Binance – Bitcoin Global Canada (BGC)

Ultimate glossary of crypto currency terms, acronyms and abbreviations

I thought it would be really cool to have an ultimate guide for those new to crypto currencies and the terms used. I made this mostly for beginner’s and veterans alike. I’m not sure how much use you will get out of this. Stuff gets lost on Reddit quite easily so I hope this finds its way to you. Included in this list, I have included most of the terms used in crypto-communities. I have compiled this list from a multitude of sources. The list is in alphabetical order and may include some words/terms not exclusive to the crypto world but may be helpful regardless.
2FA
Two factor authentication. I highly advise that you use it.
51% Attack:
A situation where a single malicious individual or group gains control of more than half of a cryptocurrency network’s computing power. Theoretically, it could allow perpetrators to manipulate the system and spend the same coin multiple times, stop other users from completing blocks and make conflicting transactions to a chain that could harm the network.
Address (or Addy):
A unique string of numbers and letters (both upper and lower case) used to send, receive or store cryptocurrency on the network. It is also the public key in a pair of keys needed to sign a digital transaction. Addresses can be shared publicly as a text or in the form of a scannable QR code. They differ between cryptocurrencies. You can’t send Bitcoin to an Ethereum address, for example.
Altcoin (alternative coin): Any digital currency other than Bitcoin. These other currencies are alternatives to Bitcoin regarding features and functionalities (e.g. faster confirmation time, lower price, improved mining algorithm, higher total coin supply). There are hundreds of altcoins, including Ether, Ripple, Litecoin and many many others.
AIRDROP:
An event where the investors/participants are able to receive free tokens or coins into their digital wallet.
AML: Defines Anti-Money Laundering laws**.**
ARBITRAGE:
Getting risk-free profits by trading (simultaneous buying and selling of the cryptocurrency) on two different exchanges which have different prices for the same asset.
Ashdraked:
Being Ashdraked is essentially a more detailed version of being Zhoutonged. It is when you lose all of your invested capital, but you do so specifically by shorting Bitcoin. The expression “Ashdraked” comes from a story of a Romanian cryptocurrency investor who insisted upon shorting BTC, as he had done so successfully in the past. When the price of BTC rose from USD 300 to USD 500, the Romanian investor lost all of his money.
ATH (All Time High):
The highest price ever achieved by a cryptocurrency in its entire history. Alternatively, ATL is all time low
Bearish:
A tendency of prices to fall; a pessimistic expectation that the value of a coin is going to drop.
Bear trap:
A manipulation of a stock or commodity by investors.
Bitcoin:
The very first, and the highest ever valued, mass-market open source and decentralized cryptocurrency and digital payment system that runs on a worldwide peer to peer network. It operates independently of any centralized authorities
Bitconnect:
One of the biggest scams in the crypto world. it was made popular in the meme world by screaming idiot Carlos Matos, who infamously proclaimed," hey hey heeeey” and “what's a what's a what's up wasssssssssuuuuuuuuuuuuup, BitConneeeeeeeeeeeeeeeeeeeeeeeect!”. He is now in the mentally ill meme hall of fame.
Block:
A package of permanently recorded data about transactions occurring every time period (typically about 10 minutes) on the blockchain network. Once a record has been completed and verified, it goes into a blockchain and gives way to the next block. Each block also contains a complex mathematical puzzle with a unique answer, without which new blocks can’t be added to the chain.
Blockchain:
An unchangeable digital record of all transactions ever made in a particular cryptocurrency and shared across thousands of computers worldwide. It has no central authority governing it. Records, or blocks, are chained to each other using a cryptographic signature. They are stored publicly and chronologically, from the genesis block to the latest block, hence the term blockchain. Anyone can have access to the database and yet it remains incredibly difficult to hack.
Bullish:
A tendency of prices to rise; an optimistic expectation that a specific cryptocurrency will do well and its value is going to increase.
BTFD:
Buy the fucking dip. This advise was bestowed upon us by the gods themselves. It is the iron code to crypto enthusiasts.
Bull market:
A market that Cryptos are going up.
Consensus:
An agreement among blockchain participants on the validity of data. Consensus is reached when the majority of nodes on the network verify that the transaction is 100% valid.
Crypto bubble:
The instability of cryptocurrencies in terms of price value
Cryptocurrency:
A type of digital currency, secured by strong computer code (cryptography), that operates independently of any middlemen or central authoritie
Cryptography:
The art of converting sensitive data into a format unreadable for unauthorized users, which when decoded would result in a meaningful statement.
Cryptojacking:
The use of someone else’s device and profiting from its computational power to mine cryptocurrency without their knowledge and consent.
Crypto-Valhalla:
When HODLers(holders) eventually cash out they go to a place called crypto-Valhalla. The strong will be separated from the weak and the strong will then be given lambos.
DAO:
Decentralized Autonomous Organizations. It defines A blockchain technology inspired organization or corporation that exists and operates without human intervention.
Dapp (decentralized application):
An open-source application that runs and stores its data on a blockchain network (instead of a central server) to prevent a single failure point. This software is not controlled by the single body – information comes from people providing other people with data or computing power.
Decentralized:
A system with no fundamental control authority that governs the network. Instead, it is jointly managed by all users to the system.
Desktop wallet:
A wallet that stores the private keys on your computer, which allow the spending and management of your bitcoins.
DILDO:
Long red or green candles. This is a crypto signal that tells you that it is not favorable to trade at the moment. Found on candlestick charts.
Digital Signature:
An encrypted digital code attached to an electronic document to prove that the sender is who they say they are and confirm that a transaction is valid and should be accepted by the network.
Double Spending:
An attack on the blockchain where a malicious user manipulates the network by sending digital money to two different recipients at exactly the same time.
DYOR:
Means do your own research.
Encryption:
Converting data into code to protect it from unauthorized access, so that only the intended recipient(s) can decode it.
Eskrow:
the practice of having a third party act as an intermediary in a transaction. This third party holds the funds on and sends them off when the transaction is completed.
Ethereum:
Ethereum is an open source, public, blockchain-based platform that runs smart contracts and allows you to build dapps on it. Ethereum is fueled by the cryptocurrency Ether.
Exchange:
A platform (centralized or decentralized) for exchanging (trading) different forms of cryptocurrencies. These exchanges allow you to exchange cryptos for local currency. Some popular exchanges are Coinbase, Bittrex, Kraken and more.
Faucet:
A website which gives away free cryptocurrencies.
Fiat money:
Fiat currency is legal tender whose value is backed by the government that issued it, such as the US dollar or UK pound.
Fork:
A split in the blockchain, resulting in two separate branches, an original and a new alternate version of the cryptocurrency. As a single blockchain forks into two, they will both run simultaneously on different parts of the network. For example, Bitcoin Cash is a Bitcoin fork.
FOMO:
Fear of missing out.
Frictionless:
A system is frictionless when there are zero transaction costs or trading retraints.
FUD:
Fear, Uncertainty and Doubt regarding the crypto market.
Gas:
A fee paid to run transactions, dapps and smart contracts on Ethereum.
Halving:
A 50% decrease in block reward after the mining of a pre-specified number of blocks. Every 4 years, the “reward” for successfully mining a block of bitcoin is reduced by half. This is referred to as “Halving”.
Hardware wallet:
Physical wallet devices that can securely store cryptocurrency maximally. Some examples are Ledger Nano S**,** Digital Bitbox and more**.**
Hash:
The process that takes input data of varying sizes, performs an operation on it and converts it into a fixed size output. It cannot be reversed.
Hashing:
The process by which you mine bitcoin or similar cryptocurrency, by trying to solve the mathematical problem within it, using cryptographic hash functions.
HODL:
A Bitcoin enthusiast once accidentally misspelled the word HOLD and it is now part of the bitcoin legend. It can also mean hold on for dear life.
ICO (Initial Coin Offering):
A blockchain-based fundraising mechanism, or a public crowd sale of a new digital coin, used to raise capital from supporters for an early stage crypto venture. Beware of these as there have been quite a few scams in the past.
John mcAfee:
A man who will one day eat his balls on live television for falsely predicting bitcoin going to 100k. He has also become a small meme within the crypto community for his outlandish claims.
JOMO:
Joy of missing out. For those who are so depressed about missing out their sadness becomes joy.
KYC:
Know your customer(alternatively consumer).
Lambo:
This stands for Lamborghini. A small meme within the investing community where the moment someone gets rich they spend their earnings on a lambo. One day we will all have lambos in crypto-valhalla.
Ledger:
Away from Blockchain, it is a book of financial transactions and balances. In the world of crypto, the blockchain functions as a ledger. A digital currency’s ledger records all transactions which took place on a certain block chain network.
Leverage:
Trading with borrowed capital (margin) in order to increase the potential return of an investment.
Liquidity:
The availability of an asset to be bought and sold easily, without affecting its market price.
of the coins.
Margin trading:
The trading of assets or securities bought with borrowed money.
Market cap/MCAP:
A short-term for Market Capitalization. Market Capitalization refers to the market value of a particular cryptocurrency. It is computed by multiplying the Price of an individual unit of coins by the total circulating supply.
Miner:
A computer participating in any cryptocurrency network performing proof of work. This is usually done to receive block rewards.
Mining:
The act of solving a complex math equation to validate a blockchain transaction using computer processing power and specialized hardware.
Mining contract:
A method of investing in bitcoin mining hardware, allowing anyone to rent out a pre-specified amount of hashing power, for an agreed amount of time. The mining service takes care of hardware maintenance, hosting and electricity costs, making it simpler for investors.
Mining rig:
A computer specially designed for mining cryptocurrencies.
Mooning:
A situation the price of a coin rapidly increases in value. Can also be used as: “I hope bitcoin goes to the moon”
Node:
Any computing device that connects to the blockchain network.
Open source:
The practice of sharing the source code for a piece of computer software, allowing it to be distributed and altered by anyone.
OTC:
Over the counter. Trading is done directly between parties.
P2P (Peer to Peer):
A type of network connection where participants interact directly with each other rather than through a centralized third party. The system allows the exchange of resources from A to B, without having to go through a separate server.
Paper wallet:
A form of “cold storage” where the private keys are printed onto a piece of paper and stored offline. Considered as one of the safest crypto wallets, the truth is that it majors in sweeping coins from your wallets.
Pre mining:
The mining of a cryptocurrency by its developers before it is released to the public.
Proof of stake (POS):
A consensus distribution algorithm which essentially rewards you based upon the amount of the coin that you own. In other words, more investment in the coin will leads to more gain when you mine with this protocol In Proof of Stake, the resource held by the “miner” is their stake in the currency.
PROOF OF WORK (POW) :
The competition of computers competing to solve a tough crypto math problem. The first computer that does this is allowed to create new blocks and record information.” The miner is then usually rewarded via transaction fees.
Protocol:
A standardized set of rules for formatting and processing data.
Public key / private key:
A cryptographic code that allows a user to receive cryptocurrencies into an account. The public key is made available to everyone via a publicly accessible directory, and the private key remains confidential to its respective owner. Because the key pair is mathematically related, whatever is encrypted with a public key may only be decrypted by its corresponding private key.
Pump and dump:
Massive buying and selling activity of cryptocurrencies (sometimes organized and to one’s benefit) which essentially result in a phenomenon where the significant surge in the value of coin followed by a huge crash take place in a short time frame.
Recovery phrase:
A set of phrases you are given whereby you can regain or access your wallet should you lose the private key to your wallets — paper, mobile, desktop, and hardware wallet. These phrases are some random 12–24 words. A recovery Phrase can also be called as Recovery seed, Seed Key, Recovery Key, or Seed Phrase.
REKT:
Referring to the word “wrecked”. It defines a situation whereby an investor or trader who has been ruined utterly following the massive losses suffered in crypto industry.
Ripple:
An alternative payment network to Bitcoin based on similar cryptography. The ripple network uses XRP as currency and is capable of sending any asset type.
ROI:
Return on investment.
Safu:
A crypto term for safe popularized by the Bizonnaci YouTube channel after the CEO of Binance tweeted
“Funds are safe."
“the exchage I use got hacked!”“Oh no, are your funds safu?”
“My coins better be safu!”


Sats/Satoshi:
The smallest fraction of a bitcoin is called a “satoshi” or “sat”. It represents one hundred-millionth of a bitcoin and is named after Satoshi Nakamoto.
Satoshi Nakamoto:
This was the pseudonym for the mysterious creator of Bitcoin.
Scalability:
The ability of a cryptocurrency to contain the massive use of its Blockchain.
Sharding:
A scaling solution for the Blockchain. It is generally a method that allows nodes to have partial copies of the complete blockchain in order to increase overall network performance and consensus speeds.
Shitcoin:
Coin with little potential or future prospects.
Shill:
Spreading buzz by heavily promoting a particular coin in the community to create awareness.
Short position:
Selling of a specific cryptocurrency with an expectation that it will drop in value.
Silk road:
The online marketplace where drugs and other illicit items were traded for Bitcoin. This marketplace is using accessed through “TOR”, and VPNs. In October 2013, a Silk Road was shut down in by the FBI.
Smart Contract:
Certain computational benchmarks or barriers that have to be met in turn for money or data to be deposited or even be used to verify things such as land rights.
Software Wallet:
A crypto wallet that exists purely as software files on a computer. Usually, software wallets can be generated for free from a variety of sources.
Solidity:
A contract-oriented coding language for implementing smart contracts on Ethereum. Its syntax is similar to that of JavaScript.
Stable coin:
A cryptocoin with an extremely low volatility that can be used to trade against the overall market.
Staking:
Staking is the process of actively participating in transaction validation (similar to mining) on a proof-of-stake (PoS) blockchain. On these blockchains, anyone with a minimum-required balance of a specific cryptocurrency can validate transactions and earn Staking rewards.
Surge:
When a crypto currency appreciates or goes up in price.
Tank:
The opposite of mooning. When a coin tanks it can also be described as crashing.
Tendies
For traders , the chief prize is “tendies” (chicken tenders, the treat an overgrown man-child receives for being a “Good Boy”) .
Token:
A unit of value that represents a digital asset built on a blockchain system. A token is usually considered as a “coin” of a cryptocurrency, but it really has a wider functionality.
TOR: “The Onion Router” is a free web browser designed to protect users’ anonymity and resist censorship. Tor is usually used surfing the web anonymously and access sites on the “Darkweb”.
Transaction fee:
An amount of money users are charged from their transaction when sending cryptocurrencies.
Volatility:
A measure of fluctuations in the price of a financial instrument over time. High volatility in bitcoin is seen as risky since its shifting value discourages people from spending or accepting it.
Wallet:
A file that stores all your private keys and communicates with the blockchain to perform transactions. It allows you to send and receive bitcoins securely as well as view your balance and transaction history.
Whale:
An investor that holds a tremendous amount of cryptocurrency. Their extraordinary large holdings allow them to control prices and manipulate the market.
Whitepaper:

A comprehensive report or guide made to understand an issue or help decision making. It is also seen as a technical write up that most cryptocurrencies provide to take a deep look into the structure and plan of the cryptocurrency/Blockchain project. Satoshi Nakamoto was the first to release a whitepaper on Bitcoin, titled “Bitcoin: A Peer-to-Peer Electronic Cash System” in late 2008.
And with that I finally complete my odyssey. I sincerely hope that this helped you and if you are new, I welcome you to crypto. If you read all of that I hope it increased, you in knowledge.
my final definition:
Crypto-Family:
A collection of all the HODLers and crypto fanatics. A place where all people alike unite over a love for crypto.
We are all in this together as we pioneer the new world that is crypto currency. I wish you a great day and Happy HODLing.
-u/flacciduck
feel free to comment words or terms that you feel should be included or about any errors I made.
Edit1:some fixes were made and added words.
submitted by flacciduck to CryptoCurrency [link] [comments]

Bitcoin (BTC)A Peer-to-Peer Electronic Cash System.

