Its time for bitcoin to move over because there are cryptocurrencies waiting in the side lines
If the token resembles a security, again on a case-by-case basis, then you need to follow existing securities regulation for an ICO. This lack of clarity poses risks for everyone from investors to entrepreneurs to marketers of running afoul of the law. Moreover, it poses questions of ethical duty: What rules should we follow?
Should government put regulations in place? There are many experts in the crypto industry that bemoan any mention of regulation, as the markets frequently react negatively to them. The anti-regulation sentiment is strong among Bitcoin investors, too. On the other hand, some experts say that the market is ready and even needs regulation to stabilize and gain the trust of mainstream investors. We should be looking to platforms like Indiegogo for inspiration on what a self-regulated crypto market should look like.
Previously limited to the crowdfunding space, Indiegogo has chosen to follow all securities regulations in its initial foray into the crypto sphere in order to protect both sellers and investors and make the market more accessible to everyone.
This is despite, as Indiegogo readily admits, the fact that many ICOs today are conducted outside of securities laws. For sellers, Indiegogo provides a registered broker-dealer that can facilitate token pre-sales inside current SEC regulations in addition to providing critical investor accreditation validation, know-your-customer KYC , anti-money-laundering AML services.
Additionally, it is not a free-for-all market—the company is carefully curating its selection of vetted token pre-sales to prevent shady ICOs from being offered on the platform. The flaws in existing systems give the crypto industry a baseline for best practices and a way to learn from past mistakes. This could be accomplished via independent analyst teams that interview companies that are planning ICOs, and issue reports on the need for a coin in their stated use case, the financial strength of said company, management team pedigree, venture capital support, and then deliver A-F rating scale on the comfort with such an offering.
You might have supposed that nodes across the world gather something bigger bit by bit. That is totally incorrect. In fact, all of the nodes that maintain the blockchain do exactly the same thing. Here is what millions of computers do:.
There is no paralleling, no synergy, and no mutual assistance. There is only instant, millionfold duplication. Every high-grade Bitcoin network client stores the entire transaction history, and this record has already become as large as GB.
The more transactions processed on the Bitcoin network, the faster the size grows. And the greatest bulk of it has appeared over the past couple of years.
The growth of the blockchain. The growth of HDD capacity definitely lags behind. In addition to the need to store a large chunk of data, the data has to be downloaded as well. Anyone who has ever tried to use a locally stored wallet for cryptocurrency discovered with amazement and dismay that he or she could not make or receive payments until the entire download and verification process was complete — a few days if you were lucky.
Sure, it would be more efficient. Second, clients would then have to trust servers. For example, this could be done in the case of post-stroke memory restoration. If each network node does the same thing, then obviously, the bandwidth of the entire network is the same as the bandwidth of one network node. But do you know exactly what that is? The Bitcoin network is capable of processing a maximum of seven transactions per second — for the millions of users worldwide.
Aside from that, Bitcoin-blockchain transactions are recorded only once every 10 minutes. To increase payments security, it is standard practice to wait 50 minutes more after each new record appears because the records regularly roll back.
Now imagine trying to buy a snack using bitcoins. If you consider the entire world, that sounds ludicrous even now, when Bitcoin is used by just one in every thousand people on the planet.
For comparison, Visa processes thousands of transactions per second and, if required, can easily increase its bandwidth. After all, classic banking technologies are scalable.
You have certainly heard of miners and giant mining farms built next to power stations. What do they actually do? The electricity consumed to achieve that is the same as the amount a city with a population of , people would use.
This is true, but the problem is that miners are protecting Bitcoin from other miners. If only one-thousandth of the current number of miners existed, and thus one-thousandth of the electric power was consumed, then Bitcoin would be just as good as it is now. It would still produce one block per 10 minutes, process the same number of transactions, and operate at exactly the same speed.
If someone controls more than half of the computing power currently being used for mining, then that person can surreptitiously write an alternative financial history. That version then becomes reality. Thus, it becomes possible to spend the same money more than once.
Traditional payment systems are immune to such an attack. As it turns out, Bitcoin has become a prisoner of its own ideology. Mining is still lucrative, and the network is still stable.
That is just an illusion, however. An estimate of computing power distribution among the largest mining pools. Gaining access to just four controlling computers would gain someone the ability to double spend bitcoins.
This, as you can imagine, would depreciate bitcoins somewhat, and doing it is actually quite feasible. But the threat is even more serious than the above might imply, because the majority of pools, along with their computing powers, are located inside one country, which makes it much easier to capture them and gain control over Bitcoin.
Distribution of mining by country. Blockchain is open, and everyone sees everything. Thus, blockchain has no real anonymity.