Month: August 2018

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Lykke

What is Lykke?

Lykke is a fintech company, Lykke Vanuatu Ltd, designed for trading various classes of digital assets. It is an exchange of colored coins (issuer backed securities) where orders are collected and then matched to clients’ requests. The colored coins are built on the Bitcoin system. The matched orders are all cleared on the Bitcoin network while the unfulfilled ones are discarded.

Note that the exchange does not own the traded coins; however, the traders need to trust it to make the right matches. Therefore, by assuming a basic level of trust in the trader means providing some collateral in the form of digital assets.

The network employs the blockchain technology to help eliminate market inefficiencies that come with conventional exchanges.

What is the problem that Lykke Solves?

The primary markets for the cryptocurrency exchanges are the exchanges. However, most of the exchanges such as Bittrex and Poloniex among others are highly centralized. This implies that to trade in the exchanges, you are required to open a trading account and deposit some tokens there. Because of this centralization, these exchanges are considered more efficient. However, they also come with myriads of challenges that make them very risky.

  • Serious security risks: If you take a closer look at most hackings and huge losses in the crypto niche, most of them took place in the exchanges. In 2011, 650,000 Bitcoins were stolen from Mt. Gox while Poloniex lost 12.3% of Bitcoins later in 2014. More recent attacks took place at Coincheck and YouBit exchanges where hackers made away with millions worth of Bitcoins and other altcoins. The later was forced to file for Bankruptcy.
  • Risk of manipulation: In most of the centralized exchanges, the administrations set the charges for the transactions. This is the reason why most of the centralized exchanges implement very diverse fee schedules. For example, some charge both the maker and taker while others opt for one party.
  • User data exposure in centralized exchanges: One of the primary goals of running a decentralized blockchain network is to facilitate anonymity when sending value or trading in the markets. However, most centralized exchanges require users to sign up with personal information. In fact, the exchanges are run in line with local securities trading laws.

How does Lykke Solve the problem?

To address the outlined shortcomings of the centralized exchanges, Lykke development team opted to follow the operational principles of simplicity and minimal risks.

They went for the technologies that had been proven to work and that had fewer risks compared to the existing models. The ideal distributed ledger according to the Lykke white paper would have been Bitcoin.

However, going for the Bitcoin would mean that only the native token, BTC, would be used. It is at this point that the idea of Colored coins was crafted.

1. The application of colored coins

“Colored coins”, as the name suggests means “coloring” Bitcoins and committing to provide underlying assets to the person who returns the coins. This implies that the colored coins are always linked to Bitcoin (the same way standard coins are bound by a few grams of metal).

The ideal solution for a centralized exchange is a decentralized one. But the decentralized ones are also inefficient because of the required lengthy chain of confirmations. The Lykke exchange is between a fully decentralized model like iDEX and centralized option such as Bittrex.

Lykke model ensures that completed trades are entered into the distributed ledger as the unfilled ones are discarded. You can also trade the assets ad hoc and can also be moved directly between the involved parties. This implies that the Lykke operates as a broker without holding the user’s deposits. Here is a demonstration of how the Lykke system works;

  • The issuer starts the process by issuing IOUs in the form of colored coins. Note that these coins can represent anything; from stocks to real assets.
  • Then, the trader who has Bitcoins or colored coins expresses the desire to trade the issued colored coins. For the trade to be initiated, an order has to be sent to Lykke in order to strike some level of trust. The traded asset has to be sent to the Bitcoin network.
  • The exchange (Lykke) waits for traders to send the orders and then add them in the order book. The supported orders include Bid, ask, and Limit among others. The matching trades are cleared in the blockchain.

Note that for the transaction to move smoothly, Lykke can select an appropriate matching algorithm.

2. Leveraging trade

Trade leveraging in the Lykke platform follows the same model used in the forex market. To allow users trade with the bank funds as opposed to their own, they are required to transfer their asset to a managed wallet. The managed account operates like a standard bank account with the bank management taking full control over them. In this case, you need to appreciate that all the orders you place will have to first go to the managed account for verification.

