Online multiplayer games are shifting towards blockchain

Online multiplayer games are shifting towards blockchain

by | Mar 7, 2019 | Blockchain, Blockchain Games

As complex and beautifully designed games are, the only part of the entire experience which is truly owned by the gamer is the feeling of achievement. That is as close as gamers ever get to really “owning” anything in the computerized world.

Online games offer avatars for sale, which gamers purchase from a computerized store as a symbol of their entity within the game and then spend hours on end to customize it, to enhance the feeling that it belongs to you, and yet it doesn’t. It can disappear in an instant. An instant in which the entertainment platform and its servers can be shut down. No warning and no explanations.

But good news strike on the horizon of online gaming. The innovation of blockchain technology can change all of that. Using decentralized systems and non-fungible tokens, or NFTs—like the ERC-721-consistent tokens previously made by Aphorism Zen’s CryptoKitties—players can make characters, vehicles, weapons, and other advanced signs that they claim forever, not simply the timeframe of realistic usability of a diversion.

The innovation can be the entryway for a player’s individualized and tokenized manifestations to move consistently on multiple online blockchains.

The potential is huge, and it’s the reason many trust the expanding blockchain gaming industry could deliver the slippery “killer app” that at last conveys this innovation to the majority.

But is the market prepared for such an extreme move in digitized gaming resources? A consortium of eight of the leading enterprises in this space, including Ubisoft,  considers so. Also, their vision for the eventual fate of gaming and the $140 billion computer game industry has the help of a developing number of gamers and diversion engineers alike.

Ubisoft’s Blockchain Initiative Manager Nicolas Pouard believes the goal of this alliance is to rally stakeholders from both the blockchain and gaming industries and work together to develop solutions for the challenges that await these converging fields, according to Ubisoft’s Blockchain Initiative Manager Nicolas Pouard.

And it’s that last piece of the puzzle—the potential for a breakthrough smash hit on the level of an “Assassin’s Creed” franchise—that fuels the vision for gaming as blockchain’s bridge to the mainstream.

“Gaming will allow people to familiarize themselves with blockchain in an interactive environment, which is the first step to mass adoption,”

Nicolas Gilot, a founding member of the Alliance and co-CEO of Ultra—a blockchain-based “next-generation games distribution platform.”

True Ownership

The ownership in the digital world has its complexities. Let’s take iTunes for example. You can buy a song on iTunes, for example, but it isn’t really yours. There are limits to what you can do with that digital file—and you certainly can’t resell it.

Nowadays, in most cases, players that are done with a game in which they invested a lot are not able to pull any value out of the items or achievements they collected with much efforts.

Blockchain’s value proposition for gaming strongly relies on what we call ‘true ownership,’

Ubisoft’s Blockchain Initiative Manager Nicolas Pouard

This also applies to game platforms. Gaming assets are similarly restricted. In conventional games, servers store all the things that players buy.

“If you stop playing, lose your account, or experience technical issues, you lose those digital goods,”

Manon Burgel, B2Expand CEO

As explained in the blockchain games vs crypto games article, the in-game items are tied to the server of the platform, not to the real-life user of the account. Some even specify in the EULA (End User Licence Agreement that players are not allowed to sell or gift items to others.

The perceived unfairness of this among gamers is what’s driving the desire for blockchain to flip it on its head.

“A game that runs completely on the blockchain is an example of a decentralized platform that could be owned by everyone.”

Dan Biton, founder of Gimli

Worldwide Asset eXchange (WAX), a blockchain e-commerce platform for digital assets, released a survey of 1,000 gamers and 500 game developers in the U.S. that shows solid support for the “true ownership” of in-game assets.

The survey states that 68% of the gamers trust they have the right to “truly own” the things they purchase. In addition, 62% would be bound to spend fiat on virtual assets if they could transfer those assets in between games, and near 75% of gamers said they would enjoy to sell or exchange in-game assets regardless of the type of the game.

What’s more, 86% of the game developers believe that in-game assets are on their way to becoming strategic components of future games, and more than 66% agree that the publisher of the game suppresses the advantages of these assets.

