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Gnosis

What is Gnosis?

Gnosis is a decentralized prediction market that is created and run on the Ethereum protocol. The platform is open-source and allows users to create markets and interested people to predict the outcomes of various events.

The project was created by Martin Koppelman and Stefan George who had earlier founded another project referred to as Fairlay.com.

Prediction markets allow users to buy or trade positions on outcomes of major events. Speculative markets are like information institutions that induce people to get info, share it through trades, and collect it into consensus prices that persuade larger audiences.

Gnosis, as a prediction market, provides more accurate oracle for future events outcomes. This is inclusive of outcomes reporting from part events.

Now, Gnosis is going further than simply being a platform for prediction markets. It is creating an infrastructure layer that allows users to build their own prediction market.

This implies that you no longer have to look at the prediction markets and wonder how they did it. You have the opportunity to create such markets and reap big from them.

What is the problem that Gnosis solves?

The biggest issue with the prediction markets is that it is highly centralized. Most people joining these markets only participate passively. This means that they can only buy positions after the markets have been created but cannot be part of the designing platforms.

Prediction market centralization further implies that a lot of trust is bestowed on the admin. This leaves the markets at great risk of manipulation. Some of the prediction market platforms are carefully designed to optimize profits for the owners. They are, therefore, open to theft and open corruption with users having no clearly set mechanisms for redress. These are the problems that Gnosis aims to address.

How does Gnosis solve the problem

Gnosis addresses the above issues by adopting a completely decentralized model that allows anybody in its network to create markets and sell positions. To demonstrate this, here is an example;

a) A demonstration of Gnosis Market prediction model

The market starts with the user identifying an event of interest and crafting a question on it. This could be anything from sports, business, or political events. For example; who will win the Russia World Cup 2018; France or Croatia? Another question might be; where will Alibaba base its US head office; New York, California, or New Jersey or other. Note that ‘Other’ is included in most questions to ensure that the answers add up to 100%. The answers are quantified into positions that users buy based on the expected outcome.

When the experts review the final lineup for the World Cup and indicate about the high chances of Croatia clinching the cup, the value of tokens in favor of Croatia will go up. Note that some people still cash their tokens at this point to those who want to reap more when the final event closes.

After the final tournament, and France is announced the winner, the France token holders can claim the full rewards. Those who predicted otherwise will lose the value of the tokens.

b) The Gnosis system

To facilitate the peer2peer market prediction, Gnosis is designed in layers. These are aimed at making it easy new markets creation and flow of information.

  • The Gnosis Core Layer: This is the foundation layer that operates on the basis of smart contracts factoring the market mechanisms, events, outcome tokens, and settlements. The charge levies at this layer is 0.5% to the users who buy the outcome tokens from the market maker. The Gnosis team indicated they will work to clear this fee.
  • The service layer: This is an important layer in the Gnosis ecosystem because it offers important services such as stable coins and chatbots.
  • The application layer: This is a layer that targets to promote the development of third-party applications. It is designed on top of the Service and Core Gnosis layers. Gnosis will also contribute to the apps going into the application layer.

c) The Gnosis tokens

Gnosis is a unique platform that targets not just to facilitate people to effectively use its prediction markets, but to also help with value transfer.

This implies that you can use the platform’s to send funds across the globe the same way Ether or Bitcoin works. The Gnosis platform features two tokens.

The main Gnosis token is referred to as GNO. The tokens were released on April 2017 during the Gnosis ICO and are ERC20 compatible. The total number of GNO tokens is 10 million. People with GNO can trade them in the cryptocurrency exchanges by forming trading pairs in the same way it happens in the forex markets.

The other token on the platform is OWL. The token is used as a stabilizing coin to help Gnosis weather the high volatility of the cryptocurrency market. To achieve this, it is pegged to the US dollar at a ratio of 1:1 (1 OWL=1 USD).

OWL tokens are generated from GNO tokens. This is done through the use of smart contracts where the GNO holder accepts to lock GNO tokens for a period of 30-365 days. A multiplier is added to motivate the users in the Gnosis ecosystem.

What makes Gnosis better than it’s competitors?

