What is a Cryptocurrency?

A cryptocurrency is a tradable digital asset or digital form of money, built on blockchain technology that only exists online. Cryptocurrencies use cryptography to verify and secure transactions, hence their name. There are currently well over one thousand different cryptocurrencies in the world and many people see them as the lynchpin of a fairer, future economy.

At its simplest a cryptocurrency works by logging transactions into a database to work out how much of that currency each individual, or their address, is holding. In that sense, the system is not so different to how banking currently works. For example, the money you spend online follows similar principles: you send money from your bank account to another account by deducting from a digital figure that you have associated with your account, that being your balance. This is nothing more than information being logged on a database, no physical exchange takes place.

Each cryptocurrency work on the same basis in that it is a large data log of information, namely transactions, that are used to determine how much of a cryptocurrency each address has attributed to it. The difference being that cryptocurrencies are purely digital, there is no option to take out a cryptocurrency in paper or coin form.

When using cryptocurrencies you have a public key and a private key, both of which appear as strings of random numbers and letters. It is very important that you never share your private key with anyone. It is also very important that you have your private key written down and stored in a safe and secure place. There is no “I Forgot My Private Key” option when it comes to cryptocurrencies. If you lose your private key, you lose everything controlled by the key.

The major difference between cryptocurrencies and traditional financial models is in the decentralized nature of cryptocurrencies. What this means is that when you spend a cryptocurrency, the approval of the transaction does not come from one central authority, like a bank or PayPal, but rather from a Peer-to-Peer network of computers, coming to a consensus that your transaction is legitimate. Many people regard this to be one of the most appealing and disruptive aspects of cryptocurrencies, this distribution of authority is ushering in a new age where money is controlled by the people rather than huge corporate organisations like banks. Most cryptocurrencies also offer the guarantee of privacy as the identity of each individual is concealed behind state of the art cryptography, meaning everyone’s privacy remains intact.

Cryptocurrencies function like the fiat currencies that we use today in that they can be used to pay for goods and services. Whereas in the past the amount of businesses that accepted cryptocurrencies was very limited, it is now continuously growing as awareness spreads and becomes more mainstream. The most commonly one is Bitcoin as it was the first one created and as such is the most widely in the world. However, businesses are starting to see the limitations of only accepting Bitcoin and as such are starting to explore other cryptocurrencies too.

History of Cryptocurrency

The first time most people tend hear about cryptocurrencies will be when coming across the first cryptocurrency created, Bitcoin. However, when Bitcoins mysterious founder, Satoshi Nakamoto, created the world’s first viable cryptocurrency, he wasn’t actually aiming to invent a currency at all.

Digital money is a concept that has long existed before Bitcoin. The prime example being a company called DigiCash Inc. founded in 1989 trying to create the world’s first widely used digital currency. DigiCash was an electronic money corporation, creating an anonymous payment protocol built on cryptography. However, after failing to gain mainstream adoption, amongst several other problems, DigiCash was forced to file for bankruptcy in 1998.

Ten years later, possibly as a reaction to the economic crash of 2008, an unknown developer, only known to this day as Satoshi Nakamoto, published a whitepaper about a decentralized, peer-to-peer electronic cash system, which went live as an open-source project (meaning any developer could contribute to it) in 2009. This project was known as Bitcoin and was the first example of a functional cryptocurrency.

Since then thousands more cryptocurrencies and utility tokens have sprouted, ranging from serious projects aiming to change the world by enabling the adoption of blockchain technology, such as Lisk, to currencies created purely as jokes, such as Dogecoin. This has led to a booming industry built on trading this currencies.

How are Cryptocurrencies Valued?

One of the most common questions in our industry is in regard to how cryptocurrencies are valued. The perception is that somehow they have less value because they cannot be held in physical form, despite the fact that cash is becoming obsolete regardless. Or that they are not “backed” by anything despite the fact that fiat currencies are no longer backed by physical commodities either.

The main difference between cryptocurrencies and fiat currencies is in that they are not supported by governments in the same way fiat currencies are. Despite the nature of money evolving to no longer having its value backed by physical commodities, like gold in a national bank, they are still supported by the government that issued them. As a result, the value of fiat currencies is generally based on the stability of the government that issued that currencies.

The value of cryptocurrencies derives from the network upon which they are built. This is further influenced by a variety of factors, such as:

  • Price of Bitcoin: all other cryptocurrencies are based on and pinned to the price of Bitcoin, meaning changes in Bitcoin price can affect other currencies.
  • Supply and demand: For example, there will only ever be 21 million Bitcoins, released at a steady rate, meaning inflation should not affect the value of the currency, assuming a consistent demand exists. Although such a system is not employed by all cryptocurrencies.
  • Energy/electricity required to validate transactions and mine coins: Proof-of-Work, the consensus protocol used by Bitcoin, consumes a lot of electricity, whereas Delegated-Proof-of-Stake, used by Lisk, consumes considerably less, which has a factor on the price.
  • Difficulty level: Similarly to the electricity required, the difficulty level faced by miners in securing a cryptocurrencies network can affect the price of each token.
  • Large investors: an investor holding a considerable amount of a cryptocurrency and deciding to sell it all at a low price will result in the price of that currency dropping considerably. Such investors are sometimes referred to as “whales” as their investments have ripple effects on the rest of the market.
  • Utility of the currency or product: what product is the company that issued the currency providing and is it useful? Where can the currency can be spent? What does the currency allow you to do? All of these factors affect the price of a currency.
  • Public perception: how investors perceive the blockchain space as well as each individual currency will directly affect its price. For example, if media reports positively on the blockchain space then prices can increase. Similarly, if a cryptocurrency is a caught up in a scandal, the price of that token will fall.

Due to all of these factors the price of cryptocurrencies can be volatile, which is why some investors regard them as opportunities to make money. Whereas the value of a dollar or euro generally tends to remain relatively stable this is not the case with cryptocurrencies.

Whether cryptocurrencies are a good storage of value is an idea that is often heavily debated. Some people argue that they are not good representations of value because they are not backed by any physical commodity, despite the fact that most currencies today are not either.

However, the notion that all cryptocurrencies are not a safe storage of value is a false and arguably outdated one. As long as the cryptocurrency held is that of a solid, respectable project and they are stored securely, they are as good a storage of value as any other investment.

Top Cryptocurrencies

Bitcoin (BTC/XBT)

The king of the crypto world, Bitcoin is now a household name; to many, it is synonymous with “cryptocurrency.” Its purpose is to provide a peer-to-peer electronic version of cash to allow payments to be sent online without the need for a third party (such as Mastercard).

The rapid rise in Bitcoin’s price has brought about an explosion of new Bitcoin investors. With the huge increase in interest has come a rise in merchants accepting Bitcoin as a legitimate form of payment. Bitcoin is fast moving towards its goal of becoming a currency accepted worldwide.

Bitcoin’s development is led by Bitcoin Core developer Wladimir J. van der Laan, who took over the role on April 8, 2014. Bitcoin’s changes are decided democratically by the community.

The History of Bitcoin

The Bitcoin whitepaper was published in 2008 by a pseudo-anonymous author named Satoshi Nakamoto. It was the first time ever that somebody put together the ideas of a digital currency and blockchain technology.

People have been speculating about the true identity of Nakamoto ever since. As the original Bitcoin miner, he is known to have amassed approximately 980,000 bitcoins. Those coins have remained untouched for years, and it seems likely that they will forever stay out of circulation.

Satoshi Nakamoto was last heard from way back in early 2011. Many have tried to find him since, but to no avail thus far. Even while Nakamoto’s real identity remains a mystery, his creation lives on.

Why Was Bitcoin Created?

Notably, the first block Nakamoto mined – called the genesis block – contained a message. It said, “The Times, 3 January 2009, Chancellor on brink of second bailout for bank”. This references a news article about the government bailouts of banks during the 2008 economic recession. It is widely accepted to be a political statement by Nakamoto about the reason Bitcoin was created – to disrupt the financial institutions that have long controlled our economies and livelihoods.

Who or What Operates the Bitcoin Network?

Bitcoin may just be a bunch of computer code, but it still takes humans to run that code. More accurately, it takes humans to build and maintain the machines that run the code. These machines and the people who operate them are called miners.

Perhaps the most critical obstacle that Satoshi Nakamoto needed to navigate when designing Bitcoin was figuring out how to get miners to run the network without giving them additional power to control it. With game theory in mind, Nakamoto devised a brilliant solution.

Aligning Incentives

True decentralization isn’t possible unless the system is designed with the right incentive mechanisms for participation. A blockchain minus the incentives is just a distributed digital ledger, minus the trustless security.

Let’s say a corporation wants to use a blockchain to improve their supply-chain management. A distributed digital ledger would be helpful to efficiently connect various manufacturers, warehouses, and stores. But each computer that stores the corporation’s blockchain would be owned by the corporation. They don’t have to worry about malicious actors in their network. Therefore, they don’t need to incentivize all the participants to behave in the best interest of the system.

For real decentralization, that’s not the case. Miners that process transactions need incentives to do so honestly. Otherwise, they could add invalid transactions to the blockchain, giving themselves more money.

Ethereum (ETH)

Ethereum is the revolutionary platform which brought the concept of “smart contracts” to the blockchain. First released to the world in July 2015 by then 21-year-old Vitalik Buterin, Ethereum has quickly risen from obscurity to cryptocurrency celebrity status.

Buterin has a full team of developers working behind him to further develop the Ethereum platform. For more background information on Buterin, read: “Vitalik Buterin: The Face of Blockchain.”

Ethereum has the ability to process transactions quickly and cheaply over the blockchain similar to Bitcoin, but also has the ability to run smart contracts.

The History of Ethereum

Ethereum started with one person, and that person is Vitalik Buterin. Unlike Bitcoin, Ethereum has a real name attached to it, a leader if you will. Buterin is a Russian-Canadian programmer and writer primarily known for his work with Ethereum and as a co-founder of Bitcoin Magazine. Involved in Bitcoin since 2011, he is also known as the developer of a fork of bitcoinjs-lib as well as one of the developers behind Egora, a cryptocurrency marketplace site.

But Ethereum is what truly propelled Buterin to fame. He came up with the idea for it at the ripe old age of 19. Instead of returning to university (he was studying computer science at the time), he began developing it full-time after receiving the Thiel Fellowship.

He now leads Ethereum’s research team, gives keynotes, and meets world leaders. He essentially lives on a plane, traveling to events and meetings all over the world, evangelizing and working to grow Ethereum.

Buterin is an influential voice in the cryptocurrency world. You can visit his official website where he sporadically posts articles or follow him on Twitter.

The Early Days of Ethereum

Now that you know a bit about Buterin, let’s look at what he did. In 2013, while working on Bitcoin, he noticed that it lacked its own scripting language for application development. He argued that this was a huge opportunity that needed some action; when he failed to receive broad support for this idea, he began writing his own whitepaper.

Released in late 2013, the Ethereum whitepaper outlines his vision to “provide a blockchain with a built-in fully fledged Turing-complete programming language that can be used to create “contracts”.

These contracts he was referring to are the “smart contracts” that Ethereum has become famous for. A smart contract is simply a self-executing contract written into code that is stored on the blockchain. They render transactions “traceable, transparent, and irreversible” (more on this later).

Buterin formally announced Ethereum at the North American Bitcoin Conference in Miami, January 2014. He’s said many times that he expected people to quickly point out all the ways in which he was wrong. But to his surprise, many people warmed to the idea and momentum started to gather behind his fledgling project.

How Ethereum Grew

As credence was given to Ethereum, a nonprofit foundation, the Ethereum Foundation (Stiftung Ethereum), was created to guide development. This development was funded by a crowdsale that kicked off in July 2014.
This was the first initial coin offering (ICO).

Ethereum also introduced its own native token called ether (ETH). ETH is the currency which runs everything in the Ethereum ecosystem. During the ICO, the Ethereum Foundation distributed the initial allocation of ETH via a public presale, making 31,591 bitcoins (worth $18,439,086 at that time) in exchange for about 60,102,216 ETH.

Late 2014 saw the buzz begin to build with more and more nodes (computers running the Ethereum protocol) coming online.

In the intervening years, developers flocked to Ethereum to work on the core technology and build their own applications on top of its blockchain. According to State of the DApps (a not-for-profit curated directory of Decentralized Applications on the Ethereum Blockchain), there are currently over 950 projects running on Ethereum. The main technology itself has already run through a few versions with Metropolis 3.5 on the horizon. The ETH token also went from being worth mere cents to well over US$1,000.

Countless ICOs (fundraisers) were held on the Ethereum blockchain and this trend looks set to continue for the foreseeable future. But there were, of course, some speed bumps too. One event, in particular, threatened to take the entire Ethereum project into the ditch.

Ripple (XRP)

Ripple aims to improve the speed of financial transactions, specifically international banking transactions.

Anyone who has ever sent money internationally knows that today it currently takes anywhere from 3-5 business days for a transaction to clear. It is faster to withdraw money, get on a plane, and fly it to your destination than it is to send it electronically! Not to mention you will be paying exorbitant transaction fees — usually somewhere around 6% but it can vary depending on the financial institution.

Ripple’s goal is to make these transactions fast (it only takes around 4 seconds for a transaction to clear) and cheap.

The Ripple team currently comprises over 150+ people, making it one of the biggest in the cryptocurrency world. They are led by CEO Brad Garlinghouse, who has an impressive resume which includes high positions in other organizations such as Yahoo and Hightail.

What Is Ripple (XRP)?

Founded in 2012, the San-Francisco based FinTech company Ripple is a veteran in the blockchain industry.

Aiming to improve financial transactions between banks by making them faster, cheaper and more reliable, Ripple has already managed to attract large financial institutions to the Ripple network, including Santander, BBVA and RBC. Just recently, Ripple made another large step in its expansion in Asia by announcing the plans for a new office in Singapore, today’s Asian hub for FinTech innovation. With a seasoned leadership team and the ever growing Ripple network, Ripple’s prospects look promising.

Although Ripple offers a disruptive solution for a real problem, a large group of individual blockchain investors hold a grudge against the company. The major problem the blockchain community seems to have with Ripple is the fact that is completely centralized and that they’re aiming to boost efficiency for the global financial system. This is contrary to the beliefs of the die-hard blockchain community that wants to circumvent this (in their opinion) untrustworthy and irresponsible industry bu using cryptocurrencies and blockchain.

