In the previous blog we went through all the markers that you need to remember while you are technically analysing the market. In this blog we will be going look at two types of Technical Analysis. Read on to find out more.
Elliott Wave Analysis
The Elliott Wave
principle is a form of technical analysis that cryptocurrency
traders use to analyse market cycles and forecast market trends by identifying
extremes in investor psychology, highs and low in prices and other collective
factors.
Elliott Wave traders believe that markets are
affected by collective investor psychology, or crowd psychology, and that it
moves between optimism and pessimism in natural sequences.
It seems to be a discipline suited for
cryptocurrency traders because, at this time, they are being solely driven by
investor psychology since there are no true underlying fundamentals backing its
price rise other than aggressive buying due to limited supply.
The key to success when using Elliott Wave analysis
is to get the wave count right. Traders who use this technique believe the
market moves in waves and that price action is primarily driven by groups of
five waves. It takes years to master Elliott
Wave analysis, but some cryptocurrency traders feel they have a good enough
grasp of the basics to apply it to markets such as Bitcoin.
Stochastics
and Relative Strength Index (RSI)
Stochastics
and the Relative Strength Index (RSI) are known in the technical analysis field
as oscillators because they move between a low of 0 and a high of 100. Some
cryptocurrency traders use them to determine the strength of a trend or to
predict tops and bottoms because of overbought and oversold conditions.
As Bitcoin prices often
trade in an overbought or oversold condition due to its high volatility, RSI
indicator signals traders to enter or exit a certain position.
They
both work under the premise that prices should be closing near the highs of
trading range during upswings and toward the lower end of a trading range
during downswings.
During a prolonged move down, the oscillators will near 0,
indicating that a bottom may be near. During a prolonged move up, the
oscillators will near 100, indicating that a top may be near. In the attached
graph, Bitcoin
is currently at 81.92 (RSI), meaning that Bitcoin is overbought and a
correction is expected.
Trend
lines, or the typical direction that a coin is moving towards, can be most
beneficial for traders of crypto. That said, isolating these
trends can be easier said than done. Crypto assets might be substantially
volatile, and watching a Bitcoin or crypto price movement chart will
probably reveal a selection of highs and lows that form a linear pattern. With
that in mind, Technicians understand that they can overlook the volatility and
find an upward trend upon seeing a series of higher highs, and vice versa –
they can identify a downtrend when they see a series of lower lows.
Additionally,
there are trends that move sideways, and in these cases, a coin doesn’t move
significantly in either direction. Traders should be mindful that trends come
in many forms, including intermediate, long and short term trend lines.
Resistance
and support levels
As
there are trend lines, there are also horizontal lines that express levels of
support and resistance. By identifying the values of these levels, we can draw
conclusions about the current supply and demand of the coin. At a support
level, there seems to be a considerable amount of traders who are willing to
buy the coin (a large demand), i.e., those traders believe that the currency is
priced low at this level and therefore will seek to buy it at that price. Once
the coin reaches close to that level, a “floor” of buyers is created. The large
demand usually stops the decline and sometimes even changes the momentum to an
upward trend. A level of resistance is exactly the opposite – an area where
many sellers wait patiently with their orders, forming a large supply zone.
Every time the coin approaches that “ceiling”, it encounters the supply stacks
and goes back.
There
is often a situation in which trade-offs can be between support and resistance
levels: gathering close to support lines and selling around the resistance
level. This opportunity usually takes place when lateral movement is
identified.
So
what happens during breakout of resistance or support level? There is high
probability that this is an indicator which is strengthening the existing
trend. Further reinforcement of the trend is obtained when the resistance level
becomes support level, and being tested from above shortly after the breakout.
Note:
False breakouts occur when a breakout happens, but the trend doesn’t change.
Hence, we must use some more indicators, such as trading volume, to identify
the trend.
Moving
averages
Another
technical analysis tool for crypto currencies and technical
analysis in general, in order to simplify trend recognition, is called moving
averages. A moving average is based on the average price of the coin over a
certain period of time. For example, a moving average of a given day will be
calculated according to the price of the coin for each of the 20 trading days
prior to that day. Connecting all moving averages forms a line.
