Telegram, one of the largest messaging platforms in the world—and used by many in the crypto industry—is launching its own blockchain platform. But it's up against a deadline: October 31. Will it deliver the GRAM cryptocurrency on time or will it be forced to backtrack on its ambitious plans?

Insights on Telegram's upcoming blockchain platform

Telegram's crypto play

Tether has a big impact on the crypto market. But there are a lot of questions—and speculation—surrounding it. Here are our takes on its latest developments.

Analysis and quick takes on Tether

A spotlight on Tether

A collection of stories exploring the halving of the Bitcoin mining reward and the implications for the wider community. 

Everything you need to know about the halvening

Bitcoin Halvening

A wrap up of news covering the announcement of Facebook's cryptocurrency, Libra.

The latest news on Facebook's Libra

Facebook's Libra

Introducing: Tokenize all the Things

What Is Tokenization?

Talking tokens with Adam B. Levine

How LTBCoin kickstarted the token revolution (and why you've never heard of it)

How Ujo helps fans own a slice of their favorite musicians

Hoodies, sneakers and bricks? How streetwear could benefit from crypto tokens

Listen: A new kind of crypto sale - The Asset Token Onboarding

How crypto helps sell CBD

Why Treum is so interested in getting high

Luc Falempin: How trying to buy stocks led to building a securities token machine

Collectible cats: How Alan Carr helped bring tokenization to the masses

How crypto is helping set gamers free

BUIDL: A 10-step guide to tokenizing an asset

The world is built on a giant $256 trillion pile of assets. Everything from property to art, to stocks to oil. Blockchain wants to change all that. This collection explores the industries being disrupted, by whom, and what that means for both consumers and enterprises.

We've delved deep into the tokenized world to uncover the people, the projects and the potential of this technology to change capital forever.

Blockchain’s promise of a more liquid world

Tokenize all the Things

Crypto Capital has worked with major exchanges, including Binance, Kraken, BitMEX and Bitfinex. But it was never really a bank, and two of its founders have been arrested by the FBI. We dig deep into it here.

Insights into the shady Panamanian bank that has been underpinning the crypto industry to this day.

The Crypto Capital Scandal

The Ethereum community gathered in Osaka, Japan, for its fifth developer-focused conference. Here are all the highlights and everything you need to know.

Breaking news and features live from Devcon's fifth conference.

Devcon 5

The largest crypto exchange in the world is expanding to the US. We track its major developments as it gears up for launch. Will the exchange survive or suffer in the harsher regulatory climate?

The latest on Binance's push into America

Binance in the USA

Decrypt's coverage of all the events taking place at Blockchain Week in and around New York City.

Decrypt's coverage of NYC Blockchain Week events

New York Blockchain Week: 2019

Andrew Hayward

Decentraland, the long-in-the-works virtual game world in which users can own digital land parcels and create and monetize interactive experiences, finally opened to the public today.

The browser-based, Ethereum blockchain-powered 3D world is now available for anyone to explore and interact with, plus the creators have implemented the final versions of creation and trading tools, such as a drag-and-drop editor, a software development kit, and a marketplace for land and in-game assets.

> The gates to Decentraland are open to the public and the four-day Treasure Hunt begins. Prizes worth over $100k USD to be found. Let’s celebrate!https://t.co/eRhIixw0mB pic.twitter.com/VhCwhp9iiY
> 
> — Decentraland (@decentraland) February 20, 2020

Decentraland will mark the occasion by giving away more than $100,000 worth of prizes over the next four days via a treasure hunt in its urban hub, Genesis City. The prizes include 1.25 million MANA (ERC-20) tokens, as well as other types of tokens, in-game items, LANDs, and an HTC Exodus 1 smartphone.

As explained in our primer on Decentraland, the company was founded in 2015 and raised $20 million via an ICO in 2017, and LAND parcel tokens have sold for as much as $60,000 apiece. Decentraland is envisioned as a place where LAND owners can create and share their own games and experiences and earn MANA from usage, as well as from renting their LAND to others.

Yesterday, the company announced that it had established a decentralized autonomous organization (DAO) to handle future policy updates, and that it had recently spread the content of the Decentraland Metaverse across numerous server nodes to eliminate any single point of failure (or kill switch) for the game.


Blockchain

cryptocurrency

Ethereum

finance

Gaming

Technology

Ethereum is a cryptocurrency that allows smart contracts and Dapps to operate on its network. It was created by Vitalik Buterin, a Russian/Canadian software developer and is regarded as an evolution of Bitcoin.

Insights into the biggest events shaping the crypto industry.

News

The long-awaited, decentralized virtual game world Decentraland has opened to the public, and early players can get in on a treasure hunt with ample prizes.

Robert Stevens

Bitcoin’s sudden drop in price yesterday from $10,00 to $9,507, could be related to the United States Marshals Service announcing it had auctioned off $37 million in forfeited Bitcoin, an analyst at the social investment network eToro said today.

“Put simply, bitcoin's price drop yesterday was due to a dump in the market,” eToro’s Simon Peters told _Decrypt_. “This followed a United States Marshals Service announcement earlier this week stating they had sold off roughly 4,000 BTC (around $37 million) that had been seized from criminal cases.” On February 18, the US Marshals  sold 4,041 Bitcoins that had been forfeited in criminal cases, or seized by authorities.

DRUGS KILL

Some of the money was related to the sale and distribution of drugs. For instance, over $200,000 worth of crypto sold by the US Marshals was forfeited by drug dealers from Alabama. Tyler Lee Ward and Henry Long Nguyen were imprisoned in May 2019 for conspiring to sell Alprazolam, maintaining a “drug-involved premise,” and “conspiracy to commit money laundering,” according to a press statement by the Department of Justice.

“Analysts feared the auction winner could potentially make a cash gain by selling the bitcoin on a public exchange, especially if they've acquired the coins for below market price,” said Peters.

Whale Alert, a Twitter accounts that tracks movements on various blockchains and flags large transactions, reported on Tuesday that 6,000 Bitcoins were transferred from an unknown wallet to Bitfinex. Whether this was the auction winnings or not is not clear—the sale was for a little over 4,000 Bitcoin, and split between several different bids—but it sure smelled like it.

Whether yesterday's dump is direct manipulation or just coincidence, “the jury is still out,” said Peters. But “what is evident is that overall liquidity of the crypto market must improve in order to prevent large market orders leading to such volatile price swings in the future,” he added.


bitcoin

etoro

money

Bitcoin is the world's first peer-to-peer cryptocurrency. It was invented by a mysterious inventor Satoshi Nakamoto in 2009 and is regarded as the first digital currency to fix the double spend problem.

Bitcoin

An etoro analyst suspects yesterday's BTC crash was due to the US Marshal's Service auctioning off $37 million in bitcoin

Ben Munster

Google plans to remove British accounts from EU data privacy obligations following the UK’s exit from the EU, _Reuters_ reported yesterday. While this nominally presents an opportunity for alternative “privacy browsers,” one company, an arch-critic of Google, suggests that it’s not a big deal. 

“The God of Google Scandals is a generous god,” said Johnny Ryan, chief policy officer at Brave, a privacy browser that seeks to challenge Google. “There is no need to invent additional outrages.”

EU’s general data protection regulation (GDPR), established in the wake of the Cambridge Analytica scandal, forces companies to disclose openly to users how their data will be used.

But the UK’s withdrawal from the union leaves GDPR’s future uncertain, and Google is reportedly looking to escape its requirements entirely, compelling users to agree to new terms and conditions. 

