Monthly Archive: October 2018

How To Get Started With Bitcoin Gambling? 0

How To Get Started With Bitcoin Gambling?

Throughout the years since its onset, online gambling has been building up into a major digital industry. For the most part, this is due to the agents involved in the business, as well as their constant tendency for improvement, advancement and innovation. This brought about many changes to online casino platforms which ultimately served players towards getting the most entertaining online gaming action.

Namely, players were able to access more stable and secure online casino floor platforms, play a much wider variety of games and pay for this or get a cashout in a much timelier manner. Regarding the final point, a new payment method has recently surfaced and taken on online casino payments in a storm –the cryptocurrency Bitcoin.

What is Bitcoin?

Around 2009, the cryptocurrency Bitcoin and its entire operating platform – the blockchain, were invented and publicly released by a Satoshi Nakamoto. This is the name used by the person or group of people responsible for its creation, and despite the large amount of Bitcoins in their ownership today, no appearance has been noted.

The cryptocurrency itself is a digital form of payment for an item or a service, performed on its own decentralized, peer-to-peer network. It is not regulated by any government or financial establishment, hence its volatile value on the one hand, and its secure and prompt payment processing capabilities, on the other.

The blockchain takes the role of a ledger, with the distinction that it is not an actual book of financial records. Yet, it still manages to record each transaction that is being performed among two or more Bitcoin accounts, update its records in real time and make all this data available to anyone in the ledger. That way, everyone knows the sender and receiver of every transaction, as well as the amount of Bitcoins involved, all to the purpose of disabling anyone from using a single bitcoin for multiple transactions.

While it might seem to disclose everything, the blockchain basically keeps things transparent but doesn’t provide anyone with any access to someone else’s possessions, be it account or personal information. In fact, all that is visible aside from the amount transferred is the string of letters and numbers used to identify Bitcoin holders’ accounts, i.e. their cryptocurrency e-wallet.

Acquiring & Storing Bitcoin

E-wallets are an online service that allows players to store their finances on a virtual location, and Bitcoin wallets are specifically designed for this purpose. These e-wallets can be found in three different formats: online cryptocurrency wallet, offline or hardware e-wallet.

The online wallet is actually a cloud-based online service that allows you to place your bitcoins on an outside server, making them responsible for any issues. However, considering that the main goal of every Bitcoin holder is to avoid such issues, there is a second option – an offline wallet. This is in fact a program installed in your computer that allows you to keep your Bitcoin treasure on your own computer hard drive.

Ultimately, you can choose to purchase a portable, hardware Bitcoin e-wallet such as Trezor or Ledger Nano S and store them on this device. Each hardware solution bears its own set of potential issues, such as theft, electricity failure or even losing it, but considering the cryptocurrency’s value, owners tend to be extra careful.

As for acquiring Bitcoins you can put in your chosen e-wallet, this is best done through a cryptocurrency exchange platform. While the process is the same if you decide to exchange your fiat currency with someone’s bitcoins as a private transaction, there are numerous perks to using such a service.

Most cryptocurrency exchange platforms perform thousands of transactions per day, for a number of users, exchanging a handful of different currencies. They provide the ‘safety net’ protection in case one of the people involved in the transaction doesn’t hold to their side of the bargain. Moreover, most of these services offer a free e-wallet for the Bitcoins you are about to purchase – or sell – as well as numerous other perks to keep customers interested.

Gambling with Bitcoin

Once you have learnt the basis of Bitcoin financial transactions, and the proper ways to get this cryptocurrency and keep it in your possession, it is time to make some use of it. Nowadays, this currency is used to pay for all kinds of merchandise and services through e-commerce platforms. One such occasion is online gambling websites, which only recently discovered the perks of Bitcoin transactions and are quick to use them to everyone’s advantage.

Bitcoin allows online casino and poker room players, as well as sports bettors or any other gambling enthusiast to enjoy their favourite pastime free of fees, payment delays and legal restrictions. This is due to the anonymity and decentralized nature of the blockchain operations, as well as the fact that it operates on a P2P basis. Basically, in order for a transaction to get processed, numerous other Bitcoin owners help make this happenwithout any central authority, simply operating on good faith and a certain gain.

Online casinos soon implemented the necessary add-ons for the payment method. All players had to do to use it instead of the existing ones is to access the ‘Cashier’, ‘Payments’ or ‘Bank’ section in the established Bitcoin online casino and choose it as a deposit and withdrawal method. After that, players put the amount for the transaction and their e-wallet sequence of numbers and letters and are free to gamble away without sharing any more personal information with cyberspace. There have also been a few pure Bitcoin casinos launched recently where you can only gamble with Bitcoin as a currency. These casinos are typically completely anonymous.

