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“The Ethereum ICO made more unaccredited investors’ millionaires than any other public company” says Alex Mashinsky, CEO of Celsius Network

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Ethereum

Don’t want to read? Listen to the artice here!

Note about the title:
As the title of the article states Ethereum created more millionaires because almost all their initial investors in their ICO were NOT millionaires and had become ones as the ETH price rose. Most investors today in public companies who participated in the A or B rounds were VC’s and rich investors who are already multi-millionaires. Small unaccredited investors did not get a chance to get into Amazon, Facebook or Google as private companies. That is why the few successful ICOs like Ethereum will create more wealth for more people than any of the public companies.

It is no wonder that our guest today was on the Crypto Top Influencers list.Highlight and Share any text

Alex Mashinsky is a force to be reckoned with in the crypto and blockchain space. He speaks with great passion about the blockchain and Celsius Network, the industry-leading crypto lending platform. To date, Celsius Network boasts $632 million in loans and zero forced liquidations in the last 6 months of 2018. It is by far the largest company in the crypto-lending business.

Alex’s vision is not confined to just what Celsius Network does today; his vision is to take control back from centralized banks and toll collectors and put the control back in the hands of hardworking individuals.

Having seen his share of busts and booms over the past 35 years, Alex is no stranger to the fast-moving NY business world. He has founded 7 successful business ventures and has over 50 patents to his name. He has not only witnessed but took advantage of the Dotcom bubble and is not deterred by this crypto winter, “we will bounce back much higher than the last highs, it cannot be any other way” he stated confidently.

We at CryptoTapas believe that we need more people like Alex who are not only idealistic but have the experience to carry out their ideals.

Celsius is one of the projects that is doing extremely well, even in this crypto winter. Since their launch in June 2018, Celsius Network has lent over $632 Million dollars worth of coins in 2018!

Decentralization is the superpower of ethereum blockchain explorer

“The power of blockchain is the power of decentralization,” Alex says, and he believes it is our opportunity to make the system right.

He is doing his part.Celcius Network Conference speech
His company, Celsius Network, is bringing the concept of interest income and crypto lending to the masses. While Celsius lends in fiat, it distributes the interest in crypto to the investors who deposit their coins with Celsius. This is an excellent combination to undermine the big banks and institutions who have the power to monopolize the lending business while bringing liquidity into the crypto market at the same time.


Even the superpowers need mass adoption

Today, to receive low-interest loans on through Celsius Network, you have to deposit collateral in crypto. This will take some time to sink into Western culture, since they are used to getting loans without collateral. Credit is abundant in the US; half of all the credit on the planet is issued in the US. 

But, that lack of collateral comes at a great cost. An average credit card charges an APR of 25%, while some Payday loans charge up to 700%. Compare that to Celsius Network, which charges 4.95% a year on crypto backed loans.

Alex proudly states, “we have not had a single forced liquidation in the $632 Million we loaned because we represent the interest of our depositors.” That is quite an achievement for any company in the crypto space or in the traditional lending and borrowing space.

Investors can also deposit their crypto securely within the Celsius Network app and receive interest at rates of 3-7% (rates subject to change).

Interest rates

Collateral-based loans are common in most nations and so is banks paying interest on deposits. Most US banks, for instance, do not pay interest on your deposits; some even charge you fees for not having recurring deposits. However, they can take your money and multiply it using a fractional reserve system and lend it out to the needy at the 25% rate on the credit cards they issue. The bank is using your money to make a huge profit and not share it with you.

This shady practice has been going on for so long that the Western population has gotten used to it and doesn’t know any better. As banks merged, the interest they pay has dropped by close to 90% as the competition has decreased. 

Celsius wants to change that using blockchain technology and cryptocurrencies; however, it needs many more people to realize that they are being taken advantage of and are losing a lot of money keeping it idle at traditional banks.

“Before focusing on banks, I disrupted the phone companies’ monopoly. They used to charge $3 a minute and now we use VOIP for free (search Wikipedia for my name) – I helped write the patents and develop the technology back in 1994. My grandma in Russia used to hang up on me because calls used to cost us a fortune, and she didn’t want me to spend that kind of money. Whatsapp came in and changed all of that by offering unlimited free VOIP for FREE, but even Whatsapp needed masses to make Whatsapp successful.” Alex related, “Celsius is no different. Inertia in financial space is more difficult to break, but it will happen eventually when people see the value and understand they are being taken advantage of.” 

I am in the elite 1% myself, but…

Alex is not doing this for charity, and he certainly is not a hippie who is waging war against Wall Street. Quite the contrary; he is using his 30+ years of business acumen to build a truly decentralized business that could change the lending segment completely.

“Today, most people rely on wages to survive, and the wage system is a pyramid model where everyone in the bottom of the pyramid is busting themselves to make the top 1/10th of 1% richer,” said Alex.

