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If you want prices to drop further so we can buy cheap…
Errr…I mean everyone should be selling now
Sell yours now before it becomes zero!

JPMorgan CEO Jamie Dimon says bitcoin is a ‘fraud’ that will eventually blow up

Jamie Dimon: Governments look at bitcoin as a novelty

Jamie Dimon: Governments look at bitcoin as a novelty  

JPMorgan Chase CEO Jamie Dimon took a shot at bitcoin, saying the cryptocurrency “is a fraud.”

“It’s just not a real thing, eventually it will be closed,” Dimon said Tuesday at the Delivering Alpha conference presented by CNBC and Institutional Investor.

Dimon joked that even his daughter bought some bitcoin, looking to cash in on a trend that has seen it soar more than 300 percent this year.

“I’m not saying ‘go short bitcoin and sell $100,000 of bitcoin before it goes down,” he said. “This is not advice of what to do. My daughter bought bitcoin, it went up and now she thinks she’s a genius.”

In an appearance at a separate conference earlier in the day, Dimon said bitcoin mania is reminiscent of the tulip bulb craze in the 17th century.

“It’s worse than tulip bulbs. It won’t end well. Someone is going to get killed,” Dimon said at a banking industry conference organized by Barclays. “Currencies have legal support. It will blow up.”

Dimon also said he’d “fire in a second” any JPMorgan trader who was trading bitcoin, noting two reasons: “It’s against our rules and they are stupid.”

Bitcoin fell to its session lows after Dimon’s comments. As of 3:01 p.m. in New York, bitcoin traded at $4,106.23, down 2 percent.

Dimon’s criticism comes at a time when some of the most well-known figures on Wall Street are starting to embrace the cryptocurrency. Fundstrat’s Tom Lee said he sees bitcoin surging to $6,000 next yearand value investor Bill Miller reportedly owns bitcoin.

Even Dimon’s own bank, JPMorgan, has reportedly begun a trial project using blockchain as it tries to cut trading costs. Blockchain is the technology behind bitcoin.

Bitcoin has already soared 315 percent this year.

Earlier on Tuesday, Dimon warned about further declines in trading revenue for the banking giant.

Dimon said third-quarter trading revenue will drop about 20 percent on a year-over-year basis. Dimon also said the bank may not give intra-quarter guidance in the future.

JPMorgan’s stock fell off its session highs on the comments, but remained up 1.4 percent on the day.

This comes just a day after Citigroup CEO John Gerspach issued a similar warning. On Monday, Gerspach said Citi’s trading revenue could fall 15 percent, citing low market volatility.

2017 has been the calmest market in decades. The CBOE Volatility Index (VIX), widely considered the best gauge of fear in the market, hit its lowest level in more than 20 years earlier this year.

The second quarter was also a weak one for JPMorgan’s trading unit as revenue fell 14 percent during the period on a year-over-year basis.

Dimon will also be speaking later Tuesday at the Delivering Alpha conference in New York.

Forward from, CNBC.com, Wilfred Frost and Jeff CoxJPMorgan CEO Jamie Dimon says bitcoin is a ‘fraud’ that will eventually blow up

For the skeptics
Keep waiting
Until most of the governments have legalized bitcoin
Until the price of bitcoin go past US$20,000
Then you are welcomed to start buying.

Russia is Working on Legalizing Status of Bitcoin, Other Cryptocurrencies: RT

Russia is in the midst of legitimizing cryptocurrencies. It is developing a legal framework that will govern transactions using digital currencies like Bitcoin, RT reports.

Russian Finance Minister Anton Siluanov conveyed this at a recent financial forum in Moscow. He assured Russian users of Bitcoin and other cryptocurrencies that the government will not outlaw nor penalize people who use cryptocurrencies.

It is a complete turnaround from the Russian Ministry’s stance last year, emerging after President Vladimir Putin signified approval for digital currencies.

Putin helps

Putin had met with Ethereum Founder Vitalik Buterin, who ingrained the merits of Russia’s usage of the Blockchain, the technology underlying Bitcoin. Thereafter, a consortium of lenders have mulled over the possibility of using the technology to cut costs. Meantime, a presidential aide had announced plans for an initial coin offering (ICO).

