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Exclusive: Does Forking Mechanism Allow for a Better Blockchain Governance Model?

Exclusive interview with Nathan Kaiser: Part 1

Nathan Kaiser, Chairperson of the Cardano Foundation and a long-time lawyer in the technology sector, shares his views on the crypto regulatory issues in different jurisdictions and blockchain governance. In particular, Nathan examines whether the forking mechanism allows for better blockchain governance and the reason why “blockchain governance = community governance”.

What is holding the industry back from blockchain governance, and what are the solutions we need for off-chain governance?

Similar to the blockchain itself, blockchain governance, whether on-chain or off-chain, is yet to mature just as the industry itself. While it is premature, the blockchain governance needs time for more research as well as elements from the Game Theory, and, certainly, from the economy.

Technological innovation always comes first and it is especially true in tech and policy. Collateral damage is subsequent. Hence, we are at a very early stage of off-chain governance.

The voting mechanism is an essential element of on-chain governance on the blockchain. Can you compare simple majority coin-voting and identity-based quadratic voting on the blockchain? Are there any drawbacks to these two voting methods?

While it is too early to compare the models, every solution is a decision based on values. There are no correct or incorrect voting systems regardless if it is quadratic or identity-based voting. Decisions will always be based on values.

The selection of different voting systems is a choice in itself. Therefore, it is a reflection on your transparency on value judgments rather than justification of the choice you make between the systems.

In terms of forking, recently there are some blockchains such as Algorand and Conflux Chain claiming that there will be no hard forks in their blockchains. Do you agree that a blockchain without forking mechanism is a better governance model than blockchains that allow forks?

There may not be a huge difference, yet there is competitive pressure on all fronts. However, when you allow forking; subsequently, you cannot disallow it. For instance, Ethereum did not allow forking. Although Ethereum did not forbid forking, it did not take proactive measures to reject it. As a result, you will have competitive pressure — a healthy kind of evolutionary pressure to improve. Otherwise, the competition will create a fork that will directly compete with you.

For blockchains that actively disallow forking, such as Algorand and Conflux chain, it is a fair design decision. You are in direct competition with other chains that will be engaged in similar things. Hence, it needs to be viewed as a different way of dealing with competitive pressures and stress.

Nathan mentioned blockchain governance is community governance in the UNCHAIN Bitcoin & Blockchain Conference, Berlin.Source: UNCHAIN Bitcoin & Blockchain Conference

In Berlin, you mentioned “Blockchain governance = Community governance.” Can you share with us more about this idea?

Governance is always about people and they matter the most in all tech-related projects. When we deal with regulation and governance in blockchain, it is about the people involved, their interaction, decision-making, reactions and ways of sharing the information. The involved people include token investors, coders, founders, employees and those who invested their time and emotions. The most important key is ways of regulating the interactions of these people involved in the blockchain project.

Exclusive: Liberal Society Comes with Friendly Crypto Regulations

Exclusive interview with Nathan Kaiser: Part 2

As a veteran lawyer in technology, Nathan Kaiser of Cardano Foundation shares his insights in identifying countries with friendly crypto jurisdictions. He also examined how different jurisdictions affect both on-chain and off-chain governance.

Which are some of the friendliest crypto jurisdictions worldwide, and how do the jurisdictions compare internationally?

Jurisdictions that do not welcome and encourage developments and those that nod to everything without dissection are the unfriendliest. These are simply irresponsible policy actions.

Friendly jurisdictions are those which try to analyze the merit of technological innovations, such as blockchain. The majority of countries in the world often fall in the middle of friendliness spectrum. For instance, developed nations have been assessing whether the existing laws can or cannot cope with the new tech phenomena. Each country will then have to analyze and assess the way they want to govern their societies and how the existing laws will interact with the emerging tech of blockchain.

Since every society can decide how they make these decisions, they can develop policies that fit the corresponding jurisdictions. Ultimately, a more liberal society will be a more friendly jurisdiction for any kind of development.

Which area in blockchain/FinTech lack cross-border regulations?

There is no unified body or even a unified set of laws governing cross-border, but rather specific aspects focusing on one item instead of a holistic overview. Egmont Group, for instance, has a broad international ambition towards anti-money laundering (AML) cross-border regulations.

The FATCA can be considered as a unilateral effort that goes beyond its own borders, as it is cross-border by nature.

How does regulation across different jurisdictions affect blockchain governance (both on-chain and off-chain)?