He makes it clear in no uncertain terms that he himself is part of the 1/10th of 1% purely by the measure of net worth. “I am considered to be the 1/10th of 1% myself, but I made that wealth bringing prosperity to others. My focus now is on taking this revolution of decentralization to the masses by collecting and distributing 80% of our interest income back into the Celsius community instead of the rewarding the officers and shareholders of the company like the banks do. We are focused on growing the community while others are focused on profit maximization.” He clarified, “if we do good, we will also do well ourselves – but not before the community benefits.”

The concept of ethereum Blockchain Explorer is not a new one 

Talking about the need of critical mass for the success of any great technology, Alex spoke about how Satoshi Nakamoto himself borrowed the concept of blockchain, digital signatures and public key distribution from the works of others from 1957, 1980 and so on (see page 9 of Satoshi white paper referring to Scott Stornetta and others).

“Blockchain is not a new concept; it goes back as far as the 1980s, and Satoshi Nakamoto himself referenced to the work he relied on in his whitepapers.” Alex enlightened us, “most people don’t check the references, but that’s where the origins can be found.”

We checked his statement and found Satoshi’s references that dated as far back as 1957. We have since added all the references from Bitcoin whitepaper in our Blockchain Research Reports Database. The main reference Satoshi is using is an advisor to Celsius Network.


Vision worth cheering up for

Alex’s vision of helping people earn interest on their hard-earned income instead of paying interest to the banks while making loans affordable is quite commendable.Celsius Network Media Ethereum Millionaires

In a world where politicians are backing payday loans that suck the blood out of the hard working class in the name of lending charging up to 700% interest using the ‘fine print’, people like Alex and projects like Celsius Network are a much-needed solace.

Test it out to believe it

“Don’t take my word for it,” Alex challenged us confidently, “download the app – check how easy it is to send crypto to anyone using our CelPay service; even those who don’t understand crypto can use it. Try it and see for yourself; it’s the only way to bring the masses and take the power away from the banks.” 

Alex is right on so many levels. The biggest hurdle that blockchain and crypto face is the barrier to entry. There is just no easy way for people to acquire crypto, and when they do acquire the crypto, there is not enough utility because most people don’t know how to use it.

If projects like Celsius find a way to make it easier to own, deposit, earn and lend in crypto, it is a massive step forward for the crypto space.Celsius Network Team Ethereum Millionaires

We encourage everyone reading this article to take Alex’s challenge quite literally. Go test out the app for yourselves: Celsius.network.

Disclaimer: Our excitement in recommending you to try is our opinion, not affiliation or solicitation. Please form your own opinions.

Cryptptapas Interview Celcius Network About Ethereum Millionaires
INTERVIEW TRANSCRIPT (EDITED*)

Cryptotapas: Congratulations on the well-deserved Top influencer recognition.

Alex Mashinsky: Thank you.

Cryptotapas: Tell us a little bit about yourself and your vision behind venturing into Crypto space and starting Celsius

Alex Mashinsky: I like to think of myself as a disruptor. I have started 7 different companies and each of them disrupted some industry or another. Not all the companies did well, but they all changed something. I invented VOIP with a company called Arbinet back in 1994 and now over 3B people use it for free. I brought wireless to the NYC subways with a company called Transit Wireless and now 8m people have connectivity and use it for free. My community benefited before I did.

See a list of all the conferences I had to attend back in the 1990s to promote VOIP and all the MOIP (Money over Internet Protocol) events I have done to promote Celsius.Celcius Network Conferences About ethereum millionaires

To make a shift in the current financial market structure, we give up to 80% of the profits back to the depositor community. The moment you are in it for profits, your thinking changes. When you are in it for the community you think much differently.

Cryptotapas: When companies like SALT have not fared well – what made you think that Celsius would be any different?

Alex Mashinsky: It’s easy to miss the simple concepts we represent. 

We loaned $632 million with zero forced liquidations. We pay back up to 80% of the income to our community as coins in their wallets. We are all about the community, and when you focus on the community your operational model is to always act in their best interests. Most other businesses, including the example you gave, are in this for profit optimization which hurts the community. 

Our loan rates are a fraction compared to some of the other lenders because what we pay to our depositors is nothing they can get anywhere else. Because again, our focus is on making our community one of the strongest in the crypto space. 

Let me give you an example. We were recently selected as the founding member of the United Nations SDG Impact Fund to accept and manage donations in crypto. Fifth Element group realized that blockchain has huge potential in tracking the journey of donations, but more importantly, Celsius Network offers one of industry’s best wallet and custodian service using BitGo with the added layer of funds earning interest.

It just makes sense.

Sensible and simple always win, but also most often missed. That’s where we are different; our focus on community and our vision to change the system helps us think differently, and that helps us become stronger.

Cryptotapas: What happens when the collateral’s value goes below the loan amount?  How does Celsius tackle that deficit?

Alex Mashinsky: Our loans are 25-50% LTV, that is, 25% of Loan to Collateral value. If you deposit $10,000 in crypto, you can take $2,500-$5,000 in the loan at the predetermined interest rate of 4.95% – 8.95%.

