the industry.

Looking back at blockchain developments over the past year, Church at Digital Asset Holdings said the financial world agreed to abandon the idea of permissionless distributed ledgers. In other words, blockchains anybody could join. Banks have gravitated toward permissioned blockchains that can only be used by those who are invited — say, counterparties to derivatives contracts or trade finance playmates.

"The permissioned environment is going to prevail because it meets the requirements of this marketplace," Church said. "That was a very significant intellectual understanding people got to."

Four. Integration/collaboration is the fattest perceived hurdle.

Asked what presents the greatest challenge to blockchain adoption — data security, privacy, scalability, business case or integration — about half of the DTCC conference audience picked integration. Last year at a similar conference, about a third of the audience chose this option. Integration in this context seems to mean the capability to work with other banks’ and partners’ blockchain technology.

“Interoperability is key: if you look at visible challenges, privacy and scalability are solved,” Church said. “If you do get interoperability, which will require collaboration, all sorts of things become possible. If you have a single source of truth, services can be built off of that, and there’s a giant market chance. Cross processes permit fresh products and services to be created.”

Aidoo noted that privacy is still tricky, because even with a permissioned, invitation-only blockchain, there can still be certain data elements not everyone on the chain should see.

“We talk about public versus private blockchains, but it’s more complicated than that,” he said. For example, the “Chinese walls” Wall Street firms have to maintain mean people in some parts of the organization should not be able to access certain information.

Aidoo also voiced anxiety about collaboration. “I worry about execution risk, meaning things like, do we have the right playmates, do we have the right ecosystem, do we have the right playmates from a collaboration perspective?” he said.

One thing many agree on: Blockchain technology is inescapable for this industry.

“This is not going to stop,” Aidoo said. “This technology will be as pervasive as SQL servers and databases.”

Related video:

ARK Press and News, Investing in Disruptive Innovation

ARK ETFs, TEAM, AND INVESTMENT PHILOSOPHY IN THE NEWS

ETF.com, July Nineteen, 2016

Bloomberg Radio Interview

October 29, 2015

“Are See-through Managed ETFs The Future? Fund Manager Cathie Wood Is Betting On It”

Samantha Sharf, Forbes

December Ten, 2014

IN THE NEWS ARCHIVE

Broadcast

Press and Online

ARK Press Release

For further information about ARK ETFs, or to request interviews or information, we ask that members of the press please contact:

ARK Active ETFs

ARK Index ETFs

Investor Material

Investor Education

In The News

About ARK

Investors should cautiously consider the investment objectives and risks as well as charges and expenses of an ARK ETF before investing. This and other information are contained in the ARK ETFs’ prospectuses, which may be obtained by clicking here. The prospectus should be read cautiously before investing. An investment in an ARK ETF is subject to risks and you can lose money on your investment in an ARK ETF. There can be no assurance that the ARK ETFs will achieve their investment objectives. The ARK ETFs’ portfolios are more volatile than broad market averages. The ARK ETFs also have specific risks, which are described in the ARK ETFs’ prospectuses.

Shares of the ARK ETFs may be bought or sold across the day at their market price on the exchange on which they are listed. The market price of an ARK ETF’s shares may be at, above or below the ARK ETF’s net asset value (“NAV”) and will fluctuate with switches in the NAV as well as supply and request in the market for the shares. The market price of ARK ETF shares may differ significantly from their NAV during periods of market volatility. Shares of the ARK ETFs may only be redeemed directly with the ARK ETFs at NAV by Authorized Participants, in very large creation units. There can be no ensure that an active trading market for ARK ETF shares will develop or be maintained, or that their listing will proceed or remain unchanged. Buying or selling ARK ETF shares on an exchange may require the payment of brokerage commissions and frequent trading may incur brokerage costs that detract significantly from investment comes back. Not FDIC Insured – No Bank Ensure – May Lose Value

All statements made regarding companies, securities or other financial information on this site are rigorously beliefs and points of view held by ARK Investment Management LLC and/or ARK ETF Trust and are subject to switch without notice. Certain information on this site was obtained from sources that ARK believes to be reliable; however, ARK does not ensure the accuracy or completeness of any information obtained from any third party. The information on this site is for informational purposes only and should not be considered as investment advice or a recommendation of any particular security, strategy or investment product. The information on this site is general in nature and should not be considered legal or tax advice. An investor should consult a financial professional, an attorney, or tax professional regarding the investor’s specific situation.

Certain hyperlinks or referenced websites on this site may, for your convenience, forward you to third parties’ websites, which generally are recognized by their top level domain name. Any descriptions of, references to, or links to other products, publications or services do not constitute an endorsement, authorization, sponsorship or affiliation with ARK with respect to any linked site or its sponsor, unless expressly stated by ARK. Any such information, products or sites have not necessarily been reviewed by ARK and are provided or maintained by third parties over whom ARK exercises no control. ARK expressly disclaims any responsibility for the content, the accuracy of the information, and/or the quality of products or services provided by or advertised on these third-party sites. ARK reserves the right to terminate any hyperlink or hyperlinking program at any time.

ARK Investment Management LLC is the investment adviser to the ARK ETFs.

Foreside Fund Services, LLC, distributor.

© 2017. ARK ETF Trust. No part of this material may be reproduced in any form, or referred to in any other publication, without express written permission.

ARK Press and News, Investing in Disruptive Innovation

ARK ETFs, TEAM, AND INVESTMENT PHILOSOPHY IN THE NEWS

ETF.com, July Nineteen, 2016

Bloomberg Radio Interview

October 29, 2015

“Are Semi-transparent Managed ETFs The Future? Fund Manager Cathie Wood Is Betting On It”

Samantha Sharf, Forbes

December Ten, 2014

IN THE NEWS ARCHIVE

Broadcast

Press and Online

ARK Press Release

For further information about ARK ETFs, or to request interviews or information, we ask that members of the press please contact:

ARK Active ETFs

ARK Index ETFs

Investor Material

Investor Education

In The News

About ARK

Investors should cautiously consider the investment objectives and risks as well as charges and expenses of an ARK ETF before investing. This and other information are contained in the ARK ETFs’ prospectuses, which may be obtained by clicking here. The prospectus should be read cautiously before investing. An investment in an ARK ETF is subject to risks and you can lose money on your investment in an ARK ETF. There can be no assurance that the ARK ETFs will achieve their investment objectives. The ARK ETFs’ portfolios are more volatile than broad market averages. The ARK ETFs also have specific risks, which are described in the ARK ETFs’ prospectuses.

Shares of the ARK ETFs may be bought or sold across the day at their market price on the exchange on which they are listed. The market price of an ARK ETF’s shares may be at, above or below the ARK ETF’s net asset value (“NAV”) and will fluctuate with switches in the NAV as well as supply and request in the market for the shares. The market price of ARK ETF shares may differ significantly from their NAV during periods of market volatility. Shares of the ARK ETFs may only be redeemed directly with the ARK ETFs at NAV by Authorized Participants, in very large creation units. There can be no assure that an active trading market for ARK ETF shares will develop or be maintained, or that their listing will proceed or remain unchanged. Buying or selling ARK ETF shares on an exchange may require the payment of brokerage commissions and frequent trading may incur brokerage costs that detract significantly from investment comebacks. Not FDIC Insured – No Bank Ensure – May Lose Value

All statements made regarding companies, securities or other financial information on this site are rigorously beliefs and points of view held by ARK Investment Management LLC and/or ARK ETF Trust and are subject to switch without notice. Certain information on this site was obtained from sources that ARK believes to be reliable; however, ARK does not ensure the accuracy or completeness of any information obtained from any third party. The information on this site is for informational purposes only and should not be considered as investment advice or a recommendation of any particular security, strategy or investment product. The information on this site is general in nature and should not be considered legal or tax advice. An investor should consult a financial professional, an attorney, or tax professional regarding the investor’s specific situation.

Certain hyperlinks or referenced websites on this site may, for your convenience, forward you to third parties’ websites, which generally are recognized by their top level domain name. Any descriptions of, references to, or links to other products, publications or services do not constitute an endorsement, authorization, sponsorship or affiliation with ARK with respect to any linked site or its sponsor, unless expressly stated by ARK. Any such information, products or sites have not necessarily been reviewed by ARK and are provided or maintained by third parties over whom ARK exercises no control. ARK expressly disclaims any responsibility for the content, the accuracy of the information, and/or the quality of products or services provided by or advertised on these third-party sites. ARK reserves the right to terminate any hyperlink or hyperlinking program at any time.

ARK Investment Management LLC is the investment adviser to the ARK ETFs.

Foreside Fund Services, LLC, distributor.

© 2017. ARK ETF Trust. No part of this material may be reproduced in any form, or referred to in any other publication, without express written permission.

Related video:

Analyzing Ethereum, Bitcoin, and one thousand two hundred other Cryptocurrencies using PostgreSQL

Analyzing Ethereum, Bitcoin, and 1200+ other Cryptocurrencies using PostgreSQL

Cryptocurrencies are fueling a modern day gold rush. Can data help us better understand this evolving market?

Update: Thank you everyone for making this #1 on Hacker News!

Lately it seems like money has been growing on trees.

We live in the age of digital currencies, with cryptocurrencies birthed within the decade. Yet already, there are more than a thousand cryptocurrencies in the market and an initial coin suggesting (ICO) almost daily.

As we embrace this fresh, proliferous market, it’s significant that we attempt to understand what’s going on. There are many risks to observe at both the micro-level (e.g., private investments) and macro-level (e.g., prevention of market crashes and major loss of capital). That’s where we come in.

We’re data people. Specifically, we’re the developers of TimescaleDB, a fresh open source time-series database built up from PostgreSQL. And we thought it would be insightful (and joy) to analyze the cryptocurrency market using PostgreSQL and TimescaleDB (plus R for data visualization).

For this analysis*, we looked at historical OHLCV price data on over one thousand two hundred cryptocurrencies (as of 6/26/2017; courtesy of CryptoCompare). While our current dataset represents only a daily record of rates, TimescaleDB scales lightly to much finer-grained historical data. With the constant influx of fresh coins and exchanges, TimescaleDB can provide a reliable foundation for time-series data in the cryptocurrency market.

Here’s what you should take away from this post:

  • Several high-level insights into the cryptocurrency market
  • A better understanding of how TimescaleDB + PostgreSQL make time-series data analysis lighter
  • Instructions on how to explosion this dataset yourself and draw your own insights (and perhaps find your own arbitrage opportunities!)

So if you had invested $100 in Bitcoin seven years ago, it would be worth…

Let’s commence with some good old-fashioned FOMO. If you know anything about cryptocurrencies, you’ve most likely heard of Bitcoin, the “granddaddy” of all cryptocurrencies. Turns out that if you had invested $100 in Bitcoin in July 2010, it would be worth over $Five,000,000 today.

Bitcoin has had a pretty nice run since then (albeit taking a puny dip recently):

Using PostgreSQL, we’ve queried BTC’s prices at 2-week intervals, analyzing the rates for USD exchanges. (Note that “time_bucket” and “last” in this query are special TimescaleDB time-series data analysis functions not in PostgreSQL.)

But hopefully you didn’t buy in February 2014…

It hasn’t exactly been a slick rail for BTC. Let’s hone in on the day-by-day volatility of BTC. Here we calculate daily comes back using the power of PostgreSQL window functions:

As a relatively fresh market, bitcoin prices are notably subject to volatile fluctuations. While a constant increase in price marks the success of BTC, the highest spike occurred in early 2014. If we zoom in on 2014, we notice that the hop occurred specifically inbetween February and March of 2014. For those who invested at the peak of this market, the price soon stabilized, forcing investors who bought then to hold for a long time to see comebacks.

Goodbye China, hello Japan

The cryptocurrency market is global. When looking at trade volumes by currency, we noticed something interesting:

The year two thousand fourteen eyed a minor hop for Bitcoin rates in China, presumably caused by the devaluation of the yuan and weakening domestic stock market. This was followed by a subsequent boom in two thousand sixteen and early 2017, as Chinese volume predominated Bitcoin trades.

Within a few months, the volumes dropped dramatically.

Why? This is where we had to step out of the numbers and do some old-fashioned research. (And what we found shows how you can’t just rely on quantitative data when attempting to understand this market.)

In early two thousand seventeen the People’s Bank of China began reinforcing regulations and legal liabilities for risky cryptocurrency exchanges. By February, two of the largest Chinese exchanges (OKCoin and Huobi.com) had suspended withdrawals and by mid-2017, Chinese transactions had dried up. From there, Japan became the leader in bitcoin transactions by volume, even going so far as to recognizing bitcoin as legal currency in April 2017.

Now, if you had invested $100 in ETH in January 2017….

Don’t worry if you didn’t hop onto the Bitcoin train in 2010. As volatile as Bitcoin has been, some would argue that Ethereum has been a crazier rail (and the latest “correction” shows it). Let’s look at the Ethereum price over time in Bitcoin (as it’s normally quoted):

But as we know, Bitcoin itself has been fairly volatile, which renders the above chart less useful. So let’s look at ETH prices in fiat currencies, using each day’s BTC to fiat exchange rates. (Taking advantage of Postgres JOINs and some fancy filters):

In its very first year, ETH surpassed any yearly BTC growth rate in all of BTC history — a hefty 530% surge in average closing price from the previous year marked a good embark. Cumulatively, the growth has since fallen to 200% going from two thousand sixteen to 2017, tho’ still an impressively high rate for any other asset. And within the last half year, ETH prices have enlargened by 3000%. So, if you had invested $100 in ETH in January two thousand seventeen (less than seven months ago), it would be worth over $Trio,000 today.

Projecting the price of ETH in these stable currencies (USD, EUR, CNY), it shows up that the trend lines remain consistent inbetween the three fiat monies. A clear progression is apparent in the steep uprise within the last six months and trends reflect a massive growth for the coin when quoted in all currencies, except BTC. Relative to the fiat charts, the ETH/BTC chart is fairly unstable due to the fluctuating price of BTC over the years. As a result, the representation of ETH by BTC price inflates the variability of ETH. Clearly BTC is still too immature to be considered a base currency.

What about the one thousand two hundred other cryptocurrencies??

With that brief examination of BTC and ETH trends, hopefully you have more context into the hectic world of cryptocurrencies. So what do we do with the other one thousand two hundred cryptocurrencies?

Well very first, let’s use our dataset to trace the lineage of these cryptocurrencies:

(Disclaimer: our dataset represents when we very first have recorded data, which may not necessarily correspond to the ICO.)

It’s an evolving market. And one with no clear ceiling, as we can see when we query the number of fresh cryptocurrencies by day. Above are just the most latest twenty records, demonstrating how many fresh currencies amass each week.

Here’s a look at that same day, but counting the number of fresh currencies with data each day:

When we query each of the currencies by their very first set of data (to track its “age”), it’s clear that the market is not simply for investors, but also for creators of these digital assets. Most recently, a flood of fresh coins entered our dataset during May 25–28, amounting to over three hundred fresh cryptocurrency records in less than a week. (Of course, these dates reflect when our data source very first had price data for the currencies, which may not correspond to the ICO.)

Who’s at the head of the cryptocurrency long tail?

There are so many cryptocurrencies that it becomes hard to separate the good ones from the noise. How do we identify which ones worth focusing on? Here’s one metric: total trade volume over the past week.

Quick note on what this query is doing: The BTC and crypto-currency data lives in separate tables. So we have to UNION the two queries. Also, as we established earlier, we want to quote volumes in a fiat currency (e.g., USD) and not BTC. So the 2nd half of the query joins with the BTC table to convert BTC to USD.

Top cryptocurrencies (measuring by transaction volume) are (not remarkably) Bitcoin and Ethereum. But after that, seems like Litecoin (LTC), Ripple (XRP), and Ethereum Classic (ETC) are not far off. As a five-year old coin, Litecoin is almost identical to Bitcoin and is often considered a key player in the market. Meantime, Ripple targets a more specific audience as a banking coin in the global commerce arena, also displaying promise as a progressively superior coin. Interestingly in the top five for our query, both ETH and ETC make appearances, suggesting a major shift towards Ethereum in the market.

What are the most profitable cryptocurrencies?

Another way to sift through the long tail of cryptocurrencies is by profitability (e.g., as measured by total daily come back). Our data contains a set of prices for over one thousand two hundred cryptocurrencies. If we hone in on the highest increase in rate by day, we can see which cryptocurrencies lead the daily market.

Here we identify the cryptocurrency with the highest total daily come back, by day, going rearwards in time. (To do that, we again use a window function to calculate daily comebacks, and then use the TimescaleDB last function to find the cryptocurrency with the highest come back for that day.)

Our output for the last three months shows a numeric lead by AMIS (168x on 6/15), which emerges as the cryptocurrency with the top increase for fifteen distinct days. However, if we look more closely at AMIS’ rates, we realize that this high increase is also due to high fluctuation rates: AMIS tends to drop back to a closing price of zero after each increase.

Likewise, the cryptocurrency YOVI shows up three times in our list of daily leads but has a similarly unreliable trend like AMIS:

While both trends are rather unstable, they display more promise than ETH’s down-sloping very first year (2015):

(Repeat Disclaimer: TimescaleDB does not endorse any of these cryptocurrencies and is not liable for investments that you make / losses you may incur.)

So money grows on… Merkle Trees?

Here we drew some conclusions from public cryptocurrency datasets, highlighting the power of both PostgreSQL and TimescaleDB. Yet we should recall that the cryptocurrency market will inevitably be different next month, week, even day.

If you’d like to learn more about TimescaleDB, and how it makes PostgreSQL scalable for time-series data, we’d recommend this technical post.

Thanks for reading our post! If you found it helpful, be sure to recommend or share.

If you have any go after up questions or comments, we welcome them via email or Twitter.

And if you’d like to learn more about TimescaleDB, please check out our GitHub (starlets appreciated), and let us know how we can help.

