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Comparing the technicals of Polkadot (DOT), Cosmos (ATOM), and Avalanche (AVAX)

Polkadot, Cosmos, and Avalanche have all been created to solve the same set of problems—the low latency and scalability issues plaguing Ethereum.

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Polkadot, Cosmos, and Avalanche have all been created to solve the same set of problems—the low latency and scalability issues plaguing Ethereum. However, each of the blockchains took on a different approach to improving Ethereum. We explore the subtle differences between them and the ways each of them will complement the network they set out to improve.

Multiple-chain networks will shape 2021

Scaling blockchain technology has become one of the most pressing issues the industry faces today. The rapid rise the crypto industry has seen in the past several years, both in terms of market cap and number of users, has been unprecedented in its history and has pushed some of its core problems to the surface rather aggressively.

The fact that scaling is such a massive problem across the board doesn’t mean that there aren’t any viable solutions to it—there are numerous Layer 2 solutions being developed, all utilizing different technologies and ideas to create more efficient networks.

A major problem is implementing these solutions—introducing even the slightest changes to a network as big as Ethereum is a slow and tedious process, often requiring a consensus between hundreds, if not thousands of network participants. And while Ethereum 2.0, the network’s second, proof-of-stake iteration, is almost done, there is little faith that these solutions alone will be able to give the market a truly decentralized and efficient network.

It was this lack of faith that led to the creation of multiple-chain networks, all of which set out to solve Ethereum’s lack of scalability. There are dozens of networks like these currently on the market, but few have managed to get the traction and recognition Polkadot, Cosmos, and Avalanche have.

With all of these multiple-chain networks currently in development, it’s impossible to pick a clear winner or predict which one will turn into a go-to scaling solution for the majority of the market. It is possible, however, to dig a little deeper and analyze the basic principles behind each one in a bid to help the market better understand them.

To solve the problem of Ethereum’s lack of scalability, Polkadot adopted a sharding model with multiple chains. This is mostly due to the fact that Polkadot’s consensus protocol can’t scale to multiple nodes on a single chain. However, running multiple chains requires multiple “coordinators” that ensure smooth operating that facilitates transactions.

Polkadot solved the problem of coordinators by establishing two different types of chains—the relay chain and parachains. The relay chain is the primary chain of the network, but it only supports transfers of DOT, the network’s native cryptocurrency, and a handful of other operational transactions such as slashing. The relay chain doesn’t support smart contracts, which is where parachains come in.

Parachains are all other chains that stem from Polkadot but are independent in terms of the functions they offer. The network solves the problem of security by requiring users to bid to become a validator on the main chain in order to run a parachain. After bidding high enough to become a validator of the relay chain, a node operator will be placed randomly to become a validator of one of the parachains—creating a type of “shared security” system that’s similar to what will be used in Ethereum 2.0.

Essentially more similar to Polkadot than Ethereum, Cosmos is a network of blockchains that support the development of decentralized applications.

Just like Polkadot, the network is divided into two different types of blockchains—the hub and the zones. The hub is the main Cosmos chain where all of the network’s validators are, while the zones are all other chains added to the hub that utilize the Cosmos SDK framework. However, unlike Polkadot, where node operators need to be validators on the relay chain in order to validate on any of the parachains, Cosmos validators are independent.

The zones can interact with each other by using Cosmos’ Inter-Blockchain Communication (IBC) protocol, which is set to go live sometime this year. The hub has no control over the zones, which means that there is no guarantee that any of the zones that stem from it are secure. The level of security seen in any of the zones never affects the overall security of the hub, which means that the network’s users take on all the risks of interacting with the zones.

This kind of approach enables Cosmos to be a low latency network. However, the approach also carries a set of disadvantages, the most important one being that becoming a validator is rather expensive. The blockchain also doesn’t support smart contracts and doesn’t use token locking as a security measure.

Just like its two competitors, Avalanche is a network of many networks. All of the networks on Avalanche are called subnets, short for “subnetworks,” but differ slightly in the functionality they offer. According to Kevin Sekniqi, the co-founder of Avalanche, the blockchain’s main network called the primary subnet is a proper, bonafide chain that looks a lot like Ethereum. It has most of the functionalities seen on Ethereum, such as smart contracts and transfers, and is the most secure subnet on Avalanche. With 700 validators, it stands way ahead of other subnets in terms of decentralization.