By tokenizing these assets, players can choose for themselves how to manage them: give them away, exchange them, or even offer them. It empowers a “digital second-hand market,” Burgel clarifies, and “its decentralized nature ensures that games and items are not held by one company but by the network.”

Of course, this sounds extraordinary for gamers, but publishers must figure out how to profit from this game model.

Nowadays, blockchain’s involvement in gaming is limited to the tokenization of digital assets. Furthermore, given the administrative atmosphere in the Unified States with respect to tokenized resources, this convolutes matters for an expansive, traded on an open market organization like Ubisoft.

Ultra’s CEO demands, in any case, that he sees “no issues with tokenized assets” from a lawful point of view, while organizations cling to set appropriate administrative rules. “The goal of regulatory bodies such as the SEC is to protect the public from being subject to scams,” he says. “The blockchain and crypto industry is continuously evolving, therefore it is important to keep up-to-date with the latest regulatory decisions to avoid slowing down innovation.”

Gilot additionally takes note of that the tokenized assets that will be exchanged on Ultra and all through the blockchain-gaming space. NFTs do not fall under the same rules as tokens sold during an ICO or STO (Security Token Offering), which may incorporate investment contracts and are subject to securities laws and guidelines. In the meantime, an advanced gaming asset, Gilot says, essentially “guarantees ownership, as well as proves the scarcity of an item is created through a publicly available smart contract.”

NFTs, as it were, are computerized portrayals of unique items, which are different from the collectable exchangeable cards of yesteryear. Those collectables work as a tokenized “proof of purchase” for the proprietor. They are the reason for most by far of blockchain-put together computer games at present with respect to the market, for example, Everdreamsoft’s “Spells of Genesis”— a game of collectable card, arcade-fight style game that makes a case for being the first blockchain-based mobile game.

“Spells of Genesis” was launched in April 2017, seven months before CryptoKittis were released on Ethereum. CryptoKitties and its non-fungible cats broadly smashed the Ethereum network in December 2017. CryptoKitties stay in charge of the absolute most costly NFT-based, gaming collectables ever sold—some surpassing the six-figure mark.

When will a major publisher release its first blockchain-based title?

In July 2018, the upstart blockchain gaming protocol MagnaChain announced its partnership with Epic Games, the maker of “Fortnite,” spurring rumours of an inescapable “Fortnite on the blockchain.”  However, MagnaChain hasn’t commented on any details regarding the process.

For Ubisoft, Pouard from Ubisoft is still at a “test-and-learn” stage regarding the blockchain technology, mainly because of their financial obligation to its investors. “True ownership” is an extremely new business model and many tests are still needed to conclude if this is “something publishers can handle long term.”

Burgel’s B2Expand started paying more attention to this use case, having discharged its first game Beyond the Void on Steam. Beyond the Void uses the Ethereum blockchain for its “economic backbone” enabling players to purchase, sell, and exchange “cosmetic in-game items” for the Multiplayer Online Battle Arena and Real-Time Strategy mashup utilizing B2Expand’s local Nexium (NXC) token. Burgel says Beyond the Void would have explored the blockchain technology within the core gameplay if it wasn’t for the early release of the project.

About “true ownership” and the trade made around the exchanging of NFTs, Burgel states that: “the gaming industry has yet to find the right business models fitting these opportunities.” Nevertheless, distributors could, at last, discover an incentive in tools that enable gaming networks to “organically grow and feel involved,” for example, by encouraging the creation and dissemination of user-generated content. That is just “one of many possibilities,” Burgel says, and “many companies are already exploring new ideas.”

Dan Biton, a co-founder of the Gimli platform and a Blockchain Game Alliance board member, says we have to think past the present video-game scene to imagine what these conceivable outcomes may lead to. “A game that runs completely on the blockchain is an example of a decentralized platform that could be owned by everyone, and we could think of something where every player has its share in a voting system to make the game rules evolve,” he says. The game’s logic “or even the game itself” could change as indicated by the wants of its players “in a completely decentralized way.”

