PIVX made the news in May of this year when it was revealed that John McAffee’s privacy-oriented cryptocurrency, Ghost, had copy-pasted parts of PIVX’s original whitepaper.
The question is why?
PIVX is short for “Private Instant Verified Transaction”. It a cryptocurrency focused around privacy and community with an ambitious goal of becoming the most advanced cryptocurrency in existence.
Given these facts, it should come as no surprise that Ghost developers capitalized on the information in the PIVX whitepaper and have further stated that the Ghost cryptocurrency is a fork of PIVX. Although these actions are distasteful, they reveal that there is some serious legitimacy to the PIVX project. As you will see, PIVX uses some of the most novel technology in crypto and is a pioneer among privacy coins.
The Beginnings of Pivx
The story of PIVX begins with another cryptocurrency called Dash. Those familiar with Dash will know that it is a fork of Bitcoin which seeks to be faster and more privacy oriented.
Rumor has it that in 2015, a small group of Dash developers were unsatisfied with the direction the cryptocurrency was headed and decided to create their own crypto which was initially named Darknet and later rebranded to PIVX.
Around this time, James Burden (AKA s3v3nh4cks) became the founder and one of the developers for the project. Burden has over 20 years of experience working as a hardware technician with a passion for software and has been an active cryptocurrency developer since 2012. In April 2019, he stepped away from PIVX after giving an ultimatum to the development team a year prior.
James Burden ex-CEO of PIVX, founder of Veil. Image via Veil
Like the original group of developers which left Dash, Burden was dissatisfied with the lack of privacy PIVX had come to have as well as various flaws within its governance architecture. He created a new cryptocurrency called Veil which seeks to become what PIVX was intended to be – a scalable cryptocurrency which ensures user privacy at all costs.
PIVX has seen a significant slow-down in public activity since Burden’s departure in 2019. Furthermore, the other two notable developers including Jeremy Anderson (who is also a Ravencoin developer) (who is also a Ravencoin developer) seem to have shifted focus to other projects including Veil.
For the past year or so the only visibly active member of PIVX has been Bryan Doreian, its community manager and marketing lead. As you will see, the PIVX team still seems to be hard at work behind the scenes despite these concerning circumstances.
The PIVX ICO
PIVX as launched in January 2016 as Darknet and did not have an initial coin offering (ICO). Instead, 60 000 PIVX were premined to allow for 6 masternodes to operate the initial network.
The PIVX cryptocurrency had no ICO. Image via PIVX
These 60 000 coins were then burned in the months that followed once the PIVX community grew to a sufficient size to become self-sustaining.
How Does PIVX Work?
PIVX is in fact a decentralized autonomous organization (DAO) which is self-funded and community driven. PIVX is intended to be a “third generation” privacy coin and uses a modified version of Dash’s masternode architecture and Zcoin’s Zerocoin privacy protocol (which was originally designed for Bitcoin).
The features of the PIVX ecosystem. Image via Medium
According to the PIVX website, its network fees are 40x lower than Bitcoin. While the website notes a transaction speed of 70 transactions per second (TPS), Doreain has stated that TPS can go as high as 1000 using the SwiftxX payment protocol. Let us take a closer look at these elements.
PIVX Mining & Staking
PIVX uses a proof of stake consensus mechanism which consists of two parties: masternodes and validators.
Masternodes have two tasks: to vote on development proposals tabled by the PIVX community and validate transactions on the blockchain with as little as a single confirmation that can take place off-chain via the SwiftX payment protocol. A stake of 10 000 PIVX is required to run a masternode. Each masternode gets 1 vote and is not at all involved in the mining of new PIVX tokens.
PIVX staking rewards breakdown. Image via PIVX
Mining PIVX is the job of validators which have a chance of generating a block proportional to the amount of PIVX they have staked, requiring roughly 500 PIVX to generate a single block in a 1-month time period. A new block is generated roughly every minute and yields a reward of 6 PIVX coins with 2 coins going to the validator, 3 to the masternode, and 1 to the PIVX treasury which funds successful development proposals and community initiatives.
