Market Turns Green

Market turns green

Market Turns Green

The cryptocurrency market takes a turn to the green, led by Ethereum and Bitcoin.

After two days of the so-called ‘crypto correction’ in the final days of June, the wider cryptocurrency market is seemingly back on a comeback trial as all top ten cryptocurrencies by market cap make gains over a 24-hour period.

According to CoinMarketCap, all but two of the top 50 cryptocurrencies have taken a positive turn during Tuesday’s trading period. At press time, only Bytecoin, the original anonymous crypto which made a 250% jump in May and Ardor, a blockchain-as-a-service platform, see their respective tokens fail to make gains at the top half of the table.

Ethereum leads the way among the big dogs, with a near 8% gain as Ether prices return to hitting above $275. Bitcoin, up over 2%, is trading just above $2,475. Ripple, Litecoin and Ethereum Classic are following the trend. Dash, at #7 on the crypto-ranks, is up nearly 13% at over $170 per DASH.

Today’s upward gains will come as respite during a dramatic few days for the cryptocurrency market. Rewund back to mid-June, the entire cryptocurrency market cap had struck $117 billion. At its lowest point on Tuesday, the combined market cap of all cryptocurrencies in circulation had fallen to $88 billion – a wipeout of $29 billion in two weeks. Monday, in particular, saw 92 of the top 100 cryptos hit red, with the IOTA’s IOT token and Ethereum taking the biggest falls.

Tuesday didn’t start off on sound footing either, as Ethereum fell nearly 20% to a low of $227.14 today, a near 4-week low. A mainstream rumor that Ethereum founder Vitalik Buterin died in a car crash didn’t help matters.

Ultimately, the downturn that began on Sunday evening could have ultimately proven to be the pause the market needed following significant gains in recent months. A breather helps. It never was, nor will ever be a sprint. It’s summer time, after all. Everyday investors, having helped boost entire cryptocurrency market leap from $28 billion in mid-April to a dizzying $117 billion in mid-June, could be closing their positions for profits during summertime.

“All that really happened today was some newcomers and bull traders got discount coins,” wrote CCN’s P.H. Madore amid Monday’s gloom. For others, these last few days have merely been an exercise of holding on.

David Ogden
Entrepreneur

Author: Samburaj Das

David

Why Just Holding Cryptocurrency Will Change the World

Cryptocurrency, digital assets run by blockchain distributed ledger technology, have some pretty revolutionary features and use cases. They can cheaply and permanently send wealth faster than anything else. They can cryptographically prove your identity. They can run self-executing smart contracts instead of relying on an enforcement mechanism when people don’t keep to their deals. But what if I told you that one of the most world-changing things about digital currencies is simply having some?

Crypto is new

The first, best, and most basic benefit of wealth generated by digital assets is that it’s new. Even if this new money was no different from anything currently out there, just by being new it provides a valuable fresh start to the current wealth distribution. When you hit the reset button, there’s a chance at a new bunch of people getting in at the bottom and making it big. Seeing a fresh set of faces on the rich list is better than having the same few families and groups maintaining an iron grip on the world’s resources generation after generation.

Anyone with basic technological access can get into crypto

The big barrier to entry when delving into the world of digital assets is internet access. However, this group of people currently stands at about half the global population and quickly rising. More importantly, the regions seeing the greatest growth in internet users are, in descending order: Africa, the Middle East, Latin America, and Asia. Anyone with a basic internet connection can download a wallet app or get a desktop wallet. At that point they can sign up to an exchange to buy cryptocurrency, or go the more grassroots route and buy in cash from someone they know (or a service like Wall of Coins or LocalBitcoins that connects such people) or work for it. Since the internet is global, so is the work that it can facilitate, and with it a borderless form of wealth transfer allows people in the poorest countries to be paid alongside those in the richest. Compared to other investments, the barrier to entry is very low, particularly for the unbanked.

Crypto attracts a certain kind of person

This is where we get into the uncomfortable territory of painting with a broad stroke, but it’s still important to consider. Generally speaking, cryptocurrency enthusiasts tend to be technophiles, innovators, nonconformists, activists, and liberty lovers. It makes sense, too: those seeking an alternative to the present financial system probably have a problem with the current regime to begin with, and even those who don’t will tend to display intellectual curiosity and a dash of courage to venture off the beaten path into uncharted territory, especially with something as risky as their money. Whichever kind of person we’re talking about, it’s probably a good idea to give them wealth rather than to some of the people who have it already, particularly in countries without a free economy where the entrepreneurial can’t get ahead.

