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A Monetary Layer For The Internet

Bitcoin is growing into the internet’s native monetary layer, functioning as a suite of public network protocols with undeniably scarce units of value.

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ARPANET’s First Mark Into Networked Computing

Created in February 1958, the Advanced Research Projects Agency (ARPA) was a response to the Soviet launch of Sputnik 1, the first artificial Earth satellite, to research and develop projects in technology and science beyond direct U.S. military applications.

Bob Taylor, an ARPA computer scientist, convinced a colleague to support a research project using funding from a ballistic missile defense program. Following three years of research, the ARPANET project was launched as the first network to connect two geographically-distinct computers.

On October 29, 1969 at 10:30 p.m. PT, the first successful message, “LO,”was sent from UCLA in Los Angeles to Stanford University in Silicon Valley. The message was supposed to be ‘“LOGIN”’ but the system crashed. Over seven years later, Queen Elizabeth II was sending her first email from a computer installed in the U.K.

Unbeknownst to most, ARPANET was morphing into a small but fast-growing global communication network.

Rising Computer Network Protocols

The ARPANET was the first public implementation of TCP/IP, two major protocols that now form an integral part of the Internet Protocol Suite. Taken together, this suite constitutes what we know as “the internet,” the global interconnected network that hundreds of millions of humans use daily without ever being aware of it. As additional computer nodes joined the ARPANET in different countries, novel technologies were developed to make the growing network more usable, most notably through standard network protocols.

Public computer protocols were created to govern how data is created, exchanged and interpreted between clients and servers on the same interconnected network, including Simple Mail Transfer Protocol (SMTP) to send and receive emails, File Transfer Protocol (FTP) to exchange and read files or Hypertext Transfer Protocol (HTTP) to structure and display web pages that we browse today.

HTTP is one of the most well-known public protocols. It turned ARPANET into the World Wide Web that is now commonly called the internet or the web and established a standard for computers to communicate on the application layer of the internet, having built on other layers of public protocols and open-source technologies.

The Internet’s Onion Shape

The internet is built in layers, first abstracted in a framework called the Open Interconnection System (OSI) model, which was later reinterpreted by a simpler version based on the TCP/IP architecture. The OSI model is a logical construction that defines network communication used by various computer systems that interact with each other.

As the internet morphed into a more sophisticated global network of computers, the OSI model was published to help decouple seven distinct layers of public protocols useful in the creation, exchange and interpretation of data flows.

As a hierarchical system, public computer network protocols coordinate how data moves across the internet’s seven layers. Each layer is solely responsible for performing assigned tasks and transferring completed tasks to the next layer for further processing.

This clear specialization ensures performance, reliability and scalability of the internet.

The internet is a multi-layered global distributed network of computers that we use every day for many things without ever questioning its existence. Though only 20 years old, the internet powers an immense amount of trades between an ever-growing number of consumers, companies and nations, accounting for roughly $28 trillion in 2016.

Long before Amazon was a thing, in 1972, students from Stanford and MIT conducted the first ever online transaction using ARPANET. The first good ever sold on the internet was marijuana. Many projects followed as commercial and academic attempts to create electronic cash making commerce native on the internet. All incommensurably failed from the late 1980s to the early 2000s, including B-money, Digicash, Hashcash and bit gold.

Technology capacity limits, regulatory hurdles and centralization particularly prevented mainstream digital currencies from ever taking off.   

The Missing Monetary Layer Of The Web

Regardless, for users to directly trade with geographically-distinct neighbors on the internet, one essential component has been absent until now: a monetary layer to store, exchange and measure value natively on the web without being required to use legacy financial institutions.

Over two decades, failed attempts at creating digital money paved the way to a reckoning and the silent launch of an open-source software project on a cypherpunk mailing list, back in 2008. Satoshi Nakamoto was the pseudonym of an unknown individual or group who posted about the Bitcoin project with a link to the white paper explaining how it works.

The project was initially understood as yet another doomed attempt to construct a digital currency by the disillusioned cypherpunk community. And without anyone’s permission, Bitcoin slowly emerged and diligently grew to become adopted by a small group of computer researchers, cryptographers and engineers curious to decipher the technology.

Fast forward 11 years: Bitcoin proved to be resilient to attacks, bugs and serious technical and political crises. There are hundreds of developers actively working on this project worth more than $200 billion in monetary base. Bitcoin’s latest running software (0.20.0 released in June 2020) has created and maintained the world’s first form of absolute digital scarcity. Without ever breaking the integrity of its underlying ledger, it does not rely on trusted third parties to verify that everything is running well.

