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  1. In the previous article, we considered the concept of a token. It can be formulated as a smart contract, in which there is a book of wallets’ addresses and their balances. These balances represent the value that the creator can assign. The ERC20 standard uses a specific set of functions or rules with which you can create your own token on the Ethereum blockchain. Over the past couple of years, the standard ERC20 has played a key role in creating an environment for the growth of the entire crypto-currency industry. This protocol led to much-needed standardization, which accelerated the development of hundreds of applications on a universal standard platform. The term "ERC20" is the unique identifier of the Ethereum standard. It means "Request for information from Ethereum" and allows you to distinguish it from other standards. The standard ERC20 requirements are divided into two main segments: six method-related functions and two events. They constitute the basic rules that any standardized token should follow. 1. Functions related to the method: - TotalSupply (This function determines the total stock of tokens). - Balance (Allows the address owner to receive a balance of another address account). - Transfer (Defines the number of tokens transferred to another account). -TransferFrom (This function performs the action of the sum of the values of tokens sent from one address to another address.) - Approve (Approving function performs actions with respect to transactions). - Allowance (Shows the balance on the account) 2. Basic rules (run after any of the above actions): - Transfer (This event is usually executed at any time when tokens are transferred and information about these transfers is transferred from one account to another). - Approval (This event is executed each time when tokens are sent. It mean to approve the sender function) For example, the Dans token was developed on the basis of the Ethereum blockchain (https://dan-service.com/). Tokens are compatible with the ERC20 standard and can be stored on Ethereum wallets. It allows the use of smart contracts. They facilitate the performance of contractual obligations on the Internet using cryptographic protection. Since the Ethereum blockchain is an open source, it allows the DAN Service to be a truly decentralized and transparent platform. In addition, the receipt of tokens is possible on a standard wallet, for example, using the MyetherWallet application (https://www.myetherwallet.com/). Standardizing tokens has advantages for crypto-space: - Uniformity through tokens: this leads to the creation of standard tools for interacting with several types of tokens. Therefore, developers do not need to create their own tools and specifications. - Listing for trading on exchanges: a standard compatible token can easily be specified on any exchange that supports this standard. Consequently, trading on the exchange has become more smooth. - Stimulation of innovations: The ease of use and convenience of listing on exchanges stimulated a large number of ICO, which led to innovations in this field. The Ethereum team also works on improving the ERC20 flow. This led to the creation of a new group of standards ERC223. The ERC223 protocol is backward compatible. Consequently, it is compatible with the ERC20. In addition, ERC223 combines the function of transferring a token among purses and links into one function called "transfer". The most significant difference between ERC20 and ERC223 is that a later version does not allow the transfer of a token to a contract that does not have a recall function. Finally, ERC223 tries to correct the shortcomings of ERC20.
  2. Taking into account the fact that the basic technology on which crypto-currencies are created is shrouded in technical language and mathematical terminology, the main designations require clarification. Cryptocurrency is a digital or virtual currency, which is encrypted using cryptography. In turn, cryptography is an encryption method that provides and verifies the transfer of transactions. Bitcoin was the first decentralized cryptocurrency based on the basis of the blockchain. Its creation accelerated the development of coins and tokens ecosystem. At the same time, it is important to understand that not all coins and tokens are actually crypto-currencies. Precisely because the space of crypto-currencies originates from the creation of bitcoin, the term "crypto-currency" is awarded to any other coins conceived after. However, most of them do not correspond to the above characteristics of real currency, since they are not a value store or a means of exchange. Most often in the crypto space, the following terms are distinguished: 1. Alternative coins or altcoins Alternative coins are also simply "coins." They got their name because they were created as an alternative to bitcoin. Some altcoins are forks of bitcoin since they were built using the Bitcoin source code. Altcoins' creators modify its base code and create an entirely new coin in this way. Examples of altcoins include Namecoin, Peercoin, Litecoin, Dogecoin, and Auroracoin. There are also altcoins that are not derived from the open Bitcoin code. Since now there are different types of detachments, altcoins are also called crypto-currencies, which are built on another blockchain and maintain their own currency. Examples of these coins include Ethereum, Ripple, Nxt, Waves, and other. All altcoins have such a general point - their own blockchain, on which all transactions occur. 2. Tokens Tokens are a specific asset that was built on top of another blockchain. The process of tokens creation is much simpler than altcoins since it does not imply the development of its own blockchain from scratch or its modification. Token developers need to follow standard blockchain templates on the platform (for example, Ethereum or Waves). Creation of own tokens became possible thanks to the smart contracts. In fact, the smart contract is a programmable computer code that runs independently. Tokens are created and then distributed through the original offer of coins. As I said earlier, ICO is a form of financing for project development. A template for creating tokens provides a standard algorithm for interaction between tokens. It allows storing different types of tokens on one purse. An example is the ERC-20 wallet standard created on the Ethereum blockchain. For example, the Dan Service token is created on Ethereum (https://dan-service.com/). The DAN token conforms to the ERC20 standard, which allows you to work with smart contracts and tokens. Tokens will be compatible with the ERC20 Ethereum wallets and can be stored on it. It is exactly what allows DANs to be a truly decentralized and transparent platform. It ensures transparency as long as results that cannot be manipulated. This technology involves the elimination of central management and intermediaries because, in the smart contract, you can prescribe the whole process of selecting, tracking and paying. To sum up, the main difference between altcoins and tokens is in their structure. Altcoins are separate currencies with their own blockchain, while tokens act on top of another blockchain.
