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Blockchain: is AI the Future of Blockchain?

Blockchain: is AI the Future of Blockchain?

Throughout the short history of blockchain, there have been two major events in its innovation, with the first being the creation of Bitcoin by Satoshi Nakamoto in 2008. This gave a podium for the emerging technology to stand on and software that resolved the double-spending issue traditionally associated with digital currencies by means of harnessing a probabilistic mathematical equation in the manufacture of Bitcoins.

But the second major event was the creation of the Ethereum network in 2015. This innovation allowed anyone to deploy a similar non-forgeable unit of currency without the requirement for building a blockchain on every unique cryptocurrency.  The way this worked was through redistributing computer power across the network and reusing the cost to support an additional layer of the Ethereum network on which digital token (as opposed to blockchain coins) were supported.

As reported by Mark Harrison for Hackernoon:

“The explosion in the number of digital currencies as a result of Ethereum’s global network propagation has resulted in an innovation irony. That irony is that while Bitcoin and Ethereum are both decentralised networks, the exchanges that digital currencies trade on are for the most part not.”

So even though each network confirms the principle of preventing double-spending problems and ensuring fair and transparent market behaviour, heinous actors have been able to bypass the barriers the networks put up to fight this kind of behaviour with ease as cryptocurrencies have grown over the years.

As a result of this, market manipulation is, unfortunately, a common thing in the cryptocurrency space, with a lot of blockchain project listing tokens for a minimum of $30,000 upwards only to find that there isn’t liquidity for their currency. If it just so happens that their currency does pay off (quite literally), the central server they are on will crash the price most of the time to the point that they are financially incentivised to put profitability over their customers’ user experience.

“Part of the problem with bad actors becoming an increasing influence on digital currency markets has to do with the highly-centralised mining processes that dominate the new currency protocol. In the case of proof-of-work Blockchains, coin age usually serves as a function of mining priority.”

This was a rule that was integrated to incentivise miners to hold larger shares of coins for longer so that the price of the digital currency stronger as demand outpaces supply. The issue is that holding periods aren’t suitable weight for determination of preference and as a result of this feature of the Bitcoin Blockchain, market makers and other liquidity providers aren’t incentivised to create meaningful liquidity.

“In this way, they are directly incentivised to purely prioritise the liquidity of one currency only — that which is easiest for them to cash out in; Bitcoin.”

AI

From the time when Bitcoin was launched, there have been several large-scale improvements in the overall usability and application of software programs that are artificially intelligent, specifically when it comes to the financial technology space. Many so-called ‘robotraders’ employ self-learning trading systems that have been proven to profitably conduct trading returns based on real-time assessments of market behaviour and pricing.

An artificially-intelligent Blockchain was implemented into its own exchange at the same time. This traded against a whole variety of non-securitised and essentially, securitised assets, as digital cash product would end a lot of the problems that today's blockchain innovation drain is a victim of, as well as the ongoing, continuous ‘copy-and-paste’ of traditional blockchains by new blockchain teams which is followed by the exchange ‘pump and dump’ of the new chain’s currency, which after that is most often simply abandoned altogether.

More specifically though, an AI blockchain would be able to achieve the following:

  1. It is market price-efficient. By constantly scanning the exchange for price updated and volume order updates, the AI Blockchain can easily synchronise its mining algorithm with whatever price increase or decrease is likely to occur in its own currency over the short- and medium-term. This will over time make it a stronger source of purchasing power and act as a more robust store of value than any digital asset today, where there is no correlation between currency inflation and market pricing, leading to sudden one-time spikes and erratic volatility versus steady, scalable value growth.
  2. It rewards superior market behaviour. One of the best features of the AI Blockchain is that it could assess how wallet holders and market makers were behaving, and ascribe accounts (and by association strongly connected accounts) with individual weights which would determine how much of the newly mined coins a wallet holder received. In doing this, it would look at factors such as how much liquidity that account brought to the network, how aggressive the account was about trying to quickly profit in the event of market price increases in the currency, to which accounts the account holder was connected with etc.

Having additional AI software in a blockchain network is able to engineered relatively easily. Developers would create an integrated exchange-Blockchain network which would make obtaining the necessary wallet data, and market-making data from each wallet in particular, much easier.

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Why the Philippines is in a unique position for crypto adoption

Why the Philippines is in a unique position for crypto adoption

Many countries in the world are still resistant to letting their citizens legally use cryptocurrencies. However, the popularity of blockchain technology rapidly increases, and more and more countries are aware of the benefits related to the implementation of cryptosystems in their national financial markets. Today the whole world is switching to online payments and needless to say that digital currencies like cryptos are the best option to conduct payments in a quick and effective manner. However, some countries find it hard to adopt cryptocurrencies. But still, there are many countries that are believed to have amazing opportunities for developing the crypto ecosystem and one of them is the Philippines.