It
is also important to recognize the exponential moving average (EMA), a moving
average that gives more weight in its calculation to the price values of the
last few days than the previous days. An example is the calculation coefficient
of the last five trading days of EMA 15 days will be twice that of the previous
ten days. In the following graph we can see a practical example: If a 10-day
moving average crosses above a 30-day moving average it might tell us a
positive trend is coming.
Trading
Volume
Trading
volume plays an important role in identifying trends. Significant trends are
accompanied by a high trading volume, while weak trends are accompanied by a
low trading volume. When a coin goes down it is advisable to check the volume
which accompanied the decline. A long-term trend of healthy growth is
accompanied by a high volume of increases and a low volume of declines. It is also
important to see that volume is rising over time. If the volume is decreasing
during increases, the upward trend is likely to come to an end, and vice versa
during a down trend.
Crypto traders have several tools to evaluate the cryptocurrency market. One of them is a method known as Technical Analysis. Using this process, traders can get a improved understanding of the market sentiment and isolate significant trends in the market. This data can be used to make more educated predictions and wiser trades.
Tech Analysis considers the history of a coin with price charts
and trading volumes, no matter what the coin or project does. As opposed to
technical analysis, fundamental analysis is more focused on establishing if a
coin is over or under valued.
To get a better idea of technical analysis, it is
crucial to understand the fundamental ideas of Dow Theory that tech analysis is
based on:
The market
considers everything in its pricing. All existing, prior, and upcoming details
have already been integrated into current asset prices. With regards to Bitcoin
and crypto, this would be comprised of multiple variables like current, past,
and future demand, and any regulations that impact the crypto market. The
existing price is a response to all the current details, which includes the
expectations and knowledge of each coin traded in the market. Technicians interpret
what the price is suggesting about market sentiment to make calculated wise
predictions about future pricing.
Prices
movement aren’t random. Rather, they often follow trends, which may either be
long or short-term. After a trend is formed by a coin, it’s probably going to
follow that trend to oppose it. Technicians try to isolate and profit from
trends using technical analysis.
‘What’ is
more important than ‘Why’. Technicians are more focused on the price of a coin
than each variable that produces a movement in its price. Although multiple
aspects could have influenced the price of a coin to move in a specific
direction, Technicians assertively review supply and demand.
History tends
to get repeated. It is possible to predict market psychology. Traders sometimes
react the same way when presented with similar stimuli.
Stay tuned for an in-depth explanation of the
various nitty-gritties of this type of analysis.
Margin trading with cryptocurrency allows users to borrow money against their current funds to trade cryptocurrency “on margin” on an exchange. In other words, users can leverage their existing cryptocurrency or dollars by borrowing funds to increase their buying power (generally paying interest on the amount borrowed, but not always).
For
example, you put down $25 and leverage 4:1 to borrow $75 to buy $100 worth
of Bitcoin. The only stipulation is
that no matter what happens, you’ll have to pay back to $75 plus fees. In order
to ensure they get the loaned amount back, an exchange will generally “call in”
your margin trade once you hit a price where you would start losing the
borrowed money (as they will let you borrow money to trade, but they don’t want
you losing that money). A margin call can be avoided by putting more money into
the position.
A
given exchange will have a range of different leveraging options (2:1, 3.33:1,
4:1, 100:1, etc.). Margin trading can be done short (where you bet on the price
going down) or long (where you bet on the price going up). Further, it can be
used to speculate, to hedge, or to avoid having to keep your full balance on an
exchange.
How
Margin Trading Cryptocurrency Works – Call Prices and Liquidation
This
brings us to the next point. As noted above, you have to have enough funds to
cover the bet you are taking. If you don’t have the funds, your position will
automatically be closed, “liquidated” or “called in.” As, although the lender
will let you use their money for a fee to margin trade, any money lost and any
fees paid will come out of your funds. This is like the friend who let you
borrow $50 in the Investopedia quote above; the lender is letting you borrow
money, not have it to lose.
Specifically,
if your balance falls below the “Maintenance Margin Requirement (MMR)” due to
the price going the opposite way that you bet on, the exchange will either
start liquidating your assets to get its money back or will simply request the
funds from you. This is called a “margin call.” TIP: A margin call
can be offset by contributing more funds to the order book you have the margin
in (ex. BTC/USD). When you deposit more funds, you increase your margin ratio
and improve your call price.
