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NFT – The ins and outs of the new crypto buzz
With the onslaught of everyday development in the crypto world, it gets really hard to keep up with new terminologies popping left and right constantly. By now you must have come across NFT. It’s all for lack of the better term ‘the collectible rage’ these days.
So what is NFT? Is it a currency? Is it art? Is it collectible?
NFT stands for ‘Non-fungible Tokens’
Sounds like something to do with mushrooms! So that is not very self-explanatory. We’d need to get into the basics first.
NFT, The Basics – What are they and how do they work?
A non-fungible token is something that is unique and cannot be replaced. Each token has its identification and value. The ownership of these tokens lies with one individual. In comparison, fungible coins can be converted, replaced, or traded for another and essentially non-distinguishable from each other. Like one bitcoin can be replaced by another bitcoin. But one NFT is not the same as the other NFT and that makes it non-fungible.
Now that we know what non-fungible means, let's discuss what the NFT represents, if they are not the traditional digital coin – what are they? NFT are individual assets of cryptocurrency that can represent various sorts of unique tangible and intangible items, they can range from digital art, music, virtual real estate, gaming assets, fine arts, etc. More and more real-world use cases built around a collectible and ownership concept can be applied to NFTs.
NFTs work on various special blockchain frameworks, where one can create and issue NFTs. One of the mainstream ones is ERC-721, which is a typical network used for the issuance and trading of non-fungible assets on the Ethereum blockchain.
Key Features of NFT
- Its unique and distinct digital certificate
- The ownership is individual through unique identifier
- Its indivisible
- It cannot be replaced or converted
How does NFT relate to the real world?
NFTs have been around since 2017, but again are gaining traction since Beeple’s 10-sec video sold for $6.6 million, sounds highly outrageous – but it’s legit. The digital art realm has been taken over by the NFT storm with digital artists getting their due and more. Previously digital art ownership wasn’t taken very seriously, people would produce copies, take screenshots, illegal downloads and copyright laws would only do so much, but with NFT the ownership of such assets is recorded in smart contracts thus becoming truly unique.
Not only to art, but the importance of NFT be seen with the boom in the gaming economy too. Only last month a virtual real estate sold for a record sale of $1.5 million on Axie Infinity, a real estate game. Only recently Nike came with Cryptokicks a way to track authentication of individual sneakers, color me impressed!
The application of NFT will be far wide with the future to come. It will revolutionize the event ticketing system, cutting all the possible reselling of tickets. Raising funds, transparency of supply chain and anything that revolves around verifiable ownership can be streamlined with NFTs.
Creating, Buying, Selling and Storing an NFT
Anybody can create an NFT. Yes. Just about anyone. You can do it too. Who would have thought a bunch of pixels can sell for so much?
All you need to create and sell NFTs is access to an NFT dedicated marketplace. There are a bunch of these, most common being OpenSea, NiftyGateway, Rarible, and KnownOrigin. Register on one of these, set up a legit profile, and upload your collection for sale.
For buying an NFT you have your eye on, you need to enter its auction. Bid the price in cryptocurrency, if your bid wins the ownership gets transferred to you and you get to own the NFT now. When buying an NFT, remember to first have a secure compliant Wallet at hand. Not all crypto wallets are NFT compliant. Some secure NTF collectible wallets are Pillar, Coinbase, Trust, Enjin, Metamask, etc.
Future Impact of NFT on Buyers, Collectors & Content Creators
By now you must understand that NFT is capable of revolutionizing anything that has to do with ownership. Its impacts will be seen more as blockchain continues to scale up and integrates with our lives more smoothly.
With NFT, buyers, art supporters, and genuine enthusiasts will get more opportunities to support a cause or an artist directly giving them more avenues to show their appreciation.
For Content Creators, NFTs open new avenues of monetization. Not only will it be a way to connect with fans, but creators can also create their custom digital art masterpiece and put it up for auction allowing them to further grow their revenues. Grimes, Chris Torres, Logan Paul, Mike Shinoda, Beeple, William Shatner, and even Jack Dorsey few of the people who have put up NFTs for sale.
For Collectors, NFT is a dream come true! NFT takes the process of authentication out of the equation. The lineage of ownership would be easy to track etc. The NFT technology has made it possible to add a price tag to digital art which has instantly kicked into collector’s hoarding instinct which was up till now only extended to physical pieces of art. Christie will be holding an auction for Beeple’s art that is supposed to end on 11th March and has already reached a tag of $3.7million.