Everyone and anyone can take the role of verification on the Bitcoin network. This had never been achieved in the past. Bitcoin solved a multi-decades long problem in computer science called the Byzantine Generals’ Problem, which highlights the complexity of coordinating untrusted nodes in a distributed network.

LNP/BP As Public Network Protocols

Bitcoin is growing into the internet’s native monetary layer. Functioning as a suite of public network protocols, referred to as LNP/BP, Bitcoin has undeniably scarce units of value. It is a network of storable, movable and quantifiable value. What does LNP/BP stand for? 

As a self-contained economic system on the internet, Bitcoin is powered by energy and protected by a global network of computing power that voluntarily regulates the integrity of Bitcoin’s ledger and its digitally-scarce monetary units. That self-organized configuration is unbreakable and decentralized like the internet itself.

Together, the Bitcoin Protocol (BP) and its Lightning Network Protocol (LNP) are joining the ranks of other open network protocols akin to TCP/IP. The Bitcoin Protocol has movable units of scarce value that can flow within its network, similar to the Internet Protocol (IP). The Lightning Network Protocol (LNP) acts as a second layer built on top of BP, which permits nearly instant, cheap and anonymous exchanges of data packets on BP, similarly to how the Transfer Communication Protocol (TCP) does it with the Internet Protocol.  

LNP/BP is the Bitcoin suite of protocols — responsible for the rise of a native monetary layer of the internet, adding a division to the TCP/IP model’s current stack. Bitcoin represents the world’s first bytes of data with an intrinsic financial value priced by the physical world, in the form of energy, protected by the First Law of Thermodynamics

Software now has a built-in price tag. Code is valuable without any specific application because of its remarkable scarcity. Scarcity isn’t a concept that is limited by physical boundaries anymore. Scarcity can provably be digital, and is actually the first and only form of absolute scarcity discovered by mankind, which questions its provable existence in the analogue world. Absolute scarcity now exists in the most intangible form—bits—the portmanteau for digital binary digits.

A Silent Monetary Evolution 

Bitcoin is agnostic about any human inventions such as legacy institutions, governments, central banks or corporations. Internet users can simply acquire, trade, hold and use bitcoin as they see fit. No single entity controls the protocol. It is governed by open-source software, which is voluntarily run by tens of thousands of independent node operators.

Computer nodes in the network play two roles around Bitcoin’s ledger, called the timechain, by either writing or reading transactions. Bitcoin’s timechain is a chain of blocks, which transcribes a suite of bundled transactions that are recorded sequentially by one set of computers called miners.

Often referred to as “the blockchain,” which is more appropriate for other cryptocurrencies desperately trying to mimic Bitcoin, the term “timechain” is more accurate to describe Bitcoin’s ledger as it ties to the original semantic used by Bitcoin’s pseudonymous creator, Satoshi Nakomoto.

A Free Market Of Rational Volunteers

Miners are powerful computers with specialized hardware dedicated toward writing transactions to Bitcoin’s ledger. In a public computational contest, vast amounts of energy are expended by miners to brute-force random alphanumeric strings in an effort to guess a random code — akin to a digital lottery.
Bitcoin miners’ contributions to the network are measured as hash rate, which is a function of the total computational power allocated to the network, which is currently hitting new all-time highs at approximately 125.2 EH/s.

Once that random code, called a “nonce” is found by a computer in the network, it proves that the miner has completed enough work in the form of energy and time expenditure. This is commonly referred to as Proof of Work, which allows all computers in the Bitcoin network to verify that the system stays fair and honest.

The lucky computer (or mining pool, as they often combine computing power for efficiency) can then gather a batch of unconfirmed transactions from a queue called the “mempool” and bundle them into a block to permanently write that block of transactions into Bitcoin’s ledger.

To be granted permission to write on Bitcoin’s ledger, there is no shortcut such as political influence, hierarchy or seniority. Each participant adding information to Bitcoin’s ledger needs to earn it through proven work that they must demonstrate to the network using the random nonce.

In return for their service to the network, miners receive a block reward, including a subsidy with new bitcoin (currently 6.25 bitcoin per block), as well as transaction fees paid for by users seeking Bitcoin transaction settlement. This is the only way for new bitcoin to be issued. It must be earned via provable energy expenditure.

See Also

Since 2018, Bitcoin has shifted the world into an era of exahash computing. If one were to gather the 500 top supercomputers, altogether they would only represent 1.6 percent of Bitcoin’s hash rate. It is dwarfing the world’s computing horsepower by multiple orders of magnitude, creating a robust computational defense mechanism, preventing malicious actors from controlling the network and double spending bitcoin using the majority of the hashrate, which is an attack often referred to as a 51 percent attack.   