It’s a new and unique gaming perspective and one which Ubisoft is now putting its assets and target industry into an investigation. Ubisoft’s Strategic Innovation Lab is an inner research organization gave to analyzing future industry patterns and they are already looking far ahead from the “crypto collectable” use case of the blockchain which is found today in the market.

In recent months, the lab has gone through the process of developing a Minecraft-inspired model, a treasure-chasing and island-investigation game called HashCraft. The game doesn’t utilize NFTs. Indeed, it doesn’t have much to do with tokens. But it joins blockchain and pushes the limits of what was recently thought conceivable in gaming, situating publishers like Ubisoft as basically the makers of the “fantasy”, which are the characters and storylines of the game, and the players as the developers of “experiences” they genuinely possess.

It takes courage to embrace this new trend and Ubisoft is still in its infancy in this journey. “There is still plenty that we need to discover, which can’t be done without continuing our exploration or collaboration within the ecosystem,” says Pouard. Furthermore, cooperation is decisively what the Blockchain Game Alliance looks for. The alliance of game publishers are in the procedure now of formalizing a formal administrative structure for their association. Says Pouard: “This is just the beginning of the adventure.”

Hurdles remain, but much of the promise that this technology brings rests in its ability to redefine antiquated notions of digital rights in a rapidly changing world. We take this as good news, thinking that crypto and decentralized technologies are still in their infancy.

Blockchain Games vs Crypto Games: What is the difference?

Blockchain Games vs Crypto Games: What is the difference?

by | Feb 8, 2019 | Blockchain, Blockchain Games

Blockchain games are surely the future. The main issue is that people today do not understand how this works, perhaps due to the lack of education. Most of the time they believe almost everything they hear or read online. But still, money is made this way, and many startups profit big time from this lack of knowledge.

Note that blockchain technology can be applied to a vast number of industries, not only used in the economic sector for currency transactions. Comparing Blockchain games vs crypto games will hopefully give you a better insight.

Unfortunately, there is a HUGE lack of information and confusion about the difference between blockchain games and crypto games.

Blockchain Games vs Crypto Games: What is a Crypto Game?

The most frequent use for blockchain tech in games so far has been to store your items on the blockchain, tying them to your (Ethereum) wallet and making them permanently your own. Another term for this process is tokenization.

In contrast, in “classic” games, any items that you supposedly own in-game are in fact stored on the game publisher’s servers, as is your whole account. There are many ways for you to lose possession of your assets in this case – server malfunction (failure or attack), halted game development, banned account, etc.

The first generation of blockchain games are actually crypto games or tokenized games. They were solely based on this principle and they focused on collecting unique assets and trading them, for fun, profit, or both. CryptoKitties was the game that started this trend and they’re still quite popular.

The main difference between the two is that a blockchain game has every process in the game recorded on the blockchain as a transaction. No one can change, delete or influence the result of a game, whereas a crypto game has only a token used within the game. 

Even more, crypto games don’t even use their own blockchain. Most, if not all of them, use the Ethereum platform, which requires you to buy another token just to trade the token of the game (Gas on Ethereum).

It’s needless to add that if only 10% of the games which use the Ethereum platform would start trading at once, the network would crash. Therefore, a blockchain game would ideally be a game which uses its own blockchain. Joseph Lubin, the co-founder of Ethereum, acknowledged onstage at Ethereal Tel Aviv 2019 that the network, in its original form, wasn’t built for mass adoption: “We knew it wasn’t going to be scalable for sure,”.

To add to the confusion of this type of games, some projects claim they are developing their blockchain so that others can use it to develop blockchain games. None that we know of, yet.

CryptoKitties has collectable and unique cat cards, which are in fact tokens you can exchange, but the entire game is based on Ethereum. Also, the game is not a blockchain game, only the tokens are on the blockchain. But yes, the tokens/collectable cards can be traded and the prices are in ETH, which can indeed be transferred to a cryptocurrency exchange and be traded for another crypto or fiat.

What is the essence of blockchain games?

Just ask yourself who controls or can check the back processes of those games, and how it is decided who scores more or who gets a better crypto kitty? A blockchain-powered game has all of these processes stored on the blockchain, easy to asses and transparent for all who want to verify it.