Can someone pull a heist on NFTs?
Ocean’s 14 may probably be about this –no kidding. Blockchain has even changed the concept of a ‘heist’. Well, anything in crypto does carry with it a slight chance of being hacked cause of its digital nature. Always make sure the marketplace you are using and especially the wallet that you’d be storing your NFTs in are ‘hack proof’.
Closing Thoughts
NFTs are here to stay. Its application and impact to the real world would be far and wide. It is currently used in terms of investment, but the volatility of the cryptocurrency industry doesn’t make it a safe bet. Still however as NFT grows it will soon become more than just an investment vehicle, and a means to ensure ownership.
Cardano inching ever closer to overtaking its biggest competitor, Ethereum
Ethereum's dominance over Blockchains could be coming to an end as Cardano approaches the next phase of its long-awaited development.
Cardano is a blockchain project looking to create a fairer, more transparent platform for its users and position itself as a market leader over its biggest competitor, Ethereum.
Now, it’s finally starting to prove itself when the Cryptocurrency industry needs it most.
Cardano is the first blockchain network that is peer-reviewed and assembled by industry experts, setting itself apart through its approach in creating a research-driven, open-source blockchain.
It was launched in 2017 by Charles Hoskinson, a renowned mathematician and co-founder at Ethereum. Following his departure from the Ethereum project, he founded IOHK, which is responsible for the development of Cardano.
Since then, Cardano has become one of the fastest-growing projects in the industry, becoming a prominent figure in the Market Cap top-10 and considered a front-runner in the race for blockchain dominance.
Cardano explained like you’re five
Cardano and its native token, ADA, run on the Cardano blockchain. Users can build DAPPs (Decentralised Applications), protocols and smart contracts on Cardano.
Cardano was built to tackle the issues modern blockchains face, most notably network scaling and handling large amounts of transactions. It plans on achieving this through advanced functionalities and by using code influenced heavily by mathematics.
It differs from traditional blockchains via its two-layer design; Layer one, the “settlement” layer, handles all ADA transactions whilst the second, known as the “computational” layer, hosts all smart contracts on the network.
Products already built on Cardano focus on traceability, product authentication and digital identity, with innovations and modern adaptation expected in the industry.
In the future, Cardano may find itself becoming an in-demand network provider for those seeking to expand into these industries.
However, despite the considerable market cap of Cardano, its development and use cases remain limited, with stunted network growth and missed timelines reducing investor confidence.
In terms of development, Cardano is still in its early stages, and has yet to reach full network maturity. Based on their roadmap, there are five development phases:
Byron
The foundation stage of development introduced the buying and selling of ADA and the popular Daedalus desktop wallet, mainly used to redeem and secure ADA safely.
Shelley
Next is Shelley, which launched in July 2020. It focused heavily on Decentralization and introduced staking rewards and pools for users.
Goguen
The Goguen phase introduces more technical capabilities for users through the creation of smart contracts and DAPPs. This is due to be launched in Q2 2021.
Basho
Basho is the scaling phase, designed to optimize the Cardano network and ensure that it remains operable with other blockchains and native tokens.
Voltaire
The final phase will introduce voting and governance, giving users more control of future development decisions and paving the way for the evolution into a fully decentralized network.
The native token, ADA, is used mainly as a value transfer system, similar to cash.
There’s a total of 45bn ADA tokens in circulation, which users can send and transfer worldwide instantly without paying large network fees.
ADA is used by developers to power and develop smart contracts and for voting on potential changes to the protocol, a feature not often available within the industry.
The most beneficial and appealing use of ADA for investors is in staking pools and nodes, allowing holders to assist with block validation and approval and receive rewards from their investment.
The process can be complicated, so Cardano explained everything you need to know in a handy beginners guide.
A Hard Fork named Mary
Cardano recently upgraded their network through a “hard fork”, transforming the network from a single-asset to a multi-asset blockchain.
The hard fork, named “Mary”, allows users to create and define their own tokens similar to ADA on the Cardano network.
Enabling new token creation is seen as a progression towards full smart-contract functionality. It also follows in the footsteps of Ethereum, which saw a massive surge in price following a similar network upgrade.
It’s expected that the hard fork will accelerate network growth through the creation of competitive native tokens, increase the market capitalization of ADA and further empower users of the network.
