Blockchain and Bitstamp Customers Can Now Use Ether

Bitstamp and Blockchain add ether

Ethereum fans got a bit of a boost today from two different companies in the crypto space. UK-based cryptocurrency firm Blockchain and Luxembourg-based cryptocurrency exchange Bitstamp have each added ether to their platforms for the first time.

Blockchain says its customers can simply toggle between bitcoin (BTC) and ether (ETH) to manage and transact funds quickly and easily. Additionally, Blockchain has also integrated ShapeShift’s API so trading bitcoin to ether and vice versa can happen all from one place.

In an earlier, separate announcement to its customers, Bitstamp said it will allow full trading functionalities of ether today. Ether deposits and withdrawals opened at 9 am (UTC) and began to allow full trading functionalities at 1 pm (UTC).

Nejc Kodrič CEO of Bitstamp said: “We’ve been encouraged by ether’s potential and the demand shown for its inclusion among our trading pairs.”

Ether now joins USD, EUR, bitcoin, litecoin and Ripple among the coins for which Bitstamp allows deposits and withdrawals. In July the company announced a strategic partnership with Swissquote, the Swiss leader in online banking. Swissquote launched BTC/EUR and BTC/USD trading on its platform, with Bitstamp providing full-stack services for their two new BTC trading pairs.

Kodrič added: ”Since starting out in 2011, Bitstamp’s mission has been to be the safest and most reliable digital currency exchange on the market. Our careful approach has created a market reputation for prudence which has served us well as we continue to expand and give our customers the trading options they desire.”

Peter Smith, CEO of Blockchain said in a statement that the popularity of Ethereum has grown and so has the desire from Blockchain customers to have the option to manage multiple digital assets within their Blockchain wallets. Smith said: “We are thrilled to introduce this new functionality to our community and will continue to find ways to make interacting with digital assets even easier.”

One of the earliest bitcoin companies, Blockchain was founded in 2011 and provides a non-custodial consumer wallet for digital assets, with over 16 million wallets created across 140 countries. The company has focused on creating products that make storing, transacting and hedging digital currency a frictionless experience.

Smith was recently quoted saying: “I predict that by 2037 a complete global computer fabric will make interacting with goods, services and people easier than ever. Citizens of the world will be more closely connected through technology, communication and networks.”

Second in market cap, ether has seen its price soar as much as tenfold since the end of April, while its number of transactions quadrupled. Ether has since settled at about $300 at the time of publication.

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Crypto Exchange Shapeshift Acquires KeepKey Hardware Wallets

ShapeShift Acquires KeepKey

Today, Shapeshift.io announced its acquisition of hardware wallet manufacturer KeepKey. According to the cryptocurrency exchange, by pairing the KeepKey hardware wallet with ShapeShift, users will be allowed to safely store their coins on a secure physical device while trading their assets directly over the ShapeShift API, which can be reached from KeepKey’s interface.

“Security is of critical importance when it comes to holding and trading digital assets. One of our priorities has always been to make the exchange experience as safe and easy for users as possible, and our pairing with KeepKey enables us to provide an unmatched customer experience. Users can hold their coins on the hardware device and exchange them on demand within the wallet, without even visiting a website. When you pair the KeepKey hardware wallet with ShapeShift’s exchange, the experience is magical,” Erik Voorhees, CEO of ShapeShift, said.

KeepKey already had integrated ShapeShift’s API a year ago, allowing it to supporting the most popular cryptocurrencies. The firm’s objective is to support all leading digital assets providing the users with the “most secure storage wallet available.”

“This partnership will not only guarantee the future success of the KeepKey brand and product line, but joining the ShapeShift team will enable us to focus on continuing to work on developing better technology and security for crypto-holders,“ said Ken Hodler, Chief Technology Officer at KeepKey.

ShapeShift confirmed that the company will preserve KeepKey’s brand and product line. Furthermore, the acquisition of KeepKey will allows ShapeShift to “provide increased capital for inventory and security expertise.”

