The Smart Asset System

The NEM blockchain powers what they call the Smart Asset System. This system is intended to be an open, customizable blockchain solution for any number of use cases built on top of simple, powerful API calls. The blockchain is secured and transactions are processed by a global network of nodes running the NEM core software, and the network is used as an API Gateway server.

This means developers looking to build blockchain powered apps don’t need to run any special NEM software as all of the NEM functionality is available by accessing API calls.

This allows for a lot of flexibility when it comes to system design and how various apps are making use of the NEM network. Apps can access the NEM API directly, access a separate server in addition to making NEM requests, or existing servers can be adapted to make use of NEM in the background.

Developers define NEM Addresses that act as containers for assets and can be updated and changed over time. An Address could represent simply a wallet holding coins or something more complicated like a document that requires signatures or an election that is collecting votes.

The developer would then create Mosaics: identical, transferable assets that represent the coins, signatures, or votes that will reside in the Addresses. This system of flexible addresses and configurable mosaics is viable for countless use cases, and since all of the NEM functionality is accessed through the NEM API, anyone can build any sort of system they dream up and hook it into the NEM blockchain with relative ease.

Proof-of-Importance and Harvesting

The NEM Blockchain employs a Proof-of-Importance algorithm (as opposed to Bitcoin’s Proof-of-Work or PIVX’s Proof-of-Stake) to achieve consensus through a process that incentivizes active participation in the network. This makes for a decentralized, nimble network of well-behaved nodes. Each node has an importance score that determines how often it can harvest  (think mining or staking in PoW or PoS systems) XEM, NEM’s native token.

Part of this system works by vesting coins: when you place coins in your wallet, they start out as unvested coins.

Over time, your coins will begin to vest or count toward the importance of your account. In order to be eligible for an importance score, your account must have at least 10000 vested XEM.

This part of the system acts just like staking coins in PoS setups but is only one part of calculating your importance.

In addition to tracking vesting, the transaction graph of the NEM network is constantly analyzed to provide information on which nodes are contributing and which are not. This means that the more transactions you send to other users and the more you use the network normally, the more important you become. The vesting process and transaction metrics result in an importance score for each node, and these scores are used to scale the likelihood of your node harvesting XEM.

Since PoI is not hardware intensive, it allows full nodes to be run on almost any machine regardless of power, preventing centralization of harvesting to those with the biggest machines.

Since it requires a time commitment via the vesting process, it prevents the “rich get richer” effect of many staking systems wherein those with the most money immediately become the biggest earners and cannot be outpaced.

In some systems like Bitcoin, mining blocks and running a network node are separate. In the NEM system, running a node to secure the network and harvesting coins is done by the same software, incentivizing running a full node and leading to more decentralization over time as harvesting becomes more profitable.

Overall, the PoI system is unique and seems promising, an excellent alternative to traditional consensus methods that all comes with their share of strengths and weaknesses.

Other Blockchain Features

NEM uses a custom version of the Eigentrust++ algorithm that implements a “reputation system” for nodes on the network. Basically, each node keeps track of the information it receives from other nodes (new blocks, transactions, etc.) and then verifies this information.

If the information proves valid, the reputation of the providing node will increase, and if it’s bad info the reputation will decrease. The reputations of all nodes are then passed around the network and updated within each node. This allows for automatic load balancing and removing bad nodes from the network, keeping the network running as smoothly and quickly as possible.

Additional Features:

• Built-in spam filters that prevent garbage transactions from flooding the network and clogging up the works
• A P2P time synchronization system that allows the network to maintain accurate timestamps without relying on any outside servers for checking the time
• Encrypted messaging on the blockchain without hacking transaction fields to carry data like other coins
• Multisignature addresses allow developers to define shared addresses and multiparty control over assets and containers

Information on the technology described here and can be found on the NEM technology page and in more technical detail in their technical reference.

Public vs. Private

Anyone can use the public NEM blockchain by making use of the API calls as described above, but for applications that require more privacy or wish to keep things in-house, a private version of the NEM blockchain can be provisioned to run on internal servers and only make use of predefined nodes of the users’ choosing. On these trusted, private node networks, some features of the public network that are in place to prevent bad nodes from causing problems can be removed or reused in scope, allowing for even faster transactions (into the thousands/second) in a closed box setup.

These private blockchain deployments can be used to power anything from loyalty points programs to shipping fleet logistics, all without ever exposing the transaction data and providing unparalleled speed and security. This makes a lot of sense for companies that want to use the blockchain to power up their existing internal tools and don’t need the added functionality of the public chain. Use cases for the NEM system public and private are explored on their website at https://nem.io/enterprise/.

Final Thoughts

NEM offers a truly impressive system that promises to be a major player in the coming blockchain powered economy. The ease of development, flexibility, and unique PoI system make NEM a very attractive platform for any developer or company that’s looking to build out a blockchain solution.

As time moves on, I think we’ll see more and more interesting projects being built on top of NEM. Keep an eye on it!

The post What is NEM Cryptocurrency? | Beginner’s Guide appeared first on CoinCentral.

The mission of Tether is to bring the ease of transfer, record keeping ability and other benefits of a blockchain-based digital currency to traditional fiat currencies. This allows merchants or traders to convert digital currencies into their fiat value, transfer these fiat-pegged tokens as easily as other digital currencies, and price services or products in traditional currencies while avoiding the overhead of converting digital currencies into fiat currencies.

How Does Tether (USDT) Work?

Tether Limited, the business entity in charge of Tether, is responsible for accepting fiat deposits and withdrawals and creating and destroying Tether in accordance. They also manage the Tether website that allows storage and transfer of Tethers, work on Tether integrations with exchanges and other third parties, and have custody of the fiat reserves backing the Tether tokens. The Tether Foundation has said that it’s dedicated to transparency and will regularly publish public audits by external auditors to their Transparency Page.

The Tether technology works by embedding metadata in the Bitcoin blockchain itself via the Omni protocol. The Omni protocol allows for the creation (or granting) and destruction (or revocation) of digital tokens represented by metadata on the Bitcoin blockchain. These tokens, including Tether, can be stored in the Omni wallet and their circulation can be viewed on the blockchain through the Omnichest viewer.

You can store, buy and sell Tether through the Tether mobile wallet site.

Who Uses Tether (USDT)?

The implication that Tether tokens can be treated as Dollars or Euros has led to the adoption of Tether as a major trading pair on most of the larger exchanges. Bitfinex, Bittrex, Poloniex, and Binance do not deal in fiat currencies at all but have dedicated USDT markets for most of the major coins. Traders use Tether to hedge their trades and to get in and out of the crypto markets they are trading in.

The circulation of Tether is approaching 1 billion tokens, and more and more are being created as more and more funds reportedly flow into the Tether reserve accounts. As the circulation of tether continues to increase, the use of these tokens as a replacement for USD and other fiat currencies as a store of value increases as well.

What Are the Concerns with Tether (USDT)?

As the use of Tether as a replacement for fiat currencies grows on major exchanges, the Tether price of Bitcoin and other currencies is now synonymous with the fiat price, meaning buying and selling with Tethers is influencing the price in “real” money. As long as a Tether is truly representative of a fiat note like the dollar, this isn’t an issue.

However, there are some concerns surfacing recently about the legitimacy of Tether’s reserves and as to whether the company intends to honor their promise of audits. There are a lot of rumors floating around about the relationship between Bitfinex (the largest cryptocurrency exchange by volume) and Tether, with allegations of money laundering, collusion, and fraudulent Tether “printing.”

Bitfinex and Tether have come out in the press and promised an accredited audit to squash these concerns, calling the claims slander and dismissing any allegation of wrongdoing on their part. Further articles on new developments related to these allegations are on their way and will be updated as we go along.

That being said, the Tether whitepaper addresses these concerns and others, like the possibility that Tether Limited goes bankrupt or that Tether Limited attempts to take off with the money. They note that nearly all exchanges and third parties who manage crypto assets face these same risks, and therefore they are not a special case.

They tout their accounting and transparency process to eliminate the risk of bad behavior on the part of Tether employees or leadership, and they note that in the event of Tether Limited filing bankruptcy the reserves of fiat backing the tokens themselves will remain safe and redeemable.

