Category: Uncategorized

WHAT IS BANCOR?

Bancor is a decentralized protocol network created to increase the liquidity of coins. It gives other cryptocurrencies, especially the not so popular and upcoming coins the alternative of exchanging and transacting their coins without the use of exchange platforms and other counter parties. It is used to convert other digital currencies directly rather than waiting to be listed on exchange platforms.

Bancor is an ERC-20 token which implies that it is built on the Ethereum Blockchain Technology. The platform provides a new system that allows individuals to develop what is known as smart coins or tokens that can trade and hold different cryptocurrencies. It employs the use of the smart contract technology by connecting it with other ERC-20 tokens to increase liquidity.

Bancor makes use of another kind of trading process that creates a smart token with the smart contract without depending on the existence of another party for a successful exchange.

Smart contracts are a substitute of exchange platforms. The balance of every ERC-20 token is contained in the connector module in the smart contract.

The platform makes use of a formula which they created themselves to determine the prices of these tokens every time. The Bancor platform has its own currency known as Bancor Network Token designated as BNT.

It is the first smart token created to launch the Bancor Network and the standard used for conversion as it serves as a reserve for another token.

The aim of the platform is to give every coin equal chance to compete in the world at large without any sense of inferiority. It aims to remove every form of illiquidity and by reducing the gap between major coins like Ethereum and bitcoin and other coins. To Bancor, every single token should have a marketplace.

What is the problem Bancor solves?

There are over 1000 cryptocurrencies in the crypto market place all seeking for worldwide recognition an adoption.

One major attribute of every one of these cryptocurrencies is that they all depend on people to achieve their goals and objectives. This means that if they are not recognized, all their ideas fade and they lose in the marketplace.

For adoption and recognition to be fulfilled, there is a need for these coins to be traded one for the other. Unfortunately, nobody wants to trade on coins that have no guarantee or solid backing. Nobody wants to lose their money for a project that doesn’t solve a real problem.

This has given rise to the problem of illiquidity of coins and that is what Bancor aims to solve.

The most popular coins like the Bitcoin and Ethereum enjoy a lot of liquidity because they are well known and trusted to last longer. This has created stereotypes in the mind of people hence, not wanting to participate in upcoming or newly created coins.

Most of these upcoming coins spend a lot of money on marketing and advertising their coins for the public to see and invest in but people do not trust them enough to invest in. Once this happens, there is the issue of illiquidity or low liquidity.

Because of the risk involved, most exchange platforms refuse to list these coins on their platform as the liquidity of such a coin is highly dependent on consistent buying and selling.

Since many of these coins are yet to attract such blooming market, the purposes they aim to serve are not actualized hence, they have a low liquidity.

Since they have low liquidity, it means the token is not popular and exchange platforms would not want to be left stranded and run at a loss as the exchanges buy the coins too from the company itself. As such, they pay attention to the kind of coin they invest in.

How does Bancor solve this problem?

Bancor makes use of smart contracts to develop smart tokens that would serve as an alternative to trade with not depending on exchange platforms to interchange tokens.

Using these smart tokens, various ERC20 tokens are converted internally using the Ethereum blockchain algorithm, not depending on any crypto exchange.

The smart tokens carry out the process of converting tokens through keeping the reserves of the different ERC20 tokens inside each of their smart contracts. This way, each of these tokens can be converted forth and back based on request.

These smart tokens are like containers that can hold money. Just like banks have reserves of foreign money and convert their money with the foreign money, so also is the Bancor protocol designed to operate.

The platform allows all tokens issued on as ERC 20 token to perform these operations. All ERC-20 tokens are smart tokens thus, they can easily interact with the different ERC 20 tokens out there.

The platform uses its token, the BNT, as the automatic currency for reserves.

Since the conversion of a smart token to its reserve, its connected token, is very possible that implies that we can have a chain of connected tokens all depending on one and the other which gives room for an automatic and fast conversion.

By eliminating the need for the interaction of buyers and sellers to make an exchange, Bancor has defeated illiquidity of tokens.

Now, conversion can be done at any point in time using the smart contract technology as there is no need to compare a token against another when you can begin exchange and trading immediately.

What makes Bancor better than its competitors?