Analyzing Ethereum, Bitcoin, and one thousand two hundred other Cryptocurrencies using PostgreSQL

Analyzing Ethereum, Bitcoin, and 1200+ other Cryptocurrencies using PostgreSQL

Cryptocurrencies are fueling a modern day gold rush. Can data help us better understand this evolving market?

Update: Thank you everyone for making this #1 on Hacker News!

Lately it seems like money has been growing on trees.

We live in the age of digital currencies, with cryptocurrencies birthed within the decade. Yet already, there are more than a thousand cryptocurrencies in the market and an initial coin suggesting (ICO) almost daily.

As we embrace this fresh, proliferous market, it’s significant that we attempt to understand what’s going on. There are many risks to observe at both the micro-level (e.g., private investments) and macro-level (e.g., prevention of market crashes and major loss of capital). That’s where we come in.

We’re data people. Specifically, we’re the developers of TimescaleDB, a fresh open source time-series database built up from PostgreSQL. And we thought it would be insightful (and joy) to analyze the cryptocurrency market using PostgreSQL and TimescaleDB (plus R for data visualization).

For this analysis*, we looked at historical OHLCV price data on over one thousand two hundred cryptocurrencies (as of 6/26/2017; courtesy of CryptoCompare). While our current dataset represents only a daily record of rates, TimescaleDB scales lightly to much finer-grained historical data. With the constant influx of fresh coins and exchanges, TimescaleDB can provide a reliable foundation for time-series data in the cryptocurrency market.

Here’s what you should take away from this post:

  • Several high-level insights into the cryptocurrency market
  • A better understanding of how TimescaleDB + PostgreSQL make time-series data analysis lighter
  • Instructions on how to explosion this dataset yourself and draw your own insights (and perhaps find your own arbitrage opportunities!)

So if you had invested $100 in Bitcoin seven years ago, it would be worth…

Let’s embark with some good old-fashioned FOMO. If you know anything about cryptocurrencies, you’ve most likely heard of Bitcoin, the “granddaddy” of all cryptocurrencies. Turns out that if you had invested $100 in Bitcoin in July 2010, it would be worth over $Five,000,000 today.

Bitcoin has had a pretty nice run since then (albeit taking a puny dip recently):

Using PostgreSQL, we’ve queried BTC’s prices at 2-week intervals, analyzing the rates for USD exchanges. (Note that “time_bucket” and “last” in this query are special TimescaleDB time-series data analysis functions not in PostgreSQL.)

But hopefully you didn’t buy in February 2014…

It hasn’t exactly been a sleek rail for BTC. Let’s hone in on the day-by-day volatility of BTC. Here we calculate daily comebacks using the power of PostgreSQL window functions:

As a relatively fresh market, bitcoin prices are notably subject to volatile fluctuations. While a constant increase in price marks the success of BTC, the highest spike occurred in early 2014. If we zoom in on 2014, we notice that the hop occurred specifically inbetween February and March of 2014. For those who invested at the peak of this market, the price soon stabilized, forcing investors who bought then to hold for a long time to see comes back.

Goodbye China, hello Japan

The cryptocurrency market is global. When looking at trade volumes by currency, we noticed something interesting:

The year two thousand fourteen eyed a minor hop for Bitcoin rates in China, presumably caused by the devaluation of the yuan and weakening domestic stock market. This was followed by a subsequent boom in two thousand sixteen and early 2017, as Chinese volume predominated Bitcoin trades.

Within a few months, the volumes dropped dramatically.

Why? This is where we had to step out of the numbers and do some old-fashioned research. (And what we found shows how you can’t just rely on quantitative data when attempting to understand this market.)

In early two thousand seventeen the People’s Bank of China began reinforcing regulations and legal liabilities for risky cryptocurrency exchanges. By February, two of the largest Chinese exchanges (OKCoin and Huobi.com) had suspended withdrawals and by mid-2017, Chinese transactions had dried up. From there, Japan became the leader in bitcoin transactions by volume, even going so far as to recognizing bitcoin as legal currency in April 2017.

Now, if you had invested $100 in ETH in January 2017….

Don’t worry if you didn’t hop onto the Bitcoin train in 2010. As volatile as Bitcoin has been, some would argue that Ethereum has been a crazier rail (and the latest “correction” shows it). Let’s look at the Ethereum price over time in Bitcoin (as it’s normally quoted):

But as we know, Bitcoin itself has been fairly volatile, which renders the above chart less useful. So let’s look at ETH prices in fiat currencies, using each day’s BTC to fiat exchange rates. (Taking advantage of Postgres JOINs and some fancy filters):

In its very first year, ETH surpassed any yearly BTC growth rate in all of BTC history — a hefty 530% surge in average closing price from the previous year marked a good begin. Cumulatively, the growth has since fallen to 200% going from two thousand sixteen to 2017, however still an impressively high rate for any other asset. And within the last half year, ETH prices have enlargened by 3000%. So, if you had invested $100 in ETH in January two thousand seventeen (less than seven months ago), it would be worth over $Three,000 today.

Projecting the price of ETH in these stable currencies (USD, EUR, CNY), it shows up that the trend lines remain consistent inbetween the three fiat monies. A clear progression is apparent in the steep uprise within the last six months and trends reflect a massive growth for the coin when quoted in all currencies, except BTC. Relative to the fiat charts, the ETH/BTC chart is fairly unstable due to the fluctuating price of BTC over the years. As a result, the representation of ETH by BTC price inflates the variability of ETH. Clearly BTC is still too immature to be considered a base currency.

What about the one thousand two hundred other cryptocurrencies??

With that brief examination of BTC and ETH trends, hopefully you have more context into the hectic world of cryptocurrencies. So what do we do with the other one thousand two hundred cryptocurrencies?

Well very first, let’s use our dataset to trace the lineage of these cryptocurrencies:

(Disclaimer: our dataset represents when we very first have recorded data, which may not necessarily correspond to the ICO.)

It’s an evolving market. And one with no clear ceiling, as we can see when we query the number of fresh cryptocurrencies by day. Above are just the most latest twenty records, showcasing how many fresh currencies amass each week.

Here’s a look at that same day, but counting the number of fresh currencies with data each day:

When we query each of the currencies by their very first set of data (to track its “age”), it’s clear that the market is not simply for investors, but also for creators of these digital assets. Most recently, a flood of fresh coins entered our dataset during May 25–28, amounting to over three hundred fresh cryptocurrency records in less than a week. (Of course, these dates reflect when our data source very first had price data for the currencies, which may not correspond to the ICO.)

Who’s at the head of the cryptocurrency long tail?

There are so many cryptocurrencies that it becomes hard to separate the good ones from the noise. How do we identify which ones worth focusing on? Here’s one metric: total trade volume over the past week.

Quick note on what this query is doing: The BTC and crypto-currency data lives in separate tables. So we have to UNION the two queries. Also, as we established earlier, we want to quote volumes in a fiat currency (e.g., USD) and not BTC. So the 2nd half of the query joins with the BTC table to convert BTC to USD.

Top cryptocurrencies (measuring by transaction volume) are (not remarkably) Bitcoin and Ethereum. But after that, seems like Litecoin (LTC), Ripple (XRP), and Ethereum Classic (ETC) are not far off. As a five-year old coin, Litecoin is almost identical to Bitcoin and is often considered a key player in the market. Meantime, Ripple targets a more specific audience as a banking coin in the global commerce arena, also demonstrating promise as a progressively superior coin. Interestingly in the top five for our query, both ETH and ETC make appearances, suggesting a major shift towards Ethereum in the market.

What are the most profitable cryptocurrencies?

Another way to sift through the long tail of cryptocurrencies is by profitability (e.g., as measured by total daily come back). Our data contains a set of prices for over one thousand two hundred cryptocurrencies. If we hone in on the highest increase in rate by day, we can see which cryptocurrencies lead the daily market.

Here we identify the cryptocurrency with the highest total daily come back, by day, going rearwards in time. (To do that, we again use a window function to calculate daily comebacks, and then use the TimescaleDB last function to find the cryptocurrency with the highest come back for that day.)

Our output for the last three months shows a numeric lead by AMIS (168x on 6/15), which shows up as the cryptocurrency with the top increase for fifteen distinct days. However, if we look more closely at AMIS’ rates, we realize that this high increase is also due to high fluctuation rates: AMIS tends to drop back to a closing price of zero after each increase.

Likewise, the cryptocurrency YOVI shows up three times in our list of daily leads but has a similarly unreliable trend like AMIS:

While both trends are rather unstable, they showcase more promise than ETH’s down-sloping very first year (2015):

(Repeat Disclaimer: TimescaleDB does not endorse any of these cryptocurrencies and is not liable for investments that you make / losses you may incur.)

So money grows on… Merkle Trees?

Here we drew some conclusions from public cryptocurrency datasets, highlighting the power of both PostgreSQL and TimescaleDB. Yet we should reminisce that the cryptocurrency market will inevitably be different next month, week, even day.

If you’d like to learn more about TimescaleDB, and how it makes PostgreSQL scalable for time-series data, we’d recommend this technical post.

Thanks for reading our post! If you found it helpful, be sure to recommend or share.

If you have any go after up questions or comments, we welcome them via email or Twitter.

And if you’d like to learn more about TimescaleDB, please check out our GitHub (starlets appreciated), and let us know how we can help.

Analyzing Ethereum, Bitcoin, and one thousand two hundred other Cryptocurrencies using PostgreSQL

Analyzing Ethereum, Bitcoin, and 1200+ other Cryptocurrencies using PostgreSQL

Cryptocurrencies are fueling a modern day gold rush. Can data help us better understand this evolving market?

Update: Thank you everyone for making this #1 on Hacker News!

Lately it seems like money has been growing on trees.

We live in the age of digital currencies, with cryptocurrencies birthed within the decade. Yet already, there are more than a thousand cryptocurrencies in the market and an initial coin suggesting (ICO) almost daily.

As we embrace this fresh, proliferous market, it’s significant that we attempt to understand what’s going on. There are many risks to observe at both the micro-level (e.g., individual investments) and macro-level (e.g., prevention of market crashes and major loss of capital). That’s where we come in.

We’re data people. Specifically, we’re the developers of TimescaleDB, a fresh open source time-series database built up from PostgreSQL. And we thought it would be insightful (and joy) to analyze the cryptocurrency market using PostgreSQL and TimescaleDB (plus R for data visualization).

For this analysis*, we looked at historical OHLCV price data on over one thousand two hundred cryptocurrencies (as of 6/26/2017; courtesy of CryptoCompare). While our current dataset represents only a daily record of rates, TimescaleDB scales lightly to much finer-grained historical data. With the constant influx of fresh coins and exchanges, TimescaleDB can provide a reliable foundation for time-series data in the cryptocurrency market.

Here’s what you should take away from this post:

  • Several high-level insights into the cryptocurrency market
  • A better understanding of how TimescaleDB + PostgreSQL make time-series data analysis lighter
  • Instructions on how to geyser this dataset yourself and draw your own insights (and perhaps find your own arbitrage opportunities!)

So if you had invested $100 in Bitcoin seven years ago, it would be worth…

Let’s commence with some good old-fashioned FOMO. If you know anything about cryptocurrencies, you’ve most likely heard of Bitcoin, the “granddaddy” of all cryptocurrencies. Turns out that if you had invested $100 in Bitcoin in July 2010, it would be worth over $Five,000,000 today.

Bitcoin has had a pretty nice run since then (albeit taking a petite dip recently):

Using PostgreSQL, we’ve queried BTC’s prices at 2-week intervals, analyzing the rates for USD exchanges. (Note that “time_bucket” and “last” in this query are special TimescaleDB time-series data analysis functions not in PostgreSQL.)

But hopefully you didn’t buy in February 2014…

It hasn’t exactly been a slick rail for BTC. Let’s hone in on the day-by-day volatility of BTC. Here we calculate daily comebacks using the power of PostgreSQL window functions:

As a relatively fresh market, bitcoin prices are notably subject to volatile fluctuations. While a sustained increase in price marks the success of BTC, the highest spike occurred in early 2014. If we zoom in on 2014, we notice that the leap occurred specifically inbetween February and March of 2014. For those who invested at the peak of this market, the price soon stabilized, forcing investors who bought then to hold for a long time to see comebacks.

Goodbye China, hello Japan

The cryptocurrency market is global. When looking at trade volumes by currency, we noticed something interesting:

The year two thousand fourteen eyed a minor leap for Bitcoin rates in China, presumably caused by the devaluation of the yuan and weakening domestic stock market. This was followed by a subsequent boom in two thousand sixteen and early 2017, as Chinese volume predominated Bitcoin trades.

Within a few months, the volumes dropped dramatically.

Why? This is where we had to step out of the numbers and do some old-fashioned research. (And what we found shows how you can’t just rely on quantitative data when attempting to understand this market.)

In early two thousand seventeen the People’s Bank of China began reinforcing regulations and legal liabilities for risky cryptocurrency exchanges. By February, two of the largest Chinese exchanges (OKCoin and Huobi.com) had suspended withdrawals and by mid-2017, Chinese transactions had dried up. From there, Japan became the leader in bitcoin transactions by volume, even going so far as to recognizing bitcoin as legal currency in April 2017.

Now, if you had invested $100 in ETH in January 2017….

Don’t worry if you didn’t hop onto the Bitcoin train in 2010. As volatile as Bitcoin has been, some would argue that Ethereum has been a crazier rail (and the latest “correction” shows it). Let’s look at the Ethereum price over time in Bitcoin (as it’s normally quoted):

But as we know, Bitcoin itself has been fairly volatile, which renders the above chart less useful. So let’s look at ETH prices in fiat currencies, using each day’s BTC to fiat exchange rates. (Taking advantage of Postgres JOINs and some fancy filters):

In its very first year, ETH surpassed any yearly BTC growth rate in all of BTC history — a hefty 530% surge in average closing price from the previous year marked a good begin. Cumulatively, the growth has since fallen to 200% going from two thousand sixteen to 2017, tho’ still an impressively high rate for any other asset. And within the last half year, ETH prices have enhanced by 3000%. So, if you had invested $100 in ETH in January two thousand seventeen (less than seven months ago), it would be worth over $Trio,000 today.

Projecting the price of ETH in these stable currencies (USD, EUR, CNY), it emerges that the trend lines remain consistent inbetween the three fiat monies. A clear progression is apparent in the steep uprise within the last six months and trends reflect a massive growth for the coin when quoted in all currencies, except BTC. Relative to the fiat charts, the ETH/BTC chart is fairly unstable due to the fluctuating price of BTC over the years. As a result, the representation of ETH by BTC price inflates the variability of ETH. Clearly BTC is still too immature to be considered a base currency.

What about the one thousand two hundred other cryptocurrencies??

With that brief examination of BTC and ETH trends, hopefully you have more context into the hectic world of cryptocurrencies. So what do we do with the other one thousand two hundred cryptocurrencies?

Well very first, let’s use our dataset to trace the lineage of these cryptocurrencies:

(Disclaimer: our dataset represents when we very first have recorded data, which may not necessarily correspond to the ICO.)

It’s an evolving market. And one with no clear ceiling, as we can see when we query the number of fresh cryptocurrencies by day. Above are just the most latest twenty records, displaying how many fresh currencies amass each week.

Here’s a look at that same day, but counting the number of fresh currencies with data each day:

When we query each of the currencies by their very first set of data (to track its “age”), it’s clear that the market is not simply for investors, but also for creators of these digital assets. Most recently, a flood of fresh coins entered our dataset during May 25–28, amounting to over three hundred fresh cryptocurrency records in less than a week. (Of course, these dates reflect when our data source very first had price data for the currencies, which may not correspond to the ICO.)

Who’s at the head of the cryptocurrency long tail?

There are so many cryptocurrencies that it becomes hard to separate the good ones from the noise. How do we identify which ones worth focusing on? Here’s one metric: total trade volume over the past week.

Quick note on what this query is doing: The BTC and crypto-currency data lives in separate tables. So we have to UNION the two queries. Also, as we established earlier, we want to quote volumes in a fiat currency (e.g., USD) and not BTC. So the 2nd half of the query joins with the BTC table to convert BTC to USD.

Top cryptocurrencies (measuring by transaction volume) are (not remarkably) Bitcoin and Ethereum. But after that, seems like Litecoin (LTC), Ripple (XRP), and Ethereum Classic (ETC) are not far off. As a five-year old coin, Litecoin is almost identical to Bitcoin and is often considered a key player in the market. Meantime, Ripple targets a more specific audience as a banking coin in the global commerce arena, also demonstrating promise as a progressively superior coin. Interestingly in the top five for our query, both ETH and ETC make appearances, suggesting a major shift towards Ethereum in the market.

What are the most profitable cryptocurrencies?

Another way to sift through the long tail of cryptocurrencies is by profitability (e.g., as measured by total daily comeback). Our data contains a set of prices for over one thousand two hundred cryptocurrencies. If we hone in on the highest increase in rate by day, we can see which cryptocurrencies lead the daily market.

Here we identify the cryptocurrency with the highest total daily comeback, by day, going rearwards in time. (To do that, we again use a window function to calculate daily comes back, and then use the TimescaleDB last function to find the cryptocurrency with the highest come back for that day.)

Our output for the last three months shows a numeric lead by AMIS (168x on 6/15), which shows up as the cryptocurrency with the top increase for fifteen distinct days. However, if we look more closely at AMIS’ rates, we realize that this high increase is also due to high fluctuation rates: AMIS tends to drop back to a closing price of zero after each increase.

Likewise, the cryptocurrency YOVI shows up three times in our list of daily leads but has a similarly unreliable trend like AMIS:

While both trends are rather unstable, they display more promise than ETH’s down-sloping very first year (2015):

(Repeat Disclaimer: TimescaleDB does not endorse any of these cryptocurrencies and is not liable for investments that you make / losses you may incur.)