If the market value of your collateral goes below the required LTV (with resistance level at 50%) we have a mechanism to recover the deficit from the collateral if you do not want to deposit more coins, but if the coin value goes up, you keep all the profit and you only paid small interest to the rest of the community. The banks don’t get to make any money from this transaction.

BitGo acts as the custodian protecting the customers from any unauthorized withdrawals, while it also protects our community by ensuring that we are not going below the liquidity levels on our loans.

Cryptotapas: How do you ensure Safety of collateral digital assets?

Alex Mashinsky: BitGo, who act as custodian for Kraken/Bittrex, also manages Celsius Network funds. They never had a single breach or hack in 7 years, so it is quite safe.

Cryptotapas: The need to un-bank is the most in third world countries more than the western world, what are your plans to reach countries that do not use USD Fiat? 

Alex Mashinsky: First, we need to perfect the system before we can take this to the other parts of the world. We lend out in different forms of Dollar like Euro, Pounds, etc.

Right now, people work hard for their wages. These financial institutions are milking their customers for their profits. Their first and only focus is on profits – we need to change the equation from banks lending our own money and keeping most of the profit to making lending a decentralized process in which the community keeps most of the profit.

This is how we find a use case for the blockchain and the lending space. This is a great use case for blockchain which can bring the next 1B people to crypto. We get the masses to utilize this service and that’s how we bring blockchain potential to the masses. Decentralization takes power from the 1/10 of 1% and puts it in the hands of a broader middle class.

Don’t get me wrong, I am part of that 1/10 of 1% myself, which is the result of the ventures I did over the years and 50 different patents I own, but I started with nothing. I came to America as an immigrant with less than $100 in my pocket, so I know the hard life others are living every day. I was born in Russia during Communism and grew up in Israel – which has socialism, but for the last 30 years, I have lived in the US under Capitalism. Today 0.01% of Americans or 33,000 people have the same wealth as 90% or 300,000,000 Americans. This is not a system that can last for a long time. One just needs to remember the French guillotine.

My focus right now is to bring the power of finance back to the people by decentralizing interest income and dollar borrowing and scaling the space. Build one of the biggest communities. Once we have established it here in the western world, we can then replicate it in other regions where we will need to issue much smaller loans that cost more to issue.

Without mass adoption, even the Blockchain can die from transaction starvation.

Cryptotapas: What is your thought process in coming up with the idea of 100 million people in Crypto concept?

Alex Mashinsky: Critical mass. For any industry to start disrupting – they need critical mass. For instance, if Whatsapp only had 15 million users, it wouldn’t have made the dent it had in the VoIP industry. The financial industry is much bigger and tougher to change and it needs a certain amount of critical mass.

I am disappointed that only 25 million crypto wallets exist in 2018 at the 10th birthday of Bitcoin. We need 10x more.

As disruptive and as amazing this revolution is, it won’t sustain without many more people. Many great technologies have come and gone because they did not find the critical mass to sustain and thrive.

Did you know when the first blockchain was proposed? It was long before the 2000s. The idea of blockchain kept floating and drowning since the 1950s.

Satoshi Nakamoto in the Bitcoin whitepaper mentions on page 9 all his references. Blockchain as a concept is not new. It has never been applied in a global decentralized model; Bitcoin was the first time someone had done that. We have an opportunity to take that momentum forward, but we cannot do it without critical mass.

Cryptotapas: Do you believe that we are in a fight with the traditional financial system? Do you see any way for the traditional financial system to collaborate or even accelerate the blockchain/crypto space?

Alex Mashinsky: Yes, there is no question about the war against traditional banks and their shark-like models to compete with decentralization. We are challenging the core fabric of the current financial system and the rich people who run big banks will not take it lying down when we are disrupting their business and cutting into their ludicrous profits.

Right now, it’s difficult to get into Crypto.

Do you know what Fiat means? It comes from a Latin word that closely means ‘nothing behind it’. The US Dollar is backed by big nothing, and most of the world’s currencies are backed by big nothing. The dollar has over 22 Trillion in debts and no gold or silver behind it. A system that keeps 90% of its population suppressed will not stay that way for long. At one point or the other, the system will be disrupted, it cannot be any other way.

Ethereum created a lot of wealth. Those who invested in it early made millions of dollars. Institutions who couldn’t participate in ICO’s cannot even grasp how they could miss this.

Whereas previously, any new idea was first available to the wealthy of us to get on the ground floor and it was later dumped on masses in an IPO, like Facebook or other public company shares.

Ethereum created more millionaires because almost all their initial investors in their ICO were NOT millionaires and had become ones as the ETH price rose. Most investors today in public companies who participated in the A or B rounds were VC’s and rich investors who are already multi-millionaires. Small unaccredited investors did not get a chance to get into Amazon, Facebook or Google as private companies. That is why the few successful ICOs like Ethereum will create more wealth for more people than any of the public companies.

Cryptotapas: You were part of the traditional finance system, including VC space, now you are a force behind Crypto revolution, what kind of ridicule or resistance have you’re faced from your friends from the Wall Street?

Alex Mashinsky: Most people complain that I am messing up with their great system that rewards the already rich.