In other
words, technical jargon aside, the concept here is: margin trading allows you
to make bigger bets than you otherwise would at the cost of extra fees and
extra risks. When you take a bet, you can use the lender’s money, but if the
bet goes the wrong way, the funds come out of your pocket. You take all the
risk.
That is
the gist of margin trading; with that information, you know just enough to be
dangerous.
Should
You Use This Strategy?
We
strongly suggest staying away from margin trading unless you have done
research, are experienced, and are margin trading with a very specific purpose
such as hedging. Losing money trading cryptocurrency
is stressful enough without borrowing funds plus interest to create leveraged
positions. That magnifies your stress level.
Of
course, if you are less conservative than we are and want to trade on margin
anyway, your next step should be reading all the documentation on margin
trading for a given exchange before getting started. Understanding how to open
and close margin positions, and making sure you understand margin ratios and
calls, as well as brushing up on some margin trading strategy, is part of the
next step. We’ll assume you are already well versed in technical
indicators.
WARNING
ON RISKS, RATIOS, AND BET SIZE: Margin trading cryptocurrency is one of the riskiest
bets you can take. Cryptocurrency
is risky, and margin trading is risky. Put them together on a highly leveraged
moonshot, and you could find yourself owing a great deal of money rather
quickly (especially with low volume high volatility altcoins). Unlike with
regular trading, you can lose your entire initial investment margin trading.
Further, the more you leverage, the quicker you can lose it.
For
example, if you go long on a 4:1 margin and the position goes down about 25%
from where you opened the position (or a little less since you’ll likely owe
fees), the margin will be called in, and you’ll be left with nothing. Think of
it this way; you put down $25, you borrowed $75, and thus with fees you only
have a little under $25 to lose of the total $100 you are betting. If it goes
up, then you can keep the position open as long as you like (as you aren’t
risking the lender’s $75), but if it goes down your position will be liquidated
based on the rate at which you are leveraged unless you put more funds in. Do
an 8:1 leveraged position and it will be called in twice as fast at around
12.5%, do a 2:1 position and it will be called in at around 50%. Yes, you can
always add to your position to prevent it from closing, but this is the exact
sort of rabbit hole that loses people money. For an obligatory horror story and
fair warning of the perks and perils of margin trading, see the Reddit post “How
I Lost Nearly 200 BTC trading this past month.”
It is important to understand what a blockchain system is: a blockchain is a growing list of records, called blocks, which are linked using cryptography. Each block contains a cryptographic hash of the previous block a timestamp, and transaction data (generally represented as a Merkle tree). By design, a blockchain is resistant to modification of the data. It is “an open, distributed ledger that can record transactions between two parties efficiently and in a verifiable and permanent way.
A
blockchain is, in the simplest of terms, a time-stamped series of immutable
record of data that is managed by cluster of computers not owned by any single
entity. Each of these blocks of data (i.e. block) are secured and bound to each
other using cryptographic principles (i.e. chain). Now that we’ve got a basic
understanding of what a Blockchain System is we can dive right into
understanding hybrid blockchains.
Hybrid Blockchain
Hybrid
Blockchains could lie
somewhere in-between private and public blockchains, depending on their
architecture. Hence, to get a good understanding of hybrid blockchains, one
must first understand the differences between private and public blockchains.
As the name suggests, public blockchains are accessible to and managed by the
public. Anyone can participate in the upkeep and governance of the blockchain.
The most popular blockchain in the world, Bitcoin, is a public blockchain.
Participators are typically rewarded in the form of block rewards for their
contributions to the network to incentivise good behaviour on the part of
network peers. Since millions of users manage a public blockchain across the
world in real time, attaining consensus for a public blockchain is
time-consuming and expensive.
For example, the consensus
mechanism that Bitcoin uses, Proof of Work, relies profoundly on wasteful
computations for millions of devices to ensure security. By comparison, a
private blockchain allows limited access to entities outside a trusted few who
were involved in the creation of the private blockchain. Typically, private
blockchains have administrators who can control permissions of adding or
modifying data on a private blockchain. The most popular private blockchains
include the Hyperledger
fabric which is being developed as a competitor to Ethereum by IBM and
quorum, which is being developed by J.P. Morgan. Private blockchains are much
faster than public blockchains because the network is managed by a handful for
trusted nodes whose motives are clearly for the benefit of the network. Such
trusted nodes typically belong to financial institutions or universities to
maintain fairness and remain unbiased.