“Amid heightened interest in the concept of digital currencies, a simple, user-friendly cold storage wallet with native exchange functionality is one key to wider adoption,” said Voorhees.

The combination of ShapeShift and KeepKey reflects both companies’ commitment to security and privacy. ShapeShift does not collect any personal information on its users. Furthermore, customer funds are not collected on the company accounts and users maintain control of their keys at all times.

The KeepKey drive is physical hardware device that protects users’ funds from “hackers and thieves.” It uses wallet software located on the user’s computer. The device takes over the management of private key generation and storage along with the signing of transactions. The hardware has a built-in random number generator for private keys, which works in combination with the “randomness” provided by the user’s computer. After the private key is generated, the user is given a twelve-word recovery sentence, which can be used to recover the device without compromising its private keys.

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Bank of Canada Report: Imagining a “Bitcoin Standard” Financial System

Bank of Canada Bitcoin Standard

In a 37-page long research paper, Warren E. Weber, research consultant at Bank of Canada who is also a visiting scholar at the Federal Reserve Bank of Atlanta and adjunct professor at the University of South Carolina, speculated about a financial system where bitcoin would be the standard currency (referred as the “Bitcoin standard”) instead of fiat currencies.

In the study, Weber explored the similarity between the Bitcoin standard and the gold standard. The research consultant chose to compare bitcoin to gold since the two have many similarities. The two most prominent resemblances include the lack of control of central banks or monetary authorities and the limit in the supply: Bitcoin’s algorithm only allows the circulation of 21 million BTC while gold can be found in finite quantities on the planet. If the Bitcoin standard becomes real, there will be three distinct media of exchanges, just as there was under the gold standard. Bitcoin will serve as the main currency while there will be fiduciary currencies issued by countries’ central banks, and fiduciary currencies (banknotes or deposits) issued by commercial banks.

Issuing fiduciary currencies will be one of the very few abilities central banks can do as part of a monetary policy where banks will act as lenders of last resort. Bitcoin’s “virtually costless arbitrage” on an international scope will deprive the central banks of their ability to impose interest rate policies to affect their domestic economies, Weber detailed.

Should Bitcoin serve as the standard medium of exchange, there would be a moderate increase in deflation; however, according to Weber, once a certain level is reached, the rate of deflation will be minimal. Price levels will become highly or perfectly correlated under Bitcoin’s dominance in various countries, just as they did for those countries that adopted the gold standard. Despite the fact that the cryptocurrency would become the standard, Weber believes that economic crises could still happen since “they can occur under any fractional reserve financial system.”

According to Weber, the Bitcoin standard will benefit the economy in two ways. Due to the “known, deterministic rate” at which new BTC is created, people would be able to predict the price level of the cryptocurrency more easily. The second benefit would be that investment resources which are currently devoted to hedging against fluctuations in the currency exchange rates would free up and could be used in “more productive ways.”

On the other hand, Weber thinks that the Bitcoin standard will never come into existence since there will be heavy opposition by central banks and governments. If the Bitcoin standard becomes real, neither the governments nor the central banks will be able to implement interest rates to affect their economies, neither could they generate seigniorage revenues obtained from their ability to “almost costlessly create money,” the Bank of Canada research consultant explained. Since the governments don’t want to lose these powers, they will do anything to prevent Bitcoin from becoming the standard medium of exchange.

Weber is also skeptical about the longevity of the Bitcoin standard. According to him, the financial system is advancing so rapidly that there would likely be another (crypto)currency that can provide the same or greater benefits as Bitcoin, possibly at lower costs. Furthermore, if a financial crisis occurs, an opposition is likely to emerge that would seek to replace the “old” financial system, rather like the way that Bitcoin is challenging today’s status quo.

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Blockstack Partners with VCs to Launch $25 Million Blockstack Signature Fund

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New York-based decentralized internet and developer platform Blockstack has partnered with a number of venture capital groups to launch the $25 million Blockstack Signature fund.

