Six Cryptocurrencies for 2018 and Beyond

Six Cryptocurrencies for 2018 and Beyond If you’re cooking up a portfolio of alternatives to Bitcoin and Ethereum, here are some themes which I believe will become increasingly important as the digital asset space continues its rapid growth. Reduction in energy costs of maintaining a network. [EnergyConsumptionIndex] [LeoWeese] [BBC] [Bloomberg]Next generation technology to scale and increase transaction throughput. [Wired] [Bloomberg] [Forbes]Make it safer to codify business logic as smart contracts. [HackingDistributed] [Parity]Improve the user experience, removing friction from transactions [WrongAddress] [TransactionDelays] [BitcoinFees, EthGasStation] [WithdrawalDelays]Reward users for being stakeholders in the network. [HarvardBusinessReview]Derive value through utility of the network and not animal spirits alone. [Investment Thesis Yours.org] [BitPay Multi-chain Payments] So here are six cryptocurrencies, dubbed CUCINA, which capture some of the above themes. Each project is unique, neither forked from Bitcoin nor Ethereum. All were priced below a dollar when I started writing this post, but since then, one has flown the nest. I’ve included some tidbits and links which I find interesting. Build a better blockchain through “strenuous academic and scientific principles” [Vision paper] [Research]Deploying Ouroboros “the first proof of stake protocol that has mathematically been shown to be provably secure” [Paper] [Video: Crypto 2017] [Video: Oxford University]Philip Wadler leads development of Plutus smart contract language. Comparison with Simplicity and Michelson.RuntimeVerification tasked with building “virtual machine and a universal language framework” using formal analysis and verification techniques. “Unlike the EVM, which is a stack-based machine, IELE will be a register-based machine, like LLVM.“ Developers can “write smart contracts in any programming languages that have a formal semantics in K.” [Blog] The “first licensed Bitcoin ATM company in the U.S”, Coinme, will expand its ATM network to increase accessibility to crypto.ATMs will reward customers with 1% cashback in the form of UpToken, which can be viewed as a crypto loyalty point.“Here’s The Man Who Created ICOs And This Is The New Token He’s Backing” [Press: Forbes, IBTimes] Utility token provides access to “a system of predictive analytics, data, and market indicators” to help trading of digital assets.“Traders and investment funds trade using the average of answers provided by all forecasters for each question and enhanced by our AI/ML algorithms.”Forecasting Reward: “The more accurate your predictions — the higher monthly reward you receive.” [0.2% of CND for early forecasters.]“AI platform Cindicator drives 47% per annum yield in Moscow Stock Exchange pilot” [IBTimes]Example trading signal: “Cryptometer #XRP_USD Bid is higher on kraken than ask on bitstamp by 5.49%”. Available on Telegram desktop app, Android, iOS.See also MetaTrader4, Reuters Datastream and Numera.ai Machine-to-machine payments between iOT devices using directed acyclic graph (DAG) instead of a blockchain. [“The Tangle” Paper] [Introduction]Quantum resistance from using one-time Winternitz signatures but this presents a UX challenge as using the same address twice to send funds weakens security model.Launched pilot of a data market with large number of blue chip companies including Accenture, Bosch and Microsoft. [Blog]Resolved a cryptographic issue and hired external security auditors. Criticism from [NickJohnson] [VitalikButerin] [JohnRatcliff].See also Hashgraph (DAG) consensus [Paper] [Video] said to achieve “250,000+ transactions/second” in a private chain environment [Benefits and Challenges] Proof-of-Importance [NEM Technical Reference calculation]Business logic lives at the edge, not in the blockchain: “Our solution has no smart contracts… A smart contract cannot work in isolation. It still relies on external inputs or oracles… It is a paradox because the main value proposition of a decentralised smart contract solution was to be a trustless smart contract platform, which is not possible.” [Catapult White Paper]Public chain will migrate to Catapult with tests showing “average transaction rate came to 3,085.77 tps” [Source]China: NEM is the only cryptocurrency wallet approved in WeChat (as a mini-app) giving NEM access to a social network of 963 million monthly active users. [Video: Wechat demo] Utility token for processing orders on a peer-to-peer decentralized exchange [Paper]Comparison with 0xProject. Other competitors: Comit, OmegaOne, Kyber“We’re creating a platform for market makers” [Blog]Co-founder “Michael Oved helped Virtu Financial Inc. become the most consistently profitable market maker in the history of electronic trading… Virtu gained fame for only losing money on a single day from 2009 to 2014 as it matched buyers and sellers in stocks, bonds, futures and currencies.” [Bloomberg] With regards to public platforms, in the case of Ethereum we can see that bail-outs are political decisions which beget winners [DAO] and losers [Parity]. For smart contracts to live up to the mantra “Code is Law” programmers need to deliver bug free code. This is a herculean task given software defect rates [1][2] where even Microsoft is said to, at best, achieve ~ 0.5 defects per 1000 lines of production code.This is the rationale behind NEM’s keep it simple approach and conversely explains why Cardano exists: to specify and build a platform, suitable for high assurance code using techniques adopted by Boeing, Toyota, NASA et al. An astute reader will notice that Airswap, Cindicator and Uptoken exist as ERC20 tokens, however the projects themselves are not intrinsically tied to the Ethereum platform. For example, most token contracts simply map account addresses to balances and can be easily migrated [Kik: Goodbye Ethereum] and businesses are already trying out alternatives [NEM: Zeus.Exchange, Xarcade video game platform] [Stellar: IBM payment pilot, Using Stellar for ICOS].Disclosure: The author has a financial interest in various cryptocurrencies. This is not investment advice.