Ripple’s sole purpose is to make transactions between financial institutions more efficient and has repeatedly stated that they’re not interested in facilitating transactions between individuals.

XRP’s Unique Price Determinants

Besides the enormous increase in transaction speed Ripple offers, the cost of these transactions are extraordinarily low and will be paid in XRP. This is done by destroying a very small percentage of the XRP sent and received.

This means that the cryptocurrency is subject to deflation, as there are less and less total coins around with every transaction conducted. Therefore the price would increase with every transaction, though it will be barely noticeable in the short run. However, when you are thinking long-term this is something to take into account.

Nonetheless, there is one major problem with the amount of XRP in circulation and its price. The amount currently in circulation is only 38% of the total XRP created. At the moment, Ripple still owns 62% of their XRP themselves, which is one of the main concerns of individual investors.

Banks demand a stable price in order to properly conduct financial transactions and it has been suggested that this is the reason why Ripple is doing this. However, the real reason for this this has not yet been officially given.


By trying to facilitate global financial transactions, Ripple faces a giant named SWIFT. If you have ever made a transaction from your bank to a bank abroad, it is likely that SWIFT was used by the banks to ease the process of this transaction.

Currently, over 11,000 financial institutions across roughly 200 countries and territories have been connected by SWIFT to complete bank-to-bank transactions. SWIFT encourages banks to join their network to increase the ease of transactions, which sounds very similar to what Ripple is currently doing. VISA and Deloitte have also been looking at ways to gain market share from SWIFT.

All three of these companies announced investments in R&D focusing on blockchain technology to increase the efficiency of transactions and to gain a competitive advantage in this industry. In this regard, Ripple seems to have a head start as their blockchain is already being used and gaining momentum.

Ripple Controversy

Blockchain investors have quite opposing opinions concerning Ripple. It seems like you either love or hate it. Why people love it is quite simple: it offers a proven solution for a real and global problem. However, the dislike of Ripple and its operations does have some substance.

The first argument against Ripple is that the company still owns 62% of all XRP. The real reason for this is still unclear but it puts Ripple in a position in which they can easily manipulate the price to their liking. Another issue with Ripple is that it’s centralized. This angers a lot of blockchain enthusiasts as blockchain is a way to decentralise the world, letting no one party control all data and accounts.

Be that as it may, it makes sense that a cryptocurrency facilitating bank-to-bank transactions is centralized as banks like control and accessibility to the history of all transactions. This does oppose anonymity and ownership of your own information, which is a key feature that most of the popular financial transaction crypto’s share.

Finally, the most widespread argument against Ripple is that they cooperate with the “enemies” of blockchain ideology: governments and financial systems. Employing blockchain technology for exactly the opposite of what, for example, Bitcoin stands for (namely, no central powerhouses and more control and privacy) has created a serious dislike for Ripple, no matter how useful their technology is.

BitcoinCash (BCH)

Bitcoin Cash was created on August 1, 2017 after a “hard fork” of the Bitcoin blockchain. For years, a debate has been raging in the Bitcoin community on whether to increase the block size in the hope of alleviating some of the network bottleneck which has plagued Bitcoin due to its increased popularity.

Because no agreement could be reached, the original Bitcoin blockchain was forked, leaving the Bitcoin chain untouched and in effect creating a new blockchain which would allow developers to modify some of Bitcoin’s original programmed features.

Generally speaking, the argument for Bitcoin Cash is that by allowing the block size to increase, more transactions can be processed in the same amount of time. Those opposed to Bitcoin Cash argue that increasing the block size will increase the storage and bandwidth requirement, and in effect will price out normal users. This could lead to increased centralization, the exact thing Bitcoin set out to avoid.

Bitcoin Cash does not have one single development team like Bitcoin. There are now multiple independent teams of developers.

The History of Bitcoin Cash

The obvious place to start in order to understand Bitcoin Cash is, of course, with Bitcoin. After all, the two currencies shared the same blockchain up until the date of the hard fork in August 2017.

The Great Scaling Debate

The story of Bitcoin Cash begins with the start of the scaling debate. That is, the debate over how to most effectively increase Bitcoin’s ability to process transactions cheaply and quickly.

At the core of the scaling debate is blockchain block size. Each block on the Bitcoin blockchain is capped in size at 1MB – a limit set somewhat arbitrarily by Satoshi Nakamoto in 2010. That allows for a transaction throughput of less than 4 transactions per second on average.

The block size limit has some significant benefits:

  • Prevent DOS (denial of service) attacks: Bitcoin transactions used to be ridiculously cheap. As a result, it was once possible for somebody to affordably overwhelm the Bitcoin network with thousands of tiny spam transactions that the network was unable to keep up with, such that legitimate transactions also couldn’t be processed.
  • Ensure adequate block propagation speed through the distributed network: When a new block is mined, it must be downloaded quickly by the other miners so that they can begin mining the next block on top of it. The larger the blocks, the greater internet capacity is needed for the network of miners to stay in sync.
  • Limit overall blockchain size: The entire blockchain must be stored by every full node in the network. The smaller the blocks, the easier it is for people to store the whole blockchain in order to mine.

On the other hand, 1MB blocks have a very significant disadvantage as well. When there are more transactions occurring than the network has the capacity to process, fees go up and the memepool of unconfirmed transactions grows.

In the 2017 bull run, the negative scenario above became reality. As a result, Bitcoin had higher average transaction fees and longer confirmation times than your typical bank wire transfer, essentially rendering it useless as a currency for most users and merchants.

Two Types of Solutions

There’s no question that inadequate transaction throughput is a problem that must be solved in order for Bitcoin to retain its status as the top cryptocurrency. However, the best way to solve that problem is less obvious.

There are two ways that Bitcoin can scale up:

  • On-chain: Increase the block size to increase transaction throughput.
  • Off-chain: Employ second-layer solutions (e.g. Lightning Network) to process transactions and reduce the burden on the blockchain.

Each type of solution has pros and cons. How you feel about Bitcoin and Bitcoin Cash should ultimately depend on your analysis of those pros and cons.

Arguments Against Bitcoin Cash

If we dive deep into the politics, it would be possible to write a short book just on the history of Bitcoin Cash. Before touching on any of that though, it’s best to understand where people on both sides of the argument are coming from. Let’s begin with those who are against Bitcoin Cash.

The main criticism that you’re likely to hear about Bitcoin Cash is that it is more centralized than Bitcoin. There are a few reasons people make this claim. First is that the 8MB block size raises the threshold of the hardware needed to mine Bitcoin Cash, resulting in just a few miners having the majority of the hashpower.

Fortunately, there are websites like that provide helpful statistics about Bitcoin and Bitcoin Cash, enabling us to easily compare the decentralization of the two currencies side by side.

From this comparison, there are two points of interest.

First is that Bitcoin mining is actually more top heavy recently than Bitcoin Cash. The top 3 mining pools for Bitcoin control over 50% of the total BTC hashpower, while the top 3 for Bitcoin Cash control just over 45% of the total BCH hashpower.

Second is that there are a lot more small-scale mining pools for Bitcoin than Bitcoin Cash. That may be because mining Bitcoin Cash isn’t as profitable or worthwhile for small-scale miners, as Bitcoin Cash detractors suggest to be the case.

On the other hand, it could be that there is just much less data available about the ‘Other Mining Pools’ for Bitcoin Cash and the number of small-scale participants is actually more similar than these pie charts suggest.

An additional part of the ‘Bitcoin Cash is more centralized’ argument is based on a longer-term outlook. As touched on earlier, a downside to on-chain scaling is that the overall size of the blockchain will grow faster with bigger blocks, requiring more hardware storage capacity for miners in the somewhat distant future.

For the time being, total blockchain size has zero impact. Bitcoin’s blockchain is just about 170GB large, while Bitcoin Cash’s blockchain is approximately 160GB large. For reference, affordable laptops these days typically have between 0.5 to 2TB of storage capacity. But with Moore’s Law projected to reach its physical limits in the 2020s, it’s not realistic to expect technological advancement to outpace the growth of these blockchains forever.

It’s a real concern for some people that a blockchain with much bigger blocks might grow so large that it becomes infeasible for everybody to store the full blockchain and mine, leading to centralization. Obviously, we are still a very long time away from that, but it’s something to consider nonetheless.

Arguments Against Bitcoin Cash

There is one major argument in favor of Bitcoin Cash that is critical to understand. That argument is that Bitcoin is meant to be a currency first and foremost, not merely a store of value.

With the high fees and slow transaction processing speeds of Bitcoin during its 2017 surge, merchants had little reason to transact in the currency. And in fact, many merchants that used to accept Bitcoin stopped doing so in 2017.

Those who supported keeping blocks small prioritized making Bitcoin a decentralized store of value over it being widely useful as medium of exchange.

The outspoken proponents of Bitcoin Cash – most notably Roger Ver, Gavin Andersen, Craig Wright, and Jihan Wu – believe that Bitcoin is supposed to be more than just digital gold. They anticipate that Bitcoin Cash’s utility as a currency will help it achieve far more significant adoption among merchants and consumers, ultimately fostering greater decentralization in the process.

Bitcoin vs. Bitcoin Cash: Similarities and Differences

The graphic below summarizes some of the key similarities and differences between Bitcoin and Bitcoin Cash, with some extra information beneath it.

Note that with the activation of SegWit, the Bitcoin block size is no longer restricted to 1MB. For that matter, the block limit isn’t based on the number of bytes at all, but rather a different parameter known as Block Weight. You can read an in-depth explanation of it in Understanding SegWit Block Size, but the gist of it is that blocks with SegWit transactions can theoretically be up to 2MB in size now.

You’ll also notice that the Bitcoin blockchain is larger than that of Bitcoin Cash, while there are more blocks (and therefore a larger circulating supply) for Bitcoin Cash. This is partially a result of the volatile mining difficulty for Bitcoin Cash when it first went live using the Emergency Difficulty Adjustment (EDA) algorithm. Difficulty stabilized when Bitcoin Cash employed a new Difficulty Adjustment Algorithm (DAA) on November 13, 2017.

The other reason for the discrepancy between the number of blocks and total blockchain size is that Bitcoin still has much higher transaction volume than Bitcoin Cash, meaning that each Bitcoin block contains more data.

Stellar (XLM)

Shorthand for Stellar Lumens, XLM is simply an ISO code (like USD) that represents the currency or ‘native asset’ of an open-source, distributed payments infrastructure known as Stellar.

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In this way, XLM is similar to BTC (Bitcoin) — a digital token of exchange that works through blockchain technology. Unlike BTC, however, Lumens (XLM) have been given a unique name that distinguishes them from the network they run on and from the organization that created them.

Currently, Lumen is the 20th most popular cryptocurrency in the world with an approximate market cap of $662,000,000. It is being developed by the nonprofit Stellar Development Foundation whose team include household names such as Kamal Ravikant and Matt Mullenweg.

In a nutshell, Stellar Lumens seeks to use blockchain to make very fast international payments with small fees. The network can handle thousands of transactions a second with only a 3-5 second confirmation time.

History of XLM

To tell the backstory of XLM, one really needs to tell the story of Stellar. Founded in early 2014 by Jed McCaleb and Joyce Kim, Stellar was originally a hard fork in the Ripple protocol. After making a few changes to the all-important consensus code, the network forked creating “Stellar-core.”

It was around this time that Joyce Kim claimed there was a flaw in the initial Ripple protocol (this statement was contested in a blog post by Ripple Labs CTO, Stefan Thomas). It was in the wake of this drama that the Stellar Development Foundation (SDF) was formed and an updated version of the protocol featuring a new consensus algorithm was released.

The aim of this new platform is (among other things) to “connect people, payment systems, and banks.”

The whitepaper and new code for this upgrade were released in April 2015 and the network went live in November of the same year. The original asset on the Stellar network was referred to as “stellars” (launched with 100 billion units in 2014); the name was changed to Lumens (XLM) following the 2015 upgrade.

Challenges and Criticisms

Every new currency (and network technology underlying it) is not without its challenges and potential for failure. XLM is no different.

One issue that’s been noted is that the technology McCaleb forked and the stuff that Ripple uses today are very different. This puts a lot of pressure on his vision individually.

Ripple is run by of a team of over 200 people and has raised close to $100m in funding. Conversely, Stellar is run by a small handful of people with significantly less funding. The argument being, that likelihood of an error or failure is higher with fewer people involved.

There have also been some quibbles about Stellar’s transparency (or lack thereof) when it comes to salaries Lumen grants to its employees, and Lumen giveaways or “airdrops.” Whether these issues are valid criticisms or simply the growing pains of a young technology/company is yet to be seen.

Last Thoughts

The Lumen/XLM is yet another asset in the rapidly populating field of cryptocurrencies. It appears to be positioned as a digital currency solution for the developing world, but has been flying under the radar (somewhat) in the last few years.

As of November 2017, Deloitte, Stripe and, most notably, IBM have created partnerships with Stellar. A big step in the right direction.

Wander around cryptocurrency forums and you’ll hear people touting its user-friendliness, speed (lack of congestion on its blockchain as of yet) and as a low-cost solution for remittance. But question marks remain, and as with almost all new currencies/platforms, the truth will only be fully seen when volume picks up.


Billed as a potential “Ethereum Killer,” EOS proposes improvements that can challenge Ethereum as the dominant smart contract platform. One main issue EOS looks to improve is the scalability problems which has plagued the Ethereum network during times of high transaction volume, specifically during popular ICOs.

A perhaps more profound difference EOS has, compared to Ethereum, is the way in which you use the EOS network. With Ethereum, every time you make modifications or interact with the network, you need to pay a fee. With EOS, the creator of the DAPP (decentralized app) can foot the bill, while the user pays nothing. And if you think about it, this makes sense. Would you want to have to pay every time you post something on social media? No, of course not!

In addition to this, EOS has a few other technical advantages over Ethereum such as delegated proof of stake and other protocol changes. Just know that EOS has some serious power under the hood to back up the claim of “Ethereum Killer.”

EOS was created by Dan Larrimer who is no stranger to blockchain or start ups. He has been the driving force behind multiple successful projects in the past such as BitShares, Graphene and Steem.