From a traditional lens, you will see different policy approaches from various jurisdictions concerning on-chain and off-chain governance. If you have illiberal approaches, they will not win the game.

At the same time, there is no such thing as the race to the bottom: meaning an “anything goes” approach is equally not a winning strategy. In jurisdictions which allow everything, that strategy will not be a winning argument for a given company or project. A low regulatory framework will rather provide a sense of “no governance,” whereas people want to have stability and security.

With Bitcoin recognized as virtual property with monetary value in China, what is your outlook on Chinese crypto regulation?

During my first semester when I was studying law, we were taught that buying illegal drugs and selling them, they are recognized as “property.” Although, these drugs are recognized as property by the court, it is also illegal! Being recognized as property does not make it easier to buy and sell illegal drugs.

This response by the Chinese authorities is very antiquated and standard. Of course, Bitcoin is property and it remains illegal. In my opinion, the fact that it was considered property did not move anything within the overall Chinese regulatory response.

The current identity management systems may have privacy and security problems. What are some ways that blockchain technology can solve these problems?

One of the primary uses of blockchain is for identity management. However, I also feel that there are a couple of players that are focusing in this area, and the tech has not caught up yet. On the cryptographic and tech side, it is still in an embryonic stage.

I believe that there is going to be a lot of development, and I am convinced that in the next five to 10 years, much of identity management will be handled through blockchain.

Cardano Partners With COTI To Enable Merchant Transactions via ADA Payment Gateway

Cardano, based in Zug, Switzerland recently partnered with COTI, an enterprise-grade fintech platform to create an ADA payment solution for merchants.

The ADA payment system will be launched in November this year, and it will help merchants to process payments in ADA and receive payments in 35 different local currencies into their bank account. This was announced by Cardano on October 23, in an official blog post.

In the wake of this partnership, Shahaf Bar-Geffen, CEO of COTI, expressed how delighted his team was to partner with Cardano in developing such a payment gateway. He said:

“We are pleased to team up with the Cardano Foundation in building a unique payment solution for merchants seeking adaPay checkout functionality. We have a lot to the mutual trust and support between the Cardano ecosystem partners and COTI. This joint effort is one of the first steps we are taking in delivering a truly universal payment solution and expanding the COTI tech stack beyond our own ecosystem. The ways people exchange value is changing for the better, and the future is looking more promising for payments.”

According to the report, while COTI will develop and implement the service in such a way that will make the ADA payment gateway simple to deploy for merchants; Cardano will take advantage of COTI’s Universal Payment Solution 36 (UPS) to power the ADA payment gateway solution which will then extend the utility use case for the token. All the possibilities associated with COTI UPS will be extended to ADA merchants.

With either a QR-based PoS or an ADA pay button, the payment solution will be easily integrated directly into a merchant’s website.

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Chico Crypto Goes Head-to-Head with Cardano Founder on Smart Contracts

Crypto gets its first bout in the ring with well-known crypto YouTuber Tyler Swope aka Chico Crypto going head to head against Charles Hoskinson Founder of Cardano.

As reported from Chico Crypto himself, live streaming on youtube, a fight has been on the cards for weeks. With quips coming from both sides on who would win and who would be happy to get this fight moving.

The proceeds will all go towards charity which will make it a fight for a good cause, many other events have taken place in recent years with influencers getting into the ring. This time St. Judges Children’s Hospital will receive all of the proceeds.

Industry awareness for blockchain and raising money for charities is all a positive that will surely get enough media coverage. But does this have any meaning for cryptocurrency or blockchain?

With many questioning, if this is newsworthy, only time will tell leading up to and after the event. Mass adoption and media need to continue to breach all industries, with sports being a fantastic podium to discuss more the technology and what it can do for the athletes, ticket offices and more.

Showing off what blockchain can currently do, the fighters’ contracts for the fight will very likely happen on-chain. With both fighters agreeing to terms and having everything signed likely on the Ethereum blockchain. Showcasing what can currently be achieved, and its many benefits will be one strong reason why those in the industry should be hoping for more information and events like this to be shared on traditional media channels, with those not working or investing in the industry.

Smart contracts will have a great chance to shine showing how agreements can be carried out fairly, cheaply and effectively using Distributed Ledger Technology (DLT) aka Blockchain.

Taking control of how proceeds are distributed, rewarded and also confirmed is a huge advantage that DLT brings. With over 60,000 subscribers coming from YouTuber Chico Crypto alone, it could be one of the biggest crypto events of 2020.