Bitcoin (BTC)A Peer-to-Peer Electronic Cash System.
  • Bitcoin (BTC) is a peer-to-peer cryptocurrency that aims to function as a means of exchange that is independent of any central authority. BTC can be transferred electronically in a secure, verifiable, and immutable way.
  • Launched in 2009, BTC is the first virtual currency to solve the double-spending issue by timestamping transactions before broadcasting them to all of the nodes in the Bitcoin network. The Bitcoin Protocol offered a solution to the Byzantine Generals’ Problem with a blockchain network structure, a notion first created by Stuart Haber and W. Scott Stornetta in 1991.
  • Bitcoin’s whitepaper was published pseudonymously in 2008 by an individual, or a group, with the pseudonym “Satoshi Nakamoto”, whose underlying identity has still not been verified.
  • The Bitcoin protocol uses an SHA-256d-based Proof-of-Work (PoW) algorithm to reach network consensus. Its network has a target block time of 10 minutes and a maximum supply of 21 million tokens, with a decaying token emission rate. To prevent fluctuation of the block time, the network’s block difficulty is re-adjusted through an algorithm based on the past 2016 block times.
  • With a block size limit capped at 1 megabyte, the Bitcoin Protocol has supported both the Lightning Network, a second-layer infrastructure for payment channels, and Segregated Witness, a soft-fork to increase the number of transactions on a block, as solutions to network scalability.

https://preview.redd.it/s2gmpmeze3151.png?width=256&format=png&auto=webp&s=9759910dd3c4a15b83f55b827d1899fb2fdd3de1

1. What is Bitcoin (BTC)?

  • Bitcoin is a peer-to-peer cryptocurrency that aims to function as a means of exchange and is independent of any central authority. Bitcoins are transferred electronically in a secure, verifiable, and immutable way.
  • Network validators, whom are often referred to as miners, participate in the SHA-256d-based Proof-of-Work consensus mechanism to determine the next global state of the blockchain.
  • The Bitcoin protocol has a target block time of 10 minutes, and a maximum supply of 21 million tokens. The only way new bitcoins can be produced is when a block producer generates a new valid block.
  • The protocol has a token emission rate that halves every 210,000 blocks, or approximately every 4 years.
  • Unlike public blockchain infrastructures supporting the development of decentralized applications (Ethereum), the Bitcoin protocol is primarily used only for payments, and has only very limited support for smart contract-like functionalities (Bitcoin “Script” is mostly used to create certain conditions before bitcoins are used to be spent).

2. Bitcoin’s core features

For a more beginner’s introduction to Bitcoin, please visit Binance Academy’s guide to Bitcoin.

Unspent Transaction Output (UTXO) model

A UTXO transaction works like cash payment between two parties: Alice gives money to Bob and receives change (i.e., unspent amount). In comparison, blockchains like Ethereum rely on the account model.
https://preview.redd.it/t1j6anf8f3151.png?width=1601&format=png&auto=webp&s=33bd141d8f2136a6f32739c8cdc7aae2e04cbc47

Nakamoto consensus

In the Bitcoin network, anyone can join the network and become a bookkeeping service provider i.e., a validator. All validators are allowed in the race to become the block producer for the next block, yet only the first to complete a computationally heavy task will win. This feature is called Proof of Work (PoW).
The probability of any single validator to finish the task first is equal to the percentage of the total network computation power, or hash power, the validator has. For instance, a validator with 5% of the total network computation power will have a 5% chance of completing the task first, and therefore becoming the next block producer.
Since anyone can join the race, competition is prone to increase. In the early days, Bitcoin mining was mostly done by personal computer CPUs.
As of today, Bitcoin validators, or miners, have opted for dedicated and more powerful devices such as machines based on Application-Specific Integrated Circuit (“ASIC”).
Proof of Work secures the network as block producers must have spent resources external to the network (i.e., money to pay electricity), and can provide proof to other participants that they did so.
With various miners competing for block rewards, it becomes difficult for one single malicious party to gain network majority (defined as more than 51% of the network’s hash power in the Nakamoto consensus mechanism). The ability to rearrange transactions via 51% attacks indicates another feature of the Nakamoto consensus: the finality of transactions is only probabilistic.
Once a block is produced, it is then propagated by the block producer to all other validators to check on the validity of all transactions in that block. The block producer will receive rewards in the network’s native currency (i.e., bitcoin) as all validators approve the block and update their ledgers.

The blockchain

Block production

The Bitcoin protocol utilizes the Merkle tree data structure in order to organize hashes of numerous individual transactions into each block. This concept is named after Ralph Merkle, who patented it in 1979.
With the use of a Merkle tree, though each block might contain thousands of transactions, it will have the ability to combine all of their hashes and condense them into one, allowing efficient and secure verification of this group of transactions. This single hash called is a Merkle root, which is stored in the Block Header of a block. The Block Header also stores other meta information of a block, such as a hash of the previous Block Header, which enables blocks to be associated in a chain-like structure (hence the name “blockchain”).
An illustration of block production in the Bitcoin Protocol is demonstrated below.

https://preview.redd.it/m6texxicf3151.png?width=1591&format=png&auto=webp&s=f4253304912ed8370948b9c524e08fef28f1c78d

Block time and mining difficulty

Block time is the period required to create the next block in a network. As mentioned above, the node who solves the computationally intensive task will be allowed to produce the next block. Therefore, block time is directly correlated to the amount of time it takes for a node to find a solution to the task. The Bitcoin protocol sets a target block time of 10 minutes, and attempts to achieve this by introducing a variable named mining difficulty.
Mining difficulty refers to how difficult it is for the node to solve the computationally intensive task. If the network sets a high difficulty for the task, while miners have low computational power, which is often referred to as “hashrate”, it would statistically take longer for the nodes to get an answer for the task. If the difficulty is low, but miners have rather strong computational power, statistically, some nodes will be able to solve the task quickly.
Therefore, the 10 minute target block time is achieved by constantly and automatically adjusting the mining difficulty according to how much computational power there is amongst the nodes. The average block time of the network is evaluated after a certain number of blocks, and if it is greater than the expected block time, the difficulty level will decrease; if it is less than the expected block time, the difficulty level will increase.

What are orphan blocks?

In a PoW blockchain network, if the block time is too low, it would increase the likelihood of nodes producingorphan blocks, for which they would receive no reward. Orphan blocks are produced by nodes who solved the task but did not broadcast their results to the whole network the quickest due to network latency.
It takes time for a message to travel through a network, and it is entirely possible for 2 nodes to complete the task and start to broadcast their results to the network at roughly the same time, while one’s messages are received by all other nodes earlier as the node has low latency.
Imagine there is a network latency of 1 minute and a target block time of 2 minutes. A node could solve the task in around 1 minute but his message would take 1 minute to reach the rest of the nodes that are still working on the solution. While his message travels through the network, all the work done by all other nodes during that 1 minute, even if these nodes also complete the task, would go to waste. In this case, 50% of the computational power contributed to the network is wasted.
The percentage of wasted computational power would proportionally decrease if the mining difficulty were higher, as it would statistically take longer for miners to complete the task. In other words, if the mining difficulty, and therefore targeted block time is low, miners with powerful and often centralized mining facilities would get a higher chance of becoming the block producer, while the participation of weaker miners would become in vain. This introduces possible centralization and weakens the overall security of the network.
However, given a limited amount of transactions that can be stored in a block, making the block time too longwould decrease the number of transactions the network can process per second, negatively affecting network scalability.

3. Bitcoin’s additional features

Segregated Witness (SegWit)

Segregated Witness, often abbreviated as SegWit, is a protocol upgrade proposal that went live in August 2017.
SegWit separates witness signatures from transaction-related data. Witness signatures in legacy Bitcoin blocks often take more than 50% of the block size. By removing witness signatures from the transaction block, this protocol upgrade effectively increases the number of transactions that can be stored in a single block, enabling the network to handle more transactions per second. As a result, SegWit increases the scalability of Nakamoto consensus-based blockchain networks like Bitcoin and Litecoin.
SegWit also makes transactions cheaper. Since transaction fees are derived from how much data is being processed by the block producer, the more transactions that can be stored in a 1MB block, the cheaper individual transactions become.
https://preview.redd.it/depya70mf3151.png?width=1601&format=png&auto=webp&s=a6499aa2131fbf347f8ffd812930b2f7d66be48e
The legacy Bitcoin block has a block size limit of 1 megabyte, and any change on the block size would require a network hard-fork. On August 1st 2017, the first hard-fork occurred, leading to the creation of Bitcoin Cash (“BCH”), which introduced an 8 megabyte block size limit.
Conversely, Segregated Witness was a soft-fork: it never changed the transaction block size limit of the network. Instead, it added an extended block with an upper limit of 3 megabytes, which contains solely witness signatures, to the 1 megabyte block that contains only transaction data. This new block type can be processed even by nodes that have not completed the SegWit protocol upgrade.
Furthermore, the separation of witness signatures from transaction data solves the malleability issue with the original Bitcoin protocol. Without Segregated Witness, these signatures could be altered before the block is validated by miners. Indeed, alterations can be done in such a way that if the system does a mathematical check, the signature would still be valid. However, since the values in the signature are changed, the two signatures would create vastly different hash values.
For instance, if a witness signature states “6,” it has a mathematical value of 6, and would create a hash value of 12345. However, if the witness signature were changed to “06”, it would maintain a mathematical value of 6 while creating a (faulty) hash value of 67890.
Since the mathematical values are the same, the altered signature remains a valid signature. This would create a bookkeeping issue, as transactions in Nakamoto consensus-based blockchain networks are documented with these hash values, or transaction IDs. Effectively, one can alter a transaction ID to a new one, and the new ID can still be valid.
This can create many issues, as illustrated in the below example:
  1. Alice sends Bob 1 BTC, and Bob sends Merchant Carol this 1 BTC for some goods.
  2. Bob sends Carols this 1 BTC, while the transaction from Alice to Bob is not yet validated. Carol sees this incoming transaction of 1 BTC to him, and immediately ships goods to B.
  3. At the moment, the transaction from Alice to Bob is still not confirmed by the network, and Bob can change the witness signature, therefore changing this transaction ID from 12345 to 67890.
  4. Now Carol will not receive his 1 BTC, as the network looks for transaction 12345 to ensure that Bob’s wallet balance is valid.
  5. As this particular transaction ID changed from 12345 to 67890, the transaction from Bob to Carol will fail, and Bob will get his goods while still holding his BTC.
With the Segregated Witness upgrade, such instances can not happen again. This is because the witness signatures are moved outside of the transaction block into an extended block, and altering the witness signature won’t affect the transaction ID.
Since the transaction malleability issue is fixed, Segregated Witness also enables the proper functioning of second-layer scalability solutions on the Bitcoin protocol, such as the Lightning Network.

Lightning Network

Lightning Network is a second-layer micropayment solution for scalability.
Specifically, Lightning Network aims to enable near-instant and low-cost payments between merchants and customers that wish to use bitcoins.
Lightning Network was conceptualized in a whitepaper by Joseph Poon and Thaddeus Dryja in 2015. Since then, it has been implemented by multiple companies. The most prominent of them include Blockstream, Lightning Labs, and ACINQ.
A list of curated resources relevant to Lightning Network can be found here.
In the Lightning Network, if a customer wishes to transact with a merchant, both of them need to open a payment channel, which operates off the Bitcoin blockchain (i.e., off-chain vs. on-chain). None of the transaction details from this payment channel are recorded on the blockchain, and only when the channel is closed will the end result of both party’s wallet balances be updated to the blockchain. The blockchain only serves as a settlement layer for Lightning transactions.
Since all transactions done via the payment channel are conducted independently of the Nakamoto consensus, both parties involved in transactions do not need to wait for network confirmation on transactions. Instead, transacting parties would pay transaction fees to Bitcoin miners only when they decide to close the channel.
https://preview.redd.it/cy56icarf3151.png?width=1601&format=png&auto=webp&s=b239a63c6a87ec6cc1b18ce2cbd0355f8831c3a8
One limitation to the Lightning Network is that it requires a person to be online to receive transactions attributing towards him. Another limitation in user experience could be that one needs to lock up some funds every time he wishes to open a payment channel, and is only able to use that fund within the channel.
However, this does not mean he needs to create new channels every time he wishes to transact with a different person on the Lightning Network. If Alice wants to send money to Carol, but they do not have a payment channel open, they can ask Bob, who has payment channels open to both Alice and Carol, to help make that transaction. Alice will be able to send funds to Bob, and Bob to Carol. Hence, the number of “payment hubs” (i.e., Bob in the previous example) correlates with both the convenience and the usability of the Lightning Network for real-world applications.

Schnorr Signature upgrade proposal

Elliptic Curve Digital Signature Algorithm (“ECDSA”) signatures are used to sign transactions on the Bitcoin blockchain.
https://preview.redd.it/hjeqe4l7g3151.png?width=1601&format=png&auto=webp&s=8014fb08fe62ac4d91645499bc0c7e1c04c5d7c4
However, many developers now advocate for replacing ECDSA with Schnorr Signature. Once Schnorr Signatures are implemented, multiple parties can collaborate in producing a signature that is valid for the sum of their public keys.
This would primarily be beneficial for network scalability. When multiple addresses were to conduct transactions to a single address, each transaction would require their own signature. With Schnorr Signature, all these signatures would be combined into one. As a result, the network would be able to store more transactions in a single block.
https://preview.redd.it/axg3wayag3151.png?width=1601&format=png&auto=webp&s=93d958fa6b0e623caa82ca71fe457b4daa88c71e
The reduced size in signatures implies a reduced cost on transaction fees. The group of senders can split the transaction fees for that one group signature, instead of paying for one personal signature individually.
Schnorr Signature also improves network privacy and token fungibility. A third-party observer will not be able to detect if a user is sending a multi-signature transaction, since the signature will be in the same format as a single-signature transaction.

4. Economics and supply distribution

The Bitcoin protocol utilizes the Nakamoto consensus, and nodes validate blocks via Proof-of-Work mining. The bitcoin token was not pre-mined, and has a maximum supply of 21 million. The initial reward for a block was 50 BTC per block. Block mining rewards halve every 210,000 blocks. Since the average time for block production on the blockchain is 10 minutes, it implies that the block reward halving events will approximately take place every 4 years.
As of May 12th 2020, the block mining rewards are 6.25 BTC per block. Transaction fees also represent a minor revenue stream for miners.
submitted by D-platform to u/D-platform [link] [comments]

Update TKEYSPACE 1.3.0 on Android

Update TKEYSPACE 1.3.0 on Android

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Version 1.3.0 is a powerful update to TkeySpace that our team has been carefully preparing. since version 1.2.0, we have been laying the foundation for implementing new features that are already available in the current version.
Who cares about the security and privacy of their assets is an update for you.
TkeySpace — was designed to give You full control over your digital assets while maintaining an exceptional level of security, which is why there is no personal data in the wallet: phone number, the email address that could be compromised by hackers — no identity checks and other hassles, just securely save the backup phrase consisting of 12 words.

Briefly about the TkeySpace 1.3.0 update :

  • Code optimization and switching to AndroidX;
  • New section-Privacy;
  • Built-in TOR;
  • Selecting the privacy mode;
  • Selecting the recovery method for each currency;
  • Choosing the address format for Litecoin;
  • Enhanced validation of transactions and blocks in the network;
  • Disk space optimization;
  • Accelerated syncing;
  • Checking “double spending”;
  • The bloom filter to check for nodes;
  • Updating the Binance and Ethereum libraries;
  • A function to hide the balance;
  • Advanced currency charts;
  • Access to charts without authentication;
  • News section;
  • Browser for Tkeycoin;
  • Independent Commission entry for Bitcoin;
  • New digital currencies;
  • Digital currency exchange tab.