Regulation, where existent and applicable, has minimal effect

There’s one big problem with the current financial system: control. The few at the top, whether in government, banking, or an industry powerful enough to influence the first two, effectively direct what happens to everyone else’s money. The average person is helpless when they can have their bank account frozen, their cash devalued or reissued (or discontinued altogether), and their investments taxed or seized. Even a physical asset such as gold can be confiscated and have its supply and exchange severely limited. Cryptocurrency, when run in a truly distributed fashion as Bitcoin’s mysterious creator intended, is highly censorship-resistant, requiring an area-wide internet shutdown to provide any meaningful chance of being stopped. Regulation can just make it harder to own and use crypto through legitimate channels. For some fun anecdotal evidence, remember that even Venezuela has a cryptocurrency exchange.

Dash in particular builds longer-term, harder to censor wealth

If you look at the cryptocurrency charts long-term, you’ll see that holding pretty much any digital token can make you rich at this point. However, Dash in particular has demonstrated, in addition to stable and consistent growth, a few extra benefits. To begin with, anyone with the foresight to run a masternode back when it was $5,000 (or less) to do so is now sitting on almost $200,000 that makes over $1,250 per month in recurring income as a reward for helping to run the Dash network. Those of us (almost all of us at this point) who can’t afford to buy into that level of recurring income can look into a masternode share with some trusted third party (not as good as running something yourself, but still better than a bank). In the future, Dash has savings accounts planned, which will allow anyone to make recurring income off of their investment. And, let’s not forget that you can move Dash around for a couple pennies per transaction, and can spend it at hundreds of places worldwide, lessening your need to hold other, lesser forms of money.

Now remember, this is just what cryptocurrency can do for the world if you do nothing but get some and hold on to it. Imagine what will happen when we start leveraging the technology for all it can really do. The future is exciting indeed.

David Ogden
Entrepreneur

Author: Joël Valenzuela

David

Cryptocurrencies Continue Recovery, Resume 2017’s Growth Trend

Cryptocurrencies Continue Recovery, Resume 2017's Growth Trend

Cryptocurrencies Continue Recovery, Resume 2017’s Growth Trend

Cryptocurrencies continued their recovery from last week’s massive price fallout, resuming the upward trend that has characterized 2017. All but 12 of the top 100 cryptocurrenices posted gains in the last 24-hour period.

Market leaders bitcoin and Ethereum had the smallest gains the last 24-hour period, with the former adding 0.88 points and the latter 1.15 points and market caps of $45 billion and 31.7 billion, respectively.

Bitcoin’s price reached $2,760.61, attempting to reclaim the record $2,864.85 it set on June 9. The price has hovered in the high 2,700 range after falling to a monthly low near $2,100 last week.

Ethereum Recovers From Bottleneck

Ethereum, at $342.27, continued the recovery it began two days ago following two days of losses. Ethereum has been fighting a correction that came from a sudden increase in demand which caused a bottleneck that delayed its transactions.

Despite showing a correction since it peaked at $402 two weeks ago, Ethereum is still showing impressive overall gains this month.

Ethereum has suffered from scaling problems as more new digital currencies opt for the Ethereum platform when holding their initial coin offering (ICO). Status ICO, which raised more than $100 million in Ethereum, caused a demand spike that some exchanges couldn’t handle, causing Ether prices to drop 15% momentarily. This sudden drop also affected other currencies, as nine out of the top 10 registered losses.

Third place Ripple rose 9.19 points to $0.294288 in the last 24-hour period, reaching a $12.7 billion market cap, but still below the $0.348079 it hit on May 16.

