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Blockchain & Crypto Analysis

Waltonchain – IoT & RFID Supply Chain on the Blockchain

Friday, July 20, 2018

Waltonchain is a China-based IoT project focused on building secure and reliable business ecosystems on the blockchain with proprietary RFID chips. The Waltonchain platform enables merchants and businesses to build subchains that fit their specific needs while providing the framework to conduct business through timestamped and immutable transactions on the blockchain. With Waltonchain’s RFID technology, the blockchain is able to autonomously track physical goods through the whole supply chain process – from raw materials to delivery of a finished product. By maintaining such a fine level of traceability, Waltonchain successfully battles data tampering and counterfeit goods. WTC is the utility token on the Waltonchain network, and it can be traded on Huobi Global against BTC and ETH pairs.

Advantages of the Waltonchain Platform

Compared to traditional supply chain processes, Waltonchain has five major advantages – high security, high traceability, high scalability, anti-counterfeiting, and reduction of business costs.

High Security

Security on the Waltonchain platform is derived from its immutable blockchain that encourages decentralization through staking incentives for masternodes. Anyone who stakes 5,000 WTC or more is eligible to become a masternode and will receive rewards for providing network services.

High Traceability

High traceability in the Waltonchain ecosystem is possible via proprietary RFID tag chips and RFID reader/writer control chips which also act as Waltonchain nodes. Compared to typical RFID chips, Waltonchains’ chips offer a number of extended features.

  • An encryption/decryption module is built into each chip, enabling safer communication between the tag chip and reader/writer chips.
  • Hash processing logic is built into the chip, enabling secure hashing which can be automatically recorded onto the immutable Waltonchain blockchain.
  • The RFID tag chip has built-in memory to store its hash status and key information, making the chip less prone to data tampering.
  • At scale, Waltonchain’s RFID chips consume less power than traditional RFID chips, while providing more features.

The RFID tags can be embedded into physical goods in the raw materials stage, which allows for high traceability during manufacturing and shipping processes. As a commodity makes its way through the supply chain, each “processing stop” can use the RFID reader/writer chip to confirm the legitimacy of the commodity.

A demonstration of Waltonchain RFID technology. (Courtesy of Boxmining)

For example, this RFID ecosystem can be used to confirm the authenticity of automobile parts during different steps of the assembly line. This RFID system also aids in the decentralization of the Waltonchain network because every business entity that uses the Waltonchain platform will have its own node through the RFID reader/writer chip.

High Scalability

Waltonchain’s platform enables businesses to build and use child chains that don’t directly affect the performance of a parent chain on a consistent basis. Not all businesses require constant use of the public chain, and some may elect to use a private chain with a different consensus algorithm suited to their specific needs. Secondly, Waltonchain itself adopts a PoST + PoW consensus algorithm that can handle larger transaction volumes compared to traditional PoW blockchains like Bitcoin and Ethereum.

Anti-Counterfeiting

Waltonchain’s high traceability via RFID technology and immutable blockchain reduces the chance of counterfeiting. Since products can be finely tracked from the raw materials stage all the way to delivery on a secure public ledger, both businesses and clients can be certain of a product’s authenticity.

Reduction of Business Costs

Waltonchain provides businesses with high security, high traceability, and anti-counterfeiting. Thus, businesses can (in theory) reduce the size of teams employed for these purposes. This would enable businesses to redirect those funds to R&D and marketing to improve products for their users.

How Waltonchain Can be Used in the Real World

Here are two real-world examples of how Waltonchain can be used to add security, traceability, and anti-counterfeiting to the supply chain.

  1. A manufacturer of premium sake in Japan embeds an RFID tag into their bottles. When a customer receives the bottle, he or she can verify the authenticity of the bottle via the blockchain.
  2. A clothing manufacturer ships finished garments embedded with RFID tags. The garments are then shipped to various distributors around the world. Each distributor can check the authenticity of the garments to ensure they weren’t swapped with fakes during the shipping process.

Conclusion

Waltonchain is one of the few blockchain projects that have legitimate use cases, and I see true value in the WTC token. With so many products being designed and so many new factories opening up around the world, some estimate the global logistics industry to be worth over $15 trillion by 2023.

WTC/BTC trading on Huobi Global.

There’s an obvious demand for supply chain traceability and optimization, and I believe Waltonchain with their purpose-built blockchain and proprietary RFID chips is in a great position to become a major player in the space. This project is definitely one to keep a close eye on.