Bancor has many advantages which make it better than its cryptocurrency competitors but also give it advantage over another traditional exchange-based trading platforms. Some of the numerous advantages are;

• Continuous liquidity: through the use of the smart contract to create smart tokens to hold reserves, liquidity of such token is preserved. If the reserve in question retains its relevance, liquidity of that smart token remains on a high note as its liquidity is not dependent on buying and selling or on exchanges.
• Smart Contract: with the use of the smart contract, every transaction is done on the technology. On the smart contracts, there are varieties of tokens to choose from, giving users a multitude of options to engage in. Since the smart contract automatically carries out operations, it is not possible to manipulate the system.
• No spread: Spread is the difference between the buy and sell price. This is what gives the traditional market the profit it needs. Bancor does not depend on such profit to operate, so rather than this, Bancor’s spreads used are decentralized and are introduced so as to encourage the adoption of the network which in turn benefits the participants.
• Predictable prices: Bancor smart token is transparent and is used to know the price of conversion before the conversions are done. It makes one able to predict the price of the conversions.
• Based on ERC20: Smart tokens are ERC-20 tokens making it easy for them to be integrated into another existing token. Any standard token of such existing can be connected to the Bancor network. Also, the platform has plans to further its benefits to other non ERC-20 token
• Value: unlike platforms like bitcoin which stores value in its coin, the BNT token facilitates value through its token.

How can Bancor be categorized?

There are three categories in which Bancor fits. These are:

• Smart contract: the Bancor platform is highly dependent on the smart contract technology to carry out its operations. The smart contract was created to eliminate the need for a third party and the Bancor network has been able to eliminate the need for an exchange for a coin to achieve liquidity.

Also, the smart contract is used to create smart tokens of one’s choice and in it contains all the necessary information needed for a transaction. The price of the token is also determined by the contract.

Furthermore, smart tokens can be linked up through the smart contract such that there is an interdependence on each token. More so, security is guaranteed as a smart contract works as programmed by the source.

Terminal: the Bancor network creates a means through which one token can be connected to the other for functionality and liquidity. Through the creation of a smart token which hold reserves of other token like the Ethereum for instance, the created token can also serve as a reserve for another token and the chain can continue.

The fact that it is built on the Ethereum Blockchain Technology means that other platforms can be built on it. The number of tokens that can be built on the platform is unlimited as the aim of the platform is that every cryptocurrency has a lucrative market place. Tokens are linked together through the smart contract making them interdependent on one and the other and as such, increasing the life span and liquidity of these coins.

Exchange: the Bancor protocol eliminates the presence and need of an exchange platform for the buying and selling of coins.

The system replaces the role of these exchange platforms by giving every cryptocurrency an equal survival opportunity in the market place. In traditional exchange platforms, developers select the most viable coin for listing so as not to run into any potential loss.

They buy coins and sell it to others at a slightly higher price. If a coin is not lucrative, they do not add it to their exchange so as not to run into a loss.

However, the Bancor platform has created an alternative mode of trading through the creating of smart tokens which would depend on another coin, most preferably an established coin, to act as a reserve. This way, it is automatically valuable and can be exchanged in the market directly between buyers and sellers. Prices are determined automatically by various algorithm and formulas.

What is Bancor’s vision on security?

The network through which the Bancor system operates demands a tight security. This is because a lot of token is built on the network and if anything happens, it would have an adverse effect on the platform.

The fact that the platform is built on the blockchain is a step towards security.

Exchanges are centralized platforms and are prone to hack. There have been numerous instances of such occurrence and as such, it has been tagged as unsafe.

With the implementation of the smart contract, the Bancor protocol eliminates the possibility of such infiltration. Every exchange done on the network is on the smart contract of the smart token in question.

Smart contracts are applications that involves that every action carried out is pre-determined and uploaded in the platform. For action to be completed, it must have been determined before hand on the smart contract. This way, there can be no way an external party can influence any decision.

EXAMPLE OF BANCOR USE CASES/APPLICATIONS

There are three applications of Bancor. They are;

1. Scalable and Reliable Token markets: this is when BNT is used as an alternative for other centralized tokens. This occurs with a network that has multiple positive implications. An example of this smart token is the relay token.
2. Long tail of small-scale token: examples of this are local commerce, crowdfunding, community collaboration etc. This helps small scale tokens to have liquidity too and save them from lack of a sufficient number of buyers and sellers.
3. New token application: this refers to new applications that can be of great aid to the blockchain world. An example is a decentralized token array. Traders use the decentralized token array to hold token without the need of an intermediary. This helps to remove third parties completely from the transaction, putting participants of the transaction in charge of the transaction itself.
4. Loyalty Point: since Bancor aims towards providing high liquidity, it is an opportunity for business to develop a smart token that can be employed as a loyalty point. It would be a means for business partners to trade with one another and other establishment in a completely different way.

WHAT IS PIVX?

PIVX is a decentralized, open-source cryptocurrency created to enhance privacy, anonymity, quicker transaction and security compared to other crypto platforms. PIVX is the shortened form of Private Instant Verified Transaction and it was derived from DASH, another cryptocurrency platform.