With the introduction of Mary and the Goguen phase, Cardano will be at the forefront of existing blockchains, and due to the rigorous development of the network, it could be even more advanced than its competitors when introduced.
Ultimately, the Goguen phase will propel Cardano forward through the collective input, creative nature and entrepreneurial spirit of token creators.
Allowing every ADA holder the opportunity to create assets will see new DAPPs built, NFT’s created and utility tokens minted, attracting even greater attention and investment.
Most importantly, it will finally allow Cardano to go head-to-head with Ethereum.
Is the future on Cardano or Ethereum?
The most realistic answer is... nobody knows.
With Cardano's roadmap just starting to come to fruition and Ethereum 2.0 still in development, it’s difficult to choose a future market-leader as neither project has peaked yet.
Based on recent performance, Ethereum is still the blockchain powerhouse it has always been, both in total market cap and industry use cases.
However, despite smart contracts already existing on Ethereum, Cardano’s consistent development indicates that it’s starting to catch up to its proverbial big brother.
Ethereum has also recently been hampered by scaling issues and sky-high gas fees when interacting with smart contracts.
Now, investors are starting to see the long-term potential of building on Cardano over Ethereum. Cardano was built to address the many issues faced by early blockchain projects, tackling each carefully through its 5 phase development cycle.
Patience is often overlooked in a fast-moving industry like Cryptocurrency, but in the case of Cardano, they've bided their time carefully and playing the long game looks to have worked wonderfully.
If Cardano can fulfill their roadmap and deliver what's promised, a new leader in the long-running battle of blockchain superiority over Ethereum may finally emerge.
The Crypto and Bitcoin Ventures of Elon Musk
A series of events that reveals the impact on Bitcoin’s price by Elon Musk.
Institutional investments have been one of the key themes in the cryptocurrency industry for the second half of 2020, and it continues to gain momentum in 2021. The trend of institutional investment started with Square purchasing $50 million worth of Bitcoin in 2020. The move resembles several institutions like Grayscale, MicroStrategy, MassMutual, and more that now hold Bitcoin in their investment portfolios. Moreover, leading banking institutions like JPMorgan and Morgan Stanley are also weighing Bitcoin as an investment instrument.
One of the organizations that topped the list of institutional investments in Bitcoin has been Tesla. Led by Elon Musk, Tesla, in January 2021, announced that it purchased $1.5 billion worth of Bitcoins. A document filed by Tesla reveals that the move is designed to provide more flexibility to diversify their investments. Elon Musk has always held an opinion towards cryptocurrencies that he has expressed on numerous occasions through different platforms, including his Twitter handle and even interviews.
In this article, we look at the different incidents whereby Musk expresses his stance on Bitcoin or crypto and its impact on the price of Bitcoin.
Elon Musk’s Cryptocurrency Ventures
The Tesla CEO has started being vocal about Bitcoin and cryptocurrencies like Dogecoin in the last two years. In May 2020, Elon Musk revealed in a Tweet that he owns 0.25 BTC while replying to JK Rowling. In the same thread, he also stated how the issuance of money by the central government is making the ‘Bitcoin internet money look solid.’
On more than one occasion, Musk has advocated another cryptocurrency called Dogecoin. In December 2020, Musk, on his Twitter handle, tweeted ‘One Word: Doge.’ This caused the cryptocurrency to jump by over 20%. The Shiba-Inu-themed digital coin, intended to be created as a meme, rallied over 50% after Musk posted two consecutive tweets on Dogecoin in the first week of February 2021. He also recently conducted a Twitter poll asking his 48.6 million followers to choose ‘the future currency of Earth’ with one of the options being ‘Dogecoin to the moon.’
Elon Musk’s Influence on Bitcoin’s Price
Although Tesla announced its Bitcoin investment in January 2021, Musk has held an opinion on Bitcoin for a while now. This has been evident on several occasions - from Musk explaining Bitcoin as the ‘internet of money’ to his recent interview where he expressed his desire to own Bitcoins.
Let’s look at the series of events of Musk and his influence on the price of Bitcoin.
Elon Musk Bitcoin Tweets
The Tesla CEO’s tweets or statements on Bitcoin have not always resulted in a positive impact on the BTC price. For instance, in December 2020, his tweet on Bitcoin being as bs as fiat money resulted in a 1.7% decline in Bitcoin’s price. Subsequently, on the same day, he also tweeted, ‘Bitcoin is my safe word,’ which briefly increased the volume of trades per hour.