So money grows on… Merkle Trees?

Here we drew some conclusions from public cryptocurrency datasets, highlighting the power of both PostgreSQL and TimescaleDB. Yet we should recall that the cryptocurrency market will inevitably be different next month, week, even day.

If you’d like to learn more about TimescaleDB, and how it makes PostgreSQL scalable for time-series data, we’d recommend this technical post.

Thanks for reading our post! If you found it helpful, be sure to recommend or share.

If you have any go after up questions or comments, we welcome them via email or Twitter.

And if you’d like to learn more about TimescaleDB, please check out our GitHub (starlets appreciated), and let us know how we can help.

Analyzing Ethereum, Bitcoin, and one thousand two hundred other Cryptocurrencies using PostgreSQL

Analyzing Ethereum, Bitcoin, and 1200+ other Cryptocurrencies using PostgreSQL

Cryptocurrencies are fueling a modern day gold rush. Can data help us better understand this evolving market?

Update: Thank you everyone for making this #1 on Hacker News!

Lately it seems like money has been growing on trees.

We live in the age of digital currencies, with cryptocurrencies birthed within the decade. Yet already, there are more than a thousand cryptocurrencies in the market and an initial coin suggesting (ICO) almost daily.

As we embrace this fresh, proliferous market, it’s significant that we attempt to understand what’s going on. There are many risks to observe at both the micro-level (e.g., individual investments) and macro-level (e.g., prevention of market crashes and major loss of capital). That’s where we come in.

We’re data people. Specifically, we’re the developers of TimescaleDB, a fresh open source time-series database built up from PostgreSQL. And we thought it would be insightful (and joy) to analyze the cryptocurrency market using PostgreSQL and TimescaleDB (plus R for data visualization).

For this analysis*, we looked at historical OHLCV price data on over one thousand two hundred cryptocurrencies (as of 6/26/2017; courtesy of CryptoCompare). While our current dataset represents only a daily record of rates, TimescaleDB scales lightly to much finer-grained historical data. With the constant influx of fresh coins and exchanges, TimescaleDB can provide a reliable foundation for time-series data in the cryptocurrency market.

Here’s what you should take away from this post:

  • Several high-level insights into the cryptocurrency market
  • A better understanding of how TimescaleDB + PostgreSQL make time-series data analysis lighter
  • Instructions on how to flow this dataset yourself and draw your own insights (and perhaps find your own arbitrage opportunities!)

So if you had invested $100 in Bitcoin seven years ago, it would be worth…

Let’s embark with some good old-fashioned FOMO. If you know anything about cryptocurrencies, you’ve very likely heard of Bitcoin, the “granddaddy” of all cryptocurrencies. Turns out that if you had invested $100 in Bitcoin in July 2010, it would be worth over $Five,000,000 today.

Bitcoin has had a pretty nice run since then (albeit taking a petite dip recently):

Using PostgreSQL, we’ve queried BTC’s prices at 2-week intervals, analyzing the rates for USD exchanges. (Note that “time_bucket” and “last” in this query are special TimescaleDB time-series data analysis functions not in PostgreSQL.)

But hopefully you didn’t buy in February 2014…

It hasn’t exactly been a sleek rail for BTC. Let’s hone in on the day-by-day volatility of BTC. Here we calculate daily comebacks using the power of PostgreSQL window functions:

As a relatively fresh market, bitcoin prices are notably subject to volatile fluctuations. While a sustained increase in price marks the success of BTC, the highest spike occurred in early 2014. If we zoom in on 2014, we notice that the hop occurred specifically inbetween February and March of 2014. For those who invested at the peak of this market, the price soon stabilized, forcing investors who bought then to hold for a long time to see comes back.

Goodbye China, hello Japan

The cryptocurrency market is global. When looking at trade volumes by currency, we noticed something interesting:

The year two thousand fourteen witnessed a minor leap for Bitcoin rates in China, presumably caused by the devaluation of the yuan and weakening domestic stock market. This was followed by a subsequent boom in two thousand sixteen and early 2017, as Chinese volume predominated Bitcoin trades.

Within a few months, the volumes dropped dramatically.

Why? This is where we had to step out of the numbers and do some old-fashioned research. (And what we found shows how you can’t just rely on quantitative data when attempting to understand this market.)

In early two thousand seventeen the People’s Bank of China began reinforcing regulations and legal liabilities for risky cryptocurrency exchanges. By February, two of the largest Chinese exchanges (OKCoin and Huobi.com) had suspended withdrawals and by mid-2017, Chinese transactions had dried up. From there, Japan became the leader in bitcoin transactions by volume, even going so far as to recognizing bitcoin as legal currency in April 2017.

Now, if you had invested $100 in ETH in January 2017….

Don’t worry if you didn’t hop onto the Bitcoin train in 2010. As volatile as Bitcoin has been, some would argue that Ethereum has been a crazier rail (and the latest “correction” shows it). Let’s look at the Ethereum price over time in Bitcoin (as it’s normally quoted):

But as we know, Bitcoin itself has been fairly volatile, which renders the above chart less useful. So let’s look at ETH prices in fiat currencies, using each day’s BTC to fiat exchange rates. (Taking advantage of Postgres JOINs and some fancy filters):

In its very first year, ETH surpassed any yearly BTC growth rate in all of BTC history — a hefty 530% surge in average closing price from the previous year marked a good embark. Cumulatively, the growth has since fallen to 200% going from two thousand sixteen to 2017, tho’ still an impressively high rate for any other asset. And within the last half year, ETH prices have enlargened by 3000%. So, if you had invested $100 in ETH in January two thousand seventeen (less than seven months ago), it would be worth over $Trio,000 today.

Projecting the price of ETH in these stable currencies (USD, EUR, CNY), it shows up that the trend lines remain consistent inbetween the three fiat monies. A clear progression is apparent in the steep uprise within the last six months and trends reflect a massive growth for the coin when quoted in all currencies, except BTC. Relative to the fiat charts, the ETH/BTC chart is fairly unstable due to the fluctuating price of BTC over the years. As a result, the representation of ETH by BTC price inflates the variability of ETH. Clearly BTC is still too immature to be considered a base currency.

What about the one thousand two hundred other cryptocurrencies??

With that brief examination of BTC and ETH trends, hopefully you have more context into the hectic world of cryptocurrencies. So what do we do with the other one thousand two hundred cryptocurrencies?

Well very first, let’s use our dataset to trace the lineage of these cryptocurrencies:

(Disclaimer: our dataset represents when we very first have recorded data, which may not necessarily correspond to the ICO.)

It’s an evolving market. And one with no clear ceiling, as we can see when we query the number of fresh cryptocurrencies by day. Above are just the most latest twenty records, demonstrating how many fresh currencies amass each week.

Here’s a look at that same day, but counting the number of fresh currencies with data each day:

When we query each of the currencies by their very first set of data (to track its “age”), it’s clear that the market is not simply for investors, but also for creators of these digital assets. Most recently, a flood of fresh coins entered our dataset during May 25–28, amounting to over three hundred fresh cryptocurrency records in less than a week. (Of course, these dates reflect when our data source very first had price data for the currencies, which may not correspond to the ICO.)

Who’s at the head of the cryptocurrency long tail?

There are so many cryptocurrencies that it becomes hard to separate the good ones from the noise. How do we identify which ones worth focusing on? Here’s one metric: total trade volume over the past week.

Quick note on what this query is doing: The BTC and crypto-currency data lives in separate tables. So we have to UNION the two queries. Also, as we established earlier, we want to quote volumes in a fiat currency (e.g., USD) and not BTC. So the 2nd half of the query joins with the BTC table to convert BTC to USD.

Top cryptocurrencies (measuring by transaction volume) are (not remarkably) Bitcoin and Ethereum. But after that, seems like Litecoin (LTC), Ripple (XRP), and Ethereum Classic (ETC) are not far off. As a five-year old coin, Litecoin is almost identical to Bitcoin and is often considered a key player in the market. Meantime, Ripple targets a more specific audience as a banking coin in the global commerce arena, also displaying promise as a progressively superior coin. Interestingly in the top five for our query, both ETH and ETC make appearances, suggesting a major shift towards Ethereum in the market.

What are the most profitable cryptocurrencies?

Another way to sift through the long tail of cryptocurrencies is by profitability (e.g., as measured by total daily come back). Our data contains a set of prices for over one thousand two hundred cryptocurrencies. If we hone in on the highest increase in rate by day, we can see which cryptocurrencies lead the daily market.

Here we identify the cryptocurrency with the highest total daily come back, by day, going rearwards in time. (To do that, we again use a window function to calculate daily comebacks, and then use the TimescaleDB last function to find the cryptocurrency with the highest come back for that day.)

Our output for the last three months shows a numeric lead by AMIS (168x on 6/15), which emerges as the cryptocurrency with the top increase for fifteen distinct days. However, if we look more closely at AMIS’ rates, we realize that this high increase is also due to high fluctuation rates: AMIS tends to drop back to a closing price of zero after each increase.

Likewise, the cryptocurrency YOVI shows up three times in our list of daily leads but has a similarly unreliable trend like AMIS:

While both trends are rather unstable, they demonstrate more promise than ETH’s down-sloping very first year (2015):

(Repeat Disclaimer: TimescaleDB does not endorse any of these cryptocurrencies and is not liable for investments that you make / losses you may incur.)

So money grows on… Merkle Trees?

Here we drew some conclusions from public cryptocurrency datasets, highlighting the power of both PostgreSQL and TimescaleDB. Yet we should recall that the cryptocurrency market will inevitably be different next month, week, even day.

If you’d like to learn more about TimescaleDB, and how it makes PostgreSQL scalable for time-series data, we’d recommend this technical post.

Thanks for reading our post! If you found it helpful, be sure to recommend or share.

If you have any go after up questions or comments, we welcome them via email or Twitter.

And if you’d like to learn more about TimescaleDB, please check out our GitHub (starlets appreciated), and let us know how we can help.

Related video:

A History of Bitcoin – Smith Crown

A History of Bitcoin

This article is a brief history of Bitcoin. Our purpose is to give the reader a reliable abbreviated overview of Bitcoin. We will reference places where the interested reader can learn more about specific topics or dive deeper.

The history will be structured around Bitcoin’s trade price (as a reflection of market sentiment) and page views of wikipedia (as a reflection of broader awareness).

2008/2009: Bitcoin’s birth

In November 2008, someone going by the user name ‘Satoshi Nakamoto’ released a paper to a cryptography mailing list. The 9-page paper was entitled “Bitcoin: A Peer-to-Peer Electronic Cash System“, and it laid out a vision for a distributed digital money system.

In January 2009, Satoshi Nakamoto released the very first version of the open-source bitcoin core software on SourceForge and the bitcoin protocol commenced running. Nakamoto mined the very first fifty bitcoins. The protocol was a breakthrough in cryptography, tho’ it drew on developments that had preceded it but hadn’t been combined yet.

Bitcoin ran calmly in the background—a topic of excitement and fascination for a dedicated crowd of coders but largely off the world’s radar. Discussion was distributed across different forums, and it wasn’t until the end of the year that the very first dedicated forum was established. This helped coders could more lightly coordinate with other coders as the underlying code got tweaked. By mid-2009, people other than Satoshi Nakamoto were actively contributing to the open-source codebase in Github.

The protocol was a breakthrough in cryptography, tho’ it drew on many cryptography innovations that preceded it. A community of cryptography experts and privacy advocates known as the Cypherpunks (cypher not cyber) played a key role in recognizing the technical genius of Bitcoin and understanding its implications. Many members of this community would become torchbearers later in Bitcoin’s history.

As two thousand nine ended, Bitcoin did not have a ‘trade price’ and three hundred nine people viewed the Wikipedia page.

2010: Bitcoin’s very early years

The Bitcoin ‘ecosystem’ was largely just a record of Bitcoin transactions (the blockchain), a set of online forums where users communicated and organized transactions, and the open-source software code. There were no wallet services, payment processors, or real user interface beyond actual instruction prompts and raw code. This limited involvement to a dedicated and savvy crowd who organized transactions through online forums and initiated them on the blockchain with code. For example, the very first commercial transaction took place in May 2010: a programmer in Florida spent Ten,000 BTC on a pizza.

However, beginnings of a market support system began to emerge. In early 2010, the very first exchange opened, which permitted structured trading of bitcoins. The very first “article” on bitcoin appeared on Slashdot and stoked interest beyond the initial insider cryptocurrency crowd. Users grew. In late 2010, Mt. Gox launched as the 2nd exchange and became the superior place to trade Bitcoins for a duo years.

As two thousand ten ended, the price of one Bitcoin was $.Trio and three hundred nine people viewed the Wikipedia page.

2011: Bitcoin finds niche uses and awareness grows

In 2011, Bitcoin began to mature as a digital payment system, tho’ its use was limited by the aspirations of early adopters.

The perceived anonymous nature of the digital currency made it ideal for online black markets. That year spotted the emergence of the Silk Road, an ebay for illicit goods (predominantly drugs) that used Bitcoin as a payment method. The Silk Road was one of the public’s primary introductions to Bitcoin, prompting several politicians cast the currency as a vehicle for money laundering and drugs.

Mainstream media also began covering it. Forbes, Bloomberg, and TIME all wrote articles. Politicians warned against it. Academics wrote about it. At the end of the year, CBS aired an scene of the “The Good Wife” that focused on bitcoin.

Other consumer services were also commencing to emerge. WikiLeaks began accepting Bitcoin donations. An iPad app was launched. Bitpay, a service that let merchants accept bitcoins over the phone, was founded and claimed to have one hundred merchants. More exchanges opened, letting people trade bitcoins for other currencies.

The Bitcoin code also underwent a major switch. Through 2011, Satoshi Nakamoto had overseen the maintenance of the codebase. Satoshi never called or met anyone and only communicated on forums and direct messages. In April 2011, Satoshi Nakamoto wrote his last verified email, leaving Gavin Andreson in charge of the project, and left, never to be (verifiably) seen or heard from again. Andreson quickly selected four others to share this responsibility and introduced some structured ways of updating the underlying code.

“He told myself and Gavin that he had moved on to other things and that the project was in good mitts.”

Also in 2011, the very first alternative digital currency or “altcoin”, Litecoin, launched.

The world was in an awkward time in which financial markets were doing well but workers were not. Occupy Wall Street commenced in September and soon Occupy protests had taken place in almost one thousand cities worldwide. It is effortless to see how the idea of a bankless currency could take root.

By the end of the year, the world was deeply ambivalent about the digital currency. A currency for the 21st Century that could topple banks? A contraption for laundering money and buying illicit substances?

As two thousand eleven ended, the price of one Bitcoin was $Four.60 and two thousand one hundred eighty five people viewed the Wikipedia page.

2012: Bitcoin matures

Bitcoin was railing a wave of legitimacy in many circles, and these were having conflicting effects.

The currency became a popular target for hackers and thieves. Mt. Gox had been hacked in 2011, and now more major attacks on exchanges and other databases led to millions of dollars worth of Bitcoin theft. Several Ponzi schemes ended with theft.

Black markets utilizing bitcoin as a payment method continued to operate. It’s estimated that $15 million worth of Bitcoin passed through the Silk Road this year. A popular online gambling site, Satoshi Dice, launched and flooded the bitcoin network with very puny gambling transactions (bets worth less than $.0001). This sparked a debate on how to deal with such ‘transaction dust.’

More generally, the community was feeling the impacts of having no central authority. There were no dedicated funds to support core development of the code and no sanctioned gathering places places other than online forums.

The Bitcoin Foundation was also established. Its role was to fund core development, represent the currency to governments, and conduct outreach and education. Late that year, a Bitcoin exchange Bitcoin-central.net was licensed similar to a bank in Europe.

As it garnered the attention of more governments, its legal ambiguity became more demonstrable and more awkward. People were trading it like an asset, using it like a currency, and downloading it like open-source software. Gambling and the Silk Road didn’t help. Some services commenced pulling down bitcoin out of fear of its legality.

Broadly, this is a year in which the industry also witnessed the promise of banking the unbanked with Bitcoin. Forbes runs one of the very first mainstream articles discussing Bitcoin’s use in remittance payments. WordPress embarked accepting Bitcoin, explaining that traditional payment processor limitations were preventing international bloggers from participating in the blogosphere.

As two thousand twelve ended, the price of one Bitcoin was $13.44 and two thousand eight hundred nine people viewed the Wikipedia page.

2013: The world wakes up to bitcoin

2013 was one of the most tumultuous years for Bitcoin. It had two period of incredible volatility in which people literally woke up to almost 100% price increases.

The very first occurred in early 2013. A bail-out deal inbetween the EU and Cyprus included a levy on bank accounts with sizeable sums of money, inspiring Cypriot account holders to buy bitcoin en masse. The Bitcoin price almost doubles, and Cypress sets a precedent for using Bitcoin as a means of capital flight.

Bitcoin survived one of its very first major crises of legitimacy this year: the shutting down of the Silk Road and the arrest of its founder. The government seized all assets and helped cement public association of Bitcoin with online black markets. After a quick price drop, the price quickly recovered, but Bitcoin has lived in the Silk Road’s shadow ever since.

Globally, governments began to take Bitcoin more gravely but reactions were mixed.

  • The People’s Bank of China, after originally approving Bitcoin, banned financial institutions from using it or working with customers whose businesses involve it.
  • The US Department of Homeland Security proclaimed Mt. Gox a ‘money transmitter’ (a powerfully regulated entity) and moved to seize some of its assets.
  • US Financial Crimes Enforcement Network (FINCEN) issued some of the world’s very first bitcoin regulation in the form of a guidance report for persons administering, exchanging or using virtual currency. In particular, exchanges must conform with money laundering laws and register as Money Services Businesses.
  • The US Senate held a hearing which was (to the surprise of many) open to the long-term prospects of Bitcoin.