Final Thoughts… Legitimacy TBD 

In 2019, the Office of the Attorney General for the Southern District of New York announced an investigation into Tether Ltd, which as brought ghosts of the past into the mainstream conversation again. Whether Tether seemingly intentionally opacity in disclosing its USD collateral is mischief, strategy, or sheer mismanagement, the cryptocurrency and broader regulatory ecosystem are looking at this current investigation to shine some light. One argument posted on Medium positions Tether as being one of the greatest exit scams in motion, and is worth the read for those willing to explore further. 

The post What is Tether? Is the USDT Stablecoin Legit? appeared first on CoinCentral.

PIVX (or Private Instant Verified Transaction) is a privacy-centric Proof-of-Stake cryptocurrency forked from DASH. The PIVX Manifesto focuses on community governance and a decentralized project from the technology itself to how project proposals are voted on and implemented.

As the name implies, PIVX is attempting to build a usable digital means of exchange that is easy to spend privately and securely in everyday life. To this end, the main focuses of development are minimizing transaction times and fees while maintaining privacy and security.

The PIVX community is vibrant and global, with active populations on all of the major chat platforms (Discord, Reddit, BitcoinTalk, etc.) as well as a public roadmap and lots of resources for interested investors and community members to learn about the technology and get involved.

The core team welcomes participation from anyone willing to put in the time and effort, and all community proposals are entertained, discussed, and voted on by invested community members.

In this PIVX guide, we’ll go over some basic history about the project, the PIVX mobile wallets, how staking and Masternodes work, and technical features of the network and token.

About PIVX

PIVX is was launched on January 31, 2016, by two DASH community members.

The founders admired the DASH technology but wanted to see some changes. They moved to a completely Proof-of-Stake system as opposed to DASH’s Proof-of-Work system and implemented what they saw as a fairer reward system that used a see-saw mechanism to auto-balance reward payouts (this is gone into more detail in the staking section below).

They saw privacy as a critical component of a daily means of exchange and set out to combine the “digital cash” ethos of DASH that prioritizes fast, cheap payments with more advanced privacy and anonymity. Their hope is to become the go-to payment method for peer-to-peer transactions and in-store exchanges.

Point of Sale and Wallet

As a coin focused on being digital cash, a lot of attention is being paid to the mobile wallets that will enable users to spend their PIVX in stores and with other users. The idea is to create a simple app that lets you buy anything right from your phone like you would with Venmo or Apple Pay. The wallet promises to be flexible, secure, and convenient. The Android wallet was released on August 1, 2017, and the iOS wallet is set to be released by the end of 2017.

The wallet comes equipped with security measures like 2-factor authentication (which is pretty expected from most secure apps these days) and also Universal 2-Factor, which makes use of a hardware dongle to provide an extra layer of security when accessing your funds. The PIVX team wants their wallet to be your bank so they can assist you in managing your funds to make buying and sending a breeze while maintaining complete security. They’re pulling out all the stops when it comes to the latest security measures and want to see the PIVX wallet become the cornerstone of digital asset storage.

The wallet roadmap includes the ability to create escrow agreements with other users, enabling users to make use of the wallet to transact directly with peers for goods and services in a safe and efficient manner. This makes the wallet not only a storage for your assets but also a peer-to-peer marketplace and payment processor, like Paypal. Encrypted messaging built into the wallet is aimed at making the PIVX wallet the easiest way to arrange sales, send funds, receive payments, and power commerce in all contexts.

Coin Supply and Sustainability

The PIVX network allows for 2.6 million PIVX tokens to be minted per year forever, with 90% of the minted coins going to staking wallets and Masternodes (staking is covered in the next section), and 10% going to fund budget proposals voted on by the Masternodes and stakers.

This lack of a maximum coin supply makes PIVX function similar to a traditional currency, as inflation is introduced to the system to encourage daily usage and avoid hoarding. The inflation is around 4% per year, but instead of simply devaluing your currency like the Fed does when it prints Dollars, all those minted coins are going directly to holders of PIVX, offsetting the effect of inflation by spreading the profits.

While the coin supply will grow indefinitely, there is a “soft cap” that throttles the rate of inflation imposed by burning transaction fees based on the traffic level of the network. Once the number of transactions reaches a certain threshold, transaction fees are “burned,” meaning that a number of coins equal to the transaction fees are permanently removed from circulation.

Community Governance and Staking

There are two ways to earn rewards for contributing to the PIVX network: Masternodes and staking.

A network of Masternodes, users holding coins as collateral, are used to verify and anonymize transactions, store the blockchain, and vote on community proposals, and in return pay out dividends in the form of PIVX rewards.

Masternodes require a holding of 10,000 PIVX in the PIVX-Qt wallet available from the pivx.org website. The budget, development roadmap, and any major community decisions are decided by this voting mechanism, decentralizing the governance of the project and putting the decision-making power in the hands of those invested in the success of the technology.

Staking coins are used to secure the network and to release new blocks (think “mining” in regard to other coins like Bitcoin). Any amount of PIVX can be staked in the wallet, and recently a proposal was passed to give some voting rights to all stakers. This means that you don’t need to hold a full 10,000 PIVX to earn rewards and vote. Each block (every 60 seconds) a reward is released at random in chances proportional to the amount of coins being staked.

The more coins you’re holding, the higher your chance, but every staking wallet will eventually receive some rewards. The network uses a see-saw mechanism to balance the rewards between Masternodes and traditional staking, auto-balancing the reward frequency and size as the number of nodes changes. Your expected returns from staking or running a Masternode can be calculated using the Returns Calculator a community member put together. To learn more about running your own Masternode check out the official Masternode website. To learn more about staking coins in the PIVX wallet or other opportunities to earn PIVX, take a look at the reward page.

Private and Instant

PIVX employs a custom version of the popular Zerocoin protocol to anonymize transactions by obfuscating the addresses associated with coins. It’s based on the libzerocoin technology that many other privacy coins employ, but the much of the PIVX code is custom-built. As opposed to Dash and Zcash, PIVX can be completely anonymous, preventing blockchain analysis from revealing recipients and senders.

This in-house version of Zerocoin produces smaller and faster transactions than the original libzerocoin library employed by other coins, which allows them to provide privacy (which usually comes with added transaction fees and speed reductions) while also working to live up to the goals of super fast transactions and negligible fees. They also added a mechanism for auto-minting anonymous coins, which ensures that there are always enough anonymous coins in circulation to secure the network and keep things private.

To spend coins anonymously, users need to convert their standard PIVX tokens into ‘zPIV’ tokens and then send them to any PIVX address. On the other end, a user receives PIVX tokens just like any normal transaction, but thanks to Zerocoin, the transaction is both verifiable on the blockchain and anonymous as to who sent and received those coins. Moving forward, the community is aiming to decrease the added costs of anonymity, moving more and more of the total coin supply over to private zPIVs.

Using what the PIVX community calls SwiftX, transactions are nearly instant and coins are spendable within seconds of being sent. With a block time of 60 seconds and a global network of Masternodes constantly verifying transactions, PIVX aims to make instant spending and receiving a reality. This is further enabled by very small transaction fees, usually around the order of fractions of cents per transaction. This is vital to the mission of owning your day-to-day purchases and payments and goes a long way toward paving the way for PIVX to take a big role in the space moving forward.

Conclusion

PIVX is a promising privacy coin aiming to be an easy-to-use digital cash replacement. There have been a few hiccups surrounding the implementation of the privacy technology, but the community and development team are active, engaged, and optimistic. It’s performing well on the market, with high volume and support from major exchanges (most notably Bittrex) and looks like it’ll be around for a while.

Complete privacy from the Zerocoin implementation, instant, and dirt-cheap transactions thanks to SwiftX, and a return on your investment via staking all add up to a very solid coin worth keeping an eye on.

There are projects with similar missions, but PIVX brings some unique value to the table with its advanced Proof-of-Stake algorithm and decentralized, Community Guided Governance model.

The post What is PIVX Cryptocurrency? | Beginner’s Guide appeared first on CoinCentral.

EOS is a blockchain platform for the development of decentralized applications (dapps), similar to Ethereum in function. In fact, supporters have dubbed it the Ethereum killer. It makes dapp development easy by providing an operating-system-like set of services and functions that dapps can make use of.