On January 29, 2021, Elon Musk changed his Twitter bio handle to ‘#Bitcoin.’ This event caused BTC price to skyrocket from nearly $32,000 to $38,000 in a span of a few hours. Moreover, the tweet also pushed a rise in the number of trades from 5,000 trades per hour to more than 20,000 trades per hour.
Tesla’s Bitcoin Investment
After changing his Twitter bio handle, he openly showed his support in Bitcoin in an interview on Clubhouse. In the interview, he discussed that in the past, one of his friends offered him to get involved in Bitcoin eight years ago, admitting that “I at least should have bought some bitcoin eight years ago.” He openly confirmed that while he may not have an opinion on other cryptocurrencies, he supports Bitcoin. Furthermore, he also stated that Bitcoin is on the verge of getting broad acceptance by conventional finance people.
A major milestone that brought waves in the entire cryptocurrency industry was when Tesla announced its $1.5 billion worth of investment in Bitcoin in February 2021. The reaction to this news caused Bitcoin’s price to surge, pushing it beyond $48,000. Twitter activity on Bitcoin also reached an all-time high with 143,000 tweets in 24 hours. During the same period, Tesla also announced that it plans to make Bitcoin an official payment method for its products in the near future.
After trading at all-time high levels, a tweet by Musk also caused a significant drop in the prominent crypto asset. In a tweet, Musk stated that he thought the price of bitcoin and Ethereum “do seem high lol’. This tweet sent Bitcoin’s price to drop as much as 10%. Eventually, the price of BTC also fell below $46,000 before rising to levels close to $50,000.
Bottom Line
There is a lot of influence on any asset when one of the most influential people on the earth holds a strong opinion towards it. More than the impact on Bitcoin’s price, Musk’s crypto ventures have led to an increase in mainstream adoption of the industry. The retail activity has boosted with a rising number of traders growing familiar with crypto as a new asset class.
Furthermore, the acceptance of Bitcoin as a payment method by Tesla also boosts its credibility as a payment method. More importantly, its $1.5 billion Bitcoin investment has led to many institutions drawing their eyes on digital assets.
DeFi Shakes the Crypto Market
When your token price goes up by 450% percent, you do not remain a secret. That is the adage appropriate for DeFi, which stands for Decentralized Finance. DeFi not only beat CeFi (short for "Centralized Finance"), they also became the crypto market darlings and remained so.
What DeFi did was feared by the "Fiat" financial industry, namely banks, it devised a decentralized way to create traditional financial instruments in a permissionless, decentralized market.
What's even better is that in terms of crypto assets, most DeFi platforms don't even demand you to hand over the custody of crypto assets.
Why did DeFi become so popular?
Good Question! With prosperity back to crypto markets and prices of most currencies going through the roof, investors wanted to find an additional way for their idle crypto investments to earn money. To do so at a traditional financial institution, they'd have to cash in their crypto assets, which is growing by the hour.
That may be the reason why coins for DeFi platforms like Aave and Compound (COMP) are going through the roof.
What the Heck is DeFi anyway?
Oh yes! Before we get ahead of ourselves, let me explain what DeFi is and does.
Usually, traditional banks' long-term lending and borrowing use instruments like a mortgage, a car, or a student loan. Similarly, short-term lenders in money markets use instruments such as CDs (certificates of deposits), Repos (repurchase-agreements), Treasury Bills, and others. Both lending and borrowing are different in the DeFi world. Not only do traditional banking and short-term market lending instruments have legal definitions, but the agreements are legally enforceable. Thus all functions are centrally connected, and the process is permissioned.
In DeFi, lending and borrowing occur through Compound and Aave protocols that are essentially decentralized and permissionless and do not require both parties' identity and financial history.
Some of the lending transactions occur via Decentralized Exchanges (or DEXs), which facilitate these transactions through peer-to-peer without the interference of a central bank or intermediary that retains the custody of cryptocurrencies lent.
The magic in the case of most of DeFi's leading contenders occurs through Decentralized Apps. As explained by Michael Beck, Project Lead at DeFi risk management firm UNION, "DeFi apps are built on smart contracts, like traditional DApps, but they strive to decentralize the role of governance and the custodial role of the application."