Google’s plan, according to _Reuters_, would involve transplanting British data from the EU-governed Ireland to the US, where privacy laws are lax. 

All this could, potentially, leave an opening for companies which explicitly don’t track data—for instance, those involved in the cryptocurrency space. 

You’d expect that Brave, which does not track users and rewards them in cryptocurrency for engaging with ads, would be one such company. Last month, Brave upbraided Google for its data practices, writing in a letter to the British government that the company was openly violating “GDPR requirements of transparency, fairness, accountability, and purpose limitation in data protection law,” and that the government was complicit by not enforcing it. 

 Google rival Brave uncovers mass surveillance of UK citizens

Brave also implicated Google in privacy breaches involving up to 400 regional British councils, which supposedly enlist private companies—using Google’s technology—to track constituents’ data. It advised the government to “neutralise Google’s unfair advantage.” 

Of the latest revelations, however, Brave’s Johnny Ryan demurred, noting that GDPR rules in the UK remain in force, at least for now. 

“The GDPR continues to apply to all people in the UK at present, irrespective of any Google actions,” he told _Decrypt_. He added that intelligence wise, it is probably in the UK’s interest to hew to the EU’s provisions. 

“The UK is eager to maintain a free flow of personal data between it and the EU, and has

said so since the start of the Brexit planning,” he said. “This is important for all or almost all sectors of the economy. If the UK were to remove itself from the GDPR structure, it would be burdensome to all businesses that work in the UK and the much larger EU market.”

Indeed, he added, “it would be fatal.” 

Nevertheless, UK prime minister Boris Johnson has already shown willingness to dismantle other economically significant EU provisions, having scrapped freedom of movement earlier this month. 

That, too, could be fatal. 


Brave

google

privacy

Basic Attention Token

Google plans to remove British accounts from EU data privacy obligations following the UK’s exit from the EU. Brave suggests it isn't a big deal.

Sweden’s central bank today announced it is testing an e-krona based on blockchain. The e-krona, which the bank is developing in partnership with professional services firm Accenture, is aimed at everyday users.

In a statement, the Riksbank noted that doesn’t mean that it has plans to issue an e-krona, nor is it an indication of how an e-krona might be designed, or what technology it would be based on. “The main purpose of the pilot is for the Riksbank to increase its knowledge of a central bank digital krona,” it wrote in a statement. 

Sweden’s central bank digital currency will also not be issued to the public, or indeed anyone with a soul. Instead, “simulated users” will be able to hold it in a digital wallet, and can use the e-krona to make payments, deposits, and withdrawals via a mobile app. Sending money is as easy as sending a text, it wrote on its website.

Simulated and potential users alike might be interested to learn that the pilot project runs until February 2021, whereafter the bank will make the decision whether to build an e-krona on the technology. Sweden first conceptualized an e-krona in September 2017, months before Bitcoin’s price peaked at $20,000. 

 Digital currency offers nothing new to banks, says Bank of Finland economist

The simulated pilot lags behind other countries, such as Senegal, Cambodia, and the Bahamas, who’ve begun testing CBDCs with real people. Cambodia’s been piloting its CBDC since July, and anyone who has a Cambodian phone number can join, Makoto Takemiya, co-founder of Soramitsu, the vendor that created the blockchain platform for Cambodia’s CBDC, told _Decrypt_. 

Still, with Sweden’s GDP almost 10 times the size of the combined GDP of Senegal, Cambodia, and the Bahamas, according to World Bank data, the conclusions of the pilot study might have a greater impact on the global economy. 


banking

cambodia

central bank

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<ul>
<li>Sweden's central bank is trialling a CBDC.</li>
<li>It'll be tested on "simulated users". The bank has not yet indicated that it plans to issue one.</li>
<li>Sweden follows in the footsteps of other countries who've trialled CBDCs, such as Cambodia.</li>
</ul>

In brief

Sweden’s central bank today announced it is testing an e-krona based on blockchain. The e-krona is aimed at everyday users.

Sorare, a fantasy football (U.S. translation: soccer) site and game, today released a digital asset that represents superstar Cristiano Ronaldo as a non-fungible token. Sorare also released cards for all players on Ronaldo’s team, Juventus FC,  during its presale.

Players can use the cards to compete in fantasy leagues or trade them on secondary markets, such as OpenSea. The tokens were published via a licensing agreement with the club. 

Soare will release only 111 Cristiano Ronaldo cards, which players can bid on in a presale, which ends on Friday. The most expensive bundle Ronaldo’s in is currently valued at around 57 euros, or $61. 

HOW SORARE'S NON-FUNGIBLE TOKEN WORKS 

Soare issued the cards via the Ethereum token standard, ERC-721, which is also known as a non-fungible token. This means the cards are unique, and can’t be duplicated. The 111 Ronaldo cards up for grabs are the only ones in existence (unless the company decides to issue more). 

Other popular tokens in the NFT market include those from Gods Unchained (crypto’s take on Hearthstone), and CryptoKitties, which tokenizes digital kittens.

> Welcome Juventus FC to our Fantasy Football Game! ⚫️⚪️ 
> Pre-Sale starts today! 🚀
> Juventus blockchain cards, only on https://t.co/u8nTjVchzM#ForzaJuve pic.twitter.com/IBsiI5Wvdf
> 
> — Sorare (@SorareHQ) February 20, 2020

Still, Ronaldo is a "common" card, according to the site. In fact, when _Decrypt _created an account on Soare's site, we were issued our very own Ronaldo card for free.

FOOTBALL EMBRACES BLOCKCHAIN

The football industry is getting on board with blockchain in a big way. Last week, blockchain company London Football Exchange announced it had bought an 80% share in the Australian football team, Perth Glory. “Our plan is to build out a full group [...] where you’ve got a stake in multi-club ownership in various leagues, globally,” CEO, Jim Aylward, told _Decrypt_. 

And on Monday, the Union of European Football Associations (UEFA) announced it is distributing one million tickets on the blockchain for the UEFA Euro 2020 football tournament.


cristiano

crypto

football

ronaldo

soccer

sorare

Sorare has turned Juventus FC into non-fungible tokens (Image: Cristiano Barni/Shutterstock)

<ul>
<li>Fantasy soccer game Sorare tokenized the soccer team that Cristiano Ronaldo plays in, Juventus FC.</li>
<li>Players can buy unique cards that they can trade, and use for fantasy football leagues on the platform.</li>
<li>It's a non-fungible token, like CryptoKitties.</li>
</ul>

Sorare, a fantasy football game, today released a digital asset that represents soccer superstar Cristiano Ronaldo as a non-fungible token.

Tim Copeland

A potential exploit in the decentralized finance (DeFi) ecosystem has been exposed and it won’t be fixed until noon on Friday. The reveal comes just days after two exploits used DeFi tools to take home $1 million.

Dominik Harz, a PhD candidate at Imperial College London, has posted a Medium post detailing the potential weakness. It’s focused on the concept of flash loans and the stablecoin Dai. While he has notified Maker—which runs Dai—the issue won’t go up for a vote until tomorrow. And in the meantime, $700 million is at risk.

Genius hacker exploits DeFi again, takes $1 million in total
“That attacker would be able to steal $700m worth of ETH collateral and be able to print new Dai at will,” Harz wrote. “This attack would spread throughout the whole DeFi space as Dai is used as backing collateral in other protocols.”

WHAT IS A FLASH LOAN?