The Blockstack Signature fund is backed by Lux, OpenOcean, VersionOne, RisingTide, and Compound, and funding will go toward apps being built in the Blockstack ecosystem.

Patrick Stanley, growth partner at Blockstack, explained to Bitcoin Magazine that “Blockstack is not launching the VC fund but facilitating.” That is, the company’s role in the fund has been to gather the venture capital groups, attract the developers and facilitate the partnerships that will result in quality app development on the Blockstack platform.

According to Blockstack, the VC fund will dedicated to “rapidly accelerating startups building decentralized applications on the platform, and tools for developers to bootstrap their apps, with tokens on the Blockstack network — just like you see with Ethereum.”

Muneeb Ali, co-founder at Blockstack, told Bitcoin Magazine: “We are at a stage where some of the developers are incredibly excited about building apps and usually get in touch with us. If developers get in touch with us with an app that they are excited about, this is one funding channel we can point them to.”

Ali added: “The VCs involved in the fund will take a look at that application and make a independent decision to fund that company or now. Our intention here is to bring together sophisticated investors, people who have been thinking a lot about decentralization and can do their due diligence.”

VC investing is a type of private equity, a form of financing that is provided by firms or funds to small, early-stage, emerging firms that are deemed to have high-growth potential, or which have demonstrated high growth in terms of number of employees, annual revenue or both.

Ali explains: “If you look at this space in general we feel that there are a lot of low quality apps which are raising an insane amount of capital from token sales, for example. We want to bring some quality and sanity to the picture. We feel that VCs can still have a seat at the table … we want to open up that channel as well.”

Blockstack was formerly known as Onename and passed through its young company status in the summer of 2014 as a startup looking to streamline bitcoin transactions.

Watch the video here.

blockstack video

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Enterprise Ethereum Alliance Expands Legal Industry Working Group

Enterprise Ethereum Alliance Expands Legal Industry Working Group

On August 14, the Enterprise Ethereum Alliance announced the addition of more than a dozen organizations to its blockchain collaboration under the umbrella of its Legal Industry Working Group, responsible for creating enterprise-grade applications on the Ethereum blockchain. The new members include law schools, legal departments of universities, academic institutions and leading global law firms.

According to the EEA, the swift expansion of the Legal Industry Working Group is due to the fact that an increased number of legal professionals are showing interest in blockchain technology. The Ethereum blockchain consortium believes this working group will serve as a base for the success of “various efforts taking place within the organization.”

“We are thrilled to see robust interest in blockchain technology by forward-looking law firms and institutions. Lawyers are poised to serve as the catalysts for blockchain technology, and the Legal Working Group will serve as a neutral space to explore blockchain-based legal technology, develop standards for “smart” legal agreements, support emerging enterprise use cases and tackle important policy issues raised by this new impactful technology,” Aaron Wright, Chair of the EEA Legal Industry Working Group, Associate Clinical Professor and Co-Director of the Cardozo Law School’s Blockchain Project, and co-founder of the smart contract project OpenLaw, said in a statement.

The Legal Industry Working Group isn’t the only part of the blockchain collaboration to be experiencing a rapid growth in new members. On July 18, 2017, the EEA announced that the alliance had onboarded 34 new organizations, bringing the number of the participants to more than 150 members. The newly joined participants included Mastercard, Cisco, the Government of Andhra Pradesh (one of the 29 states of India), Scotiabank and many others.

Formed in late February 2017 by founding members such as Intel and J.P. Morgan, the EEA strives to create, promote and support open standards, best practices and open source reference architectures on the Ethereum blockchain. The consortium serves as the major research and development body of the Ethereum blockchain, helping Ethereum to evolve into an enterprise-grade technology. In terms of development and research, the EEA focuses on multiple areas, including privacy, confidentiality, scalability and security, as well as investigating hybrid architectures and industry-specific, application-layer working groups.