The EOS Vision

EOS has big plans. It will be a software that will act as a decentralized operating system. Developers can then build applications on the EOS software. It will be highly scalable, flexible, and usable.

EOS Features Image

The most notable feature that everyone is getting excited about is horizontal scalability — what this means is the EOS blockchain will be able to allow parallel execution of smart contracts and simultaneous processing of transactions. This could be a game changer because this would really set EOS apart from all other platforms currently out there that can’t do this — and never will be able to do this — without a complete rebuild.

EOS will incorporate the delegated proof-of-stake (DPoS) consensus protocol, created by founder Dan Larimer himself. This system is less centralized, uses far less energy, and is incredibly fast — as in, up to millions-of-transactions-per-second fast.

Furthermore, there will be no user fees on the EOS blockchain. This would also set them apart from the competition and could help them gain more widespread adoption of their platform.

EOS also wants to put a blockchain constitution in place to secure user rights and enable dispute resolution.

As explained in their technical whitepaper:

The EOS.IO software is designed from experience with proven concepts and best practices, and represents fundamental advancements in blockchain technology. The software is part of a holistic blueprint for a globally scalable blockchain society in which decentralized applications can be easily deployed and governed.

If the EOS team can really pull off all of these promises, it would be hugely successful. But until they have something to show, this all remains just a vision.

Skepticism About EOS

Thus far, EOS has made huge claims with no actual substance as of yet. They have not fully explained how they plan on achieving the impressive list of features their platform will boast.

Moreover, many believe Dan Larimer hypes up his projects with clever marketing and makes audacious claims, then doesn’t see them through — he left both Bitshares and Steem. Nonetheless, others argue that both of these companies have been successes and therefore we should have faith in Larimer.

The EOS team will need to deliver an actual working product to assuage the fears of both investors and the public.

Last Thoughts

At this point in time, it’s too early to tell whether EOS will deliver on their promises. If they manage to create a blockchain with all of the impressive features they claim it will have, EOS will surely be a huge competitor to Ethereum.

Until then, investors can only rely on’s word that they will develop something great one day.

Litecoin (LTC)

Similar to Bitcoin, Litecoin is a peer-to-peer transaction platform designed to be used as a digital currency. Due to some notable technical improvements, Litecoin is able to handle more transactions at lower costs. Litecoin has been designed to process the small transactions we make daily.

Simply put, Litecoin is a low cost, decentralized cryptocurrency used to pay for everyday items instantly.

Litecoin ranks as one of the top 5 most valuable cryptocurrencies in the world by market cap, behind Bitcoin, Ethereum, Ripple and Bitcoin Cash.

History of Litecoin

Litecoin was developed by Charlie Lee while he was still working for Google and went live on October 7, 2011. This makes Litecoin one of the oldest cryptocurrencies.

The source code itself was a fork off of the Bitcoin Core Client with a few notable changes and improvements such as decreased block generation time, utilizing different hashing algorithms and decreasing the time needed to process payments.

How is Litecoin Different from Bitcoin?

Since Bitcoin is the household name in the world of cryptocurrencies, it is useful to compare Litecoin to Bitcoin to give you an idea of why you should even care about Litecoin in the first place.

Litecoin is nearly identical to Bitcoin as far as its original intended use; however, there are some notable differences as far as functionality goes.

Quoting the Litecoin website, the differences between Litecoin and Bitcoin can be described as follows:

  • The Litecoin blockchain is capable of handling higher transaction volume than its counterpart – Bitcoin. Due to more frequent block generation, the network supports more transactions without a need to modify the software in the future. As a result, merchants get faster confirmation times, while still having ability to wait for more confirmations when selling bigger ticket items.

Here’s a summary of Litecoin benefits:

  • Litecoin as much faster transaction times. Money sent via Litecoin generally will appear in your wallet within a few minutes, while with Bitcoin this can take 10-15min.
  • Transaction fees are significantly lower with Litecoin. The longer the block, the more you have to pay the miners for the transactions. Litecoin has smaller blocks than Bitcoin, hence lower fees.
  • Litecoin has some notable technical improvements such as Segregated Witness (SegWit) and the Lightning Network.
  • Litecoin is better at dealing with high transaction volume, something that has been a major problem for Bitcoin and Ethereum in the past.
  • There will be a total of 84 million Litecoins mined, an amount that is 4x that of Bitcoin.

The Future of Litecoin

Litecoin has all of the functionality of Bitcoin with notable improvements. It is likely that in time Bitcoin and Litecoin could become the gold and silver standards, not just for purchases but for all other coins and tokens. In the future, when you need to purchase another type of coin or a physical product, you could just swap the coins you already have for what you need.

A good way to think about this is the way that you buy fuel for your car. Just because you have a car doesn’t mean that you need to buy crude oil barrels. You simply go to the gas station when you need to and exchange your money for what you need as you need it.

While it hasn’t received all of the press and hype of Bitcoin or Ethereum, Litecoin has all the ingredients to become one of the world’s standard currencies once cryptocurrencies become widely adopted in the future.

Binance (BNB)

Binance is one of the largest cryptocurrency exchanges by trade volume in the world today. The exchange was launched in July 2017 and has since then grown to become a leading platform in the cryptocurrency market.

Binance exchange is warmly preferred by many in the crypto community because of its unique business model (and approach to fees), high data processing speed and multilingual support.

In the review of its first year of operations in July 2018, a number of significant milestones were achieved such as a daily trading volume of $10 billion. Binance has over 370 trading pairs and over 143 tokens (and coins) listed on the platform. It is consistently among the top 5 crypto exchanges by trade volume.

Binance is a crypto-to-crypto exchange, hence deposits in fiat are not possible.

Binance Account

Binance is not just a crypto exchange; it is an ambitious ecosystem that aims to run the crypto market in the most remarkable way. An example of growing niches in the Binance ecosystem is Binance Launchpad which gives Binance users the opportunity to participate in ICOs on the platform.

Binance is growing fast, adding more tokens and coins as well as trading pairs. It is also about to open its first fiat-to-crypto exchange platform, Binance Uganda. Many crypto projects now consider Binance listing as a sort of achievement, and hence prioritize bringing their coins and tokens to Binance.

Binance has an easy-to-understand user interface, good support and high liquidity. These features make having an account with Binance worth it.

Key Features of Binance

Binance has a few features that makes the platform attractive to crypto traders. Some of those include:

Basic and Advanced Exchange Views

There are a lot of new traders in the crypto market and Binance recognizes that. Instead of having just one trading view that tries to cater for both beginners and experts, the exchange has 2 views. The basic view is designed to be easily understood by beginners, and the advanced view is for professionals who require more trading tools.

Low Trading Fees

The trading fee on Binance is 0.1%. However, users who opt to pay the trading fee in the Binance token (BNB) will get a discount of 25% (throughout the second year).

The discount is tiered: it was 50% in the first year, it will be 12.5% in the third year, 6.25% in the fourth year and none in the fifth year and onward.

Bounty & Reward Programs and Trading Competitions

From time to time, Binance organizes trading competitions to encourage trading. This is in form of cryptocurrency giveaways to accounts that achieve certain trade volumes with the mentioned coins. There are also bounties and reward programs for contributing to the Binance ecosystem by finding bugs, errors and other inefficiencies.

Binance Coin and Its Benefits

Binance Coin is known as BNB. It was used to raise money for the platform in its ICO conducted in 2017.

BNB is a utility coin with the main purpose of offering discounts on trading. Every quarter Binance buys back BNB with 20% of their tokens and burns it. This will continue until 50% of the total supply of tokens is burnt, leaving only 100 million BNB.

The burn is to cushion the reduced demand for BNB as the trading fee discount is reduced. It’s notable that the demand for BNB is strong even in the current bear market as the BNB price analysis indicates.

Binance has the ability to announce additional incentives to own BNB tokens. An example is the announcement that users with over 500 BNB will get 40% of referral bonuses, which is higher than the usual 20%.

BNB tokens can also be used to invest in ICOs taking place on Binance Launchpad. More incentives to own BNB tokens could be announced in the future.

Is It Safe to Use Binance?

There has been a number of hacking and phishing attempts on Binance. However, the cryptocurrency exchange has gotten wiser with each of the attempts. Compared to other crypto exchanges and what they’ve lost in hacking attacks and phishing attacks on users, Binance is considerably better and safer.

On July 3, 2018, the exchange witnessed a unique problem that made some users lose money. Irregularities were detected in the trading of SYS coin. Trades were halted, some got reversed and some lost money.

In light of the situation, Binance launched Secure Asset Fund for Users (SAFU). From July 14, 10% of the trading fee is allocated to SAFU to protect users and their funds in extreme cases. This fund is stored in a separate cold wallet.


Although Binance is a centralized cryptocurrency exchange, the platform has demonstrated a phenomenal ability to capture the needs and wants of crypto traders. It is also simple enough to lure newbies into crypto trading.

Creating an account and trading cryptos on Binance is as simple as we’ve shown above. Ready to start trading? Head to Binance now. Happy trading!

Tether (UDST)

Tether is a cryptocurrency token issued on the Bitcoin blockchain. According to the Tether team, each USDT is backed by one US Dollar. The goal is to facilitate transactions with a rate fixed to the USD.

Amongst other things, Tether looks to fix some of the legal issues which can arise when trading cryptocurrencies and it aims to protect people from market volatility.

Tether has faced constant scrutiny over the years, in particular with regards to whether or not their currency is truly backed by USD. A full discussion of this issue can be found in: “59% Of Polled Investors Don’t Believe Tether Is Fully Backed By USD“.

many people in the crypto community have become familiar with the term “The Great Tether Controversy.” This refers to the fact that many have become suspicious that, while Tether claims they back every single USDT coin with $1 USD, that they actually only hold a small fraction of the dollars that they claim they hold.

The reason many people suspect Tether of lying about their USD holdings is because Tether has never agreed to a transparent audit of their bank reserves.

They did release a document in September 2017 entitled, “Proof of Funds,” but the document is far from transparent — the names of the banks have been blacked out and it was hardly a full audit.

To further the controversy, the firm that conducted that audit, Friedman LLP, dissolved their relationship with Tether just a few months later.

Despite these numerous suspicions, nobody has proven one way or the other whether Tether has been creating tons of unbacked USDT coins, or whether this whole controversy is just FUD (fear, uncertainty, and doubt).

Tether’s Future Looks Uncertain

All this controversy surrounding Tether can easily be seen in their recent charts.

USDT’s coin market capitalization has steadily dropped from the beginning of the month, from $2.8 billion down to $1.9 billion at the time of writing.

The stablecoin has not been so stable lately, either. USDT has been selling at below its supposed $1.00 value for most of the month, dipping as low as $0.94 on October 15, 2018.

Tether Chart Image

Tether’s popularity has been declining as a direct result of people distrusting the project’s non-transparent practices.

Moreover, lots of new stablecoins have been entering the market lately which is causing increased competition in the stablecoin scene.

Among these competitors include 2 stablecoins — the Paxos Standard (PAX) and the Gemini Dollar (GUSD) — that have been approved and regulated by the New York State Department of Financial Services, making them the first regulated cryptocurrencies to come to market.

One competitor to Tether is Circle’s USD Coin (USDC). Circle CEO Jeremy Allaire has stated that he believes the crypto market will start moving away from controversial Tether and quickly begin supporting more transparent stablecoins in the near future:

  • Market infrastructure like stablecoins will become the base layer that supports every financial application. It has to be legitimate, trustworthy, built on open standards. We are solving a lot of these fundamental problems that exist. That’s a huge difference from something like Tether, and we think the market will very quickly gravitate to that.

Tether certainly still takes the prize for being the most popular and highly used stablecoin out there by far.

But with all these new transparent — and some even regulated — competitors rising up, it could spell trouble for Tether’s future if they don’t prove to the public that they’re trustworthy soon.

Cardano (ADA)

Cardano is a smart contract-focused blockchain. It was originally released under the name Input Output Hong Kong by Charles Hoskinson and Jeremy Wood, a few of the early team members of Ethereum, and later rebranded into Cardano.

Cardano is trying to fix some of the largest problems the cryptocurrency world which have been causing ongoing issues for years such as scalability issues and democratized voting.

They have the potential to challenge Ethereum’s dominance in the smart contract world. Cardano is developing their own programing language similar to Ethereum; however, they are focusing more heavily on being interoperable between other cryptocurrencies.

While some cryptocurrencies are all bite but no bark, Cardano is quite the opposite. They are quietly focusing on a strong software which will be completely open-source.

Cardano’s team comprises some of the best minds in the industry, and they seek to create a strong foundation which others can build upon for years to come.

How Cardano Began and Where It’s Heading

Charles Hoskinson was an early founder and CEO of Ethereum before it launched. He worked with a colleague named Jeremy Wood who managed operations. The two of them ultimately left Ethereum and went on to team up once again, this time to create an engineering company named IOHK that builds cryptocurrencies and blockchains for academic institutions, government entities, and corporations.

A group of Japanese business people approached IOHK in 2015. They were interested in creating a blockchain that would function as a cryptocurrency and a smart contract platform, but not just any ordinary blockchain. They wanted to build one that was more secure and more reliable than any other blockchain in existence. IOHK was up to the challenge.

The group decided to focus their ICO in Asian markets, since the Western world was already so saturated with cryptocurrencies. The crowdsale ran from September 2015 to January 2017 and raised $62 million. Roughly 30 billion Ada vouchers were sold, with 45 billion being the maximum supply of Ada.

After almost 2 years of research and over a year of development with teams all over the world, Cardano was officially launched on September 29, 2017. It’s still in its bootstrap era, which they are calling the Byron phase. IOHK is currently working on stabilization and refinement, and making substantial improvements to core components.

The next phase, Shelley, will focus on ensuring that key elements are in place so that the technology grows into a fully decentralized and autonomous system. This is expected to take place in mid-2018.

After that, the Goguen phase will see the integration of smart contracts. Then onto the Basho phase, which will be centered around performance improvements. And finally, in the Voltaire phase, IOHK will add a treasury system and governance.

Competitors and Challenges

Obviously Cardano has to compete with already hugely successful blockchain technologies such as Ethereum and Bitcoin, which are basically household names by now. Cardano is still relatively obscure to the public since they’re so new.