A Self-Managed Computing Organism  

Bitcoin’s ledger is secured and managed by cryptography. On average, a new block of transactions is added every 10 minutes, no matter what happens in the world. Each time, this creates new bitcoin on the network, in the form of a block subsidy for the lucky miners. The block subsidy used to be 50 BTC, which was halved according to the protocol specifications in 2012, in 2016 and in May 2020, bringing the current block subsidy to 6.25 BTC per block today. This process is called halving.

Halving events happen every 210,000 blocks that are added to Bitcoin’s ledger. It is the only rule that controls the issuance of new bitcoin. It will continue roughly every four years until all 21 million bitcoin are mined, which should happen approximately in the year 2140.

The discovery rate of bitcoin slows down over time, until it ultimately turns to zero. No new bitcoin will be found after that moment in time. As new adoption increases demand, the number of bitcoin goes up, which incentivizes participants to join. Opportunistically, new miners are attracted to the Bitcoin network to mine blocks of transactions and receive the valuable block reward.

As more computers join the network and produce a larger collective hash rate, Bitcoin is automatically adjusting the difficulty of the mining lottery. Roughly every two weeks, or 2,016 blocks, mining either becomes harder or easier based on how much hash rate there is at this given time. It is the most reliable way to have Bitcoin blocks mined roughly every 10 minutes, keeping the issuance schedule highly stable and predictable, regardless of the network’s aggregate hash rate.

Toward Universal Financial Integrity

Since its first block mined on January 3, 2009 by Satoshi Nakamoto, Bitcoin has been up 99.98 percent of the time, and has never validated a malicious or wrong transaction, which is unprecedented for legacy financial institutions.

This is only possible because verifying Bitcoin transactions is very accessible. While writing new transactions on the ledger is extremely costly, reading them to verify the integrity of the ledger is easy and accessible to all.

Full-validating nodes can be operated on computers less powerful than what many people have at home or at work, making it trivial and affordable to verify the history of the Bitcoin transactions. Anybody can run them. This makes Bitcoin an impenetrable fortress of security as everyone can check every single transaction that ever happened in Bitcoin. It’s an openly auditable ledger.

Miners and full-node operators voluntarily run a version of the Bitcoin software that is compatible with the majority of the network. This maintains a general consensus on the shared rules of the network such as the block size, which dictates how many transactions can be included in a block by miners. Large miners are incentivized to grow the size of blocks to include more transactions, gaining additional fees and making it more costly for newcomers and small participants. Full-node operators choose voluntarily to run a version of the software to keep block size small to make verification accessible to everyone.

Miners have to be compatible with full-nodes to have the mined blocks be verified and approved. If Bitcoin’s block size grows, more powerful computers are required to run full-nodes with extra memory and bandwidth, which will centralize verification, adding a level of trust in the system, especially around miners. Bitcoin’s current block size is approximately 2 MB (with a theoretical block size of 4 MB with the SegWit upgrade), and has been challenged many times in the past. The most serious attack was in 2017 under the form of a hard fork, called Bitcoin Cash, or Bcash (BCH), which copied Bitcoin’s software and transaction history, and adjusted the code to raise the block size up to 8 MB.

Deviations such as Bcash are the unavoidable by-product of the open-source nature of Bitcoin, which lets anyone create forks of Bitcoin’s timechain, though the market continues to value these forks at a substantially discounted value.

Liberating Modern Capital Markets

As the internet liberated free information between global peers, Bitcoin is liberating capital exchange, creating open, fair and social markets in which anyone can participate. New companies exclusively built on Bitcoin’s base layer and/or Lightning are making it safer and easier for sovereign people to opt-out of the legacy banking system.

As trust-minimized agents, companies building on Bitcoin and Lightning are pushing for reasonable adoption with ethical principles and a core focus on security, usability and sovereignty. Whether working on non-custodial private key management, Lightning channel capacity distribution, protocol implementations, or peer-to-peer Bitcoin exchanges, Bitcoin native companies make the capital flow from the legacy banking system into Bitcoin possible.

Bitcoin native companies are creating massive economic upside potential for this new internet monetary layer and will be building a Bitcoin-based economic system in the next 20 to 30 years with almost no doubt.

This is a guest post by Thibaud Marechal of Knox. Opinions expressed are entirely his own and do not necessarily reflect those of BTC Inc or Bitcoin Magazine. This article was originally published on Medium.

