Tokenization is the transformation of a physical asset like land, art-work, gold, equity, etc to a digital form on a distributed ledger known as a blockchain. A blockchain is a sequential, timestamped database that is stored on multiple computers at different geographical locations. Because all ledgers are the same, a single entry can be easily searched from any point on the network. You control your asset and the corresponding tokens through your private key.
Advances in automation have allowed us to use an algorithmic model which makes decisions based on a pre-defined set of instructions. The On-Chain mobile application monitors aggregate weighted price for crypto prices from the largest exchanges. By using both time and volume weighted price, the model predicts beyond a 50% accuracy score a price movement up or down for a given timeframe. The model includes timeframes ranging from 5 minutes to 1 day. Currently On-Chain supports all crypto assets listed on the largest exchange by volume Binance, with other exchanges and coins to be listed for later versions of the application.
The grid display consists of the crypto coin pairs on the vertical column with the timeframes along the top horizontal row. Each box alternates in color ‘Red’ representing negative price movement and ‘Green’ representing positive price movement. The box colors change based on our proprietary model based on what’s known as a Parabolic Stop and Reverse, with some variations.
Version 0.1 Beta is live in the iOS App Store for Apple and Google Play Store for Android.
Proof of Work and Proof of Stake
There are fundamentally two methods of generating new crypto currency, known as proof of work and proof of stake.
Currently the Bitcoin network is the largest decentralized computer network in the world. This decentralized network is made possible by an economic incentive system known proof of work or PoW. Bitcoin is the PoW decentralized network used validate and secure the native crypto currency known by the same name. The validators on this network are known as miners and exist throughout the world in different locations. The miners are rewarded for solving complex mathematical equations as way for validating transactions on the network and for doing so they earn newly minted or ‘mined’ crypto currency. The equations being solved are asymmetric meaning the solution is hard to solve but easy for the network to verify. A network node that finds valid proof of work for new blocks, by repeated hashing is a process known as crypto currency mining. This economic system is the infrastructure of Bitcoin and it uses over 70 TWh per year to secure the network. These miners are essentially pools of computers devoting their computational power towards solving complex mathmatical equations. The first miner to come up with the correct answer to the equation earns what is know as a ‘block reward’ which contains a value crypto currency. The miners are responsible for verifying the transactions that take place on the network and also earn the culmination of the transaction fees for a given block in the chain.
In a Proof of stake, or PoS network, validators are established by controlling or staking a large value of crypto currency. New crypto currency is minted by the nodes. Economic value is rewarded to the nodes with the largest amount of currency staked. The size of the value staked is linearly correlated to the probability of the validator minting the next block. The node then receives the fees generated within the block as a reward for validating and signing the block on to the blockchain. If validators provide false information they forfeit their staked value, which incentivizes a network of honest validators.
Both systems play a role in decentralized networks with PoW being the predecessor to PoS. To date, PoS is still theoretical as networks like Ethereum are currently rolling out their own incentivized staking system dubbed Ethereum 2.0. Other decentralized oracle networks like Chainlink incentivize nodes to validate accurate data. On-Chain Ventures administers a Chainlink node known as 7x Oracle which validates the authenticity of data that developers can use for their smart contracts.
Why does decentralization matter?
Install METAMASK to interact with derivative contract. METAMASK is a Chrome extension wallet.