Increase in transactions definitely gave Bitcoin a boost on its value, but there is much more to be done. Best you can do is get yours and enjoy the care-free online gaming experience as much as possible.

How to Help Translate 0

How to Help Translate

If you’re a fluent or native speaker of a language other than English, this
blog post will help you learn how to get started translating so
that more people around the world who speak your language can learn about

Thank you to Simon AKA “Komodorpudel” for preparing content to help organize this post.

Getting Started with the Translation Team

Translations for are done on a website called Transifex. Basic instructions for how Transifex works can be found here.

Below is a summary:

  1. Create a free Transifex account.
    Creating a Transifex account is free and not much information is needed.

  2. Join the translation team
    and select the language you want to translate the site into. Your request to
    join a team will be accepted instantly, and you will be a translator for the
    language you selected. If your language is not available yet, close the pop-up,
    scroll down, and navigate to “Request language”.

  3. Play around with the interface. Transifex’s interface can be a bit confusing
    and it cannot hurt to take a look around. As a translator, you cannot cause any
    harm as you can only edit unreviewed strings. A complete history is saved for
    every string, making it impossible to destroy previous work. In the beginning,
    stay away from the Glossary as this can be edited by new translators but no
    history is saved.

  4. Join the Telegram group for translators.
    The website maintainer, both team leaders for translations, a number of language
    coordinators, and various translators are present in this group. We are happy to
    help in case you need assistance.

  5. Choose what you want to translate. Navigate to the “Dashboard” on the top of
    the page, then to “Languages” and select your language. You will see a lot
    of different resources and their progress. Each resource consists of a number of
    strings. A string is a “string” of text on Each string has three
    possible states – “untranslated”, “translated but unreviewed”, and “reviewed”.
    Only the first state “untranslated” is relevant for most translators. However,
    if you find a “translated but unreviewed” string that contains obvious mistakes,
    you are free to correct them. “Reviewed” strings can only be changed or
    unreviewed by reviewers. The first resource “” contains all strings
    of the main page. Start here. Everything else that follows starts with
    “devdocs…”, indicating that these files are part of the developer
    documentation. It is recommended that you only try to translate the developer
    documentation if you are an experienced Bitcoin user and/or developer with a
    profound understanding.

  6. Start translating. You must be a native or fluent speaker for the language
    you choose to translate. Please be careful to preserve the original meaning of
    each text. Sentences and popular expressions should sound native in your
    language. Translations need to be reviewed by a reviewer or coordinator before
    publication. Once reviewed, coordinators will notify the team leaders that a
    certain translation is ready for publication. If in doubt, please contact the
    coordinator(s) for your language on Transifex.

  7. Please take a look at the Responsibilities and Tasks section below to learn
    more about the different types of users that you’ll encounter on Transifex
    when helping translate

Responsibilities and Tasks

Team Leaders

Team Leaders are currently Simon AKA “Komodorpudel” and Hendrawan AKA “khendraw”.

Responsibilities and Tasks

  • Providing oversight on the complete translation efforts on Transifex.
  • Keeping track of everything.
  • Being a contact person for all sorts of questions that cannot be answered by language coordinators.
  • Promoting or demoting users (e.g. promoting a reviewer to coordinator).
  • Managing groups that have no active coordinator.


Various people across all language teams are coordinators. For a number of
languages, no active coordinator exists. If there are any questions or you want
to assist by becoming a coordinator, please write one of the team leaders.

Responsibilities and Tasks

  • Translating and striving for consistency across strings.
  • Providing oversight on the complete translation efforts for a specific language.
  • Notifying team leaders if a resource is ready to be put on the website.
  • Being a contact person for the team leaders.
  • Being a contact person for all reviewers and translators within a specific language team.
  • Introducing and helping new volunteers.
  • Promoting or demoting users (e.g. promoting a translator to reviewer).
  • Removing user that do not follow instructions (e.g. using Google Translate).


Responsibilities and Tasks

  • Translating and striving for consistency across strings.
  • Reviewing strings (preferably not their own strings if possible).
  • Checking translations for correctness regarding meaning and spelling.
  • Checking for consistency across translations (e.g. is “transaction malleability” translated consistently across all strings?).


Responsibilities and Tasks

  • Translating and striving for consistency across strings.
  • Extending the glossary with translations for necessary and general terms.

About was originally registered and owned by Satoshi Nakamoto and Martti
Malmi. When Satoshi left the project, he gave ownership of the domain to
additional people, separate from the Bitcoin developers, to spread
responsibility and prevent any one person or group from easily gaining control
over the Bitcoin project. Since then, the site has been developed and
maintained by different members of the Bitcoin community.

Despite being a privately owned site, its code is
open-source and there have
been over 3,200 commits from 180 contributors from all over the world. In
addition to this, over 950 translators have helped to make the site display
natively to visitors by default in their own languages — now 25 different
languages and growing.

