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IOTA (mIOTA): Simple Explanation

What is IOTA, mIOTA & the Tangle ?

IOTA is a distributed ledger protocol for recording and executing transactions between machines in the Internet of Things (IoT) ecosystem. It has a cryptocurrency called mIOTA but some cryptocurrency exchanges also refer to it as simply IOTA or IOT . IOTA allows people and machines to transfer money and data without any transaction fees in a decentralized environment. Most other cryptocurrencies such as Bitcoin make use of the Blockchain protocol. However, IOTA makes use of the Tangle which is a different type of data structure (aka. Directed Acyclic Graphs or DAGs). By 2025, 75 billion connected devices are projected to be in use. From tiny sensors on roads and bridges to wearable electronics, mobile phones, and more, every day the world is becoming more and more interconnected. The vision of IOTA is to become the backbone protocol for all connected devices & enable true interoperability between them.

 

How is IOTA different from blockchain, Bitcoin and other cryptocurrencies?

Imagine a classroom of students submitting their homework to the teacher. Blockchain is analogous to the teacher collecting everyone’s homework and checking it one by one. Whereas the tangle is analogous to the teacher having all the students grade each other’s homework. The main difference between IOTA’ Tangle and other blockchain projects are the following:

  1. Transaction Fees: In a blockchain, every transaction has to pay a fee to the miners for their work. On the other hand, there are no miners in the Tangle. A transaction inherently performs the role of miners as every transaction has to first verify two previous transactions. With the elimination of transaction fees, even nano payments are viable.
  2. Data Structure: All the transactions in a blockchain are clubbed together into blocks forming a ‘linked list’ data structure. These blocks get verified one by one and on verification, they point to the previous block in a chronological order. However in the Tangle, every transactions refers to two previous transactions forming a more complex data structure called the Directed Acyclic Graphs (DAGs).
  3. Consensus: With IOTA, consensus is achieved through the “heaviest tangle” as opposed to the “longest chain” in a blockchain. The more activity there is in the tangle the faster will be a consensus on the transactions’ confirmation.
  4. Scalability: As illustrated in the image below, blockchain leads to a bottleneck where all the miners are trying to add just one block at a time to the longest chain. Whereas, in IOTA, all the transactions are allowed to go through and are later cleaned up, following the rule of heaviest tangle.

IOTA, Tangle vs Blockchain

What can I do with IOTA? What are the main use cases ?

Along with enabling the emerging IoT (Internet of Things), IOTA will be the transaction settlement and data integrity layer for the Internet of Everything. This includes smart cities, smart grids, infrastructure, supply chain, financial services, peer-to-peer payments, insurance, and much much more. On IOTA’s website, the following main use cases have been listed under verticals.

  1. Mobility & Automotive: The first proof of concept for charging stations running entirely on IOTA has already been built. In cooperation with the ElaadNL foundation which developed the leading protocol for the communication between charge points and back-end software.
  2. Global Trade & Supply Chains: IOTA foundation claims that their technology is the only one that can support the millions of transactions that global trade depends upon. Their vision for tomorrow is to build the distributed ledger that can merge e-signatures, e-permits and e-payments into a single process.
  3. e-Health: Healthcare needs to tackle two important problems surrounding the increasing data generation in and around its institutions. First is the security and integrity of this data. Second is its siloed nature which lacks the ability to share data seamlessly across institutions. The IOTA MAM (Masked Authenticated Messaging) protocol aims to provide a backbone for secure and inter-operable healthcare data (both patient and research data).
  4. Smart Energy: The energy sector is now undergoing a massive transition towards distributed or smart decentralization of the existing grid system. IOTA sensors aim to enable a two way trans-active smart grid solution. For example this will incentivize people to sell their surplus energy to the grid for a profit.

Current Applications/Developments

Besides their main use case verticals, following real world applications are currently under development/PoC stage:

  1. Taipei Smart City: The IOTA foundation has signed an MoU with the city of Taipei. TWO IOT is currently installing sensors on waste bins to measure fill levels on the first three floors of Taipei City Hall Building as a Proof of Concept. This holds great promise as the Taipei city plans to integrate similar initiatives into their smart city project.
  2. MatchX: A German company called MatchX provides the technology to enable even the tiniest devices be connected to the internet. Looking at this tweet, it is obvious that they are collaborating with IOTA to make use of the Tangle.