The 14 new members of the Enterprise Ethereum Alliance include:

Cooley, Debevoise & Plimpton, Goodwin, Hogan Lovells, Holland & Knight, Jones Day, Latham & Watkins, Morrison & Foerster, Perkins Coie, Shearman & Sterling, Cardozo Law School, Duke Center on Law & Technology, and the Department of Legal Studies and Business Ethics at the University of Pennsylvania’s Wharton School.

In addition, existing members of the consortium will be joining the EEA Legal Industry Working Group, including BNY Mellon, ConsenSys, ING and JPMorgan Chase & Co.

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Blockstream Satellite: Broadcasting Bitcoin from Space

Blockstream Satellite: Broadcasting Bitcoin from Space

Yesterday a video teaser from blockchain technology company Blockstream created waves of excitement among enthusiasts of both cryptocurrencies and space. Most participants speculated that Blockstream was about to implement the idea, promoted by Bitcoin developer Jeff Garzik (among others), of a satellite system that streams the Bitcoin blockchain to the whole planet from space. The speculations were, indeed, correct.

Today, the company is announcing Blockstream Satellite, a new service that broadcasts real-time Bitcoin blockchain data from satellites in space to almost everyone on the planet. Blockstream Satellite covers across two-thirds of the Earth’s land mass and, according to the company, additional coverage areas will soon come online to reach almost every person on the planet by the end of the year.

“Bitcoin is a powerful and transformative internet native digital money that has blazed a trail of disruption, with its full potential yet to unfold. Because it’s permissionless, Bitcoin enables anyone to freely create new financial applications and other innovations that use the blockchain that haven’t been possible before,” said Blockstream co-founder and CEO Adam Back.

“Today’s launch of Blockstream Satellite gives even more people on the planet the choice to participate in Bitcoin. With more users accessing the Bitcoin blockchain with the free broadcast from Blockstream Satellite, we expect the global reach to drive more adoption and use cases for Bitcoin, while strengthening the overall robustness of the network.”

The Blockstream Satellite network currently consists of three geosynchronous satellites at various positions over Earth that cover four continents: Africa, Europe, South America and North America. Blockstream is leasing bandwidth on existing, commercial, geosynchronous satellites: Galaxy 18 (covering North America), Eutelsat 113 (covering South America) and two transponders on the Telstar 11N satellite (one covering Africa and one covering Europe).

Ground stations, called teleports, uplink the public Bitcoin blockchain data to the satellites in the network, which then broadcast the data to large areas across the globe. Additional satellites and teleports are being added to achieve worldwide coverage by the end of the year.

Blockstream_Satellite_Phase1+2_Coverage_Areas.jpgBlockstream_Satellite_Phase1+2_Coverage_Areas.jpg

The Blockstream service is expected to be especially useful to people in remote regions of developing world with poor internet connectivity.

“When I first heard of Blockstream Satellite, I immediately recognized its great potential to bring Bitcoin to regions of the world where internet access is either unavailable or expensive,” said Tim Akinbo, who runs the only bitcoin node in West Africa. “Not to mention providing redundant access when internet access is temporarily unavailable.”

Blockstream Satellite uses GNU Radio, an open-source software development platform for Software-Defined Radio (SDR), expected to reduce costs and streamline development by eliminating the need for specialized hardware. Blockstream Satellite utilizes the Fast Internet Bitcoin Relay Engine (FIBRE), an open-source protocol backed by several years of history operating and studying the Bitcoin Relay Network. “Together, these open-source technologies power the Blockstream Satellite network enabling Blockstream to provide this free service reliably and cost effectively,” noted the Blockstream press release.

“Anyone can receive the signal with a small satellite dish (similar to a consumer satellite TV dish) and a USB SDR (software-defined radio) interface,” notes the Blockstream Satellite FAQ. “The total equipment cost for a user is only about $100. The software is free. The software interface is the open-source GNU Radio software, which is the receiver. GNU Radio will send data to the FIBRE protocol, which is the Bitcoin process and is where the blocks reside.”