A flash loan is a new—and risky—concept in DeFi. It’s essentially the act of lending out money, without asking for anything held as collateral in case the loan is defaulted upon. The only reason that they exist is that the loan gets paid back, in the same transaction. This is possible because on Ethereum—the blockchain platform in question—transactions can be made up of multiple components.

> Can an attacker use flash loans to attack @MakerDAO? Find out!
> 
> We quantify the required MKR and show that an attacker can increase his chances by:
> - combining loans from @dydxprotocol and @AaveAave to increase liquidity 
> - oracle tampering on DEXshttps://t.co/CxzpUnUPCy
> 
> — Dominik Harz (@dominik0_) February 20, 2020

So, in the case of the first DeFi exploit the other day, the trader made one big transaction that triggered a bunch of actions across various DeFi protocols. Within the transaction, they made a flash loan, used the money for nefarious goals, profited $350 million, and returned the loan. The lender is safe because they know that—due to the power of the blockchain—if the money doesn’t come back, the transaction is (kind of) reversed so it never happened in the first place. Either way, they keep their money.

THE $700 MILLION ATTACK VECTOR

Now, here’s how Harz argues that flash loans could be used to exploit Maker.

MakerDAO is a decentralized governance system that runs the Dai stablecoin. Holders of the governance token MKR vote on how Dai should be programmed. But it’s possible to exploit the governance system.

“The basic idea is to accumulate enough MKR tokens to replace the existing governance contract with the attacker’s, malicious, governance contract,” Harz said. “The malicious governance contract is then able to give the attacker full control over the system and withdraw any collateral in the system as well as create arbitrary amounts of new Dai.”

However, when this attack vector was suggested before, the idea was to crowdfund the MKR tokens needed to carry it out. And that’s where flash loans come in. They make it much easier for an attacker to build up a large supply of MKR tokens—and use them to take over the system.

Not only can they use a flash loan to buy a large amount of MKR, but they can also use flash loans to manipulate the price of MKR—in the same way as the recent DeFi attacks. With a cheaper MKR price, it becomes much easier to snap up more coins.

Harz said that this strategy could be used in combination with a crowdsourcing strategy for maximum effect at a low cost. Maker is set to vote on a solution to stop flash loans from affecting the governance mechanism tomorrow—but the clock is ticking.


breaking

DeFi

Hacker

Flash loans present a number of ways of taking money out of DeFi. Image: Shutterstock.

<ul>
<li>There is a potential exploit regarding the Dai stablecoin.</li>
<li>It involves the concept of flash loans.</li>
<li>It should get fixed tomorrow at noon.</li>
</ul>

A researcher has found a way of using flash loans to take a large amount of funds out of DeFi. But the exploit won't be fixed until tomorrow.

The Ethereum Name Service was designed to make sending and receiving crypto easier. You take your Ethereum (ETH) address—an alphanumeric string of characters, which shows how much ETH you have in your account—and replace it with a simple name. Much like how email addresses replaced clunky pieces of code, it was supposed to make crypto simpler.

But _Decrypt_ has learned that this step forward in user design, has meant several steps backward when it comes to privacy. Since the Ethereum blockchain is transparent, anyone can use your Ethereum name to peer at your finances. It's the difference between sending someone an email and them being able to look at your entire inbox.
[Ethereum coin on a motherboard]Blockchain's transparency makes it dangerous to use Ethereum names. Image: Shutterstock.
In our investigation we found it possible to work out where people would be in the future, see insights into business deals and know just how much money people _really _have—all by observing public blockchain data.

WHAT IS THE ETHEREUM NAME SERVICE?

Lead developer Nick Johnson set up the Ethereum Name Service (ENS) in May 2017. Ethereum names look like domain names: “decrypt.eth.” Anyone can use an Ethereum address to register a name, or multiple names. They can then assign any of the names to other addresses they own, or sell them. All a user needed was a pre-existing Ethereum address to make the purchase.

Johnson told _Decrypt_ Ethereum fans have spent 6,235 ETH ($1.7 million) so far, just buying up Ethereum names. But even if they assign the Ethereum name to one of their accounts that only has a handful of crypto in it, the address they used to register the name is available too. And this allows snoopers to see how much money was stored in those accounts.
[Ethereum Name Service icon on blue background]The Ethereum Name Service proves that blockchain isn't ready for prime time yet. Image: Ethereum Name Service.
Inside the 15,000 unique addresses that have bought the 133,000 Ethereum names, there is a combined total of 364,000 ETH ($100 million)—and thousands, if not millions, of dollars of Ethereum-based tokens too. So we decided to see how much we could glean just from these crumbs of information. Turns out it's quite a lot.

We reached out to everybody we looked into and have included any replies received.

IDENTIFYING HIGH-NET-WORTH INDIVIDUALS

While the richest Ethereum addresses tend to be attached to pseudonymous names—hiding the owner's real identity—not all of them are. And even the most abstract names aren't always foolproof.
[We were able to identify some accounts]Even those wearing masks may not be as anonymous as they think. Image: Shutterstock.
Let’s start with a challenge. The Ethereum name “netural.eth” is connected to an address that’s empty of Ethereum, and contains just $0.08 in OmiseGo tokens. There are no other names associated with the address and it has made just four transactions, ever. Not much to go on.

But the address that registered the name tells a different story. It contains 58,000 Ethereum, worth $15 million, and an extra $2.5 million in tokens. What’s interesting about this address is that it regularly received large payments from crypto exchange Poloniex’s main wallet (while most payments are typically handed out using its secondary wallets). These payments stopped the same day that Circle—which owned the exchange at the time—scrapped trading fees, suggesting it’s a company wallet. This may also explain why the name is so understated.
[Looking at Ethereum transactions]Poloniex's main wallet sent the address regular payments just shy of 500 ETH until November 8, 2018. Image: Etherscan.
The third biggest address owns: “consensys.eth,” “weifund.eth,” and “metamask.eth.” It contains 31,600 ETH, worth $8 million. Could this be our very own financier, Ethereum billionaire Joe Lubin who owns ConsenSys, which funds an editorially independent _Decrypt _and was the incubator for none other than MetaMask and Weifund? It just might be.

Sometimes it’s surprisingly easy to identify an Ethereum name. Take “silberjunge.eth.” While the address linked to it contains just $17 of Ethereum, the address used to register it contains a hefty 1,163 ETH, worth $255,000, alongside a further $121,000 of Ethereum-based tokens.
[Thursten Schulte's handle is silberjunge]It looks like Thorsten Schulte may own the silberjunge.eth name. Image: Twitter.
A quick Google search reveals that “silberjunge” is simply a pseudonym for Thorsten Schulte, a well-known silver and gold expert, bestselling author and former investment banker. He even used the pseudonym as his Twitter handle. He’s also spoken about Bitcoin and other cryptocurrencies, including a 20 minute interview with Hamburg-based Grosse Freiheit TV on the subject. It’s possible the Ethereum name isn’t his, but it sure looks likely.

The issue here is that Ethereum names make it trivially easy for criminals to create a list of people that have the most amount of Ethereum and likely have a crypto wallet—such as a Ledger Nano—sitting in their bedroom at home. Not because Ethereum names themselves are a bad idea, but because Ethereum is too open.

“It's well known that public ledgers like Bitcoin and Ethereum lack privacy, and that as a result it's easy to track transactions made on these public blockchains,” Johnson told _Decrypt_, adding, “ENS makes it easier to exchange addresses for Ethereum and other cryptocurrencies, which makes them more generally useful to everyone. It doesn't attempt to address the privacy issues inherent in public ledgers. 