To ensure a balance between masternodes and validators, PIVX uses a “seesaw” mechanism which sees rewards increased for validators when there were too many masternodes and vice versa in the event of too many validators.
This small detail sets PIVX apart from other governance focused cryptocurrencies such as Decred which uses a pre-programmed division of mining rewards which cannot be changed. You can also estimate your PIVX staking rewards using their very own calculator.
Oddly enough, PIVX currently does not offer private transactions. Up until last year, PIVX used the Zerocoin privacy protocol. While the fundamental technology behind the Zerocoin protocol is quite complex, how it worked within PIVX is straightforward.
If a user wanted to send a private transaction, they would use PIVX to “mint” zPIV. The corresponding amount of zPIV would be sent on the PIVX blockchain and then “burned” to create the corresponding amount of PIVX for the recipient.
What is quite remarkable is that it was possible to stake zPiv in the same way PIVX was staked. This was enabled to enhance the security and liquidity of the PIVX network. The only difference between zPiv staking and PIVX staking was that the block reward distribution; masternodes would receive 2 coins with the validator receiving 3.
PIVX Cryptocurrency Supply
The ‘tokenomics’ of PIVX are quite interesting. PIVX does not have a hard supply cap and has an inflation rate of anywhere between 3-4% per year. However, PIVX has a theoretical “soft-cap” because of one small feature: transaction fees.
The possible supply of PIVX cryptocurrency . Image via Whitepaper
Every transaction on the PIVX network costs 0.01 PIVX (this was also the cost for minting zPIV). Since transaction fees are burned, there is a point at which the number of transactions taking place outnumbers the number of new PIVX being generated.
If this were to happen, PIVX would actually become deflationary like other proof of stake cryptocurrencies. This would lead to a complete crash of the network were it not for the fact that the PIVX community can simply vote to lower the transaction fees to prevent excessive deflation. The community can also vote to increase transaction fees to reduce inflation if it gets out of hand.
The PIVX Roadmap
In the world of cryptocurrency roadmaps, PIVX takes the cake when it comes to comprehensibility and transparency. This is impressive considering that the direction of development is fundamentally determined by PIVX masternodes. It is worth noting that certain projects which were greatly anticipated earlier on such as zDex, PIVX’s decentralized exchange, have yet to come to public fruition.
PIVX completed roadmap goals. Image via Roadmap
Despite a few missing elements, the PIVX development team has achieved quite a bit since 2016. The most notable milestones include the implementation of the Zerocoin protocol which brought private transactions to the network via zPiv along with the ability to stake zPiv in 2017 and 2018, respectively. Unfortunately, the use of zPiv was limited to desktop wallets and never made it to mobile PIVX wallets.
In March of 2019, PIVX announced they would be temporarily disabling zPIV functionality due to various issues in the protocol. At the time of writing, these issues have still not been resolved.
In what appears to be the most recent interview with a PIVX team member in January of this year, Doreian noted that the development team was hard at work developing a new privacy protocol for PIVX. In February, the PIVX development team detailed the architecture of the new protocol which has yet to be implemented.
PIVX roadmap for 2020 and 2021:. Image via Twitter
In March of this year, PIVX released a detailed roadmap for 2020-2021. The roadmap is divided into 4 sections: core wallet, lightnode wallets, community, and alliances. There are roughly 2 dozen projects in total and the progress bar next to each one lets you know how far along they are in completing them. Notable goals include implementing the new privacy protocol, cold wallet staking functionality, sponsoring athletes, and even starting a charity called the PIVX foundation.
PIVX Price Analysis
PIVX’s price history is quite predicable. When it first entered the market in February of 2016 it was worth a fraction of a cent and began to rally in 2017, eventually reaching an all time high of nearly 13$USD in January of 2018. The price dropped in the months that followed, effectively flatlining by mid-2019 at a price of just over 22 cents USD.