3. The distributed ledger technology

To make the entire ideal of Lykke exchange work, the development team used the distributed ledger technology (Bitcoin in this case) to make it easier for more users to participate. However, the core library used at Lykke does not rely on Bitcoin as the main client to lower the risk of attack. Rather, the Lykke uses a core library to link to the Bitcoin network via JSON RPC Interface. The core library scans all the relevant information about transactions and keeps the balances in a verifiable account.

4.The native token

To facilitate effective governance of the Lykke network, the development team released a native token referred to as LKK. The tokens were released in an ICO held in October 2017 and raised $1.2 million from about 700 investors.

It is important to appreciate that in Lykke, the tokens are considered shares; 1LKK=1share in the markets. This also provides users with the right to vote on the system. For example, you will be called to vote when a new application or other major applications are to be implemented in the network.

What makes Lykke better than it’s competitors

The cryptocurrency niche has become highly competitive. Starting from 2009, more than 1700 cryptocurrencies have entered the market. Lykke stands taller than its peers for providing a unique marketplace that caters for diverse digital assets. Supporting more assets implies that more corporate entities and even individual users are likely to get meaning of these assets including tokens, cryptocurrencies, and asset-based cryptocurrencies.

  • Lykke provides a clear intersection between banks and the blockchain system. This offers users with an opportunity to easily buy the preferred digital assets directly from their banks. Today, many exchanges such as Binance and Bittrex are crypto-to-crypto only. This requires users to start from different platforms that accept fiat. However, Lykke allows its users to directly purchase the tokens which make the process simpler, faster, and cheaper.
  • The market value of Lykke has grown steadily since inception. Between June 2017 and January 2018, the price of the native Lykke token grew with more than 650% compared to the 2016 levels. The market capitalization also grew steadily during the same period to surpass other cryptocurrencies including Lampix and Ergo.
  • The Lykke system provides users with a better platform to access and trade diverse digital assets. You can use Lykke to invest in the common cryptocurrencies such as Ripple and Bitcoin or others such as the colored coins for CO2 certificates and colored coins for music certificates.
  • The Lykke system has helped to redefine the term “digital cryptocurrencies” and their trading. You no longer have to confine thoughts to the tokens released in the ICOs by companies. Indeed, anything can be turned into a digital asset. From music rights to the real estates and latest scientific research, Lykke will help to tokenize everything.
  • To help Lykke and other coin users to draw more value from their tokens, Lykke also runs a marketplace. This implies that you can visit the marketplace and make a direct purchase. The marketplace utilizes a special corporate structure that makes the price low and deliveries prompt.
  • Lykke is operated in line with the laws of the jurisdictions it is based in. therefore, users on the network do not need to worry about operating illegally. This compliance is implemented in the form of Know Your Customers (KYC) strategies such as providing proof of address and government-issued ID.
  • The Lykke exchange model, though not completely decentralized, allows users to trade without holding their deposits. This lowers the risk of the assets getting stolen because they are not located in the same pool.

How can Lykke be categorized?

Lykke is a great demonstration of a network determined to conquer the current hurdles that lay on the way of blockchain network adoption.

The creative method used by the founders and the entire development team to circumvent the problems associated with decentralized exchange has impressed the cryptocurrency community. However, a lot needs to be done to operate more competitively in the current market.

Cryptocurrency experts have recommended that the Lykke team compare the platform with other top placed platforms such as Binance. This is not all.

They should also rethink the idea of total decentralization in order to attract more users especially those who want to operate in total anonymity.

What’s Lykke’s vision on Security?

The Vision of Lykke is providing users with the most secure platform for trading different classes of assets.

Though the development team has put a lot of efforts in ensuring that users operate securely, the threats facing it are numerous. Here are some of these risks that could compromise its main vision.