  3. After the appearance of bitcoin, the world saw three types of blockchains, which will be discussed in this article: 1. Public blockchain This type blockchain is created by people for people. Each participant in the chain can participate in its audit. The public blockchain is also characterized by its transparency, so each participant can observe every block at a certain point in time. Decision-making, in this case, occurs through various decentralized consensus mechanisms, such as proof of work (POW), proof of stake (POS), etc. Examples of such blockchain include Bitcoin, Ethereum, and Litecoin. In fact, everyone can start mining BTC / ETH / LTC, make transactions on the chain or check it. 2. Private blockchain The private blockage is the private property of an individual or organization. Unlike public blockchain in private, there is a person who is responsible for reading or writing data. He/she selectively give access to it. The consensus is achieved at the request of the central server, which chooses whom to give the right to the extraction of the coin. The private blockchain is inherently centralized, which eliminates the main advantage of public - decentralization. An example is Bankchain (http://www.bankchaintech.com/). Only certain individuals can start a node, start mining, or make transactions on a chain. 3. Consortium or Federated Blockchain In this type of blockchain, there is a group of responsible people who make decisions in the interests of all networks. Such groups are called consortia or federations. For example, suppose that you have a consortium of 20 institutions that you defined in the code. If more than 15 institutions voted for a transaction, block or decision, only then it can be added to the blockchain. Examples are r3, EWF (http://ewfed.com/). In the federated blockchain, members of the consortium can run a full node and start mining, make decisions on the chain, check and view the blocks. There are several more complex types, such as blockchain with open access, with private rights, etc. There are also various consensus algorithms. They are designed to achieve agreement between distributed systems. Solving the consensus problem is vital for creating a common public register on a global scale. In Blockchain, consensus algorithms ensure that each next block is the only one. They provide reliability in the network and prevent system failure. At the moment, the most popular consensus algorithms in the cryptographic world are PoW and PoS. Proof of Work (PoW) PoW is a protocol that requires confirmation that some work has been successfully completed. This algorithm rewards miners who solve math problems to check transactions and create new blocks. The main task of PoW is to protect the network and prevent cyber attacks. Bitcoin and Ethereum, as well as various tokens and coins ERC20 standard, use PoW consensus protocol. For example, DANs is built on the basis of the Ethereums blockchain, so computational power is used to create its tokens (https://dan-service.com/). The project works with open source code (public blockchain). It allows Dan Service to be a truly decentralized and transparent platform. The use of smart contracts designed to conclude and maintain commercial relations in the blockchain technology. It provides transparency because the results of transactions not be manipulated. Proof of Stake (PoS) PoS is a protocol that requires users who have more coins (higher stake) to determine the next block. In the PoS system, there is no reward for the block, and the miners take on transaction fees. The first cryptocurrency that started using this method was Peercoin (https://peercoin.net/index.php?locale=ru). However, this protocol is connected with the danger of achieving a currency monopoly. PoS and PoW have similar goals, but the process of achieving them is somewhat different. The main difference between PoW and PoS is that PoW requires the burning of an external resource (machine equipment). The ways of confirming transactions and reaching consensus also contrast. In the PoW consensus, new blocks are created by expensive computers in the mining process. In the PoS consensus, new blocks are created by users depending on their stake of coin ownership. In the first type of consensus, a reward for the block is provided to the miner who solves the mathematical problem, while in the second type there is no reward in the block. Instead, the miners receive a commission for transactions. In the PoW protocol, there is a competition between the miner, while in the PoS protocol it does not exist. There are also other types of consensus algorithms, but they have not become so widespread, so they will not be covered in this article.
  4. `I think it's okay and it can be used for daily payment. Furthermore, If giants like Amazon will allow paying in cryptocurrencies, such services will be extremely useful.