The many blockchain game names found on Google, have merely a whitepaper, for a future project, but none of them is functional. The market also exploded after the overnight success of CryptoKitties which was at its best a well-developed marketing plan. CryptoPuppies falls into this category as well as other not-so-famous variations of collectable crypto animals. The developers just stopped replying to their early enthusiasts. And this is not a singular case.

Let’s talk about crypto casinos.

Many believe that gambling and crypto put together in the same sentence give the blockchain technology a bad name. As you can see, there are many ways to utilize blockchain, but most developers seem to be in it for the short run, for the quick win. Ethereum platform has become their home and the network is invaded. Even the developers of Ethereum aren’t happy with this, as another short success of such a game would compromise the network.

Fortunately, crypto enthusiasts now know how to better research a project before investing in it. Just try to remember 2017, when ICOs weren’t regulated and nobody understood what they were, but people were just throwing money at anyone with a whitepaper.

Blockchain Games vs Crypto Games: What is a Blockchain game?

Blockchain games are any games that include blockchain technology in its backend or in its mechanics in general.

Blockchain, by definition, is a public and transparent distributed data ledger. It gives the developers and the users the chance to check and verify every transaction ever made, not leaving any place for interpretation or data manipulation. The blockchain is a growing list of records, called blocks, which are linked using cryptography. Each block contains a cryptographic hash of the previous block, a timestamp, and transaction data.

Nowadays, the blockchain stores not just cryptocurrency and tokens, but also in-game assets and progress. But most processes of the games, remain as they were: clueless of the blockchain technology and nowhere near it.

However, there is hope, as the market is barely starting to understand and embrace this new technology. At the moment there is exactly one cryptocurrency project with the blockchain technology to build a blockchain game, not just for the cryptocurrency inside the game, but for everything that the game implies.

This project which stands out, as a true blockchain game, is one in which not only the cryptocurrency used to develop its in-game economy is stored on the blockchain, but the entire game uses the blockchain technology. FootballCoin is a fantasy football blockchain game. It will probably become known at least for being the first project of its kind.

FootballCoin is the first and so far, the only blockchain game on the market. The rest of them just spend money they don’t have on marketing.

Gaming is evolving and as in any other field, gaming can and probably will adopt the blockchain technology the right way, not just for tokens.

Cryptocurrency Regulation Around the World Report

Cryptocurrency Regulation Around the World Report

by | Jan 22, 2019 | News

This report surveys the legal and policy landscape surrounding cryptocurrency regulation around the world. This report covers 130 countries as well as some regional organizations that have issued laws or policies on the subject.

After analysing how various jurisdictions, it would be possible to identify emerging patterns, as this report is trying to describe. The country surveys are also organized regionally to allow for region-specific comparisons.

The terminology used to describe cryptocurrency

One first aspect the report has revealed is the variety and fluidity of the terminology used to describe cryptocurrency.

Read more on The differences between cryptocurrency coins and tokens

Some of the terms used by countries to reference cryptocurrency include: digital currency (Argentina, Thailand, and Australia), virtual commodity (Canada, China, Taiwan), crypto-token (Germany), payment token (Switzerland), cyber currency (Italy and Lebanon), electronic currency (Colombia and Lebanon), and virtual asset (Honduras and Mexico).

Cryptocurrency regulation: Cryptocurrency warnings and approach

One common action was identified across the surveyed jurisdictions: the government-issued notices about the pitfalls of investing in the cryptocurrency markets.  Such warnings, mostly issued by central banks, are designed to educate people about the difference between actual currencies, which are issued and guaranteed by the state, and cryptocurrencies, which are not.

Most government warnings include the following: the investment risk resulting from the high volatility, many of the organizations that facilitate such transactions are unregulated, investing is done as a personal risk and some even add that cryptocurrency was created for illegal activities, such as money laundering and terrorism.

Read more on What is cryptocurrency and why do we need it?

Some of the countries surveyed go beyond simply warning the public and have expanded their laws on money laundering, counterterrorism, and organized crimes to include cryptocurrency markets, and require banks and other financial institutions to ban or limit any type of activity that cannot be tolerated under such laws.