  • Though the idea of working with colored coins was great, it is fast getting overtaken because of the changing operational circumstances.
  • The Lykke system is prone to numerous risks such as financial risks, liquidity risk, and credit risks.
  • Because the market does not have encryption, it stands as an easy target for hackers who want to especially pull personal information for traders in the platform.
  • By relying on the Bitcoin network, it implies that Lykke also suffers some serious deficiencies reported on the network. For example, the danger of decentralized mining in the Bitcoin system implies that even Lykke is still at a serious risk of 51% attack.

Examples of Lykke’s use cases / applications

From an early development of the Lykke and the trading platform, Richard Oslen (the founder) and the entire development team wanted to outdo competitors by increasing the use cases. Here are some of these applications.

  • The native Lykke tokens, like others such as Bitcoin and Monero, can be used to make purchases in different stores and platforms that accept them. If you cannot find a store that is already accepting Lykke, consider checking the platform’s marketplace. It is a complete e-commerce platform where users can buy fashion items, home products, and even services.
  • LKK can be used as an investment or saving platform. Here, you only need to buy the tokens of an equivalent amount that you want to save. Note that if you are targeting to hold and sell when the value grows, the expected growth is only based on predictions. The myriads of factors such as the looming regulations across the globe and stiff competition could affect growth this growth.
  • The native token can be used to pay for transaction fee at the different markets. Most markets will charge a fee based on the traded volume. You can pay that fee using Lykke.
  • You can use Lykke to send value instantly on the native network. If you have some LKK tokens in your wallet, you can send them across the globe to transfer value instantly. This is done on a peer2peer basis so that no third party can know about your transaction details. It is cheaper than banks because they are centralized and designed to optimize profits. Note that both the sender and recipient need to be part of the network and have the right wallets.

https://coincheckup.com/coins/Lykke

https://lykke.com/

http://lykke.world/

https://streams.lykke.com/

https://www.lykke.com/city/blog/

https://www.lykke.com/LKK2Y%20whitepaper.pdf

https://www.lykke.com/media/lykke_whitepaper_march2016.pdf

https://www.lykke.com/media/Whitepaper_LykkeExchange.pdf

 

 

 

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Syscoin

What is Syscoin (SYS)

Syscoin is a globally distributed ledger, peer2peer blockchain, and a digital cryptocurrency. The project was established in 2014 through a fork of the Bitcoin core code. The most interesting thing about SYS was that developers allowed merge mining with the release of Syscoin 2.1. This implies that miners can mine the two coins at the same time.

The concept of merge mining is preferred in some coins to help a newer token ride on the popularity of a more established one.

The Syscoin system was created by a team of computing and financial experts that included Quang Nguyeng, Sebastian Schepis, Jagdeep Sidhu, Brad Hammerstron, Chris Marsh, Dan Wasyluk, and Sebastian Dimichele. The team was concerned about the high level of decentralization, especially in the financial sector. They were also motivated by the progress in the blockchain technology, especially Bitcoin and wanted to provide a lever for taking it to the next level.

To make the blockchain technology more realistic and applicable in the community, the Syscoin released the native token referred to as SYS and also created a marketplace where those with coins could walk and buy various items and services. This approach has made Syscoin become highly popular in the market.

What problems does Syscoin solve?

The main issue that Syscoin came to address is centralization of payment. If you want to send value abroad or make payment, you will need to go through a centralized entity such as a bank. In most of the cases, these third parties are profit-based. This implies that they increase the transaction fee to raise profits. Take a closer look at the following situations;

  • If you want to send funds across the globe, the commonest method is using a bank. However, the banks have to conduct multiple background checks and reveal your information to multiple parties such as cashiers, bank management, and the jurisdictions’ financial management.
  • Using a bank account to send value also takes longer because of the lengthy bureaucratic procedures. Before sending funds from the US to South Korea or other jurisdictions using a bank transfer, it could take a couple of days.
  • The cost of sending funds across the globe is very high. Banks, as profit-based organizations charge a fee to cover their expenses, meet tax obligations, and make hefty profits.
  • For people who prefer making payments with credit cards, it is a very expensive method. Most of the cards come with serious restrictions and hefty penalties when you do something wrong such as overspending or delaying payments.