Litecoin Hits A Road Bump

Litecoin, the fourth highest market cap at $2.408 billion, was the only currency with more than $1 billion in market capitalization to show a loss in the recent 24-hour period, losing 2.36 points. Litecoin nevertheless has managed to hold the number four spot, following the activation of the Bitcoin Core development team’s transaction malleability fix Segregated Witness (SegWit), which led to an increase in the demand for Litecoin and a significant surge in development. Within months after the activation of SegWit, Litecoin creator Charlie Lee announced his resignation and his intent to focus on the development of Litecoin full time, which further increased the expectation of the cryptocurrency community and market toward Litecoin.

Within three months, Litecoin’s market cap increased from $200 million to a staggering $2.5 billion, recording a 1,150 three-month increase. In that short period of time, Litecoin surpassed Ethereum Classic, Dash and NEM in market capitalization.

More importantly, the mid-term increase in the market cap of Litecoin, the activation of SegWit, successful testing of Lightning Network on Litecoin, issuance of services by companies such as BitGo and the shift in focus from Litecoin creator Charlie Lee further triggered the currency’s development community.

On June 19, Bitstamp, the eighth largest Litecoin trading platform within the U.S. Litecoin exchange market, announced the integration of BitGo’s Litecoin multi-signature security service. Although the majority of Litecoin trades are processed within the Chinese Litecoin exchange market and Bitstamp only accounts for a fraction of global Litecoin trading, it marked the first case in which a major international digital currency trading platform has integrated BitGo’s security services to secure Litecoin transactions.

IOTA Gained The Most

Among those with more than $1 billion in market capitalization, IOTA, number 7, posted the biggest gain as the price hit $0.525929 for a $1.461 billion market cap, a 26.48 point gain. IOTA has continued recovering since suffering one of the largest losses last week, when it dropped 36.5 points in a 24-hour period.

David Ogden
Entrepreneur

Author: Lester Coleman

David

Cryptocurrency: How We Hook the Masses

In this opinion piece, Svinkin argues that using cryptocurrencies for rewards schemes can demonstrate the value of the technology and ultimately help bring mass adoption.

Before the hype and before the price explosions of the past year, I sat down and looked at cryptocurrencies from a UX perspective.

That post, published on CoinDesk, offered a simple central premise: the entire bitcoin project was envisioned, designed, built and released as a peer-to-peer value exchange system. It wasn't supposed to be a standalone asset class or a messaging system for banks.

A year later, we're in the midst of a hype-ridden initial coin offering (ICO) explosion. ICOs are another use case in the UX quiver, one we can add to the progress of the last few years. The ICOs (I prefer to call them token sales) are a great engine of growth but they do not achieve our ultimate goal: adoption of cryptocurrency by the masses.

Looking back

Prior to Jobs and Wozniak, computers were the domain of engineers, hobbyists, large corporations and government agencies. The dominant framework for users to interact with these machines, the command line, ensured low user adoption.

As Neal Stephenson noted, however, the wizards who held sway over the simple cursor and text interfaces later built the tools to drive mass adoption. From the command line, we moved into something relatable and simple, and, in the process, we hid all of the piping behind wall after wall of abstraction.

I don't want to understate how big of a leap this was for my generation. You mean we can make the screen do what we want like an arcade game? We can "save" what we're doing and come back to it later? We can put stuff on a disk and put it on another computer? Wow!

After we were hooked, we started learning heuristics for the things we'd need to master to get more out of the experience. We started implicitly understanding what a KB meant. We grew to "kinda know" how much would fit on a floppy disk.

Some of us started learning how to make simple animations and games. The computer was at first a toy then a tool.

I argue that, in the crypto space, we're at the point in our evolution where the command-line is giving way to new and more generalized heuristics – with similarly explosive opportunities. Right now, the equivalent of the command line are things like wallet addresses, private keys, cold storage, and other obfuscating elements.

I wrote a year ago that I think we need a Steve Jobs in this space. No one has yet stepped up to the plate.

Crypto is no MacOS, yet

Even if regular people were to learn all the terms of art, master using the exchanges, grow comfortable with identity verification and currency exchange rates, and accept the long wait times in transferring fiat in/out, we'd still have a problem that would keep the bulk of the planet off the chain in a meaningful way: risk.

Modern operating systems mitigate risk immensely. Every program we use has some sort of backup system and now you rarely lose work. With cryptocurrencies, the existential threat of losing everything is still there.

The best way to deal with risk, at least at the start, is to try to eliminate it. We must not treat crypto like a competitive currency at least not now. Instead we must treat it like a reward, something new.