The landscape for crypto adoption is much more promising in the Philippines compared to many other developed countries. For years, the country has been trying hard to become crypto-friendly and this is why cryptocurrencies were legalized in the country in 2014. However, the most popular crypto, Bitcoin isn’t on the list of the digital currencies that are regulated by the Central Bank of the Philippines, and therefore, after that, the country still had to do a lot in order to fully integrate cryptos into their market. 

IMF sees huge potential in the Philippines

Now the Philippines is widely considered as a unique position for crypto adoption. Recently the International Monetary Fund (IMF) has released a report where it’s said that the crypto conditions in the Philippines are very favorable at this moment. According to the report, the Philippines should work on the way to the crypto adoption process because the country attracts more and more customers to the crypto sector. They encourage the officials to take more steps forwards in increasing the usage of blockchain technology because, considering the monetary and financial data, the Philippines has a real potential to become an effective market for these digital assets. 

Besides the fact that the customers of the country are more interested to use cryptocurrencies in daily transactions and also the number of crypto exchanges has increased, one more important reason why the Philippines has this much potential for integrating cryptocurrencies is their politically favorable atmosphere. The Philippines has really good relations with the US which is the biggest investor in the country. Specifically, the U.S. Securities and Exchange Commission (SEC) successfully performs its activities in the Philippines and the majority of SEC verified forex companies in the Philippines are US brands, meaning that there is space for further financial cooperation. Usually, the SEC ensures that investors that operate with local forex traders are protected and are responsible for maintaining fair functioning of the securities markets. 

However, it’s important to note that SEc is not the only leading investor in the Philippines, and as a result of their unique location, it’s a popular option for foreign investors from China and Japan, both very strong crypto countries. This is why the IMF believes that all it takes is just regulatory clarity for the country to thrive.

The increasing number of crypto exchanges

The increased number of crypto exchanges is another important reason why the Philippines is becoming more crypto-friendly. Recently Bangko Sentral ng Pilipinas, a central bank of the Philippines has announced that they plan to register more crypto exchanges, after already registering 13 of them. Also, the Securities and Exchange Commission has been working hard to develop crypto guidelines. These crypto projects play an important role in boosting the number of crypto exchanges. 

Besides, the country is known for its special economic zone where various crypto exchanges from overseas are officially allowed to operate as the authorities gave them a license recently. Specifically, it was revealed in June that 27 crypto exchange operators are licensed from the Cagayan Economic Zone Authority (CEZA) which has been establishing a “Crypto Valley of Asia” for firms that are operating in Cagayan Special Economic Zone. However, they are still not allowed to sell securities to Filipinos or to exchange tokens into fiat money. 

Many changes are still yet to come and this is why the Philippines is considered as one of the most optimal places for crypto adoption. However, it’s important to validate the practical need for cryptocurrencies among the local workers. Today a lot more has to be done because still, about 77% of Filipinos don’t have bank accounts because of the inaccessibility of some necessary documents and inadequate funds. But more than 10% of adult residents of the country are turning to cryptocurrency as a payment method. 

The need for the adoption of cryptocurrencies has become even more obvious after the lockdown because during this whole time people have been making digital money transactions and everybody realized the advantages of digital currencies. Now even more research is being conducted in order to identify how effective the crypto policies are in the country and what are advantages of traditional payment methods. But one thing is certain - people are already finding it practical to use cryptos despite the doubts and speculation surrounding digital currencies.

 

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Gary Cohn, a former member of the Trump administration, criticises BTC due to the lack of transparency

Gary Cohn, a former member of the Trump administration, criticises BTC due to the lack of transparency

Quick take

1 minute read

  • Gary Cohn, a former economic chief who worked from 2016 to April 2018 under the Trump administration has recently criticised the bitcoin industry.
  • Gary quit his job in the administration after disagreeing with numerous people within the position who oppose his proposals about tariffs.

Gary Cohn, a former economic chief who worked from 2016 to April 2018 under the Trump administration, has recently criticised the bitcoin industry.

Gary left his job in the administration after disagreeing with numerous people within the position who oppose his proposals about tariffs.

The President of Goldman Sachs, as he was before joining the administration, has said that transparency is one key reason as to why bitcoin may fall in the future.

He goes on to highlight that a good asset class is an asset class that can maintain its integrity by not keeping any secrets about its holders.

