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The Process for holding an Initial Coin Offering explained.

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The cryptocurrencies and Blockchain Technology spawned a new way of public crowdfunding known as Initial Coin Offering or ICO.

Understanding various steps to conduct an Initial Coin Offering successfully.  

  • Introduction

A few decades ago, the internet was the revolution, that brought the humans closer to each other. All the information across the world was made available on the fingertips of each and every individual, gradually the network gained momentum and now the internet is the biggest network of computers and servers around the globe. After Internet, came Bitcoin and through Bitcoin came Initial Coin Offering.

 

  • Cryptocurrencies

The Internet is the one where a copy of the data is sent to the client requesting it, but with the invention of cryptocurrencies using the Blockchain Technology, the transfer of information was made possible by avoiding keeping copies of it in different places. In other words, an asset on the Blockchain network would be available at only one location at a particular instant of time. Hence it was based on, not sharing, but ‘transfer of value.’ Bitcoin was popularly known to have been solved the double spent problem which existed in cryptocurrencies prior to Bitcoin, but with the Blockchain Technology and its spectacular features, people couldn’t stop praising and embracing it.

 

  • Initial Coin Offering assisting Entrepreneurs

In order to start a particular business, an entrepreneur requires huge amounts of investments depending upon his project. Earlier it was difficult, as the entrepreneur had access only to a limited number of Venture capitalists and investors in his vicinity. But the cryptocurrencies and Blockchain Technology spawned a new way of public crowdfunding known as Initial Coin Offering through which the investors and venture capitalist from all around the world gained access to participate in the offering provided by the project.

 

It is well known that the Initial Coin Offerings are highly beneficial, as they digitize the complete process and reaches to every investor in the nook and corner of the world as it is online. Depending upon the popularity as well as the potential of the project, it is evident that one has been able to raise almost millions of dollars within a few days of the Offering, which was highly challenging for the Initial Public Offering.

 

The Initial Coin Offering Process is as explained below.

1. Having a clear Idea or intention behind the project is the first and the foremost prerequisite for the Initial Coin Offering. One must be very crystal with respect to his project and its implications in the real world. One must be able to differentiate themselves from other similar ongoing projects in the market so the users understand why the project must be supported.

2. After having a clear idea for the reason of existence of a project the entrepreneur’s next step is to create an effective team consisting of developers with a lot of technical knowledge to develop the product, business professionals in order to assist in the marketing and for the development of business model for the product along with the barristers to provide the project with legal assistance with respect to the regulations from the government.

3. Once the entrepreneur is done with the above-mentioned steps, he must have a clear vision of what Blockchain must be applied for his particular project so as to make it as efficient as possible. The structure of the public sale, the number of tokens, along with the time frame for the ICO must be ready at this stage.

4. Development of a user-friendly and technically apt White paper is the next step. The entrepreneur is needed to author a Whitepaper which explains the project in an easy and an effective way for the investors. This is one of the crucial steps, as the White paper is the official document that contains all the legal terms and conditions of the Initial Coin Offering along with the project’s detailed information. The entrepreneur must be able to resonant the project into the investor’s minds for a successful Initial Coin Offering through this.

5. Before making the project open to the public, it is well advised that the entrepreneur reveal it to the industry insiders and some of the close investors so as to get feedback from them and give a facelift to the project. The Entrepreneur might not be able to identify some of the key inherent flaws in his project. Doing this would surely be helpful to him. This group of people might further act as a word of mouth to propagate the project further.

6. A pre-sale can be conducted by raising a limited capital prior to the original Offering. This might help in funding for the developmental as well as legal procedures required to set up the complete ICO. This is, however, is optional.

7. A selected suite of investors can then be targeted to market the project through numerous social media tools. The project members can also initiate a discussion on various Bitcoin forums about the application of the project.

8. Finally, the Initial Coin Offering is conducted on the stipulated date. It might also be offered in different phases for a prolonged duration of time to obtain funds consistently.