The 2nd period of volatility occurred in November. In thirty days, the price went from just over $100 to just over $1200. Searches for bitcoin spikes. News outlets covered it. In thirty days, it went from a successfully digital currency proof-of-concept to a fresh technology in the eyes of the world. The price plummeted back down in December, but it never stayed below $200 again.

The erect of popularity led to an explosion of “altcoins”—digital currencies based on modified or different underlying protocols. Litecoin had been the very first, back in 2011, but two thousand thirteen witnessed hundreds of these fresh altcoins launch. Many turned out to be scams, but many are also still traded today.

As two thousand thirteen ended, the price of one Bitcoin was $764 and twenty six thousand three hundred fifty four people viewed the Wikipedia page.

2014: Bitcoin beyond cryptocurrencies and cryptocurrencies beyond Bitcoin

In early 2014, Bitcoin survived another major crisis of legitimacy: the closure of Mt. Gox. Mt. Gox had been the longest-running and most successful virtual currency exchange to date. It was a pole of both the bitcoin economy and the community. In February, Mt. Gox abruptly shut trading, and leaked documents display it had lost 744,000 BTC (approximately $40 million). Bitcoin naysayers had a field day on forums, and it was widely seen as a gargle to the digital currency’s capability to operate securely without any oversight or regulation.

Governments began to pass regulation this year. The wild end to two thousand thirteen woke many regulators up to the volatility of this currency. The IRS proclaimed Bitcoin to be taxed as property. The People’s Bank of China coerced Chinese banks to close the bank accounts of major Chinese exchanges, tho’ many exchanges exploited legal loopholes to keep operating. Fresh York announced its Bitlicense: a legal licensing framework for businesses that interact with Bitcoin and cryptocurrencies. This is largely decried by the cryptocurrency community. The desire of unregulated cash was quickly fading.

The currency also traveled more into the payment mainstream, and a wave of major retailers accepted the currency. Overstock, Tiger Direct, Newegg, Dell, and Microsoft all announced acceptance of Bitcoin. Near the end of the year, a subsidiary of PayPal announced it will work on integrating Bitcoin on their platform.

Another development in the world of cryptocurrencies is that many many people began imagining Bitcoin without the digital currency part: how could the underlying technology be used for other purposes?

A wave of fresh protocols emerged with applications beyond digital currency, presaging a so-called “Bitcoin Two.0” era in which people would repurpose blockchains (Bitcoin’s and others) to store all kinds of information. Some notable ones included

  • Ethereum, a platform for software that could run on a distributed network.
  • Maidsafecoin, a protocol to permit distributed file storage built on top of the Bitcoin blockchain
  • Factom launches to create a data layer on top of the blockchain to enable elementary, verifiable, and secure record keeping.

This reflected the rising awareness of what early enthusiasts had thought: the technology of cryptocurrencies could be the foundation of the next Internet. Today is like the early 90s, and in the coming years, blockchains could remake everything. The idea was planted, but with it, a sobering realization: this process would take time.

Despite these developments, Bitcoin’s price began a slow decline this year that would bottom out in early two thousand fifteen below $200 and stay relatively dormant for months. Part of this decline was a shift in capital from bitcoin to other digital currencies. Bitcoin’s contribution to the total market value of all cryptocurrencies fell from a higher of 95% in August to 78% in December. Another was the realization that upending global financial markets wouldn’t happen overnight. Bitcoin was not above the law, and financial law was very complicated. Bitcoin had the potential to be disruptive but disruption can be slower than founding visionaries hoped. In many ways, cryptocurrencies faded from the public eye.

AS two thousand fourteen ended, the price of one Bitcoin was $314 and six thousand one hundred sixty two people viewed the Wikipedia page.

2015: The business blockchain

The basic features of this industry mostly continued. Hacks and theft continued, including a high-profile loss of close to $Five million from a major exchange at the beginning of the year.

Regulators around the world continued to explore the implications of this technology while also proving that users of Bitcoin are not beyond the reach of the law. Ross Ulbricht, founder of The Silk Road, is sentenced to life in prison without parole for deeds that were “terribly ruinous to our social fabric.” Mark Karpeles, CEO of Mt. Gox, is arrested in Japan. Two federal agents who stole Bitcoin during the Silk Road investigation plead guilty.

The fattest shift came from banks and industry. Many industry executives began talking about “blockchains” and “distributed ledgers” rather than Bitcoin. Microsoft launched blockchain-as-a-service (BaaS) on its Azure cloud-computing platform. This permits companies to experiment with blockchains and explore how they could be used in different areas of their business.

This likely contributed to the growth in interest in Bitcoin among the broader public and among traders. Bitcoin’s price began a constant ascent as people embarked realizing Bitcoin and blockchains were still around.

However, a crisis was brewing in the form of the “block size debate.” The Bitcoin protocol was designed to process approximately seven transactions per 2nd; the blocks in the blockchain were not large enough to store more. Members of the community realized Bitcoin was on rhythm to reach that in 2015. If nothing was done, it could stymie the currency’s growth in popularity.

What followed was a bitter and divisive debate about whether to increase the size of the Bitcoin blocks (permitting more transactions per 2nd) or to reposition the Bitcoin blockchain as a ‘settlement layer’ while permitting other services to process transactions that happen off-chain. In Bitcoin, there are no democratic rules, public sanctioned spaces to gather, or Robert’s rules of order. Reddit, Bitcointalk, and a duo other online forums were serving as venues for ‘public’ discussion, and the Bitcoin Foundation began hosting events toward the end of the year.

No one could agree, and the debate was fierce. This deadlock struck a suck to Bitcoin’s perceived legitimacy. If it couldn’t deal with a challenge like this, how could it deal with others? People began talking earnestly about other currencies that might be viable alternatives to Bitcoin. Ethereum topped that list, and in early 2016, its price would increase tenfold.

As two thousand fifteen ended, the price of one Bitcoin was $426 and four thousand seven hundred thirty people viewed the Wikipedia page.

2016: A Year of Promise

It is too early to tell the story of two thousand sixteen for Bitcoin. Many of the trends that coalesced in two thousand fifteen continued: more enterprise and corporate interest in blockchain technology, more uncertainty over the block size debate, and some price volatility.

Security remains an issue. Just this year, Gatecoin, a major exchange based in Hong Kong, lost $Two million and suspended trading. Shapeshift, a major US-based exchange, suffered a series of hacks in a saga that reads like a crime novel.

Broadly, industry players in finance and technology remain bullish on blockchains and ambivalent about Bitcoin. More and more startups are branding themselves as blockchain companies rather than bitcoin companies. A fresh ambivalence about Bitcoin has emerged: not as a dangerous quasi-legal currency but as a good proof-of-concept that ultimately won’t be ready for primetime. As they say, “the pioneers get the arrows, the settlers get the land.” At a premier industry conference, some compared Bitcoin to Netscape.

A History of Bitcoin – Smith Crown

A History of Bitcoin

This article is a brief history of Bitcoin. Our objective is to give the reader a reliable abbreviated overview of Bitcoin. We will reference places where the interested reader can learn more about specific topics or dive deeper.

The history will be structured around Bitcoin’s trade price (as a reflection of market sentiment) and page views of wikipedia (as a reflection of broader awareness).

2008/2009: Bitcoin’s birth

In November 2008, someone going by the user name ‘Satoshi Nakamoto’ released a paper to a cryptography mailing list. The 9-page paper was entitled “Bitcoin: A Peer-to-Peer Electronic Cash System“, and it laid out a vision for a distributed digital money system.

In January 2009, Satoshi Nakamoto released the very first version of the open-source bitcoin core software on SourceForge and the bitcoin protocol began running. Nakamoto mined the very first fifty bitcoins. The protocol was a breakthrough in cryptography, however it drew on developments that had preceded it but hadn’t been combined yet.

Bitcoin ran calmly in the background—a topic of excitement and fascination for a dedicated crowd of coders but largely off the world’s radar. Discussion was distributed across different forums, and it wasn’t until the end of the year that the very first dedicated forum was established. This helped coders could more lightly coordinate with other coders as the underlying code got tweaked. By mid-2009, people other than Satoshi Nakamoto were actively contributing to the open-source codebase in Github.

The protocol was a breakthrough in cryptography, however it drew on many cryptography innovations that preceded it. A community of cryptography experts and privacy advocates known as the Cypherpunks (cypher not cyber) played a key role in recognizing the technical genius of Bitcoin and understanding its implications. Many members of this community would become torchbearers later in Bitcoin’s history.

As two thousand nine ended, Bitcoin did not have a ‘trade price’ and three hundred nine people viewed the Wikipedia page.

2010: Bitcoin’s very early years

The Bitcoin ‘ecosystem’ was largely just a record of Bitcoin transactions (the blockchain), a set of online forums where users communicated and organized transactions, and the open-source software code. There were no wallet services, payment processors, or real user interface beyond actual directive prompts and raw code. This limited involvement to a dedicated and savvy crowd who organized transactions through online forums and initiated them on the blockchain with code. For example, the very first commercial transaction took place in May 2010: a programmer in Florida spent Ten,000 BTC on a pizza.

However, beginnings of a market support system began to emerge. In early 2010, the very first exchange opened, which permitted structured trading of bitcoins. The very first “article” on bitcoin appeared on Slashdot and stoked interest beyond the initial insider cryptocurrency crowd. Users grew. In late 2010, Mt. Gox launched as the 2nd exchange and became the superior place to trade Bitcoins for a duo years.

As two thousand ten ended, the price of one Bitcoin was $.Trio and three hundred nine people viewed the Wikipedia page.

2011: Bitcoin finds niche uses and awareness grows

In 2011, Bitcoin began to mature as a digital payment system, however its use was limited by the aspirations of early adopters.

The perceived anonymous nature of the digital currency made it ideal for online black markets. That year spotted the emergence of the Silk Road, an ebay for illicit goods (predominantly drugs) that used Bitcoin as a payment method. The Silk Road was one of the public’s primary introductions to Bitcoin, prompting several politicians cast the currency as a vehicle for money laundering and drugs.

Mainstream media also began covering it. Forbes, Bloomberg, and TIME all wrote articles. Politicians warned against it. Academics wrote about it. At the end of the year, CBS aired an scene of the “The Good Wife” that focused on bitcoin.

Other consumer services were also beginning to emerge. WikiLeaks embarked accepting Bitcoin donations. An iPad app was launched. Bitpay, a service that let merchants accept bitcoins over the phone, was founded and claimed to have one hundred merchants. More exchanges opened, letting people trade bitcoins for other currencies.

The Bitcoin code also underwent a major switch. Through 2011, Satoshi Nakamoto had overseen the maintenance of the codebase. Satoshi never called or met anyone and only communicated on forums and direct messages. In April 2011, Satoshi Nakamoto wrote his last verified email, leaving Gavin Andreson in charge of the project, and left, never to be (verifiably) seen or heard from again. Andreson quickly selected four others to share this responsibility and introduced some structured ways of updating the underlying code.

“He told myself and Gavin that he had moved on to other things and that the project was in good arms.”

Also in 2011, the very first alternative digital currency or “altcoin”, Litecoin, launched.

The world was in an awkward time in which financial markets were doing well but workers were not. Occupy Wall Street commenced in September and soon Occupy protests had taken place in almost one thousand cities worldwide. It is effortless to see how the idea of a bankless currency could take root.

By the end of the year, the world was deeply ambivalent about the digital currency. A currency for the 21st Century that could topple banks? A implement for laundering money and buying illicit substances?

As two thousand eleven ended, the price of one Bitcoin was $Four.60 and two thousand one hundred eighty five people viewed the Wikipedia page.

2012: Bitcoin matures

Bitcoin was railing a wave of legitimacy in many circles, and these were having conflicting effects.

The currency became a popular target for hackers and thieves. Mt. Gox had been hacked in 2011, and now more major attacks on exchanges and other databases led to millions of dollars worth of Bitcoin theft. Several Ponzi schemes ended with theft.

Black markets utilizing bitcoin as a payment method continued to operate. It’s estimated that $15 million worth of Bitcoin passed through the Silk Road this year. A popular online gambling site, Satoshi Dice, launched and flooded the bitcoin network with very puny gambling transactions (bets worth less than $.0001). This sparked a debate on how to deal with such ‘transaction dust.’

More generally, the community was feeling the impacts of having no central authority. There were no dedicated funds to support core development of the code and no sanctioned gathering places places other than online forums.

The Bitcoin Foundation was also established. Its role was to fund core development, represent the currency to governments, and conduct outreach and education. Late that year, a Bitcoin exchange Bitcoin-central.net was licensed similar to a bank in Europe.

As it garnered the attention of more governments, its legal ambiguity became more demonstrable and more awkward. People were trading it like an asset, using it like a currency, and downloading it like open-source software. Gambling and the Silk Road didn’t help. Some services began ripping off bitcoin out of fear of its legality.

Broadly, this is a year in which the industry also spotted the promise of banking the unbanked with Bitcoin. Forbes runs one of the very first mainstream articles discussing Bitcoin’s use in remittance payments. WordPress embarked accepting Bitcoin, explaining that traditional payment processor limitations were preventing international bloggers from participating in the blogosphere.

As two thousand twelve ended, the price of one Bitcoin was $13.44 and two thousand eight hundred nine people viewed the Wikipedia page.

2013: The world wakes up to bitcoin

2013 was one of the most tumultuous years for Bitcoin. It had two period of incredible volatility in which people literally woke up to almost 100% price increases.

The very first occurred in early 2013. A bail-out deal inbetween the EU and Cyprus included a levy on bank accounts with sizeable sums of money, inspiring Cypriot account holders to buy bitcoin en masse. The Bitcoin price almost doubles, and Cypress sets a precedent for using Bitcoin as a means of capital flight.

Bitcoin survived one of its very first major crises of legitimacy this year: the shutting down of the Silk Road and the arrest of its founder. The government seized all assets and helped cement public association of Bitcoin with online black markets. After a quick price drop, the price quickly recovered, but Bitcoin has lived in the Silk Road’s shadow ever since.

Globally, governments began to take Bitcoin more earnestly but reactions were mixed.

  • The People’s Bank of China, after originally approving Bitcoin, banned financial institutions from using it or working with customers whose businesses involve it.
  • The US Department of Homeland Security announced Mt. Gox a ‘money transmitter’ (a strongly regulated entity) and moved to seize some of its assets.
  • US Financial Crimes Enforcement Network (FINCEN) issued some of the world’s very first bitcoin regulation in the form of a guidance report for persons administering, exchanging or using virtual currency. In particular, exchanges must obey with money laundering laws and register as Money Services Businesses.
  • The US Senate held a hearing which was (to the surprise of many) open to the long-term prospects of Bitcoin.

The 2nd period of volatility occurred in November. In thirty days, the price went from just over $100 to just over $1200. Searches for bitcoin spikes. News outlets covered it. In thirty days, it went from a successfully digital currency proof-of-concept to a fresh technology in the eyes of the world. The price plummeted back down in December, but it never stayed below $200 again.

The erect of popularity led to an explosion of “altcoins”—digital currencies based on modified or different underlying protocols. Litecoin had been the very first, back in 2011, but two thousand thirteen witnessed hundreds of these fresh altcoins launch. Many turned out to be scams, but many are also still traded today.

As two thousand thirteen ended, the price of one Bitcoin was $764 and twenty six thousand three hundred fifty four people viewed the Wikipedia page.

2014: Bitcoin beyond cryptocurrencies and cryptocurrencies beyond Bitcoin

In early 2014, Bitcoin survived another major crisis of legitimacy: the closure of Mt. Gox. Mt. Gox had been the longest-running and most successful virtual currency exchange to date. It was a pile of both the bitcoin economy and the community. In February, Mt. Gox abruptly shut trading, and leaked documents display it had lost 744,000 BTC (approximately $40 million). Bitcoin naysayers had a field day on forums, and it was widely seen as a deepthroat to the digital currency’s capability to operate securely without any oversight or regulation.

Governments began to pass regulation this year. The wild end to two thousand thirteen woke many regulators up to the volatility of this currency. The IRS announced Bitcoin to be taxed as property. The People’s Bank of China coerced Chinese banks to close the bank accounts of major Chinese exchanges, tho’ many exchanges exploited legal loopholes to keep operating. Fresh York announced its Bitlicense: a legal licensing framework for businesses that interact with Bitcoin and cryptocurrencies. This is largely decried by the cryptocurrency community. The wish of unregulated cash was quickly fading.

The currency also traveled more into the payment mainstream, and a wave of major retailers accepted the currency. Overstock, Tiger Direct, Newegg, Dell, and Microsoft all announced acceptance of Bitcoin. Near the end of the year, a subsidiary of PayPal announced it will work on integrating Bitcoin on their platform.

Another development in the world of cryptocurrencies is that many many people began imagining Bitcoin without the digital currency part: how could the underlying technology be used for other purposes?

A wave of fresh protocols emerged with applications beyond digital currency, presaging a so-called “Bitcoin Two.0” era in which people would repurpose blockchains (Bitcoin’s and others) to store all kinds of information. Some notable ones included

  • Ethereum, a platform for software that could run on a distributed network.
  • Maidsafecoin, a protocol to permit distributed file storage built on top of the Bitcoin blockchain
  • Factom launches to create a data layer on top of the blockchain to enable ordinary, verifiable, and secure record keeping.

This reflected the rising awareness of what early enthusiasts had thought: the technology of cryptocurrencies could be the foundation of the next Internet. Today is like the early 90s, and in the coming years, blockchains could remake everything. The idea was planted, but with it, a sobering realization: this process would take time.