An Overview of the Waves Open-Source Blockchain Platform

Friday, June 29, 2018

What is Waves?

Waves is an open-source blockchain platform originally founded by Russian physicist, Sasha Ivanov in 2016. Currently, it is being developed, marketed, and operated by Switzerland-based Waves Platform AG. Waves is a comprehensive blockchain platform that features fiat gateways, smart contracts, mobile wallet, token issuance, a DEX (decentralized exchange), and more. WAVES is the token on Waves platform, and offers a number of incentives to holders. In addition to the Waves DEX, the WAVES token can also be traded on Huobi Pro with BTC and ETH pairs.

Waves’ Consensus Algorithm & Platform Features

Waves’ PoS (proof of stake) consensus algorithm is called Waves-NG, and is based on the Bitcoin-NG (New Generation) algorithm that was presented in 2015. Bitcoin-NG is a forward-looking PoW consensus algorithm designed to increase the Bitcoin network’s throughput and performance. The algorithm works by electing a leader every ten minutes who is in charge of vetting transactions as soon as they occur. This greatly increases TPS capacity because miners no longer compete to verify transactions. Instead, miners compete to be elected as leader, thus removing the block size and block interval performance limitation of Bitcoin’s current PoW algorithm. Waves’ consensus algorithm, Waves-NG, is a PoS implementation of Bitcoin-NG.

Token Issuance & ICO Platform

The Waves platform allows users to issue their own digital tokens, which can be traded on the open market. Businesses and projects have used the Waves platform to issue tokens for their ICOs (initial coin offerings). Tokens generated by Waves can be used for a variety of purposes on the platform including transfer of value, voting, ratings, and more. Currently, over 15,970 tokens have been released on the Waves platform, with MobileGo being the most successful Waves project with a $53 million ICO.

Waves DEX

The Waves client has a built-in P2P DEX (decentralized exchange), and supports a number of popular trading pairs. The DEX currently processes ~$6 million in daily volume, making it one of the more successful decentralized exchanges out there. In terms of assets, the Waves DEX supports many popular crypto trading pairs such as ETH/BTC, DASH/BTC, XMR/BTC, and more. On the fiat side, the DEX supports WAVES/USD and WAVES/EUR.s

Multi-Currency Wallet, Staking, and Mining

Waves’ multi-currency wallet supports WAVES, Waves tokens, major cryptocurrencies, and fiat currency (USD & EUR). The wallet is available as a desktop client, online client, and mobile app. Users can participate in “mining” by staking a minimum of 1,000 WAVES tokens. Alternatively, users can also choose to lease their tokens to a mining pool in exchange for a proportionate share of transaction fee payouts.

The Waves Team

Waves currently has over 50 employees working in various locations around the world. The core team consists of Sasha Ivanov, Maxim Pertsovskiy, Mariya Borovikova, Natalya Malyova, Alexey Kofman, Ilya Smagin, Alexey Koloskov, and Phil Filippak.

Here’s a recent photo taken from Waves’ headquarters in Moscow.

Recent Developments & Future Milestones

2018 has been the year of smart contracts for Waves. In Q1 2018, the team focused on smart contract implementation. Unlike Ethereum’s Turing complete smart contracts, Waves’ initial solution will not be Turing complete. This isn’t necessarily a bad thing, as we all know about Ethereum’s The DAO and Parity Wallet debacles. Waves’ approach is to create non-Turing complete smart contracts first, which can still be used for automation and logic in business situations. Since Waves’ blockchain platform is targeting businesses, this makes complete sense. In Q4 2018, the team is expected to release Turing complete smart contracts after they have taken enough time to ensure the platform is secure and reliable.

Other recent accomplishments include…

  • Hardware wallet and ShapeShift support.
  • Updated DEX trading interface.
  • Desktop client release and updated mobile apps.
  • Launch of MRT buyback program.
  • Launch of Waves Node v0.13.2, which supports data transactions, token burns, fee sponsorships, and fair PoS.
  • On-chain messaging.

In the future, Waves is expect to release…

  • Atomic swaps for interoperability with other blockchains.
  • Frontend voting GUI.
  • Off-chain messaging service to reduce blockchain bloat.
  • Turing complete smart contracts.