Other important features of IOTA:

  1. Quantum-Secure: A quantum computer is a threat to most cryptocurrencies as it would be about 17 billion times more efficient than a classical computer for mining. IOTA is quantum immune as the tangle utilizes a next generation trinary hash function called Curl-p (Winternitz signatures).
  2. Token Supply: The total IOTA token supply is fixed and will never change. It is now impossible for anyone to “mint” or “mine” new tokens. The total supply is 2,779,530,283,277,761 tokens.
  3. Qubic: With Qubic, IOTA can execute smart contracts just like ethereum. They are also infinitely scalable, feeless transactions with the ability to have continuous money flows within smart contracts.
  4. Coordinator: In order for the tangle to be secure it requires a higher number of transaction throughput. Currently, the network has a very low throughput thus the need of the coordinator. IOTA Foundation controls this role and it issues zero-valued transactions every two minutes. Co-ordinator verified transactions are considered to 100% confirmed at the moment. Eventually, as the transaction throughput increases, this role will become distributed by using an algorithm that reports a % confidence on every transactions’ finality.

Click here to view the IOTA development roadmap

Read this article for step by step guide to buying IOTA.

 

Nem Header

What is NEM(XEM)?

Introduction to NEM

  • Nem was created by forking NXT and then being adopted by the non-profit team of the NEM foundation.
  • NEM which stands for the New Economy Movement was launched in March 2015.
  • It has been adopted by the Mijin commercial blockchain.

 

Proof of Importance

NEM Proof of Importance

  • NEM uses Proof-of-Importance as its consensus algorithm.
  • Proof of work needs to use a large number of resources to get mine new blocks. Asics, which is used by companies, overpower the individual using CPUS. Therefore the rich get richer.
    Proof of work do not need to use larger resources but larger staking and older stakes get preference in mining blocks. This also leads to the rich getting richer.
  • NEM’s Proof of importance takes into account balance as well as transactions.
  • How many transactions and to whom the transactions take place with. Each user has a trust score, the higher the score the more you will be rewarded.
  • Vesting- You need 10000 XEM vested to start mining. 10% of your unvested balance becomes vested every 24 hours.Nem Vesting
  • Harvesting- There are two types of harvesting local and delegated harvesting.
  • Local harvesting is easier but has disadvantages to delegated harvesting.

 

Notarizations

  • NEM aims to make an advantage of different features to make a j=holistic blockchain notarization system called Apostille.
  • These notarizations are not one-time notarizations, they are dynamic moving and changing which is constantly updated on the blockchain.
  • The four main features to implement this system are Namespaces, Mosaics, Messages, and Multisig Contracts.

 

Namespaces

  • Namespaces are analogous the domain names on the internet. Just like domains, they are unique but the “sub-domains” are not.
  • For example, there is only one switchmycrypto.com but “blog.”switchmycrypto.com is not unique. The blog subdomains are used widely even if the root level domain is unique.
  • Giving unique namespaces allow companies to build and maintain a reputation system. If we take the same example, you will be sending NEM digital features to switchmycrypto domain which would be registered by the company showing authority and legitimacy ensuring trust.
  • This same feature can be used in the government when officials are required to approve any document. The namespace will act as a stamp of authority. It is an officially endorsed on the public blockchain.

Mosaics

  • Mosaics are user created named assets on the blockchain.
  • Mosaics have customizable names, descriptions, divisibility quantities as either fixed or mutable, and transferability restrictions if necessary, and can have levies applied to them. They can be also created to pay for levies on other mosaics.
  • Private companies can use this to make shares in a company. Governments may use it to give any type of identity to the citizen or the citizenship itself.

Messages

  • Messages in NEM can be Open, Encrypted and Hex.
  • The max length of Messages are 320 characters, 272 if encrypted. If a longer message is needed they can be strung together.
  • Messages are needed in the notarized system because after the notary is made there may be a need to make updates and changes. This change can be made to the file and the thing it represents.
  • Messages can also be used as plain-text to add additional information, links, etc.
  • Hex can be used to update the backend of any application.

 

Multisig Contracts

  • NEM is not like other multisig accounts. They are actually on-chain contracts.
  • They are created by converting a normal pre-existing and funded address.
  • There can be multisig accounts where there are m members and n members are needed to access the account. Here m and n can be 1-32.
  • This allows a feature in Apostille. Let’s say all transactions sent to a multisig account need to be verified. This account is no longer a normal account. It is now a certification account call Apostille account.

 

Apostille Overview

Apostille NEM

  • An individual wants to notarize/approve a file.
  • The individual send s the file to a Apostille account.
  • The apostille account is made by converting a funded account into a multisig account with a reputable domain.
  • One or more of the authorized officials will notarize the file and send it out or may reject the request.