  5. Postulating unrealistic goals The first reason for doubting the adequacy of the project should be unrealistic goals. Scam projects often state that their coin will make x100 after being released to the crypto exchange, completely change the industry, replace bitcoin as an inefficient cryptocurrency or rid the world of poverty. Indeed, potentially projects can be successful, but a professional will never make loud promises, realizing that too many factors affect the success of a project. Professional developers will talk about the potential of the project, allowing investors to independently distinguish a valuable product from the scam. Meaningless salad of words If on the website of the project or any other source of information about it you read a meaningless set of linguistic structures on the heap with incredible promises - be sure that you see a scam project. Real projects simply state their ideas. Furthermore, after reading their documents, you can adequately understand what the project proposes and what specific problem it is trying to solve. If after reading each paragraph you do not have new information or you are simply confused – it’s better to stop wasting your time. Whitepaper The presence of white paper, which details the problem that the product solves, solutions, distribution of tokens, team information and links to the information sources, is one of the main criteria for distinguishing a potentially promising project from a scam. The whitepaper should provide real statistics in the form of diagrams or tables with links to data sources. If you understand that the new token does not obscure its function or does not have a real way of further monetization, it is better to avoid it. A good example of this is deCloud. ICO, which turned out to be a complete fraud without any product. Their technical paper is filled with meaningless statements, which unfortunately deceived a sufficient number of depositors. You can read their white paper here https://drive.google.com/file/d/0B3isfML9O09eRTltUUQwUHpnZmc/view. On the other hand, take a look at the Dan Service project (https://dan-service.com/whitepaper.pdf?pdf=whitepaper-en). Presence of code repository The presence of code on Sourceforge or Github is an important argument for. If the project does not refer to the resource or almost completely clones the code of another project, there is a high probability that you are facing another fraudulent project. Command It is very important to understand who is behind the project in which you possibly plan to invest money. Of course, it's better when team members are already famous people who participated before in different projects. However, even projects with young team players can be promising. At the same time, you should see the faces of these people and have the opportunity to look at their profiles, at least in the LinkedIn. Naturally, there are anonymous players in any team. However, anonymous developers should have some kind of story in social networks. If you can not get any information about the team, it's more likely that it does not exist at all. Compromised Escrow Escrow is inherently a service that allows you to increase confidence in the global community. It keeps coins for clients until the completion of a certain transaction. If the service or product for which you send money is not received, then the reserved amount of coins is returned to you. ICO, as a rule, has a conditional deposit, which is a multi-sigmatic wallet. It stores the funds of participants during and after the ICO. When several participants have keys to the wallet, one of them needs a permission to move funds. It is also necessary to understand the type of deposit. In a good project, funds are released for development gradually. For example, part of the funds is frozen for half a year, another part of the funds for a year and so on. I agree that it is not always easy to identify a scam project, but if you follow all the above steps, the risk is significantly reduced.
  6. In order to protect yourself from the potential scфm, it is not worth investing your money in the first project with a beautiful website. If you really plan to multiply your investments, you will need to answer a number of questions for yourself that will make it possible to distinguish potentially profitable from the usual slag. Analyzing a potential product at the ICO stage is definitely more difficult than considering a coin that is already traded on the stock exchange. However, there are a number of questions that will help to determine how much the project is able to "survive" in the crypto world: 1. First, is the problem that the project is trying to solve in the current situation real? You may not be competent in narrowly specialized matters, but the basic knowledge will allow you to answer this question. For example, in the crypto-space a large number of projects that offer the creation of a crypto exchange. All of them are trying to offer something "unique" but in truth, it's just another crypto exchange. It's hard to create a bicycle in this area. Another project Dan Service is aimed at creating a decentralized advertising platform, which will be controlled by the users themselves. It will solve the problem of centralized advertising and its low conversion. There are no analogs to this project, which makes it potentially much more successful. 2. Is the project really able to improve the current situation in a certain industry? 3. How will the project monetize the currency? Charitable projects created on the blockchain certainly try to solve the global problems of mankind, but initially do not imply an economically advantageous model that can increase the company's capital, and at the same time multiply your initial deposits. 4. Does the project have a roadmap with adequately realistic steps? 5. Is it possible to track the actions of the company in accordance with their roadmap? To do this, you will come to the aid of social networks and forums. In the real projects, there is always a public relations officer, who should regularly inform his subscribers about the project's successes and the latest updates. 6. Does the team have any products or projects that have already been implemented? If yes, what exactly it was, did they solve the task, how much time was spent implementing the idea and how much it was financially successful? 7. Are there any prospects for the growth of the coin? If it is already traded, it is necessary to understand what its market capitalization and is it overvalued or undervalued? 