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CRYPTO-SECURITY

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CRYPTO-SECURITY

Blockchain is one of the fastest-growing digital technologies in recent history, and its revolutionary decentralised model is being appropriated by industries far and wide. Part of its popularity is derived from cryptocurrency, which is now a decade old—calculating by 2009, the launch year of Bitcoin, the first established cryptocurrency.

 

When Bitcoin was born, cryptocurrency was just that: a currency. However, the term ‘cryptocurrency’ is now somewhat dated. The rise of initial coin offerings (ICOs) means that there are now thousands of different cryptocurrencies out there, with ICO-generated coins commonly referred to as ‘tokens.'

 

2021 will likely signal the rise of one special kind of token, called a security token, which provides one of the most encouraging cases for blockchain technology yet.

 

Moving in a New Direction

Once used to describe fiat money alternatives in general, and Bitcoin in particular, cryptocurrency is now a catch-all phrase covering literally any payment transferrable via blockchain.

 

Utility is where the market headed after Bitcoin became old news. The aptly named ‘utility tokens’ are the result of an ICO whereby users of a blockchain platform pay with the tokens sold during the ICO, or that they earn for providing some other relevant input.

 

Golem is a pertinent example, allowing users to lend their own PC’s power to the network which collectively employs it

 

to run a remote supercomputer. Users earn golem network tokens, or GNTs, for connecting to the network, but they can also buy them via an exchange. Basic Attention Token is similar, with users rewarded in BAT for using the BRAVE browser and viewing ads.

 

However, these tokens amount to little more than the loyalty rewards points given by credit cards, in some cases, and barely need to be denominated in token form for the platform in question to work. Attaching value to them is an exercise in ambiguity as the market pretends that the underlying business’s value proposition and market (potential or real) make its tokens more valuable.

 

This often isn’t the case. Projects like the ones mentioned above are gaining new partners and users constantly, and yet their tokens still move in relation to Bitcoin and the market at large. Participants with utility tokens are therefore purchasers of a service, and not investors in it. The result of their contribution to an unregulated crowd-sale is simply the ability to use the service itself, and nothing more.

 

Once used to describe fiat money alternatives in general, and Bitcoin in particular, cryptocurrency is now a catch-all phrase covering literally any payment transferrable via blockchain.

A better balance is found in security tokens, which are essentially digital, liquid contracts for fractions of any asset that already has value, like a house, a car, a painting, or equity in a company.

 

Benefits of Security Tokens

Denominating fractional ownership of a real asset in security tokens is an idea that is naturally more structured and means investors can expect that their ownership stake is preserved on the blockchain ledger.

 

Security tokens are a natural bridge between the traditional finance sector and blockchain and benefit both equally. This is because the assets divvied up via tokens already exist in the traditional market—even the biggest markets like equities (either public or private equity) and real estate. Many blockchain projects now have platforms that directly undercut the old ICO model by tokenising equity rights for pre-IPO companies.

 

A lack of regulation for utility tokens has meant that companies raising capital can circumvent institutional finance alongside the costs and accountability involved. However, given the perpetually volatile cryptocurrency market, and its precipitous 2018 slide followed by its bull rally through 2020, it has become riskier to launch an ICO and expect conditions stable enough to run a company.

 

NEM

NEM is a blockchain written in Java, the double-layer blockchain supports multiple ledgers on its cryptocurrency layers. NEM’s ecosystem is built in such a way that seamlessly connects and transfers any type of digital assets between private and public blockchains. A collective growth mindset, made NEM to abdicate the POS consensus and introduce the POI. NEM is the world’s first practitioner of POI (Proof-of- Importance) consensus. Although it is similar to Proof-of-Stake which requires locking of certain amounts of coins in the ecosystem, there are several major differences.

The key difference between the POS and POI consensus is that in the POS consensus the amount of coins staked does matter, whereas a staker allocating 10% of the staked amount will be able to mine only 10% of blocks in the network. The POI consensus is used to determine network participants which are eligible enough to add blocks to the blockchain, in NEM’s ecosystem adding blocks to the blockchain is called “harvesting”.

 

NYPD Needs Better Accountability Says Manhattan Borough Presidential Candidate Mark In POS the more coins one stakes, the higher the reward and the reputation, however in POI mechanism, there are three key factors which build the reputation of the node: vesting (holding of 10000 XEM in the wallet), transaction partners, number of transactions within 30 days.

 

Symbol

Symbol is NEM’s project mainly focused on Enterprise. Symbol is a hybrid blockchain, which means that the blockchain is not fully accessible by anyone although it still bears features of a blockchain such as transparency, security and solidness. The hybrid blockchain is fully customisable and blockchain nodes can decide which transactions should be verifiable, who can participate in the blockchain and which transactions can be public.

The interoperability of public and private chains from what it seems like allow a cost-efficient, seamless data transfer between these two chains, avoiding third party bridges, which are used in interconnection of public and private chain protocols. Just like other blockchains built nowadays, Symbol is interoperable, which means no intermediaries needed for data transfer and token swaps between any blockchain and Symbol.