For instance, Australia, Canada, and the Isle of Man recently enacted laws to bring cryptocurrency transactions and institutions that facilitate them under the ambit of money laundering and counter-terrorist financing laws.

Some countries (Algeria, Bolivia, Morocco, Nepal, Pakistan, and Vietnam) ban any and all activities involving cryptocurrencies. Qatar and Bahrain have a slightly different approach in that they forbid their citizens from engaging in any kind of activities involving cryptocurrencies locally but allow citizens to do so outside their borders.

Other countries are indirectly imposing restrictions, by restricting cryptocurrency transactions of the financial institutions (Bangladesh, Iran, Thailand, Lithuania, Lesotho, China, and Colombia).

Cryptocurrency regulation: ICOs

Cryptocurrency regulation is not the only concern for some. Only a limited number of countries surveyed regulate initial coin offerings (ICOs). Some of these countries ban ICOs altogether (mainly China, Macau, and Pakistan), while most tend to focus on regulating them.

For the rest of the countries that do address ICOs, its regulations depend on how an ICO is categorized. For instance, in New Zealand,  particular obligations may apply depending on whether the token offered is categorized as a debt security, equity security, managed investment product, or derivative.  In the Netherlands, the rules applicable to a specific ICO depend on whether the token offered is considered a security or a unit in a collective investment, an assessment made on a case-by-case basis.

Read more on How to earn free cryptocurrency (without investing or mining)

Cryptocurrency regulation: Blockchain technology

Some of the jurisdiction surveyed for this report, while not recognizing cryptocurrencies as legal tender, see potential in the blockchain technology behind it and are developing a cryptocurrency-friendly regulatory regime as a means to attract investment in technology companies that excel in this sector. In this class are countries like Spain, Belarus, the Cayman Islands, and Luxemburg.

Read more on Blockchain technology used in non-cryptocurrency applications

Some jurisdictions are seeking to develop their own system of cryptocurrencies.  This category includes a diverse list of countries, such as the Marshall Islands, Venezuela, the Eastern Caribbean Central Bank (ECCB) member states, and Lithuania.

Belgium, South Africa, and the United Kingdom stated that the size of the cryptocurrency market is too small to be cause for sufficient concern to warrant regulation but have issued warnings to the public about the pitfalls of such investments.

Cryptocurrency regulation: Cryptocurrency taxation

The challenge appears to be how to categorize cryptocurrencies and the specific activities involving them for purposes of taxation.

Transactions must first get classified either as income or capital gains to determine the applicable type of tax.

Read more on Top countries where cryptocurrency is legal

The surveyed countries have categorized cryptocurrencies differently for tax purposes, as illustrated by the following examples:

Israel → taxed as asset
Bulgaria → taxed as financial asset
Switzerland → taxed as foreign currency
Argentina & Spain →   subject to income tax
Denmark → subject to income tax and losses are deductible
United Kingdom: → corporations pay corporate tax, unincorporated businesses pay income tax, individuals pay capital gains tax

Mainly due to a 2015 decision of the European Court of Justice (ECJ), gains in cryptocurrency investments are not subject to value added tax in the European Union Member States.

Cryptocurrency mining is exempt from taxation in most surveyed countries. However, in Russia mining that exceeds a certain energy consumption threshold is taxable.

Cryptocurrency regulation: Cryptocurrency payments

In a small number of jurisdictions, cryptocurrency regulation permits cryptocurrencies as a means of payment.

Read more on What Can You Buy Using Cryptocurrency?

In the Swiss Cantons of Zug and a municipality within Ticino, cryptocurrencies are accepted as a means of payment even by government agencies. The Isle of Man and Mexico also permit the use of cryptocurrencies as a means of payment along with their national currency.  Much like governments around the world that fund various projects by selling government bonds, the government of Antigua and Barbuda allows the funding of projects and charities through government-supported ICOs.