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#Bitcoin

Latest: Bitcoin Mining Complete Analysis

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The bitter truth is that Bitcoin mining has a centralized business operation as few handfuls of Companies have taken over the Bitcoin mining industry.

Citing various possibilities of regaining decentralization in the Bitcoin mining industry.

Why do we need a Consensus?

Any particular system, for efficient functioning, must have a governance mechanism, in order to avoid exploitation of the resources. This can be related to the Cryptocurrencies, where for its smooth functioning the consensus algorithm is applied. The power of decision making is taken from an individual and distributed among the community itself, which is the inherent reason for the development of Crypto economy. Proof of Work, Proof of Stake, Delegated Proof of Stake, etc is some of the only algorithms applied. Specifically, the world’s most popular cryptocurrency, Bitcoin incorporates the Proof of Work algorithm which implies the bitcoin mining operations.   

 

Decrease in the block reward over time

Mining is very similar to the traditional Gold mining where the users utilize the computer resources in order to solve a particular puzzle generated by the algorithm. The algorithm is designed in such a way that, on solving a puzzle successfully, that particular node of the network receives something known as block reward, in the form of Bitcoins along with the total transaction fees of the transactions he or she verifies. Currently, the block reward is 12.5 Bitcoins and before that was 25 and 50 Bitcoins respectively. It is estimated that approximately, for every 4 years the block reward gets halved.

 

The dominance of Bitcoin mining pools of China

The bitter truth is that Bitcoin mining has a centralized business operation as few handfuls of Companies have taken over the Bitcoin mining industry through their extensive hardware pieces of equipment. Specifically, Bitcoin mining companies from China namely Bitmain, BTCC/BTC China, and discus fish/F2Pool. The algorithm is designed in such a way that if the number of nodes club together and solve a common problem, then the difficulty is not increased but if the same number of minors individually try to you solve it, then the difficulty of solving increases. Therefore, people in early day days preferred to join the mining pools rather than individual mining. As an uninvited consequence of which, has resulted in the centralization of the mining pools.

 

Individual mining from home is non-profitable

If you are thinking of setting up a Bitcoin mining facility at your home, then it would be an utter failure, as the returns from the operations would be negligible, compared to the expenditure for electricity and types of equipment. In fact, smaller mining pools have also been suffering greatly and a Swedish Bitcoin mining pool, KnCMiner had also filed for bankruptcy. Hence, joining major Bitcoin mining pools is only way out, but even that has its own consequence as it leads to centralization of the mining operations. In a nutshell, it is highly challenging for an individual to undertake the Bitcoin mining operations.

 

Environmental effects and cost of electricity due to Bitcoin mining

Bitcoin mining operations have become so rampant, that they are eating up electricity which can be utilized by an entire country for a year. As mining operations have skyrocketed, even the price of electricity in various countries have been increased, particularly in China as they dominate it. The electricity bill of China’s largest Bitcoin mining pool, Antminer (Bitmain) accounts for a staggering $39,000 per day. China accounts for almost two-thirds of the total computational power vested in the field of Bitcoin mining. As mining operations require lots of electricity and generate thermal energy, it has environmental hazards and creates an imbalance in nature.

 

Increased electricity costs

On citing the harmful effects of Bitcoin Mining, governments of various countries have taken a stance of regulating them. Therefore, as a precautionary measure, they have increased the prices of electricity in order to control the mining operations but this would indirectly affect the Crypto Economy, as the mining pools would be forced to reduce their operations which would indirectly have an adverse effect on the prices of Bitcoin as the transaction fees would be affected. The combined effect of all these consequences might also push the price of Bitcoin.

 

Nearly impossible to regain the sanity of Bitcoin Mining

Long story short, Bitcoin mining have slipped from the hands of people as major business corporations have dominated over the industry. Regaining back decentralization in Bitcoin Mining, as it used to be in the earlier days, is highly challenging and equally competitive.

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Adoption

Fortnite using Cryptocurrency: ERC20, ERC721 and more, good or bad?