Bitcoin News Summary – October 15, 2018 0

Bitcoin News Summary – October 15, 2018

The post Bitcoin News Summary – October 15, 2018 appeared first on 99 Bitcoins.

Here’s what happened this week in Bitcoin in 99 seconds.  Major exchange and Tether operator, Bitfinex, has imposed a temporary ban on all fiat deposits. Clients are no longer able to deposit Euros, Dollars, Yen or Pounds to the exchange. Withdrawals are reportedly working normally. Bitfinex has said that they expect the issue to […]

<h1>Parity Signer v2.0 Turns Old Phones Into Hardware Wallets</h1> 0

<h1>Parity Signer v2.0 Turns Old Phones Into Hardware Wallets</h1>

The project is still in beta, so don’t transfer all your crypto just yet. But maybe start digging out that old iPhone with the cracked screen.

Bitcoin Price Surges 10%, Bulls Take the Charge of the Crypto Market 0

Bitcoin Price Surges 10%, Bulls Take the Charge of the Crypto Market

After last weeks massive correction, today’s recovery in the crypto market is a huge relief to the investors.

The post Bitcoin Price Surges 10%, Bulls Take the Charge of the Crypto Market appeared first on CoinSpeaker.

Continue reading at Coinspeaker

The Fall of Tether and What It Means for the Cryptocurrency Markets 0

The Fall of Tether and What It Means for the Cryptocurrency Markets

The demise of Tether has been a car crash in slow motion. An unswervable event that has played out over the course of months, it has reached a crescendo in the past 24 hours, with tether slipping significantly from its dollar peg. It is possible, perhaps even probable, that it will regain parity with the U.S. dollar. But by then, the damage may have already been done.

Also read: The Daily: Tether Sheds Its Peg

The Beginning of the End
or the Start of a New Dawn?

A cryptocurrency losing 10 percent of its value in a week would not normally be news. But when that cryptocurrency is a supposedly “stable” coin — and one whose very stability is relied on by a huge tranche of the market — its slippage is big news. One small slip for tether can result in a giant leap for other cryptocurrencies; it is no coincidence that BTC’s climb to $7,500 in the past 12 hours, as well as its subsequent decline, was triggered by tether’s instability.

A precis of the events that led to this state of affairs goes as follows:

  • Tether’s trading volume has built up over time, leading to it becoming the second most traded crypto after BTC (USDT 24-hour volume currently stands at $4.8B)
  • Bitfinex’s failure to publish an audit has led to fears that tether could be backed by nothing, or at least not enough to cover the 2.5 billion tethers in circulation
  • Bitfinex’s struggle to obtain a banking partner has exacerbated the problem
  • Rumors of Tether/Bitfinex being subpoenaed and potentially shut down have swirled for months
  • Last week Bitfinex lost its latest bank, HSBC, forcing it to suspend fiat deposits
  • A steady stream of criticism has poisoned the Tether brand, leaving confidence in the stablecoin at an all-time low
  • Wary of being trapped in an asset that’s a prime target for FUD (both real and false), traders have exchanged USDT for BTC or other stablecoins
  • This has caused the price of tether to slip and other stablecoins to trade at a premium

Which leads us to where we are today, which is a cryptocurrency market that doesn’t know what’s going on. Tether bears are loving the collapse of USDT, other stablecoins are relishing their time to shine, memers are meming, arbers arbing, and BTC is leading the market on a merry dance from the low $6000s to the high sevens.


Tether’s drop-off has occurred sharply, as can be seen when viewed over a three-month window.

On cryptocurrency forums, traders shared apocalyptic predictions of what tether’s demise might do for the ecosystem, and whether it would presage Mt Gox 2.0. Hyperbole reigned supreme. “It took almost four years for people to regain some kind of confidence after Gox,” wrote one. “This is far worse than Gox, and will hurt crypto immensely in the eyes of even the bagholders and basic bitches.” They continued:

Without dumb money entering the system, you can’t offload your shitcoins, thus you’ll all be sitting on bags, and the market will become inert. It’s gonna be a bad, bad turn, regardless of what happens.

Exchanges Rush to Introduce New Stablecoins

With tether’s card marked, so to speak, cryptocurrency exchanges have sought to expedite the introduction of alternative stablecoins. Today (Oct. 16), Okex went stablecoin crazy, adding TUSD, USDC, GUDC, and PAX. On Binance, meanwhile, TUSD is trading at $1.12 against tether, having reached a high of $1.24 at one stage. At the time of publication, tether was averaging $0.93 across exchanges, but with some marked disparities between platforms. On Binance and Bittrex, for example, where there is a greater choice of stablecoins, tether has fared worse. On Kraken and Bitfinex, on the other hand, traders have little option but to trust in tether.