Source: https://bitcoinmagazine.com/articles/a-monetary-layer-for-the-internet?utm_source=rss&utm_medium=rss&utm_campaign=a-monetary-layer-for-the-internet

Blockchain

The North American Bitcoin Conference Returns

Bitcoin. Blockchain. Enterprise Pioneering crypto conference announces high-power, enterprise-savvy lineup On January 16 and 17,2020, the global Bitcoin and blockchain community will meet in Miami for the seventh year running to create the future of the industry. The North American Bitcoin Conference (TNABC) has hosted 20,000 attendees since 2013 and the ongoing show of support … Continued

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Bitcoin. Blockchain. Enterprise

Pioneering crypto conference announces high-power, enterprise-savvy lineup

On January 16 and 17,2020, the global Bitcoin and blockchain community will meet in Miami for the seventh year running to create the future of the industry. The North American Bitcoin Conference (TNABC) has hosted 20,000 attendees since 2013 and the ongoing show of support and community convergence from around the world continues to propel cryptocurrency from niche to mainstream.

A key focus of the 2020 conference is enterprise and global adoption, delving into the commercial potential of blockchain. Attendees can also expect the traditional South Beach launch night to mingle with highly sought-after, international crypto names.

TNABC has announced a lineup of over 60 world-class presenters, including technology veterans and founders of companies transforming finance across the globe

The second round of speakers include:

  • Francis X Suarez – City of Miami, Mayor
  • Bobby Lee – Ballet, Founder & CEO
  • Kathleen Breitman – Tezos & Coase, Co-Founder
  • Jon Najarian – Market Rebellion, Co-Founder
  • Bill Barhydt – Abra, CEO
  • Brock Pierce – Blockchain Pioneer
  • Andrew ‘Flip’ Filipowski – Fluree, Co-Founder
  • Colleen Sullivan – CMT Digital, Partner and CEO
  • Stefan Rust – Bitcoin.com, CEO
  • Jenna Pilgrim – Streambed, CEO
  • Perianne Boring – Chamber of Digital Commerce, Founder

The two-day conference has announced further partnerships with VeriBlock, BnkToTheFuture and CrytpoCurrencyWire. TNABC will focus on themes of investment, blockchain enterprise, legal implications and regulation, and how decentralization is disrupting international supply chains. TNABC has hosted crypto events in Miami for seven years and continues to give voice to the city as a LATAM-US crypto hub, with an innovative lineup, guest appearance from the Mayor and multiple satellite events.

Miami Blockchain Week 2020 will begin with an extra special installment of community meetup ‘CryptoMondays’ at Bitcoin Center Miami and feature a job fair run by international student volunteers running alongside the TNABC conference. A hackathon and executive dinners round out the highlights of the week.

Keynote’s founder Moe Levin says, “This conference comes at a pivotal time, as innovation forces us all to make wise investing decisions. With an influx of new opportunities and new blockchain applications, Keynote wants to give our attendees the opportunity to meet the people and products they’ll be investing in and get a better understanding of the fast-expanding blockchain ecosystem. We’re also excited for our attendees to meet and interact with our sponsors and exhibitors, who number among the greatest blockchain companies active at the moment.”

TNABC

For Sponsorship and Exhibiting information please email amy@keynote.ae


About Keynote

Keynote was launched in 2012 by blockchain strategist Moe Levin. Further information and details about Keynote can be found at keynote.ae

For media inquiries, please contact lyndsey@keynote.ae

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Blockchain

12 Blockchain Industry Experts Offer Predictions For 2020

Nothing is more certain than the past, nor more uncertain than the future. That is why predictions are made. When it comes to a new and emerging technology like blockchain, making a prognosis on what’s to come for the next decade can improve your chances of being correct. Here are 12 predictions from industry experts … Continued

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Nothing is more certain than the past, nor more uncertain than the future. That is why predictions are made. When it comes to a new and emerging technology like blockchain, making a prognosis on what’s to come for the next decade can improve your chances of being correct.

Here are 12 predictions from industry experts for 2020 and beyond. Predictions cover topics including enterprise adoption, market movements, next-generation blockchains, and regulation.