“Ongoing research into privacy in distributed ledgers has led to breakthroughs such as ZCash and Tornado Cash. We strongly recommend people take care with what activities they expose on public ledgers, and take advantage of these solutions where appropriate,” he said.

WATCHING BUSINESS DEALS IN REAL-TIME

This level of oversight also makes it possible to see what people are doing with their money.

SpankChain CEO Ameen Soleimani owns both “ameen.eth” and “ameensol.eth.” Looking at the blockchain, you can see a transaction he made for 10 ETH on November 30, 2019, worth $1,540 at the time. It seems likely that it was sent to James Kim, CEO at Global Block Branding, who sells domain names for a living—and claims to own 20,000 crypto domain names. It's possible he was either buying Ethereum names or some crypto-related domain names.
[payment from Ameen Soleimani to James Kim]When you start labelling Ethereum addresses, the blockchain becomes very transparent. Image: Etherscan.
(Update: It turned out that this analysis was incorrect. MetaCartel operator Peter Pan tweeted that, in fact, he owned the domain name for "jameskim.eth," and Soleimani sent him the money.)

“I know the risks of using public ENS names,” Soleimani said, adding, “That's why we're all so excited about privacy technology like Tornado Cash so we can create fresh Ethereum accounts without a direct link to previous accounts, without having to go through an exchange.”

Another example is Jordan Muir, creator of Frame, who owns multiple Ethereum names, including “jordan.eth,” “framehq.eth,” and “smartaccounts.eth.” In these accounts he owns a total of $106,000 in ETH and various tokens. Back in May 2018, Aragon announced it had given a grant of $48,000 to Frame. It added that the project could receive a bonus of up to $50,000 if certain deliverables were met.

It appears that they were, although no further announcement was made. Just three days after Frame released an alpha mainnet version on April 1, 25,000 Aragon tokens, worth $17,000, were sent from Aragon’s main wallet to Muir’s account, implying that releasing the mainnet was one of the deliverables. While this isn’t particularly secretive, it does provide some extra insight into the project than was publicly available.

It’s possible to see people’s salaries too, when they’re paid in Ethereum, or in token form. For example, Jack Cheng, “chief evangelist” at Breaker—formerly SingularityDTV—who owns “jackcheng.eth” and “ethoutlet.eth,” received payments in SNGLS, its native token.

Cheng was paid 33,055 tokens, worth $4,600, in August, 2017, and then one million SNGLS tokens, worth $15,000, in May 2019. Since the payments came directly from the main “SingularDTV: Wallet,” it is likely they were part of his salary. But watching how much people are getting paid is not all you can do.

STALKING SOMEONE ON THE BLOCKCHAIN

Ethereum names can be used to track people’s whereabouts.

Bobby Ong, co-founder of data site CoinGecko, owns the Ethereum name “bobbyong.eth.” Anyone watching the blockchain address linked to the name, would have known that Ong would be at Unshudo 7-2 Sugaharacho, Kita Ward, Osaka on October 7, 2019, attending the DAIsucki meetup—focused on the stablecoin DAI—17 days before the event even happened. And, two days after the event, they would have seen strong evidence that he did, in fact, attend.
[People who attended the Kickback event]Kickback rewards those who turn up to events. Image: Kickback.
The event in question was run by Kickback events, where you put down a deposit for the event and if you don’t turn up, your deposit gets shared between those who do—it’s designed to incentivize people to only sign up for events they plan on attending. While that might be effective, it also lets people observe attendees from the comfort of their own home.

In this case, Ong sent $10 of DAI to an address labelled on block explorer Etherscan as “Kickback: DAIsuki Meetup,” on September 20, 2019—indicating that he planned on attending the event the following month. Then, on October 9, he received the “kickback” of $19 in DAI, showing that not only did he turn up, but he was rewarded handsomely for doing so.

“In this case, I should have been more careful with my Ethereum address hygiene and segregated transactions that I wanted to make public from those that I wanted to keep private,” Ong told _Decrypt_, adding, “ENS provides convenience to users but it is up to the users to preserve their privacy. I hope that more privacy features will be built on Ethereum to improve privacy and security for users.”

> Ethereum is privacy 
> Ethereum is money
> Ethereum is cool games
> Ethereum is IoT
> Ethereum is a hedge on Bitcoin
> Ethereum is a digital passport
> 
> Ethereum is smart contracts, payments, & a better internet.
> 
> Great minds build on great platforms, and that's what we're seeing.
> 
> — Omar Bham (Crypt0) (@crypt0snews) February 2, 2020

Ethereum’s selling points have always been that it offers control over your own data, identity, and privacy. Crypto YouTuber and Ethereum bull Omar Bham, who has 119,000 subscribers, even recently tweeted that “Ethereum _is _privacy”. But, if anything, the Ethereum Name Service opens a door into people's private lives that we've never seen before.

_This article has been updated with a comment from Peter Pan._

_The purpose of this article is to inform Ethereum users of the risks of combining their personal and financial data on a public blockchain. It is an argument for greater privacy on Ethereum, which teams like __Aztec__, __EY__, and __JP Morgan__ are working on._

_We would like to thank Alex Svanevik, __cofounder of D5__—The Data Science DAO—and TM Lee, __co-founder of CoinGecko__, who contributed to this article.
_

Have a news tip or inside information on a crypto, blockchain, or Web3 project? Email us at: tips@decrypt.co.

Editors' Picks

Ethereum names

investigation

investing

security

The Ethereum Name Service wants to make Ethereum easier to use. But there's a catch. Image: Ethereum Name Service.

<ul>
<li>We analyzed 133,000 Ethereum names and their respective balances.</li>
<li>We found it was possible to identify several high-profile people, even if they weren’t using their real names.</li>
<li>We were able to see business deals and watch people’s movements, just using the blockchain.</li>
</ul>

Deep dives into Web 3.0, future and present.

Features

The Ethereum Name Service lets users send and receive crypto effortlessly. It also makes it incredibly easy to spy on them.

Mathew Di Salvo

The charity sector is notoriously slow to react to transformative technologies—in the Charity Digital Skills Report 2019, only 12% of UK charities are considering how technological innovations like AI could change their charity. And in the 2019 Global NGO Technology Report, only 34% of NGOs worldwide admitted to understanding blockchain—the lowest stat relating to emerging technologies like the Internet of Things and augmented reality.

Among small charities, though, a revolution is brewing. Spurred on by challenges around infrastructure and dealing with authoritarian states, some forward-thinking organisations are already using cryptocurrency to receive donations. They’re hoping that big charities will catch on, too. 

FEEDING VENEZUELA WITH BITCOIN CASH

With the highest rate of inflation in the world, soaring crime and a shortage of basic goods, Venezuela is an extremely difficult country to live in. It’s also extremely difficult to get money into.

In February 2018, Venezuelan brothers Jose and Gabriel—both longtime users of crypto—discovered Bitcoin Cash (BCH), a fork of Bitcoin. After Jose was quizzed online by friends about the situation in Venezuela, the brothers decided to set up EatBCH, a nonprofit food drive using Bitcoin Cash.
[EatBCH in Venezuela]EatBCH in Venezuela (Image: EatBCH)
Jose, who doesn’t like to reveal his identity due to a fear of reprisals in the increasingly authoritarian state, told _Decrypt_ that, “We were receiving questions from people on Reddit about Venezuela, such as: ‘Is it really that bad?’, ‘Are people really starving’ or ‘How do you manage?’”

