What is the Finney Phone and What Does it Mean for Crypto?

What is the Finney Phone and What Does it Mean for Crypto?

Finney, the first blockchain focused smartphone, is expected to begin shipping in late December. Created by Sirin Labs, the phone’s operating system is SirinOS, which is a fork of Android made with the intention of implementing blockchain technology at its core. The Finney will allow users to securely and reliably use blockchain products and services.

The phone will include a decentralized marketplace (dCENTER), a built-in cold storage wallet, token conversion services, encrypted communication, peer to peer resource sharing, and incentivized educational apps. It will also include a 12 megapixel camera and 128GB of memory.

The default cryptocurrency used to purchase apps and use their services will be Sirin’s own SRN token. Just to purchase the Finney, which is priced at $1,000, requires the use of SRN.

In preparation to satisfy clients and meet demand, Sirin Labs has partnered with Foxconn, the same manufacturer Apple uses for their iPhones. In an interview with CNN, Sirin’s CMO Nimrod May said:

“By choosing Foxconn to build the FINNEY, we’re demonstrating the public’s desire to have a mass-market smartphone that is able to safely and securely operate within blockchain and cryptocurrencies.”

Sirin Labs raised over $157,000,000 by issuing SRN tokens through an ICO. They used the capital to fund the development and marketing efforts of the Finney. While the future success of the phone is uncertain, the community is excited to see a finished product delivered.

What Does This Mean for Crypto?

The Finney phone is one step in the right direction toward mainstream adoption. There are inherent limitations with blockchain technology that hurts the user experience.

For example, most cryptocurrencies require their own wallet to be downloaded due to compatibility issues. This means that if a user wants to hold Bitcoin and Monero, they will need to download two different wallets, one for each currency. This can become cumbersome when dealing with lots of different cryptocurrencies and tokens.

Additionally, finding, using and downloading decentralized applications is not a smooth process. We expect that Finney’s decentralized marketplace, coupled with token conversion services and a built-in cold storage wallet will allow virtually anyone to explore the decentralized world at their fingertips, relieving many of the pain points users experience today.

Until the phone is released, we cannot know for certain the extent to which blockchain technology is integrated, but at the very least we view the Finney as a foundation for a robust, blockchain-focused OS.

How to Take Advantage of the New Crypto Market Volatility

Market Volatility

Volatility has fallen by such an extent that the more mature global equity markets, including the U.S equity markets, are now more volatile and therefore considered to be a riskier trade.

While the lack of direction has left the crypto majors flat by historical standards, their volatilities continue to be well above those seen across fiat currencies, though not significantly above, which does provide an opportunity to incorporate more tried and tested trading strategies and a safer environment to trade.

Advantages of a Lower Volatility Trading Environment

While the heightened volatility across the broader market through late last year and much of this year drew the attention of more seasoned day traders, leading to an increase in daily volumes, the lack of cryptomarket maturity left traders and investors exposed to a number of trading pitfalls. The current environment has alleviated a number of these, though risks do remain and could impact the market at any given time, with governments and regulators not being required to provide forward guidance.

One can only imagine how the world of FX would be if central banks simply moved rates without a schedule and any forward guidance that has essentially become a hand holding exercise. No such luck in the crypto world, where governments and regulators have little-vested interest in abiding by deadlines, as has been the case through the 2nd half of this year, where both the G20 and the SEC have pushed back on key decisions that have ultimately resulted in the tight ranges across the crypto majors.

For those looking for 2,000% returns in a matter of weeks, there aren’t going to be too many advantages to the current trading environment, but for those that are looking to trade intraday on fundamentals, now may just be the time.

Trading on Fibonacci’s, the day’s major support and resistance levels and moving averages, amongst others, coupled with the use of leverage and stop loss options certainly makes trading a far less stressful environment, with the chances of one of the crypto majors sliding by more than 20% in a given minute significantly reduced. This also means that there is greater control on buy and sell orders than before, with the amount of slippage significantly reduced, allowing traders to place market rather than limit orders.

The bad news is that the slide in volumes also means that, for some of the major cryptocurrencies at least, liquidity has also fallen off the cliff, leading to a lengthening in execution times.

Trading with Cryptocurrency CFDs provides investors and day traders with access to the cryptomarket, but with margin trading and the option to go both long and short and with the technical analysis and appropriate trading strategies, the lack of wild swings provides a somewhat different, but not unfamiliar way of generating spreads.

There are still pockets of news that drive the broader market and individual cryptocurrencies, including news of upcoming hard forks and even planned inclusion or removal of cryptocurrencies from the more recognized exchanges, both of which can lead to material price action.