Despite these developments, Bitcoin’s price began a slow decline this year that would bottom out in early two thousand fifteen below $200 and stay relatively dormant for months. Part of this decline was a shift in capital from bitcoin to other digital currencies. Bitcoin’s contribution to the total market value of all cryptocurrencies fell from a higher of 95% in August to 78% in December. Another was the realization that upending global financial markets wouldn’t happen overnight. Bitcoin was not above the law, and financial law was very complicated. Bitcoin had the potential to be disruptive but disruption can be slower than founding visionaries hoped. In many ways, cryptocurrencies faded from the public eye.

AS two thousand fourteen ended, the price of one Bitcoin was $314 and six thousand one hundred sixty two people viewed the Wikipedia page.

2015: The business blockchain

The basic features of this industry mostly continued. Hacks and theft continued, including a high-profile loss of close to $Five million from a major exchange at the beginning of the year.

Regulators around the world continued to explore the implications of this technology while also proving that users of Bitcoin are not beyond the reach of the law. Ross Ulbricht, founder of The Silk Road, is sentenced to life in prison without parole for deeds that were “terribly disruptive to our social fabric.” Mark Karpeles, CEO of Mt. Gox, is arrested in Japan. Two federal agents who stole Bitcoin during the Silk Road investigation plead guilty.

The thickest shift came from banks and industry. Many industry executives began talking about “blockchains” and “distributed ledgers” rather than Bitcoin. Microsoft launched blockchain-as-a-service (BaaS) on its Azure cloud-computing platform. This permits companies to experiment with blockchains and explore how they could be used in different areas of their business.

This likely contributed to the growth in interest in Bitcoin among the broader public and among traders. Bitcoin’s price began a constant ascent as people began realizing Bitcoin and blockchains were still around.

However, a crisis was brewing in the form of the “block size debate.” The Bitcoin protocol was designed to process approximately seven transactions per 2nd; the blocks in the blockchain were not large enough to store more. Members of the community realized Bitcoin was on tempo to reach that in 2015. If nothing was done, it could stymie the currency’s growth in popularity.

What followed was a bitter and divisive debate about whether to increase the size of the Bitcoin blocks (permitting more transactions per 2nd) or to reposition the Bitcoin blockchain as a ‘settlement layer’ while permitting other services to process transactions that happen off-chain. In Bitcoin, there are no democratic rules, public sanctioned spaces to gather, or Robert’s rules of order. Reddit, Bitcointalk, and a duo other online forums were serving as venues for ‘public’ discussion, and the Bitcoin Foundation began hosting events toward the end of the year.

No one could agree, and the debate was fierce. This deadlock struck a gargle to Bitcoin’s perceived legitimacy. If it couldn’t deal with a challenge like this, how could it deal with others? People began talking earnestly about other currencies that might be viable alternatives to Bitcoin. Ethereum topped that list, and in early 2016, its price would increase tenfold.

As two thousand fifteen ended, the price of one Bitcoin was $426 and four thousand seven hundred thirty people viewed the Wikipedia page.

2016: A Year of Promise

It is too early to tell the story of two thousand sixteen for Bitcoin. Many of the trends that coalesced in two thousand fifteen continued: more enterprise and corporate interest in blockchain technology, more uncertainty over the block size debate, and some price volatility.

Security remains an issue. Just this year, Gatecoin, a major exchange based in Hong Kong, lost $Two million and suspended trading. Shapeshift, a major US-based exchange, suffered a series of hacks in a saga that reads like a crime novel.

Broadly, industry players in finance and technology remain bullish on blockchains and ambivalent about Bitcoin. More and more startups are branding themselves as blockchain companies rather than bitcoin companies. A fresh ambivalence about Bitcoin has emerged: not as a dangerous quasi-legal currency but as a good proof-of-concept that ultimately won’t be ready for primetime. As they say, “the pioneers get the arrows, the settlers get the land.” At a premier industry conference, some compared Bitcoin to Netscape.

A History of Bitcoin – Smith Crown

A History of Bitcoin

This article is a brief history of Bitcoin. Our aim is to give the reader a reliable abbreviated overview of Bitcoin. We will reference places where the interested reader can learn more about specific topics or dive deeper.

The history will be structured around Bitcoin’s trade price (as a reflection of market sentiment) and page views of wikipedia (as a reflection of broader awareness).

2008/2009: Bitcoin’s birth

In November 2008, someone going by the user name ‘Satoshi Nakamoto’ released a paper to a cryptography mailing list. The 9-page paper was entitled “Bitcoin: A Peer-to-Peer Electronic Cash System“, and it laid out a vision for a distributed digital money system.

In January 2009, Satoshi Nakamoto released the very first version of the open-source bitcoin core software on SourceForge and the bitcoin protocol embarked running. Nakamoto mined the very first fifty bitcoins. The protocol was a breakthrough in cryptography, tho’ it drew on developments that had preceded it but hadn’t been combined yet.

Bitcoin ran calmly in the background—a topic of excitement and fascination for a dedicated crowd of coders but largely off the world’s radar. Discussion was distributed across different forums, and it wasn’t until the end of the year that the very first dedicated forum was established. This helped coders could more lightly coordinate with other coders as the underlying code got tweaked. By mid-2009, people other than Satoshi Nakamoto were actively contributing to the open-source codebase in Github.

The protocol was a breakthrough in cryptography, however it drew on many cryptography innovations that preceded it. A community of cryptography experts and privacy advocates known as the Cypherpunks (cypher not cyber) played a key role in recognizing the technical genius of Bitcoin and understanding its implications. Many members of this community would become torchbearers later in Bitcoin’s history.

As two thousand nine ended, Bitcoin did not have a ‘trade price’ and three hundred nine people viewed the Wikipedia page.

2010: Bitcoin’s very early years

The Bitcoin ‘ecosystem’ was largely just a record of Bitcoin transactions (the blockchain), a set of online forums where users communicated and organized transactions, and the open-source software code. There were no wallet services, payment processors, or real user interface beyond actual instruction prompts and raw code. This limited involvement to a dedicated and savvy crowd who organized transactions through online forums and initiated them on the blockchain with code. For example, the very first commercial transaction took place in May 2010: a programmer in Florida spent Ten,000 BTC on a pizza.

However, beginnings of a market support system began to emerge. In early 2010, the very first exchange opened, which permitted structured trading of bitcoins. The very first “article” on bitcoin appeared on Slashdot and stoked interest beyond the initial insider cryptocurrency crowd. Users grew. In late 2010, Mt. Gox launched as the 2nd exchange and became the superior place to trade Bitcoins for a duo years.

As two thousand ten ended, the price of one Bitcoin was $.Trio and three hundred nine people viewed the Wikipedia page.

2011: Bitcoin finds niche uses and awareness grows

In 2011, Bitcoin began to mature as a digital payment system, however its use was limited by the aspirations of early adopters.

The perceived anonymous nature of the digital currency made it flawless for online black markets. That year spotted the emergence of the Silk Road, an ebay for illicit goods (predominantly drugs) that used Bitcoin as a payment method. The Silk Road was one of the public’s primary introductions to Bitcoin, prompting several politicians cast the currency as a vehicle for money laundering and drugs.

Mainstream media also began covering it. Forbes, Bloomberg, and TIME all wrote articles. Politicians warned against it. Academics wrote about it. At the end of the year, CBS aired an gig of the “The Good Wife” that focused on bitcoin.

Other consumer services were also kicking off to emerge. WikiLeaks embarked accepting Bitcoin donations. An iPad app was launched. Bitpay, a service that let merchants accept bitcoins over the phone, was founded and claimed to have one hundred merchants. More exchanges opened, letting people trade bitcoins for other currencies.

The Bitcoin code also underwent a major switch. Through 2011, Satoshi Nakamoto had overseen the maintenance of the codebase. Satoshi never called or met anyone and only communicated on forums and direct messages. In April 2011, Satoshi Nakamoto wrote his last verified email, leaving Gavin Andreson in charge of the project, and left, never to be (verifiably) seen or heard from again. Andreson quickly selected four others to share this responsibility and introduced some structured ways of updating the underlying code.

“He told myself and Gavin that he had moved on to other things and that the project was in good arms.”

Also in 2011, the very first alternative digital currency or “altcoin”, Litecoin, launched.

The world was in an awkward time in which financial markets were doing well but workers were not. Occupy Wall Street began in September and soon Occupy protests had taken place in almost one thousand cities worldwide. It is effortless to see how the idea of a bankless currency could take root.

By the end of the year, the world was deeply ambivalent about the digital currency. A currency for the 21st Century that could topple banks? A implement for laundering money and buying illicit substances?

As two thousand eleven ended, the price of one Bitcoin was $Four.60 and two thousand one hundred eighty five people viewed the Wikipedia page.

2012: Bitcoin matures

Bitcoin was railing a wave of legitimacy in many circles, and these were having conflicting effects.

The currency became a popular target for hackers and thieves. Mt. Gox had been hacked in 2011, and now more major attacks on exchanges and other databases led to millions of dollars worth of Bitcoin theft. Several Ponzi schemes ended with theft.

Black markets utilizing bitcoin as a payment method continued to operate. It’s estimated that $15 million worth of Bitcoin passed through the Silk Road this year. A popular online gambling site, Satoshi Dice, launched and flooded the bitcoin network with very puny gambling transactions (bets worth less than $.0001). This sparked a debate on how to deal with such ‘transaction dust.’

More generally, the community was feeling the impacts of having no central authority. There were no dedicated funds to support core development of the code and no sanctioned gathering places places other than online forums.

The Bitcoin Foundation was also established. Its role was to fund core development, represent the currency to governments, and conduct outreach and education. Late that year, a Bitcoin exchange Bitcoin-central.net was licensed similar to a bank in Europe.

As it garnered the attention of more governments, its legal ambiguity became more visible and more awkward. People were trading it like an asset, using it like a currency, and downloading it like open-source software. Gambling and the Silk Road didn’t help. Some services embarked pulling down bitcoin out of fear of its legality.

Broadly, this is a year in which the industry also eyed the promise of banking the unbanked with Bitcoin. Forbes runs one of the very first mainstream articles discussing Bitcoin’s use in remittance payments. WordPress commenced accepting Bitcoin, explaining that traditional payment processor limitations were preventing international bloggers from participating in the blogosphere.

As two thousand twelve ended, the price of one Bitcoin was $13.44 and two thousand eight hundred nine people viewed the Wikipedia page.

2013: The world wakes up to bitcoin

2013 was one of the most tumultuous years for Bitcoin. It had two period of incredible volatility in which people literally woke up to almost 100% price increases.

The very first occurred in early 2013. A bail-out deal inbetween the EU and Cyprus included a levy on bank accounts with sizeable sums of money, inspiring Cypriot account holders to buy bitcoin en masse. The Bitcoin price almost doubles, and Cypress sets a precedent for using Bitcoin as a means of capital flight.

Bitcoin survived one of its very first major crises of legitimacy this year: the shutting down of the Silk Road and the arrest of its founder. The government seized all assets and helped cement public association of Bitcoin with online black markets. After a quick price drop, the price quickly recovered, but Bitcoin has lived in the Silk Road’s shadow ever since.

Globally, governments began to take Bitcoin more gravely but reactions were mixed.

  • The People’s Bank of China, after originally approving Bitcoin, banned financial institutions from using it or working with customers whose businesses involve it.
  • The US Department of Homeland Security proclaimed Mt. Gox a ‘money transmitter’ (a strongly regulated entity) and moved to seize some of its assets.
  • US Financial Crimes Enforcement Network (FINCEN) issued some of the world’s very first bitcoin regulation in the form of a guidance report for persons administering, exchanging or using virtual currency. In particular, exchanges must obey with money laundering laws and register as Money Services Businesses.
  • The US Senate held a hearing which was (to the surprise of many) open to the long-term prospects of Bitcoin.

The 2nd period of volatility occurred in November. In thirty days, the price went from just over $100 to just over $1200. Searches for bitcoin spikes. News outlets covered it. In thirty days, it went from a successfully digital currency proof-of-concept to a fresh technology in the eyes of the world. The price plummeted back down in December, but it never stayed below $200 again.

The erect of popularity led to an explosion of “altcoins”—digital currencies based on modified or different underlying protocols. Litecoin had been the very first, back in 2011, but two thousand thirteen spotted hundreds of these fresh altcoins launch. Many turned out to be scams, but many are also still traded today.

As two thousand thirteen ended, the price of one Bitcoin was $764 and twenty six thousand three hundred fifty four people viewed the Wikipedia page.

2014: Bitcoin beyond cryptocurrencies and cryptocurrencies beyond Bitcoin

In early 2014, Bitcoin survived another major crisis of legitimacy: the closure of Mt. Gox. Mt. Gox had been the longest-running and most successful virtual currency exchange to date. It was a pile of both the bitcoin economy and the community. In February, Mt. Gox abruptly shut trading, and leaked documents display it had lost 744,000 BTC (approximately $40 million). Bitcoin naysayers had a field day on forums, and it was widely seen as a deep-throat to the digital currency’s capability to operate securely without any oversight or regulation.

Governments began to pass regulation this year. The wild end to two thousand thirteen woke many regulators up to the volatility of this currency. The IRS proclaimed Bitcoin to be taxed as property. The People’s Bank of China compelled Chinese banks to close the bank accounts of major Chinese exchanges, however many exchanges exploited legal loopholes to keep operating. Fresh York announced its Bitlicense: a legal licensing framework for businesses that interact with Bitcoin and cryptocurrencies. This is largely decried by the cryptocurrency community. The desire of unregulated cash was quickly fading.

The currency also traveled more into the payment mainstream, and a wave of major retailers accepted the currency. Overstock, Tiger Direct, Newegg, Dell, and Microsoft all announced acceptance of Bitcoin. Near the end of the year, a subsidiary of PayPal announced it will work on integrating Bitcoin on their platform.

Another development in the world of cryptocurrencies is that many many people began imagining Bitcoin without the digital currency part: how could the underlying technology be used for other purposes?

A wave of fresh protocols emerged with applications beyond digital currency, presaging a so-called “Bitcoin Two.0” era in which people would repurpose blockchains (Bitcoin’s and others) to store all kinds of information. Some notable ones included

  • Ethereum, a platform for software that could run on a distributed network.
  • Maidsafecoin, a protocol to permit distributed file storage built on top of the Bitcoin blockchain
  • Factom launches to create a data layer on top of the blockchain to enable ordinary, verifiable, and secure record keeping.

This reflected the rising awareness of what early enthusiasts had thought: the technology of cryptocurrencies could be the foundation of the next Internet. Today is like the early 90s, and in the coming years, blockchains could remake everything. The idea was planted, but with it, a sobering realization: this process would take time.

Despite these developments, Bitcoin’s price began a slow decline this year that would bottom out in early two thousand fifteen below $200 and stay relatively dormant for months. Part of this decline was a shift in capital from bitcoin to other digital currencies. Bitcoin’s contribution to the total market value of all cryptocurrencies fell from a higher of 95% in August to 78% in December. Another was the realization that upending global financial markets wouldn’t happen overnight. Bitcoin was not above the law, and financial law was very complicated. Bitcoin had the potential to be disruptive but disruption can be slower than founding visionaries hoped. In many ways, cryptocurrencies faded from the public eye.

AS two thousand fourteen ended, the price of one Bitcoin was $314 and six thousand one hundred sixty two people viewed the Wikipedia page.

2015: The business blockchain

The basic features of this industry mostly continued. Hacks and theft continued, including a high-profile loss of close to $Five million from a major exchange at the beginning of the year.

Regulators around the world continued to explore the implications of this technology while also proving that users of Bitcoin are not beyond the reach of the law. Ross Ulbricht, founder of The Silk Road, is sentenced to life in prison without parole for deeds that were “terribly devastating to our social fabric.” Mark Karpeles, CEO of Mt. Gox, is arrested in Japan. Two federal agents who stole Bitcoin during the Silk Road investigation plead guilty.

The fattest shift came from banks and industry. Many industry executives began talking about “blockchains” and “distributed ledgers” rather than Bitcoin. Microsoft launched blockchain-as-a-service (BaaS) on its Azure cloud-computing platform. This permits companies to experiment with blockchains and explore how they could be used in different areas of their business.

This likely contributed to the growth in interest in Bitcoin among the broader public and among traders. Bitcoin’s price began a sustained ascent as people began realizing Bitcoin and blockchains were still around.

However, a crisis was brewing in the form of the “block size debate.” The Bitcoin protocol was designed to process approximately seven transactions per 2nd; the blocks in the blockchain were not large enough to store more. Members of the community realized Bitcoin was on tempo to reach that in 2015. If nothing was done, it could stymie the currency’s growth in popularity.

What followed was a bitter and divisive debate about whether to increase the size of the Bitcoin blocks (permitting more transactions per 2nd) or to reposition the Bitcoin blockchain as a ‘settlement layer’ while permitting other services to process transactions that happen off-chain. In Bitcoin, there are no democratic rules, public sanctioned spaces to gather, or Robert’s rules of order. Reddit, Bitcointalk, and a duo other online forums were serving as venues for ‘public’ discussion, and the Bitcoin Foundation began hosting events toward the end of the year.

No one could agree, and the debate was fierce. This deadlock struck a suck to Bitcoin’s perceived legitimacy. If it couldn’t deal with a challenge like this, how could it deal with others? People commenced talking earnestly about other currencies that might be viable alternatives to Bitcoin. Ethereum topped that list, and in early 2016, its price would increase tenfold.

As two thousand fifteen ended, the price of one Bitcoin was $426 and four thousand seven hundred thirty people viewed the Wikipedia page.

2016: A Year of Promise

It is too early to tell the story of two thousand sixteen for Bitcoin. Many of the trends that coalesced in two thousand fifteen continued: more enterprise and corporate interest in blockchain technology, more uncertainty over the block size debate, and some price volatility.

Security remains an issue. Just this year, Gatecoin, a major exchange based in Hong Kong, lost $Two million and suspended trading. Shapeshift, a major US-based exchange, suffered a series of hacks in a saga that reads like a crime novel.