  • Unlike the conventional prediction markets that only allow the platform owners or admin to create markets, Gnosis is a decentralized system that makes it possible for users to create the markets. Whether it is in sports, political event or even a major business event, you can easily create binary positions in Gnosis to sell and make profits.
  • Gnosis has a diversity of markets that helps to draw a lot of users. Unlike the centralized platforms where administrations select the markets they believe are popular Gnosis is always overflowing with new event ideas. People will have markets even in areas outside the common sports and political areas. For example, people can target price movement in cryptocurrencies, businesses operations, and even weather.
  • In addition to prediction markets, Gnosis has an app development layer. This layer is expected to help with the progressive development of the Gnosis system to improve the user experience at Gnosis. Because it is open source, the chances are that the development will be rapid making the growth or Gnosis faster and increasing the use cases.
  • Unlike other cryptocurrencies such as Augur, Ethereum or Bitcoin that are highly susceptible to high volatility, Gnosis has two tokens in its system, GNO and OWL. OWL is aimed at helping Gnosis beat cryptocurrency volatility. One OWL is equal to one USD. This means that when you use the token or lock funds, they will be less susceptible to extreme price swings. This has made it a great option for saving funds without worrying about value loss.

How can Gnosis be categorized?

Gnosis is one of the high potential peer2peer and decentralized prediction markets that could help the industry grow to the next level. Its design, tokens, and focus on motivation aims at helping the prediction market diversify while protecting users from extreme price volatility. For most people, Gnosis is helping them get the best of both sides; the cryptocurrency and prediction markets.

The most enthralling component is the stabilizing coin, OWL, that has worked magic to help keep the value of the network stable, grow its value, and attract more users.  Now, it is not just those with interest in prediction markets who are coming to Gnosis. Investors, people interested in savings, and app developers are all interested in the platform.

What’s Gnosis’s vision on Security?

Gnosis vision on security is providing users with the most secure prediction markets and stability. The development team does not stop at anything in ensuring that the platform is secure and users can operate without worrying about attacks. Here are some of the things used to secure the network.

  • Regular updates. The Gnosis development team progressively works on new updates that help to fix gaps and bugs found in the network.
  • Gnosis operates as an open-source platform that allows developers to come up with apps that can help them address issues and security gaps. The apps are also very useful in advancing the Gnosis system to other areas.
  • All details in the Gnosis system including the user details, their keys, and predictions are encrypted so that no one can follow back and unmask you. Even when you send value using GNO, the miners in the Ethereum system can only follow the public address to check the balance of the user.

While the Gnosis system and the development team work tirelessly to hit the security target, those on the platform have to also play their part. As a high potential crypto network, Gnosis coins are of huge interest to attackers. Therefore, here are the recommended tips to stay safe on the network.

  • Make sure to triple check the public address before sending value.
  • Only trade the Gnosis tokens on secure cryptocurrencies.
  • Always store Gnosis in cold storage when not trading them in the exchanges.
  • Ensure to always keep the computer hosting the Gnosis client and the Gnosis client up-to-date all the time.

Examples of Gnosis use cases / applications.

The Gnosis prediction market utilizes the wisdom of the crowd where a group of people pools its knowledge on a subject so that it is considered more accurate compared to an individual’s stand. There is no end to the number of scenarios that people can predict on in markets. From climate change to sports, you only need to have the right questions to establish whether a specific result will be achieved or not achieved. You can even set a market to predict whether an event will occur or not occur.

  • Today, people are opting to use prediction markets to harness the wisdom of the crowd in making business decisions. For example, investors can use market prediction to determine which city is better for a business to grow faster compared to another.
  • The financial sector has found the prediction markets very helpful in determining the shifts in financial assets. Whether you are an investor in the financial sector or want to trade in different currencies, prediction markets will help you to correctly get the price shifts. Many financial markets are also using the markets for policy changes especially with regard to inflation.
  • In property markets, prediction markets have become an important tool especially when the prices are approaching the extremes. For example, traders who want to optimize profits by selling their property when the price hits the peak just before the slowdown and recession commences.
  • In sports, Gnosis can be used to predict the outcome of individual competitions or even a set of tournaments. For example, you can predict the outcome of the English premier league, NFL, or other games at home or internationally. You can even tailor the questions targeting individual players. Note that the options in sports are endless because sports competitions such as skating, skiing, soccer, horse racing, or others are can be selected all year round.
  • Gnosis has also become a great tool for weather prediction. Whether you want to know how the weather will be in the next few months or climate change, the wisdom of the cloud will give near perfect results. Indeed, you can even predict occurrences of various weather phenomenon such as tornadoes.
  • Like other cryptocurrencies, GNO token can also be used for trading in the exchanges, paying trading fees, and even on e-commerce stores that accept it.
  • Because of its stable coin, OWL, Gnosis has become a highly reliable option for people who want to save funds without worrying of price fluctuations. This option is considered better compared to others because it is decentralized and users’ accounts are encrypted. Therefore, your funds will be away from the public eyes and cannot be reached by third parties or frozen even by courts of law.
  • Gnosis tokens, like others such as Ripple and NXT, can also be used for sending value across the globe. GNO, an Ethereum based token can be sent to other people who are in the Gnosis network across the globe. In some decentralized exchanges, it is possible to send value even to those in different networks.