The idea behind EOS is to bring together the best features and promises of the various smart contract technologies out there (e.g. security of Bitcoin, computing support of Ethereum). Simply put, the EOS community is working to provide one simple to use, massively scalable dapp platform for the everyday user.

In this beginner’s guide, we’ll get into:

• How Does EOS Work?
• Roadmap, Team, and Community
• EOS Token and Trading
• The Controversy
• How to Buy EOS
• Where to Store EOS
• Conclusion
• Additional Resources

How Does EOS Work?

The EOS vision is to build a blockchain dapp platform that can securely and smoothly scale to thousands of transactions per second, all while providing an accessible experience to app developers, entrepreneurs, and users. They aim to provide a complete operating system for decentralized applications by providing services like user authentication, cloud storage, and server hosting.

Be Authentic(ated)

The EOS network is a ready-made platform for apps that lets you tap into a full-featured authentication system. User accounts, complete with different permission levels and their own locally secured user data, come as a feature of the network. You’re also able to share database access between accounts and store user data on a local machine off of the blockchain.

Recovery for stolen accounts is baked into the system as well. You have various methods of proving your identity and restoring access to a compromised account.

Keep It In the Cloud

Server hosting and cloud storage are part of the EOS system as well. As an application developer, you can build and deploy applications with hosting, cloud storage, and download bandwidth that the system provides. This opens you up to bring your ideas into reality free from the demands of securing storage and bandwidth.

As a developer, you also have access to usage analytics for storage and bandwidth directly from EOS and are able to set limits for specific applications. You pay for these services by staking tokens.

Scaling Up

Most common blockchains (think Bitcoin and Ethereum) use consensus over state, meaning that, at any point, all of the computers on the network can verify the current state of the entire blockchain. Doing so helps to prevent fraud and confirm transactions. The blockchain in those cases is a graph of the state of the system. And when each new block appends to the blockchain, nodes on the network take each transaction from the block and update the state of each address associated with those transactions.

On the other hand, EOS implements consensus over events. When using consensus over events, the focus is on the transactions (or simply messages) as opposed to the state. Instead of verifying the state of the network at any given time, nodes verify the series of events that have occurred so far to keep track of network state. The system takes longer to completely reconfirm the history of transactions when it restarts but can handle a much higher throughput of transactions while running.

Simply put, the network can scale to one million transactions per second out of the gate on a single machine, with theoretically infinite scaling possible in parallel between multiple machines.

Free to Use

By default, an application built on the EOS platform does not require micropayments by end users to send transactions and perform tasks on the blockchain. Individual app developers determine how users pay transactions fees. So, companies are free to come up with their own monetization strategies.

Features, not Bugs

The EOS system provides a governance model based on block producers than vote on which transactions are confirmed, whether an application is running correctly, and on changes to the source code of individual applications as well to the system itself. The community can actively upgrade, downgrade, and fix bugs in the system in a democratic and secure manner.

No Trouble Performing

The system reduces the latency and maximizes performance by structuring each block (produced every 0.5 seconds) even more finely into sequential cycles. Cycles comprise threads that run in parallel within cycles. This structuring allows you to send and respond to transactions within single blocks and between blocks, bringing the theoretical bottom limit to the response time down to simply message transmission time over the net.

The Technical Whitepaper outlines a lot of the nitty-gritty features and details that we’ve left out here for brevity.

Roadmap, Team, and Community

The EOS project was created by a company called Block.one. The company is led by Dan Larimer (co-founder of both Bitshares and Steemit) and Brendan Bloomer. Both provide some serious experience in the crypto world and have been publicly active in promoting the technology as a whole in addition to their own projects.

EOS Dawn 1.0  was released September 14, 2017, the Dawn 2.0 release brought resource tracking and inter-blockchain communication on December 4, 2017, and the Dawn 3.0 release (the project’s official launch) occurred in April 2018.

The community behind EOS is vibrant and global, with a lot of love from investors and contributors alike. Meetups are common, art is being created, the Telegram group is active, and more communities can be found on Facebook, Twitter, and Steemit.

There are currently over 100 dapps on the EOS network. Unfortunately, the activity on these dapps is somewhat lacking. The most active application, PRA CandyBox, has just over 6,000 daily active users. However, this number is substantially higher than Ethereum’s most popular dapp, the IDEX decentralized exchange, which currently sits at slightly over 1,000 daily active users. 

The Controversy

Other than maybe Ripple (XRP) or Bitcoin Cash (BCH), EOS is probably the most polarizing project in the space. Opponents argue that the project is heavily centralized due to its implementation a Delegated Proof-of-Stake consensus mechanism in which just 21 Block Producers verify transactions. Additionally, many community members feel as if the project’s year-long, $4 billion ICO was negligent and greedy at best, or even fraudulent at worst.

The EOS network has had its fair share of bugs as well. Several critical vulnerabilities surfaced leading up to the launch of the platform’s main net, leaving many people scratching their heads wondering how they could happen with such a large budget. Even after the launch, benevolent hackers continued to report bug after bug.

EOS Token and Trading

The EOS token sale was one-of-a-kind. It took place over a full year, starting June 26, 2017, with 350 periods of distribution. At the end of each period, the total number of tokens designated for that period were distributed to contributors based on the amount of ETH they contributed divided by the total contribution amount.

During this time, most of the major exchanges listed EOS tokens. Therefore, the market mainly determined the price. This opened up the sale to anyone interested and gave plenty of time to watch the development and progress of the team before contributing. The result has been one of the most lucrative token sales to date and a lot of growth for the token in the meantime.

The EOS token itself doesn’t perform a function. It’s only useful in that developers developing applications on the platform must use them to generate their specific application tokens. And, each application’s acceptance on the platform is contingent on voting by token holders.

Trading

Following the closing of the ICO, the EOS price experienced a steep drop-off from a high of $4.85 (~0.00181 BTC) down to just over $0.50 (~0.000093 BTC). The coin price has been on a roller coaster since then, reaching an all-time high of $21.46 (~0.00227 BTC) before leveling off at its current price of about $5.40 (~0.000837 BTC).

Surprisingly, this record high didn’t occur during the market bull run toward the end of 2017. It instead happened at the end of April 2018. This large runup coincided directly with the launch of the platform’s main net as well as the eosDAC airdrop on April 15th.

With the main net launch in the books, the most influential event to impact the price is simply more EOS dapp use. Large partnerships and wide-scale enterprise use could push this along.

How to Buy EOS

The simplest way to buy EOS is to purchase it on Binance with either USDT, BTC, or ETH. You can also buy it on Bitfinex, Huobi, or OKEx although the process may not be as straightforward.

If you only have USD (or any other fiat) currently, you’ve got some additional steps. First, you need to set-up an account on a platform that supports fiat to crypto exchanges. Gemini, GDAX, and Coinbase are all popular options.

Once you’ve created an account, you should link your bank account and send USD to the platform. From there, buy Bitcoin.

Now that you own Bitcoin, send it from your original exchange to Binance. Finally, on Binance, trade your Bitcoin for EOS.

Where to Store EOS

You have several community-created wallets to choose from when storing your EOS tokens.

The Greymass wallet seems to be the overwhelming favorite of the community. It’s got everything you need to store your tokens and vote for Block Producers in an easy-to-use layout.

Simpleos is another solid option that community members recommend. As the name implies, the wallet has a clear focus on simplicity that even novice token holders should feel comfortable using.

If you’re more tech-savvy, you can always use the Command Line Interface (CLI) wallet included with the blockchain. This wallet is open-source and provided directly from Block.one, so it’s your safest bet.

Conclusion

EOS is a controversial project in the dapp arena with a proven team, lofty vision, but questionable execution so far. The $4 billion budget should be more than enough, though, for the project to accomplish all it’s set out to do. The next couple of years will be crucial for the platform to place a foothold in the dapp market.

Love it or hate it, one thing is certain: EOS isn’t going anywhere anytime soon.

Editor’s Note: This article was updated by Steven Buchko on 10.28.2018 to reflect the recent changes of the project.

Additional Resources

Website

Github

Youtube

Twitter

Facebook

Medium

The post What Is EOS? | Everything You Should Know appeared first on CoinCentral.

But what do you do when you come across an HONEST scam?