Finance ministry wobbling

The Russian Finance Ministry had previously balked on and considered prohibition of the use of cryptocurrencies in apartments which it deemed unsafe. Now that it has gotten backing from Putin, and the state has realized that digital currencies are part of the new economic realities, Siluanov said there is no point in outlawing them. He said the next move is to draw up a bill before yearend to regulate cryptocurrencies.

Siluanov has yet to disclose further details, but merely said that the Russian Ministry’s goal is to make the purchase of cryptocurrencies covered by law to in the same manner as buying treasury bonds and other securities.

Bank of Russia Governor balks

As with other technology trends, digital currencies have not won over everyone. In Russia, there are still non-believers. Bank of Russia Governor Elvira Nabiullina, for instance, referred to the global commotion over digital currencies as a “gold fever” sweeping nations, and expressed misgivings over their use as a surrogate for money.

In other news, China has not been as receptive to the growing demand for cryptocurrencies. In fact, its financial regulator plans to shut off major Bitcoin exchanges has led to Bitcoin’s price plummeting.

There has also been much speculation over cracking down on cryptocurrencies, following a recent decision by The People’s Bank of China (PBOC) to outlaw fundraising through ICOs, which have surged in popularity.

Forward from : Joshua Althauser, cointelegraph.com, Russia is Working on Legalizing Status of Bitcoin, Other Cryptocurrencies: RT

Austria, one of the most memorable and romantic place I have ever been to.
Maybe there is another good reason now for another visit?

You Can Now Buy Bitcoin At 1,800 Post Office Locations All Over Austria

AUSTRIAN POST OFFICE AND BITPANDA PARTNERSHIP

In a new report, the Austrian post office, and the Bitcoin exchange Bitpanda partnered up together to offer Bitcoin, litecoin, ethereum and dash at 1,800 post branches all over Austria. Thanks to this partnership, customers will be able to safely and easily buy various cryptocurrencies with euros at all post branches in Austria.

Initially, there will be a trial period for this service and users will be able to buy cryptocurrencies in three different quantities. Users can buy cryptocurrencies worth 50 EUR, 100 EUR and 500 EUR.

Currently, there are no plans to offer smaller denominations but this might change in the near future. After the buyers receive their cryptocurrency vouchers they can then apply the code on the official Bitpanda website and receive their cryptocurrencies within minutes.

A STEP IN THE RIGHT DIRECTION

With this cooperation, buying cryptocurrency will be made easier for the average consumer. Nowadays, exchanges require more and more data and information from users and take even more time to verify the identity of each user. This voucher system by Bitpanda will make buying cryptocurrencies more secure, faster and easier for potential adopters and investors.

“Digital currencies will become a central point of our daily lives but they will not be in conflict with classic currencies,” said Eric Demuth, the co-founder of Bitpanda.

Bitpanda was founded in 2014 and is headquartered in Vienna, Austria. It currently has more than 300,000 users and with this new service, it’s aiming to raise their transaction volume to $200 million. Another goal of the service is to make cryptocurrencies more mainstream and get rid of their current dubious image.

Forward : You Can Now Buy Bitcoin At 1,800 Post Office Locations All Over Austria , Author by Ashour Iesho

This is definitely just the beginning.
More to come? You bet.

MAS clarifies regulatory position on the offer of digital tokens in Singapore

The Monetary Authority of Singapore (MAS) clarified today that the offer or issue of digital tokens in Singapore will be regulated by MAS if the digital tokens constitute products regulated under the Securities and Futures Act (Cap. 289) (SFA). MAS’ clarification comes in the wake of a recent increase in the number of initial coin (or token) offerings (ICOs) in Singapore as a means of raising funds.

2     A digital token is a cryptographically-secured representation of a token-holder’s rights to receive a benefit or to perform specified functions. A virtual currency is one particular type of digital token, which typically functions as a medium of exchange, a unit of account or a store of value.