If the functionality offered by the primary subnet isn’t enough, Avalanche enables users to launch another subnet, much like Cosmos does. That subnet can have its own validators just like Cosmos, but unlike Cosmos, requires them to be validators of the primary subnet. Sekniqi explained that this forces security to pool into the primary subnet, essentially preventing users from launching arbitrary subnets.

However, cross-subnet communication isn’t live on Avalanche yet, and the network is yet to see major traction both among users and developers.

Posted In: Altcoins, Technology

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Source: https://cryptoslate.com/comparing-the-technicals-of-polkadot-dot-cosmos-atom-and-avalanche-avax/

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2020 Crypto-In-Review: The Year of The ₿ull

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Prices are soaring, innovation is breaking ground, opportunities are flourishing and cryptocurrency adoption is relentless. As we begin a new year with unbridled enthusiasm, Kraken examines the
past year — one that won’t be soon forgotten. 

The year 2020 will be remembered for economic and humanitarian catastrophe. It will also be recognized by the crypto community as the beginning of a new bull market. 

The COVID-19 pandemic sent shockwaves through the financial markets and cryptocurrencies were not spared from the carnage. The “Black Thursday” market selloff was one of the worst days for bitcoin as price dropped 41% – the second worst intraday loss in its history. 

Since the $3,911 low on March 13, 2020, bitcoin has produced over 700% returns and institutional demand for the premier cryptocurrency has surged as those companies seek a store of value. Favorable legislative action such as Wyoming establishing a path for digital asset banks and institutional adoption from major companies such as Square, PayPal, MicroStrategy, MassMutual, and others have set the stage for a promising future in the cryptocurrency industry. 

Kraken Intelligence has compiled a comprehensive report exploring all of the fundamental factors that have influenced the cryptocurrency industry in 2020. Our team provides insight on developments like the DeFi markets, institutional adoption, legislative and regulatory changes, industry innovation, price action and so much more to help market participants for the year ahead.

By downloading this report, we anticipate you will have a greater understanding of where the growth opportunities are emerging in cryptocurrencies, which projects you should consider and an understanding of market dynamics.

We cover:

  • What’s Influencing Adoption – Institutional buying has surged as nearly 6% of the total bitcoin supply is now held in corporate treasury. Wallets holding over 100 BTC grew significantly since the beginning of March and wallets with less than 1 BTC saw double digit growth in that same time period. 2020 is the year when we witnessed a groundbreaking uptick in institutional investor interest. 
  • The Halving – Provable scarcity is one of the main appeals of bitcoin. The hard-coded event to reduce the block reward subsidy and further enforce the disinflationary trend of bitcoin’s supply growth has often foreshadowed each new bull cycle. On May 11, 2020, the latest halving event occurred and by the end of the year, nearly 90% of all of bitcoin’s 21 million supply had been mined. With demand rising for a limited supply, price has once again shown to be on the rise. 
  • Yield Farming – The emergence of Decentralized Finance has not only helped growth in stablecoins, but has created a new opportunity for crypto investors – a yield curve. DeFi has provided crypto holders yield in exchange for offering their coins into liquidity pools. The emergence of yield in cryptocurrency is another step in the direction towards challenging the existing financial infrastructure as it provides an opportunity to earn for those holding long term.
  • Stablecoin Growth – Stablecoin adoption exploded in 2020 with the rise in  Decentralized Finance as traders began utilizing them for yield farming. The total market supply for stablecoins rose nearly 400% to $27.7 billion by end-of-year. As Visa announced that it will connect their global payment network to USDC, it appears this may just be the beginning of a stablecoin paradigm shift. Stablecoins are proving to be an on-ramp for individuals that may have difficulty accessing traditional financial products as well as safe havens in periods of volatility, thus increasing their appeal in a growing industry.

Download Our Full Report

Source: https://blog.kraken.com/post/7496/2020-crypto-in-review-the-year-of-the-%e2%82%bfull/

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Blockchain

Chinese Investors Fight Over Crypto as They Look for Safe Haven

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Chinese Investor

Customary institutional speculators once thought about cryptographic forms of money as a venture for the strong or the dumb: a specialty market with a terrible standing and high unpredictability. In 2017, J.P. Morgan CEO Jamie Dimon considered Bitcoin a fake. 

