Category Archives: Blockchain

Decentralized autonomous organizations

Organizational operations is a delicate and complicated process. To get the work done, job are divided into bits for different parties. Through this process, a lot of energy is lost through man power and owing to human limitations, processes move a little bit slower. Consequently, there’s been a need for a system that is swift and accurate. This birthed the technology of Decentralized Autonomous Organizations, DAOs, they are simply digital entities that operate through the sole use of precoded rules. DAO is a unique concept that utilizes the bitcoin principle to enable a business operate without a defined management system.

What are DAOs?

DAO is an acronym for Decentralized Autonomous Organization. DAO is an organization that is run uniquely through encoded rules on a smart contract. All organisations have a structure that governs the way work is done and guides everyone to understand perfectly their individual functions. DAO make use of blockchain technology to enable organizational operation that require no hierarchy. Also, it utilizes blockchain technology to provide a secure online ledger that is capable of tracking financial operations across board. DAO can simply be described as a smart contract that self-runs an intelligent algorithm that makes decisions based on the rules encoded without the need for traditional management.

More so, DAO operates similarly to bitcoin by eliminating the presence of intermediaries and middlemen that exist in organization transactions process making it relatively slow and error prone. It is however important to note that the fate of the organization is governed by the encoded rules and the owners of the system that have a predefined look of how they want to run their affairs.

Traditional organizations and DAOs

In all traditional organisations  workers have a specified duty and relationship with the company. Their rights and obligations are put in check by legal contracts that is in accordance with the legal system of the country the company is operating. This guides operations and if anything goes wrong, the law comes in to settle the parties involved. On the other hand, DAO involves a number of people interacting with one and another through a self-run protocol. The people involved are charged with transaction confirmation, block security while being rewarded with a percent of the token involved in the network. It is a typical smart contract that reduces cost and takes off too much duty from the shoulders of involved personnel. All through, the aim of unmatched transparency is maintained in the system. Members of a DAO are not bound together by a legal entity but are instead kept on the network by the native incentive rewards which is enforced by blockchain consensus. Only the rules of the smart protocol governs the operations on the ledger system.

Furthermore, in traditional organizations, individuals up the hierarchy can take more risk than normal, naturally because of their position. This may alter a lot of things and lead to a greater effect negatively. DAOs, however, once deployed cannot be changed or controlled by one entity, but instead, a predefined majority of participants is needed to achieve blockchain consensus. Therefore, transactions are swifter and are sure to have met all the necessary requirements.

Problem

Due to it blockchain technology background, it is satisfactorily safe. But in cases where a flaw or vulnerability is detected; the whole system can easily be used to exploit.

Prominent use cases of DAO

  1. DASH
  2. UnionChain

Emerging trends in cryptocurrency and blockchain to look for in 2020

Cryptocurrencies and blockchain have been major news for several years and look set to take off in a much bigger way in 2020. 2019 was a particularly remarkable year in the crypto-market worldwide. There were evolving and maturing new and innovative trading methods, new groupings and several blockchain protocols. 

Global regulatory bodies have started to become less apprehensive when dealing with cryptocurrencies, and even began developing their own blockchain infrastructures.  

To push innovation forward, even China entered the world of global competition. It’s obvious that the market for crypto and blockchain is certainly on an uptrend. Momentum is picking up and the market looks very promising to 2020. So what trends should you look for in 2020? 

DeFi – Decentralized Finance 

Known as DeFi in popular culture, decentralized finance is an open-source, permissionless, and transparent financial service ecosystem that is available to everyone and operates without any central authority. Users maintain full control over their assets and interact with this ecosystem through peer-to-peer (P2P), decentralized applications (dapps).

Decentralized finance is expected to be the way forward in 2020 owing to the wide-ranging benefits it offers. DeFi is a natural breeding ground that has allowed innovation to flourish and decentralized finance ventures have reached the value of $650 million. Even though it would never have been believed just a couple of years ago, stable and trustless financial services laws have started to introduce new margin trading and lending facilities, enabling traders to easily switch between various debt positions. Through holding cryptocurrencies as leverage, Babel Finance and other market players are also assisting large-time miners in making use of major capital. 

The Arrival of Ethereum 2.0 

Phase 0 of Ethereum 2.0 has now reached its final testing phase and the public launch of its multi-client test-nest. The teams which led the creation of the components and clients listened carefully to community feedback and received frequent and active updates on developments. As a result, confidence in the Etherum blockchain has grown, and this could result in at least a partial launch during 2020. 

More Crypto Derivatives 

Recently, crypto-derivatives have grown significantly in both accessibility and scale. Not so long ago, they were offered only by a few exchanges but now most allow investors to trade in options and futures for large-cap cryptocurrencies. As a result, the market will become much more competitive with more exchanges jumping into the picture during 2020. 

The Lightning Network 

The Lightning network is a platform for crypto-traders (although in disguise). This layer-2 payment protocol applied on all blockchain-based currencies paves the way for instant Bitcoin settlements. Furthermore, this protocol uses off-chain data to catalyze transaction rates and to reduce the associated charges. Further platforms, applications and nodes are expected to be installed on the lightning network infrastructure over 2020, offering even greater market performance. 

New Crypto-Friendly Regulations 

Over the past two years, no fewer than 13 regulations on cryptocurrency and blockchain have been passed by one U.S. state (Wyoming). This has contributed to the sparsely populated state of America becoming an unexpected global hotspot for cryptocurrency organizations. Wyoming’s new regulations are digital banking friendly and split digital assets into three separate categories. It is unsurprising that other regulatory bodies and U.S. states followed suit rapidly and it is highly likely that more authorities will hop on this bandwagon by 2020. 

Conclusion 

It is clear that 2020 will be crucial for the development of cryptocurrencies and blockchains. Most experts believe that 2020 will have a secular bull market, as the era of consolidation seems to be fading out. Online assets are already a strong force, and finding out how this year will play out is sure to be very interesting.