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What is Qtum (QTUM) ?

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The emergence of cryptocurrencies has been accompanied by a wave of innovation that has put the nascent sector into the spotlight. Bitcoin’s model has been replicated and improved upon, and other cryptocurrencies have offered up their own takes on blockchain.

Alongside the industry’s expanding popularity, more companies are looking for ways to capitalize on blockchain, and existing solutions for development have shown their limitations. Ethereum, for example, is the most popular solution for blockchain-based apps, but recent events have prominently displayed its problems with scale and managing large network loads.

With these issues in mind, the Singapore-based Qtum Foundation created their own blockchain solution – QTUM – which deploys the more stable bitcoin chain while providing an app development environment akin to the capabilities Ethereum currently provides. The company is aiming to offer businesses an improved smart contract platform that extends functionality along with a more secure and transparent environment.

What Is Qtum?

At its core, Qtum is a cryptocurrency designed to simplify the use of smart contracts for inter-business and institutional operations. More than simply a coin, however, the foundation created a blockchain solution that combines several aspects of two major cryptocurrencies – bitcoin and Ethereum – to facilitate interoperability between the two and take advantage of their major benefits.

Qtum is built on a bitcoin core fork, but the foundation has created its own hybrid blockchain with the help of several key tools. The coin uses bitcoin’s chain because of its simple and stable nature, allowing the foundation to build upon it more easily.

On top of the foundation, it uses a layer of abstraction that enables Qtum to combine several virtual machines that contribute different functionalities. Most important among these is the Ethereum Virtual Machine, which gives Qtum the ability to create its own smart contracts.

On a more granular level, however, each layer has a specific purpose. The bitcoin chain offers the foundation the ability to use the UTXO (Unspent Transaction Outputs) model, a simplified version of accounts that eschews the traditional banking account model in favor of a more peer-to-peer oriented one.

Instead of individual accounts that have sums debited when a transaction occurs, all transactions are written as bank checks. This way, users must specify just who the amount is being credited to, and the reason, simplifying the smart contract creation process. Users’ “balances” are then just the total of all the transactions they can complete.

The problem with UTXO is that Ethereum uses a more traditional account model, where users have balances that can be debited to complete a transaction, and their destination accounts have the same sum credited. This is one of the bigger problems in bitcoin-Ethereum interoperability, one which Qtum solves with an Account Abstraction Layer that translates bitcoin’s UTXO outputs into account-style data Ethereum can interpret.

The Ethereum aspect is the other major component of Qtum, as it allows for the creation of smart contracts and decentralized applications (dApps). However, by combining it with bitcoin, Qtum draws on Ethereum’s attributes to focus its sights towards business and institutional adoption. All told, Qtum’s blockchain is based around stability, interoperability, and modular design, helping contribute to its overall value.

Proof of Stake – Qtum’s Value-Added Proposition for Businesses

One other major difference between Qtum and its building blocks that serve as the foundation for the platform is its use of Proof of Stake consensus over the more traditional Proof of Work.

PoW is the standard for bitcoin and is based around miners who validate transactions to create new blocks. The system was useful initially as adoption rates were low and processing each block was relatively easy.

The problem with PoW consensus is that as chains expand and the number of transactions increase, solving each block becomes significantly harder. This manifests in several ways. The first is that mining takes significantly longer, slowing down the overall speed of the network and transactions. The second is that because mining becomes exponentially more complex, better computers and systems are required, as well as large amounts of real-world power.

Mining operations use substantial amounts of electricity that costs fiat currency, putting pressure on cryptocurrency values. For business purposes, PoW becomes inefficient as thousands of transactions must be processed quickly and at relatively low costs. Having to wait hours for a transaction to be recorded and completed means businesses lose fiat money while they wait.

PoS consensus, on the other hand, randomizes the creator of every new block on the chain by introducing a deterministic algorithm that chooses based on wealth, or a user’s stake. This removes the block rewards for miners, and also the need for increasingly costly mining operations to which bitcoin and others have fallen prey. More importantly, all coins are mined when the blockchain is created, so there is no real reward outside of transaction fees, lowering overheads and expediting the speed of transactions.

For businesses, this model is preferable as it removes the need for competition and ensures that transaction fees remain low enough to make the system viable. Furthermore, because there is no need for mining, there is also no downward pressure on cryptocurrencies’ values from miners having to sell cryptocurrency to cover fiat expenses.