8. Do you believe that in 5 years the project will exist? In order to collect further information, you will need to visit the company's website, examine their white paper, look at their potential competitors and study their websites. You need to understand how much the project you want to invest in is competitive. Look at the social networks and see how active the pages of the project and its teams are. If the project is not yet completely at the initial stage, then Google will tell you the latest news, interviews or other information about it. Also, you can discuss this project on the crypto forums and see the attitude to the project. If you want to invest in a project with an already existing coin, then you should analyze: 1. When was the coin created? 2. For what purpose was the coin created? 3. Is this a coin or a token? (It is important!) 4. What is the value of a coin in the real world? Can it be used in everyday life? 5. Does the coin have financial support? 6. Who is in the team? You can get the minimum information using Google and social networks. 7. Are the social networks of the project active? You can write in telegram chat or comment on the post on the project page on Twitter, Facebook or Reddit and see if you get an answer. Adequate projects always have a person responsible for maintaining media channels and public relations. Furthermore, the teams that are really working on the development of the project are constantly sharing their latest news with their subscribers. 8. What is the website and how much traffic they make per month (for this you can use similiarweb.com or any other resource with the same functionality)? 9. Do they have a road map and did they follow their previous goals? Basically, successful projects undergo certain stages in development, which are fixed in the roadmap and find coverage in social networks. 10. Whether there was an ICO project or they were invested solely from domestic investment. 11. Do they have a "technical document"? 12. On which exchanges is the coin represented? In order to trade on a normal exchange, you need to have sufficient initial capital. In addition, the lower the level of trading on the stock exchange, the lower the probability that you will be able to make a profit. 14. What is the level of market capitalization of a coin and the volume of its trading? 15. Read reviews about coins on resources like bitcointolk. If the project is successful, you will find those who have already invested in the coin earlier, or had some experience in communication with the project team. The answers to all these questions will help you invest in a potentially profitable project and multiply your capital in the long run.
  7. Investing in ICO is currently one of the most controversial themes in the crypto community. A large number of scam projects led to the general community skepticism. Unfortunately, the general boom in the crypto industry has attracted a large number of profit hunters. Projects that had nothing but beautifully painted ideas collected millions of investments. Therefore, among the most obvious cons of investing in ICO can be called: 1. Scam Since no one can give a guarantee that buying tokes at the development stage, the investor will receive them after completion. Naturally, the project team also does not guarantee that the funds raised will go to the development of the project, and not to the usual enrichment. Therefore, you need to carefully analyze any project in which you plan to invest money. It would be nice if the team has already implemented other projects and you can analyze, whether they were successful. 2. Hacker attacks Next to the promising and successful ICO, there are often hackers who are able to steal money before the ICO (for example, fraudsters compromised Enigma's company accounts and sent messages calling for investment in the preliminary ICO), during (CoinDash stolen 7 million by replacing the address for purchase tokens), and sometimes after (DAO-hacker used a vulnerability in the code and sifted 3.6 million Ethereum). Of course, you can not 100% insure yourself against losses as a result of a hacker attack. However, you should check whether the company's team is reliable enough to react immediately in case of any emergency. 3. High volatility Any predictions regarding the price of the token after entering the exchange are only assumptions. The price of coins can vary dramatically, furthermore, in both directions. So at one point, you can lose some of your investments, or you can make a fantastic profit. However, investing in ICO is still profitable for a number of reasons: 1. The capital growth Investing in promising enterprises at an early stage allows in the long term to receive a high return with minimal initial investment. In fact, this is similar to the classical scheme of investing in company shares at an early stage. Therefore, it is better to choose a project with a really worthwhile idea or a unique proposal. In addition, it is also necessary to choose a company that offers a work product, which can be applied to real life, and not just an "incredible idea". For example, Dan Service offers a decentralized advertising platform. In fact, the advertising network will be managed by the users themselves (https://dan-service.com/). It will increase the conversion of advertising and reduce the likelihood of fraud, as in the case of centralized advertising platforms. 2. Availability If you do not have the right contacts, it's difficult to invest money in a large company. Investing through the ICO allows you to reduce the entry barrier. To become a particular amount of tokens you need money and access to the Internet. 3. Low input threshold In order to invest in a large company, a high level of initial seed capital is also needed. However, there is no "entry threshold" when investing in ICO - you can invest $ 10 or $ 10,000. Consequently, it is a way to provide equal opportunities for potential investors. 4. The absence of geographical barriers You can live in Uganda, Russia or China, and still, have the opportunity to invest in a Japanese project. ICO is an excellent example of the effects of globalization. 5. No commission, no taxes ICO offers independence and anonymity from government agencies or any other institution. You do not pay a commission to banks or any other intermediaries when investing and also do not pay taxes on the profits you receive. Of course, in the ocean of projects that "flooded" crypto space, it's hard to choose a really potentially successful one. However, you can train your own analytical ability to increase capital.