Conclusion

Waves is a leading blockchain platform in the space, and it’s certainly a project to keep your eyes on. To this day, platforms like Ethereum, ICON, Cardano, and Waves have been synonymous incredible returns on investment over the last two years. While this is not financial advice, platform coins may continue to yield positive returns as the industry moves to the early adopter and mass adoption phases over the 5-10 years. In my opinion, Waves is certainly a competitive player in the space with its feature-rich platform, business partnerships, and sleek marketing. If you’re interested in the WAVES token, head over to Huobi Pro where BTC and ETH trading pairs are available.

CHAIN ID, ActiveX, and South Korea’s Authentication Nightmare

Tuesday, May 22, 2018

In order to fully grasp the potential impact of theloop’s CHAIN ID, one must first understand the current digital authentication landscape in South Korea.

South Korea has always been technologically progressive. In fact, the world’s first smart city is situated 40 miles southwest of the country’s capital, Seoul. Thus, it’s no surprise that South Korea was one of the first countries to encourage Internet banking, shopping, and other services in the late 1990s.

It’s hard to believe now, but shopping and banking on the Internet was a completely new technology in the not so distant past. With this new way of carrying out business, both customers and businesses were wary of fraud. To dispel this fear, the South Korean government implemented a nationwide digital authentication system in the Digital Signature Act of 1999.

Authentication Certificates in South Korea

There are two types of certificates in South Korea – private and accredited.

Private Certificates

Private certificates are issued by institutions that are not accredited, or certified, by the South Korean government, and are only valid for specific services. For example, a bank might issue a private certificate to a customer that is only valid for services within the bank. Compared to accredited certificates, private ones are impossible to verify, valid only by mutual agreement by the parties involved, difficult to get compensation for, and are only valid for a limited scope of services. The only advantage of private certificates are that they are often easier to obtain.

Accredited Certificates

Accredited certificates are issued by institutions that are accredited by the government. Currently, the following institutions can issue accredited CAs – KFTC, KOSCOM, KICA, KECA, and KTNet. Accredited certificates, while more difficult to apply for, offer quite a few advantages when compared to private certificates. Accredited certificates are seen as legal binding endorsements, are valid for compensation in the event of damages caused by the certificate, and can be used for a variety of Internet services without the need for multiple certificates. Thus, the accredited certificate is by far the most popular authentication in Korea with over 33 million issued certificates.

How Accredited Certificates are Generated

Accredited certificates are issued by government-accredited institutions through a process of manual verification of a resident’s National ID and other documents. Following verification, a resident’s identifying details are hashed into a public/private key pair along with the issuing authority’s digital signature. This process places burden of proof on the issuing CA.

After the certificate is generated, the resident can use his or her public key for online financial services such as banking and shopping.

The Age of Internet Explorer & ActiveX

In the late 1990s, Internet Explorer was the most popular web browser in the world. Hard to imagine, right? In addition to basic browser capabilities, Internet Explorer also offered a software framework for plugin development called ActiveX. South Korean institutions ended up using ActiveX to develop software which allowed users to upload their certificates to authenticate financial transactions online. Keep in mind there is no industry-standard software. Thus, Koreans are forced to install many ActiveX plugins in order to use their assortment of authentication certificates. This can only be described as a user experience s***show with glaring security holes.

Over the next decade and a half, the rest of the world moved on. The online shopping and mobile device industries experienced unprecedented growth, and the FIDO Alliance was established. In short, FIDO provided a standardized protocol for supporting a full range of authentication technologies including biometric, fingerprint and iris scanners, voice recognition, and more. Korea’s inability to adapt and integrate with FIDO left the country at a disadvantage in the global business and trade sectors.

In May 2014, the South Korean government announced that authentication certificates would no longer be required for financial transactions under ₩300,000 (approximately $280). This was a response both to complaints about a Microsoft-centric culture and also the inability for foreigners to buy goods online because they are unable to apply for accredited certificates. One notable example was Chinese customers not being able to purchase clothes and accessories worn by characters on the famous Korean drama, 별에서 온 그대 (My Love From the Star). While this particular situation may seem a little silly, it’s a great example of how South Korea’s absurdly complicated authentication requirements effectively put a bottleneck on the country’s economy.

An official statement from South Korea’s Financial Supervisory Service read, “the revision is expected to improve the complicated security system and diversify payment methods by giving more freedom to financial firms to decide on their own security.” As a result of this new regulation, new services would eventually find their way into Korea’s complicated authentication landscape, but accredited certificates are still issued and used to this day.

theloop, CHAIN ID, and ICON

Last October, theloop revealed that its blockchain-based authentication solution, CHAIN ID, was already being piloted by 25 banks and securities companies in the Korea Financial Investment Blockchain Consortium. Half a year later, theloop announced that CHAIN ID would be used by Samsung (one of Korea’s largest companies) in their biometric authentication technology, Samsung Pass. Recently, ICON Foundation wrote, “in the future it is expected that there will no longer be classifications of certified/private certifications, and all certificates will have the same authenticity.”