Code optimization and switching to AndroidX

A lot of work has been done on optimizing the code to speed up the application, improving the logic, synchronization speed, calculating the hash of cryptocurrencies, and successfully switching to AndroidX.

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New section: Privacy

  • Enable Tor;
  • Blockchain transaction (the selection of the privacy mode);
  • Blockchain recovery (choosing a recovery method);
https://preview.redd.it/iydfwuhittx41.png?width=1080&format=png&auto=webp&s=2ce7c489d893a2ab6b9d6fede57d8b94404edcfb

TOR

Starting with the current update, the TkeySpace wallet can communicate via the TOR network, includes new privacy algorithms, and supports 59 different currencies.

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Tor is a powerful privacy feature for those who own large assets or live in places where the Internet is heavily censored.
Tor technology provides protection against traffic analysis mechanisms that compromise not only Internet privacy, but also the confidentiality of trade secrets, business contacts, and communications in General.
When you enable TOR settings, all outgoing traffic from the wallet will be encrypted and routed through an anonymous network of servers, periodically forming a chain through the Tor network, which uses multi-level encryption, effectively hiding any information about the sender: location, IP address, and other data.
This means that if your provider blocks the connection, you can rest easy — after all, by running this function, you will get an encrypted connection to the network without restrictions.

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In TOR mode, the wallet may work noticeably slower and in some cases, there may be problems with the network, due to encryption, some blockchain browsers may temporarily not work. However, TOR encryption is very important when Internet providers completely block traffic and switching to this mode, you get complete freedom and no blocks for transactions.

Confidentiality of transactions (the Blockchain transaction)

The wallet can change the model of a standard transaction, mixing inputs and outputs, making it difficult to identify certain cryptocurrencies. In the current update, you can select one of several modes for the transaction privacy level: deterministic lexicographic sorting or shuffle mode.

Mode: Lexicographic indexing

Implemented deterministic lexicographic sorting using hashes of previous transactions and output indexes for sorting transaction input data, as well as values and scriptPubKeys for sorting transaction output data;
We understand that information must remain confidential not only in the interests of consumers but also in higher orders, financial systems must be kept secret to prevent fraud. One way to address these privacy shortcomings is to randomize the order of inputs and outputs.
Lexicographic ordering is a comparison algorithm used to sort two sets based on their Cartesian order within their common superset. Lexicographic order is also often referred to as alphabetical order or dictionary order. The hashes of previous transactions (in reverse byte order) are sorted in ascending order, lexicographically.
In the case of two matching transaction hashes, the corresponding previous output indexes will be compared by their integer value in ascending order. If the previous output indexes match, the input data is considered equal.

Shuffle Mode: mixing (random indexing)

To learn more about how “shuffle mode” works, we will first analyze the mechanisms using the example of a classic transaction. Current balance Of your wallet: 100 TKEY, coins are stored at different addresses:
x1. Address-contains 10 TKEY. x2. Address-contains 20 TKEY. x3. Address-contains 30 TKEY. x4. Address-contains 15 TKEY. x5. Address-contains 25 TKEY.
Addresses in the blockchain are identifiers that you use to send cryptocurrency to another person or to receive digital currency.
In a classic transaction, if you need to send, for example, 19 TKEY — 100 TKEY will be sent to the network for “melting” coins, 19 TKEY will be sent to the Recipient, and ~80.9 TKEY will return to the newly generated address for “change” in your wallet.

https://preview.redd.it/x595qwdottx41.png?width=806&format=png&auto=webp&s=d9c2ae5620a3410ed83f7e16c018165c8ab35844
In the blockchain explorer, you will see the transaction amount in the amount of 100 TKEY, where 80.99999679 TKEY is your change, 19 TKEY is the amount you sent and 0.00000321 is the transaction fee. Thus, in the blockchain search engine, most of your balance is shown in the transaction.

How does the shuffle mode work?

Let’s look at a similar example: you have 100 TKEY on your balance, and you need to send 19 TKEY.
x1. Address-contains 10 TKEY. x2. Address-contains 20 TKEY. x3. Address-contains 30 TKEY. x4. Address-contains 15 TKEY. x5. Address-contains 25 TKEY.
You send 19 TKEY, the system analyzes all your addresses and balances on them and selects the most suitable ones for the transaction. To send 19 TKEY, the miners will be given coins with x2. Addresses, for a total of 20 TKEY. Of these, 19 TKEY will be sent to the recipient, and 0.99999679 TKEY will be returned to Your new address as change minus the transaction fee.

https://preview.redd.it/doxmqffqttx41.png?width=1400&format=png&auto=webp&s=5c99ec41363fe50cd651dc0acab05e175416006a
In the blockchain explorer, you will see the transaction amount in the amount of 20 TKEY, where 0.99999679 TKEY is Your change, 19 TKEY is the amount you sent and 0.00000321 is the transaction fee.
The shuffle mode has a cumulative effect. with each new transaction, delivery Addresses will be created and the selection of debit addresses/s that are most suitable for the transaction will change. Thus, if you store 1,000,000 TKEY in your wallet and want to send 1 TKEY to the recipient, the transaction amount will not display most of your balance but will select 1 or more addresses for the transaction.

Selecting the recovery method for each digital currency (Blockchain restore)

Now you can choose the recovery method for each currency: API + Blockchain or blockchain.
Note: This is not a syncing process, but rather the choice of a recovery method for your wallet. Syncing takes place with the blockchain — regardless of the method you choose.
https://preview.redd.it/gxsssuxrttx41.png?width=1080&format=png&auto=webp&s=cd9fe383618dda0e990e86485652ff95652a8481

What are the differences between recovery methods?

API + Blockchain

In order not to load the entire history of the blockchain, i.e. block and transaction headers, the API helps you quickly get point information about previous transactions. For example, If your transactions are located in block 67325 and block 71775, the API will indicate to the node the necessary points for restoring Your balance, which will speed up the “recovery” process.
As soon as the information is received, communication with the peers takes place and synchronization begins from the control point, then from this moment, all subsequent block loading is carried out through the blockchain. This method allows you to quickly restore Your existing wallet.
‘’+’’ Speed.
‘’-’’ The API server may fail.

Blockchain

This method loads all block headers (block headers + Merkle) starting from the BIP44 checkpoint and manually validates transactions.
‘’+’’ It always works and is decentralized. ‘’-’’ Loading the entire blockchain may take a long time.

Why do I need to switch the recovery method?

If when creating a wallet or restoring it, a notification (!) lights up in red near the selected cryptocurrency, then most likely the API has failed, so go to SettingsSecurity CenterPrivacyBlockchain Restore — switch to Blockchain. Syncing will be successful.

Selecting the address format

You can choose the address format not only for Bitcoin but also for Litecoin. Legacy, SegWit, Native SegWit. Go to SettingsManage WalletsAddress Format.

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Working at the code level

Enhanced validation of transactions and blocks in the network

Due to the increased complexity in the Tkeycoin network, we have implemented enhanced validation of the tkeycoin consensus algorithm, and this algorithm is also available for other cryptocurrencies.

What is the advantage of the enhanced validation algorithm for the user

First, the name itself speaks for itself — it increases the security of the network, and second, by implementing the function — we have accelerated the work of the TkeySpace blockchain node, the application consumes even fewer resources than before.
High complexity is converted to 3 bytes, which ensures fast code processing and the least resource consumption on your device.

Synchronization

The synchronization process has been upgraded. Node addresses are added to the local storage, and instant synchronization with nodes occurs when you log in again.

Checking for double-spending

TkeySpace eliminates “double-spending” in blockchains, which is very valuable in the Bitcoin and Litecoin networks.
For example, using another application, you may be sent a fake transaction, and the funds will eventually disappear from the network and your wallet because this feature is almost absent in most applications.
Using TkeySpace — you are 100% sure that your funds are safe and protected from fraudulent transactions in the form of “fake” transactions.

The bloom filter to check for nodes

All nodes are checked through the bloom filter. This allows you to exclude fraudulent nodes that try to connect to the network as real nodes of a particular blockchain.
In practice, this verification is not available in applications, Tkeycoin — decided to follow a new trend and change the stereotypes, so new features such as node verification using the bloom filter and double-spending verification are a kind of innovation in applications that work with cryptocurrencies.

Updating the Binance and Ethereum libraries

Updated Binance and Ethereum libraries for interaction with the TOR network.

Interface

Function — to hide the balance

This function allows you to hide the entire balance from the main screen.

Advanced currency charts and charts without authentication

Detailed market statistics are available, including volumes, both for 1 day and several years. Select the period of interest: 1 day, 7 days, 1 month, 3 months, 6 months, 1 year, 2 years.
In version 1.3.0, you can access charts without authentication. You can monitor the cryptocurrency exchange rate without even logging in to the app. If you have a pin code for logging in, when you open the app, swipe to the left and you will see a list of currencies.

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News

In the market data section — in the tkeyspace added a section with current news of the cryptocurrency market.

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Blockchain Explorer for Tkeycoin

Transaction verification for Tkeycoin is now available directly in the app.

Independent Commission entry for Bitcoin

Taking into account the large volume of the Bitcoin network, we have implemented independent Commission entry — you can specify any Commission amount.
For other currencies, smart Commission calculation is enabled based on data from the network. The network independently regulates the most profitable Commission for the sender.

New digital currencies

The TkeySpace wallet supports +59 cryptocurrencies and tokens.

Cryptocurrencies

Tkeycoin (TKEY), Bitcoin (BTC), Litecoin (LTC), Ethereum (ETH), Bitcoin Cash (BCH), DASH, Binance (BNB), EOS.

Stablecoins

TrueUSD (TUSD), Tether USD (USDT), USD Coin (USDC), Gemini Dollar (GUSD), STASIS EURO (EURS), Digix Gold Token (DGX), Paxos Standard (PAX), PAX Gold (PAXG), Binance USD (BUSD), EOSDT, Prospectors Gold (PGL).

ERC-20, BEP2, and EOS tokens

Newdex (NDX), DigixDAO ERC-20 (DGD), Chainlink ERC-20 (LINK), Decentraland ERC-20 (MANA), EnjinCoin ERC-20 (ENJ), the Native Utility (NUT), 0x Protocol ERC-20 (ZRX), Aelf ERC-20 (ELF), Dawn DAO ERC-20 (AURA), Cashaaa BEP2 (CAS), Bancor ERC-20 (BNT), the Basic Attention Token ERC-20 (BAT), Golem ERC-20 (GNT), Mithril ERC-20 (MITH), MEETONE, NEXO ERC-20, Holo ERC-20 (HOT), Huobi Token ERC-20 (HT), IDEX ERC-20, IDEX Membership ERC-20 (IDXM), Bitcoin BEP2 (BTCB), Waltonchain ERC-20 (WTC), KuCoin Shares ERC-20 (KCS), Kyber Network Crystal ERC-20 (KNC), Loom Network ERC-20 (LOOM), Ripple (XRP), Everipedia (IQ), Loopring ERC-20 (LRC), Maker ERC-20 (MKR), the Status of the ERC-20 (SNT), Ankr Network BEP2 (ANKR), OmiseGO ERC-20 (OMG), ^ american English ERC-20 (^american English), Polymath ERC-20 (POLY), Populous ERC-20 (PPT), Pundi X ERC-20 (NPXS), Parser ERC-20 (REP), Revain ERC-20 (R), Binance ERC20 (BNB-ERC20), Gifto BEP2 (GTO).

Exchange of cryptocurrency

The “Limitless Crypto Exchange” tab is available for a quick transition to an unlimited exchange in 200 digital currencies — 10,000 currency pairs.

How do I update TkeySpace to version 1.3.0?

  1. Go to Google Play on your device — My apps and games — find TkeySpace in the list of apps — click Update.
  2. Go to Google Play on your device-write TkeySpace in the search — click on the app icon — Update.
After the update, you will need to restore your wallet.
submitted by tkeycoin to Tkeycoin_Official [link] [comments]

Technical: A Brief History of Payment Channels: from Satoshi to Lightning Network

Who cares about political tweets from some random country's president when payment channels are a much more interesting and are actually capable of carrying value?
So let's have a short history of various payment channel techs!

Generation 0: Satoshi's Broken nSequence Channels

Because Satoshi's Vision included payment channels, except his implementation sucked so hard we had to go fix it and added RBF as a by-product.
Originally, the plan for nSequence was that mempools would replace any transaction spending certain inputs with another transaction spending the same inputs, but only if the nSequence field of the replacement was larger.
Since 0xFFFFFFFF was the highest value that nSequence could get, this would mark a transaction as "final" and not replaceable on the mempool anymore.
In fact, this "nSequence channel" I will describe is the reason why we have this weird rule about nLockTime and nSequence. nLockTime actually only works if nSequence is not 0xFFFFFFFF i.e. final. If nSequence is 0xFFFFFFFF then nLockTime is ignored, because this if the "final" version of the transaction.
So what you'd do would be something like this:
  1. You go to a bar and promise the bartender to pay by the time the bar closes. Because this is the Bitcoin universe, time is measured in blockheight, so the closing time of the bar is indicated as some future blockheight.
  2. For your first drink, you'd make a transaction paying to the bartender for that drink, paying from some coins you have. The transaction has an nLockTime equal to the closing time of the bar, and a starting nSequence of 0. You hand over the transaction and the bartender hands you your drink.
  3. For your succeeding drink, you'd remake the same transaction, adding the payment for that drink to the transaction output that goes to the bartender (so that output keeps getting larger, by the amount of payment), and having an nSequence that is one higher than the previous one.
  4. Eventually you have to stop drinking. It comes down to one of two possibilities:
    • You drink until the bar closes. Since it is now the nLockTime indicated in the transaction, the bartender is able to broadcast the latest transaction and tells the bouncers to kick you out of the bar.
    • You wisely consider the state of your liver. So you re-sign the last transaction with a "final" nSequence of 0xFFFFFFFF i.e. the maximum possible value it can have. This allows the bartender to get his or her funds immediately (nLockTime is ignored if nSequence is 0xFFFFFFFF), so he or she tells the bouncers to let you out of the bar.
Now that of course is a payment channel. Individual payments (purchases of alcohol, so I guess buying coffee is not in scope for payment channels). Closing is done by creating a "final" transaction that is the sum of the individual payments. Sure there's no routing and channels are unidirectional and channels have a maximum lifetime but give Satoshi a break, he was also busy inventing Bitcoin at the time.
Now if you noticed I called this kind of payment channel "broken". This is because the mempool rules are not consensus rules, and cannot be validated (nothing about the mempool can be validated onchain: I sigh every time somebody proposes "let's make block size dependent on mempool size", mempool state cannot be validated by onchain data). Fullnodes can't see all of the transactions you signed, and then validate that the final one with the maximum nSequence is the one that actually is used onchain. So you can do the below:
  1. Become friends with Jihan Wu, because he owns >51% of the mining hashrate (he totally reorged Bitcoin to reverse the Binance hack right?).
  2. Slip Jihan Wu some of the more interesting drinks you're ordering as an incentive to cooperate with you. So say you end up ordering 100 drinks, you split it with Jihan Wu and give him 50 of the drinks.
  3. When the bar closes, Jihan Wu quickly calls his mining rig and tells them to mine the version of your transaction with nSequence 0. You know, that first one where you pay for only one drink.
  4. Because fullnodes cannot validate nSequence, they'll accept even the nSequence=0 version and confirm it, immutably adding you paying for a single alcoholic drink to the blockchain.
  5. The bartender, pissed at being cheated, takes out a shotgun from under the bar and shoots at you and Jihan Wu.
  6. Jihan Wu uses his mystical chi powers (actually the combined exhaust from all of his mining rigs) to slow down the shotgun pellets, making them hit you as softly as petals drifting in the wind.
  7. The bartender mutters some words, clothes ripping apart as he or she (hard to believe it could be a she but hey) turns into a bear, ready to maul you for cheating him or her of the payment for all the 100 drinks you ordered from him or her.
  8. Steely-eyed, you stand in front of the bartender-turned-bear, daring him to touch you. You've watched Revenant, you know Leonardo di Caprio could survive a bear mauling, and if some posh actor can survive that, you know you can too. You make a pose. "Drunken troll logic attack!"
  9. I think I got sidetracked here.
Lessons learned?