3     ICOs are vulnerable to money laundering and terrorist financing (ML/TF) risks due to the anonymous nature of the transactions, and the ease with which large sums of monies may be raised in a short period of time. MAS’ media release of 13 March 2014 had communicated that while virtual currencies per se were not regulated, intermediaries in virtual currencies would be regulated for ML/TF risks. MAS is currently assessing how to regulate ML/TF risks associated with activities involving digital tokens that do not function solely as virtual currencies.

4     MAS’ position of not regulating virtual currencies is similar to that of most jurisdictions. However, MAS has observed that the function of digital tokens has evolved beyond just being a virtual currency. For example, digital tokens may represent ownership or a security interest over an issuer’s assets or property. Such tokens may therefore be considered an offer of shares or units in a collective investment scheme1 under the SFA. Digital tokens may also represent a debt owed by an issuer and be considered a debenture under the SFA.

5     Where digital tokens fall within the definition of securities in the SFA, issuers of such tokens would be required to lodge and register a prospectus with MAS prior to the offer of such tokens, unless exempted. Issuers or intermediaries of such tokens would also be subject to licensing requirements under the SFA and Financial Advisers Act (Cap. 110), unless exempted, and the applicable requirements on anti-money laundering and countering the financing of terrorism. In addition, platforms facilitating secondary trading of such tokens would also have to be approved or recognised by MAS as an approved exchange or recognised market operator respectively under the SFA.

6     The types of digital tokens offered in Singapore and elsewhere vary widely. Some offers may be subject to the SFA while others may not be. All issuers of digital tokens, intermediaries facilitating or advising on an offer of digital tokens, and platforms facilitating trading in digital tokens should therefore seek independent legal advice to ensure they comply with all applicable laws, and consult MAS where appropriate.

 

Forward : MAS clarifies regulatory position on the offer of digital tokens in Singapore, http://www.mas.gov.sg/

Yes, that’s why I always say the blockchain technology is still in its infancy.
Decentralization is a way to solve certain issues, not ALL problems.
And by the way, blockchain actually means distributed databases, which means it includes centralization as well.
The possibilities are endless as we research more into it technically, politically and economically.

The Dark Side Of Decentralized World

The Blockchain technology is providing us with the bricks to build a decentralized world. In this new society, cryptocurrencies are the main form of payment, there is complete anonymity and the economy is truly decentralized.

This has many advantages, of course, but there is a dark side too.

There was no electric chair before the discovery of electricity.

Too much anonymity

Cryptocurrencies like Monero, ZCash and soon Ether offer nearly untraceable anonymity features for its users. This is great because many people prefer to keep their transactions private.

However, it also facilitates certain criminal activities. Money laundering, online drug, weapons dealing and tax avoidance are some of its possible applications. Dark Web marketplaces like Silk Road or AlphaBay would have probably never come to life without the partial anonymity cryptocurrencies provide.

But anonymity is not only used for payments. An increasing number of Internet users are making use of strong encryption protocols, VPN’s and onion routing. Users that are active on platforms like 4chan or Reddit will have probably noticed how anonymity empowers the very worst among us.

So far, 4chan has been involved in tricking people to microwave their iPhone, causing countless suicides, making Apple stock to drop by 10 percent and hoaxing people into fabricating highly toxic chlorine gas.

The cryptocurrency market can be manipulated

The total market cap of all cryptocurrencies combined sits now at around $90 bln. In contrast, Facebook is worth around five times more with a market cap of $475 bln. This shows how small the crypto world still is.

We live in a society where half of the world’s wealth is in the hands of one percent of the population. In the crypto market, wealth distribution is brought to a new extreme. This is mainly due to the difficulties associated with acquiring these assets.

The top 315 Bitcoin addresses own a 25 percent of all circulating coins. This makes market manipulation an actual threat.

Not efficient enough

A decentralized company or cryptocurrency does not have a chain of command. Although this has several advantages, it can also make the decision taking process painfully slow or ineffective.

A good case study is the current situation of Bitcoin. Core developers, stakeholders, and miners have been debating about Bitcoin’s scalability issue for months. However, each party is fiercely protecting their own interests.

