Sep 102016
 

iconomi-dividends

ICONOMI is the latest crypto-token ICO to have hit the marketplace, and as of this writing, has raised over $4.5 million. By any standards, it is one of the highest grossing ICOs. It has performed impressively even in a hot market where too many ICOs are chasing investment Bitcoins. But it seems like a lot of people who are investing in the ICONOMI ICO don’t fully understand the ideas behind the project. This post will help you understand what ICONOMI’s goal and vision is for the project, and how investors could benefit. It is an explanation of how ICONOMI funds work.

The idea behind ICONOMI

In one sentence, ICONOMI is a crypto version of a fund. ICONOMI is slated to launch with two funds:

  • Coin Traded Fund (CTF, also ICONOMI.INDEX): This is similar to an ETF in the real world. It will track a basket of securities to be determined in the future. It is a passive investment. Ideal for those investors who are looking to put a small percentage of their money in cryptocurrency as an asset class, and those that don’t follow the daily price fluctuations of the crypto markets.
  • Coin Managed Fund (CMF also ICONOMI.PERFORMANCE): This is similar to a classical hedge fund. You will trust an investment manager with your money and your profits are tied to the performance of this fund manager. In an ideal world, the returns will be superior to CTF because of manager’s skill, but this is obviously an additional risk you’re taking and there is no such guarantee. It is more of a ‘strategic investment’ in the crypto space. This is suited for investors that are more active in crypto trading and can judge performance and trading decisions themselves through their prior knowledge.

That’s all there is to it. There is no cryptocurrency yet that has managed to be a fund of other cryptocurrencies. The vision of ICONOMI, however, stretches beyond the initial launch of the 2 flagship funds. It aims to be an open fund platform, which means if you trust me as a crypto-trader, then I’ll be able to launch my own fund on their platform, and people who want to buy my fund can do so. The fees will be split between ICONOMI and the trader (me in this example).

Risks and Uncertainties

The first type of risk is regulatory. It is unclear if they clear the Howey Test in the US or not. Especially after The DAO fiasco, regulatory risk has become more common (thanks for spoiling it for everyone else, Slock.it team).

Also, with any project that has custody of funds, there is a security risk no matter how many precautions are taken. We have seen this time and again that even some very good and secure systems can be hacked in this space.

However, the real uncertainty with investor returns and adoption of the platform will come from the nitty-gritty details. How will the managers be compensated? Will there be a returns cliff? Will managers have to ‘earn back’ their keep when they underperform? How are returns calculated? What prices are used? Is there enough liquidity in the market to determine valuation? If not, what valuation models will be used to value holdings? What opportunities are present for traders to indulge in arbitrage to ensure CTF tracks its NAV?

These are many questions that will determine the success or failure of the project.

How to think about ICONOMI as an investor? 

As an investor, you need to do all the research, read the whitepaper, and do your due diligence. When it comes to terms and specific details, make sure you understand the risks and uncertainties that I outlined above, make different scenarios and do a scenario analysis and then do a risk-return analysis to determine if it is worth the risk or not.

You can check out the ICO here.

Photo Credit: daddyboskeazy

Jul 312016
 

HEAT ICO

HEAT has announced an ICO until August 11th 2016. Now, there is no shortage of ICOs and pumps and dumps in the cryptocurrency space, so a new ICO in and of itself isn’t very exciting. However, reading through the technical and social features of HEAT, I would say that this ICO is worth taking a serious second look at. Here’s the Bitcointalk ANN thread for more details for those interested. Now my regular readers will know that I don’t advocate investing in ICOs if you don’t know the risk or don’t do your homework. Please do your research, and don’t invest anything you can’t afford to lose.

With that out of the way, let’s talk about how the HEAT is a promising ICO, and why if you’re an ICO investor, you might want to take a deeper look at this project.

Founders

Firstly, the founding team is very important. They are NXT veterans who also ran another cryptocurrency project called FIMK. Now I’ll admit that I had never heard of FIMK before, but it is a niche community that provided one of the first asset tokenization features. As many would know, the NXT code makes tokenization and asset creation on a blockchain easier, and it was one of the first platforms to offer such a feature. FIMK provides these features already that projects like Waves are announcing now.