Connect the dots.

  • CHAIN ID is already being used by some of South Korea’s largest banks and securities companies.
  • CHAIN ID is being implemented in Samsung Pass. Samsung has over 57% market share in South Korea’s mobile smartphone market.
  • ICON revealed there will only be one kind of certificate in the future.

After a little reading between the lines and a tiny amount of educated speculation, I have come to the conclusion that the majority of digital authentication in South Korea will happen on the CHAIN ID platform in the near future. This blockchain solution is being aggressively adopted by the country’s biggest financial and technology firms. If there’s really only going to be one certificate in the future, it’s obvious they will be issued by the first mover in the space – theloop’s CHAIN ID.

What is CHAIN ID?

Now that we’ve established that CHAIN ID will probably take over South Korea similar to how Thanos took over the universe in the most recent Avengers movie, let’s talk a little about what CHAIN ID is exactly and how it may or may not affect ICON in the future.

A Smart & Distributed Network

South Korea’s current authentication system relies on a centralized network of government-approved entities who are allowed to issue accredited certificates. This system works because a certificate’s trust value is backed by the accreditation and approval of the government. CHAIN ID, on the other hand, provides trust via a decentralized or distributed network.

CHAIN ID leverages several aspects of a distributed network to provide a secure, scalable, and smart authentication platform. The decentralized nature of the platform makes it less prone to major hacks because data monopolization is not an issue. Secondly, decentralized networks are easier to scale than their centralized counterparts. Lastly, CHAIN ID runs on a system of smart contracts and extended feature sets can be easily implemented in the system. This means complex DApp ecosystems can easily integrate CHAIN ID for authentication services.

On the CHAIN ID platform, joint authentication certificates are issued through consensus of all the nodes on the network. These certificates are called “joint certificates” because they are generated through “joint consensus” of the network participants. As a result, these joint certificates are valid for all services offered by CHAIN ID nodes. Smart contracts ensure the network’s rules are being obeyed, keeping data secure and up to date.

The Future of CHAIN ID

On a philosophical level, the concept of identity is integral to the human condition. Proving our identity is part of our everyday lives, and this aspect of modern society moving over to the blockchain is absolutely fascinating. On a technical level, CHAIN ID is just a DApp running on theloop’s blockchain engine, but I believe it has the potential to have a profound impact on South Korea’s culture and economy. With so many major companies and institutions adopting CHAIN ID, it’s only a matter of time before we see more complex ecosystems governed by smart contracts with CHAIN ID acting as an authentication layer between the real world and digital world. Keep in mind that these DApp ecosystems will require an interoperable protocol to communicate with each other.

That’s where ICON comes in.

What is Blue Whale – Part 1

Friday, May 11, 2018

Blue Whale is a blockchain project that promises to revolutionize the gig economy by cutting middleman costs and introducing traditional concepts like benefits and pensions to freelancers around the world. As a freelancer myself, this project seriously caught my interest. In this first post, we’ll take a look at the current state and weaknesses of the gig economy.

What is the Gig Economy?

Before we dive into the details behind Blue Whale, let’s take a moment to understand what “gig economy” means. If I understand it correctly, “gig economy” refers to the various participants in the freelancing industry.

  • A business uses Fiverr to find a graphic designer to create a new logo.
  • A local guide uses Airbnb to sell experiences to tourists.
  • A driver uses Uber to locate customers who need a ride somewhere.

In the examples above, there are always three or more parties that make up the gig economy — freelancer, client, and a marketplace platform.

The world is becoming more Internet-centric each year, and the global surge in the number of freelancers reflects this fact. Between 2012 and 2017, the number of Internet users globally grew from 2.4 billion to 3.58 billion. In other words, over 1 billion new people were presented with the opportunity to market their freelance skills and services to the world in the last five years.

Number of internet users worldwide from 2005 to 2017 (in millions).

I believe there’s also a cultural shift going on, especially in my current age demographic (22–28). The previous generation placed heavy emphasis on securing a stable 9–5 job immediately after graduating from university. This is simply not the case anymore for us “millennials”. Many of us value freedom above financial security, and choose to live and work as freelancers. In fact, 36% of the USA’s workforce already classify themselves as freelancers, with a staggering 50% of millennials committing to the freelance lifestyle. This number is projected to increase even further in the coming years.