Now, it is clear that each type of blockchain has its strengths and
weaknesses. Public blockchains while being transparent and resistant to
tampering are slow and expensive whereas, private blockchains are somewhat
centralised but can deliver much higher throughput and speeds. As a logical
step, hybrid blockchains combine the benefits of both of the blockchains while
trying to limit the disadvantages. Therefore, with hybrid blockchains, we can
employ a public blockchain to make the ledger accessible to every single person
in the world, with a private blockchain running in the background that can
control access to the modifications in the ledger.
Hybrid Blockchains in the Real World
One of the leading hybrid
blockchain platforms, XinFin,
has developed a unique network for Ramco Systems for the management of supply
chain logistics. XinFin completed its ICO earlier this year and had since
developed its public-private blockchain on Ethereum (public blockchain) and
Quorum (private blockchain). There are numerous benefits to using a hybrid
blockchain like the speed of private blockchains combined with the security of
public blockchains. The private blockchain is used to generate a hash of
transactions which is later verified using the public blockchain.
Another real-world application of hybrid blockchains includes Ripple network and the XRP token. Ripple has
regularly been criticised for its centralised nodes which can arbitrate
transactions in the case of a dispute. But by adding a public blockchain to
verify the operations of its private blockchain can make the network much more
secure for its users.
The
main aim of Blockchain
is to create an immutable public ledger to ensure integrity of transactions. In
the past few years of its existence multiple different types of blockchain have
evolved from the original blockchain. The concepts of public and private
blockchains have come into being, these two are often confused together as they
both have very similar features. This article ensures to bring out the
difference between the two.
Public vs. Private blockchain
Public and private
blockchains are equally decentralized, peer-to-peer
networks where each member maintains a copy of a shared ledger that
stores digitally signed transactions. This ledger can only be affixed to,
but not edited. Participants in a blockchain
retain this ledger in sync through a consensus protocol. This produces a
assurance on the immutability of the ledger which cannot be tainted
even if there are some malicious members on the blockchain.
The difference between public
and private blockchain is related to the type of members allowed within the
network that preserve the ledger and execute the consensus protocol.
Public
blockchains
Public blockchains are open networks that allow anyone
to participate in the network, hence the name ‘public’. Such a network depends
upon the number of participants for its success, and hence encourages more and
more public participation through an incentivization mechanism. The best
example of a public blockchain is Bitcoin
where participants in the network (miners) are rewarded with BTC tokens.
In a blockchain, each block contains a record of
numerous transactions on the network. Creating new blocks gives out a reward,
also known as the “miner’s fee”. In a public blockchain, where there can be a
lot of participants on the network, it becomes necessary to maintain scarcity
of the reward tokens, and regulate who gets the right to create the next block.
To achieve this, each participant in the network must solve a complex
cryptographic problem (also known as “proof of work”). Whoever solves the
problem earn the right to create the next block (and gets the reward). The
disadvantage to this is, these problems are very resource intensive and take a
substantial amount of computational power to solve.
Another disadvantage is the public nature of the
blockchain itself. There is little to no privacy for transactions, nor any
regulation or criteria for participants to join. Public blockchains might be
suitable for projects in the public domain (such as Blockchain), but not ideal
for enterprise-level use cases.
Private
blockchains
Enterprises can set up private blockchains to protect
the privacy and security of their data. Participation in a private blockchain
requires an invitation, which itself is also validated by the network starter
or a set of rules that can put into place. Such a network is known as a permissioned
network, and puts a restriction on who is allowed to join. Private
blockchains can also restrict participant activity such that certain
transactions can only be carried out by certain participants and not others,
despite the fact that they’re on the network. This creates an added layer of
privacy.
Participation rules can either be set up by existing
participants, a regulatory authority or a consortium. All participants in a
network play a role in maintaining the blockchain in a decentralized manner.
An example of a private blockchain is Linux Foundation’s
Hyperledger Fabric,
designed to cater to enterprise requirements. Only entities participating in a
particular transaction have knowledge about it — other entities will have no
access to it. Because such a blockchain is lighter, it provides transactional
throughput that is orders of magnitude higher than in public blockchains.