HEAT Founders

The founders are from Finland, which has a surprisingly active cryptocurrency community. And they are not anonymous – nothing wrong with being anonymous, but if the founders are willing to reveal themselves, there is more at stake and are less likely to do an exit scam after raising all the money in the ICO.

High Scalability

Scalability can become a buzzword, but it is something that we are seeing with Bitcoin, can be quite important. When you’re working on advanced features, like decentralized exchanges, scalability can indeed matter a lot. With the new generation of cryptocurrencies coming up with new features, scalability sometimes becomes an afterthought.

A few cryptocurrencies take this seriously, like Bitshares. HEAT follows in these footsteps, and is capable of thousands of transactions per second. It does this through a clever use of a chain of blockchains instead of a single embedded database.

Features: Built-In Exchange/Fiat Gateways

The high scalability helps with its other important feature, which is high-frequency trading (high-frequency is generous. It is likely high frequency for a blockchain, which is good enough for this case). Yes, HEAT implements an asset exchange (somewhat similar to Bitshares), and there are gateways that will be built into the client. This means you should be able to trade currency pairs, like say BTC/ETH because of these gateways. Gateways convert BTC to HEAT-BTC and ETH to HEAT-ETH.

The gateways of course will need to be built it. The founders plan to implement a fiat gateway as well, which would allow people to trade and speculate on currency pairs against the dollar and Euro. This is again a feature can potentially be used by a lot of traders. If nothing, it might just become another place to run arbitrage bots.

Because it has asset tokenization and built-in exchanges, HEAT is capable of hosting the full suite of ICOs for new projects. There is a lot of competition in this space, however, with the most recent one being ICOO from openledger (which is also part of the HEAT ICO hosting).

Investment

As an investment, HEAT, in my opinion, provides a very fair risk-adjusted return probability due to the relatively lower amount raised in the ICO so far. It does have many good features. If the major exchanges list it soon after launch, that would be another big plus.

Photo Credit: Arizona Parrot

Mar 162016
 
Lisk ICO Javascript Smart Contracts

Lisk is a new cryptocurrency project with the aim of making it as easy as possible for developers to build and deploy their decentralized applications (DApps). Lisk is especially noteworthy in its use of JavaScript as the programming language that will power these DApps. JavaScript is one of the most common languages that most web developers are familiar with, and therefore Lisk is able to tap into a huge market of existing developers throughout the globe.

Lisk aims to make it easier to build DApps for developers who may find Ethereum challenging to learn, or just provides an alternative to developers, so they are not overly dependent on Ethereum for their DApps. Lisk has created a clever infrastructure around this project, which includes a Lisk DApp Store that will list the DApps built by people, for ease of discoverability. Lisk will likely lower the barriers to entry into this exciting new space.

Lisk is also one of the few blockchain and cryptocurrencies listed on Microsoft Azure. In fact, it finds a mention in Azure’s official blog, along with other projects like Augur, Bitshares, Syscoin, and Slock.it.

How Lisk Works

Lisk makes it easy to integrate with existing services that a lot of web software developers are familiar with, such as Github. In its current infrastructure, Lisk will assign a new sidechain to each DApp but aims to use a Virtual Machine (VM) architecture in the future. The BTC Geek spoke to Max Kordek, the CEO of the Lisk project –

“Lisk offers a unique solution for JavaScript developers to deploy their own blockchain and develop a decentralized application on top of it. We think it’s high time to spread thousands of blockchains with different use-cases throughout the whole world.”

Lisk is branched out of the Crypti community, where a segment of the initial team diverged in their vision and started Lisk. This shows the community is already familiar with cryptocurrencies in general. Crypti raised 750 Bitcoins in its Initial Coin Offering (ICO). Lisk is also going through the ICO process, and has raised several thousand Bitcoin already. The ICO is expected to last until March 20th 2016.

Projects like Lisk help spread the idea of cryptocurrencies and blockchain to the more mainstream developer community that may not be very familiar with blockchains in general and therefore fear treading into the space due to a steep learning curve. By working with tools, technologies, and sites including Github, Docker, and Node, Lisk aims to make building decentralized applications as easy as building any regular web application. It also abstracts away a lot of low-level code by providing useful APIs, which make the developer further simplified. Lisk a beginner-friendly version of a cryptocurrency that allows for the creation of DApps.