What Are the Uses for Qtum?

The Qtum Foundation has angled itself as a solution for businesses, offering a better way to embrace blockchain without the inherent risks and complications associated with bitcoin and Ethereum, but with all the benefits. Qtum offers businesses several advantages over its predecessors, making it impressively useful in a variety of situations.

The most obvious is their hybrid smart contracts, which thanks to UTXO, are more secure than Ethereum’s version. While the latter created smart contracts, there have been several well publicized incidents where the technology has underperformed, causing millions in losses. Instead, bitcoin’s secure transactions are now usable with Qtum smart contracts, offering an extra layer of protection.

One of the biggest appeals for Qtum users is the blockchain’s ability to create lightweight dApps in almost any computer language, as opposed to Ethereum’s somewhat restricted library. There are already several applications built on Qtum’s chain, including traditional services like healthcare records and marketing, as well as more unorthodox dApps focusing on food traceability, prediction markets, and artist copyright protections.

More importantly, Qtum is hoping to attract bigger institutional actors and become a bridge for business-to-business transactions thanks to their smart contract design. The company’s use of UTXO and Ethereum smart contracts means that it offers a truly trustless ecosystem for transactions, fully removing the need for middlemen all while reducing overheads for businesses.

Real-World Penetration

Qtum is past its initial stages and has already locked down agreements with several important companies that could quickly raise its profile while adding to its appeals as a central hub for blockchain development in the future.

The Qtum Foundation has already struck up a partnership agreement with Starbucks, though the terms haven’t been fully specified. Furthermore, to stay at the vanguard, the foundation has ironed out a relationship with China’s 360 Finance to create a blockchain research lab dedicated to improving the system’s underlying technology.

While still early in the year, many experts have high hopes for Qtum, and the cryptocurrency seems poised to fulfill its potential. While it must still prove itself to the private sector to gain momentum, the virtual currency could quickly become the dominant go-to for dApp development and offer businesses a safer, more effective, way to transact.

Investing in cryptocurrencies and other Initial Coin Offerings (“ICOs”) is highly risky and speculative, and this article is not a recommendation by Investopedia or the writer to invest in cryptocurrencies or other ICOs. Since each individual’s situation is unique, a qualified professional should always be consulted before making any financial decisions. Investopedia makes no representations or warranties as to the accuracy or timeliness of the information contained herein.

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Bitcoin

Bitcoin’s Mining Costs Will See It Bottom out at $6,000, Traders Argue

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Two well-known traders, Brian Stutland and Jim Iuorio, have recently revealed they believe bitcoin has a major support at the $6,000 thanks to its mining costs, which means it may be the bottom of the cryptocurrency’s downtrend.

Speaking to CNBC, the traders noted that while it may be too expensive for the “average person” to start mining the flagship cryptocurrency, some of the miners will find it difficult to mine profitably if the cryptocurrency falls below the $6,000 mark.

Their comments came shortly after bitcoin lost over $1,000 in a 24-hour period, after reports suggested Goldman Sachs had dropped its plans to open a bitcoin trading desk in the near future and a whale moved over $100 million to cryptocurrency exchanges.

Brian Stutland stated:

It’s going to be difficult [to profit] once we get down to this $6,000 level I think that’ll act as some support there. But look, do we really need Goldman Sachs? The point of cryptocurrency was to get people out of the banking system, and bank and transactions offline from that.

Goldman Sachs’ chief financial officer (CFO), as CryptoGlobe covered, later on revealed the reports were false as the company is still working on “setting up a trading desk to make markets in digital currencies such as bitcoin.” It’s moving into the crypto space in “response to client interest in digital currencies.”

Per Stutland’s words, while the drop created “some selloff” the bottom will be reached a $6,000. Jim Iuorio then noted bitcoin price charts point to a potential bounce if the cryptocurrency manages to go through $6,480.

If bitcoin goes through that level, Iuorio said, the cryptocurrency will “come out of that little consolidation it’s been on” and go up to $6,800. If it fails to do so and trades under $6,300, he added, it’ll fall back to $6,000.

At press time, BTC is trading at $6,470 after rising 1.38% in the last 24-hour period, according to CryptoCompare data. The cryptocurrency seemingly started recovering after reports suggested crypto exchange Coinbase was tapping the expertise of $6 trillion asset manager BlackRock to launch a crypto ETF.

