Blocktrak

 

Enigma was one of the most anticipated ICO’s during the summer of 2017. It was viewed as a winning project with a team out of Massachusetts Institute of Technology. The idea was to create a prediction market for Crypto investors similar to a Bloomberg terminal and driven by artificial intelligence. I myself decided to invest in Enigma due to their seemingly all star team. However, they were hacked about 1 month prior to the official launch of the ICO. The article from TechCrunch can be read here.

“Users on Reddit found that Engima CEO Guy Zyskind’s email was accessed by the hacker. His email had been part of a hacking of a different services in the past and had been dumped on the internet, but seemingly Zyskind had not taken the time to change the password..”

Enigma lost investors half a million dollars and angered their Telegram community. At this point a downward trend began and the bullish confidence began to fade. What made matters even worse was that the hard cap was raised toward the beginning of the ICO to $45 Million. The questions began to pop up. Why do they need to raise the hard cap? Investors began smear campaigns across social media. Incredibly, the ICO was executed and funds were raised. The damage had been done, but at least the token sale went unscathed.

Can Enigma be the Bloomberg Terminal of Crypto?

The Initial Coin Offering price was 60 cents for the crowd sale. It pumped around 80 cents range for a couple of days, and then quickly dropped way below ICO price. I felt that the hacking incident and lack of organization lead to the initial demise but there is still a light at the end of the tunnel. Enigma does have an ALPHA version available now. When looking at a Crypto startup it’s important to see a working product as opposed to only a Whitepaper. The fact that Enigma does have an Alpha gives me some confidence in it’s future. Some of the features Enigma offers are:

• Quant Research Tools – free, open-source Python SDK – either locally or over a web-based IDE – to quickly access crypto-data and to design, test and refine winning trading strategies.
• Data Marketplace – decentralized data marketplace for the blockchain ecosystem as a data curator, data consumer, or both. Provide crypto-investment data in exchange for ENG tokens and spend tokens to subscribe to data sources. Get market, network, sentiment, ICO and other crypto-investment relevant data from a single source and create your edge in beating the crypto markets.
• Machine Based Investing – Invest in winning strategies with a proven track record, even if you lack the skills or time to create your own algorithms. For developers – prove you can create successful algorithms and attract investment from your peers.

Enigma’s Future

I attended a Data Science event last year in New York City and the keynote speaker proclaimed Data is the new currency. But when you think about it, everything we do digitally collects data for marketers. Your phone, tablet, websites you visit, Apps you install, all collect data which is bought and sold. This is part of the reason why we are seeing a movement towards decentralization. Do people want to voluntarily pay for expensive devices and give away their private information at no cost, with no benefit? This is part of the reason why I see decentralized systems taking root. Enigma does have a strong team and backed by some major names including MIT, Digital Currency Group, Flybridge Capital Partners, Floodgate, Converge and Heroic Ventures. It could very well become the Bloomberg terminal of Crypto, it all depends on the reliability of their product and the community that backs them.

 

 

Today has been a historically epic day for Bitcoin Cash (BCH) because it has reached all time highs due to many factors. Part of it had to do with the sudden cancellation of the much anticipated Segwit2x Fork. Some have even called it a showdown between Bitcoin Legacy (The first and original Bitcoin chain) and Bitcoin Cash which was introduced to the world on August 1st 2017. Bitcoin Cash (BCH) is actually a clone of the original Bitcoin (BTC). However some changes were added to it making the transaction speeds faster. For the average person out there who is reading this, Bitcoin transactions are generated through Bitcoin Miners, sort of like Gold Mines but giant supercomputers that take up a lot of energy in lay terms. They require massive amounts of electricity and can be very expensive to operate. Miners are a key component to the Bitcoin ecosystem. Many of the miners operated out of China but it was possible, and still is possible to mine Bitcoin on a home computer setup. The technicalities behind Bitcoin Mining are quite complex and we will not get into that subject in this article. What we are talking about is Bitcoin Legacy (BTC) and Bitcoin Cash (BCH). One of Bitcoin Cash’s biggest supporters is Roger Ver, who describes himself as the world’s first Bitcoin investor. He also is the creator of Bitcoin.com. Roger is indeed very influential in the Cryptocurrency space and this definitely has an effect on Bitcoin Cash’s rise.

