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Posts tagged ‘crypto-currencies’

The new kid on the block – Ethereum Introduced (IPO Feb 1)

All the buzz in the last few weeks in the crypto-currency space is about Ethereum, a “Turing complete crypto-currency”. Let me TL;DR wtf that is (and I’m by no means an Ethereum expert, so don’t quote me on this):

Ethereum is a “Minecraft for money”. It’s a new raw protocol that allows people to build arbitrarily complicated financial scripts and treat these scripts as first class citizens. In Bitcoin, you can send money to an address, that’s easy. A less-known fact about Bitcoin is that you can send money to a script, e.g. a 3-out-of-5 “multisig” script, that requires a signature from at least three people in order to spend.

Bitcoin scripts are deliberately not Turing complete – you want scripts to be very easy to compute and verify – the last thing you want would be someone spamming the network with high fee transactions to a script that is a hidden infinite loop, causing miners and users to overwork their CPU.

I’m not going to go into the details (see the spec, I’ve asked them to prepare a TL;DR and an FAQ). After the last year, in which we saw interesting launches of “Second generation crypto-currencies” such as Mastercoin, ProtoShares, Nxt and others”, everybody’s looking for “the next best thing”. Ethereum is an innovative project with very high ambitions – think of it as a commercial attempt to develop javascript 20 years ago. If it works, the ecosystem this will create can be huge. However, they do face tremendous risk as far as execution and complexity of the project. Add to it an extreme hype that’s generated right now, and it adds to a very risky investment (they are IPO-ing on Feb 1st).

So my TL;DR – I don’t know. When Mastercoin came out August 1st 2013, it was the first second generation crypto-currency, and this is why I posted a buy recommendation that turned out to give a more than X10 profit. Ethereum’s timing is different, for good and bad – they’re getting a lot of attention which is great for them, but it might also mean an over-priced IPO.

Go do your own homework! Follow these links, engage the community, and make up your own mind. I wish them a successful IPO.

Mastercoin now has a blog

Mastercoin, the new currency and protocol layer on top of Bitcoin, now has a new official blog.

There have been a dizzying array of new developments, and it’s been rather hard keeping track of them all. Now with the new blog, people should find it easier to get concentrated updates on all the things going on, new clients, features, etc.

A new beta page for Bitblu!

Yuval and myself, and a few others, have been working diligently over the past week, and we’re happy to present the new beta page for our startup – Bitblu.

The site is still not mobile-friendly, we will work out these kinks soon. If you have any sort of feedback, please do report it (you can even open bugs or send pull requests, the site is completely open source).

MasterCoin – your new high yield investment!

(Hebrew speakers might appreciate the wiki entry I prepared about MasterCoin)

The title of this post is a tribute to the first post on my blog promoting Bitcoin, written on March 27 2011 (Bitcoin was worth 80 cents then, compared to $106 today).

Of the various alt-coins (Bitcoin forks), I have only promoted Litecoin on this blog, on October 2011 – it was a chance for early adopters to join in on an attempt to make a “fairer, more decentralized Bitcoin”. Litecoins have started as being worth 0 BTC, and have slowly built up value, especially over the last 6 months. Currently 1 LTC = 0.025 BTC, which is more than I would have believed myself a year ago, and Litecoin’s market cap is already 5% of Bitcoin’s ~ $1,000,000,000.

Today, I’d like to expose you to a riskier, crazier investment, called MasterCoin.

MasterCoin isn’t exactly a Bitcoin fork, but rather it’s a system that is built on top of Bitcoin, that can accommodate many different currencies, betting, self-regulating currency issue, and more. It’s really beyond the scope of this post to explain MasterCoin, but I’ll just briefly summarize:

  1. Dacoinminster AKA J.R. Willet has first written about MasterCoin a year and a half ago. The idea was very exciting, and inspired some other projects such as Colored Coins. At the time, there were a lot of missing details, and the project kind of went into hibernation.
  2. Since then, other projects such as Colored Coins and Ripple tried to attack this problem of modeling real world currencies in a decentralized way. Each of these project takes a different approach to accomplish similar objectives, but both have attracted great interest from the Bitcoin community.
  3. Yesterday, Dacoinminster finally was able to fix the apparent flaws in the first version of his paper (dubbed v0.5), and released version 1 on the protocol.
  4. The source code that implements this protocol isn’t yet built. Dacoinminster will use funds collected from a fundraiser, kickstarter style, to fund the development.
  5. People who fund the project (until August 31 2013) will receive in return a given amount of MasterCoins, already determined in the protocol.

The full details are available in the linked resources. I believe MasterCoin can be an important part of the growing Bitcoin ecosystem. Thus far, 29.6 BTC have been raised in the first few hours of the fundraiser (about $3000). I plan to invest some of my own.

  • Anything I say here or anywhere else should not be considered investment advice or any other type of professional advice. I do not act in any way as a financial advisor and do not hold myself out to be such. Please consult a financial advisor before investing in MasterCoin (they will probably have a heart attack at the thought).
  • See in particular the Risks document that Willet himself prepared.