  8. The initial coin offering (ICO) is a means of financing the development of a new crypto-currency project. Currently, more than 1000 coins are available on different stock exchanges. Not all crypto coins have their own chain since they can be released on another Blockchain. A good example is the ERC-20 tokens, which are the standard of interaction in the Ethereum blockchain. Ethereum is a one-piece general-purpose chain, on which different tokens can be released without creating its own infrastructure. In order to participate in the upcoming ISO, it is necessary to go through several steps: Step 1: Investigation of upcoming ICOs Study the various resources, which present the latest ICOs. Step 2. Performing due diligence It is necessary to conduct a study to make sure that a particular project is good. Among the key factors should be the idea of the project, the team, how long the project exists, its partners and so on. There are also various resources that will provide you with a proper fundamental analysis. Step 3: The ICO Participation Process Open an account If you are sure in the project that you have chosen and you want to invest in it, you should first open an account in order to convert the domestic fiat currency to the cryptocurrency. Follow the instructions of ICO More often, the ICO will provide a step-by-step guide for participants. You should join their official communication channels to receive the latest updates and ask questions directly to the developing team. Step 4: Trade in coins If the project, in which you have invested, is worthwhile, then you can hold the coin in the medium and long-term. If you just want to get a certain percentage of profits quickly, you can sell it as soon as it goes to the crypto exchange. You can also buy tokens directly on the exchanges. How to invest in ICO? Most ICOs are built on the Ethereum platform using the ERC20 protocol. There are also other platforms such as NEO, Qtum, Lisk, Komodo, Strat, ICX and many others. Every person who represents digital assets for the project should confirm his/her identity by sending scans or photos of his/her ID. Participants should have a suitable wallet and tokens for transactions. After the ICO the technical group requires several weeks for tokens’ programming. Finally, the tokens will be transferred to the depositors. Different stages of the ICO includes: 1. Early financing At this stage, the project is committed to improving its idea, establishing work processes, including team building, website preparation, strategy and technical document. On this step, the team often seeks to find funding from its own sources, since the project is not yet known to anyone. It is the riskiest to invest in the project in this step, as not all companies reach the ICO stage. 2. Private sales At this step, the project already usually has the white paper, a page in social communities and on targeted resources. Private sales as in the previous case can provide participants with high bonuses. However, it is also the risky step for investments. 3. Preliminary ICO or preliminary sales Prior to ICO, the project should secure sufficient funding for a full marketing campaign. At this stage, the project tokens are usually sold at a discounted price. 4. Active ICO The actual ICO is the main sale of the project tokens. Usually, most tokens are left for sale at this stage, as the marketing momentum has reached its apogee, and most potential investors have received information about the ongoing crowdsale. For example, in the Dan Service crowdsale funds were collected for the initial development and promotion of the DAN project among users (https://dan-service.com/). Crowdsale lasted for two months. However, part of the tokens remains on the DAN Fund address blocked for 24 months. It will allow the project to finance the subsequent development, operating costs and attract advertisers in the future. At this stage, potential investors already have enough information, so they are more willing to invest. 5. After the ICO After completing the ICO and generating the tokens, each participant should receive a share of the total pool of tokens. Tokens are transferred or programmed by the technical team of the project. After the ICO, the team should agree with the crypto-exchange markets, so that their tokens could be traded. Exit to the exchange usually leads to an increase in tokens’ demand and value.