Price History of PIVX. Image via CMC
Despite this dismal drop in price, the ROI of PIVX remains incredibly high. It has also experienced a slight increase in price in recent months, doubling from 22 cents to around 44 cents USD. A closer look at the last year of price data seems to indicate that PIVX is slowly but surely on the rise.
Unfortunately, trading pairs are quite limited and the trading volume for PIVX is exceptionally low, possibly because a substantial amount of PIVX is being used for staking. This means that markets can become quite volatile with even a few BTC worth of buying power, so trade with caution!
PIVX Cryptocurrency Wallets
PIVX has quite limited support when it comes to cryptocurrency wallets. If you are looking to store your PIVX cryptocurrency, you effectively have 3 options: the Ledger hardware wallet (which has PIVX staking functionality), the PIVX desktop and mobile wallets, and the Coinomi desktop/mobile wallet.
PIVX Core Wallet. Image via PIVX
If you prefer an offline wallet, you can create a PIVX paper wallet using walletgenerator.net. You can learn more about PIVX cryptocurrency wallets by reading our in-depth article on the topic.
Our Opinion of PIVX
Although PIVX had a lot of promise coming out the gates, it seems that the bottom has fell out of the project. In addition to being sidelined by its most notable developers, the ‘decentralized’ structure of its development funding has put PIVX in a self-imposed trap.
Specifically, the approximately 20-22 000 PIVX which is allocated to operations on a monthly basis cannot possibly be enough given its currently low price which cannot increase without serious advances in development and marketing.
PIVX Educational Content on YouTube
This is evidenced by the sudden disappearance of its previously hyperactive community outreach. The PIVX YouTube channel was uploading videos every single week and even hosted cryptocurrency tutorials focused around PIVX technology on the PIVX Class YouTube channel. Unfortunately, PIVX’s intense focus on community seems to have taken away from the blockchain’s actual development.
PIVX & Privacy
PIVX seems to have strayed away from its original goal of total user privacy. This was in fact why Burden left the project to start his own. PIVX was supposed to move towards greater and greater privacy but started moving in the opposite direction. In PIVX’s defense, this is probably due to the increased scrutiny privacy coins have received in recent months from governmental regulators.
This seems to be an issue common across all privacy coins. As regulatory bodies around try to bring “transparency” to cryptocurrency, privacy coins are being pushed off exchanges and out of reach for unseasoned traders and investors. Last year, South Korean cryptocurrency exchange delisted a handful of privacy coins including PIVX and Monero, even though PIVX’s privacy function was optional.
PIVX design flaws
Both Burden and Doreian had noted that PIVX’s zPIV Zerocoin protocol had privacy flaws in metadata, specifically in how zPIV “change” was returned to users in transactions. Since zPIV cannot be sent in decimals, the resulting “change” in any transaction would be returned to the original sender.
If they chose to receive that change in PIVX, it would make it possible for third parties to determine who had sent the private transaction based on the publicly available PIVX transaction history.
The costs and profits of being a PIVX masternode. Image via Steemit
Burden has also noted that the role of masternodes in PIVX has resulted in a “rich boy’s club” where decisions have become increasingly centralized. Masternodes are the only players in the system which can vote on new development proposals and Burden claims that their voting quickly became like-minded, causing many development proposals desired by the community at large to be voted down.
While PIVX sounds good on paper (at least good enough to be plagiarized) in practice its design flaws seem to have undermined the project, which appears to be on its last leg. There is still hope for PIVX though – they continue to post regular development updates on their website and appear to be on their way to achieving their future development milestones.
With some luck, they may just find their footing and get back on track to becoming the most advanced privacy-oriented cryptocurrency on the market.
Featured Image via Shutterstock
Disclaimer: These are the writer’s opinions and should not be considered investment advice. Readers should do their own research.
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‘Overlooked’ Part of Senate Infrastructure Bill Renews Worries From Crypto Lobby
The $1 trillion infrastructure bill, which passed in the Senate in early August and is expected to be approved by the House, is the gift that keeps on giving.