The blockchain era has already begun. Taking into account the fast progress in the development of new and more efficient healthcare record systems, wearable devices, and medical examination systems implementing artificial intelligence, cryptography will become an important part of the way hospitals work. There are, however, a few improvements still needed in order for seamless blockchain adoption across the entire medical industry. According to Hyperledger’s survey, 42.9% of healthcare organizations suppose that the interoperability of electronic health records will help for faster blockchain implementation; with 28.6% of respondents ready to use this technology in care settings today. So, what are the benefits of blockchain technology in healthcare?
Data
Provenance and Integrity
With
an ongoing increase in patient numbers, healthcare providers have to manage
more and more health data on a regular basis. As the data volume increases each
year, it becomes harder for hospitals and clinics to process and store
information.
Data
managed by medical organizations includes:
·
Patient health information (PHI);
·
Electronic health records;
·
Data collected from IoT devices (Internet of Things) or monitoring systems;
and,
·
Medical insurance claims.
Secure
information sharing methods, which allow both healthcare providers and their
covered entities to verify the correctness of data, are crucial for ensuring
proper medical services. This is where blockchain comes in useful, as one of
its main advantages is data integrity. When information is recorded and
encrypted, it becomes impossible to change or remove.
One
of the blockchain approaches that allows for the secure recording and sharing
of information is anchoring data to the public blockchain. This method involves
generating a proof of data integrity. Using this proof, any user can verify the
data timestamp without the need to rely on third-parties. This method allows
users to:
·
Verify PHI integrity;
·
Perform unchangeable medical audits;
·
Prove the integrity of clinical research results;
·
Reduce audit expenses and ensure regulatory compliance; and,
·
Ensure data safety.
HIPAA
requires the usage of safe methods of communication between those who deal with
PHI stored in electronic form. That is why data encryption plays a crucial role
in ensuring data privacy and safety. Our team has a deep expertise in
developing digital solutions for the healthcare industry. One of our projects
is a HIPAA compliant online communication platform called MDChat that allows
patients to securely communicate with medical employees and be sure they are
protected from any hacker attacks.
More
Secure Standards
Blockchain
provides a more secure way to protect data than ordinary encryption. The new
technology allows for the implementation of new standards in managing insurance
claims, PHI, and medical records. It excludes intermediation in data sharing,
when using blockchain. Such consortiums as Hyperledger help
increase awareness of the advantages of cryptography and further explain how to
use blockchain in healthcare.
According
to the survey mentioned above, the main reason why medical organizations
hesitate to use blockchain is the lack of knowledge around this technology. A
quarter of respondents are still at the stage of education and exploration,
which is why responsible state organizations should make the corresponding
information more widespread among caregivers. Healthcare providers suppose that
this technology must pass several milestones before any adoption is possible,
including:
·
Technical proof of concept (PoC) (65.4%);
·
Security proof (38.5%);
·
Privacy proof (34.6%); and,
·
Regulatory approval (23.1%).
We
can spend a lot of time wondering why caregivers hesitate to implement blockchain
in their organization, though the answer is far simpler than it may seem: they
simply do not know enough about this technology and its advantages.
Data
Transparency
Besides
disintermediation, data integrity and provenance, healthcare providers see
transparency (55.2%) as one of the top advantages of using blockchain in their
industry. To better understand this aspect, let’s consider how it works in the
financial sector.
This
technology provides a decentralized register of ownership by recording every
transaction made through the system. It stores all details starting from the
formation of a data block, and ending with any digits related to a specific
transaction. Every device that is a part of the system stores a copy of this
block. Before making a transaction, the system confirms whether a blockchain
version coincides with another in the network. Therefore, each blockchain user
can identify the owner of a particular data block at any time. Furthermore, the
blockchain is not only a secure way to send money, but a fully protected data
sharing method that widens its potential use in healthcare.
Blockchain
in Healthcare: Usage
Caregivers
feel quite optimistic about fast blockchain implementation, with 37.9%
predicting that it will take only five years to adopt it across medical
organizations. For now, these organizations and professionals need examples of
blockchain, and how it can be helpful in their field. Here, we will cover
examples of blockchain use in the healthcare industry, describing existing
issues in the sector and considering possible solutions through the use of this
technology.
