When Kitties Jamm the Ethereum Network

Today Mr. Positive Blue and Mr. Negative Red meet Mrs. Inquisitive Brown to talk about Blockchain Performance. Mr Neutral Black has taken a look at the scene and Mr Technological Green is around just in case. Mr Market Purple has joined today for a beer.
- Today I was sending some ether to the Game Flip token sale and it seemed that I just could not get the transaction through.
- Oh, yes, there is a known issue these days, the network has so many transactions that you would need a huge gas price.
- What's that?
- You pay a fee for the transaction to be mined on the Ethereum network. If you set that price too low, it will take a while for any miner to be interested in processing it.
- You can see the recommended prices here at gas station.
- I see. So, why is the network congested?
- Well, typically very large ICOs or lots of trading in particular moments. But on this occasion there is kind of a funny side effect of a DAPP called Crypto Kitties (https://www.cryptokitties.co/)
- I know that one, prices for kitties are mooning now.
- How do you know?
- Oh, see, you can see the major burners here and the first one is that DAPP / game.
- But, is the Ethereum network really that vulnerable?
- Yes and no. We spoke the other day about companies that try to use it as a payment network for regular purchases and how that is still not possible. However there are projects like the Plasma Protocol and the Raiden Network that are already providing solutions.
- That's good, I would not like to be in a market where a cat can ruin an operation.

Raiden, Plasma, Qtum, NEM ... moving towards mainstream payments

Today Mr. Positive Blue and Mr. Negative Red meet Mrs. Inquisitive Brown to talk about mainstream payments. Mr Neutral Black has made a through reading of the document and Mr Technological Green is around just in case. Mr Market Purple has joined today for a beer.

- Recently, we spoke about Pundi-X, it would seem that they were going to use Ethereum to make payments at point-of-sale.

- That would not work! Is too slow!

- There are recent news. Apparently they have implemented NEM and QTUM.

- What does that imply?

- Nem is quite efective to deal quickly with transactions, ethereum is not today but the Raiden and Plasma projects will change that in a year. NEM is got the catapult project and they are migrating to C.

- Is C better than Java? 

- Better is a term I would not use to compare programming languages but It is very efficient, very close to compiler code. 

- Oh, by the way NEM has now a Magento implementation.

- Oh, magento, sound familiar but...

- Magento is one of the top plataforms for shops on the internet.

- That is an interesting step. It seems that this coin is moving in the right direction.

- What about Qtum?

- Far less mature in terms of time.

- Not close to VISA levels, but will be near in one to two years.

- What about Ethereum?

- The Raiden network is working now on testnet. Low transaction fees and excelent speed. 

- Who will win the race?

- Difficult to say. Ethereum has plenty of developing power behind, but NEM is more agile, Qtum is a promise.

- It going to be great for market player like me!

- And for developers!

The value of Utility Tokens - CryptoTickets

(this, to all effects, is fiction, not advice).
Today Mr. Positive Blue and Mr. Negative Red meet Mrs. Inquisitive Brown to analyse the value of "utility tokens". Mr Neutral Black has made a through reading of the document and Mr Technological Green is around just in case.
- I have seen many ICOs that sell tokens that will eventually be used to provide a service or buy goods.
- That is right. CryptoTickets, Genesis Vision, WaBi,... and many other.
- My question is, the sales argument for an investor in the ICO is that since those tokens will be used to pay for services if the services are extended and demand grows the value of the token increases. Is that true?
- Well, that is a market law, if you have a limited supply of something and more people want it, you can ask for a higher price.
- Well, I do not agree.
- Why? That is kind of common sense!
- The amount of tokens is fixed, but each one of them can be used many times. The offer of tokens is de-facto infinite because they are not consumed but recirculated. For example, an event organiser or an artist that is paid in tokens will immediately change it for fiat, to pay in the "real world".
- So the only chance for an increase in value is if they decide to hold the tokens?
- I would say that is just speculation.
- Put in even simple terms please.
- Shakira agrees to get paid in tokens 
- That would be difficult to believe.
- Just, accept it for the moment. Shakira sells 1 ticket for 10 TKT tokens. Immediatly goes to the market and gets, let´s say 50 USD to pay the crew, site, etc... So the token has been bought for 50 USD by the client and has returned to the token market for 50 USD.
- That is simplistic, there are many factors to take into account.
- I agree, but basically that is what would happen, and that would add not a penny to the value of the token.
- So, there is no increase in value possible?
- Actually, there is. An event organiser has to own a certain amount of TKT tokens to use the platform.
- Oh, ok, so at the end of all this complex model lies the idea of the event organisers buying the tokens and, at in the end, paying for this new system, at a premium, rather than using the existing platforms.
- That is right in my view.
- And in return they get the value of controlling the sale price of the token, resale and having a system to manage all this.
- I think this is a very risky investment.
- I think there is a good chance for a great reward.
This system actually seems interesting for event organisers, as it allows them to vote and have some control over the middle-man and the development of the sales channel.
In any case, be very careful when you buy a token. Many times you are not buying a "share" of the profit, and, in the worst cases, you may be buying a worthless token or buying for a value that would take years to recover.