“One person told me to send him a [Bitcoin Cash] address so he could send $5 that I could either keep, or use to buy food for kids on the streets.”

PolloPollo: The crypto project putting chicken back on the table in Venezuela
Jose and Gabriel used that $5 to buy a meal for a family – and then some 40 more people. 

They then started asking for charitable donations on Twitter and provided a BCH address to receive the money. The BCH was then sold, used to buy food from local food vendors. The two then posted photos – mainly of children they’d given food to – as proof the cash was being used to feed starving Venezuelans. 

> Working for our communities💪 pic.twitter.com/QqI78TTqUB
> 
> — eatBCH Venezuela (@eatBCH_VE) January 24, 2020

In a country where it is thought a generation of young people will never meet their full physical or mental potential due to malnutrition, the result of a crippling economic crisis, the donations continued to come flooding in. 

To date, EatBCH has received thousands of donations and bought hundreds of meals. They operate in 23 locations around Venezuela and have just launched in South Sudan. Last year they were invited to Washington DC to talk about their strategy with a think tank. 

The initiative is also being noticed by businesses who wish to donate to charity. US-based food startup Crazy Calm, which sells CBD instant coffee, has been donating $5 per order to EatBCH. “It is transparent, efficient charity,” said co-founder Matt Aaron. “We love that EatBCH is using the power of cryptocurrency, borderless cash to feed people in need.” “Our customers love the fact that they can see via the block explorer a link to the donation made on their behalf.”

> 2/9 Update: Mission complete! $500 worth of BCH donated to @eatBCH_SS and @eatBCH_VE.
> 
> Thanks to everyone for participating and most of all @eatbch for their amazing work.https://t.co/g5Tl0EMNtj
> 
> — CrazyCalm CBD Coffee (@CrazyCalmCo) February 9, 2020

Jose added: “When we started this project we said maybe we can accept regular donations in fiat with bank accounts as an alternative. But we simply couldn’t, and cryptocurrency was the only solution.” 

Because of international sanctions, Venezuealans are locked out of traditional payment methods and providers like Western Union and PayPal, he explained. “There is no chance of opening a US bank account so I can receive payments from outside,” Jose told _Decrypt_. “We are simply locked out of the international world. So our only solution is cryptocurrency.”

He added: “I think cryptocurrencies are a better choice than regular financial methods for donating to charity.”

And Jose is not the only one who thinks that. 

CHANGING THE CHARITY SECTOR WITH CRYPTO

Other projects looking to shake up the charity sector by using cryptocurrency are starting to pick up momentum. 

One such project is Giveth, which aims to re-engineer charitable giving, by creating an entirely free, open-source platform built on the Ethereum blockchain. Giveth claims that their system cuts out bureaucracy and provides donors with a high level of transparency and accountability.

“Unlike most things, with crypto you can get financial privacy, but you also get transparency—and you get that by default,” said Giveth founder Griff Green. 

 Griff Green">THERE IS NO REAL USE FOR CRYPTO IN JUST TRANSFERRING MONEY AROUND

“Just being able to transfer money around is not the be all and end all,” he added. “There is no real use for crypto in just transferring money around.” What’s more interesting, he said, is the ability to create economies. 

> “If you’re using #DAOs to do good work in society, people will believe that decentralized governance might actually have some other impact besides just making investors rich.”
> 
> Watch Griff’s full interview on Giveth’s origin story and future roadmap herehttps://t.co/vDmD9TdMQm https://t.co/vdxBBfAht6
> 
> — Giveth (@Givethio) April 26, 2019

Still, there is one challenge for crypto projects looking to overhaul the charity sector, Green said: “The biggest problem that people run into is that no one in the charity space uses crypto; only nerds use crypto.”

GRASSROOTS FUNDING FOR KENYA

One organisation busily engaged in creating economies with crypto is Grassroots Economics, a non-profit foundation based in Kenya. Grassroots Economics works to provide vulnerable communities with alternative currencies, via the blockchain and mobile payments, so that they can take an active role in their own economies. 

> Are #blockchain powered community currencies the 2.0 of cash transfer? #rethinkingaid https://t.co/rdARzTaPL5
> 
> — Grassroots Economics (@grassEcon) May 28, 2019

Grassroots Economics founder, physicist and economist Will Ruddick, moved to Kenya over a decade ago from California. He told _Decrypt _that the charity sector in Africa currently wastes a lot of money with little effect. “The charity sector has a huge impact problem, which has led toward cash transfer or Cash and Voucher Assistance as an emerging modality—essentially dumping cash on vulnerable communities,” he said. “This has opened up the charity sector to faster and more efficient forms of digital vouchers using crypto.”

Grassroots Economics has most recently partnered with the Red Cross and digital wallet provider Sempo to create Community Inclusion Currencies (CICs). CICs enable communities to develop their own media of exchange that can connect to other communities in regional markets and provide a gateway to national currencies via a push button feature phone. As many as 1,000 businesses adopted them in a single week in Kenya. 

“Blockchain gives communities the ability to define and manage a shared financial commons which fundamentally strikes at the heart of poverty,” said Ruddick. 

Though it seems big charity may take a while to fully latch onto using crypto – be it for donations or for creating informal economies – things are moving in the right direction.  

“For me, for the nonprofit sector and for public goods funding in general, cryptocurrency is the bee’s knees,” said Green.


bitcoin cash

charity

Venezuela

Bitcoin Cash was a hard fork of Bitcoin. The split took place in 2017 and since then, Bitcoin Cash has become one of the largest cryptocurrencies to emerge from Bitcoin.

Bitcoin Cash

Among small charities, a revolution is brewing. From South America to Africa, charity projects are revolutionising aid donations and impact using crypto.

If you support the cryptocurrency Bitcoin SV, there is a land far beyond the blood-soaked trenches of Twitter where you can come to no harm. Where enthusiasts of the Bitcoin fork graze unmolested in fields of plenty; where money flows like spring water from a deep geyser, sparkling and true; where men and women join hands in celebration of a singular investment thesis. The name given to this land, nay, this _paradise,_ is “Twetch.” 

Twetch is a Twitter clone built on the BSV blockchain, founded by developer Randy Moish. Moish originally tried to build a similar platform on Ethereum, among other competitive protocols, but preferred Bitcoin SV. That’s the Bitcoin fork helmed by Craig Wright, the widely maligned Australian computer scientist who claims to be the inventor of Bitcoin.

He would not say how many people are in its community; the number of users is likely miniscule. Still, there is something to it.

Tweets are preserved immutably, they can only be viewed by approved members (there’s a waiting list—get in line!) and you must pay, in BSV, to like, share or comment on another’s post. The app comes with some Twetchy jargon: tweeting is “twetching,” retweeting is “branching,” and, well, that’s pretty much it. (“Twetch” itself is a portmanteau of “Tweet” and “Etch”).

[a typical twetch]

It’s the curious, even sci-fi-esque philosophical undertones guiding Twetch that make it more intriguing. 

TWETCH IS A HOME FOR AN EXILED PEOPLE 

BSV is the dark horse of the cryptocurrency world, which is saying something. A contentious Bitcoin fork that purports to align with “Satoshi’s Vision” (hence the name), BSV has been ostracized from the mainstream Bitcoin “community” ever since its birth-by-hard-fork in late 2018 (it’s actually a fork of a fork, splitting off from first generation Bitcoin fork Bitcoin Cash, rather acrimoniously). Last year, its outcast status was further cemented after a cabal of major exchanges delisted the token from their platforms, in response to Wright’s perceived libel trolling. 