Spilman Channels

Incentive-compatible time-limited unidirectional channel; or, Satoshi's Vision, Fixed (if transaction malleability hadn't been a problem, that is).
Now, we know the bartender will turn into a bear and maul you if you try to cheat the payment channel, and now that we've revealed you're good friends with Jihan Wu, the bartender will no longer accept a payment channel scheme that lets one you cooperate with a miner to cheat the bartender.
Fortunately, Jeremy Spilman proposed a better way that would not let you cheat the bartender.
First, you and the bartender perform this ritual:
  1. You get some funds and create a transaction that pays to a 2-of-2 multisig between you and the bartender. You don't broadcast this yet: you just sign it and get its txid.
  2. You create another transaction that spends the above transaction. This transaction (the "backoff") has an nLockTime equal to the closing time of the bar, plus one block. You sign it and give this backoff transaction (but not the above transaction) to the bartender.
  3. The bartender signs the backoff and gives it back to you. It is now valid since it's spending a 2-of-2 of you and the bartender, and both of you have signed the backoff transaction.
  4. Now you broadcast the first transaction onchain. You and the bartender wait for it to be deeply confirmed, then you can start ordering.
The above is probably vaguely familiar to LN users. It's the funding process of payment channels! The first transaction, the one that pays to a 2-of-2 multisig, is the funding transaction that backs the payment channel funds.
So now you start ordering in this way:
  1. For your first drink, you create a transaction spending the funding transaction output and sending the price of the drink to the bartender, with the rest returning to you.
  2. You sign the transaction and pass it to the bartender, who serves your first drink.
  3. For your succeeding drinks, you recreate the same transaction, adding the price of the new drink to the sum that goes to the bartender and reducing the money returned to you. You sign the transaction and give it to the bartender, who serves you your next drink.
  4. At the end:
    • If the bar closing time is reached, the bartender signs the latest transaction, completing the needed 2-of-2 signatures and broadcasting this to the Bitcoin network. Since the backoff transaction is the closing time + 1, it can't get used at closing time.
    • If you decide you want to leave early because your liver is crying, you just tell the bartender to go ahead and close the channel (which the bartender can do at any time by just signing and broadcasting the latest transaction: the bartender won't do that because he or she is hoping you'll stay and drink more).
    • If you ended up just hanging around the bar and never ordering, then at closing time + 1 you broadcast the backoff transaction and get your funds back in full.
Now, even if you pass 50 drinks to Jihan Wu, you can't give him the first transaction (the one which pays for only one drink) and ask him to mine it: it's spending a 2-of-2 and the copy you have only contains your own signature. You need the bartender's signature to make it valid, but he or she sure as hell isn't going to cooperate in something that would lose him or her money, so a signature from the bartender validating old state where he or she gets paid less isn't going to happen.
So, problem solved, right? Right? Okay, let's try it. So you get your funds, put them in a funding tx, get the backoff tx, confirm the funding tx...
Once the funding transaction confirms deeply, the bartender laughs uproariously. He or she summons the bouncers, who surround you menacingly.
"I'm refusing service to you," the bartender says.
"Fine," you say. "I was leaving anyway;" You smirk. "I'll get back my money with the backoff transaction, and posting about your poor service on reddit so you get negative karma, so there!"
"Not so fast," the bartender says. His or her voice chills your bones. It looks like your exploitation of the Satoshi nSequence payment channel is still fresh in his or her mind. "Look at the txid of the funding transaction that got confirmed."
"What about it?" you ask nonchalantly, as you flip open your desktop computer and open a reputable blockchain explorer.
What you see shocks you.
"What the --- the txid is different! You--- you changed my signature?? But how? I put the only copy of my private key in a sealed envelope in a cast-iron box inside a safe buried in the Gobi desert protected by a clan of nomads who have dedicated their lives and their childrens' lives to keeping my private key safe in perpetuity!"
"Didn't you know?" the bartender asks. "The components of the signature are just very large numbers. The sign of one of the signature components can be changed, from positive to negative, or negative to positive, and the signature will remain valid. Anyone can do that, even if they don't know the private key. But because Bitcoin includes the signatures in the transaction when it's generating the txid, this little change also changes the txid." He or she chuckles. "They say they'll fix it by separating the signatures from the transaction body. They're saying that these kinds of signature malleability won't affect transaction ids anymore after they do this, but I bet I can get my good friend Jihan Wu to delay this 'SepSig' plan for a good while yet. Friendly guy, this Jihan Wu, it turns out all I had to do was slip him 51 drinks and he was willing to mine a tx with the signature signs flipped." His or her grin widens. "I'm afraid your backoff transaction won't work anymore, since it spends a txid that is not existent and will never be confirmed. So here's the deal. You pay me 99% of the funds in the funding transaction, in exchange for me signing the transaction that spends with the txid that you see onchain. Refuse, and you lose 100% of the funds and every other HODLer, including me, benefits from the reduction in coin supply. Accept, and you get to keep 1%. I lose nothing if you refuse, so I won't care if you do, but consider the difference of getting zilch vs. getting 1% of your funds." His or her eyes glow. "GENUFLECT RIGHT NOW."
Lesson learned?

CLTV-protected Spilman Channels

Using CLTV for the backoff branch.
This variation is simply Spilman channels, but with the backoff transaction replaced with a backoff branch in the SCRIPT you pay to. It only became possible after OP_CHECKLOCKTIMEVERIFY (CLTV) was enabled in 2015.
Now as we saw in the Spilman Channels discussion, transaction malleability means that any pre-signed offchain transaction can easily be invalidated by flipping the sign of the signature of the funding transaction while the funding transaction is not yet confirmed.
This can be avoided by simply putting any special requirements into an explicit branch of the Bitcoin SCRIPT. Now, the backoff branch is supposed to create a maximum lifetime for the payment channel, and prior to the introduction of OP_CHECKLOCKTIMEVERIFY this could only be done by having a pre-signed nLockTime transaction.
With CLTV, however, we can now make the branches explicit in the SCRIPT that the funding transaction pays to.
Instead of paying to a 2-of-2 in order to set up the funding transaction, you pay to a SCRIPT which is basically "2-of-2, OR this singlesig after a specified lock time".
With this, there is no backoff transaction that is pre-signed and which refers to a specific txid. Instead, you can create the backoff transaction later, using whatever txid the funding transaction ends up being confirmed under. Since the funding transaction is immutable once confirmed, it is no longer possible to change the txid afterwards.

Todd Micropayment Networks

The old hub-spoke model (that isn't how LN today actually works).
One of the more direct predecessors of the Lightning Network was the hub-spoke model discussed by Peter Todd. In this model, instead of payers directly having channels to payees, payers and payees connect to a central hub server. This allows any payer to pay any payee, using the same channel for every payee on the hub. Similarly, this allows any payee to receive from any payer, using the same channel.
Remember from the above Spilman example? When you open a channel to the bartender, you have to wait around for the funding tx to confirm. This will take an hour at best. Now consider that you have to make channels for everyone you want to pay to. That's not very scalable.
So the Todd hub-spoke model has a central "clearing house" that transport money from payers to payees. The "Moonbeam" project takes this model. Of course, this reveals to the hub who the payer and payee are, and thus the hub can potentially censor transactions. Generally, though, it was considered that a hub would more efficiently censor by just not maintaining a channel with the payer or payee that it wants to censor (since the money it owned in the channel would just be locked uselessly if the hub won't process payments to/from the censored user).
In any case, the ability of the central hub to monitor payments means that it can surveill the payer and payee, and then sell this private transactional data to third parties. This loss of privacy would be intolerable today.
Peter Todd also proposed that there might be multiple hubs that could transport funds to each other on behalf of their users, providing somewhat better privacy.
Another point of note is that at the time such networks were proposed, only unidirectional (Spilman) channels were available. Thus, while one could be a payer, or payee, you would have to use separate channels for your income versus for your spending. Worse, if you wanted to transfer money from your income channel to your spending channel, you had to close both and reshuffle the money between them, both onchain activities.

Poon-Dryja Lightning Network

Bidirectional two-participant channels.
The Poon-Dryja channel mechanism has two important properties:
Both the original Satoshi and the two Spilman variants are unidirectional: there is a payer and a payee, and if the payee wants to do a refund, or wants to pay for a different service or product the payer is providing, then they can't use the same unidirectional channel.
The Poon-Dryjam mechanism allows channels, however, to be bidirectional instead: you are not a payer or a payee on the channel, you can receive or send at any time as long as both you and the channel counterparty are online.
Further, unlike either of the Spilman variants, there is no time limit for the lifetime of a channel. Instead, you can keep the channel open for as long as you want.
Both properties, together, form a very powerful scaling property that I believe most people have not appreciated. With unidirectional channels, as mentioned before, if you both earn and spend over the same network of payment channels, you would have separate channels for earning and spending. You would then need to perform onchain operations to "reverse" the directions of your channels periodically. Secondly, since Spilman channels have a fixed lifetime, even if you never used either channel, you would have to periodically "refresh" it by closing it and reopening.
With bidirectional, indefinite-lifetime channels, you may instead open some channels when you first begin managing your own money, then close them only after your lawyers have executed your last will and testament on how the money in your channels get divided up to your heirs: that's just two onchain transactions in your entire lifetime. That is the potentially very powerful scaling property that bidirectional, indefinite-lifetime channels allow.
I won't discuss the transaction structure needed for Poon-Dryja bidirectional channels --- it's complicated and you can easily get explanations with cute graphics elsewhere.
There is a weakness of Poon-Dryja that people tend to gloss over (because it was fixed very well by RustyReddit):
Another thing I want to emphasize is that while the Lightning Network paper and many of the earlier presentations developed from the old Peter Todd hub-and-spoke model, the modern Lightning Network takes the logical conclusion of removing a strict separation between "hubs" and "spokes". Any node on the Lightning Network can very well work as a hub for any other node. Thus, while you might operate as "mostly a payer", "mostly a forwarding node", "mostly a payee", you still end up being at least partially a forwarding node ("hub") on the network, at least part of the time. This greatly reduces the problems of privacy inherent in having only a few hub nodes: forwarding nodes cannot get significantly useful data from the payments passing through them, because the distance between the payer and the payee can be so large that it would be likely that the ultimate payer and the ultimate payee could be anyone on the Lightning Network.
Lessons learned?

Future

After LN, there's also the Decker-Wattenhofer Duplex Micropayment Channels (DMC). This post is long enough as-is, LOL. But for now, it uses a novel "decrementing nSequence channel", using the new relative-timelock semantics of nSequence (not the broken one originally by Satoshi). It actually uses multiple such "decrementing nSequence" constructs, terminating in a pair of Spilman channels, one in both directions (thus "duplex"). Maybe I'll discuss it some other time.
The realization that channel constructions could actually hold more channel constructions inside them (the way the Decker-Wattenhofer puts a pair of Spilman channels inside a series of "decrementing nSequence channels") lead to the further thought behind Burchert-Decker-Wattenhofer channel factories. Basically, you could host multiple two-participant channel constructs inside a larger multiparticipant "channel" construct (i.e. host multiple channels inside a factory).
Further, we have the Decker-Russell-Osuntokun or "eltoo" construction. I'd argue that this is "nSequence done right". I'll write more about this later, because this post is long enough.
Lessons learned?
submitted by almkglor to Bitcoin [link] [comments]

Which are your Top 5 favourite coins out of the Top 100? An analysis.

I am putting together my investment portfolio for 2018 and made a complete summary of the current Top 100. Interestingly, I noticed that all coins can be categorized into 12 markets. Which markets do you think will play the biggest role in the coming year?
Here is a complete overview of all coins in an excel sheet including name, market, TPS, risk profile, time since launch (negative numbers mean that they are launching that many months in the future) and market cap. You can also sort by all of these fields of course. Coins written in bold are the strongest contenders within their market either due to having the best technology or having a small market cap and still excellent technology and potential. https://docs.google.com/spreadsheets/d/1s8PHcNvvjuy848q18py_CGcu8elRGQAUIf86EYh4QZo/edit#gid=0
The 12 markets are
  1. Currency 13 coins
  2. Platform 25 coins
  3. Ecosystem 9 coins
  4. Privacy 10 coins
  5. Currency Exchange Tool 8 coins
  6. Gaming & Gambling 5 coins
  7. Misc 15 coins
  8. Social Network 4 coins
  9. Fee Token 3 coins
  10. Decentralized Data Storage 4 coins
  11. Cloud Computing 3 coins
  12. Stable Coin 2 coins
Before we look at the individual markets, we need to take a look of the overall market and its biggest issue scalability first:
Cryptocurrencies aim to be a decentralized currency that can be used worldwide. Its goal is to replace dollar, Euro, Yen, all FIAT currencies worldwide. The coin that will achieve that will be worth several trillion dollars.
Bitcoin can only process 7 transactions per second (TPS). In order to replace all FIAT, it would need to perform at at least VISA levels, which usually processes around 3,000 TPS, up to 25,000 TPS during peak times and a maximum of 64,000 TPS. That means that this cryptocurrency would need to be able to perform at least several thousand TPS. However, a ground breaking technology should not look at current technology to set a goal for its use, i.e. estimating the number of emails sent in 1990 based on the number of faxes sent wasn’t a good estimate.
For that reason, 10,000 TPS is the absolute baseline for a cryptocurrency that wants to replace FIAT. This brings me to IOTA, which wants to connect all 80 billion IoT devices that are expected to exist by 2025, which constantly communicate with each other, creating 80 billion or more transactions per second. This is the benchmark that cryptocurrencies should be aiming for. Currently, 8 billion devices are connected to the Internet.
With its Lightning network recently launched, Bitcoin is realistically looking at 50,000 possible soon. Other notable cryptocurrencies besides IOTA and Bitcoin are Nano with 7,000 TPS already tested, Dash with several billion TPS possible with Masternodes, Neo, LISK and RHOC with 100,000 TPS by 2020, Ripple with 50,000 TPS, Ethereum with 10,000 with Sharding.
However, it needs to be said that scalability usually goes at the cost of decentralization and security. So, it needs to be seen, which of these technologies can prove itself resilient and performant.
Without further ado, here are the coins of the first market

Market 1 - Currency:

  1. Bitcoin: 1st generation blockchain with currently bad scalability currently, though the implementation of the Lightning Network looks promising and could alleviate most scalability concerns, scalability and high energy use.
  2. Ripple: Centralized currency that might become very successful due to tight involvement with banks and cross-border payments for financial institutions; banks and companies like Western Union and Moneygram (who they are currently working with) as customers customers. However, it seems they are aiming for more decentralization now.https://ripple.com/dev-blog/decentralization-strategy-update/. Has high TPS due to Proof of Correctness algorithm.
  3. Bitcoin Cash: Bitcoin fork with the difference of having an 8 times bigger block size, making it 8 times more scalable than Bitcoin currently. Further block size increases are planned. Only significant difference is bigger block size while big blocks lead to further problems that don't seem to do well beyond a few thousand TPS. Opponents to a block size argue that increasing the block size limit is unimaginative, offers only temporary relief, and damages decentralization by increasing costs of participation. In order to preserve decentralization, system requirements to participate should be kept low. To understand this, consider an extreme example: very big blocks (1GB+) would require data center level resources to validate the blockchain. This would preclude all but the wealthiest individuals from participating.Community seems more open than Bitcoin's though.
  4. Litecoin : Little brother of Bitcoin. Bitcoin fork with different mining algorithm but not much else.Copies everything that Bitcoin does pretty much. Lack of real innovation.
  5. Dash: Dash (Digital Cash) is a fork of Bitcoin and focuses on user ease. It has very fast transactions within seconds, low fees and uses Proof of Service from Masternodes for consensus. They are currently building a system called Evolution which will allow users to send money using usernames and merchants will find it easy to integrate Dash using the API. You could say Dash is trying to be a PayPal of cryptocurrencies. Currently, cryptocurrencies must choose between decentralization, speed, scalability and can pick only 2. With Masternodes, Dash picked speed and scalability at some cost of decentralization, since with Masternodes the voting power is shifted towards Masternodes, which are run by Dash users who own the most Dash.
  6. IOTA: 3rd generation blockchain called Tangle, which has a high scalability, no fees and instant transactions. IOTA aims to be the connective layer between all 80 billion IOT devices that are expected to be connected to the Internet in 2025, possibly creating 80 billion transactions per second or 800 billion TPS, who knows. However, it needs to be seen if the Tangle can keep up with this scalability and iron out its security issues that have not yet been completely resolved.
  7. Nano: 3rd generation blockchain called Block Lattice with high scalability, no fees and instant transactions. Unlike IOTA, Nano only wants to be a payment processor and nothing else, for now at least. With Nano, every user has their own blockchain and has to perform a small amount of computing for each transaction, which makes Nano perform at 300 TPS with no problems and 7,000 TPS have also been tested successfully. Very promising 3rd gen technology and strong focus on only being the fastest currency without trying to be everything.
  8. Decred: As mining operations have grown, Bitcoin’s decision-making process has become more centralized, with the largest mining companies holding large amounts of power over the Bitcoin improvement process. Decred focuses heavily on decentralization with their PoW Pos hybrid governance system to become what Bitcoin was set out to be. They will soon implement the Lightning Network to scale up. While there do not seem to be more differences to Bitcoin besides the novel hybrid consensus algorithm, which Ethereum, Aeternity and Bitcoin Atom are also implementing, the welcoming and positive Decred community and professoinal team add another level of potential to the coin.
  9. Aeternity: We’ve seen recently, that it’s difficult to scale the execution of smart contracts on the blockchain. Crypto Kitties is a great example. Something as simple as creating and trading unique assets on Ethereum bogged the network down when transaction volume soared. Ethereum and Zilliqa address this problem with Sharding. Aeternity focuses on increasing the scalability of smart contracts and dapps by moving smart contracts off-chain. Instead of running on the blockchain, smart contracts on Aeternity run in private state channels between the parties involved in the contracts. State channels are lines of communication between parties in a smart contract. They don’t touch the blockchain unless they need to for adjudication or transfer of value. Because they’re off-chain, state channel contracts can operate much more efficiently. They don’t need to pay the network for every time they compute and can also operate with greater privacy. An important aspect of smart contract and dapp development is access to outside data sources. This could mean checking the weather in London, score of a football game, or price of gold. Oracles provide access to data hosted outside the blockchain. In many blockchain projects, oracles represent a security risk and potential point of failure, since they tend to be singular, centralized data streams. Aeternity proposes decentralizing oracles with their oracle machine. Doing so would make outside data immutable and unchangeable once it reaches Aeternity’s blockchain. Of course, the data source could still be hacked, so Aeternity implements a prediction market where users can bet on the accuracy and honesty of incoming data from various oracles.It also uses prediction markets for various voting and verification purposes within the platform. Aeternity’s network runs on on a hybrid of proof of work and proof of stake. Founded by a long-time crypto-enthusiast and early colleague of Vitalik Buterin, Yanislav Malahov. Promising concept though not product yet
  10. Bitcoin Atom: Atomic Swaps and hybrid consenus. This looks like the only Bitcoin clone that actually is looking to innovate next to Bitcoin Cash.
  11. Dogecoin: Litecoin fork, fantastic community, though lagging behind a bit in technology.
  12. Bitcoin Gold: A bit better security than bitcoin through ASIC resistant algorithm, but that's it. Not that interesting.
  13. Digibyte: Digibyte's PoS blockchain is spread over a 100,000+ servers, phones, computers, and nodes across the globe, aiming for the ultimate level of decentralization. DigiByte rebalances the load between the five mining algorithms by adjusting the difficulty of each so one algorithm doesn’t become dominant. The algorithm's asymmetric difficulty has gained notoriety and been deployed in many other blockchains.DigiByte’s adoption over the past four years has been slow. It’s still a relatively obscure currency compared its competitors. The DigiByte website offers a lot of great marketing copy and buzzwords. However, there’s not much technical information about what they have planned for the future. You could say Digibyte is like Bitcoin, but with shorter blocktimes and a multi-algorithm. However, that's not really a difference big enough to truly set themselves apart from Bitcoin, since these technologies could be implemented by any blockchain without much difficulty. Their decentralization is probably their strongest asset, however, this also change quickly if the currency takes off and big miners decide to go into Digibyte.
  14. Bitcoin Diamond Asic resistant Bitcoin and Copycat

Market 2 - Platform

Most of the cryptos here have smart contracts and allow dapps (Decentralized apps) to be build on their platform and to use their token as an exchange of value between dapp services.
  1. Ethereum: 2nd generation blockchain that allows the use of smart contracts. Bad scalability currently, though this concern could be alleviated by the soon to be implemented Lightning Network aka Plasma and its Sharding concept.
  2. EOS: Promising technology that wants to be able do everything, from smart contracts like Ethereum, scalability similar to Nano with 1000 tx/second + near instant transactions and zero fees, to also wanting to be a platform for dapps. However, EOS doesn't have a product yet and everything is just promises still. Highly overvalued right now. However, there are lots of red flags, have dumped $500 million Ether over the last 2 months and possibly bought back EOS to increase the size of their ICO, which has been going on for over a year and has raised several billion dollars. All in all, their market cap is way too high for that and not even having a product.
  3. Cardano: Similar to Ethereum/EOS, however, only promises made with no delivery yet, highly overrated right now. Interesting concept though. Market cap way too high for not even having a product. Somewhat promising technology.
  4. VeChain: Singapore-based project that’s building a business enterprise platform and inventory tracking system. Examples are verifying genuine luxury goods and food supply chains. Has one of the strongest communities in the crypto world. Most hyped token of all, with merit though.
  5. Neo: Neo is a platform, similar to Eth, but more extensive, allowing dapps and smart contracts, but with a different smart contract gas system, consensus mechanism (PoS vs. dBfT), governance model, fixed vs unfixed supply, expensive contracts vs nearly free contracts, different ideologies for real world adoption. There are currently only 9 nodes, each of which are being run by a company/entity hand selected by the NEO council (most of which are located in china) and are under contract. This means that although the locations of the nodes may differ, ultimately the neo council can bring them down due to their legal contracts. In fact this has been done in the past when the neo council was moving 50 million neo that had been locked up. Also dbft (or neo's implmentation of it) has failed underload causing network outages during major icos. The first step in decentralization is that the NEO Counsel will select trusted nodes (Universities, business partners, etc.) and slowly become less centralized that way. The final step in decentralization will be allowing NEO holders to vote for new nodes, similar to a DPoS system (ARK/EOS/LISK). NEO has a regulation/government friendly ideology. Finally they are trying to work undewith the Chinese government in regards to regulations. If for some reason they wanted it shut down, they could just shut it down.
  6. Stellar: PoS system, similar goals as Ripple, but more of a platform than only a currency. 80% of Stellar are owned by Stellar.org still, making the currency centralized.
  7. Ethereum classic: Original Ethereum that decided not to fork after a hack. The Ethereum that we know is its fork. Uninteresing, because it has a lot of less resources than Ethereum now and a lot less community support.
  8. Ziliqa: Zilliqa is building a new way of sharding. 2400 tpx already tested, 10,000 tps soon possible by being linearly scalable with the number of nodes. That means, the more nodes, the faster the network gets. They are looking at implementing privacy as well.
  9. QTUM: Enables Smart contracts on the Bitcoin blockchain. Useful.
  10. Icon: Korean ethereum. Decentralized application platform that's building communities in partnership with banks, insurance providers, hospitals, and universities. Focused on ID verification and payments. No big differentiators to the other 20 Ethereums, except that is has a product. That is a plus. Maybe cheap alternative to Ethereum.
  11. LISK: Lisk's difference to other BaaS is that side chains are independent to the main chain and have to have their own nodes. Similar to neo whole allows dapps to deploy their blockchain to. However, Lisk is currently somewhat centralized with a small group of members owning more than 50% of the delegated positions. Lisk plans to change the consensus algorithm for that reason in the near future.
  12. Rchain: Similar to Ethereum with smart contract, though much more scalable at an expected 40,000 TPS and possible 100,000 TPS. Not launched yet. No product launched yet, though promising technology. Not overvalued, probably at the right price right now.
  13. ARDR: Similar to Lisk. Ardor is a public blockchain platform that will allow people to utilize the blockchain technology of Nxt through the use of child chains. A child chain, which is a ‘light’ blockchain that can be customized to a certain extent, is designed to allow easy self-deploy for your own blockchain. Nxt claims that users will "not need to worry" about security, as that part is now handled by the main chain (Ardor). This is the chief innovation of Ardor. Ardor was evolved from NXT by the same company. NEM started as a NXT clone.
  14. Ontology: Similar to Neo. Interesting coin
  15. Bytom: Bytom is an interactive protocol of multiple byte assets. Heterogeneous byte-assets (indigenous digital currency, digital assets) that operate in different forms on the Bytom Blockchain and atomic assets (warrants, securities, dividends, bonds, intelligence information, forecasting information and other information that exist in the physical world) can be registered, exchanged, gambled and engaged in other more complicated and contract-based interoperations via Bytom.
  16. Nxt: Similar to Lisk
  17. Stratis: Different to LISK, Stratis will allow businesses and organizations to create their own blockchain according to their own needs, but secured on the parent Stratis chain. Stratis’s simple interface will allow organizations to quickly and easily deploy and/or test blockchain functionality of the Ethereum, BitShares, BitCoin, Lisk and Stratis environements.
  18. Status: Status provides access to all of Ethereum’s decentralized applications (dapps) through an app on your smartphone. It opens the door to mass adoption of Ethereum dapps by targeting the fastest growing computer segment in the world – smartphone users.16. Ark: Fork of Lisk that focuses on a smaller feature set. Ark wallets can only vote for one delegate at a time which forces delegates to compete against each other and makes cartel formations incredibly hard, if not impossible.
  19. Neblio: Similar to Neo, but 30x smaller market cap.
  20. NEM: Is similar to Neo No marketing team, very high market cap for little clarilty what they do.
  21. Bancor: Bancor is a Decentralized Liquidity Network that allows you to hold any Ethereum token and convert it to any other token in the network, with no counter party, at an automatically calculated price, using a simple web wallet.
  22. Dragonchain: The Purpose of DragonChain is to help companies quickly and easily incorporate blockchain into their business applications. Many companies might be interested in making this transition because of the benefits associated with serving clients over a blockchain – increased efficiency and security for transactions, a reduction of costs from eliminating potential fraud and scams, etc.
  23. Skycoin: Transactions with zero fees that take apparently two seconds, unlimited transaction rate, no need for miners and block rewards, low power usage, all of the usual cryptocurrency technical vulnerabilities fixed, a consensus mechanism superior to anything that exists, resistant to all conceivable threats (government censorship, community infighting, cybenucleaconventional warfare, etc). Skycoin has their own consensus algorithm known as Obelisk written and published academically by an early developer of Ethereum. Obelisk is a non-energy intensive consensus algorithm based on a concept called ‘web of trust dynamics’ which is completely different to PoW, PoS, and their derivatives. Skywire, the flagship application of Skycoin, has the ambitious goal of decentralizing the internet at the hardware level and is about to begin the testnet in April. However, this is just one of the many facets of the Skycoin ecosystem. Skywire will not only provide decentralized bandwidth but also storage and computation, completing the holy trinity of commodities essential for the new internet. Skycion a smear campaign launched against it, though they seem legit and reliable. Thus, they are probably undervalued.

Market 3 - Ecosystem

The 3rd market with 11 coins is comprised of ecosystem coins, which aim to strengthen the ease of use within the crypto space through decentralized exchanges, open standards for apps and more
  1. Nebulas: Similar to how Google indexes webpages Nebulas will index blockchain projects, smart contracts & data using the Nebulas rank algorithm that sifts & sorts the data. Developers rewarded NAS to develop & deploy on NAS chain. Nebulas calls this developer incentive protocol – basically rewards are issued based on how often dapp/contract etc. is used, the more the better the rewards and Proof of devotion. Works like DPoS except the best, most economically incentivised developers (Bookkeeppers) get the forging spots. Ensuring brains stay with the project (Cross between PoI & PoS). 2,400 TPS+, DAG used to solve the inter-transaction dependencies in the PEE (Parallel Execution Environment) feature, first crypto Wallet that supports the Lightening Network.
  2. Waves: Decentralized exchange and crowdfunding platform. Let’s companies and projects to issue and manage their own digital coin tokens to raise money.
  3. Salt: Leveraging blockchain assets to secure cash loands. Plans to offer cash loans in traditional currencies, backed by your cryptocurrency assets. Allows lenders worldwide to skip credit checks for easier access to affordable loans.
  4. CHAINLINK: ChainLink is a decentralized oracle service, the first of its kind. Oracles are defined as an ‘agent’ that finds and verifies real-world occurrences and submits this information to a blockchain to be used in smart contracts.With ChainLink, smart contract users can use the network’s oracles to retrieve data from off-chain application program interfaces (APIs), data pools, and other resources and integrate them into the blockchain and smart contracts. Basically, ChainLink takes information that is external to blockchain applications and puts it on-chain. The difference to Aeternity is that Chainlink deploys the smart contracts on the Ethereum blockchain while Aeternity has its own chain.
  5. WTC: Combines blockchain with IoT to create a management system for supply chains Interesting
  6. Ethos unifyies all cryptos. Ethos is building a multi-cryptocurrency phone wallet. The team is also building an investment diversification tool and a social network
  7. Aion: Aion is the token that pays for services on the Aeternity platform.
  8. USDT: is no cryptocurrency really, but a replacement for dollar for trading After months of asking for proof of dollar backing, still no response from Tether.