Should Bitfinex succeed in restoring its banking arrangements this week, as the exchange has promised, it is conceivable that the move could restore faith in tether, which may regain the $1 peg it has adhered to so faithfully until this week. Whether tether is backed or unbacked, audited or unaudited, its status — from a technical perspective — has not changed in the past seven days. Psychologically, though, everything has changed. Like a cheating spouse, a stablecoin that’s been caught out once will always be suspected of straying again. While the markets will weather this period of uncertainty, for tether there may be no way back. Where tether and Bitfinex go from here is anyone’s guess.

Do you think this is the end for tether, or will the stablecoin recover? Let us know in the comments section below.

Images courtesy of Shutterstock, 4chan and Twitter.

Need to calculate your bitcoin holdings? Check our tools section.

The post The Fall of Tether and What It Means for the Cryptocurrency Markets appeared first on Bitcoin News.

From Shipwreck To New Life: Venture Capitalists Save The Day For Blockchain Companies & ICOs 0

From Shipwreck To New Life: Venture Capitalists Save The Day For Blockchain Companies & ICOs

From Shipwreck To New Life:

Venture Capitalists Save The Day For Blockchain Companies & ICOs

In the first weekend of 2018, Cryptomarkets peaked to an all-time high with more than $60 Billion of cryptocurrency traded within 24 hours and the total market capitalization reaching over $830 Billion. Over the course of the next month, the entire market witnessed a free fall — crashing 65.37% to a total market capitalization to just $277 Billion.

For skeptics, this correction was a pivotal opportunity to combine effort and discredit the value of cryptocurrency assets. This effort could be seen on a majority of news websites in the form of fake news about ICOs and cryptocurrencies.

Every Action Has A Volatile Reaction

Here is a line graph with 4 vertical lines dividing the market into 4 distinct times between July 1 and Sep. 30, 2018. The graph plots the RoIs of the top ICOs.

Each line (A, B, C, D) is carefully placed to map a specific news or event which may have affected the market with either a bearish or a bullish sentiment.

Graph showing the price variation (source: InWara)

A) The Bear Signal

Here, we see prices quickly drop after what was a 2-week long bull run. This is an example of a sentiment shift due to a couple of big names throwing their weight around.

  1. A prominent Bitcoin ETF was rejected.
  2. A poorly researched report that pointed to the fall in ICO funding from Q4, 2017 to Q1, 2018.

This had skeptics jumping on the bandwagon and spreading false claims and exaggerated reports breeding Fear, Uncertainty, and Doubt (FUD).

B) The Stable Climb

There was a clear sense of confidence growing in the air. Prices were climbing up steadily.

C) Reddit Investigation Goes Viral

A Reddit investigation found that a wallet linked to the original Silk Road with 111,114 BTC recently started to move its holdings for the first time since 2014. Of the holdings, approximately 11,114 BTC were moved to Bitfinex and 4,421 BTC were moved to Binance.

Alleged fake news spread by Business Insider stating that Goldman Sachs was abandoning its plans to trade in cryptocurrencies.

D) BitMEX outage

Just a few hours after a seemingly manipulated pump added over $12 Billion to the total market capitalization. Bitcoin spiked to a peak of $6,800 on 21-Sep, 2018 when BitMEX had a temporary outage causing anomalous trade volumes.

Also, Google announced that it will end its all-out ban on cryptocurrency advertising.

Fast Forward To Today

The market confidence is growing again as Bitcoin, the poster child of crypto has established its bottom with solid support at $5900.

The ICO buzz

The United States saw the highest number of ICO rounds with a total of ~150 ICOs in North America. UK has seen the highest number of ICOs in Europe with a total of 93.

Financial services, Technology, and Gaming remain the most popular investment industries.

Are ICOs Really Doomed?

It is true that trade has slowed down, but does this mean that the market is doomed?

An indexed ROI graph of all ICOs indicates that 300+ ICOs ended Q2 with a positive delta over the period May to Jun, 2018.

Even though the ICO market appears to have been in a downtrend, an individual could have made a 5X-10X profit had he bought into the right ICOs. At $6.3 Billion, ICO funding in the first quarter exceeded the 2017 total, a figure that could undermine a widespread impression that this oft-spoken fundraising method will soon die out.

On the contrary, Cryptos grew in 2018. Only trade and crowdfunding appeared low in some cases, however, VC investments increased significantly.

Also, mergers and acquisitions are becoming very common in the world of ICOs and blockchain startups.

Mergers and Acquisitions by Buyer Industry

The reason why most ‘Research Reports’ claim that the market is withering and not maturing is that none of their statistics represent neither private investments nor merger/acquisition activity.