Enter FOMO3D and POWH3D, Ethereum-powered smart contracts that let you go long on greed itself, both created by a group going by the name Team Just who refer to the project as “a psychological social experiment in greed.”

FOMO3D is currently one of the most popular decentralized applications. 

The FOMO is Real

FOMO3D (FOMO is a crypto slang term meaning Fear of Missing Out, a common thread among traders) is a trading game that pays you for HODLing, dangling a carrot in front of new entrants in the form of a huge pot of Ethereum.

Here’s how it works:

1. Players buy keys using ETH, and each key purchase raises the key price slightly. The ETH goes into a pot.
2. Holding keys gets you dividends in the form of a percentage of fees from others buying keys, as well as a chance to win a portion of the whole pot.
3. A timer is counting down, and the last person to buy a key when it runs out wins the round and receives the whole pot.

But here’s the catch: each time a key is purchased, time is added to the timer.

This means the pot will not be won until people stop buying keys, and with millions on the line that may not be any time soon.

Baked into an immutable Ethereum contract, the game is secure and works as advertised: there’s ironically no chance of this being a scam, though some are exploring how it could be.

The site’s address (exitscam.me) plays into the common threat of dishonest project owners taking the money and running, but there’s nobody behind the scenes to take the cash in this case.

Weak Hands Unite

POWH (which stands for “Proof of Weak Hands”) is a similar game to FOMO. Players purchase tokens on a decentralized

exchange, and a 10% fee on each sale, trade, and purchase is split among all holders of the P3D token.

The game’s website encourages you to buy in… and mocks you for the same. The language on the home page playfully says, “Instead of simply playing with price over time like most crypto, we’ve added volume to the mix. Hodl finally might be a good long-term idea. (Instead of why you’re down 50%)”

The longer you #hodl, the more you’ll make in dividends, rewarding the strongest hands in the market.

Greed is Good

The creators of the games have made it clear that FOMO3D and POWH3D are commentaries on the state of crypto and human greed in general, an honest and pointed critique of the reason many are “investing” in cryptocurrencies.

The human animal is predictable, and any market trader knows this. Trading crypto is already seen as a game to many (and IS one for those familiar with game theory), and there are certainly winners and losers. Creating an actual game (meta game?) to reward trading directly is what I’d call High Art.

This glorious gambling game shines a bright light on priorities and the risk people will take on for a chance to win big. As long as there is money to be made, you can be sure there will be those willing to risk it all.

When will the FOMO end?

How long the FOMO and Weak Hands train will run is anyone’s guess. As we speak, the systems are bogged down, presumably from all the recent press (this piece included). Navigating to the websites will find you camped out on a loading screen for an indefinite amount of time.

Seeing as it’s a deployed Ethereum contract, unless Ethereum itself goes down, the FOMO will continue. So there’s hope for new players yet.

The influx of players and the limited bandwidth of the Ethereum blockchain may have added an entirely new layer of FOMO to FOMO3D by preventing new entrants for the time being, but if you can get in and buy some keys, you might be the big winner… or you may get exit scammed. Good luck!

The post Don’t Miss Out on the FOMO3D appeared first on CoinCentral.

In this final part, we’ll touch on why Steem was an early success and why Andy is confident in the future of the platform.

We start mid-conversation with this killer line from yours truly:

James: [Humans are] only good at one thing, which is figuring shit out.

Andy: Yes. And I think that is one of the real strengths of the Steem team, is that we have been in the shit. That is where stuff gets made. That is where the real stuff gets made. And so many other people in this space are going, “This is what we are going to do and this is how we are going to do it.” Yeah we’ll see about that.

Like Mike Tyson famously said, “Everyone has a plan until they get punched in the mouth.”

It often comes down to, “We are going to store some information on Ethereum for some reason that is usually stupid, and then based on that information, we are going to create a token and then that token is going to go to the most important parties in there.”

I’m reframing it to make sense in our context, but at its core that is what they are doing. “You are going to make predictions. We are going to store those predictions on Ethereum, and then we are going to create a token that is going to be distributed to all the people who are participating in this game in such a way as to ensure constant growth.”

Because if it’s not growing, no one is interested. Nobody is going to go on a gambling platform that is stuck at ten users. So, that is what they are trying to do and yet nobody has been forced to figure out what we have had to figure out because we made one very simple decision very early on, which was to create a real application. That is really what it all comes down to.

I wasn’t there, but I think what happened was that they said, “This blockchain database has massive potential. We have implemented DPoS on BitShares, we know that it works to an acceptable degree, and now in retrospect, we know that it works great. BitShares is still going great. I mean, I don’t use it but it’s there, it’s not broken.

“What else can we use this to do?” We all are very big advocates of blockchain adoption and cryptocurrency adoption. “Why don’t you get something in people’s hands?” And I bet they thought that a million apps were right around the corner. I bet they were like it’s only a matter of time. Meanwhile, two years have gone by, but that decision was huge because it forced them to answer those questions.

Once you make that decision to build an app that people actually use you’re forced to solve the most important problems. If you want to incentivize users using cryptocurrency, how do you do that without becoming a money transmitter or an employer? How do you do it without it being gameable? View counts? That’s gameable. Account-based voting? Gameable.  And that is where Proof of Brain came out of. And Proof of Brain is a revolution in capitalism. It truly decentralizes central banks among the people because it is the people who use Steem who determine where 100% of the money goes. Think about that.

And it turns out people are actually pretty good at determining what they think is valuable because STEEM’s market cap is hundreds of millions of dollars. Really STEEM is the only token that truly delivers on the original promise of cryptocurrencies.

It has near-instant transfers, fee-less transactions, and no centralized authorities controlling the distribution. Once SMTs launch the genie will really be out of the bottle because anyone will be able to create their own version of that token at little to no cost.

And all these other apps in the space, they are not operating. So, you can think you are going to do anything at that point. We’ve adapted over time. Things have certainly changed, but it is more of like a grooming process.

You get rid of stuff that didn’t work, you keep stuff that works, and you enhance the capabilities of other things. And DPoS has now proven itself to enable rapid iteration compared to other blockchains.

Steem has had 19 hardforks in 2 years none of which led to the creation of sister-chains. The blockchain just keeps getting better and better and the community just keeps growing and growing. It’s actually doubling about every 6 months.

Yeah. The market is an idea machine. The good ones last, and the bad ones get flushed out, and you see what works, and things build up.

Yes. One of the things that brought me into the project as a user was — I think what we’re so good at is we’re good at picking the simplest, stupid things that have such massive impact, starting with the social network. You have countless people telling you exactly what they want from you.

We know what people want from STEEM. We know where they want it to go. We know SMTs are a great idea because everybody agrees. They write about it! Everybody on the platform wants it, every stakeholder wants it. Even the people who criticize us every day, they criticize us now about SMTs not being launched!

There’s a lot of people trying to solve hard problems, but there’s a lot of easy problems that you could solve instead. And those are the ones you want to go through. That’s how I see it. I call that the Musk approach.

The Boring Company was a great example. He laid out his approach to markets, where he identifies, okay, “What hasn’t been fixed in 40 years, or what’s clearly broken and sucks and could probably be fixed pretty easily?” Go to that.

The Boring Company obviously was drill technology. He was like, “Wow, we’re still using the same drills we used to drill the Chunnel.” No one’s innovated, and no one’s fixed this, and there is a glaring issue. Of course, that’s what we go after. Sort of the Blue Ocean strategy. I don’t know if you’re familiar with that term.

There’s the million dollar idea that everyone’s shooting after, and then over here, there’s this wide, open market for some simple, to the point improvement. The great quote related to this I’ve heard was. “It’s easy to be number one. Go find number one and be one better.”

You have great examples of super popular and widespread social media platforms. You have Reddit. You look at Reddit and you go, “Hmm, Reddit. Awesome. Lots of people use it. How can we improve by one?” And you add that incentive structure, that Steemit did, and look what happened. The rest is history.

Yeah, I think that is a really astute observation. I think most people don’t really seem to have a good grasp on how technological advancements actually work. A good example from Nassim Taleb, the biggest innovation of the last ten years was four wheels on a suitcase.

Yes, it’s not the visionary ideas.