This makes a mutual agreement practically impossible. The result is a potential chain split on Aug. 1, 2017.

This being said, it’s important to keep in mind that the benefits of the Blockchain technology will probably outweigh its associated downsides.

 

Forward from : The Dark Side Of Decentralized World, Author by Pascal Thellmann

No more having to prove who we are with a card.
No more privacy intrusion, misuse and abuse.

Power to the User: Accenture & Microsoft Are Changing Identity with Ethereum

Centralized ways of proving identity may soon have an expiration date.

A lofty claim, perhaps, but the idea is arguably bolstered by the launch this week of a functioning blockchain prototype this week built by Microsoft and Accenture. The technology could one day allow users to accumulate verified information about their identity in a profile they control.

Instead of permanently handing over that information to a university, a healthcare provider or a potential employer, the owner of the identity could choose exactly who gets access to what data – and for how long.

The global head of Accenture’s capital markets blockchain practice, David Treat, explained in the first live demo of the prototype how any number of identity sources can be aggregated under a single profile.

Speaking on stage at the ID2020 conference hosted earlier this week, Treat explained:

“We’re not moving the data, we’re indexing this information. We’re putting it into the individual’s hands.”

Powered by a private version of the ethereum blockchain, the prototype runs on Microsoft’s Azure cloud computing platform, according to an Accenture statement, and sets out to comply with principles established by the Decentralized Identity Foundation, co-founded by Microsoft.

Under the hood

Instead of reinventing how identity itself is proved, the prototype, developed with assistance from managed service provider Avanade, acts as a cryptographically protected store of data verified by existing identity providers.

While the owner of the identity has ultimate control over the access, once permission is granted to a third party it can be queried for authenticity, and if any part of the information is in doubt, the recipient can “pull on that thread”, as Treat put it, and go back to the original source.

Yet, when the allotted time expires, any access to the identifying data is permanently revoked, meaning profiles do not “accumulate” over time.

The distributed ledger is designed to be maintained by participating parties, while simultaneously preventing personally identifiable information from being viewed by those parties.

Though the demo was conducted using a smartphone user interface, Treat said any number of formats could eventually be employed.

Should the prototype be released to the public, the network of users will likely employ Accenture’s Biometric Identity Management System to gain initial access, according to a company statement. The service has already been used in the field by the United Nations High Commissioner for Refugees (UNHCR) to enroll 1.3 million refugees in 29 countries.

“The platform we used allows for the capture of any form of biometric identity, whether that’s voice, or face, or whatever,” Treat said.

In the year 2020

All in all, the ethereum-based app was built over a six-week period earlier this year in Dublin, Ireland. Created by a team at The Dock, a new research and incubation hub establish by Accenture, the app is still in the early stage of development.

However, Treat emphasized that it does in fact work as intended and shouldn’t require years to deploy, as is frequently the time-frame proposed for blockchain projects at this early stage of the technology’s development.

In remarks after the demo, Saadia Madsbjerg, managing director of the Rockefeller Foundation (which helped fund the project), said the group was aiming to have a finalized technical proof-of-concept and multiple pilot projects up and running as soon as 2020.

By that time, Accenture’s Biometric Identity Management System is expected to have increased the number of identities it hosts to 7 million refugees from 75 countries, according to the statement.

Following Madsbjerg’s remarks, Treat concluded:

“We can do this. We can create an identity that is truly personal, private, portable, resistant, and we are excited to invite everyone to join us.”

Read More : coindesk.com, Michael del Castillo, Power to the User: Accenture & Microsoft Are Changing Identity with Ethereum

Messaging the right way
Messaging the P2P way
The blockchain way.

In Era of Compromised Online Messaging, Blockchain-Based Services Hold Key

Encryption is not just a buzzword but a critical necessity in a time when eavesdropping by state and non-state actors is a critical concern. In this sort of a backdrop, there are developmentswhich bring the usability of Blockchain to the forefront.

Can Blockchain or digital currencies and their combination be used to make communication more secure and private? Could these technologies lead to economies which help businesses cut costs dramatically and increase their productivity?