We must allow people to buy it, but also allow folks to earn it, with their time, effort, attention, with non-monetary capital. Don't force people to have to buy it with fiat.

Instead, let them earn it.

A user-first model

There are folks that are on a rewards-oriented path: Steemit, Brave, Bitwalking, Metal and others.

This is going to be a growing trend in the months and years to come. All of them want to reward you for something – Steemit for creating and engaging with digital content, Bitwalking just for walking. Brave is taking things to the next level: you get rewards just for using a secure browser and for engagement and attention.

Metal will reward you for converting, sending and spending.

All are trying to get to the same goal: they want the cryptocurrency they've issued to become valuable in the real world, to become the lifeblood of a new economy centered around a particular set of use cases.

The success of these products is dependent on ultimately hooking the masses via a rewards-based introduction – points, miles, cash back – these are notions we all get, just like I did 30 years ago with writing, drawing and reading on the Mac.

But the final step requires users to make that leap from rewards to currency for this revolution to get to the next level. And for that goal, I – a true believer – am very hopeful with this recent wave.

The big fear

That said, I still have one hesitation. All of these solutions make progress on the various complexities and issues surrounding adoption.

But, the one thing they all do not do, is obfuscate the currency exchange problem inherent in forging ahead with something new right away. It can show the value of the new currency in terms of fiat, but even currency earned through effort will be at risk of losing credibility and lasting power.

There will always be fear that the $398 I have in crypto will one day be $0, or in an hour will be worth $118.

Sure, we could be at the start of a fiat currency collapse and not even know it, as the market cap of crypto currency rockets up. This may even be good for the whole system. But, even if the crypto world supersedes the money we know, it will be the option with the most perceived stability that ends up winning. Not the ones with the most speculative upside or interesting "applications."

We’ll know we've "won" when a cryptocurrency becomes woven into the daily lives of the majority of people on earth. That people recognize finally that the fiat they know is also volatile and purchasing power is dynamic and ever changing, and cryptocurrency has many other benefits the analog doesn’t have. Or simply that a cryptocurrency finally becomes more stable so people run to it to escape losing all their value in government-backed money as a crisis looms or is underway.

Until then, it's hard to say what we’ve accomplished truly, but the goal is ultimately that we move belief in fiat money to belief in cryptocurrency.

To me, the best way to start that transition is to get people used to and interested in this new phenomenon by utilizing familiar bridges like air miles and minimizing fear and risk to allow for everyday use to come to bear – and even bring some fun to the strange world of cryptocurrencies.

David Ogden
Entrepreneur

Author:Richard Svinkin

David

Bitcoin Will Make Lots of Millionaires Before âReturning Down to Earthâ: Economics Professor

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Bitcoin Will Make Lots of Millionaires Before “Returning Down to Earth”: Economics Professor

Despite its price volatility, Bitcoin is likely to make more millionaires.

Panos Mourdoukoutas, chair of the department of economics at LIU Post in New York City, whose works are published by Forbes and The New York Times, thinks Bitcoin is likely to turn more individuals into millionaires before its price dives again.

Bitcoin recently reached an all-time high of $3,000 this June after a huge correction to $2,682 from $2,957 in the period of two days. This is after tech billionaire Mark Cuban reportedly called Bitcoin's recent price surge a bubble.

However, this is not the case since the cryptocurrency is showing an uptrend, based on its recent price of $2,831 and its continuing upward trend.

Mourdoukoutas shared a partially similar viewpoint to Cuban's. Both had similar claims that Bitcoin's price would drop after a substantial surge, however, he stopped short of calling Bitcoin a bubble.

Making more millionaires before it crashes again

Mourdoukoutas mentioned that the digital currency made many "overnight millionaires" – individuals who invested into BTC when it was worth just a portion of its current rate.

He also mentioned that Bitcoin will reach new highs, making more millionaires in the course of the action, before "returning down to earth."

Mourdoukoutas added that one of the reasons for the increased investment in the cryptocurrency is the "ultra-low” rate of interest environment, makings the trade of Bitcoin an enticing proposition.

In addition, there is a growing mistrust in the currencies of several nations, following government policies that have pushed more investors into the cryptocurrency.