Blockchain
in healthcare examples include the following usage issues:
Problem:
Drug Traceability
One
of the most serious problems in pharmacology is drug counterfeit. According to
the Health Research Funding Organization (HRFO), approximately 10%-30% of drugs
in developing countries are fake. US businesses lose up to $200 billion
annually because of drug counterfeiting; however, the main reason is not in
counterfeiting itself, but, rather, that these drugs provide different effects
than their traditional medicinal counterparts. They may not help patients at
all, or may even be harmful and dangerous to a person’s health.
Blockchain-Based
Solution
As
all transactions in blockchain are times tamped and immutable, it is easy to
detect fraudulent drug dealers. There are two blockchain types: private and
public. Trustworthy healthcare blockchain companies have to register their
products in the private system to ensure authenticity and the high quality of
their medicines. Private blockchains are moderated by central entities, and the
fact that a specific producer or distributor has access to the so-called drug
blockchain is proof of drug authenticity. This is where blockchain transparency
comes in useful. Once a drug is produced and moves from the manufacturer to
retailer, the operational data is recorded on the blockchain. It makes it
extremely easy to verify the whole path of the drug, and determine all chain
links at any time.
Problem:
Data Security in Clinical Trials
Clinical
trials are used to determine the effectiveness of particular medicines which
cure specific diseases. These tests can either prove or disprove an offered
hypothesis. During clinical trials, researchers obtain and record a great deal
of information concerning statistics, test results, quality reports, etc. Each
scientist is responsible for specific research, making it difficult to control
everyone. Those data can then be easily modified or hidden in order to change
the whole outcome of the research performed. Criminals are interested in
recording the results that are beneficial for them, even if the data does not
coincide with the reality.
Blockchain-Based
Solution
This
technology allows users to prove the authenticity of any document registered in
the system. It provides proof-of-existence by adding data in the form of the
transaction and validating the information by all system nodes. As mentioned
above, blockchain records immutable data. This characteristic will allow for
the storage of results from clinical trials in a secure way, making it
impossible to modify data. Two doctors from Cambridge University conducted a
2016 study to see how blockchain can provide proof-of existence for clinical
trials. They found that comparing a unique data code, which is set by the
system, with the original makes it possible to verify whether the data of
clinical trials has been modified, thanks to the inner SHA256 calculator which
generates a unique hash every time a modification is made to the data.
Problem:
Patient Data Management
Patient
data privacy is strictly regulated by the Health
Insurance Portability and Accountability Act (HIPAA), and requires PHI
to be totally secure. There is, however, another problem related to PHI:
sometimes, patients need to share their medical records with third parties
(e.g. with pharmacies when they need to buy specific medicines). So, how can
blockchain help protect data while providing partial access at the same time?
Blockchain-Based
Solution
The
Blockchain
creates a hash for each PHI block, together with a patient ID. Using an API,
covered entities can receive the necessary information without revealing a
patient’s identity. In the same way, a patient can decide whom to provide with
access and whether this access will be either full or partial. Furthermore, a
patient can set specific third parties that would have to give their permission
for sharing the PHI, if the patient is not sure in what he or she is doing.
Blockchain
has a tremendous potential of use in different industries, including
healthcare. This technology has already become widespread in the financial
sector, but medical organizations still hesitate to implement it into their IT
systems. This does not mean, however, that there are no healthcare companies
currently using blockchain. Below, you will find a short list of startups that
have made this technology the base of their operational structure.
Blockchain
healthcare startups:
·
Guardtime (a blockchain-based
system for securing patient healthcare records);
·
Gem Health (an
initiative that promotes blockchain-based collaboration in healthcare);
·
Cyph (a platform for building secure
digital identities and ensuring protected communication between healthcare
providers);
·
MedRec (a blockchain-based
system for securing medical records management); and,
·
Blockchain Health (a
blockchain-based system for medical research management).
Blockchain
is an effective technology that can help prevent data breaches in the
healthcare industry. It is a secure and reliable method of recording, storing,
and sharing sensitive data. Caregivers will definitely benefit from
implementing this technology, while remaining HIPAA compliant with this method
of trustworthy digital protection.
Charitable giving is on the rise, mostly due to resilient economic conditions in North America and Europe over current years. According to Giving USA, 2017 was the first year that contributions from the US crossed the $400 billion mark, a rise of five percent over the preceding year.
While
contributing to charity may deliver us with a warm glow, few people stop to
consider exactly where their donations end up. Charity fraud is a global issue,
creating a risk that donated funds end up being siphoned off through scams or
corruption.