It is the simple zero to one changes that developers, entrepreneurs then hack into their products and services to kind of infect them with that innovation. Like the car or the Model T. The real innovations behind the Model T weren’t — it wasn’t the first car. It wasn’t like engineers spent 30 years saying, “We’re going to build the perfect car.”

It was the assembly line, some lightweight steel from France or whatever, Dodge engines, and then uniformity. You could buy any color you wanted as long as it was black. The Model T is arguably responsible for trillions of dollars in wealth creation, all the technological innovations that came after it were built on it, were built on a world that was connected by automobiles.

And then the internet had a similar dynamic. Obviously, the internet was probably pretty complicated. But effectively, it just enables two computers to communicate. It’s a protocol that enables computers to talk to one another. That innovation, relative to the perceived innovation that came after —

Like when you look at Bitcoin, and you go, “Oh, this is a brilliant design” and all that stuff, that is only enabled by the simple implementations of TCP/IP. That fundamental innovation, people build on it. It’s really like adding your little thing. It’s much more of a cumulative effect than people think, or at least that’s the way it seems to me.

My only fear is that when we talk about simple solutions or promise simple solutions, that people think it is any less difficult than what other people in the space are doing. We could spend our time coming up with ever more complicated protocols that nobody uses. When we say simple, we may just be saying usable at this point. Simple is also scalable.

People don’t use stuff they don’t understand.

No, and I’ve been following this space forever. You go in and you read Tron’s whitepaper, and the parts that aren’t plagiarized from Steem or somewhere else is complexity porn. At some point, when you are delving into a system, you usually arrive at a relatively simple proposition somewhere like Bitcoin.

It’s peer to peer digital cash, uncensorable, decentralized transaction. Boom. Everything else is bonus.

There’s a ledger on everybody’s computer.

That’s it. It’s a shared ledger, everyone agrees, you don’t have to trust anyone, boom.

Here’s the complicated code we needed to come up with to enable that functionality. Whereas they are going, “Here is a complicated protocol that we think will solve some high level problem.” Usually scalability or something. I feel like it’d be unfair to private blockchains or something, people who are building private blockchains that are really dedicated to a specific use case, but they’re private. Who cares about those?

What I think is so special about SMTs is that they are a customizable, off-the-shelf incentivization schemes for a decentralized autonomous organization. You’re that application. You want to build Pinterest and you want to incentivize everybody in the system ideally.

So, every user is a shareholder?

Better. A stakeholder. Shares are a legal relationship backed by lawyers and courts. The entire point of stake is that your influence over the protocol is baked in at the protocol level, so you don’t need a bloated, expensive, corrupt legal apparatus involved. That’s the whole promise of decentralization. And you want to beat Pinterest like you said. You want to do one better than Pinterest. You’ve got to offer something special. And really, what you need to do is you need to figure out how to operate more efficiently than Pinterest. Cutting out middlemen is usually a good place to start.

What Pinterest did was, I’m sure there was some kind of magazine or something that did Pinterest before Pinterest. They probably took hundreds of more people to do it, and Pinterest probably started up with like ten people.

And so, what a DAC offers you is the ability to, like with Steemit. Steem has paid out around 40 million dollars to content creators all over the world. Do you know how many people it would take to do that? When you see other platforms being like, “We are going to distribute these rewards.” How many people? Steem does that entirely autonomously.

Now, the interesting part is that guilds and things do emerge where users themselves come together and form these subgroups. But you are not incentivizing that. Steem is. That is the result of that autonomous incentivization mechanism.

And whatever that leads to is fine, as long as it is designed to be sustainable and scalable. And so, we have built a content sharing platform that rivals many others, that is growing exponentially, that has a unique value proposition of paying its users.

And not only does it do that, but we do that with an order of magnitude fewer employees than a comparable organization would need because of Proof of Brain, because of the decentralized distribution method, because we are actually a part of a larger decentralized autonomous organization called Steem.

And so, what SMTs will offer you is the ability to launch your own decentralized autonomous organization. You give yourself a bunch at the beginning and now you are incentivized to make it more valuable over time even though you have no control over it. 

That is actually the lion’s share of the work. And so with SMTs, you want to launch your Pinterest, right? But you don’t want to deal with the nightmare of figuring out how to incentivize all of these people.

So, you launch PinterestCoin and you give yourself a bunch. And now, your responsibility is marketing, building a rudimentary interface, and telling people, “We launched this coin. We don’t control it. The Steem blockchain produces it, but you can earn it through our platform. Here’s our platform. It’s not us giving out the money.”

People will want it because what they get is influence. We know that people want influence within the social networks that they use, within the content platforms that they use. That influence has value and that’s what these tokens tokenize in part. I would say that is the foundation of the token.

We’re moving into a reputation-heavy era.

It is. It’s more influence, and I think what will probably happen with Steem is that somebody will launch an SMT and use it as a reputation token. You can create an SMT and distribute it to everyone on Steem. But with Oracles, you can say, “I’m going to appoint five Oracles. The Oracles create a whitelist of accounts that are good, and the whitelists have to agree with one another.”

And so, only if five out of five Oracles agree that this person is good do they become entitled to earn these tokens. That is one way that you could implement a reputation token. The rest isn’t really scalable. I’ve seen suggestions of the other solutions, they don’t make sense.

And whether it is an actual reputation token, you still have a reputation as an identity from people who know you, which is probably closer to influence than reputation in a technical reputation token sense.

Yes, there is certainly a reputation element to it because of the fact that you are incentivized to disclose information about yourself. I have long believed that the game of Steem, on the most fundamental layer, is proving that you are just real. This is about proving that you are a real person.

If people don’t trust you, they are not going to care about information that you are sharing.

But also, what are you doing when you are sharing information? It gets into a rather philosophical level. But on a very simple level, when you’re talking to somebody, and when I am talking to you right now, what am I really trying to learn from you?

Yes, we can call it trust. Yes, I can say I’m trying to learn information from you. But really, I am trying to figure out if you are real, if you are just being real with me right now. “Are you an actual thing? Are you some illusion? Are you pretending something?” When we are talking about trust, we are talking about realness. We are talking about reputation. It all comes down to authenticity.

Anyway, on a technical level, it is influence because the more of an SMT you have, the more influence you will have over the rewards pool of that smart media token. On Steem, it’s the Steem rewards pool.

But whenever anybody launches an SMT, so long as they specify a token inflation rate, unless they want to do that thing where they just create a token and just give it all to themselves or to people that they like, if you specify an inflation rate, that will fill a rewards pool which will be distributed based on crowdsourced, stake-weighted upvote.

And so, that is how you get influence within the ecosystem, and then the app developer can choose to use that influence to affect how you display information on your site.

In the future, do you see DTube having its currency, Steemit having its currency, DLive having its currency, DSound having its currency? Or do you think that there is still room for SMTs to coexist with platforms that are simply Steem-powered?

I think there’s room for both, and I think there will be. It’s kind of surprising. It’s kind of a fascinating evolution that the ecosystem has taken, where a year ago, what we were trying to explain to people was why they should integrate with Steem. It’s an amazing protocol. You can do stuff like you mentioned.

It wasn’t until we started talking about SMTs that people really started to appreciate the value that the STEEM token could give to their applications. I think it has something to do with being able to visualize and really personalize this thing. Everybody wants their own money. This is ownership. It enables you to think about how you would own your application.

Paradoxically, that has now led to a situation where a number of people are going, “Why don’t we just build it with the STEEM token?” And we’re like, “We love that idea!” That’s where the rewards splitting feature comes in. And the other interesting element, I think, is that now, I’ve seen a couple of people who are looking at STEEM because they don’t want to run the risk of launching their own cryptocurrency.

I think while some people are still inevitably going to be afraid to get into cryptocurrency or blockchain, period, we are a really safe option for them because STEEM has been around forever, it’s really the only truly decentralized token, and it never ICOed. More and more people are starting to appreciate that. In truth, you are still using STEEM even with an SMT.

STEEM is going to be an existing decentralized distribution mechanism that developers can instantly tap into, but it’s also going to shift toward being the resource allocation token of the Steem blockchain. And so, you create an application, it leverages an SMT, you’ve got a certain amount of bandwidth.