How Syscoin solves the problem

The focus of the Syscoin project is trying to remove the middle-men and empowering users to operate on a peer2peer basis. Some middle-men to think about here include Amazon, eBay, and other online stores. Instead, you are empowered to work directly with recipient and manufacturer to make payment direct, fast, and highly reliable. Here is how Syscoin targets to achieve this.

1.  A fully decentralized platform

To advance the ideology of a decentralized system, the Syscoin platform is designed in layers. These layers allow different stakeholders to get involved and make a contribution. At the bottom is the blockchain layer.

This is the most important section because all the other layers and are added on top of it. Then, additional layers including Z-Dag, Business, Logic, and application are added in that order. The layers have helped to make development and addition of new features easy and faster.

2. Decentralized marketplace

When Syscoin was created, Bitcoin was the main cryptocurrency on the market. But it was very difficult to make people adopt cryptocurrencies in larger numbers to sustain a marketplace on a cryptocurrency only.

Therefore, Syscoin created the decentralized marketplace to help users access and buy items and services directly. Now, the idea of the decentralized marketplace has grown and the Syscoin decentralized marketplace even allows users with other coins to make direct purchases.

3. Advanced encryption

Like other cryptocurrencies, Syscoin operations are hinged on advanced encryption. When users join the network, their details are encrypted to ensure that no third party can easily access them. The platform also allows people in its network to use aliases to enhance their anonymity.

4. The smart contracts

Smart contracts are considered the ultimate way to take blockchain network to the next level. Because they are automated and self-executing, they are inviolable and highly secure. As far as the users on the network meet the pre-set rules, the smart contract will immediately execute. It is important to note that the smart contracts used at Syscoin are hardened to ensure that they are not easily breakable.

5. The decentralized governance of the Syscoin

To advance the concept of a decentralized system, the Syscoin network relies on Proof of Stake (PoS) consensus algorithm. The network uses a set of Masternodes and standard nodes to make governance easy and seamless. When a user on the network floats a proposal, it is taken and reviewed by the masternodes before getting implemented.

All the nodes that have some stake in the network have a right to vote when issues requiring a major decision are coming up. Remember that you can also work as a miner to help confirm the transaction and get rewarded as a node.

Why Syscoin is better than its competitors

When the Syscoin development team forked the Bitcoin core code, their target was very clear; to decentralize everything.

The focus and progressive development have helped Syscoin to grow and become better year after year. Here are some of the things that make Syscoin better than competitors.

  • The Syscoin platform employs proof of work (PoW) and proof of stake (PoS) which implies that users are able to enjoy the benefits of both consensus algorithms. The adoption of the PoS is considered a great improvement on the Bitcoin system because those who hold some stake are considered trusted nodes that cannot conspire to harm the network.
  • While other cryptocurrencies are no doubt working harder to ensure that their native tokens are accepted for direct payments, Syscoin has already created a market where users can go for direct purchases of various items and services.
  • One of the key risks associated with new cryptocurrencies entering the market today is instability. Many people hold the view that most of them are risky because some of their features are still being implemented. However, Syscoin has been in operation since 2014. With most of its features having been in use for several years, it is considered a highly stable and reliable platform.
  • Syscoin is better than Bitcoin and most conventional trading platforms because it employs smart contracts. The smart contract used at Syscoin is indeed better compared to what Ethereum’s because it is hardened. At Ethereum, the smart contract is turing-complete which implies that they can still be attacked by bugs.
  • The cost of sending value on the Syscoin platform is relatively low compared to other top cryptocurrencies. This is contributed to two key things; the current low price of the native token (SYC) and its completely decentralized operations. Today, sending value on the Syscoin network is cheaper than most networks including Bitcoin Cash and Ethereum.
  • The Network has put a lot of effort into promoting anonymity. In addition to advanced encryption, Syscoin allows users to pick alias names for extra anonymity. Though this might not be as tight as the use of ring signatures, users are assured of high levels of anonymity. Like Bitcoin, you need to appreciate that it is still possible to pull out the details on the network using highly advanced computing technology.