103 - Ecosystems and Cryptocurrencies

Today, Mr Philosopher Black, Mrs Newby Blue and Mr Sceptic red meet in the Pub and start talking about "Ecosystems"...

- Ecosystem, that sounds to me like frogs eating flies and squirrels gathering nuts.

- Yeh, well that´s kind of my idea of cryptocurrencies anyway.

- It kind of makes sense to call ecosystem to what normally would be the stakeholders. You see, cryptocurrency, like Bitcoin, do need a "habitat" to survive and thrieve.

- You mean, they need computers to live in?

- Not exactly. They definetly need infrastructure, such as networks, computers, etc. But, do you remember waht we spoke about here regarding what is value in criptocurrencies?

- Yeah, well it did not make any sense... you are giving value to things that do not have it! Bitcoin is tulip-mania.

- I guess we could say the same about printed paper: nothing but colored stamps. For the moment, I would like to know more about ecosystems.

- Well.. as I was saying, there are a few things that provide value to any criptocurrency, and that is linked to the concept of value. First of all, is the trust of the users. There are many types of uses and all of them provide value.

- Oh, anyway, most people are just speculators...

- Even speculating is a value. Some currencies are a vehicle to invest. Lately, ethereum and the ERC20 tokens allow easy investmenting for the masses.

- And many scams!

- Surely, that too. But you see, these people, entrepeneurs and investors are part of the ecosystem. They provide value to everyone by using the cryptocurrency.

- Oh, yep, I think I can see your point there, just like normal money is used to invest.

- Correct. Also, you have the exchanges. Having the support of large exchanges, or at least one, makes a lot of difference. The easier it is to trade, the greater the network effect we spoke about in the value of cryptocurrencies. Also, they are very powerfull actors when forks occur, but that is a different story.

-  Oh, I have seen the exchanges list almos anything nowdays... just look at Etherdelta and the ERC20s. It just does not make sense to have so many tokens listed!

- Mmm... it does make sense, just as it makes sense to list millions of items in eBay or Amazon. But anyway, there are many other actors in the ecosystem, such as the miners.

- Everybody is talking about mining and how people go crazy about it.

- Is just a waste of time I heard, to much work for little profit.

- We should speak about mining some day, but regarding the ecosystem, the miners play a significant role when deciding where a criptocurrency is going to go when updating and deciding which chain are they are participating in. Have you seen the typical windows service packs and updates?

- For sure, and also the Android Apps upgrades. Sometimes they are good and sometimes bad.

- Well, in the cryptocurrency space the software upgrades can be quite controversial, because they inevitably favour some people and damage others. Miners support the version (they call it fork) that is best for their interest.

- I think that miners do nothing I should be removed from the ecosystem.

- At the end of the day, you need to have a distributed network, that is the essecence of a public ledger technology, and , for that, you will need to provide an incentive for the nodes and the validators. They are rewarded in several ways that we could talk about some other time, like Proof of Work, Proof of Stake, Proof of Importance,...

- And who else is there?

- We still have to list the users of the currency, the development teams and, in some cases, the hardware manufacturers.

- This seems like a jungle where everybody runs arround in circles without knowing where all this is going.

- Oh, it is quite the opposite. The ecosystem is highly "political" in the sense that there are  new initiatives continously and all the actors try to act in their best interest. Typically, the users want ease of use and security. Investor want high returns. Hardware manufacturers want to jump into the business, but some of them are unsure as of using their powerfull brands in projects that they do not control nor understand fully.

- Well, this is leading us nowhere...

- The conclusion is that when you consider how "good" is a Cryptocurrency you need to evaluate what actors are influencing it and how. Right now Bitcoin is heavily influenced by large miners, wereas Ethereum has a strong development team and leaders influence.

- But, is this not an endless fight?

- You see, that is precisely why this is an ecosystem. Not everyone in there agrees nor wants the same thing, but surely they all depend on each other to make bitcoin and other currencies strong.