References

https://coincheckup.com/coins/Gnosis

https://gnosis.pm/

https://blog.gnosis.pm/

https://forum.gnosis.pm/t/gnosis-faq/259

https://gnosis.pm/resources/default/pdf/gnosis_whitepaper.pdf

 

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NEO

What is NEO?

Neo is a  blockchain project that is playing a key role in transitioning the world to a smart economy through the use of disruptive technology. Its infrastructure is an open source network that allows for the digitalization of physical assets and the creation and execution of  smart contracts to manage these assets on the blockchain.

It has attracted the name of “China’s Ethereum” due to the striking similarities it has to the number one altcoin. China as a nation has imposed strict regulations surrounding cryptocurrencies, but it appears to have taken a divergent turn to throw its weight behind NEO. Up until June 2017, NEO was referred to as Antshares.

The switch to the name NEO was a milestone event that served as a tool to give NEO a global look, NEO means novelle or new. As of July 2018, the total market cap of NEO was at $ 2.537B, placing it at position 12. The current price of the coin is at $39.02, a significant drop from $160 at the peak of the bull market in January of 2018.

NEO uses blockchain technology to identify, digitize and self-manage digital assets within a distributed network with the aim of achieving a smart economy. Using the multifunctional NEO blockchain, users can register, identify and trade digital assets.

When it comes to governance, NEO utilizes both on chain and off chain methods. In the former, token holders manage the network while in the later the NEO council consisting of the founders of NEO control the system.

What’s striking about NEO is that it has two native tokens, NEO and NeoGas both of which have a total of 100 million tokens each. While NEO tokens represent ownership of shares in the blockchain, Gas is the currency used to power the NEO blockchain. When users hold NEO in their wallets they are able to passively earn Gas as a reward.  NEO units are indivisible, the smallest unit being 1, Gas, on the other hand, can be split up to fractions.

NEO represents two types of digital assets: global and contract assets. Global assets are publicly visible to all users while contract assets are private and only accessible to compatible clients.

Another key component of NEO is digital identity based on the public key infrastructure (X509) which is an international agreed upon standard for digital identification.

The digital identification is secured on the blockchain and will be instrumental in ensuring regulatory compliance- KYC/AML. This will also make it possible to transact high value tangible assets such as real estate on the NEO blockchain when digital identities are created and executed.

NEO also features smart contract functionality through the NEOVM. This is similar to smart contract functionality on the ethereum network. NEO is however able to accomodate more developers because it allows for the use of many programming languages such as Java and C++ in the familiar IDE environments. The NEO virtual machine allows for scalability on the blockchain. This will allow developers to create and run many applications on the network in an efficient manner.

The ecosystem comprises of three major components: smart contracts, digital identification and decentralized applications.

Unlike ethereum and bitcoin blockchains, NEO uses a unique and superior verification system- the delegated Byzantine Fault Tolerant (dBFT) algorithm which builds consensus through proxy voting.

You can envision this as many nodes selecting representative nodes (bookkeepers) through a voting process, the selected nodes are then responsible for validating transactions. With fewer nodes taking part in the validation, the process becomes very efficient and hence the network works at an amzing fast speed, theoretically at least. The dBFT also creates security in the system, once transactions are validated they cannot be revoked. More of this is discussed later.

NEO is a project set to make the dream of a smart economy a possibility. Other than creating a platform for smart contracts and decentralised applications, it is also a platform for the implementation of ICOs.

What is the problem that NEO Solves?

  • Scalability issues

Massive scalability on the blockchain is still an elusive goal. This is because most blockchains are not able to practically operate at their theoretical capacities and fall way below.