 

“After talking with many of the Bitcoin miners from China over the last few days, and hearing that they currently are not willing to do the smart thing and allow Bitcoin to scale in a timely manner, I’m on the very verge of selling some of my Bitcoins. Perhaps one day very soon I will be devoting all of my attention to a hard fork of Bitcoin that actually allows scaling in a timely manner.” – Roger Ver

Bitcoin “FUD”

Today FUD (Fear Uncertainty & Doubt) has been widespread in the Bitcoin Legacy community. Feeling threatened by Bitcoin Cash’s rise many have begun panic selling their Legacy Bitcoin in exchange for Bitcoin Cash. For those who have yet to read Satoshi Nakamoto’s original white paper, I have provided a link right here. Roger Ver describes Bitcoin Cash as a continuation of achieving Satoshi Nakamoto’s original goal. One of the biggest features of Bitcoin Cash is the increased Block size to 8MB with plans to allow much higher increases in the future. The question is, will people hold onto their Legacy Bitcoin or sell them off in exchange for Bitcoin Cash. Only time will tell. Bitcoin has been at war with itself for some time now, debating over Forks, and changes to the network. Many old school Bitcoiners are resisting the temptation to sell off their Bitcoin thinking it’s market manipulation or something else. Either way, Bitcoin Cash appears to be getting a foothold in the Cryptocurrency community. Some suspect that Coinbase users will dump all of their Bitcoin Cash in January for the original un-altered Bitcoin. Could it happen? Possibly.

 

Which Bitcoin Will It Be?

Bitcoin Cash claims to be decentralized. According to their website: “Decentralized Development – With multiple independent teams of developers providing software implementations, the future is secure. Bitcoin Cash is resistant to political and social attacks on protocol development. No single group or project can control it.” I don’t see Bitcoin Legacy disappearing overnight. It’s possible to see some heavy price drops, but given the early stages of Cryptocurrency, for the outsiders looking in who want to invest but never have, this is very confusing to them. The Cryptocurrency community will ultimately decide who the winner shall be.

 

 

In 2013 a user on Bitcointalk.org had started a thread titled “Alt chains and atomic transfers”. Fast forward to 2017 and you have “Atomic Swaps”. The terminology sounds simple but it’s quite revolutionary in the Cryptocurrency space. It’s game changing because it will allow the exchange of Coins in different Cryptocurrencies without having a trusted 3rd party or centralized exchange such as Bittrex, Poloniex, etc. What Atomic Swaps do is remove the middlemen.

On October 7, 2017 Altcoin Exchange performed and Atomic Swap between Ethereum & Bitcoin Blockchains. As of now, there are few coins with Atomic Swaps built in. For example: Decred, Litecoin and Vertcoin, there is also word Verge will also incorporate Atomic Swap technology. On September 22nd, 2017 Charlie Lee (founder of Litecoin) performed an Atomic Swap (10 LTC for 0.1137 BTC). We can clearly see Atomic Swaps are still in the early stages of development but it’s going to change the way we trade digital currency forever.

Decentralized Exchanges

Given the fact that Centralized exchanges could be facing stricter regulations, we are seeing some ICO’s (Initial Coin Offerings) such as 0x Protocol & Kyber Network. Both of these projects raised significant amounts of Ether during their crowd sales and are currently in the development phase. Currently one of the most active Decentralized exchanges is Ether Delta. The UI could use some work, but it’s still a very popular resource for traders. It can be accessed using MetaMask, Hardware wallets like the Ledger or generating a Public/Private Key through the site itself. The process of Atomic Swaps is outlined below (credit to TierNolan of Bitcointalk.org):

A picks a random number x
 
 A creates TX1: "Pay w BTC to <B's public key> if (x for H(x) known and signed by B) or (signed by A & B)"
 
 A creates TX2: "Pay w BTC from TX1 to <A's public key>, locked 48 hours in the future, signed by A"
 
 A sends TX2 to B
 
 B signs TX2 and returns to A
 
 1) A submits TX1 to the network
 
 B creates TX3: "Pay v alt-coins to <A-public-key> if (x for H(x) known and signed by A) or (signed by A & B)"
 
 B creates TX4: "Pay v alt-coins from TX3 to <B's public key>, locked 24 hours in the future, signed by B"
 
 B sends TX4 to A
 
 A signs TX4 and sends back to B
 
 2) B submits TX3 to the network
 
 3) A spends TX3 giving x
 
 4) B spends TX1 using x
 
 This is atomic (with timeout).  If the process is halted, it can be reversed no matter when it is stopped.
 