Moving away from the technical, one final and significant advantage is a greater emphasis on the individual product offerings and successes of a particularly blockchain. While we are yet to be in a world akin to the global equity markets that consider macro and impact on corporate earnings, there have been some recent moves suggesting a greater awareness of product offering and adoption.

A low cryptomarket volatility environment supports a greater emphasis on individuality, with price action determined by crypto specific events that may not impact the market as a whole and less by regulatory chatter, though until the regulatory landscape has been rolled out, the chatter will continue to be a major factor.

Final Thoughts

When considering the fact that one of the biggest pitfalls in cryptocurrency trading is the significant volatility, which has limited the effectiveness of developing trading strategies, the time is certainly ripe to begin incorporating the very strategies that may have had limited success just a matter of weeks ago.

Added to that is a likely cryptocurrency price convergence for the more frequently traded cryptocurrencies across the more liquid exchanges that account for the lion’s share of daily trading volumes.

While the positives are evident from a trading environment perspective, pitfalls do remain, however, with price manipulation, ICO pump and dumps and cyber theft all capable of impacting a particular cryptocurrency and, more often than not, the broader market, making it all the more important to protect the downside, irrespective of the trading environment.

The Best Altcoins

altcoins

Looking at the ICO market alone, there have been a total of 1,161 ICOs in 2018, at the time of writing, with total funds raised reaching a whopping $7.18bn.

In 2017, there were a total of 875 ICOs that raised $6.213m, an average $7.1m raised per ICO, compared with this year’s $6.18m. Going back to 2016, there were just 29 ICOs that raised a total of $90.25m, equivalent to an average $3m per ICO.

The growth is been exponential and with it, the number of altcoins that exist with little to no hope of ever going mainstream have also seen a sizeable increase, creating a minefield for prospective investors looking for a suitable investment that would be more of a long-term position than the short-term speculative trades that have fuelled the cryptomarkets over the last 12-months.

In the selection process of an altcoin, there are certainly some basic steps that are worth following, as one of the most important things an investor needs to do is to strip away possible scams and projects that will never get off the ground. After all, the ICO market is still largely unregulated.

Some of the key steps in peeling away the cryptomarket layers in search of a viable altcoin include:

  • Successful Initial Coin Offering: It goes without saying that selecting an altcoin that failed to successfully raise the required funds during its ICO are probably best left untouched, when considering the sizeable number of altcoins to choose from.
  • White Paper: The quality of the white paper, not just in terms of the team’s goals, but also what they are trying to achieve and why, with the appropriate technological detail is essential. A lack of a white paper or one with little detail that provides prospective investors with little on what will be on offer and how funds raised will be used should also be avoided.
  • ICO Rating: There’s no harm in reviewing analysis of the altcoin’s ICO and then assessing how the team has performed since fundraising, with successful completion of milestones, with little to no delay, a demonstration of strong capabilities to deliver the blockchain to market.
  • Sponsors and the Team: By viewing the altcoin’s website, you can evaluate the level of experience the team has and who stands behind the team, full bios being a must. In addition, regular updates on progress against the project roadmap will provide some insight into an altcoin’s prospects down the road.
  • The Offering, its Value, and Outlook: As is the case with any investment, it ultimately boils down to supply and demand. While the broader market largely tracks itself, driven by news and altcoin inclusion onto exchanges, the value proposition will become a major influence on the outlook for an altcoin and there have been some examples of altcoins outperforming the broader market due to successful adoption in the real world. Looking for solutions and product offerings that are likely to be adopted should be a consideration.

Looking across the broader market, there are a number of interesting altcoins that could see widespread adoption in the real world, and whose progress to date ticks the boxes set out above. Of the majors:

Ripple’s XRP (“XRP”): From the major altcoins in existence, Ripple’s platform has garnered the most interest to date, with Ripple delivering almost instantaneous cross-border money transfers with minimal fees. Ripple is in direct competition with financial institutions that have already begun to test the various platforms on offer. Transaction times are at around 4 seconds and transaction fees being equivalent to $0.004.

Stellar’s Lumen (“XLM”): Unlike true cryptocurrencies, the Stellar platform was developed to support cross-border transfers of value, including but not limited to payments. Chained conversions support multi-currency transactions, with Stellar’s Lumen being an intermediary currency. The Stellar network searches for the best available exchange rate on offer, which could either be a simple exchange from U.S Dollar to UK Sterling or via a chain, U.S Dollar to EUR to Swiss Franc to UK Sterling. Stellar’s Lumen is the intermediary between each individual link of the chain or between direct exchanges. Transaction times of between 2-5 seconds certainly put this high on the choice of platforms for cross-border transfers of value.