Many people would argue that the secrecy and mystery surrounding bitcoin is what makes it so alluring but because bitcoin doesn’t have an audit log, it is a big reason as to why it performs poorly in this area.

Interestingly, the comments from Gary come when bitcoin is getting ready to reach its all-time high of $20,000 by the end of the year. As to whether it will reach such a level is unknown but many analysts are predicting a bullish year for 2021 nevertheless. That being said, it is worth noting that we are not financial advisers and this is not financial advice. Investing in a cryptocurrency like bitcoin can be risky so it is always worth doing your research before putting your money into a digital asset. 

For more news on this and other crypto updates, keep it with CryptoDaily!

© 2020 CryptoDaily All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

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Joseph Lubin of ConsenSys discusses Ethereum 2.0 stating it will “Devour“ the network

Joseph Lubin of ConsenSys discusses Ethereum 2.0 stating it will “Devour“ the network

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1 minute read

  • Joseph Lubin contributor to Ethereum and founder of ConsenSys recently spoke during the Ethereum in the enterprise Asia-Pacific 2020 conference this week. 
  • During the conference, he predicted that Ethereum 2.0 is going to “devour“ the network in the short term.

Joseph Lubin contributor to Ethereum and founder of ConsenSys recently spoke during the Ethereum in the enterprise Asia-Pacific 2020 conference this week. During the conference, he predicted that Ethereum 2.0 is going to “devour“ the network in the short term.

He said:

“People in the know around the ecosystem are very optimistic about how fast things could unfold, as the really complicated work has been done in launching Phase 0.”

Joseph went on to say that the rollout of Ethereum 2.0 is “proceeding in parallel”. Essentially, this means that upgrades to the network could come quicker than many people are predicting.

He added:

“It is very likely will get a tremendous amount of data availability in the form of shards, as well as move lots of the important functionality from Ethereum 1 to Ethereum 2.0, and essentially see Ethereum 2.0 absorb Ethereum 1 in the not too distant future.”

Furthermore, he went on to predict that the next phase for 2.0 will become live in up to 12 months from now adding that the coming increasing amount of data availability will give way for layer two networks which will help them massively increase the amount of transactions per second that can be offered.

“Essentially Ethereum 2.0 represents a massive increase in scalability, so we’re already achieving tremendous scalability with layer-two networks.”

For more news on this and other crypto updates, keep it with CryptoDaily!

© 2020 CryptoDaily All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

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PayPal chief believes crypto’s time for mainstream exposure is now

PayPal chief believes crypto’s time for mainstream exposure is now

Quick Take

1 minute read

  • Dan Schulman spoke during a web summit earlier this week as a keynote speaker where he said that we have reached the time for bitcoin to go mainstream.
  • PayPal has been extremely well talked about throughout the industry after it announced that customers based in the United States would be able to buy, sell and hold crypto assets on its platform. 

Dan Schulman, the chief executive officer of the payments conglomerate PayPal spoke during a web summit earlier this week as a keynote speaker where he said that we have reached the time for bitcoin to go mainstream.

Over the course of this year, PayPal has been extremely well talked about throughout the industry after it announced that customers based in the United States would be able to buy, sell and hold crypto assets on its platform. The company has plans to further expand its crypto operations in the early months of 2021.

The CEO said that PayPal is definitely on the right path and is confident on its future in the industry:

“I think that if you can create a financial system, a new and modern technology that is faster, that is less expensive, more efficient, that’s good for bringing more people into the system, for inclusion, to help drive down costs, to help drive financial health for so many people… So, over the long run, I’m very bullish on digital currencies of all kinds.”

The CEO further went on to talk about coronavirus and how it has impacted the world this year. Specifically talking about payments and the financial world, the pandemic has outlined the need for assets like crypto and cashless payments. Because of this and more, he believes that the time for mainstream crypto is now.

For the past month or so, bitcoin has been experiencing some extremely volatile moments. Following (and during) the United States presidential election, the leading coin was extremely hectic in its price movements. For Dan, this is a cause for concern because it can reduce the profits that small merchants have on PayPal’s platform.

In order to make sure this doesn’t become an issue, PayPal is going to convert its users' crypto into Fiat currency for merchants in real time. To that end, customers will be able to know the specific exchange rate for crypto to Fiat when they make a purchase. The volatility risk is therefore mute.

The CEO further said:

“It bolsters the utility of that underlying cryptocurrency, and you can do more with it than just ride the ups and downs of it. In effect, you’re taking that as an instrument that can conduct commerce at our 28 million merchants.”

For more news on this and other crypto updates, keep it with CryptoDaily!

© 2020 CryptoDaily All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

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