A big challenge is that building the kind of impeccable technology they are striving to create takes a very long time and a lot of effort from experts. It will be several years before all of the features the team plans on implementing are ready to launch.

Last Thoughts

Over the coming months and years, we can expect to see all sorts of shiny new cryptocurrencies and blockchains get hyped up and rush to open their ICO sales, gain millions of dollars from excited investors, and then ultimately fail to produce the products they promised. Some are sure to be successful, but developing new complex technology that works well is a hugely difficult task. The ones that rush and don’t conduct proper research are going to have a hard time obtaining their lofty goals.

Meanwhile, the experts behind Cardano will be slowly and steadily building the most advanced blockchain out there. If their passion for research and scientific rigor prove to be victorious, Cardano could end up being the turtle that beats the hare in the race for blockchain success.

Tron (TRX)

As stated in TRON’s whitepaper, “TRON is an attempt to heal the internet.” The TRON founders believe that the internet has deviated from its original intention of allowing people to freely create content and post as they please; instead, the internet has been taken over by huge corporations like Amazon, Google, Alibaba and others.

TRON is attempting to take the internet back from these companies by constructing a free content entertainment system. This will enable users to freely store, publish and own data, giving them the power to decide where and how to share.

The project is led by founder Justin Sun, who has been listed on the Forbes 30 under 30 list twice (in 2015 and 2017). In addition, Sun is a protégé of Jack Ma, founder of Alibaba Group, China’s former Ripple representative and the founder of Peiwo APP.

Sun has assembled a strong team with heavy hitters including Binshen Tang (founder of Clash of King), Wei Dai (founder of ofo, the biggest shared bicycles provider in China), and Chaoyong Wang (founder of ChinaEquity Group). Sun has also secured the support of a few notable angel investors such as Xue Manzi.

In the past 5 weeks, we have seen Tron’s market cap jump from US$140 million to over US$11 billion. The most recent and significant price surge happened inthe past week after Tron made their code open-source.

TRON Chart Image

Now that it has broken into the Top 10 in terms of market cap, Tron is gaining even more attention from crypto investors and enthusiasts. And with a team of non-native English speakers plus a whitepaper translated from Mandarin Chinese, it can be a bit more challenging to learn about it compared to other cryptocurrency projects.

What Does Tron Do?

The Tron protocol is being designed so that users can freely publish, store, and own their own data on the blockchain. This data can be anything from simple text to pictures, audio, and video.

Tron’s Ethereum-based token, Tronix ($TRX), will be used to facilitate data sharing in the Tron ecosystem. For example, somebody might send Tronix tokens to a video publisher in order to gain access to their latest content release.

The ambitious purpose of the project is to create a healthier entertainment ecosystem online. The current system is ruled by middlemen services like Facebook, YouTube, and Twitter which take a substantial cut of the profits generated by content creators. Utilizing blockchain technology, Tron hopes to facilitate all the content publishing that currently happens on these services, but in a decentralized and censorship-resistant manner.

In this way, Tron shares a lot in common with another Ethereum token, Basic Attention Token ($BAT). Even looking beyond the technology, both projects are led by highly prestigious and successful founders who have dedicated themselves to building a decentralized future.

Perhaps the most obvious and significant difference between the two projects is their respective locations of origin. While the BAT team is predominantly based in North America, the entirety of Tron’s team is Chinese.

As you likely know, the internet in China looks extremely different from that of the Western world, as is the use of cryptocurrencies. It’s certainly worth your time to try to understand those differences if you are considering investing in Tron, which leads us to…

China and Censorship Resistance

It can be hard to grasp the extent to which content is censored in China without first-hand experience. However, it’s not terribly difficult to shed some light on the issue.

Let’s take, for example, the death of Liu Xiaobo last summer. He was a Chinese dissident who advocated for human rights and political reform and ended up spending the last decade of his life in prison. Upon his death, the Chinese government censored everything from the mention of his name to “RIP” messages and even the candle emoji. Moreover, such censorship isn’t limited merely to public posts on social media, but even includes private conversations on China’s text messaging app, WeChat.

That degree of censorship is what Tron hopes to diminish or eliminate entirely. From an investor’s perspective, a cryptocurrency which would allow for censorship-resistant content publishing in China and help connect the Chinese population to the rest of the global population would obviously be world-changing. On the other hand, anybody who thinks that pulling off such a grand feat is probable can only be described as naive, at least right now.

With an 8 – 10 year roadmap in play, we’ll have to reassess Tron’s progress in the coming years to see whether their chances of success in China become any more realistic.

Tron’s Roadmap and Open-Source Code

Tron is currently in the first phase of their roadmap. This stage, called Exodus, is focused on data liberation. The goal is to have a fully functional platform to publish, store, and share digital content by the end of 2018.

A review of the open-source code shows that there is still a ton of work to be done in order to realize the vision laid out in Tron’s whitepaper, even for this first phase described above.

In its current state, the code structure doesn’t differ all that much from Ethereum, and mostly uses existing code libraries rather than anything particularly innovative. That’s fine for now, and has the benefit of being less likely to have bugs in the code since it has already been tested elsewhere. However, given the gap between the existing code and what’s described in the whitepaper, Tron’s nearly $12 billion market cap should make investors extremely cautious.

Taking a look towards the future, Phase 2 of the Tron Roadmap, called Odyssey, is all about cutting out middlemen services and giving the profits directly to content publishers.

Phase 3, Great Voyage, is scheduled to begin in the summer of 2020. This phase explains why Tron’s current code structure resembles Ethereum as its purpose is to allow for “Personal ICOs”, similar to Ethereum token sales. In other words, individual content creators can hold ICOs in order to raise capital that allows them to produce more and better content.

In Phase 4, Apollo, Tron aims to create a fully decentralized trading platform for all the individual tokens created on Tron. Phase 5, Star Trek, takes that concept to the next level by building a decentralized gaming platform for developers to create online games, tapping into the $10 billion gaming market. Then the final phase, Eternity, allows for developers to build entire gaming platforms on Tron and enables general investors to invest in specific games and platforms.

The entire 6-phase roadmap is tentatively scheduled to be completed by September 2027, a long ways away. In the event that Tron is successful in developing robust solutions at each phase of the project, it’s possible to envision that it will earn one of the largest cryptocurrency market caps in the space.

Considering that none of these innovative solutions exist at this time, current investors have displayed a ton of faith in the Tron team to follow through on this ambitious roadmap.

Last Thoughts

Tron is certainly one of the most exciting projects out there. It’s a clear case where decentralization is superior, at least in theory, to existing centralized services and platforms. Additionally, the possibility of introducing censorship-resistant content publishing in China is very significant.

That being said, from the perspective of a general cryptocurrency enthusiast, it’s nerve-racking to see how big Tron’s market cap has grown. How many of the investors who bought in during the last month are planning to hold for the next 8 – 10 years as the team executes their roadmap, and how many bought just to turn a quick profit? Potential alone is only worth so much, and it’s hard to see that amount being $11 billion.

Hopefully, all the potential described in their whitepaper will eventually be realized. The world would be a better place for it.

You can learn more about Tron by visiting their website. You can also follow them on Twitter or join their Slack channel.

Monero (XMR)

Monero is a digital currency designed to be used as a completely anonymous payment system.

We live in an age where much of our lives are online, and privacy has become an important issue. In some countries with oppressive governments, or where censorship exists, privacy can even mean the difference between life and death. This is where Monero comes into play and ensures privacy for the people.

Monero is a fungible cryptocurrency that focuses on anonymizing transactions and establishes a private, censorship-resistant token that can be used to transfer value around the world. Through the use of a powerful privacy-focused protocol known as CryptoNote, Monero has been able to show that transactions of value can indeed remain private from prying eyes.

History of Monero

The history of Monero can be traced back to April 2014, when BitMonero (the original name of Monero) came into existence by forking Bytecoin. Bytecoin was also a fork from the CryptoNote protocol (even though it is not a digital currency), as CryptoNote focused on the technicalities and cryptographic capabilities of achieving true privacy/anonymity.

CryptoNote was known for its innovative ring signatures that now fuel the privacy features that Monero takes pride in. Since Monero really focuses on transactional anonymity, Monero’s blockchain is designed to be transparent by default and it is impossible to trace activity back to an individual public address, unlike with Bitcoin.

What Does Monero Do?

To better understand what Monero does, here is a comparison of Bitcoin and Monero in Figure 1 below:

Montero vs Bitcoin Comparisim Image

Figure 1: Comparison between Bitcoin and Monero.

A common fallacy that still exists is that Bitcoin is a private and untraceable cryptocurrency that cannot be tracked. The reality is that Bitcoin is well known for using a public ledger (blockchain) that contains an immutable list of transactions of everyone that makes use of the Bitcoin ecosystem. The use of a public ledger can be useful in order to verify transactions maintain integrity and confidentiality (through pseudonymity) but this doesn’t necessarily mean Bitcoin is private.

Since there exists a public ledger for every transaction made on the Bitcoin network, all transactions and its metadata can be seen for any Bitcoin public address. This means that every single transaction made for that public address will remain visible from the starting point of when the first transaction is made until the most recent transaction.

Monero, on the other hand, functions by using a cryptographic protocol known as CryptoNote. The technology that is the foundation for Monero aims to make transactions untraceable, and therefore the balances of XMR tokens remain confidential.

Privacy in the financial technology sector is becoming increasingly important as there are more security breaches that occur where financial information (such as credit card data) is stolen. Monero combats this by making it a default attribute where all transactions remain hidden from the public through the use of its powerful technology — which is described in more detail below.

Unlinkable Stealth Addresses

A big factor that distinguishes Bitcoin from Monero is the notion that Bitcoin addresses are generally re-used for multiple transactional activities. All incoming and outgoing transactions and metadata remain publicly visible to everyone with just the public address.

Although the entity has not revealed their identity, their transactions can be traced to this single address which can be used for further analysis if a malicious entity targets it. Through analyzing common patterns and linking amounts of value coming in and going out of the wallet address makes it easier to determine the identity of the person that owns the address.

On the other hand, when using Monero to transact, the destination addresses are only identifiable by the respective sender and receiver. The Monero blockchain does not show the destination address that receives XMR token(s), but instead, shows the cryptographic hash of the receiving address (which is separated from the sending address). The only entity to reveal the destination address is the sending or receiving party.

Through the use of a secret view key, the recipient is able to determine how much XMR was sent to them using this unlinkable address – separate from their public address. These type of hardened addresses are known as stealth addresses.

Untraceable Ring Signatures

Monero enables the untraceability of the currency through the use of a technology known as ring signatures. Ring signatures allow transaction mixing to take place which adds another privacy-enhanced feature. The process of transaction mixing allows a sender to randomly choose several other potential signers (from the beginning of the 1st genesis block) to send the XMR over the blockchain network.

The main thing to understand here is that ring signatures guarantee that no person can decipher where the funds came from since everyone is a potential signer in a group signing pool. Figure 3 shows how untraceable ring signatures process in Monero. Ring signatures make it difficult to trace a transaction back to a specific IP address corresponding to the transaction sender or receiver, which adds to the list of wins for privacy and anonymity.

Final Thoughts

Privacy and anonymity will continue to be two key features that are valued by individuals who are living in oppressed countries, where censorship exists, and also to the average individual who feels it’s their right to have privacy.

Monero’s vast community of skilled developers, with their strong focus on implementing privacy-based features through unique pieces of technological protocols, will continue to improve the privacy mechanisms that Monero provides. Along with the developers are knowledgeable PhD researchers constantly looking to improve and strengthen the privacy aspects of Monero.

The project has already shown how useful it can be for real world use. Not only does it provide a way to securely transfer value online, but it does so in the most secure way that it makes it incredibly difficult for a hacker to reveal an identity behind a cryptographic stealth address.

Although there are other competitors in the privacy realm, Monero still stands out as it shows that it meets the standards for providing the highest levels of privacy and anonymity for its users. As different sectors in the real world are requiring a more privacy-focused store of value, Monero shines and shows that the sky’s the limit. By protecting transactional data and metadata from public viewing, Monero has paved the way for its continued growth.

Dash (Dash)

Dash (formerly known as Darkcoin and XCoin) is an open source peer-to-peer cryptocurrency based on Bitcoin software that aims to be fast, user-friendly, and scalable.

Dash (which comes from “digital cash”) aims to be the most user-friendly and scalable cryptocurrency in the world. It has the ability to send funds instantly confirmed by “double-send-proof” security with the added functionality of erasable transaction history and the ability to send transactions anonymously.

Like Bitcoin, Dash is meant to be used as a digital currency but has some added values such as much faster transaction times and lower fees. For a slightly higher fee, Dash has the added function of “instant send” which allows transactions to be confirmed almost instantly. This is one of the main selling points of Dash because many believe that this feature would allow it to be used in brick and mortar establishments.

The Dash development team consists of over 50 members and is led by former financial services professional Evan Duffield.

Let’s translate that into simpler terms. Dash is a digital currency that has tried to improve on Bitcoin’s flaws. Dash offers up a form of money that is portable, inexpensive to move and fast.

The word “Dash” itself refers to the portmanteau of the words digital and cash. This pretty much sums it up as Dash has been developed to be a usable version of Bitcoin. Dash is currently a top 10 cryptocurrency with a market cap hovering around $5,944,673,000. It started 2017 at around $11 per coin and as we close in on the end of the year, the price is not far from $800 USD.

By focusing on ease of use, exposure, and technological advancements, Dash has the potential to be a long-term player in the cryptocurrency space. To learn about all things Dash, read on.

History of Dash

For a long time, the search for a true P2P electronic cash was the victim of slow upgrades and stymied by endless debate. It was into this quagmire that Dash first set sail on January 18, 2014.

If you trace back the lineage of the code, you’ll see that Dash originally forked from litecoin v0.8.6.2 (which itself was a fork of Bitcoin). In this way, Dash has a lot of the same core DNA that BTC does.

In March 2015, Darkcoin was renamed simply as “Dash”. After the renaming, around 1.9 million Dash coins were mined (that is around a quarter of the total supply). Evan Duffield, the developer of Dash, chalked this up to an “instamine” code error (he was heavily criticized for this as the glitch benefited him – full podcast discussion here or statement from Dash here) and offered to relaunch, but this proposal was allegedly shot down by the community.