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Bitcoin Price Analysis: Still More Room at the Top, For Now

Bitcoin Price Analysis

While many fear BTC-USD is entering bubble territory, others are calling for even higher price targets.  Politics aside, there is a clear push for higher BTC-USD prices and it’s creating market uncertainty.

Here are the facts:

  1. 30 days ago, BTC-USD was $1800.

  2. Today the price of BTC-USD has risen 130% and has managed to establish an all time high at $4300.

  3. In 5 days alone, the price of BTC-USD has increased its market value by 30%.

Taking a look at the macro trend since the rise post-$1800s, we see clear lines of support along the Fibonacci Retracements:

Figure_1.JPG
Figure 1:  BTC-USD, 6-Hour Candles, Bitfinex, Macro Fib. Lines

Across the length of the bullish push from the $2700s (the 61% line) there are signs of sustained momentum in the RSI and MACD.  Looking at the volume profile, there is no clear decline in volume and it appears to show market interest in higher values as the volume’s moving average has remained mostly flat.  However, since the bullish push from the $3200s (the 38% line) we can see signs of bullish exhaustion in the form MACD and RSI divergence.  

Zooming in on a smaller timescale, we see evidence of a higher push to new all time highs:

Figure_2.jpgFigure 2:  BTC-USD, 1-Hour Candles, Bitfinex, Potential Bull Pennant Breakout

At the top of BTC-USD’s strong run from the $3200s stands a classic bullish continuation pattern called a “Bull Pennant.”  The pennant is characterized by price consolidation within a convergent pattern and has decreasing volume throughout the length of the pennant body.  To accompany this pattern is a 1-hour RSI and MACD that began to consolidate toward its centerline.

At the time of this article, BTC-USD appears to have broken out of this pennant with a sharp increase in volume.  Currently, based on typical price projections for Bull Pennant breakouts, this pennant breakout has a price target of $5000.

Although this is a rather aggressive price target for this bull pennant, there are some considerations on a macro scale that should be addressed and discussed.

Figure_3.JPGFigure 3:  BTC-USD, 1 Day Candles, Bitfinex, Bollinger Bands

For the fourth day in a row, BTC-USD continues to push outside the Bollinger Bands.  Historically, this sort of push has led to market pullback or consolidation.  Even on high timescales, the current 3-day candle (not shown above) is fully formed outside the Bollinger Bands and shows, on a macro scale, that the market is overbought.  To accompany this push of the Bollinger Bands, a clear decrease in volume is seen on the moving average that shows, since the rise from $1800s, there has been waning bullish sentiment.  

While there is a lot of hype surrounding BTC’s recent rise, it is paramount to remain objective and skeptical of market activity and to view the market soberly.  The price target of $5000, on a micro level seems plausible.  However, on a macro level the bullish market appears to have slightly bearish divergence.  To remain a reliable price target, the market needs to see a push to newer all time highs accompanied by increase in volume to sustain the next $800 of price movement.

Summary:

  1. BTC-USD has broken out of a bullish continuation pattern called a “Bull Pennant” with a price target of $5,000.

  2. On a macro scale, there are signs of bullish momentum loss in the form of bearish divergence and overbought signals on the Bollinger Bands.  

  3. While the market can remain overbought for days and weeks, it’s important to keep in mind that the higher the market pushes into overbought zones, the more necessary market consolidation becomes in order to prevent a market pullback.  So far, there has yet to be any considerable market consolidation during this 130% rise.

Trading and investing in digital assets like bitcoin, bitcoin cash and ether is highly speculative and comes with many risks. This analysis is for informational purposes and should not be considered investment advice. Statements and financial information on Bitcoin Magazine and BTC Media related sites do not necessarily reflect the opinion of BTC Media and should not be construed as an endorsement or recommendation to buy, sell or hold. Past performance is not necessarily indicative of future results.