Price restricted by policies and supply

Mourdoukoutas said that one of these policies is the act by federal governments to provide new treasury bonds at record low rates to cover the old financial obligations with brand-new ones.

For instance, Japan sells treasuries that yield nearly absolutely nothing for the state, however, the nation's debts amount to approximately 250 percent of the country’s GDP. The teacher mentioned that China's treasury yields "something," however, no one knows the specific quantity of the "informal financial obligation".

The fact that there is a substantial quantity of financial obligations linked to the Chinese Yuan and the Japanese Yen diminishes the confidence of investors. Given that there is Bitcoin, a cryptocurrency that has increased its worth by 125 percent in 2016, investors in Asia have taken advantage of the possibility to invest more into the digital currency.

The economics professor also highlighted another government policy which might decrease trust in a country's nationwide currency. This relocation is when governments wish to eliminate the old currency notes, as held true in India and Venezuela. Such incidents, according to Mourdoukoutas, is one of the reasons why Bitcoin price has risen.

Still better hedge fund than traditional ones

Mourdoukoutas further commented that there are particular advantages which make Bitcoin a much better hedge than traditional ones, such as gold. He added that the millennial generation is one of the greatest supporters of the cryptocurrency as they understand BTC much better than the "baby-boomer generation.”

Mourdoukoutas shared:

"Unlike gold, for instance, Bitcoin is a hassle-free medium of payment around the globe.”

The economics professor expounded that Bitcoin's supply is anticipated to be restricted to 21 mln. Compared to gold, there is no deficiency of the mineral considering that when the rate of gold rises, it supplies more incentive for gold miners to mine for gold.

Finally, Mourdoukoutas specified that the financier buzz around Bitcoin continuously helps the cryptocurrency to go upwards, as a growing number of financiers are becoming familiar with the digital currency, and can utilize ETFs (exchange-traded funds) to "conveniently participate in the market."

David Ogden
Entrepreneur

Author: Charles Dearing

David

Teenage bitcoin millionaire can see the cryptocurrency’s value shooting as high as $1 million

Teenage bitcoin millionaire can see the cryptocurrency's value shooting as high as $1 million

Teenage bitcoin millionaire can see the cryptocurrency’s value shooting as high as $1 million

If this teen entrepreneur, high-school dropout and bitcoin millionaire has any predictive powers at all, then we’ve hardly seen the top of the market for the hot cybercurrency.

Meet Erik Finman, who started picking up bitcoin at $12 apiece back in May 2011, when he was just 12, riding a hot tip from hits brother Scott and a $1,000 gift from his grandmother, he told CNBC. He’s now the owner of a reported 403 bitcoins, and while the cybercurrency has been on a bit of a bumpy ride lately, at a Wednesday morning price BTCUSD, -0.48% of $2,773.54 each, the now 18-year-old Idahoan’s stash is worth $1.1 million and change.

“Personally I think bitcoin is going to be worth a couple hundred thousand to a million dollars a coin.”

Erik Finman

Finman cashed out his first bitcoin investment back in 2013 and started Botangle, an online education company that provides tools for locating instructors in subjects they need or wish to learn about.

He wasn’t a fan of high school and convinced his parents, both Ph.D.’s, to let him drop out at 15.

His teachers clearly weren’t seeing his potential. “One teacher told me to drop out and work at McDonald’s because that was all I would amount to for the rest of my life. I guess I did the dropout part,” the young bitcoin millionaire said. He didn’t really want to go to college, either, and won a bet with his parents that if he was worth a million dollars by 18, he could skip it. He was, and so he did.

Finman encountered discouragement from an Uber executive, who, instead of listening to his Botangle pitch, told him he should count on college rather than racking up millions. But the teen did end up successfully selling his company’s technology, for a cool price of 300 bitcoin, reportedly. He has said he turned down a $100,000 offer.

Bitcoin prices have soared more than 300% in the span of a year, with the bulk of the gain coming during May and June. Ethereum, one of its chief rivals, has also seen big gains. Bitcoin tapped $3,000 last week, before a pullback last week that saw it shed billions in market cap.