Security compromised

Today we communicate using a wide array of messengers and communication services – Skype, Facebook Messenger, WhatsApp, Telegram, etc. This generation of messengers was preceded by other popular services of their time like Yahoo Messenger, AOL, MSN, etc. All of these services provide varying levels of services. Some are text only, some provide voice services and some provide voice and video.

The problem with many of these services is the ability of governments and others to snoop and pry into the private conversations of the users of these apps. In June 2013, a scandal involving Edward Snowden broke.

According to Mashable, who reviewed the revelations of Snowden a year after they were made:

“The NSA….isn’t able to compromise the encryption algorithms underlying these technologies. Instead, it circumvents or undermines them, forcing companies to install backdoors, hacking into servers and computers, or promoting the use of weaker algorithms.”

It would appear then that the big name messenger services and other communications providers collude with the powers that be to weaken the security of their users deliberately.

Backdoors

End-to-end encryption is the latest technology that most mainstream messengers are favoring. Signal, Telegram, WhatsApp and others all use this technology. In principle, this technology is said to ensure that only people sending and receiving information can make sense of it.

However, the problem remains that if the tech companies want, they can build backdoors which would then allow governments to gain access to information.

The governments too have not looked kindly at end-to-end encryption with the UK Home Secretary Amber Rudd even calling for the banning of this technology.

While the secretary’s comments came in the backdrop of the Westminster attack in March 2017, it should be interesting to note that WikiLeaks’ revelations make it clear that the CIA has at least 24 weaponized Android “zero days” that allows it to bypass encryption on WhatsApp, Signal, Telegram, Wiebo, Confide and Cloackman.

Interestingly, some of these exploits the American intelligence agency received from GCHQ – a British agency.

Enter the Blockchain

There are a number of service providers in existence already that are using technologies such as Virtual Private Branch Exchanges (PBXs). Interestingly, a provider called EncryptoTel is now using cloud or a virtual PBX in conjunction with Blockchain to deliver privacy oriented services.

EncryptoTel claims to have collected $3 mln in their crowdsale and their ICO is still an ongoing process. EncryptoTel, in its beta version, is using SIP/TLS technology as well as SRTP and ZRTP protocols to focus on encryption. In the future, they want to build their own protocols for providing security. For identity verification purposes they will use the Waves digital signature.

Crypviser is also a provider that has launched its own Initial Coin Offer (ICO) for its digital currency CVCoin. The ICO started on May 20, 2017, and will continue till June 30, 2017. Crypviser is the first ever encrypted network for “social and business communication” according to the company.

Crypviser will launch commercial services on September 4, 2017. Crypviser plans to use their own unified secure instant communication network with real end-to-end encryption and a unique Blockchain-based authentication to ensure privacy.

Their aim is to provide protection to users at each stage. The Blockchain-based authentication they will use will be provided by the CSMP protocol.

According to a white paper published by Crypviser:

“Classic client-server authorization technologies became unsuitable and do not meet current security requirements. Crypviser cares of its users in a professional manner and introduces a patent-pending complex authorization solution to prevent any possibility of the user’s meta-data manipulation on the service provider side.”

Battle of messengers?

It is interesting to note that both Crypviser and EncryptoTel are launching around the same time. In a blog post, Vadim Andryan, CEO of Crypviser, compares EncryptoTel’s efforts to reinventing the bicycle. It is an interesting observation of Andryan that EncryptoTel still does not have their own protocol in place.

He says:

“There is no way to compare the ready to use CSMP protocol with the genuine Blockchain-based authentication model of decentralized public — key distribution with the “promises”.”

Regardless of the outcome of the Crypviser and EncryptoTel situation, it is clear that there is a market for more secure platforms and putting in place authentication systems based on Blockchain could be one idea that reinforces the security of end-users.

Now we must wait till these products make it to the market and there is no doubt that the best one will be left standing.

Trust no one but the banks….?

It’s Your Money But You Can’t Have It: EU Proposes Account Freezes To Halt Bank Runs

European Union states are considering measures which would allow them to temporarily stop people withdrawing money from their accounts to prevent bank runs, an EU document reviewed by Reuters revealed.