Bandwidth is what makes Steem a freemium blockchain which is part of what makes Steem such a powerful protocol for application development: it enables developers to benefit from the network effects that come from offering free applications while also gaining the advantage of integrating a hyper-scalable blockchain and a real-time fee-less token.

So the moment you launch your SMT it won’t be costing you anything. Only once your application starts getting real traction and starts generating tons of transactions will you need more bandwidth at which point you will be faced with the decision to buy STEEM and power it up into Steem Power, investing in the protocol that is clearly adding a ton of value to your app, or use some other protocol.

But even that isn’t really a cost because you can always cash out. So SMTs will really be a risk-free, cost-free way to bootstrap your own token and STEEM will be the token that ensures that this increasingly valuable ecosystem remains economically sustainable and scalable.

The only real costs to developers are the opportunity costs that come from not integrating the protocol and that’s actually true of STEEM as it is today.

And so, the applications that have lots of success on STEEM will be forced to invest in the Steem blockchain by taking STEEM off the market. It’s not money that you give to us. It’s not money that goes away. It’s money that you are investing into this protocol that you’re getting a ton of value out of.

So through that mechanism, if an SMT is being used a lot, what’s really happening is that STEEM is getting used a lot. It’s this extra layer on top of STEEM that enables you to customize the distribution of the tokens based on your needs while ensuring that the base protocol is still as safe, scalable, and secure as possible.

Out of STEEM

Andy and I ended our (thorough) conversation here. I hope you enjoyed this look behind the scenes at Steem!

The post Part 3: Interview with Andy Levine on Steem Today and Tomorrow appeared first on CoinCentral.

In this second part, we’ll get a breakdown of Smart Media Tokens, Hivemind, Communities and other big updates coming for STEEM.

James: This might be a good opportunity to say SMTs, they are not out yet but that is on the near horizon, your major next step here. Obviously, there is going to be plenty of resources on how they work and how to set them up. Talk briefly about how they are, how they work, and how you envision people making use of them.

Andy: Our two major product releases are Hivemind and SMTs. They are separate projects being worked on by separate teams with maybe a little overlap. I don’t want people to think, “Oh, it’s SMTs.”

We have a lot of projects in the works. Appbase is another project of ours that is probably less sexy to other people, but it is basically our scaling solution. It is how we plan to modularize the blockchain. It’s already in production, the foundation of it. That is one project.

The other one is called Hivemind. Hivemind is what is going to enable features like communities on top of STEEM. But we don’t develop solutions that only have one use case, we develop solutions with the broadest set of possible use cases and so Hivemind has evolved into a soft consensus layer that sits on top of the STEEM blockchain.

It effectively adds all the functionalities of Smart Contracts to STEEM without the downsides. STEEM remains super-fast and scalable because it is application-specific with respect to storing content, but Hivemind will enable developers to use the code they store on STEEM, as well as the content, to power decentralized applications without the headaches that come from having your entire application stored on the consensus layer.

The developer will get to choose for themselves just how decentralized they want their application to be as opposed to being forced to make it fully decentralized from the word “go.” This is what will enable us to use STEEM–an immutable database–to store epheremal social information.

All of the information that is submitted to Hive gets stored on the STEEM blockchain. But when you, as the developer, are building your application, what you’re actually querying is Hive preserved in social functions.

For example, you want to build a cryptocurrency community. You get the namespace, you want to appoint moderators, you want to unappoint moderators. That’s the kind of stuff that will be on Hive. It doesn’t need to be on the blockchain, it doesn’t need to be synced up perfectly to the blockchain. That is what is going to go on Hive.

Is this simply an organization on the Steemit platform, kind of like how Medium has publications? That you can have contributing writers to publications, or is this an upgrade of the simple tag system that you can organize content on by Steemit right now, or is it more than that?

It’s a massive upgrade to that. Hivemind is open-source software that will reside in the STEEM GitHub along with the STEEM blockchain, but it’s separate. What that means is that, what we are going to be asking developers in this space to do is to say, “This is open-source code. Let’s all use this together.”

And so, what that would enable is, say there is a crypto currency community on Steemit.com and it’s exclusive. There’s thirty people in it. When you go over to DTube, since they will be pulling the same information from Hive[mind], you won’t have to create a new community in DTube. You won’t have to go through the process of admitting all these people.

Personally, I think what we are trying to build with STEEM is an open, decentralized social layer of the internet that everybody can tap into. By incentivizing it, and incentivizing it first, and incentivizing it well, that will give us the first mover or advantage to always outrun the competition.

So, you’re going to have an ever-increasing diversity of portals through which you can engage with the STEEM blockchain, and STEEM users and communities will create a cross-platform capability for you to congregate with the people you want to congregate with.

Communities cross. You don’t have to recreate. It’s across DTube, across Steemit, across all the different platforms that are powered by STEEM. You can say that my tribe lives on all of these, and these are simply tools that my tribe can use.

Yes, exactly. Everything is on STEEM. Steemit.com is one interface for STEEM, eSteem is another, DTube is another. DTube is just another interface for STEEM. So you have your CoinCentral community, and people are posting in it.

And if STEEM’s stakeholders are in there upvoting it, you’ve now got a cryptocurrency flowing into that community. And through a reward-splitting feature, you as the runners of that community will be able to take a percentage of that.

That’s a cool way where you will immediately be able to tokenize a community. This is something we’re light years ahead of everybody else on, so I really think that it’s going to be really hard to catch up with us on this stuff.

But SMTs take things to the next level, because the you will be able to launch an SMT into your community. You can actually tokenize your community with your own token. When you launch an SMT, what will happen is, you’ll be able to specify who is entitled to earn that token.

I don’t know how familiar you guys are, or anyone is, with STEEM’s true unique value proposition. Yes, it stores content, but that was actually relatively simple implementation when you think about it.

But our real unique value proposition is what we call our Proof of Brain distribution mechanism. Proof of Brain is a truly decentralized token distribution mechanism. The way Proof of Brain works is that it crowdsources the valuation of content. It leverages the upvotes and the downvotes of users to calculate the value of the content.

And the way it does that is that there is a certain amount of STEEM produced every day. It fills the rewards pool. A small percentage of it goes to the block producers. The rest of it goes into the rewards pool. It is distributed based on the upvotes and downvotes of the users and proportioned based on their stake. That is how it is ungameable.

If you just give out tokens based solely on upvotes and downvotes, which I’ve actually seen relatively new projects to the space, or not even new, proposed projects in the space, suggesting that you can just distribute tokens based on upvotes and downvotes, but if their influence isn’t proportionate to their stake it’s not going to scale, at least not at the base layer if you want maximize network effects and not implement things like KYC.

It’s the same with what we have right now, now there’s just money. There’s going to be the same rigging of the system and the people. You see it a little bit on STEEM where there are bots and you have people.

Well, there’s always gaming but —

Yeah, but empowering gaming versus making it hard, introducing friction to gaming, is an issue.

Yes. And incentivizing, distributing tokens based solely on upvotes and downvotes or views is a great way to pay people to come up with ways to fake views and to create accounts.

We had just started talking about a novel solution that we are implementing with SMTs that will actually enable you to distribute tokens based on one account, one vote, but it only works because it is built on the foundation of STEEM which is still a stake-based system.

This is one of those other things — and I think another part of the problem with STEEM is that they just did too much. There’s too much innovative stuff in one thing, so how much stuff are you really supposed to focus on? There is a social network on a blockchain. How much more could there be? But in a world, in a community that claims to value decentralization so much, nobody wants to talk about the fact that the only way to earn Bitcoin is to mine it.

The only way to earn Bitcoin directly from the protocol is to mine it. It’s forgivable, because Bitcoin’s innovation was so massive, it was so new. The goals were very, I think, intentionally constrained. You can’t take it down, you won’t be able to take it down. It will bootstrap its own value for various reasons.

I think there’s an irony and a blind spot, because I think a lot of people in this space imagined that you were replacing central banks, that Bitcoin enabled the replacement of central banks.

That’s still widely held as the ‘dream’ and goal.

Right, and that’s because the people who are Bitcoin’s central bankers have a vested interest in pretending that they are not central bankers, but that’s what miners are. Miners are the central bankers of Bitcoin.

Because tokens are created, and they are distributed to a small group of people who are then tasked allegedly with distributing those tokens. The best, friendliest interpretation of it is, because these people have a vested interest in the protocol, it’s in their best interest to give these tokens to the right people or sell them.