Market 4 - Privacy

The 4th market are privacy coins. As you might know, Bitcoin is not anonymous. If the IRS or any other party asks an exchange who is the identity behind a specific Bitcoin address, they know who you are and can track back almost all of the Bitcoin transactions you have ever made and all your account balances. Privacy coins aim to prevent exactly that through address fungability, which changes addresses constantly, IP obfuscation and more. There are 2 types of privacy coins, one with completely privacy and one with optional privacy. Optional Privacy coins like Dash and Nav have the advantage of more user friendliness over completely privacy coins such as Monero and Enigma.
  1. Monero: Currently most popular privacy coin, though with a very high market cap. Since their privacy is all on chain, all prior transactions would be deanonymized if their protocol is ever cracked. This requires a quantum computing attack though. PIVX is better in that regard.
  2. Zcash: A decentralized and open-source cryptocurrency that hide the sender, recipient, and value of transactions. Offers users the option to make transactions public later for auditing. Decent privacy coin, though no default privacy
  3. Verge: Calls itself privacy coin without providing private transactions, multiple problems over the last weeks has a toxic community, and way too much hype for what they have.
  4. Bytecoin: First privacy-focused cryptocurrency with anonymous transactions. Bytecoin’s code was later adapted to create Monero, the more well-known anonymous cryptocurrency. Has several scam accusations, 80% pre-mine, bad devs, bad tech
  5. Bitcoin Private: A merge fork of Bitcoin and Zclassic with Zclassic being a fork of Zcash with the difference of a lack of a founders fee required to mine a valid block. This promotes a fair distribution, preventing centralized coin ownership and control. Bitcoin private offers the optional ability to keep the sender, receiver, and amount private in a given transaction. However, this is already offered by several good privacy coins (Monero, PIVX) and Bitcoin private doesn't offer much more beyond this.
  6. Komodo: The Komodo blockchain platform uses Komodo’s open-source cryptocurrency for doing transparent, anonymous, private, and fungible transactions. They are then made ultra-secure using Bitcoin’s blockchain via a Delayed Proof of Work (dPoW) protocol and decentralized crowdfunding (ICO) platform to remove middlemen from project funding. Offers services for startups to create and manage their own Blockchains.
  7. PIVX: As a fork of Dash, PIVX uses an advanced implementation of the Zerocoin protocol to provide it’s privacy. This is a form of zeroknowledge proofs, which allow users to spend ‘Zerocoins’ that have no link back to them. Unlike Zcash u have denominations in PIVX, so they can’t track users by their payment amount being equal to the amount of ‘minted’ coins, because everyone uses the same denominations. PIVX is also implementing Bulletproofs, just like Monero, and this will take care of arguably the biggest weakness of zeroknowledge protocols: the trusted setup.
  8. Zcoin: PoW cryptocurrency. Private financial transactions, enabled by the Zerocoin Protocol. Zcoin is the first full implementation of the Zerocoin Protocol, which allows users to have complete privacy via Zero-Knowledge cryptographic proofs.
  9. Enigma: Monero is to Bitcoin what enigma is to Ethereum. Enigma is for making the data used in smart contracts private. More of a platform for dapps than a currency like Monero. Very promising.
  10. Navcoin: Like bitcoin but with added privacy and pos and 1,170 tps, but only because of very short 30 second block times. Though, privacy is optional, but aims to be more user friendly than Monero. However, doesn't really decide if it wants to be a privacy coin or not. Same as Zcash.Strong technology, non-shady team.
  11. Tenx: Raised 80 million, offers cryptocurrency-linked credit cards that let you spend virtual money in real life. Developing a series of payment platforms to make spending cryptocurrency easier. However, the question is if full privacy coins will be hindered in growth through government regulations and optional privacy coins will become more successful through ease of use and no regulatory hindrance.

Market 5 - Currency Exchange Tool

Due to the sheer number of different cryptocurrencies, exchanging one currency for the other it still cumbersome. Further, merchants don’t want to deal with overcluttered options of accepting cryptocurrencies. This is where exchange tool like Req come in, which allow easy and simple exchange of currencies.
  1. Cryptonex: Fiat and currency exchange between various blockchain services, similar to REQ.
  2. QASH: Qash is used to fuel its liquid platform which will be an exchange that will distribute their liquidity pool. Its product, the Worldbook is a multi-exchange order book that matches crypto to crypto, and crypto to fiat and the reverse across all currencies. E.g., someone is selling Bitcoin is USD on exchange1 not owned by Quoine and someone is buying Bitcoin in EURO on exchange 2 not owned by Quoine. If the forex conversions and crypto conversions match then the trade will go through and the Worldbook will match it, it'll make the sale and the purchase on either exchange and each user will get what they wanted, which means exchanges with lower liquidity if they join the Worldbook will be able to fill orders and take trade fees they otherwise would miss out on.They turned it on to test it a few months ago for an hour or so and their exchange was the top exchange in the world by 4x volume for the day because all Worldbook trades ran through it. Binance wants BNB to be used on their one exchange. Qash wants their QASH token embedded in all of their partners. More info here https://www.reddit.com/CryptoCurrency/comments/8a8lnwhich_are_your_top_5_favourite_coins_out_of_the/dwyjcbb/?context=3
  3. Kyber: network Exchange between cryptocurrencies, similar to REQ. Features automatic coin conversions for payments. Also offers payment tools for developers and a cryptocurrency wallet.
  4. Achain: Building a boundless blockchain world like Req .
  5. Req: Exchange between cryptocurrencies.
  6. Bitshares: Exchange between cryptocurrencies. Noteworthy are the 1.5 second average block times and throughput potential of 100,000 transactions per second with currently 2,400 TPS having been proven. However, bitshares had several Scam accusations in the past.
  7. Loopring: A protocol that will enable higher liquidity between exchanges and personal wallets.
  8. ZRX: Open standard for dapps. Open, permissionless protocol allowing for ERC20 tokens to be traded on the Ethereum blockchain. In 0x protocol, orders are transported off-chain, massively reducing gas costs and eliminating blockchain bloat. Relayers help broadcast orders and collect a fee each time they facilitate a trade. Anyone can build a relayer.

Market 6 - Gaming

With an industry size of $108B worldwide, Gaming is one of the largest markets in the world. For sure, cryptocurrencies will want to have a share of that pie.
  1. Storm: Mobile game currency on a platform with 9 million players.
  2. Fun: A platform for casino operators to host trustless, provably-fair gambling through the use of smart contracts, as well as creating their own implementation of state channels for scalability.
  3. Electroneum: Mobile game currency They have lots of technical problems, such as several 51% attacks
  4. Wax: Marketplace to trade in-game items

Market 7 - Misc

There are various markets being tapped right now. They are all summed up under misc.
  1. OMG: Omise is designed to enable financial services for people without bank accounts. It works worldwide and with both traditional money and cryptocurrencies.
  2. Power ledger: Australian blockchain-based cryptocurrency and energy trading platform that allows for decentralized selling and buying of renewable energy. Unique market and rather untapped market in the crypto space.
  3. Populous: A platform that connects business owners and invoice buyers without middlemen. Invoice sellers get cash flow to fund their business and invoice buyers earn interest. Similar to OMG, small market.
  4. Monacoin: The first Japanese cryptocurrency. Focused on micro-transactions and based on a popular internet meme of a type-written cat. This makes it similar to Dogecoin. Very niche, tiny market.
  5. Revain: Legitimizing reviews via the blockchain. Interesting concept, though market not as big.
  6. Augur: Platform to forecast and make wagers on the outcome of real-world events (AKA decentralized predictions). Uses predictions for a “wisdom of the crowd” search engine. Not launched yet.
  7. Substratum: Revolutionzing hosting industry via per request billing as a decentralized internet hosting system. Uses a global network of private computers to create the free and open internet of the future. Participants earn cryptocurrency. Interesting concept.
  8. Veritaseum: Is supposed to be a peer to peer gateway, though it looks like very much like a scam.
  9. TRON: Tronix is looking to capitalize on ownership of internet data to content creators. However, they plagiarized their white paper, which is a no go. They apologized, so it needs to be seen how they will conduct themselves in the future. Extremely high market cap for not having a product, nor proof of concept.
  10. Syscoin: A cryptocurrency with a decentralized marketplace that lets people buy and sell products directly without third parties. Trying to remove middlemen like eBay and Amazon.
  11. Hshare: Most likely scam because of no code changes, most likely pump and dump scheme, dead community.
  12. BAT: An Ethereum-based token that can be exchanged between content creators, users, and advertisers. Decentralized ad-network that pays based on engagement and attention.
  13. Dent: Decentralizeed exchange of mobile data, enabling mobile data to be marketed, purchased or distributed, so that users can quickly buy or sell data from any user to another one.
  14. Ncash: End to end encrypted Identification system for retailers to better serve their customers .
  15. Factom Secure record-keeping system that allows companies to store their data directly on the Blockchain. The goal is to make records more transparent and trustworthy .

Market 8 - Social network

Web 2.0 is still going strong and Web 3.0 is not going to ignore it. There are several gaming tokens already out there and a few with decent traction already, such as Steem, which is Reddit with voting through money is a very interesting one.
  1. Mithril: As users create content via social media, they will be rewarded for their contribution, the better the contribution, the more they will earn
  2. Steem: Like Reddit, but voting with money. Already launched product and Alexa rank 1,000 Thumbs up.
  3. Rdd: Reddcoin makes the process of sending and receiving money fun and rewarding for everyone. Reddcoin is dedicated to one thing – tipping on social networks as a way to bring cryptocurrency awareness and experience to the general public.
  4. Kin: Token for the platform Kik. Kik has a massive user base of 400 million people. Replacing paying with FIAT with paying with KIN might get this token to mass adoption very quickly.

Market 9 - Fee token

Popular exchanges realized that they can make a few billion dollars more by launching their own token. Owning these tokens gives you a reduction of trading fees. Very handy and BNB (Binance Coin) has been one of the most resilient tokens, which have withstood most market drops over the last weeks and was among the very few coins that could show growth.
  1. BNB: Fee token for Binance
  2. Gas: Not a Fee token for an exchange, but it is a dividend paid out on Neo and a currency that can be used to purchase services for dapps.
  3. Kucoin: Fee token for Kucoin

Market 10 - Decentralized Data Storage

Currently, data storage happens with large companies or data centers that are prone to failure or losing data. Decentralized data storage makes loss of data almost impossible by distributing your files to numerous clients that hold tiny pieces of your data. Remember Torrents? Torrents use a peer-to-peer network. It is similar to that. Many users maintain copies of the same file, when someone wants a copy of that file, they send a request to the peer-to-peer network., users who have the file, known as seeds, send fragments of the file to the requester., he requester receives many fragments from many different seeds, and the torrent software recompiles these fragments to form the original file.
  1. Gbyte: Byteball data is stored and ordered using directed acyclic graph (DAG) rather than blockchain. This allows all users to secure each other's data by referencing earlier data units created by other users, and also removes scalability limits common for blockchains, such as blocksize issue.
  2. Siacoin: Siacoin is decentralized storage platform. Distributes encrypted files to thousands of private users who get paid for renting out their disk space. Anybody with siacoins can rent storage from hosts on Sia. This is accomplish via "smart" storage contracts stored on the Sia blockchain. The smart contract provides a payment to the host only after the host has kept the file for a given amount of time. If the host loses the file, the host does not get paid.
  3. Maidsafecoin: MaidSafe stands for Massive Array of Internet Disks, Secure Access for Everyone.Instead of working with data centers and servers that are common today and are vulnerable to data theft and monitoring, SAFE’s network uses advanced P2P technology to bring together the spare computing capacity of all SAFE users and create a global network. You can think of SAFE as a crowd-sourced internet. All data and applications reside in this network. It’s an autonomous network that automatically sets prices and distributes data and rents out hard drive disk space with a Blockchain-based storage solutions.When you upload a file to the network, such as a photo, it will be broken into pieces, hashed, and encrypted. The data is then randomly distributed across the network. Redundant copies of the data are created as well so that if someone storing your file turns off their computer, you will still have access to your data. And don’t worry, even with pieces of your data on other people’s computers, they won’t be able to read them. You can earn MadeSafeCoins by participating in storing data pieces from the network on your computer and thus earning a Proof of Resource.
  4. Storj: Storj aims to become a cloud storage platform that can’t be censored or monitored, or have downtime. Your files are encrypted, shredded into little pieces called 'shards', and stored in a decentralized network of computers around the globe. No one but you has a complete copy of your file, not even in an encrypted form.

Market 11 - Cloud computing

Obviously, renting computing power, one of the biggest emerging markets as of recent years, e.g. AWS and Digital Ocean, is also a service, which can be bought and managed via the blockchain.
  1. Golem: Allows easy use of Supercomputer in exchange for tokens. People worldwide can rent out their computers to the network and get paid for that service with Golem tokens.
  2. Elf: Allows easy use of Cloud computing in exchange for tokens.

Market 12 - Stablecoin

Last but not least, there are 2 stablecoins that have established themselves within the market. A stable coin is a coin that wants to be independent of the volatility of the crypto markets. This has worked out pretty well for Maker and DGD, accomplished through a carefully diversified currency fund and backing each token by 1g or real gold respectively. DO NOT CONFUSE DGD AND MAKER with their STABLE COINS DGX and DAI. DGD and MAKER are volatile, because they are the companies of DGX and DAI. DGX and DAI are the stable coins.
  1. DGD: Platform of the Stablecoin DGX. Every DGX coin is backed by 1g of gold and make use proof of asset consensus.
  2. Maker: Platform of the Stablecoin DAI that doesn't vary much in price through widespread and smart diversification of assets.
EDIT: Added a risk factor from 0 to 10. The baseline is 2 for any crypto. Significant scandals, mishaps, shady practices, questionable technology, increase the risk factor. Not having a product yet automatically means a risk factor of 6. Strong adoption and thus strong scrutiny or positive community lower the risk factor.
EDIT2: Added a subjective potential factor from 0 to 10, where its overall potential and a small or big market cap is factored in. Bitcoin with lots of potential only gets a 9, because of its massive market cap, because if Bitcoin goes 10x, smaller coins go 100x, PIVX gets a 10 for being as good as Monero while carrying a 10x smaller market cap, which would make PIVX go 100x if Monero goes 10x.
submitted by galan77 to CryptoCurrency [link] [comments]

Which are your top 5 coins out of the top100? An analysis.

I am putting together my investment portfolio for 2018 and made a complete summary of the current Top 100. Interestingly, I noticed that all coins can be categorized into 12 markets. Which markets do you think will play the biggest role in the coming year?
Here is a complete overview of all coins in an excel sheet including name, a full description, market, TPS, risk profile, time since launch (negative numbers mean that they are launching that many months in the future) and market cap. You can also sort by all of these fields of course. Coins written in bold are the strongest contenders within their market either due to having the best technology or having a small market cap and still excellent technology and potential. https://docs.google.com/spreadsheets/d/1s8PHcNvvjuy848q18py_CGcu8elRGQAUIf86EYh4QZo/edit#gid=0
The 12 markets are
  1. Currency 13 coins
  2. Platform 25 coins
  3. Ecosystem 9 coins
  4. Privacy 9 coins
  5. Currency Exchange Tool 8 coins
  6. Gaming & Gambling 4 coins
  7. Misc 15 coins
  8. Social Network 4 coins
  9. Fee Token 3 coins
  10. Decentralized Data Storage 4 coins
  11. Cloud Computing 2 coins
  12. Stable Coin 3 coins
Before we look at the individual markets, we need to take a look of the overall market and its biggest issue, scalability, first:
Cryptocurrencies aim to be a decentralized currency that can be used worldwide. Their goal is to replace dollar, Euro, Yen, all FIAT currencies globally. The coin that will achieve that will be worth several trillion dollars.
Bitcoin can only process 7 transactions per second (TPS) currently. In order to replace all FIAT, it would need to perform at least at VISA levels, which usually processes around 3,000 TPS, up to 25,000 TPS during peak times and a maximum of 64,000 TPS. That means that this cryptocurrency would need to be able to perform at least several thousand TPS. However, a ground breaking technology should not look at current technology to set a goal for its use, i.e. estimating the number of emails sent in 1990 based on the number of faxes sent wasn’t a good estimate.
For that reason, 10,000 TPS is the absolute baseline for a cryptocurrency that wants to replace FIAT. This brings me to IOTA, which wants to connect all 80 billion IoT devices that are expected to exist by 2025, which constantly communicate with each other, possibly creating 80 billion or more transactions per second. This is the benchmark that cryptocurrencies should be aiming for. Currently, 8 billion devices are connected to the Internet.
With its Lightning network recently launched, Bitcoin is realistically looking at 50,000 possible TPS soon. Other notable cryptocurrencies besides IOTA and Bitcoin are Nano with 7,000 TPS already tested, Dash with several billion TPS possible with Masternodes, Neo, LISK and RHOC with 100,000 TPS by 2020, Ripple with 50,000 TPS, Ethereum with 10,000 TPS with Sharding.
However, it needs to be said that scalability usually goes at the cost of decentralization and security. So, it needs to be seen, which of these technologies can prove themselves decentralized while maintaining high TPS.
Without further ado, here are the coins of the first market. Each market is sorted by market cap.

