Facebook vs. Bitcoin: Massification Challenge

Willmen Blanco
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Facebook vs. Bitcoin: Massification Challenge

Facebook promises to massify its cryptocurrency, but Bitcoin is still the most popular with 172 active addresses

One third of the world’s population starting monthly sessions on its platform make Facebook the most popular social network. Now the company plans to create its own cryptocurrency, which could become one of the most widely used. Moreover, it could also compete directly with Bitcoin due to its number of users.

Bitcoin and Facebook’s cryptocurrency certainly have different purposes and are aimed to different markets. Facebook plans to launch a cryptocurrency anchored to the dollar and other fiduciary currencies, which compares it with Tether, USD Paxos, DAI and True USD; that is, with known stablecoins and not with cryptocurrencies such as Bitcoin, Ethereum, Monero, and Litecoin.

We cannot compare the market possibilities of a crypto asset such as Bitcoin, whose owners’ trust generate value, with another supported by a fiduciary currency, since they work differently. However, some media and members of the crypto market see Facebook’s project as a possible contender for public cryptocurrencies because of their potential adoption. Many inactive members of the cryptocurrency community would not easily notice the conceptual and operational differences of both assets.

More than One Billion Users

Some studies indicate that Facebook owns a total of one billion active users monthly. This figure is equivalent to the population with the most potential adoption of the cryptocurrency, since Facebook plans to have the crypto asset distributed as a reward for those users who see advertisements, interact or buy products on its platform.

The crypto asset can also be used by Facebook and WhatsApp users to send remittances or mobile payments, so it should be considered that WhatsApp also owns more than one billion active users around the world.

Regarding Bitcoin, a big difference can be seen in the figures. A Chainalysis study last year said that 172 million Bitcoin addresses are economically active. Each of these addresses may not belong to a single user, but an individual may own several wallets or addresses within the network, so it cannot be asserted that there are 172 million Bitcoin users.

The figures vary according to the studies, since a Statista report affirms that there are really only 36 million active Bitcoin addresses and the University of Cambridge postulates that there are 139 million registered users in exchange services around the world. Consequently, it is impossible to know how many users there are in the crypto market. However, the number of Bitcoin users will not reach that of a social network of Facebook’s size.

Facebook’s cryptocurrency has a high possibility of being massified, since it is devised with the aim that all the company’s customers can access it. However, a point against Facebook could be the state regulations, since if this crypto asset wants to operate in the United States, it will have to be accountable to regulatory bodies such as the Securities and Exchange Commission (SEC), which has previously been an obstacle for the launch of cryptocurrencies within social networks, as was the case of the Telegram and Kik projects.

Battle of the Titans

Facebook is not only competing with Bitcoin, but also with other giants of the Internet and the financial world. The social network’s cryptocurrency could be an alternative to credit cards and digital fiduciary currency platforms, such as PayPal and Alipay.

Zuckerberg’s company is seeking strategic support from companies such as Visa or MasterCard to launch its cryptocurrency, and has even talked to online merchants to accept it as a payment method. In this sense, the company will offer the possibility of paying products within and outside its platform without the cumulative rates of credit cards or the high commissions of digital remittances, thus covering both markets.

The Wall Street Journal says that Facebook seems interested in emulating Apple and Amazon, since these two companies recently launched financial services thanks to their alliances with firms in the sector. Therefore, the social network may not want to be left behind in this move and also launch a financial service for its customers.

Facebook entrepreneurs have been seeking to remove Google’s dominance of advertising for some years. According to members of the project, Facebook’s cryptocurrency will be used as a fictitious token or a reward for all those users who see advertising on the page and buy items in it, which could motivate many more companies to pay for advertising on Facebook.

Loyal Users

Facebook’s cryptocurrency could succeed in capitalizing the interest of those users not actively involved in the crypto market, since it is an easily accessible payment system that promises to have many functions.

However, those who are part of the cryptocurrency community may not be very interested in changing to Facebook’s revolution. Bitcoin captured the attention of its users because it offers greater privacy and autonomy than traditional payment methods, being created under the ideological principles of free market economics, private property and self-government of the anarcho-capitalist doctrine.

At the moment, Facebook’s cryptocurrency does not seem to offer the same levels of privacy that crypto assets like Bitcoin, Ethereum or Litecoin have, to mention some of the most popular. Similarly, Facebook does not have the best reputation with respect to the privacy sector either, after it was discovered last year that the company stores private information of its users for commercial purposes.