Litecoin (“LTC”): As a true cryptocurrency and in competition with Bitcoin to become the chosen alternative to fiat currency. Faster transaction times, a larger number of coins and early adoption by the market to remit cross border at speeds far greater than those on offer at financial institutions support longevity and relative price stability in more volatile market environments.

Looking across the rest of the altcoins, there are some value propositions that deliver interesting solutions to the real world, though significant uncertainty will deliver sizeable swings in price until there is some degree of traction. Some smaller altcoins by market cap, but nonetheless interesting include:

Civic (“CVC”): Developed to facilitate the better management of digital identities, incorporating blockchain verification technology to secure and protect the transfer of personal information. With so much data theft from the World Wide Web, a viable solution to identity protection is needed.

GIFTO (“GTO”): Developed to deliver a virtual gifting model, where the network is able to purchase virtual gifts with GIFTO tokens (GTOs) to transfer value to content creators on YouTube, Instagram or any other content / social media platform. The team behind GIFTO has already delivered Uplive, an existing non-blockchain platform that generates significant income for tens of thousands of content creators from their fan base.

Crypto Mining Farms

Crypto mining farm

While a number of altcoins look to pin back the rise to power of mining cartels by developing blockchains fuelled by cryptocurrencies that are mined using hybrid consensus algorithms, there remains a large number of blockchains that are run on proof-of-work consensus algorithms that continue to support the existence of mining pools and more importantly and of greater significance, mining farms.

What is a Mining Farm?

In the early years of the cryptomarket, only a handful of cryptocurrencies existed and mining for the likes of Bitcoin was particularly easy, with miners able to use basic desktop computers.

As the price of Bitcoin rallied, mining interest for Bitcoin and other cryptocurrencies has seen a significant rise, with miners having to not only shift away from normal desktops to ASICs hardware but also to build warehouses of hardware created for the sole purpose of mining cryptocurrencies.

Unlike mining with the use of the traditional desktops, which were not created for the mining of cryptocurrencies, these warehouses, better known as mining farms, have no other purpose and run 24/7, 365-days a year.

Outside of the investment into the necessary hardware and land to build a mining farm, the other main cost comes from the electricity required to mine cryptocurrencies.

Mining farms tend to be built in countries that have cooler climates and also lower electricity costs, with mining farms needing to consider the costs associated with, not just running the hardware 24-7, but also ensuring that the hardware doesn’t overheat, the combination of which can have a significant influence on mining profitability.

Farm Mining

While particularly lucrative for mining farms that have been able to capture a sizeable portion of hashrates, mining is key to supporting cryptocurrency blockchains, the mining process ultimately being the validation of transactions on the respective cryptocurrency blockchains.

With the number of transactions anticipated to continue increasing with time as greater adoption takes place, farm mining is likely to be the only viable method of mining to meet the growing volume of transactions.

For blockchains with proof-of-work consensus algorithms, such as Bitcoin, the entire concept of decentralization would be lost without mining and, as mining difficulty increases, more individual miners are pushed out due to rising power consumption and narrowing profit margins.

The shift in the mining landscape has left the mining of cryptocurrencies in the hands of mining farms, which are now considered to have the lowest barriers to entry into the crypto market.

The growth of farm mining is particularly important for blockchains that are run on proof-of-work consensus algorithms, a greater distribution of hash power restoring the ethos of decentralization, by removing the control of blockchain advancement away from the longer-standing mining farms.

The Future

Government regulations and a general animosity towards Bitcoin and the broader cryptomarket has raised questions on whether local power grids will be willing and able to continue supporting the rising consumption of electricity to fuel cryptocurrency mining.

Outside of the animosity is what has become the highly debated impact on the environment, cryptocurrency mining now consuming such large amounts of electricity that the media have begun publishing studies suggesting the Bitcoin mining uses more power than actual mining.

With such concerns and existing government control on the cost of power, mining farms have begun to source their own power, which is independent of community grids that are often either state-owned or subsidized by taxpayer money.

One such mining facility being built in British Columbia is reported to have installed its very own power substation, with 85 megawatts capacity generated from hydroelectricity, the power being generated enough to support a city of 50,000 homes.

Controlling a key cost variable in the mining process certainly makes sense and, with mining farms having generated sizeable income in recent years, particularly over the last 12-18 months, the availability of capital is there to break free from possible state control or influence, those unable to unlikely to be able to compete with the eventual power grid independents.

While managing cost variables is certainly a key step in the process, the other sizeable cost impact is the actual hardware. One can only imagine that there are developers hard at work, with the aim of developing mining hardware that is far more efficient than existing ASICs.