 

Click here to learn how to buy NEM.

 

 

Cadano Header

What is Cardano (ADA)?

Introduction

  • Cardano is an open source project that began in 2015, which wants to change the way crypto-currencies are designed and developed.
  • The main focus is to make a more balanced and sustainable ecosystem which can equally understand the needs of the users while being able to integrate into different information systems.
  • Cardano learns from the 1000 altcoins before it and has a high emphasis on research.
  • Sojourn’s End–  There are two collections of protocols. 1. a provably secure proof of stake based crypto-currency called the Cardano Settlement Layer(CSL) 2. Cardano Computation Layer(CCL).
  • Social Element of Money– There are always disagreements about philosophy, monetary policy, or even just between the core developers lead to fragmentation and forks. The cardano settlement layer will have a layer on top to handle all these issues. Cardano will propose hard and soft forks to vote on.
  • Scripting- Scripting of smart contracts can be done unlike bitcoin. Plutus is a general purpose smart contract language and can be used for DSL inter-operability.
  • Sidechains-  Cardano will have the feature of sidechains in the future called KMZ sidechains.
  • Signatures- Signatures are needed to securely move value from one person to another. Cardano is interested in integrating quantum computer resistant signatures, which cannot be solved even when brute forced by a quantum computer.
  • User Issued Assets(UIAS)- Just like how the ethereum network has an ERC-20 standard for creating tokens, users can issue assets in cardano. One alleged drawback in ethereum is that all transaction cost must be paid in ether. This will not be the case in cardano.
  • Scalability- Scalability is achieved in most crypto-currencies by adding more number of nodes to deal with the incoming transactions. All nodes must have the copy of the blockchain and also all nodes are not active as generally they are randomly selected while the rest sit idle. Ouroborus, a delegated proof-of-stake consensus, selects a group of nodes which have the responsibility of maintaining the network for a period of time. This can accommodate the needs of large corporations such as Facebook and Google.
  • Cardano Computation Layer(CCL)-  The problem in crypto-currencies or anything decentralized is that it can be used for wrong purposes such as trafficking child pornography or selling government secrets. There is no way to stop this but Cardano Computation Layer requires consensus node to willing to include these transactions in these blocks. This can help protect the users.

 

Interoperability

  • The Grand Myopia- There is a need for an unbiased judge, an uncaring digital judge which perfectly executes according to a constitution. The problem occurs when we want to mix this new fintech with the traditional financial systems. Land can be tokenized but can’t be enforced to be given by technology. There is no way to ensure the transfer of a gold bar cannot happen by itself.
  • Legacy- There is a need to upgrade fintech to new technology and not be stuck with the old. Many banks still use backends using  COBOL. The problem is there is no bridge to move from old system to new systems. Cardano believes there are 3 main concerns that have to be addressed.
    • Representation of information and belief in its accuracy.
    • Representation of value and its associated ownership.
    • Representation of entities and, a particular user’s alongside the aggregate level of trust in such entities.
  • Tokenized assets must also be actualized in legacy applications. If Tom has a token of land and sells it on SwitchMyCrypto and if they have not updated to the new ledger there should not be a problem.
  • CryptoCurrency Interoperability-  This problem is easier solved than the legacy one. Each Distributed ledger has its own protocols and standards which can be quantified. It is a question of converting and translating messages. Plutus can be used for interoperability scripts.
  • Maze of Daedalus- The question is, what about the interoperability to something that Cardano does not provide? Should that be out of the scope? They have decided to experiment with this paradigm by deploying our reference wallet’s front end on Electron. It is an open source project maintained by Github that combines both Node and Chrome together. Cardano’s build of Electron is called Daedalus. This allows developers to use JavaScript, HTML5, and CSS3 to build their applications to bridge any need gaps in interoperability.

 

Regulation

  • The truth is all financial systems when big enough require regulation or at least there emerges a desire for regulation. Cardano has chosen to divide between individual rights and the rights of a marketplace. Individuals should have sole access to their funds.
  • Cardano knows that in the future users will have to send metadata(data about the transaction) to Tax Officials or other government authorities. But this should only be done with the consent of the user.
  • As the blockchain is immutable, has timestamping and provides auditability some metadata should be posted to the blockchain. The question arises how much should be posted and how much would just be bloat.
    • Daedalus will support over the next 12 months a large array of features to label transactions and financial activity. These metadata can be exported and shared on demand with whoever the user deems necessary. Furthermore, the data can be operated on by three party applications for domain-specific purposes (for example, tax accounting).
    • Cardano is also experimenting with some fields being encrypted so the metadata would not be revealed publicly.
  • Marketplace DAOs- Smart contracts can be used to create a commercial system using self- enforcing and free of ambiguity code. These smart contracts where there is a deterministic relationship are called marketplace DAOs. There is no need to create a new protocol or any mutability in the ledger. Regulation is done directly by the code and enforced by the code.

