Rootstock Contests Ethereum for Smart Contracts Domain

Blockchain is a valuable contribution Bitcoin has made to the finance industry. The blockchain technology is being used in various crypto technology based platforms with an extensive range of application. Smart Contract is one such application created over blockchain protocols. We now have two blockchain based protocols that are built around blockchain related applications and smart contracts. One of them is Rootstock and the other one is the well-known crypto platform – Ethereum.

Rootstock is an open-source peer to peer smart contract platform. It is similar to Ethereum in many ways, except for few differences. unlike Ethereum, Rootstock makes use of the existing Bitcoin blockchain than its own blockchain. The established Bitcoin ecosystem offers a stable and scalable support system to the platform.

Rising demand for Ethereum

While Rootstock works on the Bitcoin blockchain, Ethereum is a standalone open source platform cryptocurrency and blockchain platform. It offers a platform for developers to create and publish their applications on the blockchain. The computing power for these hosted applications is supplied by the network, where people contribute their computer’s processing power to maintain and run the applications. Like Bitcoin mining, Ethereum miners also receive ether rewards for their contributions. Ether is the crypto-tokens used on Ethereum and the developers have to pay ether to be able to host their applications. In addition, ether can also be sold or purchased on various cryptocurrency exchanges.

The versatility of gthe Ethereum platform and the ability to create and execute smart contracts makes it a valuable option for the banking and fintech industry. Banking and financial services companies are trying to implement blockchain technology to automate their operations while keeping the costs to a minimum. The strong Ethereum network, combined with its features and capabilities makes it an ideal choice. By using smart contracts financial institutions, trading platforms and even banking sector can automate their back office process, reduce the workforce and time required to process the requests. Some of the major names using Ether includes Nasdaq, the banking blockchain consortium, JP Morgan, Goldman Sachs, Visa and more.

Ethereum possesses the distinction of being the next best cryptocurrency platform after Bitcoin. Companies involved in the research and development of blockchain technology for fintech and other applications are receiving support from banking and financial institution. Digital Asset Holdings Inc. led by Blythe Masters is backed by Wall Street giants like JP Morgan and Goldman Sachs. Even IBM, Linux and other tech companies are working alongside Digital Asset to develop blockchain based Hyperledger.

How can Rootstock contest Ethereum?

While Ethereum has been gaining a lot of attention across the world, Rootstock is not far behind. However, which one among the two will become widely adopted in the future is yet to be decided.

Rootstock has its own advantages. Even though Rootstock is built around Bitcoin blockchain it uses Turing complete Virtual Machine combined with Ethereum opcode. This, in turn, makes it completely compatible with the Ethereum platform. Rootstock works flawlessly over both Rootstock blockchain which is nothing but a sidechain on the Bitcoin blockchain and Ethereum blockchain. The use of Bitcoin sidechain allows Rootstock to be merge-mined with Bitcoin. The combination and cross-compatibility between two great platforms make Rootstock a preferable option among the two.

Ref: Rootstock — Smart Contracts on the Bitcoin Blockchain


Subscribe to our newsletter

Apart from apprehension and anxiety, the cryptocurrency technology has offered a lot more to the traditional banking and financial sectors. Bitcoin is increasingly being perceived as a threat to banking and financial industries. In order to counter the threat, the industry is focusing on the very underlying that powers bitcoin. Also, the introduction of Bitcoin, an open source distributed digital currency led to the creation of various crypto-token that either adopt the same technology as bitcoin or draw inspiration from it.

The underlying bitcoin technology is known as blockchain. Blockchain is a distributed ledger that records all transactions happening over the cryptocurrency network. It acts as a permanent record keeping repository. the use of blockchain is not confined to digital currency transactions and it can be programmed to do much more than that. The same concept is used by Ethereum, another crypto-token to create smart contract based applications among others.

Ethereum is the next best crypto-platform after Bitcoin. Ethereum network is also built on the blockchain similar to that of bitcoin in many ways. The crypto-token on Ethereum is called ether, which unlike bitcoin is used to pay for running and accessing computational services on the Ethereum platform. Ether can be bought, sold or traded on many cryptocurrency trading platforms and exchanges. But it can’t be used as a replacement for fiat currency like bitcoin.

Smart Contracts Powered by Ethereum for Banking and Finance

The Smart Contracts capability of Ethereum is sought after by the banking and financial institutions as part of their attempts to improve their operations and services to counter the threat posed by Bitcoin and bitcoin-based financial services. By using smart contracts, financial institutions can automate their back office processes to a huge extent. These smart contracts on the Ethereum blockchain will be self-executing in nature, triggered by certain conditions.