What is the Syscoin vision for security?

The main Syscoin vision for security is providing fully decentralized transactions that are completely secure. Syscoin was created high on the heels of major blockchain attacks such Mt. Gox and the Silk Road Scandal.

Therefore, the development team adopted multiple tactics that have helped the network to remain very secure and free from attacks. Here are some of these strategies.

  • Use of hardened smart contracts to make it extra difficult for attackers to break.
  • The Syscoin system that combines proof of work (PoW) and proof of stake (PoW) system has been crucial in facilitating even distribution of tokens and reducing the risk of 51% attack.
  • The network is led by a tech and highly aggressive team. This has been the primary driver for regular updates that help to fix bugs and introduce new features.
  • The system utilizes advanced encryption that helps to keep user information as private as possible. It even allows users to take alias names to prevent easy discovery by third parties. Even the miners who help to confirm transactions can only check the balances on the public addresses but cannot pull out personal information.

How can Syscoin be categorized?

Syscoin can be categorized as a truly decentralized platform that has created structures to help lever the blockchain technology to the next level. Even as early as 2014, the development team had already crafted a clear roadmap for progressive growth.

However, it is their focus on implementing hardened smart contracts that have made Syscoin to be considered a better option than even Ethereum. Here are some of the things making Syscoin get the revered categorization.

  • Good performance in the markets.
  • A highly committed development team.
  • Progressive updates and the introduction of more impressive features.
  • Better security of the core code, user assets, and their information.

Use cases of Syscoin

Syscoin, as an improvement of the Bitcoin blockchain, has progressively grown the use cases. While Bitcoin was primarily created to help with sending funds in a decentralized manner, the Syscoin system extends the utilities so that both corporate and individuals can easily join and realize greater value. Here are the main applications of Syscoin.

  • Sending value on a peer2peer basis: This is one of the main use cases of Syscoin. Once you have some native coins, sending them is direct and instant. Because there is no third-party such as bank or credit services that are required to effect the payment, the cost of sending such funds will also be small. The only thing that is required is for the two parties (sender and receiver) to be on the Syscoin network and have the right wallets.
  • Purchasing products and services online: Like Bitcoin, Syscoin has been working on getting accepted as a method of direct payment for goods and services. To enhance this application, Syscoin created its own marketplace that allowed users to operate on a peer2peer basis. Even those stores that accept other tokens are only a step away. For example, if a store only accepts Ethereum, you only need to exchange SYS using an exchange such as Changelly and Flypme.
  • Syscoin is a reliable platform for saving and sending value: If you have some funds and want to invest or save, one of the top coin options to consider is Syscoin. As native tokens, you can buy the equivalent of the funds you want to save and leave the money for some time. As a decentralized platform, Syscoin is free from third-party seizures and your funds can grow over time. However, you need to be cognizant that this is simply a prediction and the value of the tokens can move in either direction.
  • Trading the native tokens in the markets: To optimize returns from Syscoin, one of the preferred methods is trading the native tokens in the markets. The online cryptocurrency markets operate like the standard forex markets though users deal with digital assets as opposed to fiat currencies. You could opt to pair SYS with top cryptocurrencies such as Ripple or newer options like Loopring. Remember that most of the exchanges that facilitate trading such as Changelly and Poloniex require users to register for trading accounts.
  • Paying transaction fee at Syscoin and trading platforms: If you want to send value on the Syscoin network, you will be charged a fee. Besides, trading in the exchanges will also attract a fee. This fee can be cleared using SYC. Note that the cost of transactions in most trading platforms varies depending on their respective policies.

https://coincheckup.com/coins/SysCoin

http://syscoin.org/

https://syscoin.org/faq/

http://whitepaper.syscoin.org/