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Last Week on LTB Network: Factom’s Paul Snow Shares Thoughts on Bitcoin Cash

Last Week on LTB Network: Factom's Paul Snow Shares Thoughts on Bitcoin Cash

Some confusion still exists around Bitcoin Cash (or Bcash), the new token that resulted from a split in the Bitcoin network on August 1. Many bitcoin (BTC) holders are still wondering how to safely remove the new tokens (BCH) from exchanges (and wallets) without putting their BTC at risk.

In a recent episode of the Crypto Show, Paul Snow, the founder of the blockchain-based data management solution Factom, offered some suggestions. He also talked about the potential benefits of holding onto BCH a little while longer.

First, while some exchanges may be offering to extract BCH for some users, Snow firmly advises people not to hand over their private keys to exchanges. He thinks sharing private keys is a bad policy in general. “Don’t do it,” he said.

“It is kind of like, you don’t wear underwear on the outside of your pants; you don’t give people your private keys,” he said. But for those anxious to cash in on their BCH right away, he describes a safe way to do it.

Create New Addresses

Snow suggests users separate their BTC from their BCH first, as follows:

If you had any number of addresses holding BTC before August 1, then you will now have an equal amount of BCH on those same addresses.

Snow recommends you go into your BTC wallets and move the entire amounts of BTC in those addresses, (imagine three addresses we’ll call A, B, C) to three new addresses (D, E, F). Now, the second set of addresses (D, E, F) will have BTC in them, but no BCH because those addresses did not exist before August 1. The first set (A, B, C) will have BCH in them, but no BTC.

“To reiterate,” Snow said, “move your Bitcoin addresses from where they were on August 1 to new addresses. Step two, input those private keys into your Bitcoin Cash wallet. Step three, profit,” he said.


For more info on how to handle your BCH safely, read A Beginner’s Guide to Claiming Your Bitcoin Cash (and Selling It).


Neutral on Bcash

Bitcoin Cash has, in a sense, divided the community. Some like Bitcoin Cash because it raises the Bitcoin block size limit to 8MB, while others are appalled at how the new chain is attempting to usurp users and hashpower from the main Bitcoin network.

Snow maintains a neutral stance. “I’m not sure I have an opinion on any particular blockchain out there,” he said.

After all, Bitcoin is not the only game in town. He pointed out that right now there are nine cryptocurrencies other than Bitcoin with a market cap of $1B or more. Those are the facts. “I don’t care whether you think Bitcoin should be the only blockchain or not. They [those other coins] exist,” he said

Moveover, he thinks Bitcoin Cash played fair and square in launching an alternative currency. Everyone who had BTC got their share of BCH in the airdrop. Nevertheless, nearly everyone he hears from is looking to reinvest that money back into BTC.

“I am seeing a lot of people who are going to cash out on the Bitcoin Cash as fast as they can and buy Bitcoin with it,” he said. 

“Hodling” Bcash

Of course, there is another option. People could hold onto (or “hodl”) their BCH just like they hold on to their BTC and see if the price goes up.

After all, Snow said the market for BCH won’t hit its stride until mid September when the mining difficulty on the new chain eases up to the point where Bitcoin miners consider it economically viable to redirect their hash power over to it.

“Right now, anyone mining on Bitcoin Cash now is effectively donating their power,” he said. “That [Bitcoin Cash] bandwagon doesn’t leave town until September 18th. Until then, it is just kind of puddling along and not quite getting anywhere.”

Dropping Anchor

But, say the Bitcoin Cash chain were to beat all odds and become super successful. If that were to happen, would Factom anchor onto the Bitcoin Cash chain instead of the Bitcoin chain?

To explain Snow’s business, Factom is a protocol that runs on top of the Bitcoin blockchain. By doing so, it allows any kind of data to be time-stamped and secured using the Bitcoin blockchain. So hashrate is essential to Factom’s security.

“We are anchoring into a chain for its proof of work,” Snow said. “But if proof of work is largely in Bitcoin Cash, then we will anchor onto Bitcoin Cash.”

He added that if the hashrate between the two chains were to split 60/40, Factom could anchor on both chains and still get 100 percent of the hashpower.