The move is aimed at helping rescue lenders that are deemed failing or likely to fail, but critics say it could hit confidence and might even hasten withdrawals at the first rumors of a bank being in trouble.

The proposal, which has been in the works since the beginning of this year, comes less than two months after a run on deposits at Banco Popular contributed to the collapse of the Spanish lender.

Giving supervisors the power to temporarily block bank accounts at ailing lenders is “a feasible option,” a paper prepared by the Estonian presidency of the EU said, acknowledging that member states were divided on the issue.

EU countries which already allow a moratorium on bank payouts in insolvency procedures at national level, like Germany, support the measure, officials said.

“The desire is to prevent a bank run, so that when a bank is in a critical situation it is not pushed over the edge,” a person familiar with German government’s thinking said.

The Estonian proposal was discussed by EU envoys on July 13 but no decision was made, an EU official said. Discussions were due to continue in September. Approval of EU lawmakers would be required for any final decision.

Under the plan discussed by EU states, pay-outs could be suspended for five working days and the block could be extended to a maximum of 20 days in exceptional circumstances, the Estonian document said.

 

Spooking Customers

I side with Charlie Bannister of the Association for Financial Markets in Europe (AFME), who says “We strongly believe that this would incentivize depositors to run from a bank at an early stage.”

Why Might Customers Want to Run?

Here are a trillion reasons: Over €1 Trillion Nonperforming EU Loans: EU vs US Percentages.

Non-Performing Loans

Notes

  • I am unsure why the graphs sometimes use different country codes than appears in the first column. Where different, I show both symbols. The list of country codes is shown below.
  • Forb ratio stands for forbearance ratio.
  • Cov ratio stands for coverage ratio: (Loans – Reserve balance)/Total amount of non-performing loans. It’s a measure of how prepared a bank is for losses.

Italy, Greece, Spain, Portugal, and Ireland have a combined €606 billion in non-performing loans.

The entire European banking system is over-leveraged, under-capitalized, and propped up by QE from the ECB. Simply put, the EU banking system is insolvent.

That the EU has to consider such drastic measures proves the point.

 

Read  more: zerohedge.com, Tyler Durden, It’s Your Money But You Can’t Have It: EU Proposes Account Freezes To Halt Bank Runs

South Korea taking a positive step.

South Korea Legalizes Bitcoin International Transfers, Challenging Traditional Banks

Starting next week, Bitcoin will be on the approved list of technologies that can move payments across the South Korean border. Fintech companies in the country will be able to obtain a permit allowing them to legally offer Bitcoin international transfer services.

New Law Making Bitcoin International Transfers Legal

South Korea Legalizes Bitcoin International Transfers, Challenging Traditional BanksStarting on July 18, the amended South Korean Foreign Exchange Transactions Act will enable fintech companies to register with the Financial Supervisory Service (FSS) to legally “provide international money transfer services for small funds,” The Herald reported an FSS official saying on Wednesday.

Once registered, companies can use various methods to send money abroad, including using Bitcoin. The amended law specifically permits digital currency remittances, “which were illegal under the Foreign Exchange Transactions law,” wrote online newspaper Dailian.

To obtain a permit, a fintech firm must have a paid-in capital of more than 2 billion won (approx. 1.75 mUSD at the time of writing) and a debt-to-equity ratio of below 200 percent, The Herald explained, adding that:

A one-off transfer via a fintech firm will be limited to $3,000 or less. By an account, an annual limit for international money transfers via fintech firms will be set at $20,000.

New Challenges for Banks

South Korea Legalizes Bitcoin International Transfers, Challenging Traditional BanksThe amended law will allow new entrants to compete with traditional banks, offering money transfer services at a fraction of the incumbents’ fees, with a shorter transfer time.

For an overseas remittance of 1 million won, a typical bank commission is between 50,000 won and 60,000 won, Dailian detailed, adding that fintech companies are expected to charge between 3,000 to 40,000 won. It also takes banks two or three days to complete a transfer, the publication wrote.

Meanwhile, Bitcoin remittance service provider Coinone only charges a 1% commission fee and “deposits are made within 3 minutes after requesting money transfer,” its website shows.