Right now a bank takes money from retail investors at 0% or 1% interest a year and then turns and lends your money to others through credit cards for 25% a year. That 24% margin is a 95% profit for the bank. Our model is changing that to give back to the community of depositors 80% of all money we make and only charge those that need a loan about 5-9% a year. We do not penalize people for late payments, and we do not charge loan or late fees or subject people to unnecessary costs.

And, the banks are scratching their heads as to why I am messing up their lucrative gig, after all, I used to be on their camp. They are happy about the crypto winter because it slowed down our progress, but it did not stop us. To have lent $632 Million dollars since June 2018 is a testament that the idea is solid, and our depositors have received interest every Monday since we launched. Crypto prices will bounce back multiple times once the market recovers; however, we are not going to sit back until that happens. We will carry our vision forward.

Cryptotapas: JP Morgan CEO slashed Bitcoin for 3 years now and JPM is now issuing their own coin. Do you think the entrance of these nefarious companies will impact blockchain/crypto negatively?

Alex Mashinsky: Look, banks are not your friends, and they are definitely not here to do good. They make over $80 Billion in profits, not just revenue, but in profits.

What they are trying to start now is an intranet or private blockchains. This is no different than when companies like IBM tried to build intranets and promised people a safe place to use the internet back in the 80s, but we don’t hear about them because the power is in open networks such as the public Internet and public blockchains. The Internet is the largest network and it won over these attempts to centralize the internet.

The larger the network, the more successful it will be. This is why Whatsapp was such a massive hit.

These banks may try to create a private blockchain to fool people into believing them, but once we scale our own public blockchain network, their users will have the opportunity of doing everything they are doing now, and they will join us instead of JP Morgan. When that happens, people will realize that they were played once again – just like no one is using AT&T to make $3 a minute long distance calls.

The real value of blockchain is really in the public blockchain where masses can participate. It is not easy since there are so many barriers to entry in the blockchain and crypto space. But that is why we need more and more people to work in the space to make it more accessible to the common public. 

For instance, check our CelPay service in our wallet which makes it easier to send crypto, even to those that have no crypto accounts or do not know how to use addresses or private keys. We have taken all the mystery of blockchain and worked it all out in our program to drive a seamless experience of using crypto for the end user. You should try it to believe it.

And I have been in the space of disruptions long enough to know that the value is in the size of the network, and that is why I believe that anyone who is working on the private blockchain is really wasting their time. A public blockchain is where all the revolution will happen.


Cryptotapas: How has Celsius changed you as a person both personally and professionally?

Alex Mashinsky: You know, in crypto you cannot say something and do something else. If you see our technical whitepaper from 2017 – we have delivered everything we said we would and more.

It becomes more important when you say you are working for the community; you have to stick to your word. Otherwise, people will call you out. More importantly, if you cannot stick to what you say you will do – you should go do something else.

In that sense, Celsius has kept me true to my words and promises we made to the community. We will continue to deliver for the community.

Cryptotapas: Do you have an exit plan or are you committed to Celsius?

Alex Mashinsky: I will work on this until I die and hopefully if we make the progress we hope to, generations to come will appreciate what we created. The bigger we become, the more resilient a company we will be – as long as we stick to the principles of putting our community first.

Cryptotapas: Talk to us about your personal life.  What specific actions do you take to find work-life balance, stay away from digital noise and stay healthy?  Any tips for our audience?

Alex Mashinsky: I do not take breaks. I am a workaholic. I am not one of the crazy Twitter or Facebook addicts and I don’t jump on every new idea either. I wait until I have something of value to say. For instance, I waited to explain the whole crypto market crash with the four-man relay race analogy. Do you know what that is?

First the Anarchist grabbed the Bitcoin baton from Satoshi and they wanted to use it for nefarious activities like drug dealings, buy things to blow up, damage the society and other illegal activities. Dreamers of Dystopia. They could not scale and gave up after less than 1m people joined their group worldwide.

Then, Libertarians took the same baton and said we will use this to create an idealistic world, for the betterment of humanity and to change Wall Street. These were dreamers of Utopia. They managed to bring another 3m user to bitcoin and got the price up to $2,000

Then came the Speculators around 2016. They ridiculed the previous two groups as wrong and as amateurs and grabbed the baton to take it upon themselves to play the space and to milk billions. They made a lot of money in the beginning by bringing over 20m new users to the Bitcoin and getting the price to $20,000. Their plan was to pass the baton to the institutions who would take it to new highs.

Institutions never miss an opportunity to make money, but this time, they were last to the party and not ready. They wanted to take this far beyond what Anarchists, Liberals, and Speculators could. However, they found out that the regulation, the scalability and the security of these networks were not ready for prime time so…

They dropped the baton and prices plunged 90% as all the other three growls started running to the exits and selling all their coins.

That is where we are currently coasting. Once Institutions find the way to make legal and regulatory concerns cleared – and believe me they will – this space is going to recover and become so big that everyone will be caught by surprise and wish they did not sell.