“We can anchor as many chains as we want,” he said, but added that he doesn’t think Bitcoin Cash will ever capture that much hashpower. With BCH currently only valued at less than one tenth of BTC, the economic rewards for miners just aren’t there.

But as Snow pointed out, all of this plays into Bitcoin’s security. “Bitcoin is designed so that it is very, very hard to split off and be successful,” Snow said.

During the course of the interview, Snow also discussed the mechanics of how Factom anchors onto the Bitcoin network and the third annual Texas Bitcoin Conference, which he founded and helps organize. The conference will take place from October 28-29.

Listen to the entire podcast here.

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Op Ed: Cryptocurrencies, ICOs and the Untapped “Family Office” Group

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With cryptocurrency investing becoming increasingly mainstream, it’s important to understand the types of potential investors waiting on the sidelines. One largely untapped investment group would be a “family office” (FO), which is a private wealth manager of investments and trusts for ultra-high net worth individuals (UHNWIs). In 2015, UHNWIs included almost 173,000 individuals whose wealth accounted for $20.8 trillion. FOs can represent a single-family office (SFO) or multi-family office (MFO), with the former being the largest group that represents one extremely wealthy single family.

The Family Office Databases reports that most FOs reside in the United States.

FO_breakdown.png

According to UBS and Global Wealth, the top three investments of an average FO portfolio are in the developed market, real estate, or venture capital and private equities.

UBS_investment_breakdown.png

Cryptocurrencies would be classified as a commodity, whereas initial coin offerings (ICOs) would represent venture capital. Furthermore, most ICOs are deemed securities based on the parameters of the Howey test. Cryptocurrencies themselves are still very new and highly complex, and innovation is happening every day. Few people understand them deeply due to the intense learning curve.

Being decentralized and transparent on a blockchain with low transaction fees means cryptocurrencies have attractive properties for UHNWIs. Cryptocurrencies provide FOs with diversification from traditional assets usually in an average portfolio. However, the risk of investing remains high, especially if there is a lack of understanding around how cryptocurrencies work or how to secure them properly.

The recent explosion of ICOs and ICO funding represents a growing percentage of investors backing the creation of software or companies that are building the technology and infrastructure. David Drake, managing partner of LDJ capital, whose focus is on compliance and underwriting for ICOs, said to Bitcoin Magazine, “These ICOs need to have a real team and business structure behind them before anyone is willing to invest.”

Drake added that many investors he speaks with “are afraid that they will not understand what is happening with cryptocurrencies, but this is changing very quickly as they become curious about the subject.”

Projects that will be able to cut through the noise and hype with a clear message and identifiable use cases will likely acquire more investors through an ICO. Two such examples of successful ICOs with straightforward use cases include Civic, a project focused on providing proof of identity, which raised $33 million; and Filecoin, a decentralized storage network, which raised $252 million.

Generally, ICOs accept funds through cryptocurrencies only, although this may change to bring in more investors. Kamil Przeorski, co-founder of Experty.io and ReactPoland, told Bitcoin Magazine that “many people I talk with are very interested in my project, but don’t always understand the process and would rather use USD.”

Ultimately, the better the cryptocurrency community can communicate and explain the complexities, intricacies and possibilities, the more potential investors will flock to this space.

This guest post is by Josh Olszewicz, an advisor to Experty.io. The views in this piece are his own and do not necessarily reflect those of Bitcoin Magazine or BTC Media.

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Ethereum Classic Forges Its Own Identity With New Mantis Client

Ethereum Classic Mantis

A group of Ethereum Classic developers wants Ethereum Classic to be known as more than a “cut-and-paste” version of the Ethereum blockchain. So they spent seven months building Mantis, a unique Ethereum Classic client, from scratch.

And it is not hard to understand their motivation.

Since Ethereum Classic split away from Ethereum as a result of the DAO hard fork last summer, the two smart contract platforms have shared the same codebase, the same smart contract development tools and more.