Duffield also suggested an “airdrop” of coins in an effort to widen initial distribution but the community also rejected this proposal. The initial coin allocation was left as is, and many of them were subsequently sold on exchanges for relatively low prices.

Fast forward to today and the development of Dash appears to be churning along unabated. Duffield and his team have cultivated a healthy developer community and appear to be succeeding in making Dash as useful as possible and connecting it to existing crypto products and services.

What Does Dash Do?

Compared to some of its blockchain brethren, Dash’s application is pretty simple. To take it directly from, “Dash can be used to make instant, private payments online or in-store using our secure open-source platform hosted by thousands of users around the world.”

Dash exists largely to be a decentralized PayPal and to answer the question “If I wanted to pay for a cup of coffee with cryptocurrency, how would I do that?” (i.e. the point-of-sale problem).

Behind the scenes, Dash is doing far more than these simplified explanations. For those who want to check out the technical details, here is the whitepaper. For the rest, we’ll hash (pun intended) out some more specifics below.

What Sets Dash Apart?

To understand the value proposition of Dash, you must differentiate it from Bitcoin. You also must understand the weaknesses Dash is attempting to address.

Making complex things easy for average users is one of the primary themes for Dash. An example of this is that they’ve created an alternative for people who look at a BTC address and immediately get turned off.

A BTC address: 1JHe8z4jJVDFTSjohjM4i9Hh234dLCNx2Sy.

A Dash user will never be confronted with an address like this or any other cryptographic nuances; you simply have a username.

Let’s look at a few other key improvements.

Just like BTC, Dash relies on Proof-of-Work (PoW) consensus done by miners to secure the network. But Dash has another component in their consensus system: the introduction of masternodes.

Masternodes do the heavy network lifting and are there to provide many exciting features not available on conventional blockchains. They account for “2nd tier” duties such as PrivateSend, InstantSend, and governance functions (more on this below).

Users who run a masternode pay 1,000 Dash to start and are paid 45% of the reward for every Dash block that’s mined. Given this structure, it might be more accurate to refer to Dash as a hybrid model that uses both PoW (miners) and Proof-of-Stake (PoS – masternodes).

As a fully open source project, Bitcoin doesn’t have a developer funding model, which leaves the development to be handled by volunteers or taken over by powerful mining pools. With the celebrity of being first, this has worked out okay for Bitcoin but Dash has taken things a step further.

While masternodes are incentivized to do good and can govern the blockchain (they each have 1 vote), the Dash blockchain itself is also self-funded. What does this mean? It means that a percentage of each block is allocated to the network development and promotion budget. This percentage is currently 10% and it means that developers and promoters receive direct payments, thus fueling consistent growth.

Another key area that sets Dash apart is speed. Bitcoin has famously slow transaction times, making it difficult for average people to use it day to day. Dash has addressed this with “Instasend”, a process that uses the instantX masternode feature to send and confirm transactions in seconds (not minutes or hours). Inputs can be locked to specific transactions and verified by consensus of the masternode network. Dash has taken Bitcoin’s process and streamlined it.

When Bitcoin was born, there were really no plans in place to protect the privacy of its users. People ran with the erroneous assumption that BTC transactions could be done completely anonymously.

As things stand today, data mining companies have become extremely good at determining the source of a transaction. Dash offers a solution to this as well, in the form of their “PrivateSend” feature. “PrivateSend” allows you send funds privately by mixing it with several other transactions, thus making it hard to identify any specific transaction. It uses a coin mixing service based on CoinJoin.

Final Thoughts

Bitcoin probably won’t ever be used for everyday transactions unless its core protocol changes dramatically (which is unlikely). It’s this void that Dash and a few other players have stepped in.

Dash seems to be based on sound principles, has seen an enormous uptick in value and its detractors may be over-stretching their arguments.

On the other hand, serious question marks remain. Come to your own conclusions regarding how the launch of this coin (and subsequent controversy) was handled but know that many people will be only focusing on the short-term gains to be had. A fair launch or the potentially problematic nature of pre-mined coins are not issues people wanting to ride a wave of hype necessarily care about.

The release of Dash Core and the piloting of KuvaCash, a program to help coup-paralyzed Zimbabwe, has seen a recent surge in Dash price. But don’t forget that Dash is only 3 years old, and it’s yet to be seen if they will be able to really attract second-tier developers to build the blockchain infrastructure (like apps or more innovative wallets for users).

There is plenty of room for a currency to carve out its own market and as the crypto space matures, it may be more important to focus on fundamentals, not an outright winner. In this sense, Dash appears to have excellent positioning for the future.


IOTA has seen many of the issues Bitcoin and Ethereum have with the PoW (Proof-of-Work) and PoI (Proof-of-Importance) models and looks to improve them with their revolutionary transaction validation network simply called “Tangle.”

Have you ever heard of the Internet of Things? The founders of IOTA have taken this idea and run with it, combining blockchain technology with the idea of the Internet of Things. IOTA technically isn’t run on a blockchain but it utilizes its homegrown Tangle technology. This technology allows IOTA to be transaction fee free, grow without limitations and makes offline transactions possible. This may seem far fetched, but the reality is that IOTA and its Tangle technology could severely disrupt the way transactions are handled.

When issuing a transaction in IOTA, you validate 2 previous transactions. This means you no longer outsource validation to miners which requires wasteful amounts of computing power and usually a large stake of coins. These required resources are, in effect, centralizing the currencies which many believe were created to be decentralized in the first place.

With IOTA, the more active a ledger is, the more validation there is. In other words, the more people who use it, the faster it gets. You don’t have to subsidize miners, so there are no fees on transactions. That’s right: zero.

The IOTA team has been actively developing blockchain technology since 2011, and created the IOTA foundation and company in 2016. Since its emergence, the team has been continuously growing, attracting exceptional talent from around the world.

IOTA has consistently been in the top 10 cryptocurrencies in terms of market cap, indicating that investors understand its potential. Although the Internet of Things (IoT) is still in it’s early days of development and yet to be implemented on a large scale, experts agree that the IoT is going to be the next big thing — just as blockchain is the next big thing. IOTA’s slogan is “The backbone of the IoT is here” and to understand IOTA, first have to understand the Internet of Things.

Machine to Machine Economies: the Internet of Things

The Internet of Things is another upcoming technological evolution. How it operates under the hood is highly complex, but on the surface it’s quite easy to grasp. The IoT will essentially provide machine-to-machine communication, without human interference. Every object that is connected to the internet will be able to communicate with each other.

Picture this. You’re thirsty and you want to get a soda out of a vending machine. You’ll use your phone to pay and a can rolls out. Your phone automatically registers the transaction and upload this information to your daily budgeting app. The vending machine will process the payment and decrease its inventory by one can of the soda you bought.

The electricity costs of the vending machine are already added to the cost of your soda, and if the can you ordered puts the total stock below a predefined threshold, a request for more cans will be sent to the supplier. The supplier’s system will receive the request and automatically prepare a delivery based on the provided data, send an autonomous car or drone to resupply the vending machine.

No human interaction is needed, and the cost of the products, services, electricity and fuel will all be incorporated in the price. A major problem with the IoT was the process of all of these micro transaction within these new machine-to-machine economies. How could these simultaneously be cost efficient and smooth at the same? IOTA and its Tangle technology are providing a method to make all of this happen, for free.

The Tangle: the First of its Kind

By implementing their Tangle technology, transactions with IOTA are free. This is possible because transactions occur on a peer-to-peer base. The ‘payment’ of your transaction is the confirmation of two previous transactions.

This may sound like a slow process, but within the IoT, thousands if not millions of transactions will occur per second, meaning the the network will constantly send and verify transactions. These verifications are spread through the network at random, so one node will verify any two transactions from the entire network when sending a transaction, meaning the network is completely tangled.

Tangle vs blockchain technology

The reason for the absence of transaction fees — peer-to-peer verification — is the same reason why there are no scalability problems with IOTA.

In contrast to blockchains, the more people use IOTA, the faster the network will become and the more transactions can be verified. When you want to make one transaction, you have to verify two, meaning that the speed increases exponentially. This does create some challenges, as the whole IOTA ledger will have to be constantly verified by the decentralized network in order to be completely secure.

With an infinitely large number of possible future transactions, the ledger will become infinitely large and time-consuming to verify. The core developers are working on advancements to tackle this future problem before it can occur.

Before the world is ready for a full scale implementation of the IoT, we have to make sure it’s completely quantum computing proof. Many developers have already addressed a major future problem with blockchains: their cryptographic security could be penetrable by quantum computers that may be able to decrypt them in ways we cannot fully comprehend yet.

To give an example of what quantum computers can potentially do, it is estimated that a quantum computer would be 17 billion times more efficient in mining bitcoins than anything we have today. If we want all of our technological interactions to happen without human intervention, it’s extremely important to make sure the operating system for this is unbreachable.

IOTA also anticipated this problem by creating and implementing the quantum-resistant algorithm called the Winternitz One-Time Signature scheme. You can find more information here about the technicalities of the Tangle.

Building Towards the Future

Globally, about 1 billion objects are expected to be connected to the IoT by 2020. The IoT is coming and IOTA has created a cryptocurrency that can aid this innovation.

The IOTA team has introduced the Tangle technology and is the first to guarantee zero transaction fees. The team is already working on tackling any potential issue IOTA could encounter, which communicates a focus on a sustainable strategy for the long run.

It seems like IOTA attracts new talent on a weekly basis and their focus on creating a highly innovative network signals their think outside the box strategy.

Another indicator of this is their humble marketing approach and low-hype announcement strategy. They are focused on keeping expectations realistic and attracting long term investors. Keep in mind that IOTA is still a future solution and it could be a while before machine-to-machine communication is adopted on a large scale.

Nonetheless, with IOTA’s Tangle, we are able to get a glimpse of what the future of our world could look like, and it’s pretty mind blowing.

Tezos (XTZ)

Tezos is a smart contracts platform hot off their wildly successful and controversial ICO. Tezos is working to create a cryptocurrency “commonwealth” where the holders of XTZ tokens have the ability to vote in new protocols, which will effectively give users full control over the future of the blockchain.

In addition, this allows for Tezos processes to incrementally change and improve overtime, instead of requiring the radical changes every now and then that tend to lead to hard forks.

With Tezos, users can vote for rewards to be allocated to developers who are making great contributions to projects, and therefore incentivizing the development of the platform.

Tezos has a few technological differences when compared to Ethereum such as the use of dPoS, the unique ability to upgrade without the need of a fork, and formal verification which allows for code to be mathematically proven to be correct. This is particularly useful in the case of sensitive calculations needed in fields such as aircraft design and nuclear development.

As stated on the Tezos website, Tezos is formalizing blockchain governance in which stakeholders govern the protocol. What this distills down to is that Tezos is a new platform for smart contracts and decentralized applications.

On this platform, there is a specific focus on Tezos network members—the project aims to let Tezos token holders fully govern the platform and improve the quality of the ecosystem. Tezos has set out to establish a true digital commonwealth, a network in which all people involved can let their voices be heard and have a shared loyalty.

On-Chain Governance

Tezos essentially is a blockchain platform, putting it in the same category as Ethereum, NEO, and EOS. Where it differs is the governance system Tezos employs.

Tezos has designed a process that enables continuous upgrades of the Tezos protocol through on-chain governance. This allows for the Tezos process to incrementally increase over time, instead of radical changes every now and then that could lead to hard forks, which are basically splitting the network. Tezos is firmly against hard forks and envisions a platform that doesn’t have to go through a hard fork as it’s continuously upgraded based on its users proposals and votes. Any parameter of the Tezos protocol can be changed by the network.

To upgrade the platform, developers independently submit proposals for protocol upgrades. These proposals also include the expected compensation a developer desires for developing and releasing the specified upgrade. Tezos token holders can vote on these proposals and if they are approved, the proposing developers can start working on their upgrade.

The funds are kept in escrow by the Tezos protocol and are distributed once an approved upgrade proposal is implemented. Since the developers are decentrally compensated, they can work independently and continuously as long as they have the community’s approval. The protocol is designed to incentivize its own progress.

Formal Verification Smart Contracts

Tezos has its own smart contract programming language called Michelson. This functional language is specifically designed to facilitate the creation of smart contracts on the Tezos blockchain.

Michelson has been employed to enable formal verification of smart contracts. In this context, formal verification is a technique that mathematically proves the correctness of the code governing transactions. This means that users can proof the properties of their contract and thus significantly increases the security of sensitive or financial smart contracts.

Formal verification methods are often used in engineering processes with little room for error such as aircraft design and nuclear development. The fact that there is a need for such a formal verification process is signalled by smart contracts failures such as the DAO hack last year and the recent Batch Overflow error for several ERC-20 tokens.

Because of Tezos’ governance model, the language can continuously change according to the wishes of the Tezos community. You can learn everything about the Michelson language here.

Delegated Proof-of-Stake

To achieve consensus on the platform, Tezos employs the delegated Proof-of-Stake algorithm. Because DPoS allows for virtual mining, instead of physical mining such as with Bitcoin’s proof of work, it is a highly energy-efficient consensus protocol. Each token holder can be part of the mining process of Tezos, either as a delegate or as a voter for delegates.

If a user decides to vote for a delegate, this means that that delegate now controls your vote to vote for proposals. This makes the governance process more efficient and puts community pressure on the delegates to perform according to the interests of the network.

Misuse of power of a delegate would lead to votes vanishing for that delegate. Unlike other DPoS projects, there is no upper limit to the number of Tezos delegates. Anyone can become a delegate and anyone can delegate their tokens to others.

Scalability Solution

Scalability is currently one of the biggest issues of the blockchain industry. Tezos has implemented an approach to ensure the long-term scalability of the platform, using zero-knowledge proof concepts, a mechanism made popular by the Zcash project.

Zero-knowledge proof concepts are used for smart contract execution and separate the actual execution of a smart contract and its verification by consensus nodes. This dramatically reduces the workload of consensus nodes which only verify the proof of a smart contract but do not need to execute the entire smart contract.

Besides the workload reduction, this method could also vastly reduce network transaction costs and allow for complex smart contracts to run more efficiently.

After the ICO, Tezos’ funds have been managed by the Tezos Foundation. This Swiss-based, non-profit foundation also has a veto power to block proposals during the first year of the network. This power doesn’t apply to submitting proposals, which all have to be democratically approved. The Tezos Foundation already scheduled to slowly remove their power for the sake of decentralization. This process will be guided by community votes.