This crypto winter is helping institutions place themselves well to benefit from the next wave.

Cryptotapas: What excites you about what you do? What keeps you going?

Alex Mashinsky: If Jeff Bezos is spending every minute of his 24 hours thinking about doing more for his users and bringing new customers, I will be spending every minute of my waking life to making this community bigger and better so that we become self-sustainable.

Once people see the value, we will grow much bigger than where we are today and that will bring much more stability to space.

This revolution is much bigger than any other revolution we have seen before. It touches all the money in the world which is much bigger than the Internet. This gives us an opportunity to change the game for the better.

Cryptotapas: It was an absolute pleasure speaking with you Alex.  We really appreciate you taking time out of your busy schedule to enlighten us with these insights.  Until we catch up again on a future success story, THANK YOU!

*Due to a technical glitch, our interview recording was corrupted. This edited transcript was reconstructed based on the notes made during the interview and has been verified with Alex.

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About the author

RK Reddy holds two Masters degrees, one in Accounting and another in Business Administration with over 15 years of experience in the financial services industry.

RK Reddy is an ardent fan of Blockchain and Cryptocurrencies. You can see the excitement about this new technology in every article on Cryptotapas.com. Sometimes this excitement leads to an overly optimistic view. Guilty as charged. RK Reddy says what may seem like an ‘overly optimistic expectation’ today may become an everyday norm in 5-10 years; look at the history of cars or airplanes, Blockchain and Cryptocurrencies belong to a similar frame of reference.”  Of course, that is just his opinion.


Interview

“Coda is world’s lightest Blockchain,” an exclusive interview with Emre Tekisalp of Coda Protocol

Published

on

Coda Protocol Interview

What happens when the miners decide to pull out their support of a public network? What
happens when nodes find a project not-profitable and they abandon the project?

It makes the blockchain network weak and vulnerable to attacks. In theory, all public blockchain
networks that rely on network strength to sustain face this existential threat.

Coda Protocol “addresses blockchain’s scalability problem at its source by utilizing recursive zk-
SNARKs to ensure the blockchain never exceeds the size of a few tweets, making it the world’s
lightest blockchain.”

Coda wants to provide a viable scalable solution without sacrificing the decentralized nature of
blockchain.

We asked Emre Tekisalp, Director of Business Development at O(1) Labs, the team behind
Coda Protocol, a lot of questions about Coda Protocol and his answers are below for anyone
wanting to learn about Coda Protocol.

Emre spent two years at Coinbase’s Business Development team where he led a number of strategic programs during a period when the company grew 10x. Before Coinbase, Emre was a Product Manager at Intel’s wearable devices group. Originally from Istanbul, Turkey, Emre has an MBA degree from Columbia University.

Q&A with CryptoTapas

In a world of 1000’s of blockchain projects and protocols, how do you envision Coda
making its mark?

Coda addresses blockchain’s scalability problem at its source by utilizing recursive zk-SNARKs
to ensure the blockchain never exceeds the size of a few tweets, making it the world’s lightest
blockchain.

Legacy blockchains like Bitcoin and Ethereum are incredibly heavy chains from a data
perspective. The heavier the chain, the greater the data processing requirements placed on
nodes, which limits the number of nodes eligible to participate. As the pool of potential nodes
diminishes, decentralization declines, jeopardizing the strength of the network.

Decentralization is not a sacrifice blockchains should be willing to make, yet this is
precisely the danger facing blockchains that focus solely on scalability. Coda confronts this
problem by using recursive zk-SNARKs to encapsulate the entire history of the chain in a single,
lightweight zero-knowledge proof.

To ensure sufficient decentralization upon mainnet launch this summer, we launched Genesis, a
token program to prepare members of our community to be block producers. With more than
500 users joining our testnet, Coda is now one of the largest layer 1 testnets by peer count. It’s
the strength of our technology and commitment to our community that differentiates us from
other protocols.

What would you say to convince the team of a project that is already on another protocol,
say Ethereum or Tron, to move to Coda?

Coda is designed for developers and for projects to use it as an easy tool to enable value
exchange in their existing apps. It is incredibly lightweight and prioritizes decentralization and
security. Already more than half of all web traffic can be attributed to mobile, and so it is
absurd to believe any blockchain system that does not work on mobile will be able to meet
the needs of the increasingly mobile digital economy. Coda’s inclusive and lightweight approach
will allow the protocol to be useful for the existing mobile internet ecosystem.

Who is behind o1Labs.org? How big of a team is working on Coda?

Emre Tekisalp founder of coda protocolCo-founders Izaak Meckler and Evan Shapiro created Coda with the goal of solving the
scalability problems that have plagued blockchain since its inception. We now have 28 full-time employees and hundreds of dedicated community members. The first cohort of validator teams participating in our Genesis program includes Bison Trails, Figment Networks, dsrv labs, and Sparkpool.

Coda Protocol Team

[CryptoTapas Side note: Bison Trails is a Libra Network member]

How does SNARKs make Coda better than other projects, can you explain in a way that a
non-blockchainer can understand?