All You Need to Know About the Upcoming Bitcoin Cash Hard Fork

Bitcoin Cash Fork

For the core developers, it was an attempt to retain some level of decentralization in a centralized mining environment, with the Bitcoin mining cartel looking to improve capacity to improve transaction times and therefore income.

Having only been created back in August 2017, a hard fork earlier in the year was relatively seamless, the May hard fork resulting in a pre-fork rally on hopes of a fresh cryptocurrency reward for Bitcoin Cash coins held at the time of the fork driving demand for Bitcoin Cash. The last fork, back in May of this year saw Bitcoin Cash rally from an early April low $600.1 to the first week of May $1,849.9.

The upcoming fork is scheduled for 15th November and, in stark contrast to the fork earlier in the year, Bitcoin Cash has been in rapid retreat in the last week, with Bitcoin Cash sliding to a November low $518.2% on Sunday, the reversal from the previous Sunday’s 18.8% rally to $571.6 seeing Bitcoin Cash down 9.34% over the period.

Hopes of a Bitcoin Cash hard fork rally have been dashed this time around and Bitcoin Cash continues to sit in the hands of the bears, with the upcoming hard fork looking to be far from seamless, there being quite a division of consensus ahead of the main event.

Hard forks are all about consensus and, while there was the necessary consensus in May to support the upgrade, this time around there is no consensus

What is the Bitcoin Cash Hard Fork Looking to Achieve?

Hard forks are not a rare occurrence for Bitcoin Cash, with the team looking to continue making improvements to the platform to make it a more viable option as an alternative to fiat currency than Bitcoin.

For the coming hard fork, the two sides of the fence are:

  • Bitcoin ABC, which is looking to make a number of upgrades, including the introduction of the use of Oracles and cross-chain atomic swaps to deliver a smart contact offering. Forward-looking, the team has also proposed some block adjustments to address scalability down the road, using a technique called canonical transaction ordering.
  • Craig Wright is backing Bitcoin SV and is proposing to increase the block size to 128MB from Bitcoin Cash’s current 32MB, with no other changes. Back in May, the block size was increased from 8MB to 32MB.

The Bitcoin ABC team are against the increase in block size and that’s where the disagreement has occurred, with Bitcoin ABC and Bitman, one of Bitcoin Cash’s largest miners sitting on one side of the fence.

Craig Wright is against the idea of Bitcoin Cash’s blockchain being used for non-cash transactions and canonical transactions, with nChain and the support it receives from one of Bitcoin Cash’s other largest miners CoinGeek, also being against canonical transactions, whilst supporting the proposed blockchain increase to 128MB.

Bitcoin SV, with its support from Bitcoin Cash miner CoinGeek, will be looking to take on new miners in support of Bitcoin SV, with CoinGeek and nChain reportedly having a higher hash power than Bitcoin ABC & Bitman, which is contributing to the downward trend seen in Bitcoin Cash ahead of the fork.

What to Do in the Days after the Hard Fork:

  • Avoid holding Bitcoin Cash coins on an exchange and keep them in a wallet with private keys, a hard wallet preferred.
  • Avoid making any transactions in the days after the Bitcoin Cash hard fork and wait until there is some clarity on what’s going on.
  • Wait for advice on how to access Bitcoin SV coins and which exchanges are supporting Bitcoin SV.

Last Thoughts

While upgrades and enhancements are traditionally a good thing for any product, particularly one so new as Bitcoin Cash, the real issue lies in the breakup of Bitcoin Cash and the creation of yet another possible alternative to Bitcoin as a viable competitor to fiat currency.

The downward trend in Bitcoin Cash ahead of the hard fork reflects, not only a lack of support for Bitcoin SV, with those looking to receive Bitcoin SV needing to hold onto Bitcoin Cash at the time of the fork, but also some anxiety over the future of Bitcoin Cash ahead of the fork.

Some disruption and fallout are to be expected as a result of the ongoing disagreement between the 2-sides and one thing that has become apparent from is the lack of decentralization, an issue that other blockchains have attempted to address through hybrid consensus algorithms that limit the powers of miners in support blockchain development and adoption.

As the war of words between Craig Wright, who claims to be Satoshi Nakamoto, and Bitcoin ABC continues, more pain is likely ahead of Thursday’s fork and the worst possible outcome for existing Bitcoin Cash holders would be for Bitcoin SV to become the dominant coin come the weekend, Bitcoin SV miners currently threatening to mine empty blocks on Bitcoin Cash that would ultimately render Bitcoin Cash useless.

Investors and speculators will be looking at the direction of Bitcoin SV, an IOU, on supported exchanges and the direction of Bitcoin Cash, with where the hash power sits at the day of the fork key to which side comes out on top.