At first, it was about roads, bridges, and clean water. Then a pay-for provision promised to give American crypto users new tax reporting requirements. And now there’s a new twist.
A report published today by the Proof of Stake Alliance (POSA), an advocacy group that counts Coinbase Custody and as members, details an “overlooked” amendment to the tax code within the 2,700-page bill that will make it a felony to incorrectly report receiving cryptocurrencies, , or other digital assets.
Writing in his role as an advisor to the POSA, law professor Abraham Sutherland details how the infrastructure bill amends Section 6050I of the tax code. The amended section 6045 that caused so much consternation when it made it through the Senate changed the definition of “broker” to cover those handling cryptocurrencies.
Industry lobbyists and cryptocurrency advocates such as the think tank Coin Center argued that the bill as written would force miners and validators on other networks to file 1099 forms for the people whose transactions they were processing—even though they lacked the personal information needed to do so.
Section 6050I, on the other hand, deals with the tax reporting requirements of those who ultimately receive the cryptocurrencies. While Americans must already report their crypto gains to the IRS just as they would with other investments, Sutherland says the amended provision goes much further: They must tell the government who sent it, including reporting social security numbers, when the value of the digital assets is more than $10,000. Not doing so within 15 days constitutes a felony.
This raises at least two issues. First, as Sutherland notes, it’s just as unwieldy as the section 6045 amendment: “This provision demands the impossible because the digital assets might not be ‘received’ from a person whose personally identifiable information can be verified and reported—including cases where the digital assets are not ‘received’ from a person or entity with a tax ID number, period.”
Second, as Sutherland alludes to and as Coin Center Research Director Peter Van Valkenburgh hammered home in a blog post, it might just be unconstitutional. The tax code currently mandates that people report such information to the IRS when they receive $10,000 in cash. That passes Constitutional muster because the bank acts as a third party; otherwise, authorities would need a warrant under the Fourth Amendment. But in cryptocurrency, a peer-to-peer transaction doesn’t have a third party.
Writes Van Valkenburgh: “One person to a two person transaction is obligated to collect a load of sensitive information from her counterparty and hand that to government officials without any warrant or reasonable suspicion of wrongdoing.”
Though he writes that Coin Center usually doesn’t “object to equal treatment of cash and cryptocurrencies,” in this case the “provision is a draconian surveillance rule that should have been ruled unconstitutional long ago. Extending it to cryptocurrency transactions would further erode the privacy of law-abiding Americans.”
Sutherland also calls into question the process by which the amended IRS code will become law—via a bill on completely unrelated topics. “A statute creating felony crimes for users of digital assets should be debated openly, not quietly inserted into a spending bill,” he wrote.
Avalanche (AVAX) bumps to near $70 after reveal of $230 million fundraise
High-speed blockchain Avalanche jumped to highs of $68.30 today after several influential crypto investors revealed the close of a private funding round involving $230 million worth of AVAX tokens in June, CryptoSlate learned in a release.
The Avalanche Foundation, a non-profit that oversees the development of the Avalanche blockchain, disclosed participants in the multimillion-dollar funding round were led by PolyChain Capital and Three Arrows Capital, and included R/Crypto Fund, Dragonfly, CMS Holdings, Collab+Currency, and Lvna Capital.
What a day! Just one of the many major initiatives the @AvaLabsOfficial team has been working on.
— Jay Kurahashi-Sofue 🔺 (@jayks17) September 16, 2021
What happens to Avalanche now?
Proceeds from the private sale will be used to support the burgeoning Avalanche ecosystem—one that has been positioned as a top contender against Ethereum for its high speed and low fees.
Part of the funds will be funneled to support DeFi (decentralized finance) projects on Avalanche as well as enterprise applications through grants, token purchases, and other forms of investments.
Avalanche’s smart contract is able to execute Ethereum Virtual Machine (EVM) contracts, making it possible for developers to ‘reuse’ their codebase if they have a working/testnet product on the Ethereum blockchain.