Token Economics

The native token of the Tezos blockchain is the Tezzies (XTZ). Tezzies are used as the platform’s store of value, for payments of network transaction fees and for fueling smart contracts.

Since the Tezos blockchain employs a delegated proof of stake consensus mechanism, the token is also used for platform governance in which each token represents a vote. These votes are cast to the delegates, which then use them to vote on approving or rejecting improvement proposals.

Validating transactions in the Tezos network is called baking and is similar to mining in Bitcoin, only on a proof of stake basis. For baking, thus validating transaction on the blockchain and securing the network, bakers are rewarded Tezzies.

The token is also used by consensus nodes to buy staking bonds and as a factor for the calculation of baking rewards.

You can buy Tezzies (XTZ) at these exchanges and store them in the Tezbox wallet, a community developed wallet, and the Tezos Blue wallet, which currently is still a work in progress and has set out to become the light version of the Tezos wallet.

The Tezos Roadmap

Even though the Tezos ICO finished in July 2017, its Tezzies made their way to the exchanges a year later on July 1, 2018. The Tezos team suffered serious delays due to legal concerns and a board member dispute and other complications they encountered, which is mainly the reason why it took so long for the Tezos token to become tradeable.

The disputes came to an end after months wasted on dispute settlement instead of working on the Tezos platform when the then president of the Tezos Foundation, Johann Gevers, stepped down in February.

After this, the team could go back to business and managed to squeeze out the Tezos betanet on June 30. According to the team, this beta version of the Tezos blockchain is fully functional, yet highly experimental. Downtime and even last resort hard forks still are in the realm of possibilities at this stage.

At the time of writing, there is no official roadmap yet and the scheduled progress of Tezos is therefore unknown. This has lead to community concerns based on the fact that most of the development of the Tezos network happens behind closed doors, leaving the community in the dark on the status of the platform. For now, few details are known about the development process of the Tezos blockchain.


Despite being plagued by legal issues and delays, the Tezos project seems to have rid itself from its down spiral with the release of the beta version of the Tezos network. The beta version is far from perfect, but it does boost confidence and indicates that the project is still alive and well.

However, the development team will likely need to step its game up if it wants to become a serious competitor of Ethereum, EOS, and all the other blockchain platforms. During the ICO, Tezos was still a novelty. However, as blockchain platforms are popping up everywhere, the project will need to do a lot more than being a novelty to make it.

Tezos’ idiosyncratic features are what should make this possible. The platform’s approach to be continuously increasing based on democratic community decisions could make the platform stand out from competition, but it could also make it slow and reluctant to make radical improvements.

The Tezos functional language does make smart contracts more secure as their correctness can be mathematically proven. This gives the platform an edge over Ethereum, for example, were flaws and bugs have been happening more than once. Additionally, the implementation of the zero-knowledge concept proofs also give Tezos a competitive edge in terms of scalability.

The vision of the Tezos founders is to create a self-amending platform that will be in a constantly evolving state. This evolution is fully steered by the Tezos network, making it a truly user-oriented blockchain platform. The foundational elements seem to be in place and are currently tested, but what they will lead to is anyone’s guess. Tezos’ success is by design completely dependent on the efforts of its community, which we will see unfolding over the next months.

If you want to learn more about the project, visit the Tezos website. You can also check out their Twitter or follow the team’s blog on Medium.

Ethereum Classic (ETH)

Ethereum Classic came about after a hard fork of Ethereum in 2016. The fork was a result of the infamous DOA hack where around 50 million dollars worth of Ethereum was stolen due to what was considered an oversight in the code.

The blockchain was forked in order to recoup the losses from this attack, but a small portion of the community did not wish to go back and change the original blockchain. Vitalik Buterin, founder of Ethereum, and subsequently the development team chose to go with the hard fork and work on what is now “Ethereum” today.

There is a lot of ongoing controversy with Ethereum Classic which can be better described on this reddit thread.

Just like Ethereum, ETC is a secure, censor-proof, reliable, public, trustless, and decentralized platform for running applications and smart contracts. Ethereum Classic has its own token, ETC, that works as the network’s “fuel”.

Supporters of ETC tend to be purists who argue it’s the “true” Ethereum while detractors claim it’s a less important or inferior version of the protocol. Both blockchains were identical in every way up until block 1920000.
But after that everything changed.

In 2016, a smart contract on Ethereum was hacked. This event split community opinion and resulted in one of the most significant schisms within the blockchain community to date. This division was over the practicalities of how to address the theft of funds that took place during the incident (more on this below). But ultimately it took on some deeper philosophical and ethical shades as well.

To really understand ETC, how it differs from Ethereum, and why this matters, we need to retrace a little bit of its history.

How Exactly Did We Get Here?

The Ethereum ecosystem works as a foundation for smart contracts. In a simplified sense, smart contracts are automated protocols that can carry out and enforce various transactions autonomously. The DAO was a complicated smart contract whose aim was to create a decentralized venture fund that would distribute money to various dapp development projects.

The code of the DAO was designed to eliminate the need to trust humans. But in the end, humans were not so easy to remove.

Understanding the DAO is not hard. If you wanted to influence the direction development took, you had to purchase DAO tokens with ETH. In order for funding to proceed, a dapp needed to get 20% of the vote from all of those DAO holders. The more DAO tokens you had, the more weight you held at the voting table.

This idea struck a chord, and investors rushed to buy tokens, investing over $150 million worth during a public sale. But no sooner had that happened than the DAO was attacked, hacked, or otherwise compromised (what exactly happened is debated).

On June 17, 2016, someone took advantage of a known oversight in the DAO code (to be clear, this has nothing to do with Ethereum itself) and siphoned away nearly 1/3 of the funds. At the time, this was around a staggering $50 million.

As can be expected, chaos ensued in the Ethereum community (and the cryptocurrency market as a whole felt the brunt as well). There was a lot of hand-wringing, eulogizing, and arguing, but ultimately the community voted on what to do moving forward.

After the vote, the consensus turned out to be that most people wanted to erase the transaction history to get the funds back to investors – and away from the attacker. Those who felt this way included Ethereum founder Vitalik Buterin and most other prominent figures in the community.

This required a hard fork, a “radical change to the protocol that makes previously invalid blocks/transactions valid (or vice-versa)”.

Ethereum Classic

The only issue with this vote was that consensus was not 100%. There was a small group of dissenters who disagreed with the majority. They believed that “code is law” and that blockchains shouldn’t be altered, even if the majority is in favor of doing so.

This group took their own action.

When Ethereum rolled back its history, the dissenters continued to mine and develop the original blockchain. They took a position that claimed to be for everything cryptocurrencies should be. Since this group lacked the majority, this original chain became known as Ethereum Classic. To quote their website, “the classic version is preserving untampered history; free from external interference and subjective tampering of transactions”.

The group behind Ethereum Classic quickly organized and published their declaration of independence. In this document, they stated their opinion that the Ethereum Foundation’s handling of the DAO hack was reprehensible and also projected a vision for the future.

It should be noted that keeping this version of Ethereum running was no small undertaking. A community hub was needed, supporters had to rally together, dedicated ETC mining pools had to be created, and there was a need for exchanges to pick up ETC.

But in the end, all of these things were accomplished. As we enter 2018, the team that survived this tumultuous history has an aggressive roadmap before them.

Ethereum Classic goals

Some of the key projects in the pipeline are as follows:

  • Classic Geth – a continuation of the ETH Geth, a set of multipurpose command line tools that run a full node. Plans include a focus on architecture modularization, performance improvements, and making it more friendly for use in a business environment.
  • Sputnik VM – is the ever-evolving, ETC-specific version of the Ethereum Virtual Machine, the technology that allows contracts written in various programming languages to be compiled into “bytecode”, which can be deciphered and executed.
  • Emerald Platform – is a software development kit (with many components), designed for third-party dapp developers with plans in place to target desktop, mobile, and web applications.
  • Emerald Wallet – will address the issue that there is currently no wallet for the Ethereum Classic community that verifies transactions for users in a trustless way. A more comprehensive description can be found here



How Does Ethereum Classic Work?

If you already understand how Ethereum works, you’re well on your way to understanding ETC. For those who wish, there is a great article on the differences between Ethereum and Ethereum Classic.


Ethereum Classic runs on the blockchain, a decentralized spreadsheet or ledger. The beauty of the blockchain is that it’s a distributed system with no single point of failure or control. Blockchains are trustless and censorship-free, and have (so far) proven largely immune to hacking or manipulation.

Every transaction or smart contract on the ETC network is packaged into blocks. These blocks are recorded in the “amber” of the blockchain, and the entire network must agree on which transactions are correct or incorrect, thus arriving at “consensus”. In this way, the system is always reconciling itself so users know they can trust its accuracy. ETC uses the same Proof-of-Work (PoW) algorithm as Bitcoin does for reaching consensus.

“Proof-of-Work”, as its name hints, requires that participants (miners) validate these blocks of data, showing that they have invested significant computing power in doing so. They must prove their work by racing to solve complex mathematical problems. The winner of this race (having proven their work) is rewarded with some ETC. Once a block has been mined, it’s added to the blockchain.

Ethereum is currently moving away from PoW for a number of reasons (centralization of mining power, energy consumption, etc.) but Ethereum Classic is sticking with PoW for now. The line given is that PoS implementation seems overly complex and they’d rather not risk the network with untested tech.

Smart Contracts

When you start drilling down, it doesn’t take long to see that smart contracts are the primary feature of ETC. As we mentioned above, smart contracts are computer programs that directly control the transfer of digital currencies or assets between parties, if certain conditions are met. The make contracts enforceable in computer code. They are, in part, why Ethereum (and by extension ETC) exists in the first place.

The Ethereum Classic network functions as “software that hosts other software”. ETC provides a place for people to build and run smart contracts – a blank canvas or a back-end, if you will, for developers to implement all manner of smart contracts and dapps. One of the key innovations here is ETC as a platform that allows for the easy scripting and creation of dapps for all types of use-cases.

There are quite a few applications running on Ethereum Classic, and more are being developed. Here are a few notable projects that are already operational.

  • – Designed to create an immutable record of existence, integrity, and ownership of documents and files.
  • BitTicket – One of the first companies to deliver ticketing solutions via blockchain technology.
  • Original My – A service that provides legal proof of authenticity that protects your creations, contracts, and much more.

The ETC Token

The ETC token functions as a method of paying for things within the ecosystem, an incentive to build good code, and, for some people, an investment vehicle. Ethereum, and by extension ETC, was created with the idea that there should not be a maximum limit on the number of tokens. This is largely because of the intention behind the token (meant more as “fuel” than a true currency). But this approach brings with it some obvious problems, namely that an unlimited supply of coins means their price would always be going down.

ETC addressed this in their ECIP 1017 monetary policy change. This change mandates (among other things) that on December 12, 2017, the block reward (remember the miners’ reward from above?) will drop from 5 to 4 ETC. This downward trend will continue until eventually the block reward is zero. What this means is that the token will remain inflationary until about 2025, at which point there should be in the vicinity of 200 million ETC. After that, it will become a deflationary currency. For those who view ETC as an investment vehicle this is likely good news. A capped or deflating supply of tokens tends to drive demand and thus prices (in general terms).

Final Thoughts

The vast majority of crypto supporters have chosen to favor Ethereum, there is no denying that, but, as some would argue, they’ve compromised their principles to do so. ETC exists for the blockchain purists and maximalists. One great thing about this smart contract platform is that identity politics and “toeing the party line” don’t matter in the way they do within some other crypto factions.

In terms of true decentralization, not too many blockchains can compare with Ethereum Classic.

Whether or not Ethereum Classic can take its highly principled and decentralized technology and continue to thrive is yet to be seen. In a winner-take-all scenario it’s hard to see the road forward, but in a world of greater nuance and complementary solutions, ETC may flourish well into the future. Ethereum Classic often doesn’t get the credit it deserves, but for now the key is continuing to get more users and developers involved.

Want the latest news? Check out the ClassicIsComing Twitter, the Ethereum Classic Twitter, and ETC.Today. Want to read an in-depth analysis of ETC investment potential? Give this a look. Want to join the ETC discussion? Most of this happens on Discord.


A leading platform for smart contracts and sometimes referred to as “China’s Ethereum.” NEO (formally Antshares) hopes to digitize many types of assets which were formerly kept in more traditional means, and therefore make it possible to use them in smart contracts.

When you google the name, you generally hear NEO referred to as “China’s Ethereum“. But in truth it is much more than that.

To imagine a potential use case of NEO, think digitizing the title to a house into a smart asset, and then setting up that asset to automatically transfer to another person after payment for the house has been received. This would be, in effect, a simple smart contract.

NEO founder Da Hongfei is a leading figure in the cryptocurrency world and has worked on numerous blockchain projects in the past. The development team consists of 6 in-house investors and a large community of third-party developers.

NEO, formally Antshares, was founded as both a community-driven and funded project with the goal of using blockchain technology to digitize assets using smart contracts and common programming language.

The similarities between NEO and Ethereum are quite apparent: both are smart contract development platforms which are attempting to bring blockchain to the masses.

But NEO has learned from Ethereum’s mistakes, and thanks to various technological advances, has positioned itself to become the world’s premier smart contracts platform.

They have branded themselves as the “smart economy”, not wanting to only be known to speculators but for its value in the new post blockchain era.

So, What Does That Mean?

What NEO has actually set out to do is enable businesses to manage smart contracts effectively, safely and legally.

That comes down to two separate parts: ‘smart assets’ and ‘smart contracts’. I won’t go into too much detail on these here but a smart asset can be described as a programmable asset which exists in the form of electronic data. Think of this as something of value, such as a stock in a company, a title to a house, or loyalty reward points.

For a thorough discussion on digital assets and smart contracts see: “Digital Assets and Smart Contracts: A Beginner’s Guide“.

A smart contract is in effect a customized blockchain which enables you to execute certain actions automatically. For instance, if an online shopper wants to buy something, the online retailer wants to make sure that the item has been paid for before sending it. With a smart contract, the item can be automatically sent only after the agreed upon amount has been paid. This would eliminate the need for a third party to act as a middleman (like Paypal cough, cough) and therefore also eliminate the 2.6% fee that Paypal charges.

