The Daily Decrypt is a daily weekday video broadcast covering a wide variety of cryptocurrency and blockchain technology topics and news stories. At CORE Media we’ve found the broadcast to be an invaluable and entertaining resource in cryptocurrency news and provide a weekly summary of The Daily Decrypt episodes. Welcome to the Weekly Decrypt!
Smart contracts, pieces of code living on a blockchain that execute automatically upon the presence of pre-specified parameters, are all the rage amongst cryptocurrency enthusiasts these days thanks in large part to Ethereum which boasts smart contracts as one of its major selling points.
Amanda had been interested in deploying a smart contract to refund a portion of Daily Decrypt sponsorship fees to sponsors if the episode in which the sponsor is featured had not reached an adequate number of views within a specified time period. She posted to the Ethereum subreddit inquiring about how this might be made possible. A smart contract company picked up the request and built her a smart contract to fulfill her needs as a means of testing and displaying their smart contract capabilities.
The smart contract was to monitor the view counts of Daily Decrypt videos and send a 25% refund to sponsors if 2000 views had not been achieved within 7 days of the video being posted. Using this smart contract, however, proved to be cumbersome and expensive and ultimately not worth the time, effort and money.
In order to access and utilize the smart contract, Amanda had to download and run the Ethereum browser/wallet known as Mist which contains a full copy of the Ethereum blockchain. Perhaps because of the blockchain’s size or bandwidth requirements, Mist crashed Amanda’s computer repeatedly. They had to run it on her partner’s more powerful computer in order to get it working.
Once Mist was running, Amanda had to find the smart contract. Upon finding it, it became apparent to her that this smart contract had to have taken hours and hours to code. If she’d had to pay the company to write the smart contract, it would have rendered the entire plan unaffordable, to begin with.
Amanda proceeded to set up the smart contract with the desired parameters and, when finished, the smart contract generated a payment address to which her sponsor should send funds. Setting up the smart contract required that Amanda pay Ethereum transaction fees, a fee to the smart contract company and the general fee required by any inflationary cryptocurrency continually creating new coins.
After going through this process, Amanda realized that The Daily Decrypt does not need a smart contract in order to refund its sponsors if viewership does not reach desirable levels. Humans have a tendency to choose solutions that are the cheapest, fastest and easiest and smart contracts at this stage for this type of application are far from the cheapest, fastest and easiest solution. They are a bit like doing backflips to get from point A to point B instead of simply walking. Smart contracts are fun and cool to talk and think about, but for most applications, they are unlikely to be the most desirable solution.
For this episode, Amanda sat down for a chat with MMA superstar Jon Fitch who has gained notoriety amongst cryptocurrency fans after agreeing to accept sponsorships from cryptocurrency projects such as NautilusCoin and HYPER and cryptocurrency companies like BitcoinDirect.
Jon understands that technology like cryptocurrency has immense disruptive potential and so the mainstream media is not likely to get on board in helping to get the message out to people. For this reason, he feels like sponsorships like those he’s accepted can be very effective in getting the message of cryptocurrency out to people who might not otherwise hear of the technology.
For Jon, accepting cryptocurrency sponsorships is not only about the money but also about promoting a technology he himself uses and in which he believes. He learned about cryptocurrency many years ago and actually owns some of his own and occasionally trades in various altcoin markets. He even promotes cryptocurrency and decentralization amongst his friends and family.
Because Jon has been involved in cryptocurrency not only as a sponsor but also as a user and trader, he is well aware of the presence of scams and half-finished projects and stresses the importance of a strong community and higher market capitalization when looking at whether or not to purchase or otherwise get involved with a given coin. He is open to accepting additional sponsorships from cryptocurrency projects as long as he believes in the project and its community.
To support Jon as he helps carry the message of cryptocurrency to new crowds, you may wish to familiarize yourself with his fight schedule.
A prediction market consists of individuals betting on the future outcome of a given event. Prediction markets which live on blockchains are the next step in the evolution of this type of market. To learn more about prediction markets and how to use them, Amanda sat down for a chat with BitShares developer Nathan Hourt.