These details indicate that Bitcoin owners may not contribute to adopt Facebook’s new crypto asset, whose token would not directly affect the Bitcoin market. However, it is necessary to recognize Facebook’s potential massification, which could eventually become a huge challenge of paramount importance for initiatives such as Bitcoin, which emerged from anonymous development and have had a community growth throughout the years.

By Willmen Blanco

PoF: New Algorithm Promises to Dominate DApps Market

Willmen Blanco
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PoF: New Algorithm Promises to Dominate DApps Market

Blockchain is undoubtedly a disruptive technology that has brought a revolutionary way to show a multitude of uses cases from a decentralized approach totally different from what society was used to before Bitcoin’s launch in 2009

Blockchain technology has generated new applications aimed to allow its increasing exploitation in the daily routines of many companies, institutions, and people.

Three levels of Blockchains are conceptualized: first-generation Blockchains, practically imposed by Bitcoin, which resolved a specific double-spend case to advance digital money in a secure and decentralized manner, contrary to what was known before.

Secondly, Buterin’s vision that the usefulness of technology should not be limited to digital currency generated other Blockchain platforms that bring decentralized applications and Smart Contracts to everyday cases. This gave rise to second-generation Blockchains such as EOS, Ethereum, and TRON, to name the most outstanding.

In both cases arises a problem that has been complemented by the evolution of the next generation, as the imperative need to solve it to achieve the scalability and security of the platforms that allow true mass adoption.

First, Bitcoin’s consensus mechanism, Proof of Work (PoW), has been inefficient to achieve mass adoption due to excessive expenditure of energy and resources to support the network, as well as its slow transactions per second (TPS).

Although the Proof of Stake (PoS) and Delegated Proof of Stake (DPoS) mechanisms solve the problem of energy expenditure and improve the TPS regarding the Blockchains based on the PoW, they still have not achieved the mainstream.

Several projects have been creating a movement within Blockchain technology, third-generation Blockchains, which use derivations of pre-existing algorithms or formulate new consensus mechanisms. They attempt to solve the limitations outlined above and take the cryptocurrency ecosystem to the next level of adoption.

For example, FLETA’s new consensus mechanism, Proof of Formulation (PoF), follows the principle of improving the weaknesses of previous algorithms such as excessive energy expenditure and slow TPS, as well as a protocol for solving both weaknesses of previous Blockchains

Consequently, this new algorithm enables achieving high transaction speeds per second, which are around 20 thousand TPS. Undoubtedly, this would allow a great advance in the adoption of Blockchain technology and the mass development of decentralized applications both industrially and recreationally.

How PoF Works

The PoF consensus mechanism consists of generating blocks using a previously agreed sequence where all the participants within the network have at least one opportunity to generate blocks. Therefore, the incentive of implicit fees plus the reward for mining avoids discontent and unnecessary forks within the chain.

Blocks are generated with a maximum of 20 nodes, which for the mining process are divided into three groups: a) a generator and/or formulator group, b) a synchronization group and c) a standby backup group.

The first group to generate block is the one with the highest score in a classification table based on the power of computation (Hash) and a value related to time called “Phase”, which refers to the number of times that the Block Formulator participates in the process.

The synchronization group immediately follows the generator from the 2nd to the 10th position and the backup group does it from the 11th to the 20th position.

The preservation of this order is essential for the Block generation process through the PoF consensus within the network.

The generator usually produces a block and sends it to the synchronization group and observer node for confirmation of the generation sequence and leads the process for receiving the respective signature of that generated block, which is then sent to the observer node.

The observer node receives six signatures from the synchronization group and reviews all signed transactions within the block and exchanges this information with the observer nodes to validate it. To do this, three signatures are required from the five observer nodes to complete the process and send it signed to the synchronization group.

The synchronization group creates a complete block by attaching the previously received signatures and sends it to the standby group, which is responsible for propagating it throughout the network.

Then the whole process is repeated for the rest of the formulators so that all generate, at least once, one block within the network.

This new mechanism, together with a redesign of the block that makes its size vs. speed ratio more efficient, plus a multi-chain protocol where each decentralized application (DApp), can have its own independent chain to operate. The company has achieved a structure that can achieve high-speed TPS and infinite scalability for the DApp ecosystem that can be sustained without limitations, thus avoiding congesting the mainnet and generating their high performance, which undoubtedly gives some exceptional added value for the development and mass adoption of Blockchain technology.