Image via Lee Cooper

Cardano EUTXO Blockchain Upgrade Will Combine the Best Of Bitcoin and Ethereum

Cardano (ADA) has released a detailed outline of how it will implement its smart contracts using the extended UTXO model. The file was shared on founder Charles Hoskinson’s Twitter feed on Jan. 27.

The smart contract implementation is vital to the upcoming Goguen update.

Keeping the Record—UTXO vs Account/Balance Model

Two popular types of record-keeping models in modern blockchain networks are the UTXO model and the Account/Balance Model.

UTXO stands for ‘unspent transaction output’. It is the output of a transaction that a user receives and is able to spend in the future as it is ‘unspent’. UTXO primarily helps to organize a blockchain ledger so that funds cannot be spent twice.

The Bitcoin blockchain works on the principle of a UTXO model and was first developed by Satoshi Nakomoto, although it is not mentioned in the original Bitcoin White Paper. In Bitcoin, each transaction is based on the concept of outputs and inputs which represent specific amounts of Bitcoin. A user’s wallet keeps track of a list of unspent transactions associated with all addresses owned by the user and the balance of the wallet is calculated as the sum of those unspent transactions. The original Bitcoin script relied heavily on UTXO to check wallets for sufficient funds when a transaction was requested.

Ethereum’s blockchain uses the Account/Balance model. This model is the same as a typical bank with the bank tracking how much money each debit card has, and when we need to spend, the bank checks the record to see how much money is left and if it is sufficient for the transaction.

Cardano EUTXO Wants Best Of Both Worlds

According to the research, “Ethereum chose the account model explicitly to facilitate more expressive smart contracts. On the other hand, Bitcoin chose UTXO for good reasons, including that its semantic model stays simple in a complex concurrent and distributed computing environment.”

Cardano’s proposed EUTXO (Extended UTXO) will be a combination of both models to potentially have “expressive smart contracts while keeping the semantic simplicity of the UTXO model.”

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Cardano CEO Getting a OneCoin Vibe from Federal Reserve's 'Infinite Cash' Statement

In an interview given to CBS’s 60 Minutes on March 22, 2020, Neel Kashkari, the President of Federal Reserve Bank of Minneapolis made a controversial remark after being asked to comment on how the state would deal with it if a situation like the 2008 financial crisis came again due the Coronavirus outbreak.

On being asked whether the Federal Reserve Bank is equipped well enough to provide money to all the banks if they needed to satisfy all incoming panic withdrawals, Mr. Neel Kashkari was quick to respond that this is the reason why Federal Reserve Bank exists.

“Yes. This is the fundamental reason the Federal Reserve exists.”, said Mr. Neel Kashkari. He further added, “If everybody gets scared at the same time and they demand their money back, that’s why the Federal Reserve is here, is to make sure that there’s liquidity, that there’s money to meet those demands.”

Mr. Neel Kashkari further clarified his controversial statement by saying ‘that’s what Congress has told us to do’. He stated that they have been given the authority to print money and provide liquidity in the financial system by first creating it electronically and then printing it with the Treasury Department.

After the interview went live on the internet it received a wave of public criticism, one of the voice was the CEO of Cardano, Charles Hoskinson. He went on to tweet that the comments made by Neel Kashkari gave the US Dollar a real OneCoin Ponzi scam vibe.

OneCoin was a Ponzi token scam that aimed to capitalize of the success and hype of Bitcoin. It is estimated that the scam costed its investors around $4 Billion as they had no idea that the tokens that they were buying had no value.

And it wasn’t just the CEO of Cardano but also other cryptocurrency experts like Anthony Pompliano and Changpeng Zhao who took a dig at Neel Kashkari’s comment.

Anthony Pompliano, co-founder of Morgan Creek Digital tweeted, “History tells us that this is not sustainable long-term for a currency.”

“Ever heard about ‘supply, demand and price’? What happens to price when you have infinite supply?”, tweets CEO of Binance, Changpeng Zhao.

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Overthrowing Bitcoin? Charles Hoskinson Says Cardano Set to Become the Next Best Crypto

In his latest Periscope video, Charles Hoskinson, the creator of Cardano, once again emphasizes that the smart contract platform would become technologically superior to leading networks like Bitcoin and Ethereum or any other blockchain in the industry this year. Charles Hoskinson, the CEO of IOHK, who is also the co-founder of Cardano (ADA) and Ethereum, has stated that Cardano will become the best cryptocurrency in 2020. He made this revelation in a video on twitter when talking about Cardano in 2020.