What can Blockchain do for Charity?
Blockchain technology is creating waves in many sectors such
as supply chain due to its functionality in providing a secure, unalterable
record of value transfers. This makes blockchain the ideal technology to bring
transparency to the distribution of charitable donations.
Using an open public ledger, a charity or NGO could
collect donations in a digital currency. Each unit collected is traceable from
the moment it’s contributed to the point that it’s spent on goods or services. Cryptocurrency
transfers are peer-to-peer, meaning that charities could also decrease fees
incurred by intermediaries like banks or foreign currency exchange services. 2017
and 2018 saw a proliferation of tech start-ups generating blockchain-based
digital tokens to crowdfund their new business venture. While the regulators
have now started to clamp down, in 2019 blockchain innovators are now turning
to regulated token generation events, known as security token offerings (STO.)
Charities and NGOs could similarly use such a mechanism to crowdsource
donations for their endeavours.
Furthermore, blockchain-based smart contracts
could even automate the distribution of funds for particular projects. For
example, if a charity collects funds to build a school, the funding could be
released by smart contracts in stages once specific milestones of the
construction project are completed. Some projects are already working on
these kinds of solutions for charities. Alice is one example.
The tech firm is collaborating with the Charities Aid Foundation and Imperial
College London to develop a blockchain-based
platform aimed at transparency in charitable fundraising.
How the Blockchain Community is Giving
Back
The Bitcoin boom of late 2017 and early 2018 saw
massive growth in the market size for cryptocurrencies and blockchain. Now,
some blockchain firms are demonstrating their commitment to social
responsibility by setting up charitable initiatives. In many cases, these are
also leveraging the benefits of blockchain in managing charity funding.
#VoiceYourLove
For example, Tronis a decentralized application protocol, launched in 2018. The
project is managed by the Tron Foundation, a non-profit based in Singapore with
tech wunderkind Justin Sun at the helm.
Tron recently
announced its
collaboration with the ALS Association on an awareness campaign timed to
coincide with Valentine’s Day, called #VoiceYourLove. The ALS Association had
enormous success back in 2014 with the Ice Bucket Challenge, which went viral
on social media. The new campaign invites people to create videos where they
talk about their loved ones. Contributions to the #VoiceYourLove campaign
will be tracked through to distribution using blockchain, with the results
published at the end of the campaign. Sun himself has personally donated
$250,000 and is “urging others in the blockchain industry to voice their love
by donating to help find a cure.”
We strongly advise you to make your contributions
to charities that accept bitcoin
and other cryptocurrencies that
work towards causes that resonate on a personal level.
To understand blockchain governance, we need to first get a fair idea of what the word governance means, read on to know more.
Humans tend to interest each other and build tribes,
villages, town, cities, or empires. With that comes societal norms among those
who are living with or near each other. These rules have different ways of pending
into existence. It doesn’t matter if the governance is the real world or the
digital world, there are shared underlying principles within both.
These principles are: Rules, Rulers, Participants.
Governance can be commenced by a government, market,
network, or social system (family, tribe, development team, etc.).
For a governance procedure to
work successfully, the above three principles will need to play nicely with
each other. For example, the rules should be aligned with the overall
participants’ goals, and the rulers should enforce positive and negative
actions within this governance structure. Now that we have a basic and simple
understanding of governance, let’s see how this is taking place in both the typical
world and the blockchain world.
Blockchain Governance
All organizations and
software advancement projects need a way to agree on and to finalise each
decision along the roadmap. Most organizations are centralized and have a
leadership team. Several strategies for governing the decentralized blockchain
have been developed.
Effective blockchain
governance includes:
Incentives
Methods of coordination
Before diving into the niceties
of how governance works on blockchains, it’s significant to have a clear meaning
of what blockchain governance is. Every blockchain is a growing system which
needs to change to meet the needs of its users. If a blockchain isn’t relevant
and useful, then it won’t survive, it needs to be able to evolve and adapt. To
evolve, the blockchain needs to make changes and needs a way to make final
decisions on what these changes should be. Organizations usually have a
leadership team or a CEO who is the final authority for their organization.
However, blockchain is designed to be decentralized in its nature, and not be
under the regulations set by any person or group. This means that blockchain
needs another way to make decisions regarding the blockchain’s roadmap.