Converting assets on-chain using a ‘bridge’—a way for two separate blockchain to communicate with and transfer value between each other—are also simple as applications querying the Ethereum network can be adapted to support Avalanche by changing API endpoints and adding support for a new network.
Meanwhile, the news caused a surge in AVAX prices last night. The token jumped 30% to over $68.30 to set a new all-time high, reaching a $14 billion marketcap and becoming the 12th-most-valuable cryptocurrency by that metric.
At press time, AVAX continues to trade above its 34-period exponential moving average, a metric used by traders that determines asset trends using historic prices. It has been been in a gradual uptrend since breaking the $15 mark in late-July, and has returned several multiples to investors in the past three months alone.
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Can NFTs impact the economic livelihood of artists in developing nations?
- Aversano deployed the first NFT portrait photography.
- The total sales volume of NFTs in the art segment rose from $64 million to $774 million.
- NFTs ensure an artist is paid royalty whenever their art is used.
Aversano, an artist known for deploying the first-ever NFT portrait photography, says he sold more than 100 NFT portraits between February and June. He said the sales earned approximately $130,000 within five months. The Twin collection in which he sold the 100 portraits are photographs of twins, which he says are in memory of his fraternal twin.
What are NFTs?
NFTs are non-fungible tokens which are real-life assets that are sold on digital platforms. The viability of NFTs depends on the uniqueness and the utility of possession. This means that tokens can only be relevant to an owner if he can prove ownership of the token. The tokens can range from unique pieces of art from artists to current assets like cars. The digital platform gives an easy and availed proof of ownership.
Non-fugitive assets are made more desirable by the fact that they are unique and one of a kind. This makes them very valuable.
According to Statista, the total sales volume of NFTs in the art segment rose from $64 million to $774 million within a record period of 30-days (August 15 – September 15, 2021). The chart below shows the fluctuation of NFT sales per 30-days period between April and August.
How can NFTs make artists’ lives better?
As the digital world takes significant steps ahead, more investors try to get a niche to explore the same fruits. When Jack Dorsey sold his first tweet at $2.9m, it started a buzz on and around NFTs. Not only for the amount of money fetched but the ‘absurdity’ of buying a tweet when there are millions of them already. However, there is much more to it. It brought about the concept of owning a one-of-a-kind piece of art which for sure is an advantage to artists.
First, NFTs guarantee immutability to the artist. There is uniqueness where the artist has complete copyrights on his art. This is enabled by the ID or metadata issued to an artist to prove possession of the art. It is offered to give essential data about the piece of art.
Second, there are no intermediaries during the trading of art on cryptocurrency platforms. Once there is an interested party, they are connected to the individual artist who lays out the asset’s guidelines to change possession. This is advantageous to the artist since transactions are done on his terms. It also keeps in place his profile and reputation as an artist. The artist also cuts the marketing cost and the issue of art brokers.
Next, there is exposure for the artist. When trading NFTs, artists are at ease to do collaborations with other artists. This is a guarantee as the platform is a haven where artists can interact and flourish while teaming up with even more significant expertise in different fields. Apart from collaborations, there is a world market availed. Geographical borders or any particular divisions do not limit the crypto platforms. Once an artist avails art on a digital platform, the piece is available for everybody.
One other factor pulling artists to NFTs is smart contracts. This is a feature that keeps a contract in code form. It works best for decentralized platforms. Smart contracts are programmed to suit an investor’s interest in trade.
For example, smart contracts can be used by artists dealing with NFTs to store data or be used to get royalties each time the piece of art changes possession. This means that the artist keeps reaping from the art long after the sale. A smart contract can be programmed to work without involving a party to set it up time and again.
On the other hand, since the buzz around NFTs began, more people are trying to get into the trade in an attempt of minting. This is leading to flooding in the market and the uniqueness of NFTs diluting. However, this is not a guarantee for the near future failure of NFTs. Artists can reap much from the NFTs.
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