The basic idea of zk-SNARKs is that they allow one to verify the result of any computation
without having to redo or acquire any detailed information about said computation. For example
you can prove “you are who you say you are” to a website without sharing any sensitive
information like a password. Coda uses zk-SNARKs to enable anyone to easily connect to the
blockchain from any device just by downloading a couple kilobytes of data. In contrast,
traditional blockchains like Bitcoin require expensive desktop machines to download hundreds
of gigabytes over many hours.

In the whitepaper, we read “The resulting consensus protocol is consistent and
responsive as long as at most 1/2 of the mining power is malicious,” can you elaborate
what this means?

In order to function, blockchains require all nodes connected to the network to periodically come
to consensus regarding the latest state of the world. The way this consensus is achieved varies
from blockchain to blockchain.

Coda Consensus

Bitcoin, for example, also requires at least half of the nodes participating in consensus to stay
honest. Unlike Bitcoin, which is a Proof-of-Work network, most Proof-of-Stake networks like
Cosmos or EOS require at least two-thirds of the nodes to stay honest. This higher requirement
makes such networks less resistant to attacks. The specific consensus mechanism we use in
Coda, a variant of Ouroboros, allows Coda to stay secure as long as half of the nodes are
honest, similar to Bitcoin. This is one of the factors that allows Coda to be more decentralized
than other blockchains out there.

Will there be a token sale? What will be the maximum supply of Coda?

We have not disclosed any plans for a token sale before the mainnet release of Coda. Coda will
not have a maximum supply, as it will have ongoing inflation per our Economic Whitepaper. At
mainnet launch, Coda will have an initial supply of 1 billion tokens.

Can non-technical members become Genesis Founding members? How many of your
1000 slots are still available?

Absolutely! We see Coda as a decentralized network and currency built by its participants, and
this includes users with many different sets of skills. The majority of the 1,000 Genesis
Founding Member slots are still open, so hop on over to our website to start getting active on
our testnet.

If you were to meet all of your goals, what would Coda look like in 5 years? What kind of
clients would it have on board and what kind of social impact does Coda have in the
blockchain space?

Coda is built first and foremost for developers.

In 5 years we see Coda enabling internet users to exchange value from any app. This will allow
any developer and business owner to easily accept money and new novel types of tokens from
anyone around the world from any device. We recognize that such a future is not built just by
one company. This is why we emphasize inclusivity above all else and are encouraging people
of all backgrounds to participate at this early stage through our Genesis program. Only by
supporting diverse participation today can we be sure the system will be equipped to serve the
diverse, global population of internet users.

CryptoTapas wishes all the best to Coda Protocol.

Thank you for reading and sharing this article and if you have spare satoshis lying around – consider donating.

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We do not endorse or guarantee the accuracy of the information and claims made.

All product and company names are trademarks™ or registered® trademarks of their respective holders. Use of them does not imply any affiliation with or endorsement by them.

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Interview

“The Asensys system delivers 1,000 times the throughput and 2,000 times the capacity of the Bitcoin and Ethereum networks” Says Dr. Brendon Wang, founder of Asensys

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Asensys AMA with CryptoTapas

There are over 5100 crypto projects that are listed on CoinMarketCap. This is not a complete list though, there are 1000s of other blockchain/crypto projects that are out there that are not listed on CMC yet for various reasons (one big one is they may not have their own cryptocurrency to trade). 

With 1000s of Crypto projects already existing – it is difficult to get excited about new projects.  However, when you hear about a project that is conceived and built by a Lead Researcher who lead the team at Microsoft on Distributed Systems, you want to learn more.  

Brendon WangDr. Brendon (JiaPing) Wang, along with Co-Founders Minghao Pan and David (Xiaobing) Zhang, has conceived of an idea that could increase the current transaction speeds by 1000s of times that of Bitcoin or Ethereum. The exciting part about Asensys is its performance increases with the user base. The more users who use the network the faster the network becomes.

This counterintuitive novelty could give Asensys the edge in the blockchain space.  But, is it all hype or is there mettle in this project?

We wanted to find out directly from the founder.  This exclusive Q&A with Dr. Brendon Wang is geared to provide great insight to the reader about Asensys.

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CryptoTapas Q&A

1) How would you describe Asensys to an already confused novice with 2000 odd projects in the market?  What sets it apart?

To understand Asensys, you first need to understand the problem we are solving. Bitcoin revolutionized finance by introducing the first peer-to-peer electronic cash system. Its brilliance lies in the fact that two individuals can exchange value without verification from a third party intermediary, upending the system we’ve relied on for centuries that gave undue power to trusted, centralized entities like banks and governments to validate transactions and provide legitimacy to currency itself. The way Bitcoin circumvents the need for trusted, centralized validators is by outsourcing verification to a decentralized web of computers, called nodes. This means that every transaction and action on the network needs to be broadcast and replicated by all nodes, a process that takes time—too much time to meet the needs of the fast-paced digital economy. This issue of how Bitcoin and all blockchain networks can scale has been one of the biggest roadblocks to adoption of cryptocurrency and blockchain systems to-date.