And BSV supporters recently got into a bizarre argument with the Wikipedia founder Jimmy Wales. After Wales agreed to attend a BSV conference, supporters hailed it as approval of the network, to which Wales clarified on Twitter, “I’m coming to speak my mind, which includes that BSV offers nothing for Wikipedia and that there is zero chance we would ever use it.”

Twetch has become a sort of port-in-a-storm for BSV-ers,  and their culture is endemic on the platform: “giveaways” of the BSV coins (whose value recently skyrocketed) proliferate; BSV citizen journalists, embedded in US district courts, report live updates from Wright’s various ongoing legal proceedings; users spell Bitcoin, “BitCoin,” a winking reference to Satoshi’s early writings, as a “signal” to those who believe in BSV’s supposed return to the roots of the protocol; others post screeds on how BSV “won the protocol war,” despite its minimal usage, in BSV’s foremost billionaire-funded propaganda vehicle, CoinGeek. 

“It’s very much a BSV echo chamber at the moment,” said “Mike in Space,” a popular and pseudonymous cryptocurrency pundit, sketch writer and Twetch fan, whose cryptocurrency allegiances fall across the aisles. “For it to succeed it will have to become far more broad in its appeal. That’s very tough as most people in crypto outside BSV will not even touch it. You’re treated like a pariah if you do. I think for it to grow it will need to attract non-crypto communities.”

[a twetch meme, in the wild]

TWETCHIES ADMIRE CRAIG WRIGHT, AMONG OTHER THINGS 

Despite the long-running, is-he-is or is-he-ain’t Satoshi circus, many in the community apparently love Craig Wright. Nevertheless, Moish insists that his use of the BSV chain is motivated purely by technicals: it’s simply the most effective protocol for him. 

“We never really cared if CSW was Satoshi, but he often pointed to things Satoshi said and explained them in a way that made sense to early bitcoiners,” said Moish. “He certainly understands how to scale a blockchain in a way no other individual has succeeded.”

And Wright’s vitriolic public persona?  “No comment,” said Moish. “I am interested solely in building Twetch at the moment.”

It’s a solid plan. If it succeeds, Twetch could demonstrate the potential of the BSV network to regular people, who haven’t yet got much to go on. (Currently, BSV’s most used app aggregates weather data.) Still, to take flight,  Twetch needs users. An ahrefs analysis suggests the site only gets around 62 organic Google searches a month, which isn’t many. 

But its small, like-minded community is highly engaged, and awaiting the second coming, as rapt as a cargo cult. 

“I think that since Twetch is a BSV project, obviously BSV users are the low-hanging fruit for Twetch to pursue as early adopters,” said Kurt Wuckert Jr, an entrepreneur adrift in the BSV space, and an enthusiastic Twetcher. (He was the author of the “protocol war” op-ed). 

Yet Wuckert insists that Twetch is more than a mere echo chamber, and that “there are even a surprising number of people from outside the general cryptosphere that have joined simply to do some reconnaissance—but who are from the non-crypto social media industry.”

Mike in Space is one of these, as is Joshua Davis, alias “Karbonbased,” a former provocative tweeter who was ousted from that platform after an imbroglio involving a DCMA takedown. Although Twetch isn’t censorship-resistant, and Davis is certainly no BSV fluffer, he nevertheless sees value in the experiment.

“The biggest hurdle they have to tackle is attracting and maintaining more active users,” Davis said. “At times it feels slow on the platform as far as engagement but I’ve always said that Twitter’s only moat is it’s users.”

Davis said he has more followers on Twetch than on Gab, the far better known alt-Twitter known for nurturing antisemtic killers. “I post more on Twetch than I ever have on Gab,” he said.

Similarly, Ryan X. Charles, who runs Money Button, the BSV-powered online payments app that handles Twetch transactions, says that many people turn up simply to escape the awfulness of Twitter. 

“Crypto Twitter is a shit hole,” he said. “I recommend everyone quit using it. It makes you dumber.”

“Twetch,” he added, “is a place to communicate unmolested. The fact that the cryptocurrency industry relies so deeply on Twitter is an indictment of the fact that it is mostly a scam industry—scammers and criminals are great at populism. Twitter encourages this. Twitter is a part of the problem.”

[A Twetch user]

On Twetch, trolling doesn’t pay—it costs. “Twetch forces you to be more thoughtful with each reply as it literally costs you money,” said Mike in Space. “That friction, even though small, does have an impact and I think raises the level of discourse. If you want to troll someone, for instance, _you need to pay them for the privilege._”
[Twetch’s incentive model doesn’t always motivate thoughtful posting.]Twetch’s incentive model doesn’t always motivate thoughtful posting. 

TWETCHIES PONDER IMMORTALITY AND IMMUTABILITY

But Twetch’s founder, Moish, believes that Twetch’s appeal lies in what it offers in the way of achieving immortality. 

It comes down to Twetch’s central feature, the immutability of users’ posts. “Twetch is an oasis because people think twice about what they post—because their words will live on chain,” said Moish. And this seems to cause the community to spend a lot of time thinking about the future and the Great Hereafter...

Twetch users, indeed, post a _lot _of stuff about eternal life on the platform, more than you’d expect on a social network. “Twetch is the on-ramp for consciousness immortalized,” writes one user. It's an “unalterable ledger on which we can securely upload consciousness,” wrote Moish himself, in a recent-ish post. 

“The blockchain will ultimately store all data that has value—your Twetch profile will be a way to remember you after you're gone.”

[twetch users like immutability.]

He’s not kidding with the sci-fi stuff. BSV supporters want everything you do, say and feel to be uploaded to the blockchain, logged and filed like numbers in a bookkeeper’s ledger. This philosophy, deeply at odds with the mainstream Bitcoiners’ pro-privacy ethos, is also the philosophy behind Wright’s ambitious “Metanet,” announced early last year, which proposes to uproot the internet and rebuild it from scratch on BSV. Twetch, in the grand scheme of things, would be the first, tentative step toward that lofty goal. 

“The idea is that everything you do, both online and in real life, will be a transaction on the blockchain,” explained Moish. “When everything you do is accounted for you are incentivized to act in a way that is honest and good for the network as a whole.”

The payments aspect plays into this, too. “Basically it becomes an economic incentive to act in a way that benefits the network (in this case the entire world),” he said, likening the possibilities afforded by Twetch to the realities presented in recent sci-fi fantasy such as Ready Player One, and Altered Carbon, a show where “consciousness can be transferred to different bodies,” according to Moish. “Things like walking an old lady across a busy street will be rewarded financially, so people will be more likely to act in that manner.”

There’s almost a surveillance capitalist flavor to all of this, albeit tempered by software engineer optimism. It’s a Panopticon for the digital age, built by and for those who would typically advocate for privacy. A life immutably surveilled, the BSV supporters say, is a life well lived. And now you know where to find them. 


cryptocurrencies

twetch

Bitcoin SV stands for Satoshi Vision.

Stemming from Bitcoin Cash and claiming to be the "original Bitcoin," BSV is a hard fork from BCH after the network upgrade scheduled for November 15th, 2018 resulted in a hash war determining the chains would be split. According to their website, the Bitcoin SV project is primarily backed by CoinGeek Mining with development work by nChain.

Bitcoin SV

Where Bitcoin SV fans go to escape online harassment  - Decrypt

Twetch is an online oasis for BSV enthusiasts, but there's more to it than that. Ben's Bugger Bin ponders the meaning of it all.