The Booming eSports Market of Blockchain Games

The Booming eSports Market of Blockchain Games

by | Jan 8, 2019 | Blockchain Games, News

The eSports market is turning heads as it is continuously growing at a pace that exceeds expectations. Dominated by major gaming players like Valve Corporation, Riot Games, and Activision Blizzard, eSports is currently on the trajectory to a total worth of more than $138 billion with a rapidly growing global audience of more than 380 million users.

Prize pools in eSports also dwarf other sports. For instance, the 2018 DOTA 2 Tournament prize pool was around $25 million. That was more than double of the Masters PGA Tour major championship purse of $11 million. Clearly, the opportunity in the eSports market for growth and integration with cryptocurrency networks is enormous.

Dota-2 crypto

Some early iterations of the integration of blockchain and eSports are already underway with projects like Unikoin Gold (gaming utility token). Further implementations will potentially see a paradigm shift in the structure of the eSports corporate landscape.

Corporations like Valve, Riot Games, and Activision Blizzard — in the context of comparing to other sports — effectively function as both the sport, the governing league, and the distributor of the content. For instance, Valve Corporation is the creator of the massively popular DOTA series (currently on DOTA 2), so in effect, Valve not only owns the game, but also creates the tournaments, and distributes the content.

While the model is clearly working and accelerating the growth of the industry, smaller developers are effectively locked out of competing against such organizations, and there is a substantially high barrier to entry in the market.

Decentralizing the gaming development model will allow many developers and smaller companies to deliver their products direct-to-consumer and offer an entirely new generation of creative games, accessible to everyone. Check out FootballCoin, the first completely independent blockchain game, which offers a wonderful fantasy football collectable game, in which you can win free cryptocurrency.

footballcoin blockchain game crypto

Games like DOTA and Counter-Strike will undoubtedly remain extremely popular among gaming fans, but blockchain and cryptocurrency networks will create the opportunity for a new wave of choices that may eventually take market share from these eSports giants. Decentralized eSports team management and recruiting platforms like DreamTeam are an early example of this trend.

Read more on How to earn free cryptocurrency (without investing or mining)

The intersection of blockchain technology, cryptocurrencies, and gaming is promising. Coupled with the meteoric rise of eSports and an opportunity for developers to properly monetize and participate in the gaming community, the intersection will assuredly facilitate a new gaming landscape.

The emergence of the blockchain gaming trend is not without its hurdles, however. Scalability issues are legitimately prohibiting the development of many games at this point and will need to be overcome before the industry can reach its potential. Once that hurdle is overcome, lookout for blockchain gaming.

The differences between cryptocurrency coins and tokens

The differences between cryptocurrency coins and tokens

by | Dec 24, 2018 | Cryptocurrency

Cryptocurrency, tokens or stablecoins? You can classify every digital currency in existence as one of these types of cryptocurrency. These distinctions determine what exactly you’re investing in, and who can invest in the first place. Let’s talk about coins, tokens, stablecoins, utility and security tokens, and their main characteristics. So, what is the difference between cryptocurrency coins and tokens?

What is the difference between cryptocurrency coins and tokens?

How do you know if a cryptocurrency is a coin or a token? Cryptocurrency is either a coin or a token. Here’s the main difference between coins and tokens:

Coins have their own blockchain. Tokens do not.

Most big-name cryptocurrencies (Bitcoin BTC, Ethereum ETH, and Ripple XRP) are coins. These coins have their own blockchain, meaning that a decentralised, peer-to-peer network records all transactions on a digital ledger.

A token does not have its own blockchain.

The Ethereum blockchain is the most popular platform for token creation, though you can theoretically create a token on any blockchain. 0x (ZRX), Maker (MKR) and Basic Attention Token (BAT) are examples of ERC-20 tokens, meaning a specific type of Ethereum-based token. In other words, their protocol exists ‘on top of’ the Ethereum blockchain.

Read more on What is cryptocurrency, and why do we need it?

Difference between cryptocurrency coins and tokens: Coins function as currency. Tokens give access to a product. 

Since coins have their own blockchains, it makes sense that they serve as currency, a means of exchange, within that network.