With slow transaction speeds come high processing fees for users. For example, the Bitcoin blockchain should be able to handle 7 transactions per second, however, it only manages half this figure. Compounded to an hour the difference is massive. The same applies to ethereum which is supposed to be able to handle 30 transactions per second but only manages to handle 15.

The problem arises due to decentralization where all nodes in the system are required to validate transactions before they are confirmed.

  • Limited programming languages

Developers have to work very hard to adapt to the new technology and be able to write codes on it. The challenge in this space has been a limit in the variety of programming languages on the ethereum blockchain- being restricted to Solidity which is relatively new to most programmers. This makes the learning curve very steep and discouraging.

As a result, project development is slowed down and ends up becoming very costly. This beats the whole sense of establishing efficiency and cost management using blockchain technology. A tenable solution to make the process simpler for developers would reduce costs significantly.

  • Issues with anonymity

Blockchain technology is synonymous with anonymity, but anonymity is not good all the time. As more and more mainstream institutions and “sensitive” industries adopt blockchain technology, there will be an increasing need for the creation of verifiable digital identities.

In order to have widespread adoption, blockchain technology will have to create systems for digital identification to allow for regulatory compliance and also allow for judicial intervention in processes when the need arises. All dealings with governments will require some form of digital identification of persons or assets involved.

  • Poor security and finality issues

The blockchain space has not been short of security issues which have led to major failures in the networks and spam attacks. This is very unfortunate considering that security is one of the selling points of the technology. In a proof of work model, availability is prioritized above and beyond the finality of transactions. This is what has led to the forking seen in bitcoin and ethereum when developers have a disagreement over a certain standard the result is a split.  This means that once a transaction is completed users cannot rest on their laurels as the decision is not 100%final. This poses a serious threat for transactions such as in the stock exchange.

  • Limited cross chain interoperability

As more and more industries adopt blockchain technology, the question of vertical integration sticks out as a sore thumb. There is an ever increasing need for connectivity between different blockchains especially as more industries such as real estate, health and financial institutions come on board. Cross chain interoperability will allow public and private blockchains to interact and share vital information that will facilitate transactions across both networks.

 

How does NEO Solve these problems?

Increased scalability

NEO uses the Delegated Byzantine Fault Tolerant system to validate transactions. This means that participating nodes in the system vote for bookkeepers who participate in the validation process.

Theoretically speaking, this allows the NEO blockchain to be able to operate at a speed of 10,000 tps or 1,000 tps practically. This is still significantly higher than what bitcoin and ethereum blockchains manage. Following the NEO DevCon that took place in San Francisco, NEO will soon roll out a state channel that will allow for off chain transaction processing using smart contracts.

The off chain channels will only need to upload the end result of the transactions to the block, making the process of validation much faster.If the plan materializes, NEO will be able to process 100,000 transactions per second and this will have solved the blockchain speed limitation with finality and allow for large-scale commercial applications.

Multi language programming

Ethereum and NEO are both platforms that allow developers to create decentralised applications and smart contracts. Ethereum is the most known of in the space with numerous Dapps developed on it, however, it uses a relatively unfamiliar coding language that is not popular with many developers – Solidity.

NEO has simplified this process for developers by allowing them to code in the most basic of languages such as Java and C++.

Creation of digital identities

In order to create a fully compliant smart economy, regulatory compliance is a necessary evil. Bookkeepers in the NEO network will be required to have verifiable digital identities.

As much as other blockchains have digital identity as an option, NEO has made this a priority and a key component of their blockchain model. This should give government agencies and large institutions the confidence to use the NEO blockchain or interact with entities that are using it.

“Digital Assets + Digital Identity+ Smart Contracts = Smart Economy”

NEO complies with X509 which is an internationally agreed upon standard for creating digital identities. Digital identity makes it possible to link physical assets to digital assets in an agreement that is protected by law. In case of violation, judicial action can be taken.

Digital identities have become increasingly important in providing proof of ownership for trading tangible assets on the blockchain. They are also vital in instituting regulatory compliance and registering financial assets. NEO opens the door for governments and other mainstream institutions to rethink large scale blockchain adoption.

Optimized security and finality of transactions

The dBFT is a fault tolerant system which ensures security and finality of transactions. The fault tolerance makes it immune to general or byzantine failures. Security is paramount if blockchain technology is to experience mainstream adoption.