David Ogden
Entrepreneur

Author: Barbara Kollmeyer
Markets Reporter

David

How To Grow Bitcoin

Grow Your Bitcoin

How to grow Bitcoin

Bitcoin is the leading chryptocurrency and is starting to change the way people use money and invest in the future. The coin is a limited resource which some compare to Gold and certainly at the moment it is holding its own value wise.

Unlike traditional coins chryptocurrencies have many more decimal places which mean you can purchase sell or earn a bit of a coin, just like in ancient times where physical coins were cut into pieces.

Bitcoins have become popular in developing countries, where they are perceived to be better value and safer to use than traditional currencies which are controlled by Governments

I started earning bitcoin a few month ago, completing online survey and earning 74to 359+ bits for 5-30 minutes work. It may not be much, but I puts you on the road to prosperity. Currently I have some 100 ukpd worth of coins in my wallet.

Rather than leaving you Bitcoin in a wallet, You can invest and trade them online, which can be risky if you do not know what to do, the basic aim is to buy on the lows and sell on the highs.

You will see many companies which offer to multiply you coins by hype methods offering high returns which are not sustainable and often lose down without notice.

I have found two companies who actually trade chryptocurrencies using specialized trading algorithms, which greatly reduce the risk of loss. One company has a excellent track record, however you need to keep you coins invested for a year, compounding your gains.

The second company based in the Far East has only been trading for a short while but is very reactive to changing conditions, which have forced its competitors to shut down, it also transfers the interest you earn into your personal wallet, which is then under your own control.

There will be many people who claim that both of these companies are a scam, but frankly most do not know what they are talking about. I used to be a currency trader many years ago and know for a fact that automated trading programs do work. Chryptocurrencies are more volatile so one can see that doubling your money in 60 days is not an unreasonable target.

David Ogden
Entrepreneur

David

Ethereum Tokens Are All the Rage. But What Are They Anyway

Ethereum wants to create an ecosystem where everything works together seamlessly as part of its vision for a 'world computer' – and that includes the tokens required to power it.

Launched in 2014 by a band of coders and an upstart teenager, ethereum was designed to make it possible for anyone to code nearly any type of app and deploy that on a blockchain. Many of these decentralized apps (or 'dapps' for short) needed their own token that could, among other things, be sold and traded easily.

To that end, nearly 18 months ago, the ERC-20 token standard was born.

It's hard to overstate how important that interface has been. By defining a common set of rules for ethereum-based tokens to adhere to, ERC-20 allows developers of wallets, exchanges and other smart contracts, to know in advance how any new token based on the standard will behave.

This way, they can design their apps to work with these tokens out of the box, without having to reinvent the wheel each time a new token system comes along.

As a result, almost all of the major tokens on the ethereum blockchain today, including those sold in the recent surge of ethereum-based initial coin offerings (ICOs), are ERC-20 compliant.

Tokens 101

Before delving deeper, it's important to spell out what a token actually is and how it differs from ether, the native currency driving the ethereum blockchain.

As they relate to the ethereum network, tokens are digital assets that can represent anything from loyalty points to vouchers and IOUs to actual objects in the physical world. Tokens can also be tools, such as in-game items, for interacting with other smart contracts.

But put simply, a token is nothing more than a smart contract running on top of the ethereum blockchain. As such, it is a set of code (functions) with an associated database. The code describes the behavior of the token, and the database is basically a table with rows and columns tracking who owns how many tokens.

If a user or another smart contract within ethereum sends a message to that token's contract in the form of a 'transaction,' the code updates its database.

So, for instance, when a wallet app sends a message to a token's contract to transfer funds from Alice to Bob, this happens:

First, the token's contract checks that the message was signed by Alice and that Alice has enough funds to cover the payment

Then, it moves funds from Alice's to Bob's account in the database

Finally, it sends a response, letting the wallet know the transaction was a success.

In contrast to tokens, ether is hard coded into the ethereum blockchain. It is sold and traded as a cryptocurrency, and it also powers the ethereum network by allowing users to pay for smart contract transaction fees. (All computations on the ethereum network have a 'gas' cost.)

When you send tokens to an exchange, for example, you pay for that transaction (in this case, a request to the token's contract to update its database) in ether. This payment is then collected by a miner who confirms the transaction in a block, which then gets added to the blockchain.