Broadly, industry players in finance and technology remain bullish on blockchains and ambivalent about Bitcoin. More and more startups are branding themselves as blockchain companies rather than bitcoin companies. A fresh ambivalence about Bitcoin has emerged: not as a dangerous quasi-legal currency but as a good proof-of-concept that ultimately won’t be ready for primetime. As they say, “the pioneers get the arrows, the settlers get the land.” At a premier industry conference, some compared Bitcoin to Netscape.

A History of Bitcoin – Smith Crown

A History of Bitcoin

This article is a brief history of Bitcoin. Our aim is to give the reader a reliable abbreviated overview of Bitcoin. We will reference places where the interested reader can learn more about specific topics or dive deeper.

The history will be structured around Bitcoin’s trade price (as a reflection of market sentiment) and page views of wikipedia (as a reflection of broader awareness).

2008/2009: Bitcoin’s birth

In November 2008, someone going by the user name ‘Satoshi Nakamoto’ released a paper to a cryptography mailing list. The 9-page paper was entitled “Bitcoin: A Peer-to-Peer Electronic Cash System“, and it laid out a vision for a distributed digital money system.

In January 2009, Satoshi Nakamoto released the very first version of the open-source bitcoin core software on SourceForge and the bitcoin protocol embarked running. Nakamoto mined the very first fifty bitcoins. The protocol was a breakthrough in cryptography, however it drew on developments that had preceded it but hadn’t been combined yet.

Bitcoin ran calmly in the background—a topic of excitement and fascination for a dedicated crowd of coders but largely off the world’s radar. Discussion was distributed across different forums, and it wasn’t until the end of the year that the very first dedicated forum was established. This helped coders could more lightly coordinate with other coders as the underlying code got tweaked. By mid-2009, people other than Satoshi Nakamoto were actively contributing to the open-source codebase in Github.

The protocol was a breakthrough in cryptography, however it drew on many cryptography innovations that preceded it. A community of cryptography experts and privacy advocates known as the Cypherpunks (cypher not cyber) played a key role in recognizing the technical genius of Bitcoin and understanding its implications. Many members of this community would become torchbearers later in Bitcoin’s history.

As two thousand nine ended, Bitcoin did not have a ‘trade price’ and three hundred nine people viewed the Wikipedia page.

2010: Bitcoin’s very early years

The Bitcoin ‘ecosystem’ was largely just a record of Bitcoin transactions (the blockchain), a set of online forums where users communicated and organized transactions, and the open-source software code. There were no wallet services, payment processors, or real user interface beyond actual guideline prompts and raw code. This limited involvement to a dedicated and savvy crowd who organized transactions through online forums and initiated them on the blockchain with code. For example, the very first commercial transaction took place in May 2010: a programmer in Florida spent Ten,000 BTC on a pizza.

However, beginnings of a market support system began to emerge. In early 2010, the very first exchange opened, which permitted structured trading of bitcoins. The very first “article” on bitcoin appeared on Slashdot and stoked interest beyond the initial insider cryptocurrency crowd. Users grew. In late 2010, Mt. Gox launched as the 2nd exchange and became the superior place to trade Bitcoins for a duo years.

As two thousand ten ended, the price of one Bitcoin was $.Three and three hundred nine people viewed the Wikipedia page.

2011: Bitcoin finds niche uses and awareness grows

In 2011, Bitcoin began to mature as a digital payment system, however its use was limited by the aspirations of early adopters.

The perceived anonymous nature of the digital currency made it ideal for online black markets. That year eyed the emergence of the Silk Road, an ebay for illicit goods (predominantly drugs) that used Bitcoin as a payment method. The Silk Road was one of the public’s primary introductions to Bitcoin, prompting several politicians cast the currency as a vehicle for money laundering and drugs.

Mainstream media also began covering it. Forbes, Bloomberg, and TIME all wrote articles. Politicians warned against it. Academics wrote about it. At the end of the year, CBS aired an scene of the “The Good Wife” that focused on bitcoin.

Other consumer services were also beginning to emerge. WikiLeaks began accepting Bitcoin donations. An iPad app was launched. Bitpay, a service that let merchants accept bitcoins over the phone, was founded and claimed to have one hundred merchants. More exchanges opened, letting people trade bitcoins for other currencies.

The Bitcoin code also underwent a major switch. Through 2011, Satoshi Nakamoto had overseen the maintenance of the codebase. Satoshi never called or met anyone and only communicated on forums and direct messages. In April 2011, Satoshi Nakamoto wrote his last verified email, leaving Gavin Andreson in charge of the project, and left, never to be (verifiably) seen or heard from again. Andreson quickly selected four others to share this responsibility and introduced some structured ways of updating the underlying code.

“He told myself and Gavin that he had moved on to other things and that the project was in good forearms.”

Also in 2011, the very first alternative digital currency or “altcoin”, Litecoin, launched.

The world was in an awkward time in which financial markets were doing well but workers were not. Occupy Wall Street embarked in September and soon Occupy protests had taken place in almost one thousand cities worldwide. It is effortless to see how the idea of a bankless currency could take root.

By the end of the year, the world was deeply ambivalent about the digital currency. A currency for the 21st Century that could topple banks? A device for laundering money and buying illicit substances?

As two thousand eleven ended, the price of one Bitcoin was $Four.60 and two thousand one hundred eighty five people viewed the Wikipedia page.

2012: Bitcoin matures

Bitcoin was railing a wave of legitimacy in many circles, and these were having conflicting effects.

The currency became a popular target for hackers and thieves. Mt. Gox had been hacked in 2011, and now more major attacks on exchanges and other databases led to millions of dollars worth of Bitcoin theft. Several Ponzi schemes ended with theft.

Black markets utilizing bitcoin as a payment method continued to operate. It’s estimated that $15 million worth of Bitcoin passed through the Silk Road this year. A popular online gambling site, Satoshi Dice, launched and flooded the bitcoin network with very puny gambling transactions (bets worth less than $.0001). This sparked a debate on how to deal with such ‘transaction dust.’

More generally, the community was feeling the impacts of having no central authority. There were no dedicated funds to support core development of the code and no sanctioned gathering places places other than online forums.

The Bitcoin Foundation was also established. Its role was to fund core development, represent the currency to governments, and conduct outreach and education. Late that year, a Bitcoin exchange Bitcoin-central.net was licensed similar to a bank in Europe.

As it garnered the attention of more governments, its legal ambiguity became more visible and more awkward. People were trading it like an asset, using it like a currency, and downloading it like open-source software. Gambling and the Silk Road didn’t help. Some services embarked pulling down bitcoin out of fear of its legality.

Broadly, this is a year in which the industry also eyed the promise of banking the unbanked with Bitcoin. Forbes runs one of the very first mainstream articles discussing Bitcoin’s use in remittance payments. WordPress commenced accepting Bitcoin, explaining that traditional payment processor limitations were preventing international bloggers from participating in the blogosphere.

As two thousand twelve ended, the price of one Bitcoin was $13.44 and two thousand eight hundred nine people viewed the Wikipedia page.

2013: The world wakes up to bitcoin

2013 was one of the most tumultuous years for Bitcoin. It had two period of incredible volatility in which people literally woke up to almost 100% price increases.

The very first occurred in early 2013. A bail-out deal inbetween the EU and Cyprus included a levy on bank accounts with sizeable sums of money, inspiring Cypriot account holders to buy bitcoin en masse. The Bitcoin price almost doubles, and Cypress sets a precedent for using Bitcoin as a means of capital flight.

Bitcoin survived one of its very first major crises of legitimacy this year: the shutting down of the Silk Road and the arrest of its founder. The government seized all assets and helped cement public association of Bitcoin with online black markets. After a quick price drop, the price quickly recovered, but Bitcoin has lived in the Silk Road’s shadow ever since.

Globally, governments began to take Bitcoin more gravely but reactions were mixed.

  • The People’s Bank of China, after originally approving Bitcoin, banned financial institutions from using it or working with customers whose businesses involve it.
  • The US Department of Homeland Security announced Mt. Gox a ‘money transmitter’ (a strongly regulated entity) and moved to seize some of its assets.
  • US Financial Crimes Enforcement Network (FINCEN) issued some of the world’s very first bitcoin regulation in the form of a guidance report for persons administering, exchanging or using virtual currency. In particular, exchanges must obey with money laundering laws and register as Money Services Businesses.
  • The US Senate held a hearing which was (to the surprise of many) open to the long-term prospects of Bitcoin.

The 2nd period of volatility occurred in November. In thirty days, the price went from just over $100 to just over $1200. Searches for bitcoin spikes. News outlets covered it. In thirty days, it went from a successfully digital currency proof-of-concept to a fresh technology in the eyes of the world. The price plummeted back down in December, but it never stayed below $200 again.

The erect of popularity led to an explosion of “altcoins”—digital currencies based on modified or different underlying protocols. Litecoin had been the very first, back in 2011, but two thousand thirteen eyed hundreds of these fresh altcoins launch. Many turned out to be scams, but many are also still traded today.

As two thousand thirteen ended, the price of one Bitcoin was $764 and twenty six thousand three hundred fifty four people viewed the Wikipedia page.

2014: Bitcoin beyond cryptocurrencies and cryptocurrencies beyond Bitcoin

In early 2014, Bitcoin survived another major crisis of legitimacy: the closure of Mt. Gox. Mt. Gox had been the longest-running and most successful virtual currency exchange to date. It was a pole of both the bitcoin economy and the community. In February, Mt. Gox abruptly shut trading, and leaked documents demonstrate it had lost 744,000 BTC (approximately $40 million). Bitcoin naysayers had a field day on forums, and it was widely seen as a deepthroat to the digital currency’s capability to operate securely without any oversight or regulation.

Governments began to pass regulation this year. The wild end to two thousand thirteen woke many regulators up to the volatility of this currency. The IRS announced Bitcoin to be taxed as property. The People’s Bank of China compelled Chinese banks to close the bank accounts of major Chinese exchanges, however many exchanges exploited legal loopholes to keep operating. Fresh York announced its Bitlicense: a legal licensing framework for businesses that interact with Bitcoin and cryptocurrencies. This is largely decried by the cryptocurrency community. The wish of unregulated cash was quickly fading.

The currency also traveled more into the payment mainstream, and a wave of major retailers accepted the currency. Overstock, Tiger Direct, Newegg, Dell, and Microsoft all announced acceptance of Bitcoin. Near the end of the year, a subsidiary of PayPal announced it will work on integrating Bitcoin on their platform.

Another development in the world of cryptocurrencies is that many many people began imagining Bitcoin without the digital currency part: how could the underlying technology be used for other purposes?

A wave of fresh protocols emerged with applications beyond digital currency, presaging a so-called “Bitcoin Two.0” era in which people would repurpose blockchains (Bitcoin’s and others) to store all kinds of information. Some notable ones included

  • Ethereum, a platform for software that could run on a distributed network.
  • Maidsafecoin, a protocol to permit distributed file storage built on top of the Bitcoin blockchain
  • Factom launches to create a data layer on top of the blockchain to enable elementary, verifiable, and secure record keeping.

This reflected the rising awareness of what early enthusiasts had thought: the technology of cryptocurrencies could be the foundation of the next Internet. Today is like the early 90s, and in the coming years, blockchains could remake everything. The idea was planted, but with it, a sobering realization: this process would take time.

Despite these developments, Bitcoin’s price began a slow decline this year that would bottom out in early two thousand fifteen below $200 and stay relatively dormant for months. Part of this decline was a shift in capital from bitcoin to other digital currencies. Bitcoin’s contribution to the total market value of all cryptocurrencies fell from a higher of 95% in August to 78% in December. Another was the realization that upending global financial markets wouldn’t happen overnight. Bitcoin was not above the law, and financial law was very complicated. Bitcoin had the potential to be disruptive but disruption can be slower than founding visionaries hoped. In many ways, cryptocurrencies faded from the public eye.

AS two thousand fourteen ended, the price of one Bitcoin was $314 and six thousand one hundred sixty two people viewed the Wikipedia page.

2015: The business blockchain

The basic features of this industry mostly continued. Hacks and theft continued, including a high-profile loss of close to $Five million from a major exchange at the beginning of the year.

Regulators around the world continued to explore the implications of this technology while also proving that users of Bitcoin are not beyond the reach of the law. Ross Ulbricht, founder of The Silk Road, is sentenced to life in prison without parole for deeds that were “terribly devastating to our social fabric.” Mark Karpeles, CEO of Mt. Gox, is arrested in Japan. Two federal agents who stole Bitcoin during the Silk Road investigation plead guilty.

The thickest shift came from banks and industry. Many industry executives began talking about “blockchains” and “distributed ledgers” rather than Bitcoin. Microsoft launched blockchain-as-a-service (BaaS) on its Azure cloud-computing platform. This permits companies to experiment with blockchains and explore how they could be used in different areas of their business.

This likely contributed to the growth in interest in Bitcoin among the broader public and among traders. Bitcoin’s price began a sustained ascent as people commenced realizing Bitcoin and blockchains were still around.

However, a crisis was brewing in the form of the “block size debate.” The Bitcoin protocol was designed to process approximately seven transactions per 2nd; the blocks in the blockchain were not large enough to store more. Members of the community realized Bitcoin was on rhythm to reach that in 2015. If nothing was done, it could stymie the currency’s growth in popularity.

What followed was a bitter and divisive debate about whether to increase the size of the Bitcoin blocks (permitting more transactions per 2nd) or to reposition the Bitcoin blockchain as a ‘settlement layer’ while permitting other services to process transactions that happen off-chain. In Bitcoin, there are no democratic rules, public sanctioned spaces to gather, or Robert’s rules of order. Reddit, Bitcointalk, and a duo other online forums were serving as venues for ‘public’ discussion, and the Bitcoin Foundation began hosting events toward the end of the year.

No one could agree, and the debate was fierce. This deadlock struck a deepthroat to Bitcoin’s perceived legitimacy. If it couldn’t deal with a challenge like this, how could it deal with others? People began talking gravely about other currencies that might be viable alternatives to Bitcoin. Ethereum topped that list, and in early 2016, its price would increase tenfold.

As two thousand fifteen ended, the price of one Bitcoin was $426 and four thousand seven hundred thirty people viewed the Wikipedia page.

2016: A Year of Promise

It is too early to tell the story of two thousand sixteen for Bitcoin. Many of the trends that coalesced in two thousand fifteen continued: more enterprise and corporate interest in blockchain technology, more uncertainty over the block size debate, and some price volatility.

Security remains an issue. Just this year, Gatecoin, a major exchange based in Hong Kong, lost $Two million and suspended trading. Shapeshift, a major US-based exchange, suffered a series of hacks in a saga that reads like a crime novel.

Broadly, industry players in finance and technology remain bullish on blockchains and ambivalent about Bitcoin. More and more startups are branding themselves as blockchain companies rather than bitcoin companies. A fresh ambivalence about Bitcoin has emerged: not as a dangerous quasi-legal currency but as a good proof-of-concept that ultimately won’t be ready for primetime. As they say, “the pioneers get the arrows, the settlers get the land.” At a premier industry conference, some compared Bitcoin to Netscape.

Related video:

9 reasonable cryptocurrencies to invest in – Paul Miller – Medium

9 reasonable cryptocurrencies to invest in

After my Ethereum investment grew 45x (as per Sep 21, 2016), I determined to do a similar research on alternative cryptocurrencies.

Since an advice without skin in the game should not be taken gravely, I invest a significant amount of individual money into all the projects listed here.

I think of pouring money into cryptocurrencies as an accessible scheme of a venture investment. U.S. regulations prohibit an investor from purchasing ownership interests in companies that are not publicly listed on a stock exchange — unless he / she has at least $200K of a yearly income. This is very unfortunate and closes those fine instruments from the general population.

Cryptocurrency investment, on the other palm, is not presently regulated by SEC — or similar agencies. Keeping this in mind, investing in Ethereum development in middle-2014 has been utterly similar to a venture investment. And, well, it played out — permitting ETH team to grow rapidly.

Any investment may grow by a enormous factor. Or, it may become worth nothing. It’s your take whether to go after the advice, or to overlook it. There are many cryptos out there which are just sophisticated ponzi schemes determined to enrich their creators. Similarly, currencies which do not bring any innovations to the table have been excluded from the list.

The simplified list

  • Ethereum: Had 40x growth rate over the last two years. Permits to build fully-functional applications on blockchain without middlemen. Utterly promising currency, solid team (take a look at what Vitalik Buterin is doing right now). #Two crypto right now — but still 1/Ten of the Bitcoin value. So even while being conservative, thinking that any crypto would not grow higher than BTC, it may grow 10x. Still 10x is a puny amount — compared to other solutions on the market. So, not enormously yummy for a mid-game. Long-term, I am keeping most of the cash here.
  • Monero: Anonymous / private Bitcoin. Now, you may think, “What are you talking about, the BTC is anonymous already?” — which is a very unfortunate albeit popular misconception. All BTC transactions can be seen by the public. For example, by providing out your wallet address to someone, the person is able to see all the payments you’ve received and sent. The black market (drug dealers and weapon manufacturers) created a solution for this: basically a software that mixes your coins with other coins. Nevertheless, the software needs to be trusted and may not work correctly. This is pretty bad when your freedom depends on it. Monero has the mixing system built-in — which makes it very delicious for any kind of black market. This is how the currency got its very first big growth boost — basically a popular darknet market adopted it. Moreover, the transaction privacy is a necessity for any kind of widely adopted currency, which makes me think it may even overtake BTC. The market capitalization of Monero is presently 1/100 of BTC, which makes it a better investment in my opinion. This is where I put most my of my “new” investment batch in.
  • Factom: A blockchain-based system that’s optimized to store millions of realtime records with a single hash. Useful for all kinds of business apps. Runs on top of Bitcoin.
  • Counterparty: A plain description of it may sound like an “Ethereum competitor backed by Bitcoin blockchain”.
  • Siacoin: Distributed data storage. An alternative to Box, Google Drive. The big corporations would not have any access to your data in this point.
  • Lisk: A JavaScript-based Ethereum competitor that aims to make the deployment and development effortless. Interesting solution for an internet of things device from a simpleness perspective.
  • Ripple: A protocol which basically permits to reduce financial transaction fees by a hefty amount (to a duo cents) — and makes the settlement almost instant. Already backed by some VCs and used inwards big banks. The currency itself tho’ is different from others: it’s premined and centralized.
  • STEEM: A decentralized platform which permits to prize content creators lightly.
  • Zcash: crypto, which aims to solve the same problem Monero does. Some venture capital is pouring in. I am unconvinced — a plain backdoor at this point can compromise the entire system in the future. Nevertheless, my individual thoughts don’t matter here — what the market thinks is much more significant; i’d very likely pour some cash once the inflation rate would become stable.