Enterprise Adoption

Chasker

Christian Hasker, Chief Marketing Officer of  Hedera Hashgraph, said:

“Blockchain and distributed ledger technology is currently squarely in the ‘trough of disillusionment’, as defined by the tried and true Gartner Hype Cycle. This is actually the most exciting time and place to be in the industry, as we are on the cusp of the slope of enlightenment when people and organizations really learn and begin to use the technology for practical, useful purposes that will change how companies, applications and users interact. We are so excited about the variety and reach of applications currently being built on top of Hedera and other parts of the DLT ecosystem, which go so far beyond what we’ve seen built on top of early generations of blockchain in the past.”

factom protocal

Greg Forst, Director of Marketing at the Factom Protocol, said:

 “This time last year, the industry said goodbye to 2018 and hoped that would mark the end of the crypto winter. 2019 has revealed numerous use cases, enterprise adoption, and advancements in the field of distributed ledgers. The most memorable thing about 2019 for the blockchain space will be the speed and sustainability with which it has regained legitimacy in the eyes of governments, enterprises, and institutional players. 

Moving into 2020, I believe this trend will continue. We are highly likely to see huge expansion as blockchain technology moves to enterprise production. We will start to see measurements of the value derived from blockchain being in production environments. The positive results of enterprise blockchain adoption will begin to reveal themselves and will encourage much broader uptake. 

I firmly believe that regulatory clarity is necessary for the industry to progress. In order for blockchain to mature, enterprises and individuals need to feel completely comfortable leveraging this technology, secure in the knowledge that their government and legal systems support them. Countries with trusted and proven regulatory frameworks will set themselves apart and provide a notable example for nations newer to the fold to also regulate the technology. Significantly, I believe 2020 will be a milestone year for advances in sentiment and regulation in the world’s larger and more powerful nations, such as the U.S, which arguably can no longer turn a blind eye to distributed ledger technology.”

pradeep

Pradeep Goel, CEO of Solve.Care said:

 “2019 was the year where the blockchain industry translated the hype of previous years into practical use cases, with a number of key players emerging to provide solutions for real business problems. In turn, this led to an overall improvement in the understanding and sentiment of blockchain, prompted in part by large-scale adoption by global enterprises, such as Facebook and JP Morgan. A Deloitte report revealed that 34% of companies have already initiated a blockchain deployment, while 86% of leaders are confident that its mainstream penetration is inevitable – results which are clearly indicative of the continued maturation of the market.

 Although governments around the world remain centralized, there is still an opportunity to incorporate decentralization into certain aspects. 2020 will certainly see further government integration of blockchain technology in order to process large quantities of data between agencies, services and administrative bodies. Distributed ledgers will be crucial to streamlining interaction and information sharing between these entities. Countries such as China and Estonia are already utilizing blockchain to manage citizens’ healthcare data and create digital identity systems respectively, and we’ll continue to see other governments pilot programs in welfare distribution, e-voting and fraud. 

 Existing businesses and enterprises have ultimately recognized blockchain’s dominance beyond digital currency and identified it as a critical priority for the future. Over the next 12 months, these companies will need to analyze their business models, and ask how, as opposed to whether, blockchain is going to disrupt their industries. Mindlessly integrating a new technology piecemeal brings its own specific risks, but those at the forefront of the revolution are creating solid strategies for holistic integration. More specifically, in the intersection of healthcare and blockchain, security balanced with accessibility should take precedent. Healthcare providers need to take advantage of blockchain technology to enrich care coordination while empowering individuals to take control of their health journeys and personal data. Allowing only those with the requisite permissions access to medical records will improve data security, trust and transparency.”

 Market Movements

GSX

Nick Cowan, CEO of the Gibraltar Stock Exchange (GSX) Group, said: 

“This year has been a steady year for the blockchain industry, with a continued arc of growth being powered by wider reach and development across numerous business sectors. Regulation has been a major focal point for many governments seeking to create some clarity, with the UK jurisdiction task force most recently concluding that Cryptoassets, including but not restricted to, virtual currencies, can be treated in principle as property. We have also seen many Central Banks looking into the creation of their own digital currencies and implementation of blockchain technology in their legacy financial ecosystems. 

As we enter into 2020, we can foresee further recognition and understanding of blockchain solutions permeating capital markets. Larger institutions are turning their attention to blockchain, so it’s safe to say that new use-cases will emerge from ongoing DLT exploration at the highest level of industry. These efforts will be geared towards the implementation of securities using the blockchain, playing towards a significantly larger market. The traditional landscape’s legacy system is outdated, inefficient and costly, a system which DLT solutions could completely redefine. 

For us, the integration of DLT solutions into the capital markets is the key priority to drastically improve the efficiency and cost-effectiveness of the current legacy platforms and T+2 model. This vision will ensure the democratisation of the markets and the generation of new, affordable avenues for entities to gain access to capital in a compliant manner.”