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Incorporation of ERC20 and ERC721 tokens by Fortnite would effectively enable the players around the world, to utilize the cryptocurrency realistically.

Estimating the probability of introduction of cryptocurrencies within Fortnite.

Cryptocurrencies have become an integral part of the gaming industry

Cryptocurrencies have been quite popular and are actively being incorporated in almost all the domain, which entails some or the other kind of financial asset. Interestingly, the cryptocurrencies are also a crucial part of the gaming community where they are utilized by the users, to buy or sell the commodities in the virtual world. Although developed to revolutionize the real world economy of the world, the cryptocurrencies don’t stay back, when it comes to their popularity amongst the gaming community. Even Satoshi Nakamoto wouldn’t have imagined the way cryptocurrencies are being incorporated these days, apart from the economic perspective.

 

It all started with the Ethereum network

Notably, with the discovery of the Ethereum Protocol, Vitalik Buterin opened tons of gates for the Developers, Gamers, Investors, Entrepreneurs, and various other people to utilize the blockchain based template and, specifically enable the developers to develop their custom cryptocurrency project based on the Ethereum blockchain. The ERC20 protocol is effectively being used by various Decentralised applications which were designed to trade the virtual assets with real monetary value.  

 

Some favorite games using Crypto tokens

Currently, there are a lot of games which incorporate the use of cryptocurrencies within them, and the users can play games to earn cryptocurrencies. Some of the most popular ones in the list are Ever Dragon, Crypto baseball, Cropbytes, etc. However, the trend got escalated when Cryptokitties became popular, as it had blocked the entire Ethereum network. Followed by which, all the strategy and game building genre of games incorporated cryptocurrencies especially the Ethereum’s ERC20 based protocol tokens.

 

The Ethereum community is concentrated towards developing their protocols

Ethereum was a pioneer in developing non-fungible tokens which are predominantly used by the gaming community. The network has even focused upon the development of advanced versions of ERC20 protocol and hence improved the ERC721 tokens. However, much lesser known ERC1155 protocol has also been developed by the Ethereum team. The fungible tokens in games like Cryptokitties are used to buy or sell various in-game assets.

 

Should Fortnite use cryptocurrencies?

Take one of the most popular games of the current generation, Fortnite for instance. With millions of players playing Fortnite at any point in time throughout the world, they always seem to be dealing with the in-game assets due to the way they are designed. Traditionally, the users need to utilize the in-game currency known as V bucks to purchase things. But there are practical problems of liquidity, fungibility, and ownership which persist in the game, which can effectively be solved by cryptocurrencies.

 

ERC20 & ERC721 Protocols

Incorporation of ERC20 and ERC721 tokens by Fortnite would effectively enable the players around the world, to utilize the cryptocurrency realistically. Currently, the business model of Epic Games, which owns Fortnite, is concentrated towards its profit, as it controls the scarcity of the costumes, skins, cosmetics, etc. in the game. The data analysts at Epic, observe the demand and supply of various commodities within the game and respectively change them.

 

Reasons point towards a downward probability of such initiatives

Therefore, the incorporation of ERC20 or ERC721 tokens, in Fortnite might take quite a lot of time as the business model of the company is at stake. Epic might even ban the users who use the in-game assets in the secondary market. There are also various reasons pointing towards the inefficiencies, by incorporating cryptocurrencies in Fortnite. First of all, the tokens are well suited for decentralized applications such as Cryptokitties, Decentraland, etc. and as Fortnite was not predominantly developed within this genre, it would be quite challenging, to incentivize the entire game with blockchain based currencies in the upcoming updates.

 

Future of cryptocurrencies if Fortnite considers it

But, if the developers are serious about introducing the Cryptos, within Fortnite, then it would invariably take the crypto community by storm, as the vast customer base from Fortnite, would also be made available for the Crypto world. The cryptocurrencies would gain access to a broader market of the audience through this initiative and are better for the democratization of the global economy towards a bright future.