Photo Credit: Dmitry Baranovskiy

Mar 102016
 

Bitshares Microsoft Azure

Bitshares announced today that it is available on Microsoft Azure. This may or may not seem like huge news to you, but I suspect people are missing the point. Just getting on to Microsoft Azure is a gimmick – everyone and their dog will be doing this soon for the publicity and price pump this is presenting at the moment. It’s an open-source platform (Ubuntu VM) and you just need to submit the right code and scripts to make this pass their automated scripts. Once the checks all pass and the mods are happy, it gets merged into the main branch and will then be available on Azure. Check this out on github to see the process. That’s what other cryptocurrencies like Factom and Emercoin have done too (I don’t want to underestimate the hard work of everyone involved though).

However, specifically in the case of Bitshares, I am cautiously optimistic that this is the right move forward for greater adoption. Bitshares differs from many other cryptocurrencies in its high blocksize and throughput. I don’t want to pretend to know all the attack vectors against its proof of stake (POS) algorithm. However, it has never really been ‘broken’ in the wild so far. Assuming it works and its security will continue to work in the future, Bitshares is an incredibly scalable blockchain solution.

Bitshares blockchain is maintained and validated by witness nodes, and they produce a block every 3 seconds – faster than most other blockchains. Given that the ultimate goal of Bitshares is to be a trading platform, it is possible that each block contains scores or even hundreds of transactions. This means the nodes need some really good computing infrastructure to really make the promise of Bitshares a reality. Hosting a witness node in the cloud, on a scalable solution like Microsoft Azure, is a great move, since it allows anyone to easily spin up a witness node and join the network, without having to worry about how their crappy internet connection at home with their pentinum 4 processor computer will hold up. Also, Bitshares’ presence on Microsoft Azure allows the stakeholders to reduce the block times even further if technology evolves, without risking too many orphan blocks.

The Blockchain-as-a-Service (BaaS) is a great move for Microsoft, and is gimmicky for many other cryptocurrencies,  but I think in the case of Bitshares, this is truly a moment when its practical scalability can go through the roof, and this will set the foundation for Bitshares’ future ambitions to be the de-facto crypto-currency exchange for other coins (via its clever incentive scheme and price feeds to maintain price – it is not a true exchange in that it doesn’t hold your private keys to other cryptocurrencies).

 

Mar 062016
 

Factom Price Rise Increased Volume

Factom saw a rise of over 50% in its price over the last 24 hours on very strong volume that now only trails Bitcoin and Ethereum. The 24 hour volume came in at a strong $2.7 million according to CoinMarketCap, ahead of competitors like MaidSafeCoin and Monero, which have also been seeing strong rallies over the last week on increased volume. Factom’s volume also overtook Litecoin’s, which as been unusually calm given all the increased price volatility among other altcoins.

Unsurprisingly, Factom has the highest trading volume from Poloniex. However, it also has a strong volume from Yuanbaohui, a Chinese exchange that allows for the trading pair of FCT/CNY.

Factom Exchange Volumes

Factom, which raised money in an unusual way by going with both a seed funding round from venture capitalists and also an initial crowdsale, has courted its fair share of controversies since launch.

Factom announced right after its fairly successful crowdsale that it has entered into partnerships with the Honduras government to store land-registry records on the Factom blockchain (hashes of records, to be precise), considered a big step in the crypto-world to gather a partnership with a government. However, it seemed like the announcement was premature, with later reports that the progress had ‘stalled’. The recent price run up comes after announcing partnerships with Chinese smart cities.

Factom’s price has fluctuated with progress since its launch. It’s latest venture capital funding valued the company at $11 million after their seed round, which was after the crowdsale that helped distribute ‘Factoids’, the native currency of the Factom blockchain.

Factom has been going up in price on strong volume since the Chinese city partnership announcement.

