The last few weeks have provided evidence that the emerging crypto 2.0 community is moving to integrate more fully with the mainstream bitcoin industry.
The trend is evidenced by projects such as DigitalTangible, a gold and bitcoin exchange that uses tokens in an effort to bring gold trading into the 21st century. The project was backed by major partners Amagi Metals and Agora Commodities.
However, the increased interaction between these two industry sectors has not been without controversy.
The block chain bloat debate
An increasing number of bitcoin industry observers now fear that the digital currency’s block chain may soon become ‘bloated‘, suffering from an information overload that weighs down the network with information that falls outside the network’s primary purpose: validating bitcoin transactions.
In other words, if bitcoin is the new email, experts are predicting it may soon face a problem from its own type of spam.
However, two notable names from the crypto 2.0 industry emerged as partial scapegoats for the situation: Counterparty and Mastercoin, projects that use bitcoin’s block chain to create new decentralized networks – in this case, networks that aim to enable more complex financial functions via the block chain.
Unsurprisingly, the crypto 2.0 industry has moved strongly to counter this viewpoint.
Counterparty co-founder Evan Wagner told CoinDesk that his project adds only a small amount of data to the bitcoin block chain. He estimates that in its nine months of operation, Counterparty has added only 15 MB of information to the bitcoin block chain, which is now 22 GB in size.
Wagner also moved to dismiss the idea that Counterparty’s data is spam, saying:
“Counterparty data serves a useful purpose, unlike true spam. Counterparty is first and foremost a protocol for financial tools, like bitcoin itself, and its use of bitcoin makes bitcoin both more powerful and more valuable.”
Shawn Wilkinson, founder of distributed file sharing service Storj, echoed this sentiment, telling CoinDesk:
“The underlying question is: how do you use a block chain as a public ledger, not just for cryptocurrency, in a way that scales and avoids problems? I reject the current ‘this is bad’ and ‘get off my block chain’ approaches. Block chain bloat is just something that can and will be solved.”
Solutions ahead
Wilkinson is not alone in his assertion, as others have suggested that if crypto 2.0 projects are posing an issue for the bitcoin block chain at present, these problems will likely be overcome through innovation. For example, representatives from Mastercoin pointed to the Notary Chains project, which is in the middle of rebranding as Factom.
If bitcoin is to serve as the ledger of record, Factom aims to use the bitcoin block chain to provide a record of its own record of provable events.
Speaking to CoinDesk, Factom’s Paul Snow described how his project could ensure that small amounts of information end up on the block chain, saying:
“Mastercoin’s Omniwallet could run its decentralized exchange protocol on Factom. Thousands of transactions – bids and asks – could be secured with just a handful of entries into the bitcoin block chain, eliminating the bloat issue.”
He added: “Metadata in the block chain is not detrimental to the network, just inconvenient. There are already solutions to the bloat problem, but they just haven’t been implemented.”
More on Factom and its potential uses for smart contracts, securities and tokens can be found in its full white paper.
Crypto’s first football squad
In our last roundup, we profiled Mypowers, a marketplace for premium access rights that allows artists to create digital coins as a way to allow fans to invest in artists while improving the overall fan experience.
Now, the Jetcoin Institute has launched a similar service, albeit one focused specifically on allowing sports teams to reward their fans for loyalty. Called jetcoin, the offering is billed as a digital loyalty coin for sports fans. In turn, jetcoin aims to provide users with a way to invest in athletes and their contracts, thereby securing a stake in their future performance.
To kick off the project, the Jetcoin Institute partnered with startup incubator Seedcoin to sponsor Chievo Verona, an Italian football club based in Chievo, a suburb of Verona.
Speaking to CoinDesk, Seedcoin‘s chief startup officer Eddy Travia, framed the partnership as one that allows his firm to capitalize on its long-held idea that sports could serve as a great onboarding tool for new cryptocurrency initiatives.
Travia told CoinDesk that one of the players the project had aimed to enlist was recruited by Chievo Verona this summer, but that interest in jetcoin at a team management level quickly grew.
He added:
“[Jetcoin] explained the concept to the team management and they liked it. They embraced it and are open to have players and fans use jetcoin, and let their merchandise be traded for jetcoins, branded products, etc.”
Going forward, the Jetcoin Institute plans to name certain fans ‘Jetcoin Champions’, who will become goodwill ambassadors for jetcoin and be supported by the jetcoin community.
Notably, jetcoin is not yet released, and it could be issued on a number of different platforms including bitcoin, Counterparty and Dogeparty. Once the coin is launched, smart contracts would be introduced on a block chain for players, with jetcoin users investing for certain revenues and rights.
Travia explained that he believes the project could gain widespread support as it provides athletes a new and novel way to secure financing based on a contract.
Ethereum’s record-setting fundraising
Ethereum’s much-discussed ether presale effort concluded this week with the successful sale of 60,102,216 ether, the fuel for its distributed application software platform.
While the exact fundraising for the project is difficult to quantify given the fluctuating price of the bitcoin it raised over the course of its ether sale, observers on Reddit estimated the final total in the $15m–$18m range.
Using figures from Wikipedia, the community suggested this would make Ethereum’s crowdfunding round the second-highest ever recorded, trailing the Star Citizen video game crowdfunding, which raised more than $50m through Kickstarter.
With these estimates, Ethereum would notably have also outraised the Ubuntu Edge smartphone, the Coolest Cooler and the Pebble smartwatch, all products that have garnered significant mainstream media attention for their efforts.
Images via Ethereum, Seedcoin and Shutterstock