Where Bitcoin SV fans go to escape online harassment

Melanie Kramer

Cryptocurrencies, utility tokens, security tokens and more…digital assets and their classifications are evolving right alongside cryptographic and blockchain technology. Non-fungible tokens, or NFTs are another example of the fast-paced change in the industry. In this guide we explore what they, how they work, and how they're being used. 

WHAT ARE NON-FUNGIBLE TOKENS?

Non-fungible tokens contain identifying information recorded in their smart contracts. It’s this information that makes each different and as such, they cannot be directly replaced by another token. They cannot be swapped like for like, as no two are alike. Banknotes, in contrast, can be simply exchanged one for another, if they are the same value, there is no difference to the holder.

Bitcoin meanwhile, is a fungible token. You can send someone one Bitcoin and they can send one back, it would still be one Bitcoin. The value might change depending on the time between exchanging Bitcoin, but it's essentially the same. You can also send or receive any part of a Bitcoin, measured in Satoshi, as fungible tokens are divisible.

Non-fungible tokens are not divisible, in the same way as you cannot send someone part of a concert ticket. Part of a concert ticket wouldn’t be worth anything on its own and would not be redeemable.

CryptoKitties collectibles were some of the first non-fungible tokens. Each blockchain-based cat is unique, if you sent someone a CryptoKitty it would be a completely different one if you were sent one in return, unless they returned the exact same one.

The unique information of a non-fungible token, like a CryptoKitty, is stored in its smart contract and immutably recorded on the token’s blockchain. CryptoKitties are Ethereum ERC-721 tokens, they use Ethereum’s protocols and the Ethereum blockchain.

In late 2018, one player was so desperate to move to a "better location" in the virtual game Decentraland that they were ready to say goodbye to 2,800,000 MANA in order to purchase a land piece in-game. At the time of the deal, that was equivalent to over Ξ1000 or $215,200. 

WHAT MAKES NFTS SO SPECIAL?

Non-fungible tokens have unique attributes, they are usually linked to a specific asset. They can be used to prove the ownership of digital items like game skins right through to the ownership of physical assets.

Other tokens are fungible, in the same way as coins or banknotes. Fungible tokens are identical, they have the same attributes and value when exchanged.

HOW ARE NON-FUNGIBLE TOKENS USED?

As well as for crypto-collectibles like CryptoKitties, non-fungible tokens can be used for digital assets that need to be differentiated from each other in order to prove their value, or scarcity.

Another example of a non-fungible token is Decentraland’s LAND token. Decentraland is a blockchain-based virtual world, similar to Second Life. Each LAND token represents a parcel of virtual land in Decentraland identified by its virtual world coordinates.

SuperRare is another blockchain project creating non-fungible tokens that allow digital artists to link a token to an image or GIF they have created. A token represents ownership of the digital art and allows the creator to also retain and record their copyright and IP. The tokens, and hence the art, can be bought and sold just like physical artwork.

Non-fungible tokens are not traded on standard cryptocurrency exchanges, instead they are bought or sold on digital marketplaces like Openbazaar or Decentraland’s LAND marketplace.

HOW DO NFTS WORK? 

Tokens like Bitcoin and Ethereum-based ERC-20 tokens are fungible. Ethereum’s non-fungible token standard, as used by CryptoKitties and Decentraland, is ERC-721. Non-fungible tokens can also be created on other smart-contract enabled blockchains with non-fungible token tools and support. Though Ethereum was the first to be widely used, NEO, EOS, and TRON, now have NFT standards.

Non-fungible tokens and their smart contracts allow for detailed attributes to be added, like the identity of the owner, rich metadata or secure file links. The potent of non-fungible tokens to immutably prove digital ownership is an important progression for an increasingly digital world. They could see blockchain’s promise of trustless security applied to the ownership or exchange of almost any asset.

As is the challenge of blockchain to date, non-fungible tokens, their protocols and smart contract technology is still being developed. Creating decentralized applications and platforms for the management and creation of non-fungible tokens is still relatively complicated. There is also the challenge of creating a standard. Blockchain development is fragmented, many developers are working on their own projects. To be successful there may need to be unified protocols and interoperability.

THE FUTURE

Predominantly, non-fungible tokens are being implemented in gaming and crypto collectibles. For gaming, non-fungible tokens could be used to represent in-game items like skins, potentially allowing them to be ported to new games or traded with other players.

Their potential however is much wider with possible application to copyright and intellectual property rights, ticketing and the sales and trading of video games.

Non-fungible tokens add potential to the creation of security tokens, the tokenization of both digital and real-world assets. Physical assets like property could be tokenized for fractional, or shared, ownership. If these security tokens are non-fungible the assets ownership is completely traceable and clear, even if only tokens representing part ownership are sold.

Further application of non-fungible tokens could be certification such as for qualifications, software licensing, warranties, and even birth and death certificates. The smart contract of a non-fungible token immutably proves the identity of the recipient or owner and could be stored in a digital wallet for ease of access and representation. One day, our digital wallets could contain proof of every certificate, license, and asset, we own.


crypto collectibles

non-fungible tokens

Tokens

The World of Blockchain &amp; Cryptocurrencies made simple.

Learn

What are ? A 3-minute guide - Decrypt

Non-fungible tokens, or NFTs, contain identifying information recorded in their smart contracts. It’s this information that makes each different.

Many new stablecoins have emerged over the past 18 months in the cryptocurrency space. Their development has partly been inspired by the need to fill a potential stablecoin void, as the first and most commonly utilized stablecoin Tether faces concerns. There is, of course, also ongoing impetus in the cryptocurrency space to develop less-volatile tokens which will be used more widely. Below we take a closer look at Maker, the governance token at the heart of MakerDAO. 

WHAT IS MAKER?

The Maker (MKR) token was created by MakerDAO and its primary purpose is to support the stability of MakerDAO’s DAI token and enable governance for the Dai Credit System. Holders of MKR make key decisions on the operation and future of the system.

MakerDAO has two tokens, MKR and DAI. The DAI is a stablecoin designed to provide an alternative to more volatile cryptocurrencies, as well as a new type of financial system. The MKR meanwhile, is used to keep the DAI stable. Traditional stablecoins use reserves of fiat currencies or even gold to peg a cryptocurrency to the value of these real-world assets to keep it stable. But that has proved problematic. MakerDAO uses the MKR token to act as a counterweight to price fluctuations. 

 Some stablecoins gain their lower volatility by being backed by fiat currencies and physical assets. Other stablecoins can be controlled through blockchain-based mechanisms or algorithms to maintain a required value.

WHAT MAKES IT SO SPECIAL? 

The MKR token helps to keep its partner stablecoin DAI at the same value as $1. MKR can be created and destroyed in response to DAI price fluctuations in order to maintain DAI’s dollar-equivalent value. DAI uses a system of collateralization (essentially insurance), whereby holders act as part of the controlling mechanism to help manage the network.

DAI is issued when buyers purchase a smart contract based collateralized debt position (CDP) which behaves much like a loan. CDPs are bought with Ether (ETH) and DAI is given in return. ETH acts as the collateral to the loan, in much the same way as a house acts as collateral for a mortgage loan.  The system means that individuals can, in essence, obtain a loan against their ETH holdings. When the loan is repaid the DAI is “burned” or destroyed. Fees occur in MKR along the way.

The MKR token is a solution for a scenario where the price of ETH falls too quickly for the DAI system to handle. If the collateral system is not enough to cover the value of DAI then MKR is created and sold to the market to raise additional collateral.