Responding to new fintech competitors, Keb Hana Bank has limited some of its transfer fees to around 10,000 won, and Shinhan Bank is considering the introduction of a Bitcoin-based overseas remittance system, The Herald reported. Kang Mi-jung, a senior researcher at Hana Institute of Finance, commented:

Domestic banks need to find ways to provide remittance services for simple and inexpensive fees, and to establish new profit models through partnerships with fintech.

The worldwide money transfer industry is expected to grow to approximately $600 billion this year, according to research by Infosys. About 40 fintech firms are slated to launch international money transfer services starting on August 15, the news outlet reported FSS officials saying, adding that “the move is expected to intensify competition in the 10 trillion won ($8.7 billion) international money transfer market.”

Images courtesy of Shutterstock and Business Korea

 

Read more : Bitsonline.com, Kevin Helms, South Korea Legalizes Bitcoin International Transfers, Challenging Traditional Banks

Nothing’s perfect
But any will do just fine.

There is No Perfect Blockchain, Here is Why

Different consensus algorithms power Blockchain technology. It is the consensus algorithm of a given Blockchain that determines how nodes participate in sharing of the database of such Blockchain.

A growing trend within the Blockchain ecosystem is the combination of two or more consensus algorithms by solution providers. By doing so, Blockchain developers seek to employ the various strengths of different algorithms in order to achieve a more robust platform.

There is no perfect Blockchain

Previn Kutty, Blockchain solutions architect, notes that several consensus algorithms have been introduced on the Blockchain. These are proof of work, proof of stake, proof of service, proof of burn, proof of space, byzantine fault tolerance etc., all of them claiming to solve the cryptocurrencies / Blockchain challenges for decentralized control, low latency, flexible trust, less resource intensive, asymptotic security, etc.

However, it is now widespread knowledge that each of these algorithms has their particular areas of strength and weaknesses, a development that Kutty describes as a “one size doesn’t fit all” scenario.

Kutty tells Cointelegraph:

“There is the lingering question of one size consensus doesn’t fit for all, as each Blockchain app has their own challenges and the entire Blockchain community is exploring new opportunities for everyday consensus challenges, which is good as it promises more and more opportunities for technological development in consensus arena.”

Bjorn Bjercke, Blockchain developer, explains that in isolation the various consensus algorithms tend to reveal profound weaknesses within their systems.

Bjercke mentions examples such as proof of stake, which has been discovered to have issues with safety, and proof of service that according to him has been proven to be hackable.

As for proof of authority, Bjercke notes despite having proven to be safe. It is a centralized system, therefore defeating the initial idea of the Blockchain.

Synergy of algorithms

In a previous report by Cointelegraph, Inpay was noted to harness the properties of Ethereum Classic and Waves in enabling features such as decentralized voting systems and aliases.

Another project that claims to be harnessing the qualities of multiple Blockchains is Qtum Foundation’s Sparknet. This project claims to combine the advantages of Bitcoin, Ethereum’s Virtual Machine and proof-of-stake consensus.

Jordan Earls, co-founder of Qtum, says that the testnet would feature an Ethereum Virtual Machine smart contract implementation along with Qtum’s proof-of-stake protocol.

Earls says:

“I am ready to get this in the hands of the community and see what everyone’s response to it will be, in particular, what features other developers can come up with.”

Internal division of labor

Still, in its early stages of development, it is natural that the Blockchain ecosystem continues to experience twitches and adjustments. The weaknesses of the various consensus algorithms in existence are becoming more and more exposed as more products are built on top of these platforms.

However, with the developing trend of combining multiple systems, improved efficiency can be achieved with the creation of more robust systems. In doing so, the various responsibilities within the given project are split among the individual algorithms that make up the platform.

Bjercke explains that a typical scenario involves splitting the Blockchain into having transactions on one side and transaction cost on the other, thereby making two different entries in the ledger when adopting a triple hash proof of work combined with proof of stake for transaction cost.

Read more : Cointelegraph.com, Iyke Aru, There is No Perfect Blockchain, Here is Why