Private investments are difficult to measure since they are carried out with a certain degree of confidentiality. Extensive measures need to be taken to capture this information. InWara does this by analyzing 3000+ ICO whitepapers, almost 2200 official company blog articles, 500 official press releases and continuous web monitoring of news and social media sources.

Director of InWara, Sushrut Gaikwad, responded to the following questions saying:

Q. How would you define the current trend in the emerging markets involving cryptocurrency?

“The future seems optimistic despite the slow down in 2018. All it really takes is a step back from the charts and an education on the underlying fundamentals to realize that digital assets have been beaten without cause.”

Blockchain composition country wise

Q. There seems to be a visible shift from public fundings to private/VC fundings. Why do you think this is happening?

“The “average Joe” has become wary of ICOs ever since the crypto market correction in Q1 2018, however, VC funds and private investors have been pumping capital into this space non-stop. This is likely a result of the growing confidence of big players entering the market and understanding the power law dynamic behind Crypto’s notoriously high volatility.”

Q. Which industry looks the most promising when it comes to disruption by blockchain technology?

“When we compare the many cases of use that come from blockchain — based startups, we can see that the Financial services industry remains the main focus of emerging innovation and invested capital. This reflects the importance of the “early-mover” advantage — a competition factor of who sets the bar first.”

The Future of Crypto

2018 has introduced crypto to the world. There have been more coins, more ICOs, more money, and more industries involved in Blockchain than ever before.


The InWara Research Team ensures quality and accurate research, analyzed exhaustively by a team of quality controllers and highly skilled analysts. The research team strives to publish only the most accurate information possible, so all information has been carefully considered on a factual basis and the data is collected by analyzing 3000+ ICO whitepapers, almost 2200 official company blog articles, 500 official press releases and continuous web monitoring of news and social media sources.

“Our customers use our data analytics engine to find data and unique insight to help them when they buy and sell crypto throughout the markets. We used our data analytics tool for this report to analyze the ROI of each ICO listed after. It takes 10 seconds to filter data by industry or country.

InWara helps you discover the information you need to make risk-free choices for your future ICO investments. Subscribe to InWara’s market intelligence tool to help make your investment decisions.”

Visit InWara’s website to view complete Q3 report of 2018.

From Shipwreck To New Life: Venture Capitalists Save The Day For Blockchain Companies & ICOs was originally published in Hacker Noon on Medium, where people are continuing the conversation by highlighting and responding to this story.

The Blockchain Party is Over 0

The Blockchain Party is Over

And vultures are circling to tokenize the world

It’s been a wild ride. The boat cruises. Lavish events. Lambo memes. Champagne on the beach. Conferences across Asia, Europe, Dubai, and the Caribbean. The abundant private VIP dinners and posh after parties sponsored by some hot new ICO. On and on and on.

Now the blockchain party is over.

It’s time to build real products and deliver on the dream sold through white papers and barely functional MVPs. That means blockchain founders need to step up and execute — regardless of the value of tokens or their crypto portfolio. Blockchain isn’t about enriching ourselves — it’s about a revolution to co-create a better world.

Meanwhile rich (mostly white male) elites who don’t really care about the underlying tech or vision want to take advantage of a new financial instrument to tokenize everything and extract all of wealth and value. I see them in every blockchain meetup and event these days in NYC.

STOs are the new ICOs, they say. After following cryptocurrency for years without getting in, security token offerings make sense to Wall Street investors and hedge funds. They deal with securities all day long. That’s all they do. FOMO is strong. They won’t miss out this time.

Uncaring about the practical utility of blockchain technologies, they look to impose an extractive model from Wall Street through fractional ownership that transforms everything into a security. This will provide instant liquidity and could ultimately displace and replace the stock market. In this future, rich white men could buy and sell every aspect of your life.

The Race is On — Visionaries vs. Vultures

The race is on to execute and manifest the vision for a more interdependent, decentralized and transparent world enabled by blockchain technologies. It’s a race to beat the vulture capitalists and bankers that Satoshi Nakamoto intended to disrupt when she wrote the original Bitcoin white paper.

Lines are being drawn for what kind of world we want to live in. There are serious choices to make and consequences for the types of outcomes that follow. It is not an understatement to say that this is perhaps the defining question of our time regarding the future of human civilization.

Do we want to live in an inclusive world that shares value and empowers everyone, or will we continue to perpetuate wealth extraction?

Will the blockchain ecosystem deliver on the vision of Satoshi Nakamoto, or will it accelerate a new wave of unprecedented inequality?

Will your children grow up with abundant opportunities to realize their potential, or will they inherit a dystopian nightmare?