CROSS

Vaibhav Kadikar, CEO and Founder of CloseCross, said:

“After the tumultuous 2019, the digital asset market will mature and bitcoin prices will continue to stabilize. In the new decade, the high volatility of the asset will become a distant memory. Price stabilization will spur a renewed interest from institutional investors to enter the space. Should 2020 bring with it another economic recession, interest in Bitcoin will grow, however, this does not guarantee further adoption contrary to some crypto fanatics. A severe global or national recession could have negative reverberations for the entire crypto ecosystem, as ultimately, it could deter or exclude certain individuals from investing their wealth in the asset class. The long-term future success of Bitcoin needs to be driven by positive fundamentals, as opposed to negative forces.”

 

heckerhut

Florian Glatz, Co-Founder of Fundament Securities, said: 

 “The digitization of national currencies will continue its momentum into 2020 as more central banks and governments warm to the idea. Benoît Cœuré, head of the Innovation Hub at the Bank for International Settlements recently asserted the benefits of digital currency and strong appetite among central banks and the European Central Banks (ECB) with regard to their role in financial intermediation. 2020 will see the People’s Bank of China launch its digital yuan, and the debate for digitizing the Euro will become more acute.

Hype and contention around Libra will not abate but actually, help to strong-arm governments into developing an alternative. The benefits of Libra certainly won’t be felt on a global level as purported but likely launch in some backwaters where the immediate impact will actually be felt. 

The G7 will continue to hold steadfast against Libra and the privatization of money throughout 2020 but eventually will cower to central bank digital currencies and stablecoins. Breaking its previous peak, Bitcoin will surpass $20,000 in the new year and growing concerns over the surveillance economy drive people to its anonymity and privacy.”

Next-Generation Blockchain

jaekwon

Jae Kwon, CEO, and Co-Founder of Tendermint Inc (Behind Tendermint and Cosmos) said:

“The next generation of blockchains will naturally be a system of independent yet cooperative entities. The ecosystem will be flexible — a multitude of interoperable systems able to fit the contours of the real world rather than the previous one chain to rule them all mentality. Multiple, sovereign blockchain with different applications, political philosophies, and validator sets will be able to interoperate. An open, sovereign, secure network of interconnected blockchains, or “Internet of Blockchains,” will emerge from interoperability protocols like Inter-Blockchain Communication. In the decade ahead, there exists not one monopoly or an oligopoly but a vast federation of networks speaking a common protocol for interoperability. Distributed ledgers will support a new global economy and decentralized finance will reach every corner of the globe. Tokenized derivatives, synthetic instruments, and as-yet unimagined financial instruments stemming from cross-chain collaboration will become realized.”

Lane

Lane Rettig, Developer Evangelist at Spacemesh, said:

“2019 was primarily a year of refocus for the industry, as we moved further away from the ICO craze and the opportunistic, quixotic use cases that dominated over the past couple of years. The announcement of Libra was the year’s watershed moment, creating a lot of noise and piquing the interest of the general public. But in the background, a lot of progress was made on important, foundational technologies such as zero-knowledge proofs, and we also saw the rapid growth of the Ethereum DeFi ecosystem through the success of projects such as Maker and Compound.

I predict that 2020 will see the launch of multiple ‘third generation’ blockchain projects, an exciting prospect even if only a fraction of these projects go live next year. The next 12 months will be about continuing to generate momentum with a focus on building essential infrastructure for consumer-facing apps that possibly won’t launch for another few years.

Going forward, in order for blockchain platforms and the apps built on top of them to stand a chance of making their mark, improving usability and finding product-market fit must be prioritized far more than they have been to date. This can and, I believe, will engender a significant shift in how users perceive and interact with blockchain. Similarly, blockchain communities will recognize the importance of good governance and will increasingly prioritize it in order to stay competitive and stand out from an increasingly crowded field of competing platforms. As blockchain technology continues to become more prevalent and impacts more industries, I hope that, as a community, we don’t lose sight of the potential for this technology to have a profoundly positive impact on human society at large.”

Paris Blockchain Week

Nicolas Cantu, Co-Host of Paris Blockchain Week Summit and Co-Founder of Chain Accelerator, said:

“A number of significant milestones emerged regarding the state of the blockchain industry in 2019.The launch of Ethereum 2.0 in 2020 will hopefully benefit from the lessons of version 1, in which we learned that developing strong technical foundations are essential to the success of a chain. The industry has also learned some tough lessons regarding the difficulties surrounding widespread adoption, finding a stronger echo in the daily lives of people will be key to solving this issue–something a corporate model might effectively achieve.