 Before 1: Nothing public has been broadcast, so nothing happens
 Between 1 & 2: A can use refund transaction after 72 hours to get his money back
 Between 2 & 3: B can get refund after 24 hours.  A has 24 more hours to get his refund
 After 3: Transaction is completed by 2
 - A must spend his new coin within 24 hours or B can claim the refund and keep his coins
 - B must spend his new coin within 72 hours or A can claim the refund and keep his coins
 
 For safety, both should complete the process with lots of time until the deadlines.

Another Step in the Digital Money Revolution

I see Atomic Swaps as being an incredible addition to the Cryptocurrency movement. If you take a look at the list of exchanges that have been hacked since 2011 there have been around 26 breaches. This is a clear indicator that Cryptocurrency traders are not trusting of centralized platforms. The only way exchanges will survive is if they adopt what the people want and the people want decentralization.

 

 

On a recent trip to Tokyo, Japan I attended the Startup Token tour featuring some up and coming players in the Crypto and Blockchain space. I will not be covering each speaker at the event, just a few who caught my attention and seem to be gaining a lot of traction. These are Pesabase, Energimine, and Dether.

 

Pesabase

The first person I met at the event was Nhial Majok, CEO of Pesabase. Pesabase aims to bring low cost remittance, payments and banking for Africa. One of the first things that caught my attention was that they are teamed up with OmiseGo. If you have not heard of OmiseGo, please read this short article I wrote about it here. Given the fact that Vansa Chatikavanij, managing director of OmiseGo is on board is huge. Nhial is a former tech leader at IBM which gives him additional leverage as CEO. As far as Pesabase goes, it describes itself as a remittance, payment, and banking e-wallet solution that uses OmiseGO and Ethereum blockchain to provide financial simplification and inclusion in Africa. Some of the key benefits are that no bank account is needed, simple token based reserves across the platform, cheap customer payments for small to large businesses across Africa, instant settlement pickup and deposit cash at all agent locations, loyalty programs for consistent users.

Pesabase offers Three products: “Coinremit” remittance, which is a stable source of income for most Africans. “Bithela” Bitcoin exchange, which simply aims to be a major exchange for trading Cryptocurrencies in Africa. “Pesabase” the multi-currency ewallet. I liked the presentation about Pesabase and believe it has the ability to gain traction in African markets. Given that OmiseGO is aligned with their project is major.

 

 Energimine

Sitting next to me at the event was CEO of Energimine Omar Rahim. His company aims to decentralize global energy markets by rewarding energy efficient behavior. Energimine has a strong team and powerhouse advisors such as Lord Rupert Redesdale, who has an extensive history in the energy sector as spokesman for energy in the House of Lords. Eddy Travia, who I also spoke to at the event, a pioneer investor in blockchain startups and CEO of Coinsilium, a London based venture builder, Yacine Terai, founder of Startup Token.

Some facts about Energimine: It is a fully functional commercial entity based in Manchester, UK. Customers include one of the largest law firms in the world, one of Europe’s largest fuel retailers, and the UK’s biggest independent construction materials group. The company also actively manages $140m worth of energy on behalf of it’s large industrial commercial customers. They also use AI & Deep Learning which lead to more enhanced insights. This will be the key feature in Energimine’s launch.

Energimine is aligned with some powerful names and is already established in the UK. I see this as a very promising project in the energy sector.

 Dether

Lastly, Dether. Dether aims to solve a simple problem, trading Ethereum. Currently, most people are limited to Coinbase as an entrypoint. What I like about Dether is that it currently has a platform that has been built unlike a lot of projects in Crypto which are just Whitepapers and ideas. The company was founded by Abdelhamid Benyahi and Mehdi Amari who both have experience in the Blockchain space. They are also advised by Eddy Travia, Blockchain pioneer investor, Yacine Terai, founder of StartupToken and William Mougayar, Toronto based investor and author of “The Business Blockchain”.

The goal of Dether is “Ethereum mass adoption in the world”. Given the fact that Dether already exist and has a user base is huge. I agree with the co-founder regarding the purchase of Ethereum and some of the difficulties obtaining it for new and less tech savvy people in the space. It allows another avenue for people to purchase Crypto in a less centralized way. I think Dether will continue to grow and we should be seeing a larger user base in the years to come if it can continue it’s progress forward.