Additionally, FLETA allows developers of decentralized applications and smart contracts to choose the consensus model for each DApp, according to their particular preference.

The platform is currently in its beta phase, whose mainnet programming is stipulated for Q2 2019, which undoubtedly brings an incredible opportunity to the blockchain stage for the development of tangible applications for the common citizen.

The company says that the proposal of this new solution has allowed improving the existing blockchains for the development of DApps such as Ethereum, EOS and TRON. Users expect the company to succeed in catapulting the adoption of real-life uses cases into the virtual world to a higher level.

DApps are considered to become the future base for the real generation of tangible value for cryptocurrencies and Blockchain technology. This will be possible once they solve the scalability problem that does not allow them to conquer the platforms currently in use, which is undoubtedly a great opportunity for solutions such as those proposed by FLETA.

By Willmen Blanco

Belfast Authorities Partner with Israeli Firm to Issue its Own Cryptocurrency

Maria Rodríguez
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Belfast Authorities Partner with Israeli Firm to Issue its Own Cryptocurrency

Belfast Coin is the UK’s first incentive-based digital currency. It will make a contribution to the development of the city economically, socially, environmentally and more

Belfast city, capital of Northern Ireland, began a plan to launch its own cryptocurrency. The token will be called Belfast Coin and will be awarded through a system of rewards for citizens that show good behavior in search of improving the city.

To achieve this goal, the city authorities announced their association with the company Colu, which exists not only in the United Kingdom, but also in Israel, and offers payment systems through its application, also called Colu. The information was disclosed on Belfast City’s website and also by the Israeli company through a recently released press release.

Belfast City Council explained that it is a digital currency project that will be developed this year. The plan will be an incentive to reward the good behavior of citizens and is also expected to encourage economic and environmental growth.

This application was presented at the beginning of this year and is the first initiative of its kind in Northern Ireland. The plan is part of the 100 Resilient Cities Global Program, funded by the Rockefeller Foundation.

“Being selected to be part of the city currency challenge means an important opportunity for Belfast, and I’m delighted that this has been made possible through our partnership with 100 Resilient Cities, and working with Colu”, Belfast Lord Mayor Councillor Deirdre Hargey explained.

“A city coin is effectively a reward or loyalty plan. It will allow us to encourage residents and reward positive behaviors, for example, for volunteering, civic activities, recycling, or shopping at local business”, says part of the statement.

It will be accepted as payment at local businesses across the city, including shops, cafes, restaurants and more. According to a press release, residents of the city can download an application and register their data to start earning Belfast Coin, which will be worth £1 from the moment it starts to circulate. After completing these steps, users can use the application as a means of payment in stores, restaurants and other types of businesses.

Amos Meiri, CEO and Co-Founder of Colu, said Belfast authorities have shown that the city has ambition and a vision of the future, thanks to the use of innovative technology.

Belfast Coin will make a contribution to the development of the city economically, socially, environmentally and more. Similarly, Belfast Coin will bring all the different elements of the city closer and will prepare residents, companies, NGOs, community groups and educational institutions to work together towards the same goals.

Colu, based in Tel Aviv and the United Kingdom, operates local cryptocurrency environments based on blockchain technology in London, Liverpool and Tel Aviv. The last one has been used by a quarter of the residents of that city.

Until now, the launch of Belfast Coin would be later this year. Meanwhile, there will be a phase of inclusion of initiatives and local businesses to the project. The idea is that citizens can pay for local products and services with the cryptocurrency of the city.

Colu, the company that will be in charge of the development of the token, already has its own cryptoactive in the blockchain of Ethereum. This is Colu Local Network (CLN). This digital asset has a market capitalization close to USD 500,000, and a current price of USD 0.004681, according to CoinMarketCap. The future for Belfast promises to be encouraging and to be a new step for the adoption of blockchain technology and cryptoactives.

By María Rodríguez

Analysts at Canaccord Predict that Bitcoin Will Return to $20,000 Levels in March 2021

Andres Chavez
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Analysts at Canaccord Predict that Bitcoin Will Return to $20,000 Levels in March 2021

Bitcoin is on the way up, at least value-wise. After spending months struggling to recover from the aftermath of a mid-November collapse that took the price of the world’s most prominent crypto asset to below $4,000, the industry has started to see sustained growth and; therefore, light at the end of the tunnel.