In fact, aside from a few protocol changes, like defusing the difficulty bomb and capping the monetary policy on the Ethereum Classic chain, for all intents and purposes, the two networks have been nearly identical.

But now Ethereum Classic is striking out on its own in a move developers behind the effort hope will position the platform as a viable alternative to Ethereum. Earlier this week, Alan McSherry, Ethereum Classic developer and Mantis project lead, announced the beta version of the new Ethereum Classic client in a blog post.

Built in the functional programming language Scala, Mantis represents a serious effort by the Ethereum Classic community to gain recognition for having its own team of developers on par with those of Ethereum. Mantis also sets the foundation for future innovations in Ethereum Classic.

“This is a good starting point for our influence in the Ethereum Classic community,” said McSherry, in speaking with Bitcoin Magazine. “We are able to say we have built from the ground up a client in Scala. And, when it comes to the future direction of Ethereum Classic, we have a pretty good handle on what we are talking about.”

But before getting into why the developers of the project chose to build a client in Scala, first, what is a client?

A Blockchain Client

In a distributed ledger, a client refers to the software that runs on a computer, or “node,” connected to the network. A blockchain client is responsible for downloading and keeping up to date an entire copy of the blockchain. In a sense, it also acts like a server in that it also serves the other nodes in the network by doing things like verifying blocks, checking that transactions include signatures and so on.  

In that respect, Mantis essentially represents a full end-to-end copy of Ethereum. It contains the mining verification algorithm, the consensus algorithm, all the network logic, the cryptography that allows users to spend their coins and the logic to verify smart contracts.

As a client, Mantis also provides interfaces for creating transactions. Still in beta, Mantis supports a command-line interface version of a wallet for making transactions. Users can also access the client from the Mist browser over HTTP.  

To be clear, Mantis is not the only client available to Ethereum Classic users. Other groups may be working on other clients, said McSherry. And the Ethereum Classic community maintains two other Ethereum clients: Geth, written in Go, and Parity, written in Rust. But McSherry explained that the hope is that Mantis will eventually become the flagship client for Ethereum Classic.

Functional Language

Mantis is different from existing Ethereum clients in that it was written in Scala, a functional programming language.

Scala is touted for benefits that include ease of testing and predictability, characteristics that allow developers to audit the code for bugs and security flaws more easily than other languages. “If you have more predictable code, that will leverage itself up to the overall quality of the product,” McSherry said.   

But there are levels of functional languages. Scala is more of a hybrid language that sits between heavyweight functional languages, like Haskell and OCaml, that draw the academic and science crowd and the user-friendly world of Java.

And this means that while Scala allows developers to write in a functional style, it still has a fairly easy learning curve, making it accessible to a broad community of developers who may want to contribute to the open-source code.

McSherry explained that because Scala is a functional language, it is also open to applying frameworks, such as Stainless, that use rigorous mathematical proofs to check that the code performs as intended. It is a theme that plays well in the Ethereum Classic community’s stance on immutability and the idea that if “code is law” then smart contracts need to run in a more secure environment.

“The ultimate goal is a much higher-quality code, and obviously, that means much higher security for the funds that are controlled,” McSherry said.

Moving Forward

In terms of a road map for Ethereum Classic, Mantis is a stepping stone to bigger things and perhaps a greater technical divergence from Ethereum.

For instance, plans are to eventually connect Mantis to IOHK’s cryptocurrency wallet platform Daedalus, giving Mantis a graphical interface. “That’s the next focus,” McSherry said.

But for now, Mantis is being made available to other developers who are willing to try out the code in a testnet environment and provide their feedback.

“We are delighted to have gotten to this stage where we have the functionality out the door,” says McSherry. “The next phase is to polish the functionality, look at the performance of it, go back and clean up, and make it a top, top client.”

He said he expects the next release of Mantis as soon as September.

The post Ethereum Classic Forges Its Own Identity With New Mantis Client appeared first on Bitcoin Magazine.

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