ADA coin

  • Total ADA = 45,000,000,000
  • 25,927,070,538 Ada were sold at launch
  • 25,927,070,538 Ada were sold at the ICO
  • This make amount is circulation equal to 31,112,484,646 ADA.
  • The remaining Ada, 13,887,515,354, will be issued after the launch through minting.

 

Additional Notes/Updates

Click here to learn how to buy ADA.

 

What is DASH?

Difference between DASH and Bitcoin

  • Bitcoin takes too much time to be accepted in point-of-sale(POS) application due the requirement for the network to varify the transactions.
  • Dash is based on the work of Satoshi Nakamoto with built-in privacy functions.
Twitter user: @Marc0chip

 

Dash Masternode Network

  • Full node servers running P2P networks receieve updates and events about the network
  • The new reward scheme has been proposed Microsoft Research and Bitnodes incentive program
  •  Nodes provide the network with the ability to synchronize and fast broadcast messages throughout the network.
  • Dash masternodes have high availability and provide the standard amount of service needed to the network to take part in the masternode reward program.
  • Masternodes are full nodes, just like the bitcoin network but the owner of the node must provide a standard of service and and a collateral to participate.
  • The operator must have control over 1000 DASH should be online to provide service.
  • Masternodes are all paid from the block reward program, 45% of all DASH is dedicated to this program.
  • The reward for a particular day can be calculated using the formula (n/t)*r*b*a

Where:
n is the number of masternodes an operator controls
t is the total number of masternodes
r is the current block reward (presently averaging about 3.3 DASH)
b is blocks in an average day. For the Dash network this usually is 576.
a is the average masternode payment (45% of the average block reward)

 

Deterministic ordering

  • A special algorithm is used to create a pseudo-random ordering of the masternodes.
  • This is done so every masternode as a random chance of being selected to verify the transactions

 

Trustless Quorums

  • Let us assume the dash network has 4800 active masternodes.
  • Each masternode as a collateral of 1000 DASH, which means 4,800,000 DASH is collateral.
  • To control the Dash network an attacker would need to buy 1000 DASH on the open market. Buying this amount is almost impossible as the price would also increase linearly.
  • There is also the pseudo-random order generator which does not guarantee the transactions validated will be from the attackers node.

 

Masternode Protocol

  • The status of the node is broadcasted to the network using protocols.
  • Only two messages are needed to activate your Masternode:
  1. Masternode Announce Message
  2. Masternode Ping Message
  • Other messages are proof-of-service message, PrivateSend,and InstantSend.
  • Masternodes are formed by having 1000 DASH in a single address in the Dash wallet and will make it capable of  being propagated across the network.
  • A secondary private key is used henceforth for signing.

 

Cold mode

  • Cold mode is possible by using  the secondary private key on two different machines
  • The “hot client”, the machine holding the 1000 DASH, signs the 1000 DASH input including the secondary key in the message.
  • The “Cold client” see the message which includes the secondary key and activates as a  masternode.
  • Now the “hot client” can deactivate and leaves no possibility of an attacker gaining access to the masternode.
  • When a masternode is started it sends a “Masternode Announce” message to the network.Message: (1K DASH Input, Reachable IP Address, Signature, Signature Time, 1K Dash Public Key, Secondary Public Key, Donation Public Key, Donation Percentage)
  • After that a ping message is broadcasted proving the node is still alive.  Message: (1K DASH Input, Signature (using secondary key), Signature Time, Stop)

 

PrivateSend

  • Dash believes in a standard teustless implmentation to improve privacy.
  • PrivateSend is an extended version of the CoinJoin by employing a series of improvements such as decentralization, strong anonymity by using a chaining approach, denominations and passive ahead-of-time mixing.
  • Lets say 0.5 BTC was sent. Private send will break apart the transaction to, for example, 0.3+0.19+0.01=0.5
  • The more transactions going through the mixer exponentially increases the difficulty
  • These sessions though can be de-anonymized at any point in the future.

 

InstaSend

  • Using masternode Quorums, users can send and receive DASH instantly.
  • Once there is a quorum, the transaction is locked and can only be spent on that transaction. This transaction lock takes around 4 seconds.
  • This feature allows point-of-sale applications and also face-to-face transaction.