 

As NEM commented, the launch of the main-net of Symbol is scheduled on March 15, after a long 4 years of developments. On March 12, the project will pre-launch Opt-in and snapshot phase at a block height of 3,105,500.

The Opt-in means that any NEM’s proprietary token – XEM holders can receive Symbol’s proprietary token – XYM upon the main-net launch. Basically what that means is that during the block height of 3,105,500 the system will read all wallets that have participated in the Opt-in and will allocate XYM to the Symbol account created during the Opt-in, which is exactly the same as the balance of one’s XEM wallet. In other words, hold your XEM in your NEM wallet (note: the wallet must be updated to the latest one), apply for Opt-in, create a Symbol account, for each 1 XEM in your balance you will receive 1 XYM, the XEM balance will remain intact, according to the announcement on NEM’s official website.

 

Take a closer look at cheap but potentially great cryptocurrencies to invest in the next 12 months:

  1. Chainlink (LINK) – appeared in 2017 in the USA. These crypto coins developed a technology that forms channels between different data providers employing smart blockchain technology. Chainlink allows all network operators, like information providers, to earn their token LINK. From an investment point of view, Chainlink has great potential. This is the list of partners who also believe in this crypto coin’s future: Dapps Inc, Google Cloud, ETHA, ConsenSys. The price (January 28, 2020) is $2,62. The market cap is $917 350 826.
  2. Basic Attention Token (BAT) is another functional type of tokens based on the Ethereum blockchain. It is used only in the Brave browser. The cryptocurrency was launched in 2015. Developers offer a various concept of interaction for all network participants. Browser users pick to choose ads or not and can monitor the token’s price in real-time via Brave. The token has a very active and massive affiliate program, has the support of the Tor browser and DuckDuckGo search engine. The current token price is

$0,218456. The market cap is $311 019 624.

  1. Synthetix Network Token (SNX) is a potentially interesting platform network based on the ERC20 token. It helps to create synthetic assets (Synths) for tracking the value of physical assets. People can create and support their Synths and make money with them, without actually being the owners of these assets. The token appeared in 2017 and back then it was called Havven. The current token price is $1,19. The market cap is $193 220 205.

 

Top 5 cryptocurrencies to invest in 2020:

  1. Bitcoin

In May 2020, the first and major cryptocurrency developers will offer 50% reduced rewards – 6.25 BTC instead of 12.5 BTC for each verified block. However, apart from that, Bitcoin is likely to bring the dominance index to 65-70% compared to other alt-coins. In such a way, it can become the cryptocurrency with the largest market capitalisation. These factors may significantly affect the growth of its price in 2020. Active use of Lightning Network may also change the BTC ecosystem. It will enable the implementation of Bitcoin in decentralised applications, micropayments, and e- commerce platforms. The current Bitcoin price (January 28, 2020) is $8 994,85.

  1. Ethereum

Unlike Bitcoin, Ethereum is based on practical smart contracts used by many projects for the digitalisation of transactions. The currency value may increase due to the increasing demand for its blockchain and functions, rather than a deficit of the asset as it happens with BTC right now. A major role in the success or failure of this currency will depend on upcoming fork updates and rapid implementation of the Proof-of-Stake algorithm. The approval by regulatory organisations and community decision to de-list ETH from the list of alt-coins may also affect its price growth in 2020. The current ETH price is

$171,38.

  1. NEO

The NEO project is often included in different cryptocurrency investment ratings for the next year. This

 

cryptocurrency breaks many stereotypes, including being the first open-source token originated from China. It claims to transform the traditional financial system by combining digital and real assets. Its unique Superconduct trading mechanism allows users to trust the funds through a decentralised platform. So, NEO’s appliance is beyond doubt, as its rapid demand growth.

NEO may even hold an ICO, but so far it is trading at the level of $11,14 USD per token. The current NEO price is

$11,14.

  1. EOS

Chinese experts, according to CoinTelegraph, really like to include EOS to the list of the most promising cryptocurrencies for the next few years. Even if you don’t know much about crypto coins, it is definitely worth your investment in 2020. If Twitter, Uber, and Amazon ever move to a blockchain, the core of their work will definitely be EOS. The EOS system is free of Ethereum problems with scalability and it is ready to replace other competitive blockchains. If Ethereum fails, EOS can level up to 100 USD per token. EOS achievements become possible thanks to the consensus algorithm of delegated proof of ownership (DPoS) and an infinite number of similar blockchains. The current EOS price is $3,94.

 

  1. Ripple

Some experts call XRP the “king of banking infrastructure”. The successful partnership with major financial market players made the Ripple ecosystem a breakthrough in the crypto industry. Take the latest integration with Western Union and the potential replacement of SWIFT to accelerate and reduce the cost of large money transfers between counter-parties.

However, do not expect huge profits with XRP in 2020, it is good for long-term investment. Even with the most optimistic approach, XRP price is unlikely to rise above

0.7 USD in the next couple of years. The current XRP price is $0,233759.

Mr Diwakar

Mr Diwakar

Crypto Trader and Blogger