Several notable trends stand out as ones to watch in 2020. The ecosystem of private blockchains will most likely concentrate around IBM. The shift towards decentralized finance (DeFi) projects will likely encounter their first roadblock in the need to show evidence of both resilience and scalability, while such networks provide significant potential to open access to financing, the practicalities require considerable development.

I hope to see 2020 bring a renewed focus on the fundamentals of the industry. Education must be prioritized in every facet of the industry from cybersecurity to business management. On a broader level, I would like to see self-governance move beyond its theoretical roots in the blockchain industry to concrete application in a variety of use-cases and domains.”

Regulation of the Industry

Alexander

Alexander Schell, Executive Director of the Crypto Valley Association, a leading global blockchain and cryptographic technology ecosystem, said: 

“With new announcements expected from the Financial Action Task Force (FATF) regarding Virtual Asset Service Providers (VASPs) in Summer 2020 and the impending Bitcoin halving, the first half of next year will see momentum building around key developments such as these. 

The CVA recognizes that the FATF’s updated guidance on the treatment of VASPs, which lays out due diligence measures to prevent money laundering and terrorist financing, has posed significant challenges to its members. Increased clarity from the FAFT on its position relating to VASPs globally will be particularly helpful. As the industry focuses on innovation and enterprise adoption, it is imperative that regulators do not implement policy that will create obstacles and stifle the development of the industry.

To ensure the longevity of the blockchain and crypto industry into the next decade and beyond, key players need to work together to prioritize education, ensuring adoption continues to occur on a wider scale. Further, the industry must work to find new use cases that will allow easier access to crypto assets as opposed to the current cumbersome and insecure laptop and hardware wallet combination. Existing products are not sustainable long term and building better user interfaces to provide end-users with safe and easy access to digital assets is critical at this point.” 

dave hodgson

Dave Hodgson, Director and Co-Founder of NEM Ventures, said: 

“In 2019, we have seen an increase in governments, regulators and central banks engaging with blockchain and crypto in general – sometimes positively and sometimes not so positively. Notably, the Financial Action Task Force (FATF) recommendations around Know Your Customer (KYC) continues to have an impact on how crypto exchanges operate; the Libra association continues to divide regulators, customers and the crypto industry, and the launch of the first Security Tokens by both major institutions (Societe Generale) and national markets, such as Germany (BitBond), is making waves. Altogether, these movements prove that the industry as a whole is evolving, and, with it, various parties are forced to ask some difficult questions as we gain more regulatory clarification. 

Looking forward to 2020, there are many trends and movements to look out for. Previous Bitcoin halving events have grabbed the public’s attention and the technical analysis is lining up to make sure this one is no different. As well, multiple large chains will be releasing significant technology upgrades – Ethereum with ETH2.0 and NEM with Catapult – both in early 2020. I believe we will also witness continued innovation in the DeFi space which is accelerating every quarter now, coupled with increased security token issuance and maturation across the board, and, if the market returns to fundraising, it will be a more well-structured mechanism than last time. We are seeing the fruits of many projects’ labour coming to fruition – with a particular focus on using blockchain for climate-impacting solutions – improving efficiency while decreasing carbonisation and power consumption.” 

Kevin Sekniqi, Co-Founder and Chief Protocol Architect at AVA Labs, said: 

 “In 2019, there has been a lot of talk about regulation in the industry – and while this has made headlines globally and caught the attention of several governments, the industry is evidently ripe for regulation granted the number of projects operating in the space. There have been a number of U.S. government bodies that are focusing on creating frameworks, including FinCEN, IRS, SEC and CFTC. While there have been efforts to control the industry in terms of backlash on unclear intentions of projects and lawsuits from different government agencies, it would ultimately be helpful to see frameworks/guidelines made to help foster innovation within the U.S.

 In 2020, I believe we will see a resurgence of Security Token Offerings (STOs), that are done at scale and in a manner that is regulatorily sound. I also expect to see a growing trend towards increased tokenization and growth in the issuance, trading and settlement of digital assets using blockchain. 

 Our priority moving forward should be making sure we have firm and compliant foundations that foster the creation of new markets. It is imperative that the tech stack is compliant from the ground up in order to be synonymous with market regulatory frameworks. Blockchain can act as a means to democratize trading, by streamlining the creation of new markets, creating more accessibility to assets, to enabling more liquidity for historically illiquid assets. Ultimately, I look forward to seeing this technology being leveraged to create an even playing field for everyone.”

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Disclaimer: CryptoCanucks.com is not intended to provide tax, legal or investment advice, and nothing on CryptoCanucks.com should be construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any asset by CryptoCanucks.com or any third party. You alone are solely responsible for determining whether any investment, asset or strategy, or any other product or service, is appropriate or suitable for you based on your investment objectives and personal and financial situation. You should consult an attorney or tax professional regarding your specific legal or tax situation.