These features and a speculation boom are the reason why upwards of $10B was invested via DeFi smart contracts in the first month of 2021, according to DeFi Pulse.
The People Who Made It Happen:
Idle hands do the devil's work. But, in terms of keeping DeFi markets booming, it may be just the ticket. "Yield Farming" or "Liquid Mining" is what got the whole DeFi phenomenon started and remained one of the top reasons why the rally remains strong.
What is Yield Farming?
In the simplest terms, "Yield Farming" is the technique to put your crypto assets, through a program, in someone else's hands to help you earn more money. DeFi is primarily based on putting their idle crypto assets into a pool of investment from which money is lent. But, for the most part, these pools use variable interest rates; a "Yield Farmer" is someone who is continually moving their assets around different pools depending on who pays the most interest.
What else keeps its "Mojo Working"?
In two words, "Flash Loans!"
In a speculative market with unusually volatile assets whose values swing wildly, what matters is how quickly you can recover and how long you can hold your position.
Speculators have been pushing the limit of how far they can leverage their existing crypto assets to new heights in the crypto world, and "Flash Loans" is a godsend for them.
It is a recent phenomenon in Decentralized Finance (DeFi) that allows loans without collateral for a brief period of time and is only available on the Ethereum network.
How does a Flash loan work?
The unprecedented rise of Aave is centered around a service that is helping fuel the unchecked speculation in the crypto market. It's called "FLASH LOANS." Yes, free money!
These are very short-term loans of just a few seconds that require no collateral. But, to Aave, it provides a steady revenue of 0.3% on each transaction. But, for the speculators, Flash loans have been a godsend.
It provides safe and secure arbitrage opportunities, which are many, at zero cost to the speculators.
Within the last year, Aave has loaned out over $2B in Flash loans.
Yet, its defenders argue that it provides an innovative and unique tool for arbitrage in finance that wasn't available before blockchains.
- Flash loans use smart contracts that are programmed into the Ethereum network in such a way that it does not let the ownership of crypto assets change hands until certain conditions are met.
- Most loans require collateral, such that in the event when the loan is not paid back allows the lender to liquidate. Flash loans do not require collateral to be put up as they are unsecured loans. In this instance, however, if the loan is not paid back, the loaned amount is sent back to the lender through a different mechanism.
- Because the loan's nature is to exploit an arbitrage opportunity, the loan is both made, and the loan amount is retrieved in the same smart contract and during the same block of transaction where the loan originated. So the entire operation of providing the loan and the payback needs to happen almost instantaneously.
Cryptocurrency arbitrage opportunities provide a window of only a few seconds to both purchase and sell the same assets, and thus Flash loans make an ideal instrument for it.
This type of loan does not have its equivalent in the real world since they are made possible only through the mechanism of how Ethereum networks work and the innovation of smart contracts.
In conclusion, the DeFi phenomenon is keeping crypto assets hot and, to some degree, responsible for the price of cryptocurrencies where they are today. It is undoubtedly a more risky proposition, but it has also balanced out the risk and rewards equation for many lucky investors for now.
The advantages of joining the crypto revolution
In the current economic context, it is evident that in addition to making direct transactions between people in a digital environment (widely known as P2P), it generates an expectation that these transactions are true, fast and simplified, with a perspective of practicality and reliability.
With that, Basecoin was created so that the target users - merchants and customers - can also experience this same practicality and reliability.
All this while maintaining low costs and excellent services. And, if in addition to the payment solution, it is possible to attract new customers?
Best of all, by accepting cryptocurrencies - especially Basecoin, you start to walk on the right path to join a new digital world with solidity. We will now address some benefits of this new digital payment and transaction technology. And how could you start accepting cryptocurrencies in your business? And what are the benefits of accepting Basecoin at your establishment?
• Reduce your costs associated with accepting payments from customers
• Expand your business by attracting new customers.
• No intermediation and third parties.
• No restriction on payments.
Reducing expenses: One of the main objectives of any company is to keep costs low, while maintaining quality of service. Basecoin, can significantly reduce its costs by accepting payments from customers. In addition, the funds will be available to you right away, because there are no third parties involved, such as banks, finance, among others. And its use can be quick and instant.