This is why Bitcoin is called digital gold and Ripple is known for its fast transactions: Bitcoin is a store of value, like gold, and Ripple facilitates cross-border bank transactions.

Also, it’s easier to exchange USD for a coin, rather than a token. Investing in a token usually requires exchanging USD for a coin first.

The value of a token is a little more complicated. Tokens are typically released in ICO, which stands for Initial Coin Offering. ICOs are like IPOs for cryptocurrency. ICOs give the investor access to tokenised services or products or represent a stake in a cryptocurrency company.

This is where tokens get a little confusing: Tokens fall under different SEC regulations depending on what they represent. You can separate tokens into two types of cryptocurrency that represent either a utility or a security.

Read more on Why Should You Use Cryptocurrency?

Utility Tokens vs Security Tokens

Understanding the distinction between these two types of cryptocurrency is absolutely necessary for investors, cryptocurrency companies and the government.

In other words, the SEC (U.S. Securities and Exchange Commission) has much stricter regulations for security tokens than it does for utility tokens because, as their name suggests, they’re considered to be digital securities.

Most Tokens Are Utility Tokens

If you can buy or trade a token on a cryptocurrency exchange without being an accredited investor, then it’s a utility token. In broad terms, a utility token gives an investor access to a service or product. This can mean that a token can represent exclusive access, a discounted rate, or early access.

When you hear about smart contracts and DApps, you should assume that a utility token is involved.

Basic Attention Token (BAT) is a utility token that has received a lot of press. It’s a means of exchange for digital advertising attention, hence the name. Integrated with the browser Brave, BAT works in three ways:

  1. Users receive BAT for consenting to view ads.
  2. Content creators receive BAT when users view ads on their site.
  3. Advertisers buy ad space with BAT.

BAT represents attention, not stock or currency, making it a utility token. This means that anyone can trade utility tokens on a cryptocurrency exchange.

Read more on Blockchain Games Will Be the Catalyst for Blockchain Mass Adoption

Security tokens are securities that exist on the blockchain

Security Tokens are different.

Like securities, security tokens represent part-ownership in a tradeable, real-world asset external to the blockchain. And because security tokens are regulated by the SEC like securities, you have to be an accredited investor to participate in STOs, meaning Security Token Offerings.

The SEC decides whether something is a security token using the Howey Test. In simple terms, the Howey Test determines whether a cryptocurrency investment is ‘speculative’, meaning that the investor makes money based on the labour of a third party.

Investing in security tokens is slightly more difficult. Investors must use a security token issuance platform, like Polymath or Swarm, to buy and trade tokenized securities.

Unlike Coinbase or Binance, which are cryptocurrency exchanges that allow anyone to create an account, security token issuance platforms require their users to meet specific requirements. This typically means having your accredited investor status confirmed by a KYC provider. The platform will then create a customized profile that specifies how and how much each investor can trade.

Read more on Blockchain technology used in non-cryptocurrency applications

Converging Types of Cryptocurrency

Since companies have access to a much smaller investment pool with security tokens, some try to pass off their security tokens for utility tokens. There is also debate over whether tokens can represent currency, like coins, rather than access to a service. To make matters less clear, stablecoins are often technically ‘stabletokens’.

What is a Stablecoin?

Stablecoins are an increasingly popular type of cryptocurrency, especially in a Bitcoin bear market. This is because stablecoins are “pegged” to traditional assets like fiat (meaning government-backed currency like the US Dollar or Euro) or gold.

For example, the theoretical exchange rate between a stablecoin pegged to the USD and the US Dollar itself is 1 to 1. In theory, the company behind a stablecoin has the same exact amount in assets, stored in bank accounts, as they do tokens.

The advantage of stablecoins is that in a bear market, crypto investors can move their money from volatile cryptocurrency to stablecoins, a more ‘stable’ asset class in theory. This is instead of converting it back to USD, which can be a two-step process that incurs transaction fees. When a bull market returns, investors can convert their stablecoin back into other more volatile currencies at little to no cost.

Historically, however, stablecoins have ‘broken their peg’ in both directions. For example, controversial stablecoin Tether (USDT) has been worth less than a dollar, and Gemini Coin (GUSD) has exceeded the value of a dollar.