Early on in ethereum's history, standards were part of the overall plan to create a user friendly and broadly accessible system. But like all standards, ERC-20 took time to evolve over a series of long discussions and careful considerations.

So, sometime before DevCon1, the first big ethereum conference in 2015, Vitalik Buterin, the founder of ethereum, introduced the initial standards token.

Later that year, Fabian Vogelstellar, one of the developers working on ethereum's Mist wallet, took that standard, changed a few things, and proposed it to the community as ERC-20 to initiate a formal conversation around how the standard should be implemented.

Then in April, due to changes in how the Ethereum Foundation was organizing its GitHub, the ERC-20 standard was moved to a Github pull request.

What's inside?

ERC-20 defines a set of six functions that other smart contracts within the ethereum ecosystem will understand and recognize.

These include, for instance, how to transfer a token (by the owner or on behalf of the owner) and how to access data (name, symbol, supply, balance) about the token. The standard also describes two events – signals that a smart contract can fire – that other smart contracts 'listen' for.

Together, these functions and events make ethereum tokens work the same almost everywhere within the ethereum ecosystem. As a result, nearly all wallets that support ether, including Jaxx, MyEtherWallet.com and the official ethereum wallet, now also support ERC-20 compliant tokens.

According to Vogelstellar, who spoke to CoinDesk about the importance of ethereum's token standard, this interoperability lays the groundwork for big changes to come.

He said:

"I believe we are just at the beginning of tokenizing everything. Maybe in the future, you will be able to buy a share of the chair you are sitting on, the paint inside your house or a fraction of equity in a huge building complex."

Bumps in the road

One thing to keep in mind, though, is that ERC-20 is formally a draft, meaning it is not being enforced and still needs to be fully blessed by the ethereum community. Regardless, Vogelstellar said, every new token will likely conform to its set of rules.

He cautioned, however, that the standard is still young, so there will be bumps in the road. One of those bumps is that sending tokens directly to a token's smart contract will result in a loss of money. That is because a token's contract only tracks and allocates money. When you send tokens to another user from a wallet, for example, that wallet calls on the token's contract to update the database.

As a result, if you attempt to transfer tokens directly to a token's contract, the money is 'lost' since the token's contract cannot respond.

So far, $70,000 worth of tokens have been lost in this manner.

But solutions are in the works. As an extension to ERC-20, ERC-223 attempts to resolve the issue by suggesting a token's contract implement a tokenFallback function to prevent the contract from holding tokens sent directly to it accidentally.

Vogelstellar argued this is all just part of developing a solid system, though, saying:

"Driving with these prototypes can be rocky at times, but ultimately they provide the necessary learning that will bring us to the future of blockchain and smart contract interactions."

David Ogden
Entrepreneur

Author: Amy Castor

David

Top 3 Reasons Not to Use an Exchange Wallet to Participate in a Cryptocurrency ICO

Even though cryptocurrency ICOs have been going on for quite some time now, a lot of basic questions continue to show up. It appears there is a lot of confusion as to why one should never send funds to an ICO from their exchange wallet directly. There are several good reasons as to why this should not be done, though, as we outline below.

3. TRANSACTION DELAYS CAN COST MONEY

Contrary to what some people may think, exchange wallets do not always send out withdrawals right away. In some cases, it can take an hour or longer until your withdrawal is effectively processed. Depending on which cryptocurrency we are talking about, it may take even longer to get the necessary network confirmations. This is anything but a fun experience, especially when it comes to dealing with a cryptocurrency ICO.

These ICOs often provide early investors with some sort of a bonus. Having to wait until the exchange sends out your funds can result in buying less ICO tokens than initially anticipated. It is not something anyone wants to deal with. Even if an ICO is scheduled to last multiple days, there is no reason not to transfer funds to your own wallet first before participating in a crowdsale.

2. AN EXCHANGE WALLET IS NOT YOUR WALLET

It may be hard for novice users to understand this principle, but a cryptocurrency wallet is not like a bank account. With a bank account, you rely on a third-party service provider to safeguard your funds. That is exactly what exchange wallets are, yet they do not let users spend their funds as they want. You always need “permission” from the exchange wallet service provider to move funds around, which is both annoying and risky.