Before it was called PIVX, it used to be referred to as Darknet but was changed to its current name for the sake of its functionality i.e. it was named PIVX because of the perks it offers.

PIVX makes use of a private protocol known as zerocoin or zero-knowledge protocol to achieve its purpose. The Zero knowledge protocol would ensure users to provide proof of their transaction without having to display any detail of the transaction to the public like it is done on other cryptocurrency networks.

Before, the PIVX operated using the proof of work before implementing the proof of stake or better still, the zero proof of stake.

PIVX is built of the Blackcoin Proof of Stake 2.0 and its functionality is dependent on a system of masternodes for a public, decentralized administration and a highly classified privacy on transactions.

PIVX was created with the goal to provide its users with very fast transactions, total anonymity and an administration that would maintain the platform for all to benefit from. On the platform, the administration is done by the masternodes.

Although they play a major role, they do not get to earn all of the incentives the platform provides. Since it operates a Proof of Stake protocol, wallet holders and master node owners share these incentives almost equally through the see-saw algorithm

WHAT IS THE PROBLEM PIVX SOLVES?

The major problem which PIV is designed to solve is the issue of privacy. Though, privacy is a key feature of the blockchain technology but how private is the privacy they provide?

A lot of cryptocurrencies including Bitcoin claim to provide anonymity in the sense that real identities do not link up to addresses attached to the platform, however, every transaction is broadcasted for everyone to see on the public ledger. This defeats the idea of privacy as with the right resources and skills, the real address could be traced from the transaction details.

Also, the issue of transaction time is the focus of the PIVX platform. Transaction time in other cryptocurrency platform is about two minutes which is just enough time to allow for double spending.

This is due to the fact that most of these platforms operate a proof of work protocol which demands that a work is done before transactions can be completed.

Others who operate a Proof of Stake protocol depend on the consensus of people to confirm transactions.

The PIVX was developed to solve the problem of the slow transaction and by  doing so, preventing the possibility of double spending.

HOW DOES PIVS SOLVE THE PROBLEM?

PIVX’s goal and objective is to achieve instant private transaction and that is made possible through the use of the Zero knowledge protocol and the SwifTX technology. Below are how they function

• Zero-Knowledge Protocol

To solve the problem of anonymity and to provide complete privacy, the PIVX makes use of the zerocoin protocol.

The Zerocoin solution prevents the possibility of any form of tracking. The PIVX has adopted the protocol and named it zPIV. This protocol achieves its goal of total privacy through coin mixing. This is done by providing no proof of transaction between the sender and receiver.

This implies that any exchange that takes place with the use of this zero protocol is completely fungible since there is no historical record of such exchanged attached. This way, no government can hold you responsible for an illegal transaction neither can you be a victim of hack or theft.

With the implementation of the zPIV, the transaction is verified and confirmed faster, wallet balance is private, and transaction records are kept secret.

Anonymity is achieved by the user converting his PIV to zPIV and sends the zPIV in the form of PIV to a PIVX address. All the zPIV coin that has been changed would be combined in a pool (no a central place but that the ledger identifies it). a zero-knowledge evidence is sent to the blockchain which then converts the zPIV coin into the normal PIV which is then sent to the target audience.

Note that immediately the zero proof is provided, every link associated with the address is destroyed.

• SwifTX Technology

This technology is employed to provide very instant transaction. Confirmation and verification of these transactions are done in seconds, and it is ensured through the masternodes.

The masternodes eliminate the need to wait for confirmations from different nodes yet, validity is still guaranteed. These masternodes are users who have a deposit balance of 10k PIV locked away as collateral. They are responsible for the governance and administration of the platform.

Despite their role, they have no possibility of taking over the platform because of the see-saw algorithm implemented by the platform.

WHAT MAKES PIVX BETTER THAN ITS COMPETITORS?

PIVX has a lot of competitors as it is not the only private coin in the world. For the fact that it was forked from Dash makes it very synonymous. However, PIVX still has an edge over it.

• One major reason why PIVX is better than its competitors is the fact that it allows for a very short transaction time. It has a block time of less than 60 seconds as compared to other cryptocurrencies with about 2 minutes and above. It makes use of the SwifTX technology to attain instant transaction and of course preventing double spending.
• Another advantage of the PIVX over its competitors is the use of the zero knowledge protocol to provide a zero knowledge on transaction making it impossible to trace the history or addresses involved in the transaction. PIV is said to be the first coin to implement the use of the zerocoin. Using this algorithm with the proof of stake provides the efficient privacy that is not present in other platforms.
• Another good thing about the PIVX is that it does not have a maximum supply of coins as seen in others. This is so because the platforms sees its token more as a currency than an asset. They are of the opinion that currency supply should increase and bound by inflation. This way, it has more possibility to last longer than other cryptocurrencies. The supply of the PIV would be 5% increase yearly making holding the coin a difficult one. this means people would have to transact with it
• The use of the see-saw algorithm is sharing of reward is another benefit the PIVX has over its competitors. The see-saw algorithm is a protocol that maintains the authority level of the masternodes. Masternodes, if not monitored, can monopolize the whole system as the more the powerful. See saw maintains the balance between the number of masternodes and number of staking per wallet. Once there is a huge variation, the algorithm calculates the rewards sent to the master nodes. This means they would earn lesser. This way, masternodes users are encouraged to stake their coins and forgo governance.