For example, thousands of people trade on stock exchanges. Whenever somebody invests in stocks or sells them on a regulated platform, the transaction is accompanied by paperwork proving or transferring the ownership of traded assets between parties. All these are currently managed manually, making it a time and cost intensive process. With Smart Contracts based automatic clearing system, all trader, customer and stock data can be stored or connected to a blockchain based application with predefined conditions and Smart Contracts already programmed into it. Any transactions that happen on the trading floor will be done over the platform/blockchain. Each transaction satisfies a condition(s), initiating the execution of corresponding Smart Contract. The Smart Contract automatically settles the trade, satisfies all regulatory requirements and closes it by communicating relevant information with parties involved in the transaction. It all happens in a matter of minutes, to hours without human intervention!

brian_hoffman_tweet

The huge potential of such a system when it comes to increasing efficiency while reducing costs makes Ethereum and blockchain technology a potential gold mine for Wall Street-based financial institutions. Some of the well-known Wall Street powerhouses that are working closely with Ethereum includes Goldman Sachs and JP Morgan. The international payments giant Visa is also looking forward to working with Ethereum to create blockchain projects. Even the banking consortium with over 40 leading international banks working together with R3CEV to develop blockchain technology for the banking sector is also included in the list.

Ethereum is a promising platform that can truly deliver the sought after blockchain solutions that can contribute to the advancement of the whole sector.

Ref: Business InsiderVisa Planning to Develop 'Secure and Scalable' Blockchain Project 

The bitcoin block size debate is the classic example for the term “running around in circles”. Those of us who have been following thins know very well that the debate about increasing the block size has been going on for almost a year now and yet we do not have any results to show for it. There have been proposals to solve the issue, most of which were never accepted. This prolonged disagreement in spite of holding several talks, round table conferences etc. shows signs of a much deeper problem with the whole setup.

The CEO and founder of Coinbase, Brian Armstrong offers an insight into the dynamics of the Bitcoin community as observed by him during the recent Satoshi Roundtable Conference. According to him, there is a great divide between all the primary stakeholders of the Bitcoin community and they do not see eye to eye with each other.

The main issue here seems to be the very people who have been working on the bitcoin protocol, followed by the growth-hungry bitcoin companies and the miners caught in between wondering whose side to pick. Brian Armstrong, in his blog post, mentions that the Bitcoin Core developers are the ones who are currently hampering the block size increase and bitcoin scalability.

Mike Hearn had recently created a controversy by calling bitcoin a failed experiment and the Bitcoin community is not working the way they were supposed to work. He predicted the whole Bitcoin Network to collapse in the coming days if it continues. Comparing his notes with that of Brian Armstrong’s it is impossible to ignore the role of core development team in the dysfunctional community relationship. A handful of people are holding the whole bitcoin at ransom because they are not interested in working on any alternative solution than their own. They prefer their solution to be perfect, but the bitcoin protocol is far from perfect. Even their perfect solution for the bitcoin infrastructure may not help much with the scalability on a long run.

READ MORE: Mike Hearn Resigns and Leaves Bitcoin Permanently

They are against hard forking the blockchain by implementing Bitcoin Classic as they fear it may lead to centralization. But without the hard fork, the Bitcoin Network may collapse by mid-2016. These highly intellectual Core developers are neither receptive to fresh developers joining the community nor good at communicating with the community.

As the Core developers fight to maintain control over Bitcoin, the upcoming bitcoin halving may spell doom to the digital currency. In the absence of any new improvements to the block size, Brian estimates a drop in hashing power as miners start to drop out due to reduced profitability, leading to increased block discovery time. In a worst case scenario, it will cause backlogs in transactions for more than a month, driving mining fees through the roof.

As an immediate solution, Brian Armstrong urges the Bitcoin community to adopt Bitcoin Classic, increasing the block size to 2 MB. Once the Bitcoin Classic is adopted, it will buy some time for the developers to figure out new scalability approach. Like bitcoin, he also wants the development to be decentralized. Developers other than the Core developers should also be able to contribute to the development process. This way, they will be able to provide better workable solutions to bitcoin scalability than the core developers who are currently stuck to perfection at the risk of losing the whole Bitcoin Network.

Ref: What Happened At The Satoshi Roundtable

The Bitcoin industry has seen a big interest from VC’s all over the world in recent years, resulting in a lot of exciting blockchain projects to be in development.  However, VC’s are not the most patient people, as they want to establish a timeline to achieve a return on investment as soon as possible. This clash between VC expectations and the time required for proper research and development of blockchain solutions is a major threat to Bitcoin.