How The Blockchain Party Ended

The blockchain space initially attracted a renegade group of visionary developers, eccentric finance people, creative marketers and community builders, and high risk takers united by a common vision of co-creating a better world that challenged the status quo.

These early-adopters bold enough to take on the power of big banks, sovereign nations, and global corporate elites accomplished something almost unthinkable in 10 years— they collectively created a decentralized network and infrastructure with enough traction to start delivering on their promise.

Empowered by the battle cry of HODL!!!!! they placed faith in the vision of Satoshi Nakamoto that things would work out. Bitcoin would eventually go up in value. Developers would eventually ship great products. The blockchain ecosystem would continue to grow, fueled by the vehicle of the ICO.

The amount of token sales increased exponentially to make the ICO market incredibly competitive, peaking in February 2018 shortly after a major correction, or crash of bitcoin. Then the market bottomed out and flat lined, drying up the abundant crypto flowing. More sales, less money to go around. Basic law of supply and demand will tell you many ICOs failed as a result.

Facebook, Twitter, and Google Adwords banned cryptocurrency ads due to a high volume of scams and speculative risk taking. Big splashy ICOs with simple marketing funnels driving people to landing pages phased out. Private token sales became the new norm with massive 80–100% bonuses to attract early investors. Retail investors were boxed out.

That led ICO marketing to shift towards private VIP events catering to whales, a mix of savvy crypto investors who made fortunes in the ICO boom and investment bankers, real estate moguls, and traditional industry heads throwing money at things really didn’t understand.

Meanwhile exchanges like Binance charge up to $1m for listings. Blockchain companies needed to spend substantial amounts of their token sale proceeds on market making in order to hit a certain amount of trade volume. Those who didn’t risked having their tokens crash.

Then token prices crashed anyways because all trading was tied to BTC and ETH. When the price was up, crypto whales had extra ETH to spread around in the ecosystem. When it was down. they went to private OTC deals or stopped investing. Secondary market trading slowed on exchanges.

Meanwhile SEC regulators in the US said all tokens are basically securities. This pushed token sales through places like Malta, Gibraltar, Singapore, or the Cayman Islands. US citizens were mostly either banned from participating, or only allowed if they were accredited investors.

All of this basically killed the ICO. It’s nearly impossible, if not illegal, to do a token sale that isn’t for a security token, or STO. Even companies that thought their sales were legal are finding the SEC taking legal action. Retail investors can’t participate in STOs due to securities laws. The paradigm of wealthy elites controlling access to deals is replicating itself again.

The blockchain party is over. Now it’s time to execute and deliver on the promise in order to attract investment, scale development, and drive mass adoption. It’s time for real utility, not speculation. It’s time to double down on core values, refine focus, and revolutionize the world.

There are two interrelated problems to address and a possible path forward.

Problem 1 — Utility Tokens without Real Utility

ICOs were primarily for utility tokens. Investors would speculate on the value of a token within the context of how a blockchain platform will work based on a white paper and MVP i.e. its future utility. The biggest ICOs tended to be for platforms and protocols. The pipes, or infrastructure, of future ecosystems.

This is a basic chicken and egg problem. Crypto investors have almost no appetite for useful applications. They want to invest in infrastructure. If you own the land and the soil, then you benefit from the buildings, crops, and everything built on top of it. However, if there are all chickens and no eggs, then everything dies within a generation.

Union Square Ventures recently published a great article on the myth of the infrastructure phase. Looking at historical data, they found that useful apps drive development of infrastructure to support scale and address specific needs. One might argue that blockchain apps and infrastructure are being developed in parallel, but investment dollars aren’t evenly distributed.

The biggest problem here is that protocols only work if you can get developers to build on top of them. Protocols sound great in theory. In practice is another story. Founding teams are developers, who know almost nothing about how to build community. Most protocols have terrible UX and poor documentation, making their protocols nearly impossible to use.

There are serious obstacles to user adoption. The entire ETH ecosystem for example basically requires people to learn how to use MetaMask, which is confusing and complicated for most of the general population. The beauty of source code doesn’t matter if there is no practical utility for end users.

Many blockchain founders don’t know what to do, how to execute, or where to prioritize their focus. Part of the reason why investors replace founders in traditional VC-funded companies is because the skill sets required to build an early-stage startup are different than the ones needed to scale.

The truth is it’s hard to build a real company with millions of users and working products that solve real problems, while addressing the engineering challenges of scaling infrastructure. Decentralizing everything and relying upon an external developer community is an added layer of complexity.

It also takes time. Typically a company would receive $25–100m in funding after years of development, hiring 100+ employees, successfully generating revenue and hitting clear milestones for growth and adoption. ICOs received a comparable amount from a white paper and MVP.

The token sale as a vehicle to raise funds has been proven through ICOs, though blockchain companies are yet to deliver on their promise to release functional, real products that millions of people want to use.