The investment process

The most elementary way of investing is buying the Bitcoin with real money on any exchange, then selling the BTC for any currency from the list.

I’ve used Poloniex to buy BTC and other currencies; which has all the pairs from the list.

I would advice to not keep any significant amount of assets on an exchange. After buying the currency of your choice, send it to a wallet without an internet connection. Reminisce to do some googling and research to ensure your storage is solid and secure.

Prepare yourself to not brief the investments with yet another market fright. Largest points in an investment game are awarded for bearing discomfort.

The article has been translated: На русском

9 reasonable cryptocurrencies to invest in – Paul Miller – Medium

9 reasonable cryptocurrencies to invest in

After my Ethereum investment grew 45x (as per Sep 21, 2016), I determined to do a similar research on alternative cryptocurrencies.

Since an advice without skin in the game should not be taken earnestly, I invest a significant amount of private money into all the projects listed here.

I think of pouring money into cryptocurrencies as an accessible scheme of a venture investment. U.S. regulations prohibit an investor from purchasing ownership interests in companies that are not publicly listed on a stock exchange — unless he / she has at least $200K of a yearly income. This is very unfortunate and closes those fine instruments from the general population.

Cryptocurrency investment, on the other arm, is not presently regulated by SEC — or similar agencies. Keeping this in mind, investing in Ethereum development in middle-2014 has been enormously similar to a venture investment. And, well, it played out — permitting ETH team to grow rapidly.

Any investment may grow by a hefty factor. Or, it may become worth nothing. It’s your take whether to go after the advice, or to overlook it. There are many cryptos out there which are just sophisticated ponzi schemes determined to enrich their creators. Similarly, currencies which do not bring any innovations to the table have been excluded from the list.

The simplified list

  • Ethereum: Had 40x growth rate over the last two years. Permits to build fully-functional applications on blockchain without middlemen. Utterly promising currency, solid team (take a look at what Vitalik Buterin is doing right now). #Two crypto right now — but still 1/Ten of the Bitcoin value. So even while being conservative, thinking that any crypto would not grow higher than BTC, it may grow 10x. Still 10x is a puny amount — compared to other solutions on the market. So, not utterly yummy for a mid-game. Long-term, I am keeping most of the cash here.
  • Monero: Anonymous / private Bitcoin. Now, you may think, “What are you talking about, the BTC is anonymous already?” — which is a very unfortunate albeit popular misconception. All BTC transactions can be seen by the public. For example, by providing out your wallet address to someone, the person is able to see all the payments you’ve received and sent. The black market (drug dealers and weapon manufacturers) created a solution for this: basically a software that mixes your coins with other coins. Nevertheless, the software needs to be trusted and may not work correctly. This is pretty bad when your freedom depends on it. Monero has the mixing system built-in — which makes it very delicious for any kind of black market. This is how the currency got its very first big growth boost — basically a popular darknet market adopted it. Moreover, the transaction privacy is a necessity for any kind of widely adopted currency, which makes me think it may even overtake BTC. The market capitalization of Monero is presently 1/100 of BTC, which makes it a better investment in my opinion. This is where I put most my of my “new” investment batch in.
  • Factom: A blockchain-based system that’s optimized to store millions of realtime records with a single hash. Useful for all kinds of business apps. Runs on top of Bitcoin.
  • Counterparty: A plain description of it may sound like an “Ethereum competitor backed by Bitcoin blockchain”.
  • Siacoin: Distributed data storage. An alternative to Box, Google Drive. The big corporations would not have any access to your data in this point.
  • Lisk: A JavaScript-based Ethereum competitor that aims to make the deployment and development effortless. Interesting solution for an internet of things device from a plainness perspective.
  • Ripple: A protocol which basically permits to reduce financial transaction fees by a big amount (to a duo cents) — and makes the settlement almost instant. Already backed by some VCs and used inwards big banks. The currency itself tho’ is different from others: it’s premined and centralized.
  • STEEM: A decentralized platform which permits to prize content creators lightly.
  • Zcash: crypto, which aims to solve the same problem Monero does. Some venture capital is pouring in. I am unconvinced — a plain backdoor at this point can compromise the entire system in the future. Nevertheless, my private thoughts don’t matter here — what the market thinks is much more significant; i’d very likely pour some cash once the inflation rate would become stable.

The investment process

The most plain way of investing is buying the Bitcoin with real money on any exchange, then selling the BTC for any currency from the list.

I’ve used Poloniex to buy BTC and other currencies; which has all the pairs from the list.

I would advice to not keep any significant amount of assets on an exchange. After buying the currency of your choice, send it to a wallet without an internet connection. Recall to do some googling and research to ensure your storage is solid and secure.

Prepare yourself to not brief the investments with yet another market fright. Largest points in an investment game are awarded for suffering discomfort.

The article has been translated: На русском

Related video:

Five Ways Theme Parks Could Embrace Blockchain (And Why They Should)

Без кейворда

Jegar Pitchforth is a statistician, data scientist and blogger with a background in sophisticated systems analysis.

In this opinion chunk, Pitchforth takes a tour of potential blockchain applications in the theme park industry, presenting five ways the summer entertainment staple could improve by using the tech.

The theme park world has been known to embrace all forms of fresh technology, from virtual reality in rails to recommendation systems on mobile apps and the touchless payment technology that now pervades all major theme parks globally.

But while the methods of delivering the theme park practice are as advanced as they come in any industry, the systems behind all of it are sorely lacking. The practice of booking tickets and organizing the visit is often a lot more strained than it needs to be, and anything that minimizes this process is likely to be well received.

Meantime, the digital world is undergoing a switch in the way it stores information and makes financial transactions. A technology known broadly as ‘blockchain’ is gaining more and more attention amongst development circles, and it promises a fresh way of interacting with data altogether free of server costs or security issues.

You’ve most likely heard of the very first major application of the blockchain known as bitcoin – an entirely digital currency given value by those who use it.

But for all the hype you’ve heard about bitcoin, this is only the very pointy peak of a continent-sized iceberg. The next iteration of cryptocurrency is called ethereum, and its applications to the theme park world are far ranging.

1. Ticketing

Ticketing is very likely the most demonstrable application of the blockchain to the operations of theme parks. There are already a range of interesting ethereum-based ‘dapps’ that promise ticketing services for music festivals and concerts at a fraction of the price.

Because the blockchain only ever permits one copy of a digital property (such as a ticket to a theme park), users can have a password-protected wallet on their phone that contains the digital tickets signed by the park which are scanned at the gate, at which time the payment transfer is finalized inbetween the guest’s wallet and the theme park’s.

No ID, no paper tickets, just a secure decentralized system approved by consensus.

What’s more, these digital tickets don’t have to be bought all at once or even by the same person. A guest who knows they want to go to the park a year out can make a promise to buy a ticket, which they can then pay off at their will over the remaining time they have. The blockchain can lightly store the payment history of the guest without any specific human approval or oversight.

Now that your tickets are digital assets that you don’t need to keep an eye on, you can pretty much permit people to do whatever they want with them.

Ethereum has the capability to run ‘brainy contracts’ (executable code with instructions to carry out deeds based on specific triggers), so any time someone sells on your park’s tickets at a profit you can get a cut. Say you take 50% of any resales as part of the contract when you sell the ticket. On popular days that ticket might go through any number of arms, and you are making money each time without any effort, while also permitting others to make money from their good predictions.

Two. Fastpass tracking and interchanges

Similar to theme park ticketing, fastpass tickets for rail queues like this one at Universal, or the equivalent at Walt Disney World can be entirely managed through wise contracts, providing them much more plasticity than the current systems.

The current system has a entire range of books and forums dedicated to how to game it, with people spending hours attempting to get the best rail times and cover the rest of their dearest rails through careful planning. It surely doesn’t need to be so tense.

What if everything switched over to a bidding system with every guest given equal chance to begin with?

You could provide guests with some tokens to spend on fastpasses when they buy a ticket, then use a demand-based system for the token cost of each rail in the park. The xxx fans can spend all their tokens on the newest rail at the most popular times, while the kids can spend theirs on railing the Jungle Cruise for the five-millionth time.

Now that you’ve established a within-park market for rail times, there’s nothing stopping you from selling extra tokens to guests buying premium packages, or to their relatives wishing them a good holiday.

The cool thing about this is that you get a lot more information about which rails people indeed wished to go on, because you can track the ‘price’ and witness them trading with each other. This would let you embark improving your recommendations to them, providing them indications of rails they might like and good times to rail them that suit their intended schedule.

Trio. Create a theme park currency

You can very likely see where all this is heading: a theme park currency that can be used at any of the park owner’s subsidiary and affiliate businesses.

A majority of people that visit premium parks now download the app before they go so they can organize their day and use the map. It’s not a good step for that app to become a digital wallet that visitors can use in your parks, stores and even online platforms. What makes this a digital currency rather than the old-school version of ‘park dollars’ is that these could be exchanged back into local currency anywhere someone wants to set up an exchange.

On its own, the prospect of having a future corporate currency that could be more stable than many local governments is interesting, but the instant benefits are still compelling. Once you transfer your ticketing, fastpasses, merchandising and digital distribution payments through one channel that doesn’t require a bank, your accounting all of a sudden becomes a lot simpler.

The concept is especially arousing for larger brands who may not have a park, but do have a store in a particular country.

The park currency can be used in all these stores without having to make special banking or business arrangements, permitting for much quicker expansion into fresh markets. With amazingly low transfer costs inbetween countries, theme parks that embrace blockchain would be able to capitalize on the post-visit practice much more effectively.

Four. Audience surveys with meaning

One of the most popular early uses of the ethereum cryptocurrency was as a voting system. Rather than a ‘one person one vote’ treatment, The DAO (the earliest manifestation of an ethereum organisation) used a share-based system where those with more coins had more vote.

While this may not be exactly what you want for your theme park, having a good skill of what the highest spenders in your park are looking for is a useful thing.

On top of that, you might also see a groundswell of grassroots support from lower-spending guests (like Universal witnessed with the opening of Harry Potter worlds in Florida), which would give you an indication that you need to build a rail with high throughput that doesn’t need a lot of stores nearby.

Whatever the outcome, an audience survey with the answers weighted by how much they have invested in your company is a lot more useful than standing around on corners asking people how they feel about things.

Five. Turn everyone into an ambassador

Once you have your audience used to using your park’s currency, and it’s gained some value, there’s more and more benefit to suggesting what are essentially cash prizes for advertising and information about your park.

This could be as basic as forwarding coins to a wallet linked to a Twitter account that posts lost of very retweeted content, or as sophisticated as real-time prizes for advice about park waiting times, incident reports and events. There are already dozens of forums online vying to be the accomplished of one park or another, why not bring it all into your own app ecology and prize your guests for their effort?

You could create ‘flashmobs’ in the park with your most loyal fans by incentivizing them with tokens, as could any guest with enough tokens and approval from the park’s digital protocols. There is no end to the ways people could build secondary and tertiary businesses around your brand, and with the right protocols you wouldn’t need to spend a cent on protecting it.

There’s a massive range of ways which theme parks can use blockchain technology, and it’s titillating to imagine what the future might hold.

What other ways could theme parks use blockchain technology? Or should they be looking at this at all? Let us know in the comments below.

This article originally appeared on the author’s blog, and has been republished here with his permission.

The leader in blockchain news, CoinDesk strives to suggest an open platform for dialogue and discussion on all things blockchain by encouraging contributed articles. As such, the opinions voiced in this article are the author’s own and do not necessarily reflect the view of CoinDesk.

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Five Practical Ways Bitcoin and Blockchain Can Influence your Petite Business

Five Practical Ways Bitcoin and Blockchain Can Influence your Puny Business

With all the hum around blockchain tech and cryptocurrencies, puny businesses might feel left out.

Even for those who are not necessarily cutting-edge in terms of tech, these five tips can empower entrepreneurs and petite businesses in leveraging bitcoin and blockchain as cryptocurrencies for their financial and other needs.

Using Bitcoin and Blockchain in Your Puny Business

Accepting Payments in Bitcoin and Other Cryptocurrencies

The survival of the cryptocurrency revolution is totally reliant on its acceptance, and that is where puny businesses can excel. Some larger companies, like Amazon and Tesla, are presently accepting cryptocurrency with not too many puny businesses hopping on board.

Very first, let’s talk a moment about why accepting cryptocurrency can be of benefit to you:

Little to no fees — Credit card processors will lightly charge you 2-4 percent in fees for using the service. Cryptocurrency transfers are close to free, albeit services will usually charge a minimal amount (0-1 percent) which means you will save money. Note that you can use services that can confirm blockchain transfers swifter, but will have a thicker fee to expedite it.

Quicker access to your funds — Banks are not involved with the transactions, and there are no centralized clearing processes. This means you get the payments considerably quicker. For example, most bank-based payment processors send payment within 1-2 days. You can get Bitcoin payments within minutes to a few hours, depending on the network’s cryptographic explosion.

No government ties — Since cryptocurrencies are not tied to any governments or regulatory agencies, there are no borders to consider. You can avoid international exchange rates or transaction fees.

Avoid disputes — Albeit cryptocurrencies are entirely digital, they work like cash rather than credit. All sales are final, and there is no way for a customer to dispute a transaction. If you have had issues with people contesting charges, accepting cryptocurrency can switch that for you.

You can actually make a name for yourself by being a pioneer in this regard. It’s as effortless as setting up a payment processor that specializes in cryptocurrency.

While many services will suggest “wallet” capability, some startups go beyond this. CryptoPay, for example, offers both a digital wallet for Bitcoins and a physical debit card, which permits users to spend cryptocurrency at any establishment that accepts Visa debit cards. CryptoPay is one of the more established players in this niche and is planning to raise funds through an initial coin suggesting (ICO) in order to further improve its services.

Signing Agreements with Vendors Through Clever Contracts

Signing agreements with vendors would usually require a lawyer to draw up a contract for you and your client to sign. This can be an agreement for an exchange of service and money, accomplish with the agenda and timeline. You would wait for the contract to be finalized, parties to sign it, and it would get notarized. Then you would do the work and expect payment to arrive. If the other party didn’t pay you as agreed, you would then go back to your lawyer to bring suit against the other party.

Brainy contracts switch all of that by making it simpler.

Blockchain technology makes brainy contracts possible — these are digitally-signed agreements to execute certain things when certain conditions are met. You create it with the services you will provide, the mutually agreed upon cryptocurrency amount and the deadline for the service to be finished.

Once submitted, the contract cannot be altered, and copies will be hosted across all the knots in the blockchain, so that it’s downright accessible at any time. Because the contract is on the blockchain, it is monitored to be sure the service promised is delivered. Then when the service is provided, the cryptocurrency is exchanged on the due date without anyone having to do anything to begin the process.

There are services to enable businesses and individuals to execute legally-binding wise contracts, such as Agrello, which dispenses with the need for middlemen, such as lawyers, and eliminates the possibility of cracking the contract.

Conserving Power through Brainy Electrical Grids

While cryptocurrencies have been criticized for their excessive use of electro-therapy, we are eyeing a turnaround in being able to conserve power through the blockchain. In some larger cities, folks are selling solar power on the blockchain to one another.

Essentially, they harvest the solar energy from their own solar panels and then store the excess on a wise power grid. Then, they utilize blockchain technology in order to monitor tens unit usage, availability of solar-generated power, and such.

These communities also use the blockchain to sell excess energy to their neighbors or the electrical play grid, or to acquire energy when their solar cells are brief. All transactions are, of course, dealt with in cryptocurrency.

As a puny business proprietor, you can benefit from using someone else’s excess solar energy, which can result in savings from buying tens unit from the grid. If you have a big enough solar power facility, you can even be a net seller of electrical play.

The Brooklyn Micro Gird is a P2P energy market based on the blockchain technology. Such projects and initiatives will improve our capability to monitor and manage transactions, as well as creating a connected and distributed network that could disrupt the energy market on a larger scale.

Keeping Track of Logistics and Vendor Shipping

As we mentioned previously, the blockchain is tamper-resistant when it comes to the integrity of your documents. You can add whatever you want, and you cannot delete or switch any document or transactions within the blockchain – albeit everything can be audited and monitored by all parties involved.

This means a lot for the petite business possessor who needs to track inventory. When you receive inventory, its transaction is recorded in the blockchain. When you sell that item, it’s recorded. When you ship the item, it’s recorded. Who you purchase the inventory from, who purchases it, and who is shipping is all recorded and makes your life much lighter. This means no more costly programs that are supposed to do this for you that happen to permit for transactions to be altered or deleted. All of it is done in real-time and with no major cost to you.

Several startups are attempting to revolutionize the supply chain. The future holds many promises and it’s only a matter of time until businesses use this technology.

Paying Utility Bills Through Bitcoin Wallets

In the past, one of the reasons people weren’t excited about cryptocurrency was the lack of use for everyday items. We want to be able to pay bills or buy gas with our cryptocurrency and permit our bank accounts to grow while we do so. This has leisurely been switching and we are observing more Bitcoin wallets providing the capability to make utility payments for us.