Now, there are so many people that have them. But if you simplified the organization the most, there are two ways to get Bitcoin: mine it or buy it from somebody who mines it, or buy it from somebody who bought it from somebody. So, they are the central bankers of the Bitcoin industry.

They have someone to policy control over it.

I think actually, the Bitcoin community can benefit from establishing some governance and some structures around what the miners should be doing with their tokens. Right now, there is no structure. Where is it going?

It’s on each individual mining pool effectively to distribute it however they want. They are not really incentivized. Bitcoin’s great. It is what it is. But they are not properly incentivized to encourage applications. I don’t think they are ideally incentivized to do that. They are not incentivized at all.

Until their main income source is transaction fees, they are still incentivized more to mine than to drive adoption. They don’t care if you adopt, because the less people the adopt, the lower the difficulty would be and the more Bitcoin they will mine in the meantime.

Yes. And at the very least that, what you can say is that on a protocol level, the only incentives built into the protocol are to mine it from what I understand of it. Again, totally fine. It’s the first one. It was pretty freaking revolutionary, right?

So, that is fine. But because of that, what is more important about that is that we’ve had this evolutionary process. Why did Ethereum use Proof of Work? It wasn’t because they thought it was scalable. It was because at that time, everyone was using Proof of Work. It was the only thing that was legitimate.

It’s the one that works. Now, I don’t see how you interpret Casper as anything other than an admission that that was an incorrect decision to some degree.

Well, yes. If you ask them they’d say, “We want both.”

Yes, and it’s fine, all of which is a roundabout way of saying for these reasons, we’ve accepted centralized distribution of tokens as the norm. There are people who do it. You can buy Bitcoin. Yes. That is a person on the other end of that sending Bitcoin because they choose to, because you have a conversation with them off chain.

No other protocol is even working on a system for manufacturing tokens and distributing them to all the necessary players in an ecosystem in such a way that it actually bootstraps its own value. We pioneered that with STEEM. We’ve used Steemit.com as a proof of concept to show how powerful this decentralized distribution mechanism can be.

And with SMTs, what we are offering to people is the ability to create your own version of STEEM but tweak the parameters, allocate founder’s tokens to yourselves, allocate trenches of tokens to the founders of the team, to important community members, to investors, whether they are private, or if you want to do a public offering you can do an ICO.

There will be smart contracts built into the smart media token’s protocol to make it super easy to specify how you want an ICO, how many tokens you want to be in it, when it happens. And with our next hard fork, we are going to enhance the ability for other developers to create accounts for people without making it insanely gameable. We actually have incentives to have one account. That is where you accumulate STEEM power.

[thrive_leads id=’5219′]

So keeping your digital identity unified is incentivized because the more power that you consolidate into your one identity, the more control and influence you have on the platform.

Yes. And so, that enables us to say with a higher degree of confidence that these are real people because this is their account, we can look into an account. There is also a lack of incentive that there is in other blockchains to create accounts.

Like with Ethereum, it is fairly common practice to create new addresses every time you want to make a new transaction. With STEEM, there is the opposite case. If I want to send somebody money, I do it from my main account. That is where I have my money.

The incentives and the disincentives encourage single accounts, even though it’s perfectly fine to have multiple accounts. We can say that I believe that we have the most users, and the decentralized distribution mechanisms, the integration into real applications that people use, leads to that.

In my opinion, this is one of those other real unique value propositions of STEEM and then of SMTs. What it really offers to developers and to entrepreneurs is the most efficient way to create a

decentralized autonomous corporation or organization in the world.

You’re an app developer. Your company is going to focus on building the application. Your application is going to ideally have thousands of users.

In order to maximize growth and productivity, what you want to do is integrate the token into your application. It is what corporations do, they call them shares. The reason why they do that is because it enables you to coordinate activities in an organization without the cognitive load of a finance department and an executive branch deciding who deserves what and who gets what. Which is inefficient, unfair, and inevitably leads to people feeling slighted and exclusion of certain people, biases, all of that stuff.

And so, what we offer is the most advanced technology for building a decentralized autonomous corporation right now. By integrating with STEEM, what happens when you integrate with STEEM is you piggyback off of our decentralized distribution mechanism. For example, Utopian rewards people who submit open-source code.

When they submit that open-source code, there are people who are in that interface that have STEEM power. They’re going through and they are upvoting and downvoting code that they like. And based on those upvotes, STEEM is rewarding them.

If you wanted to create an application, let’s say on Ethereum, that rewarded people for submitting open source code to it. How long do you think it would take you to develop that and develop the logic for incentivizing all of those people?

How long did it take to build steemit.com?

Three months, but steemit.com isn’t on Ethereum. You’ve seen how many projects announce things on Ethereum.

And then build forever.

Yeah. So, forever seems to be the current answer.

The average length of shipping your mainnet is forever.

Yeah. Building apps is a whole lot easier than writing blockchains, that’s for damn sure.

Right. Exactly. But not only that. Even the people who are looking to build blockchain applications, they’re really only looking for this very limited functionality that they just don’t realize is available to them on STEEM. They want a couple of things. They want a blockchain protocol that’s scalable.

A lot of projects that you see on the space — I mean, I don’t keep track because I have a fucking job and I’m super busy. I can’t keep track of everything that’s going on.

A lot of value props are simply scalability.

Yes, they are basically like, “We want to reward these people for something, and so, we need to launch a token that is super-fast and super low cost. And so, that is why we are building this new blockchain with this new, unique protocol.” I’m looking at it and I’m just being like, “Why wouldn’t you just outsource all that to us?”

Well, you’re a trusted third-party.

But our blockchain is decentralized and open-source. I mean, we get it. It’s nice to build your own blockchain, but we’re really good, you know. Our blockchain is processing more transactions than every other blockchain combined. And we are not even using 1% of our network capacity. You’re going to beat that?

Everyone thinks they’re cyberpunk and they’re building the new internet.

The fact of the matter is, we are growing as fast as we can. Integrating a token with Proof of Brain is the easiest way to turbocharge any application, because it’s instant gamification. You’re not going to start writing down our unique value propositions.

Yes. As unique as they sound, there’s quite a few of them.

Or maybe I am using the wrong term there, I think one of the best frameworks to come at STEEM from, is that it’s a turnkey gamification system or like a game point system, all it is. And I’m happy to just be like, “Yeah. Super simple, super stupid.”

You integrate with it, and you immediately get a game point system that’s designed to maximize engagement. That’s all we did. Do you want to know how we did it? It’s pretty simple. We classify people as content creators or curators. Forgetting block producers, right? Block producers are paid a salary to just maintain the blockchain and they’re elected in.

100% of the reward pool goes to the players of the game. What DTube, and DLive, and Blockdeals, and Musing, and DSound, and Utopian have done is tap into STEEM’s game point system. They’re already growing exponentially because of that, also because they get to share a preexisting user base. That’s another huge value proposition.

You inherit all of those users. No new accounts, no moving your content.

You create a halfway decent application on STEEM, you immediately start getting exponential growth just because all STEEM users are there, are ready. I mean, the design of the system is just so elegant.

The criticism of that might be, “Yeah, but it doesn’t matter if they are not serious stakeholders.” Yes, but who has the most incentive to check out great new applications on STEEM? Large stakeholders. That’s why when new apps come on STEEM, and they are like, “We need help getting attention.” Usually I am like, “There is no help for you.”

Because if your application was halfway decent, someone would have found it and shared it with the stakeholders.

The more people using it, the more money everyone is making.

I’m a large stakeholder in STEEM, and somebody builds an education platform that’s user-created courses. I don’t want to share it? I don’t want to go there? I don’t want to start uploading a bunch of shit? Giving great contributors tons of money? Of course I do.

At the very least, the incentive is there. There’s not much more you can do on a protocol level than create the proper incentives. That’s all we offer. I think a lot of other protocols are falling into the trap of trying to solve every problem on the blockchain level.

One point that I just want to make clear is that you will be able to tweak the Proof of Brain algorithm with SMTs. You will be able to have 1,000% inflation. You can have all of the token emissions, all of the tokens in the rewards pool. You can have them all go to posters, not commenters. You can have half go to posters, half go to commenters. You can have 90% go to curators, only 10% go to creators.