You want to be sure that transactions once made are final and irrevocable. NEO blockchain cannot fork because of the finality of transactions. Each transaction before being added a block has to be validated as authentic by two thirds of the bookkeeper nodes. Once this is done, the transactions become irrevocable and the block cannot be bifurcated.

NEO also has Anti-quantum cryptography mechanism (NeoQS) which theoretically makes it quantum computer resistant. In the future should quantum computer be an issue, NEO will be equipped to handle this risk.

Cross chain interoperability

Interactions across blockchains without having to exchange coins or tokens on an exchange is a vital necessity if the technology is to realize its full impact. Neo X is a protocol that executes cross chain interoperability on the NEO platform. Interoperability will tackle scalability issues and congestion which results in reduced efficiencies. It will also provide a bridge between public and private blockchains.

Neo X is divided into cross-chain assets exchange protocol and cross-chain distributed transaction protocol. Essentially, NeoX allows for the merging of atomic swaps and smart contracts. This means that users on two different blockchains can trade instantly and securely on this platform.

What makes NEO better than its competitors?

NEO’s main competitor in the blockchain space is ethereum, hence the coined name “the ethereum of China.”

Having been developed later, NEO has some superior features to ethereum. This is a summary:

  1. While ethereum uses primarily one programming language- Solidity, NEO uses quite a number including simple languages such as Java and C++. this makes it very easy for developers to work on the NEO platform as compared to the ethereum platform.
  2. Ethereum has one native token that fuels its platform- ether, while NEO has two native tokes; NEO and Gas. Users on the platform are rewarded with Gas when they hold NEO which represents shares in the blockchain. This allows NEO users to earn passively just by holding NEO.
  3. Through Neo X, the NEO blockchain has interoperability functions which means it can allow for transactions across different blockchains. Ethereum does not have this capability.
  4. While ethereum uses the proof of stake algorithm for validating transactions, NEO uses the delegate byzantine fault tolerant system (dBFT). This allows NEO to be able to process transactions much faster than ethereum giving NEO scalability options and finality of transactions. The dBFT offers security to the NEO blockchain as explained above.
  5. The ethereum blockchain has no finality of transactions hence it can fork out. The NEO blockchain can never fork out because transactions must be validated by 66% of nodes and once added to the block they cannot be revoked. In ethereum when there are divergent opinions the chain will split/ fork out.

 

How can NEO be categorized?

Neo is a blockchain platform for the development and execution of decentralised applications, smart contracts and is also a platform for token issuance (ICOs).  

It is a second generation blockchain platform that may soon evolve to third generation if it can tackle the issue of scalability successfully. It is also a promising cryptocurrency.

NEO and Security?

The delegated Byzantine Fault Tolerant (dBFT) is instrumental in boosting the security of the NEO blockchain. The algorithm prevents forking out of the blockchain and ensures finality of every transaction.

As mentioned above, the anti-quantum mechanics (NeoQS) makes the network quantum computer resistant.

 

Examples of NEO’s use cases / applications.

We can break this down into four:

  • Creation of digital assets

Given the security features on the NEO blockchain, it is a suitable platform for creating digital assets that can be stored or traded on the blockchain. Physical assets such as land can be converted to digital assets for easy tracking of ownership and making transfers with maximum efficiency.

  • Creation of digital identities

For high-value assets to be traded on the NEO blockchain, digital identification will be a necessary step that will allow for regulatory compliance. NEO will use facial features, voice, SMS, fingerprints and other multi factor methods for digital identification records. Once this is securely established, NEO blockchain will be used in the registration of compliant financial assets, transfer of ownership and generally transition to a smart economy.

  • Creation of smart contracts

NEO allows developers to create smart contracts on its platform using basic programming languages. It uses a universal lightweight virtual machine (NeoVM) which offers advantages such as high scalability, high concurrency, and ease of use.

  • DApps

NEO offers unique opportunities for the development of decentralized applications on its platform. The city of Zion is an independent group of open source developers and designers that support the Neo blockchain ecosystem. The team is focused on creating highly optimized Dapps such as artificial intelligence, legal smart contracts, decentralized exchanges and much more.

 

NEO has managed to form strategic partnerships (through Onchain) with Microsoft China, Alibaba group, Hyperledger and the Chinese regional government among others. However, looking at the current bearish market, NEO’s value has definitely plummeted with the rest. But given the unique solutions it presents to the space, the adaptability of their technology and the dedicated team behind it , it okay for NEO enthusiasts to remain hopeful amidst the tough times.