Expanding your business: Having a well-known business that accepts cryptocurrencies attracts new people and technology-savvy customers, customers who control their own finances and are increasingly using cryptocurrencies, thereby increasing adoption and usability. You can become a pioneer in your region by entering the community that is constantly growing and thereby helping your customers to enjoy the other benefits that cryptocurrencies bring. And finally you can say that cryptocurrencies, especially Basecoin, will be a differentiator for your company and business.
To this end, the Basecoin platform will implement the Basecoin Find Merchant in the future, an area dedicated to promoting merchants and self-employed professionals in a certain region and / or segment that accept Basecoin as a payment method in their business, thus building a solid network for dissemination of products and services, as well as encouraging the adoption of the use of cryptocurrencies for the whole society.
No intermediaries: Be your own bank, have total control of your finances, without intermediaries, 24/7, safely, simply and at low cost.
As a modern platform, Basecoin is constantly evolving, always seeking to keep up with technological innovations, as well as encouraging users' privacy and freedom and, in parallel, seeking to foster economic development and social exchange among the platform's participants.
We are building solid partnerships with projects already consolidated in the crypto market, in order to add value to the platform, with products and services, such as hosting masternodes, stakeholders, payment processors, among others.
Follow our channels on the main social networks, Telegram, Twitter, and Instagram, as well as our website, basecoin.cc (it will be updated soon) to follow the evolution of the project and be on top of everyone according to our implementations.
An Intro to IEOs
So you think you’ve come to terms with blockchain? Finally! You’ve had your eureka moment and now you’re out in the streets in your bath towel telling the whole neighborhood about it. But five minutes later, just as the cold hits you, you start doubting again. You almost got to the end of a book to do with Distributed Ledger Technology, which you think you understood then but can’t now. You read about Initial Coin Offerings until your eyes turned red and you even invested in a few (the less said about that the better).
The universe of blockchain is scattered with three-letter abbreviations and such rapid change that it is an almost full-time occupation just staying informed. And now along comes another three-letter abbreviation, another initial “offering” of some kind. But this one is something to do with exchanges, not coins. Intrigued? Try to keep up.
A very short backstory of all things blockchain so we can all start on the same ledger.
Blockchain technology burst onto the scene with Bitcoin in 2009. The key aspect of a blockchain is DLT (Distributed Ledger Technology) which maintains a decentralized public list of all network transactions as opposed to the previous model of a centralised - and hence secret - database. Whereas transactions through a bank must rely on that institution as the “trusted third party”, blockchains ensure that this third party is spread across a network of nodes. “Miners” enable and maintain the blockchain in exchange for rewards in a certain cryptocurrency. Through transparency, the aim is to guarantee trust through incorruptibility.
The potential of blockchain technology soon spread from a pure digital form of cash like Bitcoin to more specific use-cases such as smart contracts. These allow for the execution and even negotiation of contracts between two or more parties without the need for a physical intermediary to guarantee the contract. This trusted third-party is programmed into the blockchain itself. As the original, Ethereum is perhaps the best example of this, acting as a platform for others to build their own specific smart contract projects.
As the early blockchain pioneers increased, so did the accompanying ecosystem. A staggering number of ICOs (Initial Coin Offerings) appeared from around 2015, peeking in 2017 to 2018. As with anything popular, especially in an unknown and unregulated space, many of these projects were poorly conceived of or just scams. Projects were launched on their own websites, where they sold tokens of their own cryptocurrency, regardless of whether the aim was to be a pure digital currency or something with more real world application.
The term ICO closely mimics the long-established IPO (Initial Public Offering) for companies going “public” or “floating” on the stock exchange through the sale of shares of equity. The difference was that there were no rules in this new Wild West of blockchain startups. A huge number of these ICOs turned out to be fraudulent, while many more just failed through hasty and poorly-run teams. As such, ICOs quickly earned a reputation for being highly risky. Peaking in February 2018 with over 1,500, a year later by February 2019 they had almost completely died out as a method for blockchain crowdfunding.
Enter our new friend IEO
Initial Exchange Offerings grew into the vacuum left by the suspicion of ICOs, but also played an active role in hastening the end of the ICO age. Their appeal is in the increased level of trust they offer buyers of crypto tokens. So what has changed with this switch from Coin to Exchange?
Well, it’s pretty straightforward. The place where tokens are bought or exchanged has moved from the website of the blockchain project to an exchange site.