One obvious way to improve the speed at which blockchain networks can process transactions is to decrease decentralization. The more centralized a system, the fewer nodes need to be communicated with to replicate the action. However, decreasing decentralization compromises the security of the network, making it more vulnerable to a 51% attack—when a majority of nodes collude against the whole to update the chain of transactions in their own interests (AKA: cheating). Incentives are designed to deter nodes from weakening the network, as they stand to benefit from a fully-functioning blockchain, but most members of the crypto community believe weakening security is a bad idea. Furthermore, decreasing decentralization is contrary to the spirit of cryptocurrency that drew so many of us to cryptocurrency in the first place. 

What we’ve done with Asensys is introduce a way to dramatically reduce over-redundant actions across the network (the main culprit contributing to blockchain latency). Our novel solution utilizes Asynchronous Consensus Zones to essentially “divide and conquer” all intra-network tasks into “mini” networks, which are independent and parallel zones.

Dividing workload produces substantial performance lift for the entire network, but it raises two problems: cross-zone transaction handling, which is when a user in one zone transacts with a user in a different zone, and mining power dilution. Asensys addresses the efficiency issue of cross-zone transactions with eventual atomicity and the security threat of mining power dilution with Chu-ko-nu mining.

Eventual atomicity enables transactions to be verified and executed in the zone where the transaction’s first state was initiated. Groups of operations are then conveyed to other zones in relay transactions, but the data pertaining to the transaction remains in the zone in which the initial state resided.

Chu-ko-nu mining protects each zone and the entire network against a 51% attack by incentivizing miners to create multiple blocks for different zones with a single nonce, which enforces even distribution of mining power across zones.

2) Most projects do well in a test environment but fail miserably when it comes to real world application – what factors contribute to this variance and how is Asensys going to circumvent these very issues?

We have conducted an in-house experiment to simulate how Asensys will scale as more users are added to the network and greater capacity and throughput are required. The results demonstrated that performance by the Asensys protocol increases proportionately to the community size. This means that as the user base grows, Asensys becomes even more efficient at processing transactions. In a test including 1,200 virtual machines worldwide to support 48,000 nodes, the Asensys system delivers 1,000 times the throughput and 2,000 times the capacity of the Bitcoin and Ethereum networks. The below graphs are from our whitepaper.”

Linear scaling

cross zone transactions

3) Your claims are in line with companies like Credits, Hedera Hashgraph, etc., all of which have raised substantial capital to fund their projects.  How big is your team to gain traction for Asensys and how are you going to fund it?

I lead a global team working from the United States, China, and Germany. Co-Founders Minghao Pan and David (Xiaobing) Zhang are based in Frankfurt and Shanghai, respectively. Michelle Chuang leads Audience Engagement and Customer Experience for Asensys. She comes to us with over 20 years of experience in marketing and customer engagement and has led key initiatives for companies such as Starbucks, Chevron and Staples Inc. We have funding from angel investors who are also high-profile leaders in technology, news that we will be [releasing] very soon.

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4) Will you have your native currency on Asensys?

Asensys will have its own currency just like Bitcoin and Ethereum to incentivize miners to add blocks of transactions to the chain. Ultimately, however, Asensys intends to be the underlying system powering a decentralized web of applications, each capable of issuing their own tokens.

5) Is your network designed to support micro transactions, and will it be blockchain platform (bitcoin/ethereum/ripple/etc.,) agnostic? 

Asensys is its own infrastructure layer, distinct from Bitcoin, Ehtereum, Ripple, etc.

6) How does Asensys’s unlimited scalability translate to a real world business use case, can you give an example that can be understood by a non-technical business person?

Asensys will be the system powering the decentralized web, which will be comprised of dapps for entertainment, finance, healthcare, e-commerce, education, and more. Just as developers can build on Ethereum, they will be able to build on Asensys without concern for its capacity to scale as the number of users grows. Asensys has a programming language, Parallel Relayed Execution Architecture Language (PREAL), specifically designed for blockchain systems and based on asynchronous consensus zones (just like nVidia has CUDA language to GPU programming). PREAL is based on a functional programming model that allows developers to describe transaction logic without concerning themselves with the underlying parallel blockchain system. 

7) We only saw Academy research reference on your site, is there a white-paper or document that describes Asensys and contrasts it with existing projects?

If you’d like to learn more, please refer to our whitepaper, which describes the details of our system in great detail. This research was also presented at the prestigious NSDI’19 conference. We are continuing to add to our website and build our community. Feel free to follow us on LinkedIN and Twitter channels for updates on news and developments:

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IMPORTANT DISCLAIMER

Everything in this article is an opinion, not an advice of any kind. This material has been prepared for general informational purposes only and it is not intended to be relied upon as accounting, tax, investment, legal or other professional advice. Please consult with a professional for specific advice.

We do not endorse or guarantee the accuracy of the information and claims made.

All product and company names are trademarks™ or registered® trademarks of their respective holders. Use of them does not imply any affiliation with or endorsement by them.