Blockchain ecosystems won’t magically build themselves. Utility tokens need real utility. Blockchain founders must invest in community building, UX and design, and tell a story that investors, media, and customers understand. Otherwise they will never attract users.

The blockchain party is over. It’s time to build real products and platforms with practical utility that the world wants and needs.

Problem 2 — Tokenization of Securities without care for Real Utility

The privileged rich (mostly white male) investors who are now entering the space don’t know or care much about blockchain. They care about liquidity, not utility. They want predictable, fast and high returns through financial instruments that can be easily traded and manipulated.

Fractional ownership of an instantly tradable asset like a security token is incredibly appealing to investors. They no longer have to wait 3–5 years for an exit via an acquisition or IPO. They can get massive discounts for participating in a deal at an early stage comparable to a traditional seed or Series A round, with significantly less risk.

If a project looks bad or fails to execute, they can dump their tokens and pull out their money. If it takes off, they can pull out their initial investment and let the rest ride. Security tokens eliminate the need to do an IPO. Why issue stocks when security tokens are far superior to all parties?

I believe the massive benefits of the STO will eventually replace the IPO, and in turn will kill the stock market in 10–20 years. Many of the tech savvy investment bankers I speak to agree with this assessment, though few would feel comfortable speaking about it publicly given their clients on Wall Street.

STOs have the potential to revolutionize global financial markets and reshape the world economy. Companies like Airbnb are leading this revolution through asking the SEC for permission to offer equity to hosts. The fractional ownership model presents a hopeful opportunity for value distribution, increased participation, and financial inclusion.

However, the major challenge we face now is that most investors don’t care about any of that. They care about making more money. The opportunity to get instant liquidity and quickly flip security tokens encourages greater risk taking to maximize short-term profits.

If we are not careful, the STO could easily become the new credit default swap — an instrument designed for a specific subset of investors, which became misused, manipulated, and crashed the global economy.

A Path Forward — STOs with optional Utility Tokens

Nobody wins in an economy where a small class of elites control all of the wealth and the rest of the population struggles to get by. A healthy economy needs a strong middle class with expendable income to buy things, driving growth across industries and reaping healthy long-term returns to investors.

The STO and tokenization is here to stay and is likely to replace the ICO of utility tokens as a mechanism for fundraising. A superior financial instrument than stocks that traditional investors have an appetite to buy (especially hedge funds and Wall Street bankers), STOs present opportunities to raise funds from a new class of investors without having to force a utility token function into the product and white paper.

In the long run, this could be good for everyone. Blockchain projects can develop utility tokens only when they need them. In fact, eliminating the need to force a utility token into projects for the sole purpose of doing an ICO could become a driver for blockchain adoption and simplify product development.

As the co-founder of Blox 7, an agency specializing in New Economy Storytelling and marketing communications for blockchain and emergent tech, I can tell you it is much easier to explain the blockchain to potential investors, media and customers without going into how a token works. Removing complexity from the story through STOs could make it easier to raise money and scale adoption.

Blockchain platforms have the potential to mitigate risk against fraud, provide greater transparency, encourage sustainability and more efficient supply chains, and more. They can also empower users to monetize their data and earn utility tokens, which creates incentive structures for users to build and grow companies.

As threats of automation due to AI and technology risk replacing jobs, a fully realized and functioning blockchain ecosystem might generate enough supplementary sources of revenue through earning utility tokens to function like a form of basic income. It also has the potential to uplift billions of people out of poverty, many of whom will come online for the first time in the next 10–20 years.

The race is on to build functional blockchain products and real companies worthy of attracting investment. A new two-token model may become the norm, where companies sell security tokens for a raise which can be traded similar to stocks and the current alt-coin exchanges, and then issue utility tokens for use on their platforms, which function like stable coins having a fixed value that doesn’t go up or down.

For example, look at SocialFlow’s current security token sale for the Universal Attention Token. An existing company with a $100m+ valuation, they aim to use the blockchain to disrupt conventional advertising. Margins for ads are small — they cannot have a utility token fluctuate in value. Their utility token will function like a stable coin within its new ad publishing platform.

SocialFlow probably could have raised an equity round and closed it entirely from existing investors. Instead, they chose to do an STO as a way to show faith in the mechanics of a working blockchain example. Their use of blockchain case (utility token, built on the Stellar Consensus Protocol) and securitization case on the blockchain isn’t tapping into a fad. It’s the right path forward from a company positioned to disrupt the global advertising market.

The Big Unknown — Secondary Exchanges and Global Markets

The big unknown in this equation is that ICOs and utility tokens tend to be pegged to the price of bitcoin and mediated as such through sales on exchanges. Security tokens will be sold on separate exchanges. As securities, their value should be more closely tied to company performance similar to stocks. It is unclear to what extent the rise and fall of bitcoin will impact price.