  9. ICO means the initial coin offering. It is a fundraising mechanism, in which new projects sell their underlying cryptographic markers in exchange for bitcoin, ether or other cryptocurrencies. To some extent, this is similar to the initial public offering (IPO), in which investors buy shares of the company. ICO projects in the crypto-currency community are viewed as a modification of the traditional model of the venture financing or as a way to raise a large amount of capital to founders and investors. However, ICO is considered a high-risk investment, as most projects collect money for a preliminary product. The idea is the core value of ICO. The procedure for collecting investments usually has the following stages: • Preliminary announcement Initiators of the project share their idea with the public in general, learn the level of the investors' interest in the project, and also answer basic questions. Announcements are held in electronic media, social networks or in the form of electronic conferences. • Offer It is a proposal for investment, in which the terms of the idea and the amount of tokens’ issue are announced. At this stage, preliminary closed sales of tokens can be conducted. In this way, investments are being collected for the official launch. • Marketing campaign At the next stage, a new project tells about its product in various electronic media, social networks, thematic portals. • Sales start Crowdsale or token sale implies a full-fledged launch of the tokens’ sale. While the token is not yet traded, investors have the ability to purchase it within the project platform. Later it is available on the public crypto markets. Since many projects do not reach the last stage, the release of the ICO startup token on the market is considered as a kind of proof of the project’s consistency. However, it does not mean the subsequent success of the particular token in the future. Most projects use the smart contracts on the Ethereum platform. In such cases, investment takes place precisely in Ethereum. For example, for investments in the DANs project (decentralized advertising platform) crowdsale was conducted in Ethereum. Because of the upper limit, not all tokens were sold during the original crowding. The remaining tokens are stored at the blocked DANs address. In the future, they will be used by the team to attract advertisers during the popularity of the platform. The return on investment occurs precisely in ETH, less often in other crypto-currencies. The potential exhaust from ICO can be 100-1000-10000 multiples in comparison with the initial investments. However, do not forget that before you invest in any project, it is worth a thorough analysis. Consequently, it will minimize the probability of a scam.
  10. The implementation of the blockchain technology can transform the world economy. At the moment, the financial world system is centralized and managed by the participants, who have the most power. The implementation of the blockchain will create an economy of joint participation. Consequently, it will exclude intermediaries between market participants. In the financial and banking spheres it will accelerate and automate processes. Furthermore, the use of "smart contacts" will allow limiting or completely excluding regulatory bodies. The use of fast, efficient digital money that does not bear the cost of processing cash and can be tracked will improve the financial system and reduce the level of corruption. In the future, the use of blockchain will facilitate the banking and interbank transfers. In addition, digital money can be introduced to make transactions in everyday life for ordinary citizens. Already, there are digital wallets, ATMs, credit and payment systems on the basis of the blockchain. For example, to pay for advertising on the Internet, a limited set of payment methods is used (most often bank transfers). Using blockchain and cryptocurrency will allow each user to easily pay for advertisements so that they can develop their business (a similar solution is offered by the Dan Service project (https://dan-service.com/)). Optimization of advertising will allow the business to increase efficiency and conversion. The implementation of blockchain in developing countries will bring them to a qualitatively new leap in development. For example, some small countries do not have fixed phones or addresses, but most of them have smartphones and the ability to create wallets with crypto-currencies. Cryptocurrency will provide them with an opportunity to pay for basic needs, such as utilities, rentals, and meals. Besides, blockchain will increase the transparency of various charitable organizations that fall under corruption or government manipulation. Enhancing the level of trust will increase the money flow to those parts of the world that need financial assistance. Blockchain technology and the digital currency will reduce risk and fraud and give them final control over the implementation of monetary policy and taxation. Therefore, the introduction of this system will allow building a financial system based on trust. The government of developed countries also plans to implement blockchain. For example, the UK plans to use it to reduce corruption and fraud, as well as improve the efficiency of government agencies. Experimental developments are conducted in the area of welfare distribution, namely pensions and wages. It will allow Great Britain to track and record all citizens' payments. Also, one of the areas of blockchain’s possible application should be an automated customs service. Consequently, it is planned to reduce the waiting time at customs points when arriving at the airports etc.
  11. So far, interest in the blockchain was more often related to the finance area. However, there are a lot of spheres in its application. In this article, we will consider several interesting areas for blockchain implementation. Authorship and ownership Modern patent services do not work as well as it should be. The blockchain technology allows artists to confirm and preserve the right of authorship. For example, one can create digital editions using unique identifiers and digital certificates to verify authenticity. In addition, there is a mechanism for transferring ownership from the artist to the buyer or collector, including all legal aspects. Data management There are a number of projects that are used to implement a database management system and data analysis based on the blockchain technology. Businesses, governments, and any non-profit organizations can use blockchain to simplify the procedures for keeping records, capturing information about business processes etc. Since the records are stored in the blockchain system, it reduces the costs and complexity of data management. Digital identity, authentication, and authorization A number of blockchain projects use the system in solutions designed to identify and confirm access rights. Decentralized distributed registries can be used to store any types of data and perform various transactions in a safe and clear way. Besides, the creation of identity in the detachment can give individuals greater control over access to their personal data. The combination of decentralized blockchain and identity verification tools allows creating a digital certificate that plays the role of a watermark. Means of e-voting Blockchain technology can be used to develop and implement a secure and transparent platform for anonymous online voting. It can ensure the accuracy and reliability of the results. The introduction of a state digital voting platform will reduce the level of falsification during elections. Also, with the help of this technology, it is possible to introduce an electronic identification system (such system is currently functioning in Estonia) allowing all owners of the corresponding identification cards and digital keys to access a wide range of government, banking, and other services. Gambling and video games Blockchain technology is also particularly popular in the gambling and video games industry. For example, there is a platform that allows players to challenge each other in various game disciplines, bet or judge games, to organize tournaments and receive rewards from such activity. Organization of private and public administration Blockchain can be implemented not only to increase the transparency and integrity of political systems. Technology can also improve the interaction of citizens with state representatives, establish access to legal (marriage, registration of legal entities, notary) and economic services (basic income, financial transactions). Also, the blockchain can be used for effective management within organizations, automation of the formation, financing, and management of the company. The system can also improve the organizational workflow. Advertisement Finally, blockchain finds its implementation in the advertisement. For example, DAN Service (https://dan-service.com/) is a decentralized advertising platform based on Ethereum blockchain and smart contracts. In its network, the focus lies on the ease of advertising and its the transparency. Advertising will be equally easy to give both online (on a variety of sites), and offline (running lines, electronic banners and other types of offline electronic media advertisement). Use of the blockchain system will allow users of the network to independently choose and evaluate advertisement. In addition, blockchain implementation will improve the regulation of interactions between the advertiser and the customer.