As CryptoGlobe covered adoption has been growing, as billionaire Tilman Fertitta, owner of the NBA basketball team Houston Rockets, recently started accepting bitcoin and bitcoin cash in hos Post Oaks Motor Cars dealership.

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Bitcoin

What are Forks and Airdrop in Cryptocurrency?

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The cryptocurrency industry boasts of many technical terms of which most of them need no tedious search to understand them as they are self-explanatory. One of the frequently used terms in the industry is airdrop.

The word combination alone provides a gist of what it really means, however, it may not have a literal meaning as it may be assumed to be. This post identifies and explains two important most-used terms in the industry.

Airdrop

Airdrop does not literally means “drops” fall from the air or the air really drops. It signifies a free distribution of tokens or cryptocurrencies for a specific purpose. In most occasions, cryptocurrency companies decide to reward their early adopters by distributing a proportion of free tokens to them.

In addition, some companies ask interested parties to perform minor tasks, including liking their telegram page, following them on twitter and few other instructions to stand a chance of getting a portion of the distribution.

As this may be a marketing strategy to get more people on board to build a community, this may also be a strategy to evenly distribute tokens in order to avoid market manipulation by large token holders.

Airdrop is very common among the newly introduced coins that need a kind of popularity to rise to the moon.

Forks

Fork in cryptocurrency has a general meaning of dividing or introducing an updated version of an existing cryptocurrency. When inventors realize that an existing cryptocurrency falls short of a particular function, a similar but upgraded version is introduced.

A good example is Bitcoin and Bitcoin cash. Bitcoin gave birth to Bitcoin cash in 2017 after inventors announced on a fork that was intended to make the digital world even better.

Forks are categorized into two; Hard folk and Soft Folk. Hard fork has been explained to be a permanent diversion from an existing Blockchain with the nodes of the new Blockchain not interacting with the transactions of the old one.

Soft Node is quite different. Transactions of the non upgraded nodes are recognized by the new upgraded ones; however, when the non upgraded node mines blocks continuously, the new nodes will reject them.

In this case, enough hash power is needed to make it succeed. It is believed that the existence of a fork makes the future of cryptocurrency very bright. Possibility of a fork can address so many problems in the cryptocurrency industry.

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Bitcoin

What Next For Ethereum (ETH)?

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Ethereum (ETH) has had a rough week in the crypto markets. On the 5th of September, right before the whole market lost close to $40 Billion in a day, ETH was valued at $280 and seemed to have considerable support at that level. Then the news hit that Goldman Sachs have decided not to proceed with plans for a Bitcoin (BTC) and Crypto trading desk. The entire market tanked. ETH fell in the markets to current levels of $219 as the news about Goldman Sachs have since been declared as fake news.

Fears of Further Decline and ICO’s Dumping ETH in the Markets

The Ethereum HODLers in the crypto community are concerned that ETH will continue falling to levels well below $200.The last time ETH went below this levels was back in mid September when it was valued briefly at $195.

With the constant rumors that ICOs are selling the ETH they raised last year and early this year to avoid further losses, the concern still lingers of the possibility of the digital asset continuing to depreciate in value. Although this claims have not been confirmed, the theory is plausible given the tonnes of crypto that was poured into ICOs from late last year to date.

Will it Go To Zero?

The extreme side of events is that ETH will plummet to zero as everyone ditches the digital asset for more stabler coins such as Stellar (XLM). There is also the theory that ETH can be replaced as the preferred ‘gas’ payment on the Ethereum network thus making the digital asset obsolete. However, the Ethereum community would not agree to such a radical overhaul of the network’s operations.

A Call for a New Ethereum Network

This then leads to a new discussion that the Ethereum network needs to evolve with the times or risk being obsolete as more efficient networks are created. These include the likes of Tron (TRX), Zilliqa (ZIL) and Neo (NEO). Of particular concern are the security vulnerabilities in Ethereum smart contracts as well as the network having congestion issues that need to be solved by increasing its throughput.

Waiting It Out

The good thing is that ETH still has fans and HODLers who are willing to wait out the current storm in the form of a bear market. There are also high hopes that the scalability issues on the network will be solved very soon further injecting the much needed life into the digital asset.

In conclusion, the digital asset of ETH is facing some trying times in the crypto markets as it has dropped 85% since its peak value of $1,400. With the bear market still in full force at the moment of writing this, there is some fear that its value could drop further. However, the long term future of ETH is still bright if its network can evolve with the times.

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