If STOs become the new norm for raising capital (which I think will happen in the next 12–24 months), what will happen to the price of bitcoin and the 2,000+ current alt-coins / utility tokens? Will utility tokens earned through blockchain platforms using a two-token model be sold in utility token exchanges? How will this play out in regulations around the world? Will the price of bitcoin go up again and we enter a new bull run, or will a massive consolidation happen and many alt-coins never recover?

Meanwhile jurisdictions outside of the US like Singapore, Malta, Gibraltar, Cayman Islands, and more facilitate legal sales of utility tokens but not securities. As the US heads down the path of security token sales, global markets could continue to do utility token sales and simply exclude US investors. Thus we could look at the blockchain ecosystem being divided along geographical lines. Many US blockchain companies are relocating elsewhere and consider the US losing its place in the global blockchain ecosystem, including TechCrunch founder Michael Arrington.

What’s also interesting in this equation is that hedge funds and investment bankers have a bigger appetite for security tokens right now than traditional venture capitalists and tech investors. STOs coming to market are being bought up by Wall Street. Silicon Valley early-stage investors who historically have been more prone to take risk are backing off due to the regulatory landscape. They’ve also been burned over the past year with the crash of crypto markets while Wall Street sat on the sidelines. Follow-on VC firms who put money in after lead investors are especially scared.

Ultimately, a utility token with a fixed price is better for end users. Volatility is a major problem for mass adoption. Imagine you earn $10,000 worth of tokens on a platform and need to pay for college tuition or your mortgage, and then a week later they are worth $5,000 because the price of bitcoin crashed again. Would you ever trust or use a platform again?

What this means is the current market of trading utility tokens based on speculative future value is not in the best interests of end users. A stable utility token market, in turn, gives no returns to investors. Thus the future of the current $200B market cap cryptocurrency ecosystem is unclear.

A Call to Action — Let’s Get Back to Work

As Wall Street hedge funds and investment bankers enter the space, blockchain is also entering the enterprise. This requires an entirely new level of support and sales process similar to the SaaS model. I think enterprise blockchain adoption will legitimize and professionalize the industry.

Dispatch Labs is a great example of a protocol designed to enable any data-driven application to transition easily to blockchain. They also have a GDPR-ready protocol to comply with the EU General Data Protection Regulation (GDPR). They are bringing blockchain into the enterprise with real business use cases, clear documentation, and great community support.

Dispatch CEO Matt McGraw partly inspired me to write this after his recent Facebook post expressing frustration about the endless events and party hype around blockchain. A Silicon Valley veteran and serial entrepreneur, he knows how hard it is to build a real company with functional products people want to use. The time to party is after you succeed in hitting milestones and executing.

Let’s put down the champagne glasses and get back to work. The only way to co-create a better future is for blockchain founders to push ahead and build great products. Infrastructure projects must invest in developer communities, documentation and content, UX and design. Hire and recruit experienced talent that have skill sets and experience to scale engineering, marketing and PR to reach mass adoption.

All of this will attract more investment, which in turn will drive a revolution in the global financial system. Wall Street may be circling like vultures now, but this is largely because blockchain founders are yet to deliver practical business use cases and prove out the model. This will take time. The pressure is definitely on and the money will start to pour in with STOs next year. I predict a massive bull run in 2019 once the regulatory landscape becomes more clear.

As co-founder of Blockchain for Good and co-founder of Blox 7, my place and commitment to telling this story is clear. The race is on. Money always follows innovation because innovators yield the highest returns. I tracked a similar pattern in my second book Disruption Revolution, and predicted a more inclusive future in my most recent book Empower. Let’s deliver on the vision of Satoshi Nakamoto and co-create the future we want and deserve!

The Blockchain Party is Over was originally published in Hacker Noon on Medium, where people are continuing the conversation by highlighting and responding to this story.

Crypto Exchange OKEx Lists 4 New Stablecoins 0

Crypto Exchange OKEx Lists 4 New Stablecoins

Hong Kong-based cryptocurrency exchange OKEx has announced that it is listing four U.S. dollar-pegged cryptocurrencies for trading.

Bitcoin News Summary – October 15, 2018 0

Bitcoin News Summary – October 15, 2018

The post Bitcoin News Summary – October 15, 2018 appeared first on 99 Bitcoins.

Here’s what happened this week in Bitcoin in 99 seconds.  Major exchange and Tether operator, Bitfinex, has imposed a temporary ban on all fiat deposits. Clients are no longer able to deposit Euros, Dollars, Yen or Pounds to the exchange. Withdrawals are reportedly working normally. Bitfinex has said that they expect the issue to […]