But let’s rewind to crypto exchanges
To back up a bit, exchange sites grew up alongside the rise of Bitcoin and the increase of new cryptocurrencies. Here, people could buy cryptocurrencies with fiat (“normal money” - USD, EUR, GBP and so on) or exchange directly between various cryptocurrencies. More recently, as official regulation of cryptocurrencies is catching up with the industry, these exchange sites have tended to fall into two categories: regulated fiat to crypto exchanges and the wilder and more unregulated crypto to crypto alt-coin exchanges (alt-coins include all the thousands of smaller cryptocurrencies, which generally exclude the big three of Bitcoin, Ethereum and Litecoin).
These exchanges are important in our story because they stepped in to offer a solution to the general suspicion of ICOs. What they were betting on was that launching a blockchain project’s token offering on their exchange instead of on a standalone website would increase trust. And as IEOs increased in frequency and popularity, while ICOs dwindled, it became clear that they had been right.
The IEO model is based on a mutually profitable crypto triangle. First there is the project or company that wants to sell their token to raise funds to develop further. By partnering with an exchange, they ensure a level of credibility that they could not get if they sold tokens directly to buyers.
This also saves a huge amount of resources on the software development and marketing required to independently host an ICO. The fee that startups have to pay to exchanges for the IEO is almost always significantly less.
Then they are also immediately listed on an exchange, which - depending on the exchange - hugely increases the likelihood that people will buy their tokens (the ease of purchase and exchange of cytocurrenices is called “liquidity”).
That should give the team more time and resources to get on with what they are trying to develop, instead of desperately trying to get listed on an exchange, as was the case back in the days of ICOs.
IEOs are also great opportunities to invest in some up and coming projects. ATAIX IEO offers users with a project in mind with the opportunity to list their project and get funding while offering other users an opportunity to explore some new projects they might be interested in investing in.
Telegram Open Network: Is the Blockchain revolution finally happening?
UPDATE: TON's Gram Token Available on Sep 19th. Learn more
Blockchain projects have been creating hype since Blockchain “began” back in 2008 with Satoshi Nakamoto’s white paper on Bitcoin. Just having the word “Blockchain” anywhere nearby is enough, the pure mystique of this groundbreaking idea and its associated technologies do the rest. Then in 2018, “ICO” became the magic phrase to create an instant Reddit buzz, as focus switched to how to fund Blockchain projects. But the number of scams and failures soon turned ICOs sour. People even started to think that Blockchain itself was some kind of hoax. Then there’s crypto markets. Crypto investors are keen to make big profits by picking the ones that will get “to the moon” one day. And the earlier the better for making the really big profits, which is why Internet gossip is alight with rumors of the next big Blockchain venture. But finding the real winners in this cryptomania is tricky. You have to navigate a lot of hype and speculation, much of which is to influence prices and make a profit through market manipulation. Either way, another layer that adds to the disillusionment with the Blockchain utopia we have been led to believe by many.
But then there are some projects that are just too good to ignore. You read about one and just cannot let it fall back into the sea of scams or mediocrity. These are ideas that are so revolutionary that they might just transform the world we live in. And they remind us, through all the smoke and mirrors, what Blockchain is all about.
Telegram Open Network is one of these game-changers.
TON, as it is known, is a decentralized internet platform with Telegram, GRAM (the native cryptocurrency, its utility token) integrated and the tools for developers to do pretty much whatever they want.
With two pre-ICO funding rounds worth a combined $1.7 billion from selected investors, it ticks the boxes for some considerable expectations. In February 2018, Telegram launched a private presale for Gram with one token priced at $0.37 (source: Techcrunch), which raised $850 million from 81 qualified investors, among them some leading Silicon Valley VCs. Later that month, capitalizing on the huge interest the first offer generated, Telegram launched its second private presale with a staggering 400% increase in price per Gram ($1.33), effectively raising another $850 million from 94 qualified investors.
From the start, Telegram posed considerable restrictions on the Grams offered, namely a lockup period and delivery of the Grams in several batches after the release of the TON mainnet. For the second offering, however, and perhaps to also justify the much higher price, Telegram attracted the investors with a promise of immediate tradability of Grams offered after the release of TON.
Although TON is often excluded from lists of ICOs because they technically raised their funds through a SAFT (Simple Agreement for Future Tokens), which is a pre-ICO, if you consider all Blockchain fundraising rounds it sits in second place behind EOS.