HOW CAN PIVX BE CATEGORIZED?

• Digital Currency

Rather than being just a digital asset, the PIVX is more of a digital currency. It can be used as a means of exchange between buyers and sellers. PIV has more similarities with fiat money than other cryptos in the sense that it depends on inflation.

Since PIV does not have a maximum supply of coin, more coins are said to be released into its ecosystem yearly by a 5% increase. This would implore its users to make use of the coin for the transaction rather than holding it as an asset. However, rather than the need for a central authority, newly produced coins goes back to wallet holders and masternodes via the proof of Stake reward system

• Privacy

The major reason for developing the PIVX platform is to enhance privacy. Through the use of the blockchain, privacy is ensured however not totally. The additional usage of the zero knowledge protocol keeps everything a user does secret and untraceable. This keeps the system safe from external peeping, hacking or theft leaving everything on the platform truly private. The public ledger on the blockchain does not display any transaction detail whatsoever as the confirmation is done through the proof of stake protocol

• Anonymity

Everyone on the platform is truly anonymous. Nobody knows anyone as addresses are not visible to anyone. This way, a user cannot be monitored since you cannot identify anyone in the first place.

WHAT IS PIVX’S VISION OF SECURITY?

One notable feature of every cryptocurrency is security. PIVX vision on security is to make everything private and make everyone anonymous.

The platform makes use of the zerocoin to achieve the desired security. With the use of Zerocoin, transaction details are not visible and if they are not visible, there are no addresses to trace or hack from.

Records are completely private. Through coin mixing, the zerocoin does not provide any source of information or record of the transaction between a buyer and seller, leaving it totally anonymous and untraceable.

The Zerocoin protocol is also implemented to prevent spying eyes from viewing user’s balance. This way, there is nothing to view to attract thieves or hackers to your account.

Also, through the proof of stake protocol, every transaction is validated twice by a random user who has staked and also masternodes. The transaction is then confirmed and verified one hundred and one times by contributors picked randomly.

This way, for a double spending to occur, the attacker has to have more than 70% of the coin staked. The proof of stake demands that wallets be online at all times to prevent the possibility of a hack i.e. the more the wallets online, the safer the platform.

With the see-saw algorithm, there is no possibility of total dominance by a selected few- masternodes. The algorithm ensures that the reward system is proportional to the increase or decrease in masternode.

This implies that whenever there is an increase in masternode users, the reward they get becomes smaller.

Using the SwifTX technology to proffer instant transaction eliminated the possibility of double spending. The time taken to confirm a transaction is barely 60 seconds which is too short a time to fool the network. Everyone participates in the confirmation of transaction as long as you have the token in your wallet. To beat this network is to possess most of the token which is not possible.

EXAMPLES OF PIVX USE CASES

The Private Instant Verified Transaction blockchain can be implemented in several other applications today. Its features, when incorporated by other applications, make a sophisticated use case. The following are some of the practical examples of how PIVX platform has been applied:

• A medium of exchange: PIV is a digital currency which means it is spendable. It can be used for transactions just like every other form of money. Since features more as a fiat currency than an asset, there is more possibility that it is going to last longer and be used more in different sectors as a medium of exchange.
• It is a digital asset that can be stored for a particular period of time to yield profit. Just like other cryptocurrencies, PIV can be used as a means of investment, and also for trading. Without the token, one cannot be a partaker of the benefit of the platform. Since its launch, there as been so much positivity attrbuted to it which means that it is more likely to increase in demand.
• The PIVX can be implemented into systems that engage in a lot of transactions. With the protocol, transactions can be completed faster and more efficiently. It performs the function of carrying out transactions swiftly in no time. Instant transactions are guaranteed as the speed of operation is very high, coupled with an improved level of privacy and security. This feature is best suited and applied by financial institutes in the transfer of funds and also in performing trades.
• In voting, the masternodes concept can be employed. Using the see-saw algorithm, there would be no possibility of total dominance by a particular group of persons. It would maintain balance. This can be employed by a board of trustees or executives etc.