In 2020, J.P. Morgan began offering banking administrations for digital forms of money and its experts anticipated Bitcoin price could hit $146,000 in the long haul. Bitcoin’s value flooded to $20,000 a year ago, entering the standard. On Jan. 9, 2021, it momentarily hit $41,000. As of the hour of composing, one Bitcoin costs $36,500. 

Throughout the most recent year, well-to-do Chinese have rushed to blockchain-based advanced resources as a venture—and a more secure spot to stash their cash—industry insiders told. There are no hard figures on the amount Chinese speculators are placing into the generally untraceable universe of crypto.

Chinese investors have generally favored stopping their resources in US markets through interests in stocks, reserves, land, and the sky’s the limit from there. The US is an mature and fluid market, with generally close authority over corporate structures and low expenses on capital increases, making it a famous objective for the world’s riches. 

Major league salary Chinese are currently viewing cryptographic forms of money as a place of refuge for their resources, said Flex Yang, CEO and fellow benefactor of Babel Finance, a Hong Kong-based Chinese digital money resource the executives organization. 

About $50 billion in digital currencies was moved from East Asia to abroad records in the year finishing off with June 2020.

“China is a large part of this activity in East Asia,” a representative from Chainalysis told, however it has not yet examined nation level information. In light of their own meetings with specialists, Chainalysis said that probably a portion of this $50 billion speaks to capital flight.

Get the latest in Asian Bitcoin news here at Coin News Asia.

Source: http://www.coinnewsasia.com/chinese-investors-fight-over-crypto-as-they-look-for-safe-haven/

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Why This Bull Market Is Different

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This isn’t the first crypto bull run. This is the fourth market cycle since the Bitcoin Genesis Block in January 2009; each preceding one, without fail, has led to unprecedented growth and development in terms of market capitalization, infrastructure, and most importantly of all, new participants. 

In that sense, this bull cycle is no different from the last. The rush of new investors has led prices to hit new all-time highs that seemed utter fantasy months ago. In 2017, the parabolic price action that attracted so much media attention was fueled by retail traders and crypto-focused funds. The real big fish – the blue-chips and the billion-dollar hedge funds – sat on the sidelines, unsure over whether bitcoin really could be an investable asset.

Fast forward to today and those same big fish are the ones now ploughing billions of dollars into the crypto market. Investors like Stanley Druckenmiller, Paul Tudor Jones and Christopher Wood have added bitcoin to their portfolios. Square, MicroStrategy and MassMutual have each allocated millions into bitcoin while CME group will soon introduce ETH futures built on CF Benchmarks crypto indices. PayPal has made bitcoin available to their hundreds of millions of users worldwide; BlackRock, Citibank and JP Morgan, institutions with trillions of dollars on their balance sheets, have expressed interest in doing the same. 

What’s most fascinating about this run is how Kraken volumes have reached new all-time highs but, according to Google Analytics, public interest in bitcoin is nearly half of what it was at the previous high. To this point, it appears this run is mostly being driven by institutions and that individual investors are playing catch up. 

Google Analytics of Bitcoin Search Trends
Courtesy Google Analytics

“This time is different” is a market cliche proven wrong on countless occasions. But following 2020, a year of pandemics, unprecedented monetary policy and fiscal stimulus, this time really is different. 

With its fixed supply, many believe bitcoin is digital gold. An allocation into bitcoin can protect the value of households and businesses’ hard-earned savings, as well as a hedge against the possibility of out of control inflation. Since March 2020, nearly 4 trillion U.S. dollars have entered circulation, increasing total money supply by more than 20%. 

Thanks to the hard work entities such as Kraken have devoted to educating investors, more people than ever are now using cryptocurrencies to help navigate through these trying and unpredictable times. Access has improved remarkably, compared to three years ago. Kraken’s new retail app — available in over 100 European countries and launching soon in the U.S. — provides anyone with the ability to buy cryptocurrency in just a few clicks from their phones. 

The stage is set for cryptocurrencies to become an investable asset complete with a valid value proposition underpinning it. This is the time to invest in your future. Whether it is diversification of assets, holding custody over your money or hedging against uncertainty, the time is now.

Source: https://blog.kraken.com/post/7470/this-bull-market-is-different/

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