What’s Wrong with the Gig Economy?

Millions of people around the world are making a successful living in the gig economy, so it must already be perfect, right? The Blue Whale Foundation doesn’t think so, and their primary arguments revolve around reliance on centralized marketplace platforms, job security and benefits, and expensive advertising and marketing costs.

Centralized Marketplace Platforms

Airbnb, Uber, and Fiverr are three examples of centralized marketplace platforms. These tech giants match freelancers with clients, and provide communication and transaction services. In exchange for this service, these platforms charge a commission rate or service fee.

Examples of commission rates from Blue Whale’s white paper.

In Blue Whale’s white paper, they state that Uber charges up to 42.75% and Fiverr charges up to 22.9%. I have a few friends who use Airbnb Experiences to market their own tours, and they told me Airbnb’s commission rate is 20%. Depending on how you value these platforms, the presented commission rates could be considered reasonable to exorbitant.

In my opinion, Airbnb’s 20% commission on Experiences is completely reasonable —especially in highly penetrated markets. Japan currently has over 55,000 Airbnb listings, and this number is projected to increase as we inch closer to the 2020 Olympics in Tokyo.

Let’s say Tokyo accounts for 60% of Japan’s listings — that’s ~33,000 properties. With a 50% booking rate (my guess is the actual booking rate is much higher) and an average three night stay with two guests per property, you’re looking at an exposure to ~4 million people who may find your Experience as a result of their Airbnb accomadation booking.

Tokyo, Japan is one of Airbnb’s most popular markets.

It’s also important to assign value to the legal hurdles that Airbnb had to jump through in order to penetrate a popular market like Tokyo. They spent A LOT of money to build the number one accommodation platform in the world, and now they’re enabling tour guides and skilled people around the world to host experiences for an established user base. This doesn’t even take into account the fact that Tokyo’s hotel industry is severely overcapacity and overpriced, and many tourists are essentially forced to use Airbnb to get a good deal. I think a 20% commission rate is okay.

On the flip side, Uber charging up to 47.25% as a result of booking fees in addition to the advertised 25% commission rate is bull****. This means an Uber driver only nets $18,462.50 from $35,000 worth of fares, and this doesn’t even take into account other things like gas expenses and insurance. Now I really don’t understand how people can try drive for Uber “full time”.

While I agree that some centralized marketplace platforms (Uber) are gauging users with ridiculous fees, it’s important to realize that some platforms (Airbnb) actually charge reasonable rates that are in line with the services and exposure they offer. Decentralizing marketplace platforms and eliminating the middleman may be beneficial to certain industries, but it’s definitely not a blanket solution for every industry—at least not in the foreseeable future.

Job Security & Benefits

Freelancing platforms don’t offer much job security and traditional employee benefits. For example, Uber treats their drivers as independent contractors. This means drivers do not receive health insurance and other employee benefits. Uber offers low-liability car insurance when the Uber app is on, but drivers must provide their own car insurance when the app is off.

Other downsides of freelancing include lack of traditional benefits like paid time off and retirement pensions. If a decentralized blockchain platform can generate enough value to offset funds to provide these benefits to freelancers, this would be truly amazing.

Advertising & Marketing Costs

Blue Whale claims the average small business spends ~$10,000 per month or ~$120,000 per year on Google Adwords and Facebook ads. According to Sageworks, the average small business spends 1–5% of revenue on advertising. With this in mind, a business with a $10,000 per month ad budget should be bringing in between $2.4 million to $12 million in revenue. I wouldn’t classify these numbers in the small business category.

While the presented numbers may be a little inflated, I do get Blue Whale’s point. I ran a small business in the past, and it was difficult for us to spend our hard earned profits on Facebook ads ($1.72 Avg. CPC) and Google Adwords ($2.32 Avg. CPC). Another thing to consider is that CPC costs in freelancer-saturated industries are likely to be on the higher side due to more competition. For example, a freelancer running a web hosting or web design business (two highly saturated niches) may have a difficult time marketing their business without significant ad spend.

If a decentralized blockchain could help reduce advertising costs and level the playing field when it comes to the relationship between ad spend and ad display, that would certainly be a relief to many small business owners.
In the next post of this series, we’ll take a closer look at Blue Whale’s WORK System, and how it will be used to change the gig economy.