So, blockchain
governance in order to be effective, it needs to include both incentives and
methods for members to coordinate. Without incentives, members won’t
participate in governance and the blockchain will become less aligned with user
needs over time. Without a method for members to coordinate, it will be
impossible for a blockchain network to come to an agreement on future changes.
With prices rocketing back from the lows. In fact, many cryptocurrencies have doubled from their recent low prices over the last several weeks. Here are a few reasons why you should get your hands on cryptos, and make them one of your investment options:
The Market Is Still In Its Infancy
Cryptocurrency is less than a decade old. Bitcoin was launched in 2009, and other major crypto names are far younger. By way of comparison, the New York Stock Exchange began in 1792 and commodities have traded for many centuries.
Volatility is the hallmark of a new market. As exchanges and investors adjust to the new products, massive price swings are inevitable. This is why, despite my bullish bias, I say to only risk what you can afford to lose when investing in the novel cryptocurrency markets.
As the market matures, volatility will decline to create smoother equity curves for investors in both directions. Make no mistake, the inevitable decline in volatility will take much of the enormous profit potential out of the nascent market. This is why now remains an ideal time to buy despite the high risk for extreme return-seeking investors.
Regulations Are Not A Bad Thing
There is a broad fear among cryptocurrency adherents that regulations will ruin the market. Many of the early adopters and creators of cryptocurrency have a strong anti-authoritarian, anarchist bias. In other words, these folks hate the government, regulations, and anything that interferes with the free market.
The early adopter’s utopian worldview — the dream to live in a world where everyone interacts fairly and peacefully — remains nothing but fantasy in the real world. As unfortunate as it may be, regulations are a must for a smooth and fair operating exchange.
The anarcho-capitalist movement that spawned cryptocurrency, and the underground commerce sites like Silk Road, is quickly becoming less of a factor in the growth of cryptocurrencies. A strong argument can be made that regulations are a must for the continued success of the crypto market. The fear-based selloffs triggered by regulation announcements and rumours make ideal buying prospects for savvy investors. An example of this was the steep sell-off that occurred when South Korea announced a slate of regulatory measures. The move was way overblown, and crypto quickly recovered from the selling. This happens again and again, creating an exploitable pattern.
Real World Applications
Crypto has moved away from the anarchist’s preferred means of exchange into the mainstream. However, it is not entirely mainstream enough to squash the upside potential. This means now is the time to buy before it’s too late!
Everyone knows bitcoin is being accepted at more and more locations around the globe. Since it was the first mover in the space, it is the leading cryptocurrency and has gained relatively widespread acceptance in the real world of commerce.
Other crypto projects like Ripple serve to transfer fiat currencies around the world. Crushing legacy systems like SWIFT regarding time and cost, Ripple and XcelToken Plus are the leading players in the conversion of money transfer systems into the digital age. Rumours abound that even Starbuckshas plans to accept Ripple and Litecoin as payment within the next five years. Should Starbucks come on board, expect a massive move by retailers in this direction. Ripple is just the tip of the iceberg coming to real-world applications of the blockchain and cryptocurrency.
Platforms like XcelTrip allow those holding cryptocurrencies, to travel anywhere with cryptocurrencies.
Bigger ICOs
Initial Coin Offering (ICO) has become a favorite way to raise capital over the past year. Often built on the Ethereum network, ICOs use vast numbers of tokens which, in turn, increase the demand for Ether, the cryptocurrency of the Ethereum network.
These types of offerings have reached the billion-dollar stage with Telegram, a messaging app, and the old school company Kodak both recently announcing plans to launch ICOs. We will only see ICOs grow more extensive and more legitimate over time, increasing demand for Ether and other backbone blockchain network cryptos.
The Banks And Institutions Are Coming
Primarily a retail investor phenomenon, cryptocurrency has attracted the interest of major institutions, banks and hedge funds. Multiple cryptocurrency hedge funds are springing up around the world, increasing the demand for the cryptocurrency. At the same time, considerable institutional money is starting to flow into the space. Attracted by the high return potential, institutions are in the early stages of accepting the asset class.
The amount of institutional money available for the new market is staggering. Should institutions, banks, and hedge funds embrace digital currency, the upside is truly unlimited.
Keep all these points in mind and invest in a token that has
real world transaction usage and that also provides long term profits.
Future Of Cryptocurrency 