Cardano best positioned to see massive gains

In the 30-minute video, Charles Hoskinson stated that although advancements in smart contracts and wallets have been revolutionary in the recent years, Cardano is pulling all the pieces together to ascend as the most advanced blockchain in the space. According to Hoskinson, the upcoming improvements will make Cardano the best cryptocurrency in the world.

Hoskinson said, “This year, the industry will see Cardano ascend to the best cryptocurrency in the world. There really is going to be nothing on the market that’s as good as what we’re delivering this year. Because at the end of the day we have it all.”

He revealed how they would have a smart contract system, identity standard, loading system, clear interoperability, multi-asset standard, and all the scalability, which is needed to meet the rising demands.

Hoskinson mentioned that from investors, traders, developers to individuals to operate or govern the platform, the company is set to become the best in class in all of those things. He said that is what the company is delivering, and that is what his team is dedicated to delivering in the entire 2020.

However, Hoskinson cautions that Cardano’s superiority in performance does not imply that it will automatically become the most widely used or popular platform. He clarified that would depend on the success of the commercial venture incubator Emurgo and the Cardano Foundation.

Currently, Cardano stands strong with a network of scientists, engineers, and academics who are developing the platform. It is also constantly promoted, studied, and upgraded by three bodies – IOHK, Emurgo, and the Cardano Foundation.

The Cardano Foundation is a body that continuously protects, develops, and studies the cryptocurrency side of Cardano. Emurgo is the body that focuses on possible commercial connections of Cardano to entrepreneurs. IOHK (Input Output Hong Kong) is the body that continuously maintains and designs the Cardano platform.

Cardano blockchain combines the best of Bitcoin and Ethereum

Cardano recently released a formalized description of how its unique smart contract would be upgraded in the upcoming Goguen update. The cryptocurrency is unique because it stands as the perfect mix of Bitcoin and Ethereum.

Bitcoin functions as a decentralized peer-to-peer system run by blockchain. Using the same technology, Ethereum was built as a platform which can produce its own token and uses smart contract. These contracts give tokens or apps built on the platform, which will only be done after the requirements set by the user are fulfilled. Cardano mixes these best features in its own blockchain-run smart contract platform. The crypto currently holds a great potential to become a leading cryptocurrency and software, even surpassing that of Bitcoin and Ethereum.

Image via SlidesLive

Cardano Working With SA Blockchain Alliance to Free African Enterprise from Politically Entrenched Legacy Banking Systems

The Cardano Foundation has partnered with the South African National Blockchain Alliance (SANBA) in a bid to expand blockchain adoption and bring financial inclusion to the country of 59 million.

According to an announcement by the Foundation on April 7, Cardano and SANBA, a fast-tracking blockchain initiative with government support, aim to promote socio-economic growth in South Africa by empowering people and enterprise against legacy financial systems through blockchain technology.

Breaking Ties with Legacy Systems Entrenched in Politics

Cardano highlights the South African market as a potential launching pad to building a distributed network across the country that amalgamates the networks used by government authorities, institutions and enterprises.

Per the release, “Blockchain technology lets developing nations break ties with legacy banking systems, costly middlemen and entrenched political structures.”

Due to the entangled history of African financial infrastructure and its ties to corruption, Cardano cites blockchain technology as a way to guarantee greater transparency and reduce illicit behaviour.

Together SANBA and Cardano aim to build a digital identity infrastructure that will comply with KYC and AML, as well as boost developing economies through digital currencies.

Laying the Foundation For Africa

South Africa appears to be the first step for Cardano on the continent, as the release stated that the Foundation hopes to boost the entire African FinTech ecosystem.

Last year, the Foundation began its expansion efforts in Africa to build blockchain governance with the aim of future-proofing the continents’s sustainable growth and development which it cites as being “in line with its mission to shape legislation and commercial standards.”

June 1: Sell in May Postponed to Sell in June?

Trading Crypto with Eugene is a series of daily commentary of market analysis and trading advice shared by Eugene Ng of Matrixport, a veteran trader with 10 years of experience in top-tier global investment banks. If you like the article, please follow us here on Blockchain.News so you won’t miss our future publications.

