Crypto Roundup 4

Welcome to the 4th edition of our weekly crypto roundup, brought to you by HEAT crypto.

Deja vu: Yet Another Bitcoin Hack

One has to wonder how incompetent the largest Bitcoin exchanges can sometimes be, handling billions of dollars worth of transactions and having the kind of security that they do. So the latest saga in a bunch of exchange hacks is that Bitfinex got hacked, and lost a bunch of money. Like a big bunch of Bitcoin - almost 120,000 of them. That’s nearly 1% of the entire Bitcoin supply. Oops. You would have thought after the debacle at MtGox things would have gotten better, but we keep seeing such loss of funds from exchanges.

A better solution to be found is either via -

  • Decentralized (peer to peer) exchanges, like Bitsquare. The big problem is they don’t scale.
  • Semi-centralized solutions like Bitshares/WAVES/HEAT that allow tokenized fiat to trade on the blockchain via gateways, and has a built-in decentralized exchange on the blockchain.

In the second system, there is semi-centralization in the creation of tokenized fiat. However, if you trust the entity that doing this tokenization, then there is no further trust required. You can trade on the blockchain directly, instead of sending your coins to an exchange’s wallet first, in exchange for IOUs from the exchange (that may not be worth much, as we’re finding out with the Bitfinex saga through possible ‘bail-in’). The biggest challenge in this use-case involves partners who are willing to act as 'gateways' to the blockchain, e.g. convert USD to HEAT-USD and vice versa.

Instead, you control your private keys throughout the lifecycle of the trade, and yet you can trade with counterparties from around the world, all being secured by the decentralized blockchain. Did we mention that HEAT is awesome and you check out the ICO that is still ongoing, but for just a couple more days?

Other conspiracies around this revolve around data that shows an increase in short volume on OKCoin prior to the Bitfinex hack, suggesting a secondary market for this information created before the hack took place. This was potentially the MO of the DAO hacker as well - short ETH before the ‘hack’.

OkCoin volumes

Here's the actual chart in more detail:

OkCoin volume chart

Post Fork Ethereum

Ethereum continues to provide a fascinating case study of what happens after a controversial hard-fork. It can be a cautionary tale. Except, the price seems to be doing quite well honestly, considering the total price of ETH+ETC. The relative valuations keep swinging though. The combined price is still more than $13.

ETH/ETC Relative Value

Most DApp projects, including Consensys in New York that funds the largest ones, have indicated they will go with ETH instead of ETC, i.e build their applications on top of ETH.

Consensys ETH

Lisk Shows Progress

Lisk has been showing some good progress on where things stand with the project. Success comes slow and steady, and it is good to see small but significant things being created. For example, this is the Lisk autovote script that allows holders to quickly vote for the delegates of their choice (remember Lisk uses a delegated proof of stake system).

In addition, some applications are also being developed, which is a good sign. Ethereum took a while to get its first DApps as well. Hopefully, Lisk doesn't need to go through its DAO moment!

There is also a good post on What is Lisk. If you hold Lisk, you should read that post. We've made fun of JavaScript in the past, so read their rebuttal!

Asset Platforms Mature

Waves was one of the hottest ICOs in 2016. Whether it can provide real benefits to the community remain to be seen. However, progress is being made. The team has announced starting the custom token implementation system that is the cornerstone of WAVES' value proposition.

In addition to a token platform system, the WAVES team is also working on implementing a trustless exchange. Here is some more information on this. The competition is heating up - HEAT, for example, will have this feature from the beginning, and HEAT has a significant head-start on scalability. Time will tell which platform will become the dominant one for use by the crypto world.

In any case, it is good to see this area get more attention. The uses of crypto need to go beyond the niche, and tokenization, with built-in exchanges, in my view, are a great step forward for the entire industry.

Dedicated Crypto Blogger (DCB)

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