Market 1 - Currency:

  1. Bitcoin: 1st generation blockchain with currently bad scalability, though the implementation of the Lightning Network looks promising and could alleviate most scalability and high energy use concerns.
  2. Ripple: Centralized currency that might become very successful due to tight involvement with banks and cross-border payments for financial institutions; banks and companies like Western Union and Moneygram (who they are currently working with) as customers customers. However, it seems they are aiming for more decentralization now.https://ripple.com/dev-blog/decentralization-strategy-update/. Has high TPS due to Proof of Correctness algorithm.
  3. Bitcoin Cash: Bitcoin fork with the difference of having an 8 times bigger block size, making it 8 times more scalable than Bitcoin currently. Further block size increases are planned. Only significant difference is bigger block size while big blocks lead to further problems that don't seem to do well beyond a few thousand TPS. Opponents to a block size argue that increasing the block size limit is unimaginative, offers only temporary relief, and damages decentralization by increasing costs of participation. In order to preserve decentralization, system requirements to participate should be kept low. To understand this, consider an extreme example: very big blocks (1GB+) would require data center level resources to validate the blockchain. This would preclude all but the wealthiest individuals from participating.Community seems more open than Bitcoin's though.
  4. Litecoin : Little brother of Bitcoin. Bitcoin fork with different mining algorithm but not much else.Copies everything that Bitcoin does pretty much. Lack of real innovation.
  5. Dash: Dash (Digital Cash) is a fork of Bitcoin and focuses on user ease. It has very fast transactions within seconds, low fees and uses Proof of Service from Masternodes for consensus. They are currently building a system called Evolution which will allow users to send money using usernames and merchants will find it easy to integrate Dash using the API. You could say Dash is trying to be a PayPal of cryptocurrencies. Currently, cryptocurrencies must choose between decentralization, speed, scalability and can pick only 2. With Masternodes, Dash picked speed and scalability at some cost of decentralization, since with Masternodes the voting power is shifted towards Masternodes, which are run by Dash users who own the most Dash.
  6. IOTA: 3rd generation blockchain called Tangle, which has a high scalability, no fees and instant transactions. IOTA aims to be the connective layer between all 80 billion IOT devices that are expected to be connected to the Internet in 2025, possibly creating 80 billion transactions per second or 800 billion TPS, who knows. However, it needs to be seen if the Tangle can keep up with this scalability and iron out its security issues that have not yet been completely resolved.
  7. Nano: 3rd generation blockchain called Block Lattice with high scalability, no fees and instant transactions. Unlike IOTA, Nano only wants to be a payment processor and nothing else, for now at least. With Nano, every user has their own blockchain and has to perform a small amount of computing for each transaction, which makes Nano perform at 300 TPS with no problems and 7,000 TPS have also been tested successfully. Very promising 3rd gen technology and strong focus on only being the fastest currency without trying to be everything.
  8. Decred: As mining operations have grown, Bitcoin’s decision-making process has become more centralized, with the largest mining companies holding large amounts of power over the Bitcoin improvement process. Decred focuses heavily on decentralization with their PoW Pos hybrid governance system to become what Bitcoin was set out to be. They will soon implement the Lightning Network to scale up. While there do not seem to be more differences to Bitcoin besides the novel hybrid consensus algorithm, which Ethereum, Aeternity and Bitcoin Atom are also implementing, the welcoming and positive Decred community and professoinal team add another level of potential to the coin.
  9. Bitcoin Atom: Atomic Swaps and hybrid consenus. This looks like the only Bitcoin clone that actually is looking to innovate next to Bitcoin Cash.
  10. Dogecoin: Litecoin fork, fantastic community, though lagging behind a bit in technology.
  11. Bitcoin Gold: A bit better security than bitcoin through ASIC resistant algorithm, but that's it. Not that interesting.
  12. Digibyte: Digibyte's PoS blockchain is spread over a 100,000+ servers, phones, computers, and nodes across the globe, aiming for the ultimate level of decentralization. DigiByte’s adoption over the past four years has been slow. The DigiByte website offers a lot of great marketing copy and buzzwords. However, there’s not much technical information about what they have planned for the future. You could say Digibyte is like Bitcoin, but with shorter blocktimes and a multi-algorithm. However, that's not really a difference big enough to truly set themselves apart from Bitcoin, since these technologies could be implemented by any blockchain without much difficulty. Their decentralization is probably their strongest asset, however, this also change quickly if the currency takes off and big miners decide to go into Digibyte.
  13. Bitcoin Diamond Asic resistant Bitcoin and Copycat

Market 2 - Platform

Most of the cryptos here have smart contracts and allow dapps (Decentralized apps) to be build on their platform and to use their token as an exchange of value between dapp services.
  1. Ethereum: 2nd generation blockchain that allows the use of smart contracts. Bad scalability currently, though this concern could be alleviated by the soon to be implemented Lightning Network aka the Raiden Network, Plasma and its Sharding concept.
  2. EOS: Promising technology that wants to be able do everything, from smart contracts like Ethereum, scalability similar to Nano with 1000 tx/second + near instant transactions and zero fees, to also wanting to be a platform for dapps. However, EOS doesn't have a product yet and everything is just promises still. There are lots of red flags, e.g. having dumped $500 million Ether over the last 2 months and possibly bought back EOS to increase the size of their ICO, which has been going on for over a year and has raised several billion dollars. All in all, their market cap is way too high for that and not even having a product. However, Mainnet release is in 1 month, which could change everything.
  3. Cardano: Similar to Ethereum/EOS, however, only promises made with no delivery yet, highly overrated right now. Interesting concept though. Market cap way too high for not even having a product. Somewhat promising technology.
  4. VeChain: Singapore-based project that’s building a business enterprise platform and inventory tracking system. Examples are verifying genuine luxury goods and food supply chains. Has one of the strongest communities in the crypto world. Most hyped token of all, with merit though.
  5. Neo: Neo is a platform, similar to Eth, but more extensive, allowing dapps and smart contracts, but with a different smart contract gas system, consensus mechanism (PoS vs. dBfT), governance model, fixed vs unfixed supply, expensive contracts vs nearly free contracts, different ideologies for real world adoption. There are currently only 9 nodes, each of which are being run by a company/entity hand selected by the NEO council (most of which are located in china) and are under contract. This means that although the locations of the nodes may differ, ultimately the neo council can bring them down due to their legal contracts. In fact this has been done in the past when the neo council was moving 50 million neo that had been locked up. Also dbft (or neo's implmentation of it) has failed underload causing network outages during major icos. The first step in decentralization is that the NEO Counsel will select trusted nodes (Universities, business partners, etc.) and slowly become less centralized that way. The final step in decentralization will be allowing NEO holders to vote for new nodes, similar to a DPoS system (ARK/EOS/LISK). NEO has a regulation/government friendly ideology. Finally they are trying to work undewith the Chinese government in regards to regulations. If for some reason they wanted it shut down, they could just shut it down.
  6. Stellar:PoS system, similar goals as Ripple, but more of a platform than only a currency. 80% of Stellar are owned by Stellar.org still, making the currency centralized.
  7. Ethereum classic: Original Ethereum that decided not to fork after a hack. The Ethereum that we know is its fork. Uninteresing, because it has a lot of less resources than Ethereum now and a lot less community support.
  8. Ziliqa: Zilliqa is building a new way of sharding. 2400 tpx already tested, 10,000 tps soon possible by being linearly scalable with the number of nodes. That means, the more nodes, the faster the network gets. They are looking at implementing privacy as well.
  9. QTUM: Enables Smart contracts on the Bitcoin blockchain. Useful.
  10. Icon: Korean ethereum. Decentralized application platform that's building communities in partnership with banks, insurance providers, hospitals, and universities. Focused on ID verification and payments.
  11. LISK: Lisk's difference to other BaaS is that side chains are independent to the main chain and have to have their own nodes. Similar to neo whole allows dapps to deploy their blockchain to. Like most cryptocurrencies, Lisk is currently somewhat centralized with a small group of members owning more than 50% of the delegated positions. Lisk plans to change the consensus algorithm for that reason in the near future.
  12. Rchain: Similar to Ethereum with smart contract, though much more scalable at an expected 40,000 TPS and possible 100,000 TPS. Not launched yet. No product launched yet, though promising technology. Not overvalued, probably at the right price right now.
  13. ARDR: Similar to Lisk. Ardor is a public blockchain platform that will allow people to utilize the blockchain technology of Nxt through the use of child chains. A child chain, which is a ‘light’ blockchain that can be customized to a certain extent, is designed to allow easy self-deploy for your own blockchain. Nxt claims that users will "not need to worry" about security, as that part is now handled by the main chain (Ardor). This is the chief innovation of Ardor. Ardor was evolved from NXT by the same company. NEM started as a NXT clone.
  14. Ontology: Similar to Neo. Interesting coin
  15. Bytom: Bytom is an interactive protocol of multiple byte assets. Heterogeneous byte-assets (indigenous digital currency, digital assets) that operate in different forms on the Bytom Blockchain and atomic assets (warrants, securities, dividends, bonds, intelligence information, forecasting information and other information that exist in the physical world) can be registered, exchanged, gambled and engaged in other more complicated and contract-based interoperations via Bytom.
  16. Nxt: Similar to Lisk
  17. Aeternity: We’ve seen recently, that it’s difficult to scale the execution of smart contracts on the blockchain. Crypto Kitties is a great example. Something as simple as creating and trading unique assets on Ethereum bogged the network down when transaction volume soared. Ethereum and Zilliqa address this problem with Sharding. Aeternity focuses on increasing the scalability of smart contracts and dapps by moving smart contracts off-chain. Instead of running on the blockchain, smart contracts on Aeternity run in private state channels between the parties involved in the contracts. State channels are lines of communication between parties in a smart contract. They don’t touch the blockchain unless they need to for adjudication or transfer of value. Because they’re off-chain, state channel contracts can operate much more efficiently. An important aspect of smart contract and dapp development is access to outside data sources. This could mean checking the weather in London, score of a football game, or price of gold. Oracles provide access to data hosted outside the blockchain. In many blockchain projects, oracles represent a security risk and potential point of failure, since they tend to be singular, centralized data streams. Aeternity proposes decentralizing oracles with their oracle machine. Doing so would make outside data immutable and unchangeable once it reaches Aeternity’s blockchain. Aeternity’s network runs on on a hybrid of proof of work and proof of stake. Founded by a long-time crypto-enthusiast and early colleague of Vitalik Buterin, Yanislav Malahov. Promising concept though not product yet
  18. Stratis: Different to LISK, Stratis will allow businesses and organizations to create their own blockchain according to their own needs, but secured on the parent Stratis chain. Stratis’s simple interface will allow organizations to quickly and easily deploy and/or test blockchain functionality of the Ethereum, BitShares, BitCoin, Lisk and Stratis environements.
  19. Status: Status provides access to all of Ethereum’s decentralized applications (dapps) through an app on your smartphone. It opens the door to mass adoption of Ethereum dapps by targeting the fastest growing computer segment in the world – smartphone users.
  20. Ark: Fork of Lisk that focuses on a smaller feature set. Ark wallets can only vote for one delegate at a time which forces delegates to compete against each other and makes cartel formations incredibly hard, if not impossible.
  21. Neblio: Similar to Neo, but at a 30x smaller market cap.
  22. NEM: Is similar to Neo. However, it has no marketing team, very high market cap for little clarilty what they do.
  23. Bancor: Bancor is a Decentralized Liquidity Network that allows you to hold any Ethereum token and convert it to any other token in the network, with no counter party, at an automatically calculated price, using a simple web wallet.
  24. Dragonchain: The Purpose of DragonChain is to help companies quickly and easily incorporate blockchain into their business applications. Many companies might be interested in making this transition because of the benefits associated with serving clients over a blockchain – increased efficiency and security for transactions, a reduction of costs from eliminating potential fraud and scams, etc.
  25. Skycoin: Transactions with zero fees that take apparently two seconds, unlimited transaction rate, no need for miners and block rewards, low power usage, all of the usual cryptocurrency technical vulnerabilities fixed, a consensus mechanism superior to anything that exists, resistant to all conceivable threats (government censorship, community infighting, cybenucleaconventional warfare, etc). Skycoin has their own consensus algorithm known as Obelisk written and published academically by an early developer of Ethereum. Obelisk is a non-energy intensive consensus algorithm based on a concept called ‘web of trust dynamics’ which is completely different to PoW, PoS, and their derivatives. Skywire, the flagship application of Skycoin, has the ambitious goal of decentralizing the internet at the hardware level and is about to begin the testnet in April. However, this is just one of the many facets of the Skycoin ecosystem. Skywire will not only provide decentralized bandwidth but also storage and computation, completing the holy trinity of commodities essential for the new internet. Skycion a smear campaign launched against it, though they seem legit and reliable. Thus, they are probably undervalued.

Market 3 - Ecosystem

The 3rd market with 11 coins is comprised of ecosystem coins, which aim to strengthen the ease of use within the crypto space through decentralized exchanges, open standards for apps and more
  1. Nebulas: Similar to how Google indexes webpages Nebulas will index blockchain projects, smart contracts & data using the Nebulas rank algorithm that sifts & sorts the data. Developers rewarded NAS to develop & deploy on NAS chain. Nebulas calls this developer incentive protocol – basically rewards are issued based on how often dapp/contract etc. is used, the more the better the rewards and Proof of devotion. Works like DPoS except the best, most economically incentivised developers (Bookkeeppers) get the forging spots. Ensuring brains stay with the project (Cross between PoI & PoS). 2,400 TPS+, DAG used to solve the inter-transaction dependencies in the PEE (Parallel Execution Environment) feature, first crypto Wallet that supports the Lightening Network.
  2. Waves: Decentralized exchange and crowdfunding platform. Let’s companies and projects to issue and manage their own digital coin tokens to raise money.
  3. Salt: Leveraging blockchain assets to secure cash loands. Plans to offer cash loans in traditional currencies, backed by your cryptocurrency assets. Allows lenders worldwide to skip credit checks for easier access to affordable loans.
  4. CHAINLINK: ChainLink is a decentralized oracle service, the first of its kind. Oracles are defined as an ‘agent’ that finds and verifies real-world occurrences and submits this information to a blockchain to be used in smart contracts.With ChainLink, smart contract users can use the network’s oracles to retrieve data from off-chain application program interfaces (APIs), data pools, and other resources and integrate them into the blockchain and smart contracts. Basically, ChainLink takes information that is external to blockchain applications and puts it on-chain. The difference to Aeternity is that Chainlink deploys the smart contracts on the Ethereum blockchain while Aeternity has its own chain.
  5. WTC: Combines blockchain with IoT to create a management system for supply chains Interesting
  6. Ethos unifyies all cryptos. Ethos is building a multi-cryptocurrency phone wallet. The team is also building an investment diversification tool and a social network
  7. Komodo: The Komodo blockchain platform uses Komodo’s open-source cryptocurrency for doing transparent, anonymous, private, and fungible transactions. They are then made ultra-secure using Bitcoin’s blockchain via a Delayed Proof of Work (dPoW) protocol and decentralized crowdfunding (ICO) platform to remove middlemen from project funding. Offers services for startups to create and manage their own Blockchains.
  8. Aion: Today, there are hundreds of blockchains. In the coming years, with widespread adoption by mainstream business and government, these will be thousands or millions. Blockchains don’t talk to each other at all right now, they are like the PCs of the 1980s. The Aion network is able to support custom blockchain architectures while still allowing for cross-chain interoperability by enabling users to exchange data between any Aion-compliant blockchains by making use of an interchain framework that allows for messages to be relayed between blockchains in a completely trust-free manner.
  9. Tenx: Raised 80 million, offers cryptocurrency-linked credit cards that let you spend virtual money in real life. Developing a series of payment platforms to make spending cryptocurrency easier.