Source: https://cryptocanucks.com/12-blockchain-industry-experts-offer-predictions-for-2020/

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Bitcoin’s Halving May Not Pump Price Like Last Time – Here’s Why It Doesn’t Matter

With sideways trading, a bearish sentiment, and a slowing two months, Bitcoin has seen a slump from $14,000 USD highs to under $7,000 USD in recent weeks. With the Bitcoin Halviening less than 6-months away, will the market change pace and fuel the bull run that we’ve all been hoping for? While camps are divided, … Continued

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With sideways trading, a bearish sentiment, and a slowing two months, Bitcoin has seen a slump from $14,000 USD highs to under $7,000 USD in recent weeks. With the Bitcoin Halviening less than 6-months away, will the market change pace and fuel the bull run that we’ve all been hoping for?

While camps are divided, here’s why we believe this Bitcoin halving will be beneficial for the market and help propel the industry to new heights.

bitcoin clock

Understanding the Potential Downside:

Bitcoin halvenings occur every 210,000 blocks. This is, on average, about every four years and was likely designed as a way to maintain a stable circulating supply and avoid hyperinflation.

When this happens, a miner’s reward per block is cut in half. As the reward level for a block decreases and difficulty for the block increases (as there are more miners competing for a smaller block reward), opportunistic miners are effectively priced out of the competition. The idea is, theoretically at least, that low-end miners cannot afford to continue mining.

As rewards for the block decrease, miners need an ever more efficient way of competing in the marketplace. Those that cannot compete, sell-off Bitcoin in an effort to cut losses and take their gains.

Historically this has only happened after Bitcoin halvenings after reward blocks are cut in half. The worry is that even with low prices now, after the halvening there will be additional selloff because of reduced block rewards, and there may not be a significant upward move for Bitcoin for months to come.

donedonedone

(source: Digital Asset Research – statistical model, not price predictions)

 The above chart as an example shows what happens with the price (light blue line) after halvenings (dotted red lines) occur. What we’re seeing here, is that there was no price increase after the last halvening. Instead, the price started increasing in the middle of the cycle, suggesting that the increase may have already been priced in. Or said another way, that the price increase from $3,000 levels earlier this year, up to $12,000 levels already represent potential gains that might have otherwise occurred after the halvening.

But this is only part of the story.

Reviewing the upside:

Weeding out inefficient miners effectively helps boost the long-term health of the overall market. Both halvenings and low prices help drive this. With continued low prices, this might actually mean that we’ve already priced in ‘miner reduction’ simply because of the current sluggish Bitcoin prices. Only the most efficient Bitcoin miners can sustain a drop in price from $14k to current $7k levels. Many miners have already been forced to shut down their rigs.

Which could mean that the halvening may not force as much sell-off as initially thought.

If it does force additional sell-off, there could be a temporary downslide before a strong bullish movement forward. If it doesn’t force additional sell-off, the halvening will only support a strong bullish trend as supply is limited, rewards are halved, and only the strongest miners remain.

Industry Strength

If we take a step back and look at long-term projections, both cases are more than positive for the industry as a whole. While short-term gains may suffer in the worst of cases, the Bitcoin halvening should help drive a long-term bullish trend.

A simple supply and demand scenario is the easiest explanation, although there are many more nuanced theories.

As halvening difficulty increases, supply is reduced. As supply is reduced the cost of each Bitcoin is likely to rise due to scarcity. Additional factors, such as global economics, increased awareness about cryptocurrency, and increased demand for Bitcoin itself should add fuel to a bullish rally.

It has yet to be determined, and the narratives surrounding the halvening are mixed at best. Yet when we look at the long term possibilities on the state of the industry, two things are very clear.

One – cryptocurrency is here to stay. And two – in the long-run Bitcoin will see a bullish movement forward.

Are you ready to take advantage of the future?


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Disclaimer: CryptoCanucks.com is not intended to provide tax, legal or investment advice, and nothing on CryptoCanucks.com should be construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any asset by CryptoCanucks.com or any third party. You alone are solely responsible for determining whether any investment, asset or strategy, or any other product or service, is appropriate or suitable for you based on your investment objectives and personal and financial situation. You should consult an attorney or tax professional regarding your specific legal or tax situation.

Source: https://cryptocanucks.com/bitcoins-halving-may-not-pump-price-like-last-time-heres-why-it-doesnt-matter/

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