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#Bitcoin

Bitcoin Liquid: All you need to know

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Blockstream has come up with innovative Bitcoin sidechain techniques, in order to provide scalability to the Bitcoin network by Bitcoin Liquid

Shedding light on one of the most recent efforts to scale Bitcoin.

 

Scalability has been the evergreen issue of Bitcoin network

The scalability issue concerning Bitcoin has been a very tedious problem, for which no clear solutions were seeming to be practical enough to be implemented. But one of the blockchain based companies named, Blockstream has come up with an innovative Bitcoin sidechain techniques, to provide scalability to the Bitcoin network. Below are some of the critical attributes of that Liquid Bitcoin network.

 

1. The Liquid Bitcoin network went live on 27th September 2018. The information of which, was unveiled by the Chief Strategy Officer at Blockstream, Samson Mow.

2. The San Francisco-based blockchain giant, Blockstream has predominantly been in the LimeLight of the Crypto sphere for its consistent efforts in the development of Bitcoin Core.

3. It provides for anonymous transactions which means that the sender’s and receiver’s address is hidden from the entire network. As a side chain implementation, the system also increases the transaction confirmation speed and lowest the transaction fees.

4. The CEO of Blockstream, Adam Back also made it very clear that in future, the technology would enable the users to place orders and eliminate the need of exchanges to undertake transactions. According to him, this procedure would safeguard the interests and assets of the customers.

5. The Liquid Bitcoin network is supporting the mainstream Bitcoin network, by adopting the most popular Segregated Witness concept along with the two-layer micropayments, the Lightning network.

6. The company is also looking forward to their dedicated blockchain wallet, GreenAddress. However, plans are also under process to make the Liquid Bitcoin, support by the hardware wallets like Trezor or Ledger Nano S.

7. Many prominent blockchain-based institutions had participated in their mainnet launch, and some of the notable ones included Bitfinex, OKcoin, Unocoin, Crypto Garage, etc.

8. Apart from Bitcoin Liquid, it also supports Issued Token Asset feature, where the users can virtually use any asset, to trade them as tokens. The Asset can be anything ranging from Gold, Silver, Fiat currency, other tokens, reward points, etc.

9. The Bitcoin Liquid network, as a side chain implementation, would mark a great sigh of relief to the community members, as the Bitcoin network had been played with Scalability from a very long time.

10. According to experts, it has also been calculated that the emergence of Liquid Bitcoin network would disrupt many cryptocurrencies, as it has been inherently supported by many members behind the original Bitcoin protocol.

11. Many business corporations and cryptocurrency exchanges along with the regular users would greatly be benefited, as it would enhance the liquidity of Bitcoin in the market through its 1 to 1 pegged nature with Bitcoin.

12. Even though Bitcoin Liquid network is a Federation sidechain, it is not much centralized in character as the decisions concerning future advancements would be undertaken by the community members only. However, it cannot be as decentralized as the Bitcoin network is. Various Bitcoin exchanges make sure that the Liquid Bitcoin network servers are geographically distributed.

13. Bitcoin Liquid network provides the optimum speed which is very much essential in the current Bitcoin era, to the day traders.

14. Very similar to the open source implementations, Blockstream has even initiated Bitcoin community-based project, named, Elements, through which the community members assist in the development of the Bitcoin code.

15. Any particular user can join the Elements community, to develop a robust and reliable solution for the Bitcoin blockchain network. One can also enter their dedicated Slack channel.

Nevertheless, Bitcoin scalability has been one of the most talked about issues in the cryptocurrency domain as various supporters support to keep the block size constant and work on the Lightning Network or Segwit field. On the other hand, the remaining community members choose things the other way around. However, the experts also debate about the Of Chain blockchain implementations without incorporating Segwit.

 

How would the future of Bitcoin be?

However, any particular conjecture will have its own set of future consequences which must be kept in mind before undertaking any decision. However, the future of Bitcoin might lead towards a centralized economy, if better scalability implementations are put forth by the blockchain based companies. However, on an overall basis, the Bitcoin network is consistently improving which is a good sign.

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