The Maker Platform, formerly known as MakerDAO is the protocol and governance framework for DAI and also MKR. The platform is a decentralized autonomous organization (DAO) on the Ethereumblockchain.

 Smart contracts are simply computerized code which contains, and can perform, a set of instructions.

WHAT CAN YOU DO WITH MAKER?

Holders of MKR gain voting rights in the Maker platform’s continuous approval voting system. MKR holders vote on things like the collateralization rate of CDPs. For participating they gain MKR fees as a reward. These holders are incentivized to vote in a way that benefits the system. If the system works well MKR’s value is maintained or increases. Poor governance would devalue MKR.

MKR is an ERC-20 token, constructed using Ethereum’s protocols. It can be stored in ERC-20 wallets and is tradeable on a number of exchanges.

WHO CREATED MAKERDAO?

MakerDAO was founded in 2014, in California, by developer and entrepreneur Rune Christensen. Its core management and development team is 20 strong. After three years in development, MakerDAO finally launched the stablecoin DAI.

MakerDAO hope to create both a reliable stablecoin in DAI and a system of fair credit for everyone. Opening a collateralized debt position (CDP) using Ether means DAI can provide liquidity against crypto-assets.

A BRIEF HISTORY

 	* 2014 – Maker DAO founded
 	* August 2015 – MKR token launched
 	* December 2017 – DAI stablecoin launched on the Ethereum mainnet
 	* October 2018 – DAI becomes the first cross-chain ERC-20 token on Wanchain
 	* September 2018 – Kraken lists MakerDAO's Dai.
 	* October 2019 – Ledn uses MakerDAO to disburse loans to the unbanked.
 	* December 2019 – Maker Foundation transfers control of MKR to Maker Governance.

THE FUTURE

MakerDAO’s efforts to create a stablecoin without concerns over reserve-backing are credible. With the collateralization mechanisms and the further failsafe of MKR, MakerDAO has a system to protect the value of its stablecoin DAI which could lead to its wider use.

As a further failsafe, MakerDAO has an emergency process called “global settlement.” Should something go wrong with MakerDAO’s system, a group of individuals holds settlement keys. These can be used to trigger a settlement where collateral held in CDPs is released to DAI owners in the equating value of Ether.

MakerDAO also works hard on transparency, it shares its regular meeting recordings online. As DeFi or decentralized finance became one of the biggest success stories in 2019, MakerDAO, and its MKR token are in the front line of this growing industry. 


guide

learn

maker

makerdao

A 3-minute guide to the governance token - Decrypt

The Maker (MKR) token was created to support the stability of MakerDAO’s DAI token and enable governance for the Dai Credit System.

Ki Chong Tran

There’s only one Mona Lisa, only so many Picassos, a limited supply of gold on Earth. The inventor of Bitcoin believed scarcity could create value where there was none before. The Halving also known as the Halvening is due to occur sometime in May 2020. To understand it, we must understand the theory behind Bitcoin’s supply. Below we explore more. 

A BIT ABOUT BITCOIN

Bitcoin is revolutionary because it proved–for the first time–how something that was completely digital could be scarce. This limited supply is one of the primary reasons the price of Bitcoin has gone from being worth nothing 10 years ago to being priced at $20,000 per coin at its peak. 

PROBLEM

Fiat currencies such as the U.S. dollar were initially created with firm rules–to create one U.S. dollar, the U.S. government needed to have a certain amount of gold in their reserves. This was known as the GOLD STANDARD. Over time, these rules eroded as modernizing economies, during bouts of extreme financial certainty–like the Great Depression and World War II–printed more money to help stimulate struggling economies. This change in tac is precisely the kind of thing Satoshi Nakamoto wanted to avoid. He/she/they had seen that this devaluation of fiat money could have disastrous effects, and so, with code, prevented any single party to be able to print more Bitcoin. 

WHAT IS THE HALVING?

The Bitcoin code is embedded with a hard supply limit of 21 million coins. New Bitcoin is created through mining as block rewards. Miners do the work of maintaining and securing the Bitcoin ledger and as a reward; the system sends them new Bitcoin.

However, about every four years, the mining reward is halved–hence “the Halving.” Each halving reduces the rate of new Bitcoin entering into the supply until no more new Bitcoins are created at all in the year 2140.

WHO INVENTED THE HALVING?

The Halving was programmed into Bitcoin’s code by Satoshi Nakamoto. This extremely simple mechanism of reducing the total supply over time is one of the main reasons why Bitcoin is the world’s most valuable crypto asset. As Nakamoto wrote in the Bitcoin whitepaper: “the network is robust in its unstructured simplicity.” 

 The first million Bitcoins were mined by Satoshi Nakamoto 10 years ago. Since then, about 85% of the total supply has been mined and only about 3 million more Bitcoins will ever be created.

A BRIEF HISTORY

 	* 2009 – Bitcoin mining rewards start at 50 BTC per block
 	* 2012 – The first Bitcoin Halving reduces mining rewards to 25 BTC
 	* 2016 – In the second Halving, mining rewards go down to 12.5 BTC
 	* 2140 – The 64th and last Halving occurs and no new Bitcoin will ever be created

WHAT’S SO SPECIAL ABOUT IT?

If a person, group, or government is trusted to set up the money supply, they must also be trusted to not mess with it. Bitcoin is supposed to be decentralized and trustless–no one in control and no one to trust. Since Bitcoin is not controlled by any one person or group, there must be hard-set rules about how many Bitcoin gets created and how they are released. 

By writing a total supply and Halving event into the Bitcoin code, the monetary system of Bitcoin is essentially set in stone and practically impossible to change. This “hard cap” means Bitcoin is a kind of “hard money” like gold, which has a total supply that is also practically impossible to change. 

WHAT HAPPENS TO MINERS?

Miners must use precious resources to maintain the Bitcoin network, but what happens when their rewards are halved? Since the Halving reduces mining rewards, the incentive for miners to work on the Bitcoin network would also be reduced over time, which would mean fewer miners and less security for the network. In order to compensate miners properly into the future, the price of Bitcoin or the transaction fees must go up to meet miner’s demands.

HOW DO YOU TAKE ADVANTAGE OF THE HALVING?

According to the laws of supply and demand, the dwindling Bitcoin supply will inevitably lead to increasing Bitcoin demand, leading to a rise in prices. The best way to take advantage of this is of course by buying Bitcoin. As the leading and most popular crypto asset, Bitcoin can be easily purchased on nearly any crypto exchange as well as mainstream products such as the Cash App. Historically, after previous halving events, the price of Bitcoin did go up, but not necessarily straight away. Many Bitcoin watchers are hoping the same happens again.

THE FUTURE

The Halving may have a huge impact on Bitcoin’s price according to some “experts.” Cryptocurrency-focused research company, Digital Asset Research created a prediction model setting Bitcoin at over $60,000 after the next Halving in May 2020. A German bank went even further and predicted a price of $90,000 per Bitcoin after May 2020. But the truth is, no one knows for sure. 

It has been argued that since the Halving is well-known and highly predictable, the event has already been calculated into Bitcoin’s price by most investors. 

_DISCLAIMER: THIS IS DEFINITELY NOT INVESTMENT ADVICE. PLEASE DO YOUR OWN RESEARCH AND DON’T BELIEVE EVERYTHING YOU READ ON THE INTERNET. _


bitcoin halvening

Halvening

halving

A 3-minute guide to the event - Decrypt

The Halving also known as the Halvening is a slashing of the rewards miners receive while processing transactions on bitcoin.

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