 

Mar 052016
 

MaidSafeCoin Volume Overtakes Litecoin

MaidSafeCoin, the currency behind the SAFE network of MaidSafe, is seeing a steady price rise with increasing volume for the last few weeks, and over the last 24 hours, for the first time, its trading volume is higher than Litecoin’s. The price and volume run-ups have taken place after the testnet was released by the company, after several years of work on the network and its mission to decentralize the internet.

Ethereum, which has already overtaken Litecoin and Ripple to become the second most valuable cryptocurrency, is also seeing a steady price rise over the last few weeks, increasing by over 1000% in under a month and rivaling the coveted $1 billion market capitalization, also with impressive trading volume.

As the altcoin market has dried up with new and cloned coins, the ones with promise and potential behind them are getting a renewed lifeline even as Bitcoin has faltered in its quest to find an amenable solution to the scaling and block-size issues. Bitcoin’s price has fallen to around $400, even as Ethereum and MaidSafeCoin continue their upward price journey.

MaidSafeCoin is not as well known as Ethereum, but the SAFE network from MaidSafe is a very interesting concept. David Irvine, the founder, has been working on this project since 2006, long before the Bitcoin whitepaper came along. However, with the idea of cryptocurrencies, it was possible to provide a native currency to the SAFE network, which would be used for transactions for storing data on the network.

MaidSafeCoin has one of the largest IPO/ICO back in the day, which was also quite controversial because of a huge price differential between Bitcoin and Mastercoin (on which MaidSafeCoin was created), thus causing a huge bubble and subsequent bust in the price of Mastercoin. The team learned some valuable lessons during that time. The project has been making steady progress ever since even as its price had fallen. However, after the test-net announcement, it seems like people have rediscovered the potential of the SAFE network.

Sep 192015
 

Bitshares Price Rises

Bitshares, the cryptocurrency that introduced Delegated Proof of Stake as its consensus mechanism and issues collateralized assets on the blockchain, called BitAssets, is seeing a comeback in price with high trading volume as it prepares for the launch of its next phase, ‘Bitshares 2.0’. The new release has promised a bunch of new features and is scheduled to be launched next month, although the Bitshares project has been notorious for missing almost all deadlines publicly announced. The upgrade has several improvements, both on the technological front and on the business and features front, so it would be an important evolution for Bitshares. 

At the time of this writing, Bitshares had regained it’s 5th position among all the cryptocurrencies tracked by Coinmarketcap. In addition, the price increase has come on a significant increase in trading volume, which has overtaken Ethereum’s trading volume perhaps for the first time since Ethereum’s launch. Even though the overall market capitalization of Bitshares is a fraction of the market capitalization of Ethereum, at its peak, Bitshares had a higher market cap than Ethereum’s current market cap.

Bitshares Price Volume Increase

Bitshares’ price has languished, falling below the 2000 satoshi mark for several months and has just recently been going up again. Bitshares was touted to be one of the first ‘Bitcoin 2.0’ cryptocurrencies, with several appearances at conferences in the United States. However, this has stopped of late, as older investors have fled the project, especially the initial support from several Chinese community members.

The new release has been widely advertised to have unrealistic performance metrics, like 100,000 transactions per second, which is very implausible for a decentralized consensus-reaching mechanism based on today’s technology. In contrast, Bitcoin has a throughput of around 5-7 transactions per second. However, based on initial tests, several code optimizations have led to an increase in the processing ability of the delegates who add to the blockchain. Since Bitshares uses Delegated Proof of Stake, it is assumed that these delegates will use the latest technologies, including cloud computing resources if necessary, so issues like the blockchain size are not of primary concern to the system. 

The new release will also make it easy to create user issued assets, which would compete with other, older technologies like NXT and Counterparty, both of which are the preferred cyrpto 2.0 technologies for issuing new assets, especially for initial-coin offerings in the cryptocurrency community. The details are tracked on the Bitshares forum.

Bitshares has been controversial in how it handled its IPO money and several delayed feature launches over time. It was also controversial for its centralized decision making, where core fundamentals such as inflation were changed to pay the founding team that ran into several costly overruns. The project lost support in the wider community and the price had reflected that for several months, falling almost 90% from its peak, and regaining some in the last week. At its peak, the market capitalization of Bitshares was over $75 million, but has since steadily declined. 

Photo Credit: Paolo Camera