This highlights another feature of stablecoins: Most have “USD” in their name. But keep in mind that not all do. For example, Maker (MKR), another stablecoin, does not.

Stablecoins Are Generally Tokens

Despite being called stablecoins, stablecoins are usually tokens, meaning that they don’t have their own blockchain.

Maker (MKR) exists on the Ethereum blockchain. Tether (USDT) was built on the Bitcoin blockchain. Similarly, both these “tokens” function as “currency,” which is a characteristic of coins, not tokens.

As we develop new applications for digital currencies, distinctions between types of cryptocurrency become increasingly blurred, which makes SEC regulation even more uncertain.

Distinctions between types of cryptocurrency matter

Why should you care whether something is a coin or a token, a utility token or a security token?

Though the world of digital currency appears new and unclear, every prospective investor should know the value of the crypto they’re considering and, above all, how current and future SEC regulation will affect it.

Furthermore, the distinction between coins and tokens represents two potential forks in the evolution of cryptocurrency: cryptocurrency as tokenized securities and cryptocurrency as a payment method.

Will crypto replace the stock market, the US Dollar or both? As it stands, both revolutionary applications of cryptocurrency are making headway.

What Is the Basic Attention Token (BAT)?

What Is the Basic Attention Token (BAT)?

by | Nov 21, 2018 | Blockchain, Crypto wiki

With an ever-increasing struggle for internet users’ attention, more groups are considering innovative ways of using marketing for the benefit of the consumer. BAT (Basic Attention Token) hopes to position itself as the token of the world of digital advertising.

How does BAT work and what problems does it try to solve?

BAT promises to create a transparent network, where those interested in receiving or selling advertising services, are free to do so without the involvement of intermediaries, in a healthy, competitive environment.

what is BAT?

The BAT token is meant to be used to power the Brave network, set up by the developers using the ERC20 technical standard. Brave is a browser service that can also act as a marketplace to be used by those selling or buying advertising.

How does BAT hope to meet its objectives?

The project’s biggest calling card is the involvement of Brendan Eich, BAT’s founder. Eich is best known for his participation in the developing of Mozilla and Firefox, projects he helped co-found. Eich’s reputation alone was enough to garner a lot of attention for BAT.

The other members of the BAT team share an impressive background in the world of services and internet services, having worked for the likes of Yahoo, Evernote, or AOL.

There is another element that works in favour of BAT. It’s the general anti-ad attitude of the vast majority of internet users. BAT promises to offer a revenue system for those targeted by ads. As the name suggests, BAT’s objective is to convince users to provide them with their attention in exchange for BATs. And similarly, advertisers will receive BATs in proportion with the level of attention users provide them.

Competitors and possible drawbacks

BAT was conceived with the ERC20 system in mind. At the time of writing, Ethereum blockchain technology continues to be highly popular in the crypto world. BAT will to remain dependent on Ethereum and subject to be influenced by the possibility of its popularity fluctuating.

The Brave network will also need to fight against several high profile competitors, among them CDX (a representative of alt-media), Bitclave, or AdEx (a company with a similar vision to BAT).

Distribution and roadmap

BAT set an ambitious roadmap, with confidence helped by the company able to raise a large sum of money in the ICO stage ( $35M). Initially, 1 billion tokens, of the total amount of 1.5 billion, were put on sale.

The developers held a further giveaway at the start of 2018. The number of users on the Brave network also increased, with an estimated 5 million downloads at the time of writing. The company also claims to have over 18,000 verified Brave publishers.

Basic Attention Token (BAT)

Conclusion

Yes, there is undoubtedly a real market need for advertisers and their customers to connect without additional interference. There also exists a real need for the consumers to feel they are genuinely rewarded for the amount of attention they decide to invest in various marketing campaigns.

The Brave browser and the accompanying BAT token aim to offer a solution to these issues. Indeed, the hurdles they will need to overcome will be high, and the competitors they face will present a challenge. However, how the project has developed, the level of interest it has garnered from users, promises to make it an exciting prospect for the future.