With blockchain technology, smart assets and smart contracts can be decentralized, transparent and can exist without intermediaries.

NEO also operates with digital identities. This means that when smart contracts execute, individuals will have their identities associated with the smart assets. Though to some, digital identities can been seen as going against what blockchain is trying to do, it comes with various advantages such as increased industry compliance and the ability to add security measures such as facial recognition, voice, SMS and other multi-factor authentication methods.

NEO’s Competitive Advantages Explained

As described in the NEO whitepaper, NEO developers can write smart contract protocols using common programming languages such as Java or C#. Ethereum, on the other hand, developed their own programming language which developers must learn first before creating smart contracts on the platform.

NEO supports these coding languages through use of a compiler; Ether supports one language – Solidity. This is an obvious edge for NEO.

NEO built its own consensus mechanism different than that of Ethereum (Ethereum uses PoW) called dBFT. In addition to being fast (it is capable of handling up to 10,000 transactions per second, compared to Ehereum’s 15 per second), it is two-tiered.

The first tier is like PoS where you use your stake to vote on who can take part in the consensus process. In the second tier, the nodes which were voted to participate will then take place in a BFT-style consensus which has some technical advantages such as removing forks and added finality or ease of confirmation.

A notable difference between NEO and its competitors is the way you pay to use their services. With Ethereum, you pay a system fee to utilize their blockchain. This is generally paid in the form of a small fraction of an Ethereum coin.

With NEO, you don’t pay to use their services with NEO coins, but with Gas.Their reason for this: “You wouldn’t pay for an apple with a share of Apple (the company)”. So they decided to de-couple it and that’s how GAS was formed.

In the genesis block where the initial 100,000,000 NEO was made, GAS wasn’t made with it. Instead, GAS is slowly generated over the course of 22 years, with the amount of GAS you get per NEO slowly decreasing. All NEO holders are paid GAS in dividends, with 1 NEO giving you 1 GAS over the course of 22 years. The more NEO you have, the more GAS you get (per day). As users spend GAS, it gets recycled into the system. The more GAS that is used, the more that’ll be recycled and given to all holders.

NEO itself isn’t divisible, as it is a share in a company, but GAS is divisible so it is generally used as a form of payment.

NEO, Is it the One?

NEO, the Ethereum of the East, has made huge strides in the last few years and has seen explosive growth. They have strong leadership, an experienced development team and a devout community pushing their platform.

Their cooperation with Microsoft has only moved to put them in a more favorable position and the adoption of their software by the software giant only looks to strengthen NEO’s position.

This isn’t to say that everything is positive for NEO. They have lots of competitors at their heels and even though many claim this isn’t something to be worried about, I’m not convinced. NEO also lacks a clear roadmap for the future of the platform that investors and supporters alike can look to. This sometimes leads to investors and community members scratching their heads when trying to see what’s coming next. This coupled with China’s recent ICO ban leads to a lot of speculation as to what comes next.

But NEO has a strong base and enough capital to last for a few years. That, coupled with their attractive staking rewards and huge potential market, means there is a lot to be excited about when it comes to NEO.

Maker (MKR)

Maker is an asset-backed decentralized “stable coin” based on the Ethereum blockchain. Stable coins are a revolutionary approach to digital money as they remove large price volatilities in the coins.

Maker’s autonomous smart contract system is designed specifically to react to market fluctuations, keeping the price of 1 Dai equivalent to US$1. Each Dai is backed by Ether tokens as collateral, and is secured with an Ethereum smart contract.

In the event that the price of Ether drops below the predetermined threshold, the smart contract would automatically liquidate, keeping the collateral at a safe level and therefore preventing the Dai token from collapse.

By holding a MKR token, you become a member of Maker’s DAO and are entitled to certain rights as defined in Maker’s technical documents.

Like many of the best blockchain projects, Maker (MKR) is inherently complex and therefore requires an in-depth explanation to fully understand.

MKR is a utility token with a slight twist. To grasp this, we must first learn what a stablecoin is and how MKR’s complicit coin, Maker Dai, fits into that broad definition.

What Is a Stablecoin?

In short, a stablecoin is a cryptocurrency that has a fixed value.

In the case of Dai, Maker’s stablecoin, it is a token that is denominated in US dollars, starting at US$1 — this translates to it having a 1:1 USD soft peg (but not perpetually fixed to the USD). Until now, most stablecoins have worked similarly to an IOU. That is, the developers of the stablecoin hold exactly $1 for every coin issued. However, critics would perceive this as a flawed protocol as the coins effectively become promissory notes that are remarkably similar to fiat currency.

This results in the coin becoming more centralized and reliant upon government-controlled currencies – a result that is quite unlike most of the decentralized cryptocurrency platforms that currently lead the crypto marketplace.

Fortunately, Dai exists as a stablecoin that is not backed by any other currency, while MKR is the volatile governance token that allows it to be so.

The Importance of Stablecoins in Cryptocurrency

It may seem somewhat confusing at first but as you read on, it will become more clear how stablecoins are becoming necessary in the crypto ecosystem.

First, let’s take a comparative look using Bitcoin as an example:

As exciting as Bitcoin is at the moment (achieving record highs and mass public notoriety), it’s practically useless for its original intentions. The amount of volatility and market speculation makes it irrational to use for purchases. With people thinking that its value may once again skyrocket, they’re reluctant to spend it, lest we see another $150 million pizza.

Additionally, access to retail industries is not the only restriction caused by Bitcoin’s volatility. It’s also currently nearly impossible for financial services, such as money lending, to operate because interest rates on a loan cannot keep up with the potential growth of Bitcoin.

This is where the value of having a stablecoin, such as Maker’s Dai, becomes apparent. Integrating a stablecoin may be the missing piece of the puzzle that allows cryptocurrencies to disrupt or even overtake fiat currencies.

How Is Dai Created?

Dai is generated on demand in exchange for ether.

The process reflects transactions such as purchasing a house using a mortgage. Banks like to see that you have sufficient collateral available and in most instances, will only lend to a maximum of 80% of that value. The reason banks do this is to protect themselves from the potential costs of a depreciating asset.

Similar to these banks, Dai needs to be protected on both sides from inflation and deflation. That is why it has a fixed value. This is also why Maker requires that you contribute more than 100% of the token’s value in Ether. Quite often the amount required is 150%.

For example, if Ether is trading at $100 at the time of creating the Dai tokens, you will require 1.5 Ether or $150 to enable the creation of the Dai.

How Does Maker Work?

Maker is a decentralized autonomous organization on which the MKR token and Dai operate, and it is built on Ethereum. It is a prime example of the many spectacular products and services people are able to build using Ethereum’s smart contract platform. Essentially, it exists to reduce the price volatility of the Dai against the US Dollar.

For instance, when you create 100 Dai with your $150 worth of ether, the ether will be tied up in a collateralized debt position (CDP), which is basically just a program enabling the smart contract on Maker to set aside your “equity”.

Should you return your 100 Dai, you will be paid out with $150 worth of ether, but the Dai is destroyed as a part of this process.

The following sections cover what happens in the meantime while the price of ether fluctuates.

If Ether Increases

The price of ether increasing is no cause for concern. By already being collateralized above 100%, your position simply becomes even more collateralized. The value of Dai remains the same, but can be thought of as being stronger.

If ether continues to rise, the value of Dai increases along with it. Therefore systems must be put in place to keep this process in check. To this end, Maker incentivizes the creation of additional Dai from the same CDP, effectively diluting the Dai pool, bringing its value back to $1 and balancing out the the collateralization ratio back to 150%.

If Ether Decreases

An increasing price of the underlying security is rarely cause for concern. In those cases more of the coin can be generated, but the effect is similar to how a government that prints too much money will provoke a period of hyperinflation.

What’s much harder to manage is if the security drops in value.

Maker has a system in place for this situation that, again, leverages Ethereum smart contracts.

If the price decrease of ether is significant enough to suggest that securitization may fall below 100%, Dai would no longer be able to justify its own value of $1, thereby threatening its stability.

If the Dai gets returned, the problem is averted — although will not always be the case. More often, Maker will liquidate the security inside the CDP on the open market while the securitization is still above 100%.

The funds from this sale are used to buy back Dai until the overall ratio of all Dai in existence is sufficiently collateralized once more.

A more thorough description can be found in the Dai whitepaper.

How Does the MKR Token Work?

Now that we understand the reasoning behind Dai and how it works, we can begin to understand how the MKR token fits into the picture.

Maker works as a governance token, or a utility token that also functions as a recapitalization resource for the Maker network.

MKR’s utility token aspect is based on the concept that it is the only token that can be used to pay the fees for creating a CDP to generate Dai. In fact, there are approximately 530,000 MKR in circulation and whenever they are used to pay fees, the MKR gets consumed and destroyed.

As more and more MKR is ‘burned’, its value will increase, so that less is required to perform transactions.

The governance token aspect of MKR comes by its use for voting. MKR holders get to vote on every decision proposed for the Maker network and get to make proposals as well.

Votes are regular and proposals are generally concerning risk control and safety parameters. There is also a delay between vote outcomes and implementation, to prevent bulk purchasing of MKR for malicious voting. In this sense, MKR can be thought of as shares and ownership in the Maker community.

Maker also relies upon its community of MKR holders to implement policy and operates on the assumption that they will employ common sense. This is where MKR’s final aspect of being a recapitalization token comes into play.

If Maker is poorly governed, an automatic recapitalization event will be triggered, resulting in insufficient collateralization of the CDPs. In such instances, the Maker system will create additional MKR tokens to be sold, which will raise capital for additional collateralization. As a result, MKR is diluted and its value drops.

Avoiding this outcome is the incentive for MKR holders to play their part properly because if they don’t, their position in MKR will lose value.

Use Cases for MKR and Dai

Stablecoins have a stronger argument for everyday use when compared to traditional cryptocurrencies. Their stability allows for them to be used in financial markets, like money lending, wherein the lender or institution can rely upon getting a fixed return.

Their potential for regular use in retail and commerce is also very strong due to most cryptos, like Bitcoin, having significantly higher volatility. While holders of Bitcoin will be reluctant to use their coins for transactions, due to the fear of missing any potential growth, users of stablecoins will know that their coin will still carry the same value of $1 tomorrow.

Where the argument for Dai vs other stablecoins comes into play is the fact that it is the first truly decentralized stablecoin. It is reasonably safe to assume that users who are starting to use stablecoins in these early stages of blockchain technology will be cryptocurrency enthusiasts. This is a community who believe in the original intent of cryptocurrencies being decentralized and not dependent on any other currency or security.

It’s for this reason that many users are likely to gravitate towards Dai.

As the Maker community grows in strength and Dai becomes a reasonably useful cryptocurrency, the value of Dai should, in theory, also lead to a correlated increase in the value of MKR.

Competitors and Challenges
Backed Stablecoins

Though the Maker and Dai combo is still in its very early days, individuals who have interest in using stablecoins may lean towards USD-backed coins.

Stablecoin systems don’t precisely “fit” into the basic philosophy of cryptocurrencies as they are effectively centralized. This means they may simply be a romantic yet risky option that most investors won’t be able to afford.

As such, it’s currently difficult to approximate how long it will take Dai to demonstrate their claimed stability and when consumers could be jumping to use it.

Global Settlement

Global settlement describes what will happen should Maker and Dai ever collapse.

There are several events in which this could occur. If Dai becomes impossible to keep stable or becomes irreconcilably under-collateralized, global settlement will take place.

This is fundamentally when Dai becomes frozen and users are paid out the Ether in their CDPs minus transaction fees. At this point, Dai ceases to exist, though it’s quite possible that Maker might keep MKR running and introduce a new stablecoin to equalize it.

The Road Ahead For Maker

Maker’s Dai token has only been live for a little over a month. This is following several years of effort by the Maker team to launch a practical stablecoin using the Ethereum platform.

So far, users have been able to successfully use Dai to back large purchases, like home mortgages, and they have even been able to use Dai to fund small businesses. With the adoption of Dai by the community, the development team has been seeking ways of improving its viability in the cryptocurrency economy.

The team is now assessing whether it will be worthwhile to increase the limit of Dai that can be created from $50 million up to $100 million. This decision must be made with consideration of the risks of growing the system to too large a scale before it has been proven in the marketplace.

Also on the horizon is the launch of multi-collateral Dai. Expected in the summer, multi-collateral Dai should allow the network to sustainably maintain a 1:1 value ratio between Dai and USD. How effective this will be should be more clear following its release in the summer of 2018.


Dai represents a significant step forward for stablecoins. Without stablecoins, creating a cryptocurrency platform that can compete with fiat currencies on a level playing field in volatile industries, like financial services, may be nearly impossible for cryptocurrencies.

Existing stablecoins are being rejected by supporters of cryptocurrencies due to their unpalatable centralization and dependence on fiat currencies. Dai seemingly stands as a solution to this problem.

Dai and MKR are dependent on each other to operate, yet investing in either offers unique opportunities. Dai offers stability, while MKR offers involvement and potential for profitable returns.

As the technology and methodology behind this platform continues to progress the future of stablecoins, cryptocurrency platforms are certain to bring interesting evolution to the cryptocurrency economy.

For more information about the Maker community, check out their website, read their whitepaper and join their reddit page.


NEM (New Economy Movement) is the world’s first Proof-of-Importance (PoI) enterprise based on blockchain technology. With a focus on business use cases, the software was built from the ground up with adaptability in mind. NEM’s goal is for companies to use their “smart asset system” to implement customizable blockchains.

A smart asset can be almost anything: a cryptocurrency token, a business’s stock or a company’s invoicing and records.
Some potential use cases for NEM’s technology include: voting, crowdfunding, stock ownership, keeping secure records, loyalty rewards point programs, mobile payments and escrow services. A list of NEM’s use cases can be found here.

NEM’s blockchain technology offers the potential to drastically simplify an enormous variety of secure ledger and transaction tracking systems. It provides an adaptable API interface that can be used with any programming language.

The development of NEM is monitored by the Singapore-based NEM Foundation.

History of NEM

NEM was launched on March 31, 2015 with the currency symbol XEM. The code was written in Java from scratch, as opposed to most other cryptocurrencies which were ‘forked’ off of existing codes and then later altered.