  12. Cryptoeconomics is inherently a combination of economics and cryptography. Bitcoin, Ethereum, and all other public blockchains are products of crypto economics. The creator of Bitcoin Satoshi Nakamoto said that thanks to a smart combination of cryptography, network theory, informatics and economic incentives, the mankind can create new technologies. Let’s consider crypto economics using bitcoin as an example. Bitcoin's innovation lies in the fact that it allows many actors who do not know each other to reliably reach a consensus on the condition of the bitcoin system. It is achieved by combining economic incentives and basic cryptographic tools. Economic rewards are used to attract miners to support the network. Miners participate in mining using their equipment and electricity. If they produce new blocks, they are rewarded with some bitcoins. Economic costs or fines are part of Bitcoin's security model. The most obvious way to attack Bitcoin's blockchain is to gain control over the larger hashing of the network - the so-called "51% attack". It would allow an attacker to reliably censor transactions and even change the past state of the block. However, gaining control over the power of hashing costs money will require a lot of equipment and electricity. Bitcoin's protocol deliberately makes mining time-consuming, which means that gaining control of most of the network is extremely expensive - enough to make the profit from the attack very difficult. If mining did not have a high cost, it would be easy to launch a "51% attack". If there was no reward for mining, there would not be miners who buy equipment and pay electricity to contribute to the network. Bitcoin also uses cryptographic protocols. Cryptography using public and private keys is used to provide people with secure, exclusive control over their bitcoins. Hash functions are used to "link" each block in Bitcoin's locker, checking the order of events and the integrity of the previously recorded data. Cryptographic protocols give us the basic tools needed to create reliable, secure systems, such as Bitcoin. Without strong cryptographic protocols, such as hashing functions or cryptography with public and private keys, we would not have a safe accounting unit to reward miners. Without a carefully calibrated set of incentives to reward miners, such unit could not have a market value. Most of us are not used to thinking about money as a design or engineering task. In addition, we are not used to developing economic incentives that are an integral component of the new technology. Cryptoeconomics requires us to think about the problems of information security in the economic sense. Consequently, crypto economics is an interdisciplinary approach. The term crypto economics can be misleading because it involves a comparison with the economy as a whole. Cryptoeconomics is not an application of macroeconomic and microeconomic theory for crypto-currency or markets. Cryptoeconomics, like the design of mechanisms, focuses on the design and creation of systems. As in our example, we use economic theory to develop "rules" or mechanisms that create a certain equilibrium outcome. However, in crypto-economics, the mechanisms used to create economic incentives are built using cryptography and software. Furthermore, the developed systems are almost always distributed or decentralized. Most often, crypto economics is used to provide a security guarantee for a distributed system. The use of an interdisciplinary approach in crypto economics has ample opportunities for the global community. For example, the DANs token, which is based on the Ethereum blockchain, uses cryptography within the advertising network to sell or purchase an ad slot/time (https://dan-service.com/). The owners of advertising space will be able to set the price in DANs tokens for a certain time of advertising. When the owner of the advertising space accepts the application, the tokens will be frozen until the owner proves that the task is completed, or the time for displaying the advertisement does not end. At the same time, the advertiser has the right to refute the payment for advertising, if it does not correspond to the declared quality until the tokens are frozen. Tokens are transferred to the balance of the owner after the advertiser checks the quality of advertising. Some actions on the network will be stimulated by creating additional tokens, which will be transferred to the person who performed the action. It will ensure a slow inflation of the token so that there are enough tokens in the turnover for a healthy and efficient network operation. Consequently, economic rewards are used to support the network.