I don’t know why you would do that. There are other cool stuff that you will be able to do too. You can specify the rewards curve.

DPinterest? I was just saying why you might incentivize curators over posters if it’s a platform where people are sourcing content that’s not theirs. It’s a discovery platform for posting. “Hey, I found this online.” The curator is the…

That’s a really good example. I might use that. The crazy thing is that — forget anything being innovative about STEEM, even though I think it is. Go through every website that exists now that has a market cap that has a valuation of over a hundred million dollars.

Every single one. What if I integrated that with STEEM? Pinterest, right? Digg, Twitter. Every major application, even if it’s just a dumb integration where you just go, meh. But they are getting to be more innovative.

There’s an endless supply of products that could be plugged into this ecosystem and have this incentive structure laid overtop in order to reframe how these sites are incentivized.

Yes. We’re giving you so much more than that. We are giving you the ability to give yourself a bunch of tokens, yes, and then do nothing and the token will bootstrap its own value.

Just Keep STEEMing

In the final part of my conversation with Andy we touch on what made STEEM an early success, why he’s confident in the future of STEEM and the mechanism that will guarantee this future built into the platform.

The post Part 2: Interview with Andy Levine on Steem Today and Tomorrow appeared first on CoinCentral.

In this first part, you’ll get an insider’s view of the power of the Steem platform in its current manifestation and why the future looks bright for the quickly maturing platform.

James: On the surface level, Steem is Reddit with crypto. You go to the website, you’re going to have a very familiar experience to Reddit. You can post articles there, but instead of upvotes, I am getting money, which is cool. But there is more to it than that?

Andy: Yeah. Objectively, the Steem blockchain is the most successful blockchain in the world. That sounds like a crazy extreme statement that can’t possibly be true, because obviously Ethereum, Bitcoin, Bitcoin Cash or your favorite thing is because you own some. Of course, I own some Steem, but I also own some Bitcoin and some Ethereum. How can I back that up?

Well, first of all, it’s still the only blockchain with a real application that real people are using every day. That’s Steemit.com. Steem and Steemit.com have become impossibly conflated. Steemit and Steem are [seen as] the same thing; it’s just one app. But no, it isn’t.

[Steem] is the only content management system on a blockchain, and Steemit.com was just the first application to leverage it. And the fact that a mediocre Reddit clone, that’s now way better than Reddit, but you know at the time — Steemit.com was built in three months.

No one is going to pretend that there’s anything totally special about Steemit.com itself aside from the cryptocurrency integration. And that integration led to SteemIt.com growing incredibly fast, and now it’s around #1500 in the world by Alexa ranking.

But now, there are numerous examples. Now, Steem is the protocol with not just the only real application that ordinary people use every day, it’s the only protocol with multiple applications that ordinary people use every day.

DTube is a YouTube competitor that works. People go there and they go, “Oh my God, there is a YouTube competitor powered by crypto.” What other protocol has that? You’ve got DLive, that’s a Twitch competitor, same thing.

Totally different spectrum: Utopian.io, revolutionizing the open source code movement by rewarding developers for the code that they contribute to GitHub using Steem. And so, Steem is powering now many disruptive applications.

That’s something that is totally ignored for some reason because it’s not Bitcoin. So, the Bitcoiners have no interest in talking about this because they’re talking about the Lightning network. And the Ethereum people aren’t interested in talking about this they’re years away from being able to support applications with this level of transactions.

[thrive_leads id=’5219′]

DTube, DLive, and all these other competitors that are Steem-powered are alternatives to the content platforms that are out there right now. These are forms of content that people understand already. Video content, articles, live streaming, video.

Are there types of content that you can create on a Steem-powered platform that may not have even been a viable form of content on what we’ve had available so far?

That’s a good question. Steem doesn’t store any media. We encourage you to outsource to some other service like IPFS or just a private CDN.

I think my answer to that would be slightly different. I would frame it a little bit different in that when you are talking about social interactions, when you are talking about rewarding somebody for content in some kind of way whether it’s with appreciation or money or whatever, there are certain base primitives that you need.

You need an account. You need to be able to associate some content with a summary. You need to enable comments. Where Steem really shines is certainly text-based stuff.

Say, for example, you want to build an augmented reality or a video hosting site that specializes in virtual reality. You want to encourage users to generate videos and you want to encourage users to watch them and participate in them.

How do you incentivize all of these actors? How do you incentivize the person who is going to upload the content? How are you going to incentivize the person who is going to go there and participate in it?

What we offer are these turnkey primitives that apply to basically all forms of content. In a sense, we are almost never going to offer you a totally original way to monetize your content. You are going to have to tap into the specific primitives that we integrate, the Steem community, and the Steem blockchain.

At the end of the day, what Steem really shines at is integration and monetization of social applications that feature user-generated content, full stop.

Steem isn’t the only platform targeting social. In your eyes, what makes Steem the platform of choice?

Steem can be transferred anywhere in the world in three seconds with zero fees. Any other protocol that came out, and was just like, “This is our unique value proposition: Three seconds feeless transfers” would immediately be in the top five trade-wise.

We’ve got a million accounts. And these aren’t like Ethereum accounts. We’ve looked into it. I think we have the most users, too. Because if you look at the most used crypto Ethereum application, it’s CryptoKitties at 3,000 transactions a day.

Our second most popular application, eSteem, a third-party mobile application, for the Steem blockchain, has three times those transactions. Steemit has ten times more transactions than that.

So, not only do you not have this great token that’s hugely underrated because everybody thinks about social media and all of this other stuff, but you actually have probably the biggest network of users over the world.

You can actually transfer to people. And it’s easy because there are web applications and all this stuff.

Here’s the thing: The user-generated model, everybody knows how powerful this model is, right?

It drives the entire internet economy.

Yes.

Which currently is powered by attention, likes, and advertisers. The Steem platform has moved that to a more monetary, aligned incentive structure that promises to be a little bit more of a healthy environment to engage in.

We tokenize it, and this is a common question we get with respect to SMTs: “Why would a particular SMT be worth anything?” No, that’s not how it works. We give you the protocol. You use it. You make it valuable.

What our protocol enables you to do is to tokenize content. Can you think about that for a second, focus on that, let that marinate, and then go build an amazing application that people love using and then you can use our stack to tokenize it?

Full Steem Ahead

In the next part of my conversation with Andy, we move into what the Steem team is building now and the future of the platform.

We’ll learn about Smart Media Tokens, Communities, Hivemind, and what the Steem team sees the ecosystem enabling for developers.

Stay tuned! 

The post Interview with Andy Levine on Steem Today and Tomorrow appeared first on CoinCentral.

For the second time in as many months, the popular privacy coin Verge has fallen victim to a 51% attack on its network, with attackers netting 35 million XVG, worth around $1.75million at the time of the attack.

Even more concerning, the method of attack seems to be nearly identical to the attack that occurred in early April, another $1million+ heist that called into question the ability of the Verge development team to handle security issues in their system.

According to BitcoinTalk member ‘ocminer,’ the attack takes advantage of a feature of the Verge mining protocol that was supposedly fixed by the development team following the first attack.

The Verge system makes use of 5 different mining algorithms, forcing miners to alternate between the various methods in an attempt to maintain security. Both the most recent attack and the early April attack involved one or more of these mining algorithms being hacked by the attackers to mine blocks extra fast and a bug in the Verge system allowing attackers to attach invalid timestamps to blocks, effectively tricking the network into accepting the unnaturally fast blocks as valid and rejecting all other legitimately mined blocks.

The Verge team has yet to address the vulnerability or the most recent attack, taking to Twitter only to mention the possibility of a DDoS attack on some mining servers and that the team is working on network issues.

This latest attack comes on the tail of Verge’s largest partnership to date, an integration by porn giant Pornhub to accept the currency for membership fees on their website. Whether this and other partnerships will survive another round of questions about the security of the Verge network and the ability of the team to fix issues remains to be seen.

[thrive_leads id=’5219′]

The post Verge Falls Victim to 51% Attack, Again appeared first on CoinCentral.

The Impact of the Pineapple Fund

The post Pineapple Fund Donor Says Farewell After Donating Last of Funds appeared first on CoinCentral.