NEM’s origins date back to January 2014, when an open call for participation in a Bitcointalk forum called for a community-oriented cryptocurrency to be created from the ground up. The project saw 1,500 early investors buying XEM stakes, where 1 stake was equivalent to 2.25 million XEM coins.

What does NEM do?

NEM’s primary function is the implementation of what they call the “Smart Asset System”. In effect, this system gives users the ability to implement a customized blockchain for their own specific “smart contract”.

So what exactly does “Smart Asset System” mean?

Smart Assets are a way of describing the tools NEM uses to handle business data. “Smart Assets” give you the power to use NEM as if it were a custom blockchain built to handle your assets.

The “Smart Asset System” can be broken down into four components:

  • Addresses: Containers that hold coins, contracts, deeds, or any business records. These are items which are unique and can be updated. These containers could be something simple like a user’s account full of coins, or something more complex like a package to be shipped, a deed to a house, or a document to be notarized.
  • Mosaics: Custom tokens or other digital items. These could represent something like a coin, or items such as stock shares, reward points or even other currencies.
  • Namespaces: Web addresses that prove who you are and also give your assets a home. They let you create a unique place to put your assets on the NEM blockchain, thus making your assets unique, easy to use and trustable.
  • Transactions: Puts your ‘Smart Assets’ into play by allowing you to complete actions such as transferring Mosaics between Addresses or transferring and configuring ownership of Addresses.

NEM has provided a list of potential use cases for their ‘Smart Asset System’. Some uses include: voting, crowdfunding, stock ownership, keeping secure records, loyalty rewards point programs, mobile payments and escrow services. Many of these are large global industries in themselves which highlights just how huge the potential NEM customer base is.

NAs described in NEM’s whitepaper, NEM is designed to be a customizable blockchain-based technology used for business purposes. Because NEM’s software is so adaptable, the potential uses are nearly endless. For example, smart contracts can be used as central ledger software for banks, keeping track of transactions by investment companies, or storing and sending government documents such as birth certificates.

Smart contracts make it possible to share digital assets via blockchain technology. CC by 2.0

Unlike Bitcoin or Litecoin, NEM is not intended to be used as a currency.

In addition to the “Smart Asset System”, NEM is one of the most secure and easiest coins to use if you want to create your own coin and offer an ICO to raise funds for a startup.

According to NEM:

NEM’s approach is to let developers use a wide range of combinable functionalities which let them build powerful applications based on a closed set of atomic operations, and opens the network to almost any technological combination

Why Use NEM?
NEM Has A Low Transaction Fee of 0.01%

NEM utilizes a new code designed for transaction efficiency. XEM transactions take about 6 seconds to show up and about 20 seconds to confirm. On the other hand, Bitcoin can take up to an hour or more to confirm transactions.

Fees to transmit assets via the public blockchain (coins, documents, etc) are very low. Currently the transaction fee is only 0.01%. This means it costs $0.01 to send $100 worth of coins and $0.10 to send $1,000. In comparison, credit cards charge anywhere from 1.5 to 3% and Paypal charges 2.6%.

NEM’s 0.01% transaction fee is low even compared to other cryptocurrencies!

NEM Is Very Scalable

NEM is incredibly scalable. Currently NEM has transaction speeds comparable to Bitcoin, however when the planned updates go into effect the network could handle in the hundreds if not thousands of transactions per second. In comparison, Bitcoin is only able to handle 4-5 transactions per second. This has been a huge problem for Bitcoin and is a factor which has led to the Bitcoin currency being split into two (and soon three) different currencies.

If NEM isn’t meant to be used as a currency, then why care about trading coins? The truth is: you still need the coins.

In future, if companies use NEM software, they will eventually need to send their “Smart Assets” to various places. This will require sending the documents across the public NEM blockchain. Sending documents will require the company to pay a transaction fee, which can only be paid for in XEM (NEM’s coin).

In that respect, potential investors could see gains on their investment if companies begin to adopt NEM’s software. Since there is a set number of XEM coins (9 billion), as the demand for these coins increases, so will their value.

NEM Uses Unique Harvesting Methods

For those interested in harvesting some coins for yourself, NEM is one of most lucrative coins around (as opposed to the mining processes used by other coins).

NEM uses unique methods of Proof of Importance (POI) and Delegated Harvesting to award coins.

When a block is harvested, it confirms the transaction in the block, adds it to the blockchain permanently and then rewards the transactions fees from that block to the harvester.

A user’s POI determines who actually harvests a block, which is governed by three factors:

  • The user’s vested stake or if the coins have been in their account for a number of days
  • The user’s transaction partners or if the users are making transactions with others in the network
  • The number and size of transactions in the last 30 days

Delegated Harvesting is an efficient way to pool account power without exposing any private keys, which yields some benefits. For instance, your computer doesn’t even have to be running to harvest and harvesting is done automatically for anyone with over 10,000 vested XEM in their accounts.

These revolutionary methods implemented by NEM have leveled the playing field and gives power to users, not to hoarders or mining farmers.

What Sets NEM Apart From Other Cryptocurrencies/h5>

NEM is 100% traceable

NEM’s traceability is one big differentiating factor. Unlike its competitors such as Monero, there are no ‘private transactions’ on NEM.

Although many in the cryptocurrency community consider this a negative, it has some advantages. For one, traceability will allow security features such as buyer and seller protection to be implemented. This is one of the reasons NEM is a very secure coin. To date, there has been no major security issues.

NEM also allows businesses to track spending habits, a feature that is useful and may attract more businesses to use it in future

NEM Uses Less Power

NEM uses 100 times less power than Bitcoin to run a node or harvest. This is why NEM’s transaction fees cost only a fraction of some of its competitors.

NEM Is Not Subject To Inflation

Another great thing about NEM is that all of the coins (8,999,999,999 to be exact) have already been created. This means that there is zero inflation. For most other coins such as Bitcoin or Litecoin, the mining process is still actively putting new coins into circulation, which will lead to some inflation.

NEM Does Not Focus On Retail Use

One thing you do not see NEM focusing on is coin price or retail use. Many cryptocurrencies focus on the coins themselves, but NEM is much more focused on the platform and the development community to try to create new apps for the platform.

NEM’s strategy is pursuing business relationships, on-boarding developers, helping ICOs and encouraging enterprise adoption.

Competitors and Challenges

NEM has a few big competitors such as Ripple, Factom, Ubiq. Most notable is Ethereum, the 2nd largest cryptocurrency in the world with a current market cap of nearly 30 billion dollars.

Compared to its competitors, NEM seems to be a more stable choice for building new applications with support for real business models. Its security and development features allow blockchain entrepreneurs to focus on relevant problems and not technical difficulties. Its learning curve is also much smoother than that of Ethereum.

One of the biggest challenges NEM has is getting people to understand what it does. Typically, coins such as Litecoin are designed to be used like fiat currencies. However, XEM coins aren’t meant to be used as currency, but a transactional platform for businesses and developers.

Another challenge for NEM is growing the pool of developers who have the knowledge to connect NEM to existing company networks. Luckily, NEM’s API is relatively easy to integrate with legacy networks. They have also been putting a lot of effort into growing a new wave of developers who can support their system.

NEM has opened the first blockchain center in Kuala Lumpur, Malaysia. The center is meant to serve as an incubator, accelerator and co-working space. They are clearly dedicated to promoting their product but also supporting the blockchain community as a whole.

Last Thoughts

Looking at the diverse business functions that NEM can perform, it is clear that there is a large potential customer base.

In addition to NEM’s current advantages, NEM plans to release the Catapult software this year which will add even more improvements to its current Mijin software. This will only put NEM further ahead of its competition. Developers at NEM are also actively working to make their product better and better.

NEM has an excellent development team, strong community support, a robust blog, good incentives and a solid business plan.

Zcash (ZEC)

Zcash is a value transfer protocol forked off the Bitcoin blockchain. Zcash can be used like Bitcoin, with a few added improvements. With “zero cash technology,” Zcash shields both the amount transferred and the senders, making transactions truly anonymous.

However, their methods have left many feeling like their moves are too controversial to make ZCash a coin that will last. Others say it didn’t go far enough to go shoulder-to-shoulder with coins like DASH.

Zcash is one of the new kids on the block in the world of “private transactions”. It is one of those crypto coins that took a few steps outside of what makes cryptocurrency appealing while adding features that the world’s most popular cryptocurrency lacks; additional privacy measures, one kilobyte transactions, faster transaction processing.
Plus they’ve got one hell of a panel of advisors: Vitalik Buterin and Gavin Andresen among others. That’s an explosive line-up.

An interesting note is that Ethereum is in the process of implementing some of Zcash’s technologies to enable transactions on the Ethereum network to be anonymous as well.

Zcash is being developed by the Zerocoin Electric Coin Company. They’ve had some great successes, most notably JP Morgan’s announcement that they would implement Zcash’s privacy technology to Quarum, a technology JP built on Ethereum.

Zcash was recently featured on the Radiolab episode The Ceremony.

History of ZCash

ZCash originally began back in 2013 as a project that was commonly known as “ZeroCoin”, originating from the University Department of Computer Science at John Hopkins University in Baltimore, United States.

ZeroCoin was intended to build upon Bitcoin technology with a focus on privacy. Years later, it settled down as ZCash; an open-source technology operated by a private company.

ZCash is backed by a leg of the Israeli government and this is going to rub a lot of people the wrong way.

ZCash was founded by a gentleman named Zooko Wilcox-O’Hearn, a very, very established cryptographer. In spite of my criticisms, I greatly respect his work, with Least Authority being one such technology he’s championed. Additional team members include names like Roger Ver, Barry Seibert.

What Does ZCash Do?

The purpose of ZCash is intended to all the things that Bitcoin can do, but more securely, faster, and cross-chain.

Simply put; ZCash is like Bitcoin with a much more astute application of truer privacy, making it one of the best platforms for financial anonymity at this time in the cryptocurrency market. Hands down, great work. But does it hold up when compared to Dash or Monero?

Cash is a method of unregulated value transfer that is gaining popularity among cryptocurrency enthusiasts and professionals alike. This is due to its baked-in privacy measures and faster transaction speeds.

However, just like Bitcoin, it still doesn’t offer double-spend protection in real time (something that Dash does). Confirmations take around 2 and a half minutes for first confirmation with ZCash; not exactly great for buying anything at a convenience store, if that’s your thing.

One perk of ZCash is its ability to commit cross-chain transactions, meaning that you can exchange other cryptocurrencies across its protocol.

What Makes ZCash Different?

ZCash is, in a nutshell, a much more secure and private version of Bitcoin. It still operates in many of the same ways that Bitcoin does; changes to the technology requested by the community outside of its governing body will result in a fork, the code is open source, and it operates on the same kind of subsidies that Bitcoin does; miners are subsidized, nodes aren’t.

Where ZCash differs is that it’s run by a private company. Transactions have the option to be truly anonymous and private, go cross-chain, and transactions are so lightweight they can be processed in under six milliseconds. That’s a massive improvement over Bitcoin.

ZCash protocols like zk-SNARK which allow for anonymous transactions have even been partially adopted by competing blockchains like Ethereum. ZCash is truly a hybrid worth looking at.

But the party ends there. Some say that it being run by a private company with politically charged backers (note the typo “demoninations” in this article, at the time of this article’s writing) is questionable and not in the spirit of cryptocurrency, and transactions –mining—having a kind of “tax” for the founders leaves a bad taste in many mouths.

Like Bitcoin, ZCash will have 21 million units by the time it’s done issuing coins. In the first 4 years, 20% of its coins will be transferred to “Founder’s Rewards”. It is a private company, after all.

Another key differentiator is that ZCash makes cryptocurrency transactions – and the coins themselves – fungible.

In lay terms, coins are swapped constantly, making them hard to trace and everything is optionally encrypted.

If I was being “ultra lay”, I’d say it’s sort of like money laundering is baked into the platform, if only metaphorically (can I say that?). This is an editorial piece, so I may have my terminology wrong. But you get the idea.

The coins you hold or spend are algorithmically mixed up so it’s impossible to trace them; combined with transaction encryption, you can’t follow the crumb trail as you would with Bitcoin if you choose to.

This makes it harder for the IRS to do its business (and it makes them a prime target for the IRS). I’m not so sure I’d trust a private company, with all the legalities that entails. A private company owning this bad boy means it can be subpoenaed.

Their zero-knowledge protocols may protect them today, but it leaves a bad taste in my mouth. Sort of like Apple and that whole iPhone decryption scandal with the FBI. If I were to be sneaky, I’d rather be sneaky on my own and not rely on the platform to be as such.

ZCash also handles mining subsidies differently. It bakes in a “tax” called the “Founder’s Reward” into every transaction; meaning that the employees of the business behind ZCash are getting a kick back every time you use it. Personally, I don’t take issue with this. Transaction sizes are so small –1 kb—so even with that little “tax” I would make money as a miner, even over and above Bitcoin. But again, that doesn’t sit well with everyone and is a large part of the controversy surrounding ZCash.

On the flip side, Ethereum is borrowing aspects of zk-SNARK technology and implementing it into their platform. So ZCash is a bit of a leader. But red flags abound.

Does ZCash Solve a Problem

ZCash wants to solve Bitcoin’s privacy problem, but can it do that as a private company? It’s a whole lot easier to nail a business to a legal cross than it is a fully decentralized system.

Oh, in addition to that Founder’s Reward “tax” of 10%, they donate 1% to nonprofits or charities, so I guess they help solve some problems. But so did the Body Shop, and we all know they’re full of it, too. It’s a little too “feel good” for this blogger. Maybe it’s good, but I feel like it’s playing on the sympathies of their prime market to influence investment decisions. Millennials need to be cold when it comes to choosing the world’s next currency. Donations are a hidden complexity you may not want to endorse.

I’ll invest; but only because I watch the crowd, not the coin.

Last Thoughts

ZCash improves upon Bitcoin, but does it do so in ways you approve? Controversial funding, still no double-spend protection beyond a minute and a half, and it claims to be anonymous (I believe it really is) yet it registered itself as a business instead of remaining open source, through and through. It’s a tough call.

I couldn’t for the life of me rule it out as I personally invest in it, but I don’t see it as a coin that would survive legal SEC-level scrutiny; they don’t like complete anonymity, and they’ll chip away at that with unrepentant regulation one day.

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