  13. The Internet made the transaction of money much more convenient. It has significantly simplified the online purchase or trading of securities. However, out-of-date systems of financial transactions considerably complicate the transfer of financial assets. Furthermore, these systems are also not secure enough. The restructuring of the main business operations with the help of blockchain technology enabled the introduction of new forms of digital interoperability. Despite the fact that blockchain is most often associated with cryptocurrency, the possibilities of the system are not limited to this. Blockchain technology has several important advantages: 1. System Reliability Since the data structure using this technology allows users to make and verify transactions without the involvement of third-party developers, it greatly reduces the risk of unauthorized interference. 2. Transparency The data structure in the blockchain system allows monitoring of all information by users. Blockchain data is complete, accurate and consistent with all members, and changes to the public blockchain are available to all members. 3. Transaction speed The Blockchain system has reduced the transaction time to minutes compared to interbank transactions, which require several days. In addition, it allows the processing of data around the clock and without output, which can significantly increase the efficiency of many branches. 4. The reduction of transaction costs The blockchain system can be used by banks to reduce transaction costs and provide better products. However, its opportunities go beyond the scope of banking. The blockchain technology can modify the processes in security systems, healthcare, production, entertainment and others industries. Advantages of the blockchain system can be analyzed using the example of the DAN Service project (https://dan-service.com/). First, the decentralized advertising platform will benefit from the blockchain system, as it can reduce the number of intermediaries from the advertiser to the already placed advertisement in the media. Secondly, it will allow automating the system of censorship and reporting. Blockchain also provides a universal set of data for analysis, which can be used by any advertiser. Thirdly, the decentralization of advertising will improve the quality of advertising, reduce the level of fraud and increase the conversion, and hence the profit of advertisers. Fourth, this will make it easier to pay for advertising. Finally, the use of bots and decentralized mobile applications are becoming increasingly popular nowadays. The blockchain technology will allow the advertising business to use such tools. Consequently, the technology is universal, and also has a number of undeniable advantages for various industries.
  14. The blockchain is a continuous sequential chain of blocks containing information, built according to certain rules. The technology implies a decentralized database, which is controlled and maintained by the crowd. Each "block" is a series of transactional records. These records are created by a distributed network of computers. During their creation, each record is connected to the previous record in the chain, thereby creating a chain of blocks. Complex calculations are used to verify them. This, in turn, requires the presence of powerful computers that are expensive for ownership, operation, and cooling. The term first appeared as the name of a fully replicated distributed database implemented in the Bitcoin system. Consequently, the block is often referred to various crypto-currencies. However, the technology of blockchains can be extended to any interconnected information blocks. Bitcoin became the first application of blockchain technology, combining the classic idea of a mutual distributed register with a fully digital currency that was not controlled by any person or organization. Blockchain technology allows distributing of digital information, rather than its copying. Nowadays, the world community is finding other potential uses for this technology. Blockchain technology is similar to the Internet, because it has built-in reliability. By storing blocks of information that are identical in their network, the block chain can not be controlled by any individual object. The transparency of the blockchain system is determined by the state of consensus, which automatically checks itself every ten minutes. Consequently, the network negotiates each transaction in ten-minute intervals. Each group of these transactions is called a "block". The network of so-called computational "nodes" constitutes a block-chain. Each node is the "administrator" of the chain of blocks. In addition to Bitcoin, another popular cryptocurrency is the Etherium. Ethereum is an open source blockchain project. This is the platform for creating decentralized online services based on the blockchain, working on the basis of smart contracts. It is on the platform of the Etherium that various types of crypto-currencies are being created at the present time. For example, a DANS project based on Ethereum's blockchain and smart contracts allow creating a decentralized advertising platform (https://dan-service.com/). The DANS platform will use the advanced technology of blockchain and smart contracts to get rid of the excessive complexity and confusion inherent in the current advertising networks. The advertising network will be managed exclusively by users. The DAN Service network will use the DANS token for the sale or purchase of advertising space/time. The owners of advertising space will be able to set the price in DANs tokens for a certain time of advertising. When the owner of the advertising space accepts the application, the tokens will be frozen until the owner proves that the task is completed, or the time for displaying the advertisement does not end. At the same time, the advertiser has the right to refuse the payment for advertising, if it does not correspond to the declared quality until the tokens are frozen. In this way, the blockchain system opens up revolutionary possibilities for different industries.

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