Also read: Ethereum Price Weekly Analysis – Uptrend Remains Intact

VC Funding Is A Double-Edged Sword

A lot of Bitcoin companies and projects would be nowhere today without the backing of wealthy VC’s as it is quite expensive to run a business in the financial world. While there are quite a few Bitcoin entrepreneurs who had earned a lot of money in the past, it is always good to get some VC funding involved along the way.

After all, there is a lot more to venture capitalist support than just the financial side of things. These individuals have years of experience in the financial and technology industry, and they will guide startups and entrepreneurs to ensure their business plan is robust. Such a combination of money with expertise and knowledge make it invaluable to have the backing of a VC in the Bitcoin industry.

That being said, there is the topic of expectations associated with the investment made by a VC. Whenever somebody puts a lot of money into a company or business idea, there is the unspoken expectation of making a return on investment sooner rather than later. While most of these wealthy individuals will acknowledge research and development will not happen overnight, they will not wait years to see some form of a return either.

Investments in any industry are all about achieving a return as soon as possible. Bitcoin and the blockchain are both hot industries right now, and the amount of funds flowing into the digital currency ecosystem is all part of the VC crowd wanting to be part of the next big thing. But at the same time, they remain on the lookout for additional opportunities, which is why they want to recover some funds from their Bitcoin investment sooner rather than later.

Clashing interest between wanting to be part of the next big thing and trying to achieve a fast ROI do not mix well in the Bitcoin industry. These expectations put a lot of stress on startups and entrepreneurs, forcing them to rush the job or make wrong decisions which will ultimately lead to failure of the concept.

Moreover, a VC has quite a say in the direction of Bitcoin projects and how things should be handled. Not all startups or entrepreneurs want to risk standing up to investors, as they are afraid to lose financial backing. Certain individuals in the VC landscape are even looking to detach Bitcoin from the blockchain, as they are interested in the technology rather than the entire ecosystem.

Too Many Blockchains Is Counterproductive

Over the past few months, various alternative blockchain solutions have started getting a lot of attention. On the one hand, there is Bitcoin 2.0 project Ethereum, which has recently been added to Microsoft Azure’s platform. Furthermore, the R3 CEV consortium is looking to merge private blockchains with banking infrastructure. In fact, they employed the services of five different blockchain service providers, none of which are related to Bitcoin itself in any way.

A wedge is being driven between those who want to focus on Bitcoin and its blockchain and those who just want to make quick profits. Unfortunately, the average VC will be found in the latter category, which is not making the job any easier for startups and entrepreneurs. Being passionate about Bitcoin is no longer sufficient to attract investors, as most of them want to steer away from Bitcoin as far as possible and solely focus on the blockchain.

Source: Zerohedge

Header image courtesy of Shutterstock

Key Points

  • Bitcoin price continued to suffer, and there was a sharp downside move this past week.
  • There are a couple of bearish trend lines formed on the hourly chart (data feed from Bitstamp), which are acting as a catalyst for the downside move.
  • The price is hovering near $400, which must hold if the bulls have to prevent any additional weakness.

Bitcoin price was sold aggressively this past week. More losses are possible, but the $400 support area holds the key.

Bitcoin Price – Sell Rallies?

Bitcoin price traded down, and as highlighted in this past week’s analysis, the resistance area of $450 played well to push the price down. There was a sharp downside reaction, and the price moved closer to the $400 level. A new monthly low of $402 was formed where the bulls are putting up a fight to prevent any additional weakness.

There are a couple of bearish trend lines formed on the hourly chart (data feed from Bitstamp), which may play a crucial role if the price bounces from the current levels. The price is already correcting higher and broke the 23.6% Fib retracement level of the last drop from the $425 high to $402 low. However, the most important resistance area seems to be around the $415-20 area, as it acted as a support earlier and may act as a hurdle for the bulls moving ahead.

Bitcoin Price Weekly Analysis

The 61.8% Fib retracement level of the last drop from the $425 high to $402 low is also around $415 level. A break above it might call for a test of the highlighted trend lines and resistance area. The price is also well below the 100 simple moving average (H4 chart), calling for more losses.

Looking at the technical indicators:

4-hours MACD – The MACD may change the slope to the bullish area, suggesting a correction moving ahead.

4-hours RSI (Relative Strength Index) – The hourly RSI is in the oversold area, matching the view of a correction.

Intraday Support Level – $400

Intraday Resistance Level – $420

 

Charts from Bitstamp; hosted by Trading View

Key Highlights

  • Ethereum price rally continued this past week, and it looks like there is no stopping the bulls.
  • The price even traded above an important resistance area of $10, which was one of our buy targets.
  • There is a bullish trend line formed on the 4-hours chart of Ethereum price (data feed via Kraken), which may continue to act as a buy zone.