At the moment of writing this piece, Bitcoin’s price was steadily climbing, checking in at $6,583.79 according to CoinMarketCap, up 4.72% in the last 24 hours. On Thursday, May 9th, it finally surpassed the $6,000 threshold, which is where it was at the time of the ill-fated collapse of November 2018.

And, as the analysts at Canaccord Genuity observe, there is further room for growth. In fact, the specialists see Bitcoin price returning to the $20,000 range in 2021, which would be an all-time high, even surpassing what it was worth in December 2017 – January 2018.

A Matter of Two Years

Michael Graham (analyst) and his associates Alexander Frankiewicz and Matthew Volpe sent a note to Canaccord’s customers, in which they forecasted that BTC was going to return to the $20K range within the next two years.

“Now four months into 2019, we note for the third time the striking similarity in bitcoin’s price action between 2011-2015 and 2015-2019. While this simple pattern recognition has little fundamental basis, we note that bitcoin does operate on a four-year cycle of sorts, as the halving of bitcoin’s mining reward occurs approximately every four years,” they observed.

They further added that “Bitcoin has started to form the spring 2019 bottom we began mentioning last year, although a close look at the chart suggests the recovery may be slightly ahead of itself. Looking ahead, if bitcoin were to continue following the same trend, the implication is a slow climb back toward its all-time high of ~$20,000, theoretically reaching that level in March 2021.”

A Little Bit More about Canaccord Genuity

Canaccord Genuity is an independent, full-service financial services company, with operations in global capital markets and investor relations. It is an international investment banking that focuses in wealth management and brokerage. It is the biggest independent investment dealer in Canada.

The specialists in the crypto markets also observed further movement in the industry, stating that about “7 million bitcoins have been shaken out of ‘Cold’ (not active for at least six months) status and have begun trading hands again.” They predict that BTC price will rise with the next halving of the block reward, which is expected to come next year.

Also, more interest from Wall Street in cryptocurrencies will help soar the price. “Perhaps most important is Fidelity’s continued push into the space. After the asset management giant launched Fidelity Digital Assets last October and a custody service in March, numerous reports suggest the launch of an institutional digital assets trading business within the next few weeks. Fidelity also released a survey of 411 US institutional investors which found that 40% are open to owning digital assets within the next five years. Another factor may be Grayscale’s ‘Drop Gold’ advertising campaign, which hit airwaves recently and targets digitally native investor base that may prefer bitcoin to gold as a non-government store of value investment. Yet another could be several corporate crypto initiatives from the likes of Facebook, Nike, and others gaining attention in the media,” said the note.

“In any event, bitcoin is so far one of the best-performing assets of 2019,” they concluded.

By Andres Chavez

USA Would Use Blockchain ​​Technology to Monitor Wireless Services

Maria Rodríguez
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USA Would Use Blockchain ​​Technology to Monitor Wireless Services

The blockchain system could improve administrative processes and facilitate the verification of the spectrum that licenses use

The United States would be evaluating the possibility of using blockchain technology to control and monitor wireless network systems, supported by a massive amount of devices which use Internet of Things (IoT), according to a recent report published by Computerworld, this is, a magazine specialized in information technology and communication.

The project may be considered by the Federal Communications Commission of the United States (FCC), which considers as positive a blockchain system that allows the correct administration of wireless spectra, as well as other multiple functionalities and benefits.

About this point, the Commissioner of the FCC, Jessica Rosenworcel, was quoted in Computerworld’s report. She exposed the central idea of ​​the project at the Conference of the Massachusetts Institute of Technology called The Business of Blockchain.

During her speech, Rosenworcel explained that, according to what the company estimates, in the near future, the world will have an approximate of 50 billion wireless devices; therefore, it is better to have a planned project that can monitor such number of networks, and work with a so-called “Real-time market” that can control it.

In addition, Rosenworcel questioned the current monitoring system, calling it complex and expensive. “If you think about an Internet of Things world with 50 billion wireless devices and functionalities that can provide information to all of them, we should discover how we can have a real-time market for those spectrum inputs instead of this complex current system with these licenses for exclusive use”, she said.

The Administrative Process of Granting Spectrum Licenses

The Commissioner explained that the FCC makes the granting of spectrum use licenses during occasional auctions at indeterminate times. This process comprises a complex administration system and high costs. The Commissioner also mentions that the FCC has an extensive record of licenses which are not completely verified. This means that there is not any information if these licenses are used or approved to be used.