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A Crypto Crimes Database Is Here, and It’s On to Something

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Crypto Crimes regulations

If you have ever seen crime shows from the 90s or early 2000s, you inevitably saw a frustrated detective wring his hands and say, “there is no record of the crimes from the other state.”

Even to this day, a national crime database is not a thing in many countries.

In the United States, there is no simple search system to scoop records from national, state, county, and federal databases. These databases operate on a different search parameter.

However, blockchain and crypto space may be able to circumvent the painful lessons from this lack of a single-source reference.

Murphy & McGonigle, a financial services law firm with a focus on blockchain and crypto litigation, has built a database to act as a single-source reference for specific case laws, verdicts, and fact patterns.

Blockchain Litigations Expected to Rise

Daniel Payne, Murphy & McGonigle

              Daniel Payne

As more and more companies are now venturing into the blockchain space, Daniel Payne, a shareholder in Murphy & McGonigle’s FinTech & Blockchain Practice expects an uptick in the number of cases in the space and for the relevance of the database to be more prominent. “As the economy drives toward a blockchain future, we think the litigations in the space will follow,” Daniel said.

The database tracks the trend line of litigations in the space. For instance, the 2017 and 2018 trend line shows a massive increase in blockchain litigations, which has subdued in 2019 as illegal and unauthorized ICO’s died down.

According to a report by Murphy & McGonigle, securities-related fraud lead the litigation list, while Texas leads the charts for the most number of blockchain-related litigations in the US. The report also notes that “the SEC issued a warning that it has put market participants on notice and is now focusing on non-fraud violations.”


Comprehensive Search Functionality

CryptoTapas had the opportunity to preview the Blockchain Litigation Database with Daniel Payne. The search criteria are quite comprehensive, with options to search for a specific case by plaintiff, lawyer, code, verdict, or any number of parameters. All the charts and statistics on the database are hyperlinked, helping to take the users straight to the details of whatever information interests them, depending on their search.

The database lets users narrow down their searches to the minutiae of a specific type of complaint. For example, if you want to see only criminal cases within a broad category, you can do that. You can further narrow down the search to a particular jurisdiction. You can even find cases by law firm or attorney. “One interesting aspect of the database is it helps you find the law firms that dealt with specific case types,” said Daniel. “One of the interesting aspects is that a particular attorney in Florida has been very active in finding plaintiffs to file a specific type of litigations.”

“Our database helps tie the incidents together that lead to a case,” Daniel said. “A case is otherwise just a case; however, learning about the incidents helps us advise our clients so that they don’t fall into the same pitfalls.”

Bitcoin and the Blockchain Litigation Database Have Common Roots

The idea behind the database came from the mortgage litigations the firm dealt with during the 2008 financial crisis. To help the clients they represented, Murphy & McGonigle started tracking all the mortgage litigation cases, whether their clients were involved or not. This database gave them the edge in terms of finding case laws and rulings to leverage in their cases.

The utility that the firm drew from tracking mortgage litigations sowed the seeds for the Blockchain Litigation Database. Bitcoin was also born during the recession, which was primarily caused by the subprime mortgage crisis.



Smart Contracts Are Legally Binding

“Smart contracts can absolutely be legally binding, and because of that, parties entering into smart contracts need to be careful,” Daniel said. “They should consider getting the legal advice they need before entering the contract.”

All the aspects of a legally binding contract are present in a smart contract. For instance, an offer, conditions, an acceptance, and an execution are all part of the smart contract’s protocol, and as such, they can be just as binding as any other contract.

“Parties should be aware of the ramifications of entering into a smart contract before they enter into them,” warned Daniel.

Education Is Needed in the Space

“I do not think that the attorneys or the courts have the full understanding of this new technology necessary to get questions right that are being presented to them in every case,” Daniel said. “However, we have seen that many of the verdicts on the cases we are tracking are absolutely correct.”

Daniel said that there is a need to educate the individuals working in the blockchain space, especially in terms of the law. “We have seen instances where failure to really understand the technology has led to the decisions that we question,” Daniel clarified.

There is no one to blame here because this technology is so new that many people do not have the required understanding. This lack of understanding is part of the growing pains that any new industry goes through. It is part of the evolution.

“Many of the undertakings of the companies within this space fall within the purview of the existing laws, while few specific aspects need some updates,” Daniel said.

Talking about the efforts made in the space by the blockchain community, Daniel said, “I am happy with the efforts by the blockchain communities in educating the Congress so that they have the background necessary for dealing with the issues that come before them.”

The database is not available for public viewing, but they do offer subscriptions for those who want access.




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IMPORTANT DISCLAIMER

Everything in this article is an opinion, not an advice of any kind. This material has been prepared for general informational purposes only and it is not intended to be relied upon as accounting, tax, investment, legal or other professional advice. Please consult with a professional for specific advice.

We do not endorse or guarantee the accuracy of the information and claims made.

About the author

RK Reddy holds two Masters degrees, one in Accounting and another in Business Administration with over 15 years of experience in the financial services industry.

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