Ethereum price moved above $10, which was a major hurdle. Moving ahead, more gains are likely as the uptrend seems to be intact.

Ethereum Price – Buy Near Trend Line?

Ethereum price surprised many traders, but our view of buying it played out well. I even mentioned that there is a chance of it testing the $10 handle. The price did trade higher and broke the $10 handle. I was anticipating some selling pressure near the stated level, but that did not happen. The price continued to move higher and traded as high as $10.48.

There is now a bullish trend line formed on the 4-hours chart of Ethereum price (data feed via Kraken), which is acting as a support zone. If the price moves down or corrects lower from the current levels, then the trend line support may come into play. A break below it might call for a move towards the 23.6% Fib retracement level of the last leg from the $6.35 low to $10.48 high. Let us see any further losses are possible or not if the trend line paves the way. The next support can be the 50% Fib retracement level of the last leg from the $6.35 low to $10.48 high.

Ethereum Price Weekly Analysis

On the upside, a test of $11.00-20 is possible, as long as the price is above the trend line support.

4-hours MACD – The MACD is in the bullish slope, which is a positive sign.

4-hours RSI – The RSI is around the overbought levels, calling for a minor correction.

Intraday Support Level – $9.80

Intraday Resistance Level – $10.50

 

Charts courtesy of Kraken via Trading View

Key Highlights

  • Litecoin continues to struggle and it is clearly visible if we look at a higher time frame chart.
  • There is a major contracting triangle pattern forming on the daily chart (data feed via Kraken), which is calling for a crucial break in the near term.
  • The price is below the 100-day simple moving average, which may encourage sellers to take it further down.

Litecoin price continued to weaken this past week, and now it looks like if the bulls fail once again, then a move towards $2.50 is likely.

Litecoin Price – Wait for a break?

Litecoin has been traded at a lower price this past week and tested the $2.90 support area where the buyers found hard to prevent the downside move. It is important to note that the $3.00-2.90 area acted as a major support earlier, and it holds a lot of importance for the price in the days to come. There is clearly a monster contracting triangle pattern forming on the daily chart (data feed via Kraken), which can be seen as a break out pattern the coming weeks.

The most important point that one should keep in mind is the fact that the price is below the 100-day simple moving average, suggesting buyers are finding it really hard to take the price higher. Moreover, the 23.6% Fib retracement level of the last drop from the $5.00 high to $2.90 low is positioned around the triangle resistance area.

Litecoin Price Weekly Analysis

So, the 100-day simple moving average is an initial hurdle for the bulls, followed by the triangle resistance area. On the downside, the most important support is near $2.90-3.00.

Looking at the indicators:

Daily MACD – The MACD is in the bearish zone, and there seems no chance of a change in the slope.

Daily RSI – The RSI is below the 50 level, which is a bearish sign.

Intraday Support Level– $3.00

Intraday Resistance Level – $3.45

Charts from Kraken; hosted by Trading View

Key Highlights

  • Dogecoin price is forming a major base around 47.0 Satoshis and if buyers gain control, a spike higher is possible.
  • There is a crucial bearish trend line formed on the daily chart (data feed from HitBTC), which may play a major role for the bulls.
  • The price is also below the 100 simple moving average on the daily chart, suggesting the price is above a major support area.

Dogecoin price struggle continued this past week, but it looks like there is a real chance of it trading higher in the days to come.

Trend Line Break?

Dogecoin price recently traded as low as 47.0 Satoshis where buyers appeared to prevent the downside move. The main reason why the price found support near the stated level was the fact that the 100 simple moving average on the daily chart was positioned near it. The price stalled near the 100-day SMA and currently attempting to trade higher.

There is a major hurdle on the upside for the bulls, as a critical bearish trend line is aligned on the daily chart (data feed from HitBTC). The price struggled many times to clear the same trend line and traded down. However, if the 100-day SMA support holds, then there is a real chance of it moving higher in the near term.

Dogecoin Price Weekly Analysis

On the upside if the price breaks the trend line and resistance area, then the 23.6% Fib retracement level of the last drop from the 130.0 Satoshis high to 47.5 Satoshis low may be tested. A daily close above the trend line resistance might call for a change in the trend.

Looking at the indicators:

Daily MACD – The MACD is about to change the slope to bullish zone, which is a positive sign.

Daily RSI – The RSI is below the 50 level, which may be a concern for the bulls.

Intraday Support Level – 50.0 Satoshis

Intraday Resistance Level – 60.0-62.0 Satoshis

 

Charts from HitBTC hosted by Trading View