So then there is TON itself, the revolutionary idea. Although referring to TON just as an idea is a bit misleading. Because in the world of Blockchain and cryptocurrencies, it’s not so original. TON’s appeal lies in the fact that the team are on the cusp of pulling off an incredibly ambitious technical project – actually fulfilling the promise of Blockchain.
It is hard to explain to a non-technical majority what the difficulties actually are that have taken so long to surmount, even within the crypto community where most have at least a basic grasp of blockchain technologies. In short, TON is at the forefront of what is possible with Blockchain. This means tackling unforeseen problems for the first time.
Let’s start at the beginning: Telegram.
Brothers Nikolai and Pavel Durov founded and ran VK (formerly VKontakte) – a Russian-based social network similar to Facebook – from 2006 to 2013. Allegedly, they were forced to sell their stake in the company in 2013 for refusing to grant external access to certain private pages. (VK is still active but now controlled by Mail.ru group).
Frustrated at the ultimate weaknesses of such centralized and unsecured databases, they launched Telegram, a messenger with end-to-end encryption. This time, the point was that they would not be able to hand over data to any outside authority, even if they wanted to. The encryption system (designed by Nikolai Durov himself) uses private keys only visible by the user’s device.
And then along came Blockchain with its revolutionary distributed public ledger technology, offering the Durov brothers and their libertarian dreams access to the next level. Like Bitcoin and Ethereum - the two leading cryptocurrencies by market capitalization - Telegram are bringing us GRAM, their own cryptocurrency built on TON.
Their intention is for anyone to build on TON, which is Telegram’s own Blockchain. The Telegram team has stated that it will be compatible with Ethereum. And they are encouraging developers to make their own dApps (decentralized apps) once TON is up and running.
Which begs the question – when will we actually be able to use TON?
As Coinspeaker reports, TON has taken a long time to develop. Although some may consider this as a delay, it has also been posited that this is due to the unique challenges caused by the innovative nature of what the Telegram team are trying to achieve. Yet 31st October is really a date to watch, since if TON mainnet is not live by then, a clause in the contract of early investors will give buyers the right to a refund.
Due to the rising excitement and potential of the project, though, even if this date is missed it is unlikely that there would be any substantial selling of Gram tokens. Some early investors have even said that they are looking for more Gram, not ways to sell it. But considering the importance of 31st October, it is highly likely that TON will be working by then.
The fact that Telegram has just released TON testnet almost on-time and nodes start coming to live (though so far run by TON team itself), gives further support to those making positive assumption about the outcome of October 31st deadline, and furthermore further hopes for those who made a big bet on Telegram and its future.
Next stop, Facebook?
It does not take much understanding of the Blockchain, crypto or anything in the space to see how significant the public launch of Gram could be.
Gram is the native token for TON, which will be used as an almost instant transfer of value between any Telegram users. Which sounds a lot like Facebook’s plans for Libra, their own native cryptocurrency. In fact, the aims for both Gram and Libra are remarkably similar. But Telegram have been working on this for several years, and Facebook are quite a distance behind.
So if TON launches on time and users start to send Gram to each other successfully, this will truly be a momentous occasion in the relatively young history of crypto. It will be the first time that an almost instant cross-border means of exchanging value is available so easily to so many potential users. Telegram’s latest figures show an active monthly user base of around 200 million, but the launch of TON and Gram could see that escalate quickly.
Much to the probable despair of Facebook, Whatsapp and others, many millions of users would highly likely stick to the messaging service that offers crypto and has a better record with privacy and security.
And that could be just the beginning for Telegram’s plans. As well as supporting native dApps and those built on Ethereum, they have also announced TON Storage – encrypted and distributed file storage across TON nodes, TON Proxy – a VPN service that helps to keep users anonymous and TON Services to help developers build their own dApps on the Telegram Virtual Machine.
In summary, this is an exciting time for Blockchain. It might just be when all of its great potential hits the mainstream. While actually buying and selling Bitcoin is still a bit confusing for the general public, TON will be so well integrated with Telegram’s existing messenger, that we might see a huge uptake in a very short timespan.
So will we remember 31st October 2019 as the day that crypto arrived for good? It’s looking like a real possibility. If you’re an investor, perhaps it is time to use your knowledge and experience to weight pros and cons for this opportunity, lucrative and highly risky at the same time. If you’re interested in private messaging or instant money transfers, then why not download Telegram for free and see just what TON will look like when it launches.
Any day now.