The above-mentioned platform CryptoPay offers a way to lightly make bill payments without having to by hand transfer your Bitcoins to your US dollar bank account. Some wallets even let you convert your Bitcoins to fiat currency (like Euros or US dollars) so you won’t be affected by the volatile values.

Conclusion

While cryptocurrencies haven’t been embraced over the last few years like we had hoped, we are still watching growth happen — both in terms of their values vis-à-vis fiat currency and more acceptance across different businesses. Hopping on board now broadens your customer base and provides you with some added benefits that you can’t get in today’s current market.

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Four blockchain companies that could switch everything from accounting to money transfers

Opinion: four blockchain companies that could switch everything from accounting to money transfers

Published: May 11, two thousand sixteen Four:44 p.m. ET

Don Tapscott and Alex Tapscott explain Consensys, Chain, Abra and Bitfury

DonTapscott

AlexTapscott

The very first generation of the digital revolution brought us the Internet of information. The 2nd generation — powered by blockchain technology — is bringing us the Internet of value: a fresh platform to reshape the world of business and convert the old order of human affairs for the better.

Blockchain is a vast, global distributed ledger or database running on millions of devices and open to anyone, where not just information but anything of value — money, but also titles, deeds, identities, even votes — can be moved, stored and managed securely and privately. Trust is established through mass collaboration and clever code rather than by powerful intermediaries like governments and banks.

To be sure, much needs to happen to fulfill the promise of blockchain. For one, the technology must scale to meet the high expectations placed on it. Governing the protocol is still an open question, but we see these as implementation challenges that will be overcome.

Already, an intrepid and visionary crop of entrepreneurs is applying this revolutionary fresh technology to convert industries from financial services to media and everything in inbetween. Here are a few of the most promising we got to know during the research for our book “Blockchain Revolution”:

Consensus Systems

Consensus Systems is a venture production studio, building decentralized applications on the Ethereum blockchain. It sounds low key, but if implemented, the applications that Consensys (as it is known) is building would wiggle the windows and rattle the walls of a dozen industries. Projects include a distributed triple-entry accounting system, which could upend the audit and accounting businesses of the Big Four.

In double-entry accounting, a debt and credit are recorded on each side of the balance sheet. In triple entry accounting, a third time stamped entry uploads to a blockchain. It’s semitransparent and immutable and thus gives auditors and other stakeholders much better visibility into the health of a company.

Other projects are a decentralized version of the massively popular Reddit discussion forum that has been plagued of late by controversy over centralized control as well as a document formation and management system for self-enforcing contracts.

Consensys is also building prediction markets for business, sports, and entertainment; an open energy market, which is already being implemented in Park Slope, Brooklyn with energy company LO3; a distributed music model to rival with Apple and Spotify; and a suite of business instruments for mass collaboration, mass creation and mass management of a management-less company.

Additionally, Consensys launched an enterprise consulting arm called Consensys Enterprises, which counts Deloitte, Microsoft MSFT, +1.49% and Manulife Financial MFC, -1.71% as a few of its many customers.

Chain Inc.

Perhaps no other company has done more to bring blockchain to Wall Street than Chain Inc. Adam Ludwin, the company’s founder and CEO, sees a once-in-a generation chance to entirely and fundamentally switch the way financial markets work.

Chain is building a suite of blockchain-based contraptions for banks, stock exchanges, credit-card companies and other major industry participants that will enable them to stir, store, trade and manage financial assets quickly, securely and with less risk to the system.

Already, the company is working with Nasdaq NDAQ, -0.62% Citibank C, -2.19% Visa V, +1.85% Orange ORA, +0.32% and others on real-world commercial implementations of the company’s blockchain solutions. “All assets in the future will be digital bearer instruments running on numerous blockchains,” Ludwin told us in an interview for “Blockchain Revolution”.

On May Five, Chain took another big leap forward by releasing an open source blockchain protocol that it has built with a group of leading financial service firms. The protocol, called Chain Open Standard 1, or Chain OS1, is designed to be massively scalable, secure and needing just one 2nd to clear and lodge a transaction, versus the average of ten minutes using the bitcoin blockchain, another public open blockchain.

With a name like Abra, one would expect to see a little “Cadabra,” and the company doesn’t disappoint. Abra is building a global digital asset-management system with retail-banking functionality like payments and savings on the bitcoin blockchain. Abra sees opportunities in the global remittance market, estimated to be $600 billion in size.

Today, most people who want to send remittance must go through a long, costly and frustrating process, using legacy systems like Western Union, where payments can take a week to clear and lodge and the average fees are upward of 10%. Abra will enable anyone with a mobile phone and an Internet connection to rafter dollars, pesos and bitcoin to another person for around 0.25%, a fraction of the cost today.

Using the bitcoin blockchain to create a seamless user interface and secure and efficient back-end is only one of Abra’s big innovations.

Because most people in the developing world pay in cash, Abra will also make it ordinary to convert from their platform to a local currency. Anyone who uses Abra can become a teller, suggesting to interchange virtual money for physical money. Using reputation systems, GPS and other sharing-economy innovations, Abra can turn its network into the largest ATM network in the world. It took Western Union a century to build a network of 500,000 agents. Abra will exceed that in year one.

Bitfury

Bitfury, founded in 2011, is one of the “old guard” of the industry, a term we use somewhat lightly given the rapid evolution of blockchain technology. Began as a mining company — a network participant who validates transactions and secures the network — Bitfury has since evolved into a fully integrated, full-service blockchain security and technology rock-hard. It has developed proprietary hardware and software solutions that have helped the blockchain world scale both quickly and securely. The company is also a pioneer in blockchain analytics, platform development and is working toward scaling public blockchains through its involvement in The Lightning Network.

Recently Bitfury has announced a fresh property rights registry initiative. Today, billions of people in the world lack clear and enforceable title to their land, preventing them from fully participating in the global economy. Land titles on the blockchain would create a superior alternative to a system where records often go missing in centralized databases or filing cabinets and can be altered by unscrupulous and corrupt officials.

The Republic of Georgia has partnered with Bitfury to develop blockchain land titles for the National Agency of Public Registry. If effective, it would make Bitfury the global standard.

Don Tapscott is the author of fifteen books about technology in business and society. His son Alex Tapscott is CEO of Northwest Passage Ventures, a rock-hard that helps startups in the blockchain space. Their book “Blockchain Revolution: How the Technology Behind Bitcoin is Switching Money, Business and the World” was published on May Ten. Bitfury and Chain are two of the sponsors of the authors’ book tour.

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Your Food’s Safe Journey From Farm To Fork

FoodBlockchain.XYZ: Your Food’s Safe Journey From Farm To Fork

Published on: June 6, 2017

No more paying for expired, tampered-with or re-labeled food! FoodBlockchain.XYZ ensures that the quality of products purchased is exactly what you’d expect it to be – thanks to the blockchain & foodcoin.

Reminisce how the late Noughties (yep, the époque when the world wasn’t such a vapid commonplace in its substance) were ignited by a fad for realistic sci-fi? Back then, one visionary writer came up with a total mind-blower of a story: a group of handpicked heroes was instructed to build a beta-version of a fresh universe from scratch…Would you fancy to join in as well? No, earnestly. Imagine you alone could take control over everything, just everything – including the expectancy of your own life. Sounds reassuring?

Well, to that extent, maximizing the nutritional value of your daily food intake could be a good point of departure into a secure future. Statistically speaking, wise food choices can instantly win you 2-3 years of longevity top-up. Albeit, there is a catch to this seamless survival plan – up the sleeve we have a stressor which John Humphrys (The Fine Food Gamble’s author) aptly describes as “the stranglehold of big corporations”. And the latest upsurge of food safety & hygiene scandals indeed exposes: when it comes to dealing with raw materials, supply chain intermediaries are no longer bashful of resorting to product tampering when quick and effortless build up is at stake. Which again proves that on the racetrack of corporate avarice there are plainly no finish lines in glance. Whilst top industry players proceed living up to this truism the need for decentralized control over supply chains has never been so acutely crucial. To address this critical gap, FoodBlockchain.XYZ is now rolling out an Ethereum-blockchain-based ecosystem designed to nurture the unique needs of food buyers and manufacturers and to align the food markets with the interests of farmers and consumers!

But can we predict that Foodcoin – a fresh cryptocurrency developed by FoodBlockchain.XYZ – will serve as the panacea to weakened trust relationships in the agricultural market? Angel Versetti, the startup’s CEO, has agreed to lift the edges of secrecy veil draped over the project launch.

Angel, what is the core underlying principle of FoodBlockchain.XYZ? How can we avail ourselves from blockchain when it comes to bridging food supply inefficiencies?

We have a vision for the Food Supply Chain Two.0: this is not a project or a startup, this is a entire ecosystem intended to leverage the Ethereum Blockchain technology to convert the way global food markets and supply chains work, in a way to bring more transparency and quality assurance to consumers, convenience of supply chain management for producers and fair commercial opportunities for farmers and suppliers. We intend to bring these stakeholders on board through several contraptions that bring direct value to different stakeholders: mobile solutions for food origin and quality tracking at individual product level for consumers; blockchain-based storage and asset tracking for manufacturers; and a peer-to-peer marketplace where farmers can secure better deals for their quality products. We intend to also create a lot of building blocks and developer instruments to permit the community to build extra valuable modules, dApps (decentralized apps) and solutions for the users of the system. To power the system and creative incentive models, Foodcoins will be used as the medium for service exchange, transactions, and usage.

Fair said blockchain-based solutions are lately garnering global industry interest which instantly incentivizes big companies to include it in their basic inventory. How could your system be different from what they are proposing?

Firstly, when you hear that a certain company is building a blockchain-based solution for their supply chain: there’s a big crimson flag for you! That brings absolutely nothing to me as a consumer, because if I want to be assured of food quality and origins I want the system to be independent and distributed. I think if the same company whose products and supply chains should be checked is also building the quality assurance system – that entirely kills the purpose! This is not trustworthy, and sticking the word blockchain to it, is mere marketing. It needs to be distributed, free of central interested party and community-driven. Just look at that fresh enormous scandal in the USA last week where billions of dollars’ worth of products labeled as organic actually contained non-organic corn and soybean – people were essentially scammed of their money for years. They thought they are paying extra for better food, and they were sold cheap, low-quality food! We are building FoodBlockchain.XYZ to get rid of these practices once and for all.

Secondly, unlike others, we are also developing a hardware solution: Sensor System. It controls and records quality aspects of food such as origins, actual qualitative aspects such as the internal composition and structure and the outward parameters such as temperature, humidity or pressure. These aspects are very often missing or incomplete in food supply chains.

Could you explain a bit more about these powerless links in food supply chains you have just mentioned?

A lot of food waste happens either at the stage when products reach processing facilities or from processing facilities to the retailers, due to lack of sufficient control for quality of food. What very often happens is that if any breaches of the quality are discovered – which often is not the case – the client then rejects the entire batch altogether, or in case of serious breaches of safety standards the entire product line must be recalled: this leads to giant losses for companies and also results in a lot of food waste, because often only a particular batch was contaminated. So on the one mitt, you have many consumers getting spoiled food and are unaware of this, on the other forearm flawlessly normal food is ruined if one batch was contaminated. And this all comes from missing insights into quality assurance as well as the time and place of the quality breach. With our system this discovery can be made in real-time, as brainy contracts are permanently fed the readings from sensors, thus any issues will result in instant rejection of the contract so that manufacturers can go after up quick.

What added value does this solution bring to your potential clientele? How do you envision the everyday usage of your tech for supply chain management?

Our sensory systems are using the infrastructure which already exists in food supply chains but instead of making fragmented records where the client will have to order the auditing or would spend a long time attempting to find the source of the problem with food we can do it in real time and the blockchain ensures that records are made immutable and once and for all. This is where we add a key differentiator from others. We are also the very first startup to bring Ethereum technology and clever contracts to ensure the quality of food and we are very glad with the warm reception and help we have received from the Ethereum community. In other regions where we have received interest, such as the USA and Asia, there is often no sufficient infrastructure and sensors in place, so we can also supply hardware solutions to our clients there.

How did you manage to learn the ropes of the food market so promptly given its almost menacing volatility?

This is true that in the food industry there are a lot of conglomerates and closed loop systems. Our team consists of several people who have more than 25-30 years of work practice in the food industry, in supply chain management or building quality assurance sensors, so they understand all of the structures fully. Despite the closed-loop systems – or perhaps because of it! – there seems to be an chance, specifically in the establishment of peer-to-peer models where farmers could join into co-operatives and supply products directly to the customer. This system would permit more effective trading pattern and it could totally bypass the middlemen who control the buying power – and they are the ones who have been the bottleneck of the peer-to-peer system development because so far there has not been a solution to validate the quality of food delivered to the end client, so they took on that task, but at the cost of downright squeezing out any profits from farmers. Now, it’s the manufacturer’s job to control the quality and if anything happens, the manufacturer is liable for any food poisoning or outbreaks of health problems. In our case, the system controls the quality independently – directly from the farm itself. We are able to establish independent means of quality verification and at the same time, we do have a capacity to create financial relationships inbetween suppliers and buyers. Our very first demonstrator of a decentralized food exchange platform is going to be live soon.

Does this mean you are planning to dismantle the status quo & substitute and the traditional buyer-supplier horizontal with something totally fresh?

Our aim is to align the markets with the interests of consumers/farmers. Our platform, coupled with a protocol and a marketplace will be able to create a fresh level of peer-to-peer financial relationships inbetween different parts of the supply chain. These relationships existed in the past but at a very petite, local scale. There was no technological structure for them to scale. So, we intend to build a marketplace where the farmers are getting paid fairly whilst buyers are introduced with a lot more transparency insights on the food they are buying.

How does your startup contribute to ensuring this transparency?

Our system will permit consumers to prize the farmers of their choice by sending them a token of appreciation that will constitute a reputation system. Thus transactions using our native token Foodcoin can also serve as a conduit for a reputational value whereby if people are buying products they are particularly liking or they detect in our system that certain farmers go after good farming practices. Either they commit to sustainable agriculture or they make sure there are no pesticides in use even when it is not required by labeling of the government – people can prize them. The next step will be that these producers build up an enhanced reputation in the system so they get more orders from consumers or embark supplying cafeterias, restaurants or shops directly.

The advantage is that farmers will capture the value of a better product they produce. In the past, if someone loved the product it would have been simply bought again from the same shop. So the shops as intermediaries could increase the prices and capture a higher percentage of profits, which would not necessarily translate into better revenue for the farmer.

For the current moment, which milestones have you set up for the company?

One is to release our demo publicly. The demo will consist of three parts: a software demonstrator that will showcase the functionalities of the Ethereum-based solution that we suggest. We will have profiles for buyers and sellers with multi-currency wallets who are able to create orders and brainy contracts with certain specifications. For example, you could stipulate what storage conditions or quality parameters of the food you want to have and each individual batch could be assessed in real-time so you only receive goods that have passed your requirements. In the opposite case, the goods will be discounted or re-routed to another buyer who is willing to accept lower quality products. For the protocol architecture, we will demonstrate which templates for wise contracts we have, what modules we built and how the sensor systems will communicate with the blockchain and demonstrate how the entire ecosystem on top of the blockchain will work. And the third part is the hardware: we will demonstrate the sensory system which is able to analyze different food samples, create the data, convert it into the decent structure suitable for the blockchain and record it on top of that.

Where will this demo take place?

We want to publicly unveil it in June at one of the conferences where we are participating: Pioneers Festival in Vienna and the United Nations Global Conference for Sustainable Food in South Africa. By the end of summer, we also want to demonstrate how the aforesaid three components work together as a system implementing the entire process from A to Z.

Is the European landscape conducive to the deployment of blockchain solutions in general?

There are already movements at the central level to introduce solutions where blockchain will be useful. For example just a few days ago a fresh legislation came into force in Switzerland. It is now required from the local manufacturers using the “made in Switzerland” label to put up verifiable methods of quality control. Thus it will be necessary for the food industry to adopt fresh systems for regulatory compliance purposes. The same is happening in other parts of Europe: more stringent measurement criteria are being increasingly adopted to ensure quality and safety of food for the consumers. The main aim here is to prevent counterfeiting and also reassure people regarding the content of their food. In terms of the market itself, we are working with certain areas of the food industry where the quality matters a lot more.

Any example in this regard?

One such example is baby food. In Europe, the market for baby food is the most price-insensitive one. What does it mean? Parents do not care about the price of the baby food as much as they care about the quality. And they are willing to pay a lot more if they are sure about the quality of the food. Fairly a few reports also indicate there is no brand loyalty on the market. Parents only stick to brands as long as their friends or doctors recommend it. Some crucial market players are investing millions of Euros into campaigns and communications with health associations. They are just spreading the message that their food is of good quality and people simply choose them from the best-known brands. But if we could actually create a system permitting for independent verification we would lead smaller companies and fresh challengers straight into the market. With our system, they could potentially prove that they are better than the existing players.

Angel, where does your individual passion for decentralization derive from?

I would like to avoid a cliché reaction to this question. Everyone who looks at the Blockchain close enough is instantly hooked by the limitless possibilities it offers to improve our world. When I joined the United Nations, I thought I would make the world better. I spent fairly some time there attempting to do that, with few tangible results. When I discovered the blockchain, I realized through this technology I could make a much fatter positive influence on the world. And that’s why I abandon the UN and embarked building up my vision for a better supply chain for something that is so significant to the wellbeing of every person: food.

We have a long road to plow through, but this journey is arousing enough for me to embark on. And with the sultry and dedicated team and the early support we are getting, I am more and more certain that we can make a meaningful transformation of the way that food globally is produced and distributed, making life better for both the growers of food and its consumers.

Do you believe that the life of an individual can be affected by blockchain?

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