There is a big difference between an exchange wallet and a private wallet. With a private wallet, you are the only one controlling the wallet address and its associated private key. An exchange wallet is generated on your behalf, yet you have no control over it whatsoever. Although you can freely use an exchange wallet, it is not your digital property by any means. Unless you own its private key, it’s not yours, nor is any of the money associated with it.

1. YOU WON’T GET YOUR TOKENS (RIGHT AWAY)

Perhaps the biggest complication that arises when using an exchange wallet is how the purchased ICO tokens are not yours to control by any means. In most cases, a cryptocurrency ICO smart contract will send money back to the address the deposit was made from. If that wallet is an exchange wallet, the exchange is the actual owner of the tokens you purchased using their wallet. That is a rather disturbing way of buying ICO tokens, yet the end user cannot claim ownership of the tokens, as they do not own the wallet’s private key.

Granted, in some cases, exchanges will eventually support these ICO tokens and return the purchased amount to the customer. However, one has to keep in mind they have no legal obligation to do so by any means. If you send money to a cryptocurrency ICO address from a wallet, you do not fully control as the sole owner, it is your own fault. All ICOs clearly warn users not to send funds from an exchange to avoid any complications.

David Ogden
Entrepreneur

Author: JP Buntinx

David

Hedge Funds Are Quietly Investing in Bitcoin

Bitcoin’s price has gained over 180 percent this year, while hedge funds have only returned 3.5 percent on average. Most hedge fund managers have stayed away from bitcoin. However, the few that have included it are significantly outperforming their peers.

Average Hedge Funds Return 3.5% This Year

Hedge fundsHedge Funds Are Quietly Investing in Bitcoin are investment funds whose clients are accredited or institutional investors. They are less regulated than mutual funds since they are not subject to strict rules designed to protect investors. Some of them are not even required to register or file public reports with financial regulators.

Investments in hedge funds are only restricted by each fund’s mandate. They can effectively be anything including land, real estate and currencies, as long as they seek to maximize investors’ returns while reducing risks.

The comprehensive overall returns of hedge funds are measured by the hedge fund absolute return index (HFRX), which is representative of all hedge fund strategies. Hedge Fund Research (HFR), which provides data on more than 150 hedge fund indices, is the industry’s leading provider of hedge fund index data. According to HFR, the HFRI Weighted Composite Index only returned 0.46% in May and 3.5% year-to-date. In comparison, the S&P500 total return was 1.16% in May and 9.61% year-to-date.

Bitcoin Helps Hedge Funds’ Bottom Line

HFR’s data reveals that most hedge fund strategies underperformed the market both in May and year-to-date, CNBC reported. The index provider noted that technology and currencies were the only two strategies that performed well in both time periods, adding that:

The FX funds did well because of exposure to digital currencies like bitcoin.

The hedge funds that do invest in bitcoin currently do not have large positions. The best performing hedge fund index in May was the HFRI Macro Currency Index which gained 3.49% in the month and 8.22% year-to-date.

“In addition to contributions from Euro, Swiss Franc, New Zealand Dollar and Korean Won, the Currency Index also had strong contributions from exposure to digital currencies,” according to the HFR report.

Why Don’t More Hedge Funds Invest in Bitcoin?

“Many hedge funds are still very reluctant to dip a toe into the asset class,” CNBC recently reported. One hedge fund veteran, with 16 years of experience, told the news outlet:

To be honest, I just don’t know enough about it.

The reasons hedge funds are reluctant to invest in bitcoin “really boils down to concerns over volatility, security and perception,” Louis Gargour, the founder of asset manager LNG Capital, told the publication.

He listed three concerns. Firstly, “bitcoin’s extreme volatility doesn’t sit well with managers working on a risk-adjusted return basis.” Secondly, fund managers are concerned with the digital currency being hacked or stolen. Lastly, “there’s a perception that bitcoin remains a niche, retail investment that does not yet demonstrate sufficient quality to be seriously considered for many reputable institutions,” he explained.

However, as bitcoin continues to outperform other asset classes, more hedge fund managers may start following their peers and invest in the digital currency. At press time, Bitstamp shows that bitcoin has gained over 180% so far this year and over 70% in May.

By Kevin Helms

David Ogden
Entrepreneur

David