For this reason, the Commissioner assured that with a blockchain system adapted exclusively for this registry process, many technical problems can be solved and costs drastically reduced. “We have this record of all these licenses, but some days later, we do not know with great clarity what is being used and what is not being used. So, if you put this in a public blockchain you would have this record of where the demand is and for what airwaves”.

Rosenworcel said she feels in favor of this measure and that the agency is studying all the possible scenarios for the implementation of the plan. The proposal has been formally made to the capitol, as well as to different technological companies dedicated to the management of communications networks.

Despite this, the company is not only evaluating the blockchain system for the solution of tedious processes in the FCC, but it is also seeking to enable or improve current databases for more efficient ones. Some representatives say that the blockchain system may not be necessary during a period of 5 to 10 years.

By María Rodríguez

Enterprise Blockchain Framework for the Third World Is Launched and Cryptocurrencies for Ethiopia Will Be Created

Willmen Blanco
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Enterprise Blockchain Framework for the Third World Is Launched and Cryptocurrencies for Ethiopia Will Be Created

Atala is similar to the open-source Blockchain framework Hyperledger Fabric, IBM Blockchain, but this solution adopts a different approach and focuses on developing countries

The Founder of Cardano, Co-founder of Ethereum and Executive Director of IOHK, Charles Hoskinson, announced the launch of an enterprise Blockchain framework that aims to provide financial services to billions of people living in African countries.

The structure, which is called “Atala” after a butterfly that inhabits Florida, was created by IOHK in order to serve as a solution provider for developers, companies and governments seeking to implement new products. Hoskinson said:

“Atala is a business structure similar to Hyperledger Fabric. However, the objective is to be a solution provider for governments that need a municipal currency or a supply chain management system. This requires a type of framework that serves as libraries and modules that allow governments to quickly build a product for end users.”

Currency for Ethiopia

Although Atala is similar to the open-source Blockchain framework, Hyperledger Fabric, which is used by IBM Blockchain, it has a huge difference: the solution adopts a different approach by focusing less on first-world companies and more on governments of developing countries. The framework has been built from scratch, for real-world use cases such as property registration, voting systems and supply chain management. Besides, unlike other enterprise blockchain frameworks that are cryptoeconomic, Atala focuses on the adoption of a digital currency.

According to Hoskinson, Atala will first be used in collaboration with the Ethiopian government to develop a new cryptocurrency that provides a safe and reliable means of payment for the capital of the nation. He added:

“Although we have signed several memoranda, the most important of them is that we are going to build commonly used currency for the capital of Ethiopia, Addis Ababa. We are working together with the Ethiopian government to create a new digital payment system that will allow six million users to pay their energy and electricity bills with cryptocurrencies. Eventually, we may combine this with an identity card.”

Other African countries

Whilst the government of Ethiopia will be among the first to use Atala, the framework will also be introduced in other African countries that lack an inherited infrastructure, with the intention of enabling a new smart economy. In addition, Hoskinson said that Atala will provide services to other business industries that seek the adoption of block chains. He revealed:

“We are now trying to find the right product market, but I could also say that we have signed a Memorandum of Understanding (MoU) with a major footwear manufacturer for the fight against counterfeiting.”

Blockchain interoperability

Another main objective of Atala is to move, without problems, the value of the user between different blockchains. Currently, Blockchain systems lack interoperability, which Hoskinson considers problematic, especially for companies.

More than two discussions need to be held about how to blur the line between a permissioned ledger, a business ledger, and a permissionless system. We have to treat it as a single spectrum and move the user value between the two without problems. Our intention is not to alert users that they are leaving the Cardano block chain and entering Ethereum, but to allow them to have a perfect experience. We need to focus on moving data, actors and values ​​between these systems so that users can move between an exchange and an open ledger.

Additionally, Hoskinson indicated that the interoperability of the blockchain is necessary to facilitate the massive adoption of this technology. IOHK is studying the possibility of developing new tracking and traceability solutions for the agricultural supply chain of Ethiopia. However, the blockchain interoperability is a required key element. Hoskinson said:

“The only way for 15 million farmers in Ethiopia to enter a cryptocurrency-type system is by first introducing them into a supply chain system. Farmers need to be in a supply chain system to adhere to international mandates. Many of these people do not want to use cryptocurrencies, but once they are in a supply chain, they are within a network. If Cardano finds this interoperable, we can build a product that can reach 15 million people.”

By Willmen Blanco

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