BTC shot up by $400 to make a high of $9,720 over the weekend with the trendline resistance capping it from making any further grounds. While volume was quite robust for Bitcoin, it was ETH that really outperformed (+12%) in the past 48 hours, driven by record ETH options ($20mil) traded on Saturday. For the past few weeks, there has been quite a bit of talk/shill/promoting of ETH, and I think largely driven by a combination of factors that I’ve described earlier (i.e., growing daily active addresses, more than 60 billion gas being used, $7bn in stablecoins and Greyscale’s ETH demand). Other protocol tokens such as Cardano, Zilliqa, and NEO also followed the ETH move, albeit less exaggerated. I still have my doubts on whether an ETH-led or ALT-led rally somewhat lift all boats, my view is that this is a technical retracement from Bitcoin Dominance, re-allocation by funds from BTC to ALTS and new capital inflows (an example: a16z raising their mega $515mil round last month – where will they be allocating some of that capital to?). Besides, this month has plenty of macro event risks (Riots, China/US situation, Reopening risk, Jun 10 FOMC, Jun 18 EU summit, Jun 30 Fed US bank stress, and Fed purchase to decline from $2.4bn to $0.6bn per hour in coming months). Strategy? For those who have got your offers hit at $9.7k good on you, keep that on with a tight stop. There is obviously the risk of a scammy wick through to $10.5k, so you want to avoid that. Keep that short, and I think we should be targeting back to $9.2/$9k/$8.8k. For those chasing the vol move, as mentioned on Saturday morning, I’ve managed to add some vol and would start to cover and turn short once IV hits around 80-90%. Good luck.BTC could break $9,700 decisively to trade for $10,300 and $10,500.. My bias is that we don’t have that volume for BTC to trade through those levels. I still think we head back down lower before a move higher…

A closer look shows you we are just bouncing up and down in this wedge… will be exciting when the bulls or bears can break either side, otherwise respect it until it breaks..

BTC dominance chart shows that ALTs are likely to have more room to run, but how much more? Maybe when BTC hits 63% or so…

Implied vol looks to be traded against the trendline support from earlier this year, which is why I bought some vol over the weekend…

DisclaimerOpinions expressed are solely the analyst’s own and do not represent the views of Matrixport the company.
The views and opinions expressed in this article are those of the contributor and do not necessarily reflect the view of Blockchain.News.

Ethereum Founder Vitalik Buterin Says Layer 2 Scaling Solution Has ‘Basically’ Succeeded

Ethereum has been seeing an upward trend, and demand may increase further in anticipation of the upcoming ETH 2.0 update expected in Q3 2020.

Ethereum is scheduled to undergo a major change of its consensus mechanism, transitioning from proof-of-work (PoW) to proof-of-stake (PoS).

Ethereum has been expecting its scaling to occur for some time, and according to Ethereum’s creator, Vitalik Buterin, it could already be happening.

Vitalik Buterin recently tweeted that the Ethereum blockchain network’s “layer 2 strategy has basically succeeded.”

Previously, Buterin identified blockchain scalability has a difficulty for typical blockchain designs because it requires every node in the network to process every transaction, limiting the transaction processing capacity of the entire system.

To solve the scalability issue, the Ethereum creator identified strategies for scaling, including sharding, also known as the “layer 2 protocols,” which allows transactions to go through without every node processing the whole transaction.

Token transfers will continue moving to layer 2 solutions due to the fact that these transactions take up a large chunk of the network activity, according to Buterin.

Scalability: Shard Chain Simplification

Dubbed as “HackMD,” Buterin proposed the ETH2 shard chain simplification in early October 2019. In this proposal, a persistent shard chain will be abandoned, and it is replaced by every shard block which is a direct crosslink.

The number of shards is reduced from 1024 to 64 and the maximum number of shards per slot increased from 16 to 64. The “optimal workflow” is revised that there is a crosslink published for every shard during every beacon chain block. Other simplifications include less shard chain logic required, simplification of EEs, and decentralized exchanges no longer needed to facilitate paying transaction fees across shards.

The simplification proposal does come with limitations. There will be more beacon chain overhead with the attestation aggregation having an overhead of 307,200 bytes per slot in each shard. As there are more pairing from a maximum of 128 to 192 per block, the block processing time will increase by around 200ms.

Cardano’s Shelley upgrade is also expected soon, for June 30. While speculation around the upcoming hard forks, ETH and ADA prices are expected to rise, as people who want to earn staking rewards will push buying pressure.

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