 

 Dash Updates/Improvements

 

Click here if you want to know how to BUY DASH

What is OmiseGo?

Introduction to OmiseGo:

The OmiseGo whitepaper outlines five main mechanisms which together create the OMG Network.

  1. The Decentralized Exchange
  2. Liquidity Provider mechanism
  3. Clearing in-house messaging network.
  4. Asset backed blockchain gateway
  5. White label SDK

 

The Problem

  • Every day, offers are made, and goods are exchanged. At the national or global level,there are intricate networks in place to facilitate these transactions; to collect value,reallocate it elsewhere in another way, and to take a piece of a commission, acommission.Some of the most notable among these networks (as selected in the GMO Whitepaper)are Fedwire, CHIPS, SWIFT, NEFT/IMPS (in India )and ACH. You may not know or have not heard of any of these networks. However, it is very likely that you have made use of all or some of them. They operate as financial centers, brokerage operations worldwide.
  • When we send a payment we initiate the transfer as the sender, it goes to the bank using SWIFT, NEFT etc and is sent to the recipient. There is no need to have a third party to facilitate these transfers. It can all be done on the OMG network.
  • In the new world, eWallets all over the world have gained popularity but it is still not possible to have a inter-wallet transfer. For example, we cannot transfer Venmo to Alipay or PayTM to Mobikwik (in India). Using the OmiseGo white-list SDK there can be inter-wallet transfers.
  • OMG will ensure no cost goes to third parties. It will also require no trust on any 3rd party.

 

The Ewallet

  • The ewallet from OmiseGo will have a native opt-in for crypto-support.
  • Fiat currencies will also be supported.
  • Small Transfers will be using the lighting nework. Transactions will be done off-chain for rapid payments.
  • The OMG chain validates the activity of the transactions and then submits it to the Ethereum network.
  • Liquidity in the network is maintained by staking.

 

The Decentralized Exchange

  • The decentralized exchange will be used for most transactions.
  • The DEX is the central component and not the ewallet payment provider (EPP).
  • The DEX will be ideal for interwallet transfers as it will be low latency and high frequency.
  • The entire DEX will eventually be on Plasma

 

Clearing Houses for bitcoin-like blockchains

  • Bitcoin-like blockchains do not have the ability to have smart contracts .  So a oracle is needed. Clearing houses act as that oracle to clear transactions.
  • If everything is in order then the clearing house gets bonded with the OMG chain. If not, the clearing house gets slashed.

 

 

White-labeled SDK

  • Anyone can build there own wallet using the SDK given to developers.
  • By letting everyone make ther own ewallet everyone can add their own features.
  • This also will add to the liquidity to the DEX.

 

The team

  • With such an ambitious project at such an early stage, the group and the organisation are crucial. I would say that it would be difficult to see the GMO value at this point without looking first at the team behind it.
  • Omise, the company responsible for OmiseGo has existed since 2013. They operate an online payment system in Southeast Asia. Before launching OmiseGo, they had already produced a viable product, assembled much equipment, built severe relationships in their sector, and secured $20 million in funding. Besides, OmiseGo has Vitalik Buterin (Ethereum) and Joseph Poon (Lightning Network Co-Author) among its advisers. Joseph Poon is, in fact, the author of the official OmiseGo report.
  • Moreover, it is worth noting that they made a very respectable decision to limit their ICO funding to 25 million at a time when projects that are much less solid are collecting many multiples of that. It is very likely, because of their background, that they could
    have obtained a financing three times higher, if not more. Overall, OmiseGo seeks the opportunity to revolutionize the way value changes hands around the world. It remains to be seen how well they will be able to implement it, but
    the market potential is impressive.

 

OMG Token

  • Until the OmiseGo blockchain is launched, OMG is a standardised Ethereum token (ERC20).
  • When they start their Blockchain, OMG becomes a test witness for participation in the OmiseGo network. Owning OMG tokens will buy the right to validate blocks and earn fees (Miner)
  • A little less than 10% of the existing OMG was distributed to the founding members, and 20% was set aside for development costs. This assignment is under lockdown for one year. The remaining OMGs were distributed through the ICO (or rather the pre-ico, as
    they completed their funding target in the pre-sale phase).

 

Limitations

  • Ether at this time does not have Proof-of-Stake which is needed to stake OMG.
  • Interchain transfers have roll back errrors.
  • The transactions should be public but using something like SNARKS is too slow for high frequency.