Market 4 - Privacy

The 4th market are privacy coins. As you might know, Bitcoin is not anonymous. If the IRS or any other party asks an exchange who is the identity behind a specific Bitcoin address, they know who you are and can track back almost all of the Bitcoin transactions you have ever made and all your account balances. Privacy coins aim to prevent exactly that through address fungability, which changes addresses constantly, IP obfuscation and more. There are 2 types of privacy coins, one with completely privacy and one with optional privacy. Optional Privacy coins like Dash and Nav have the advantage of more user friendliness over completely privacy coins such as Monero and Enigma.
  1. Monero: Currently most popular privacy coin, though with a very high market cap. Since their privacy is all on chain, all prior transactions would be deanonymized if their protocol is ever cracked. This requires a quantum computing attack though. PIVX is better in that regard.
  2. Zcash: A decentralized and open-source cryptocurrency that hide the sender, recipient, and value of transactions. Offers users the option to make transactions public later for auditing. Decent privacy coin, though no default privacy
  3. Verge: Calls itself privacy coin without providing private transactions, multiple problems over the last weeks has a toxic community, and way too much hype for what they have.
  4. Bytecoin: First privacy-focused cryptocurrency with anonymous transactions. Bytecoin’s code was later adapted to create Monero, the more well-known anonymous cryptocurrency. Has several scam accusations, 80% pre-mine, bad devs, bad tech
  5. Bitcoin Private: A merge fork of Bitcoin and Zclassic with Zclassic being a fork of Zcash with the difference of a lack of a founders fee required to mine a valid block. This promotes a fair distribution, preventing centralized coin ownership and control. Bitcoin private offers the optional ability to keep the sender, receiver, and amount private in a given transaction. However, this is already offered by several good privacy coins (Monero, PIVX) and Bitcoin private doesn't offer much more beyond this.
  6. PIVX: As a fork of Dash, PIVX uses an advanced implementation of the Zerocoin protocol to provide it’s privacy. This is a form of zeroknowledge proofs, which allow users to spend ‘Zerocoins’ that have no link back to them. Unlike Zcash u have denominations in PIVX, so they can’t track users by their payment amount being equal to the amount of ‘minted’ coins, because everyone uses the same denominations. PIVX is also implementing Bulletproofs, just like Monero, and this will take care of arguably the biggest weakness of zeroknowledge protocols: the trusted setup.
  7. Zcoin: PoW cryptocurrency. Private financial transactions, enabled by the Zerocoin Protocol. Zcoin is the first full implementation of the Zerocoin Protocol, which allows users to have complete privacy via Zero-Knowledge cryptographic proofs.
  8. Enigma: Monero is to Bitcoin what enigma is to Ethereum. Enigma is for making the data used in smart contracts private. More of a platform for dapps than a currency like Monero. Very promising.
  9. Navcoin: Like bitcoin but with added privacy and pos and 1,170 tps, but only because of very short 30 second block times. Though, privacy is optional, but aims to be more user friendly than Monero. However, doesn't really decide if it wants to be a privacy coin or not. Same as Zcash.Strong technology, non-shady team.

Market 5 - Currency Exchange Tool

Due to the sheer number of different cryptocurrencies, exchanging one currency for the other it still cumbersome. Further, merchants don’t want to deal with overcluttered options of accepting cryptocurrencies. This is where exchange tool like Req come in, which allow easy and simple exchange of currencies.
  1. Cryptonex: Fiat and currency exchange between various blockchain services, similar to REQ.
  2. QASH: Qash is used to fuel its liquid platform which will be an exchange that will distribute their liquidity pool. Its product, the Worldbook is a multi-exchange order book that matches crypto to crypto, and crypto to fiat and the reverse across all currencies. E.g., someone is selling Bitcoin is USD on exchange1 not owned by Quoine and someone is buying Bitcoin in EURO on exchange 2 not owned by Quoine. They turned it on to test it a few months ago for an hour or so and their exchange was the top exchange in the world by 4x volume for the day because all Worldbook trades ran through it. Binance wants BNB to be used on their one exchange. Qash wants their QASH token embedded in all of their partners.
  3. Kyber: network Exchange between cryptocurrencies, similar to REQ. Features automatic coin conversions for payments. Also offers payment tools for developers and a cryptocurrency wallet.
  4. Achain: Building a boundless blockchain world like Req .
  5. Centrality: Centrality is a decentralized market place for dapps that are all connected together on a blockchain-powered system. Centrality aims to allow businesses to work together using blockchain technology. With Centrality, startups can collaborate through shared acquisition of customers, data, merchants, and content. That shared acquisition occurs across the Centrality blockchain, which hosts a number of decentralized apps called Scenes. Companies can use CENTRA tokens to purchase Scenes for their app, then leverage the power of the Centrality ecosystem to quickly scale. Some of Centrality's top dapps are, Skoot, a travel experience marketplace that consists of a virtual companion designed for free independent travelers and inbound visitors, Belong, a marketplace and an employee engagement platform that seems at helping business provide rewards for employees, Merge, a smart travel app that acts as a time management system, Ushare, a transports application that works across rental cars, public transport, taxi services, electric bikes and more. All of these dapps are able to communicate with each other and exchange data through Centrality.
  6. Bitshares: Exchange between cryptocurrencies. Noteworthy are the 1.5 second average block times and throughput potential of 100,000 transactions per second with currently 2,400 TPS having been proven. However, Bitshares had several Scam accusations in the past.
  7. Loopring: A protocol that will enable higher liquidity between exchanges and personal wallets by pooling all orders sent to its network and fill these orders through the order books of multiple exchanges. When using Loopring, traders never have to deposit funds into an exchange to begin trading. Even with decentralized exchanges like Ether Delta, IDex, or Bitshares, you’d have to deposit your funds onto the platform, usually via an Ethereum smart contract. But with Loopring, funds always remain in user wallets and are never locked by orders. This gives you complete autonomy over your funds while trading, allowing you to cancel, trim, or increase an order before it is executed.
  8. ZRX: Open standard for dapps. Open, permissionless protocol allowing for ERC20 tokens to be traded on the Ethereum blockchain. In 0x protocol, orders are transported off-chain, massively reducing gas costs and eliminating blockchain bloat. Relayers help broadcast orders and collect a fee each time they facilitate a trade. Anyone can build a relayer.

Market 6 - Gaming

With an industry size of $108B worldwide, Gaming is one of the largest markets in the world. For sure, cryptocurrencies will want to have a share of that pie.
  1. Storm: Mobile game currency on a platform with 9 million players.
  2. Fun: A platform for casino operators to host trustless, provably-fair gambling through the use of smart contracts, as well as creating their own implementation of state channels for scalability.
  3. Electroneum: Mobile game currency They have lots of technical problems, such as several 51% attacks
  4. Wax: Marketplace to trade in-game items

Market 7 - Misc

There are various markets being tapped right now. They are all summed up under misc.
  1. OMG: Omise is designed to enable financial services for people without bank accounts. It works worldwide and with both traditional money and cryptocurrencies.
  2. Power ledger: Australian blockchain-based cryptocurrency and energy trading platform that allows for decentralized selling and buying of renewable energy. Unique market and rather untapped market in the crypto space.
  3. Populous: Populous is a platform that connects business owners and invoice buyers without middlemen. Furthermore, it is a peer-to-peer (P2P) platform that uses blockchain to provide small and medium-sized enterprises (SMEs) a more efficient way to participate in invoice financing. Businesses can sell their outstanding invoices at a discount to quickly free up some cash. Invoice sellers get cash flow to fund their business and invoice buyers earn interest.
  4. Monacoin: The first Japanese cryptocurrency. Focused on micro-transactions and based on a popular internet meme of a type-written cat. This makes it similar to Dogecoin. Very niche, tiny market.
  5. Revain: Legitimizing reviews via the blockchain. Interesting concept, though market not as big.
  6. Augur: Platform to forecast and make wagers on the outcome of real-world events (AKA decentralized predictions). Uses predictions for a “wisdom of the crowd” search engine. Not launched yet.
  7. Substratum: Revolutionzing hosting industry via per request billing as a decentralized internet hosting system. Uses a global network of private computers to create the free and open internet of the future. Participants earn cryptocurrency. Interesting concept.
  8. Veritaseum: Is supposed to be a peer to peer gateway, though it looks like very much like a scam.
  9. TRON: Tronix is looking to capitalize on ownership of internet data to content creators. However, they plagiarized their white paper, which is a no go. They apologized, so it needs to be seen how they will conduct themselves in the future. Extremely high market cap for not having a product, nor proof of concept.
  10. Syscoin: A cryptocurrency with a decentralized marketplace that lets people buy and sell products directly without third parties. Trying to remove middlemen like eBay and Amazon.
  11. Hshare: Most likely scam because of no code changes, most likely pump and dump scheme, dead community.
  12. BAT: An Ethereum-based token that can be exchanged between content creators, users, and advertisers. Decentralized ad-network that pays based on engagement and attention.
  13. Dent: Decentralizeed exchange of mobile data, enabling mobile data to be marketed, purchased or distributed, so that users can quickly buy or sell data from any user to another one.
  14. Ncash: End to end encrypted Identification system for retailers to better serve their customers .
  15. Factom Secure record-keeping system that allows companies to store their data directly on the Blockchain. The goal is to make records more transparent and trustworthy .

Market 8 - Social network

Web 2.0 is still going strong and Web 3.0 is not going to ignore it. There are several gaming tokens already out there and a few with decent traction already, such as Steem, which is Reddit with voting through money is a very interesting one.
  1. Mithril: As users create content via social media, they will be rewarded for their contribution, the better the contribution, the more they will earn
  2. Steem: Like Reddit, but voting with money. Already launched product and Alexa rank 1,000 Thumbs up.
  3. Rdd: Reddcoin makes the process of sending and receiving money fun and rewarding for everyone. Reddcoin is dedicated to one thing – tipping on social networks as a way to bring cryptocurrency awareness and experience to the general public.
  4. Kin: Token for the platform Kik. Kik has a massive user base of 400 million people. Replacing paying with FIAT with paying with KIN might get this token to mass adoption very quickly.

Market 9 - Fee token

Popular exchanges realized that they can make a few billion dollars more by launching their own token. Owning these tokens gives you a reduction of trading fees. Very handy and BNB (Binance Coin) has been one of the most resilient tokens, which have withstood most market drops over the last weeks and was among the very few coins that could show growth.
  1. BNB: Fee token for Binance
  2. Gas: Not a Fee token for an exchange, but it is a dividend paid out on Neo and a currency that can be used to purchase services for dapps.
  3. Kucoin: Fee token for Kucoin

Market 10 - Decentralized Data Storage

Currently, data storage happens with large companies or data centers that are prone to failure or losing data. Decentralized data storage makes loss of data almost impossible by distributing your files to numerous clients that hold tiny pieces of your data. Remember Torrents? Torrents use a peer-to-peer network. It is similar to that. Many users maintain copies of the same file, when someone wants a copy of that file, they send a request to the peer-to-peer network., users who have the file, known as seeds, send fragments of the file to the requester. The requester receives many fragments from many different seeds, and the torrent software recompiles these fragments to form the original file.
  1. Gbyte: Byteball data is stored and ordered using directed acyclic graph (DAG) rather than blockchain. This allows all users to secure each other's data by referencing earlier data units created by other users, and also removes scalability limits common for blockchains, such as blocksize issue.
  2. Siacoin: Siacoin is decentralized storage platform. Distributes encrypted files to thousands of private users who get paid for renting out their disk space. Anybody with siacoins can rent storage from hosts on Sia. This is accomplish via "smart" storage contracts stored on the Sia blockchain. The smart contract provides a payment to the host only after the host has kept the file for a given amount of time. If the host loses the file, the host does not get paid.
  3. Maidsafecoin: MaidSafe stands for Massive Array of Internet Disks, Secure Access for Everyone.Instead of working with data centers and servers that are common today and are vulnerable to data theft and monitoring, You can think of SAFE as a crowd-sourced internet. It’s an autonomous network that automatically sets prices and distributes data and rents out hard drive disk space with a Blockchain-based storage solutions.When you upload a file to the network, such as a photo, it will be broken into pieces, hashed, and encrypted. Then, redundant copies of the data are created as well so that if someone storing your file turns off their computer, you will still have access to your data. And don’t worry, even with pieces of your data on other people’s computers, they won’t be able to read them. You can earn MadeSafeCoins by participating in storing data pieces from the network on your computer and thus earning a Proof of Resource.
  4. Storj: Storj aims to become a cloud storage platform that can’t be censored or monitored, or have downtime. Your files are encrypted, shredded into little pieces called 'shards', and stored in a decentralized network of computers around the globe. No one but you has a complete copy of your file, not even in an encrypted form.

Market 11 - Cloud computing

Obviously, renting computing power, one of the biggest emerging markets as of recent years, e.g. AWS and Digital Ocean, is also a service, which can be bought and managed via the blockchain.
  1. Golem: Allows easy use of Supercomputer in exchange for tokens. People worldwide can rent out their computers to the network and get paid for that service with Golem tokens.
  2. Elf: Allows easy use of Cloud computing in exchange for tokens.

Market 12 - Stablecoin

Last but not least, there are 2 stablecoins that have established themselves within the market. A stable coin is a coin that wants to be independent of the volatility of the crypto markets. This has worked out pretty well for Maker and DGD, accomplished through a carefully diversified currency fund and backing each token by 1g or real gold respectively. DO NOT CONFUSE DGD AND MAKER with their STABLE COINS DGX and DAI. DGD and MAKER are volatile, because they are the companies of DGX and DAI. DGX and DAI are the stable coins.
  1. DGD: Platform of the Stablecoin DGX. Every DGX coin is backed by 1g of gold and make use proof of asset consensus.
  2. Maker: Platform of the Stablecoin DAI that doesn't vary much in price through widespread and smart diversification of assets.
  3. USDT: is no cryptocurrency really, but a replacement for dollar for trading After months of asking for proof of dollar backing, still no response from Tether.
EDIT: Added a risk factor from 0 to 10. Significant scandals, mishaps, shady practices, questionable technology, increase the risk factor. Not having a product yet automatically means a risk factor of 6. Strong adoption and thus strong scrutiny or positive community lower the risk factor.
EDIT2: Added a subjective potential factor from 0 to 10, where its overall potential and a small or big market cap is factored in. Bitcoin with lots of potential only gets a 9, because of its massive market cap, because if Bitcoin goes 10x, smaller coins go 100x.
submitted by galan77 to ethtrader [link] [comments]

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