BitShares allows its users to set up their own prediction markets through the creation of assets/smart coins with specific parameters. As an example, Amanda postulated creating an asset/smart coin called CarCoin. In the description of this coin she would proclaim that in one year a person would be able to purchase a car for $1. As the creator of this prediction market, she would have the final say in deciding the outcome of the prediction and could make a profit by accumulating trading fees paid by people buying and selling in her prediction market.
To purchase this coin would be to place a bet that, indeed, in one year a car will be able to be purchased for $1. To short this coin by putting up collateral in BitShares in order to borrow the coin from the blockchain and sell it to a buyer on the market would be to place a bet that, no, in one year a car will not be able to be purchased for $1.
To experiment with your own prediction market or peruse the already-available prediction markets on the BitShares blockchain, download and run the BitShares lite client. You may also wish to follow Nathan Hourt’s most recent project, FollowMyVote, which is an extension of his work on BitShares’ prediction market pertaining specifically to voting and transparent elections.
Amanda sat down for an interview with Daniel Diaz, DASH business developer, about DASH’s recent vote to reprioritize some of its block reward towards funding development and implementation of DASH fiat gateways. Partners in this endeavor include Deginner, Coinapult & CryptoCapital. These gateways will make it easier for people to purchase DASH with fiat currencies without having to buy Bitcoin first and then exchange it for DASH.
There is a lot of discussion taking place lately in cryptocurrency circles regarding the upcoming halving of Bitcoin’s block reward. The next halving is set to take place in July 2016 and will cut the block reward in half from 25 coins per block to 12.5 coins per block. Bitcoin’s block reward is set to half approximately every four years until it reaches its maximum coin supply of 21 million.
Basic laws of supply and demand say that if the supply of something decreases while the demand for that something remains constant, the price or value of that something will increase. With respect to Bitcoin, a price increase is necessary for Bitcoin mining to remain profitable when the block reward is cut in half.
Bitcoin’s block size limit of 1MB, however, could affect the price of Bitcoin as the halving of the block reward comes nearer. When the price of Bitcoin increases in volatility, more transactions are submitted to the network as people begin to move their coins around in preparation for buying or selling. As those of us using Bitcoin have discovered recently, Bitcoin’s blocks have been reaching their data cap more frequently. When this happens, transactions are delayed and held in the mempool until there is space for them to be included in the next block. Bitcoin users have already reported transaction delays exceeding 24 hours.
If a significant number of people sell their Bitcoin because they can no longer deal with the slow rate of transaction processing resulting from the block size cap, the price may not increase as much as it needs to in order to continue to incentivize miners to keep mining. If miners stop mining, the network’s hashrate will go down while the difficulty of the work miners need to do will remain the same for the next 2,016 blocks before it will readjust to the reduced hashrate. The remaining miners would then require even more time to find the next block than before, which means it would take even longer for 2,016 blocks to be mined and for the difficulty to readjust.
What some folks on Reddit are referring to as a ‘death spiral’ could unfold as remaining miners and users could be becoming increasingly frustrated and turn off their miners or sell their coins, further delaying the difficulty readjustment, reducing the network’s hashpower and security, and decreasing the price which is what incentivizes miners to continue to participate in the network.
Although this sort of doomsday type scenario is certainly plausible, there are a lot of people who absolutely do not want this to happen and who will do everything they can to keep Bitcoin functioning to the satisfaction of everyone. All of this could be easily avoided altogether if the block size cap were simply increased as alternative reference client Bitcoin Classic has been trying to do with limited success for the past several months.
Why it has been so difficult for Bitcoin thought leaders and its miners to avert such a disaster, no one knows. Thankfully for all of us cryptocurrency fans, cryptocurrency competition is alive and well, and there exist many alternative options to Bitcoin to which we could convert if that time were to come.
All episodes of The Daily Decrypt broadcast to date can be found on their YouTube channel as well as their website and you may get involved in the discussion on cryptocurrency competition at the Daily Decrypt subreddit.