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Crypto Lending Platforms Prepare to Assail the Banking System

The battle lines have been drawn and the troops assembled. On the one side stands the combined might of the banking cartels, centuries of deeply entrenched financial infrastructure supporting them. And on the other side stands a handful of crypto companies armed with little more than a passionate plea: “Ditch the legacy system and come join us. Where we’re going, you won’t need banks.” It’s an enticing call – but is anyone heeding it?

Also read: Crypto Salaries Gain Regulatory Recognition Around the World

Crypto Lending: Innovation or Emulation?

Every couple of months, a new trend comes along that captures column inches and crypto Twitter chatter, before everyone moves on to the next new thing. Last month it was defi, before that IEOs, and before that exchange tokens. Right now, the hot topic is crypto lending, and it comes bearing an intriguing question: are crypto lending platforms a solution to a common problem, or a solution in search of a problem to wrap itself around?

Crypto Lending Platforms Prepare to Assail the Banking System

Before we attempt to answer that, some basic facts: getting a bank loan for personal or business use is extremely hard, verging on the impossible these days. Unless you have property you can collateralize against, you’ll struggle to get a loan, and even if you do, the interest will likely be exorbitant. Gone are the days when you could walk into your bank, have a sit down with the manager and thrash out the terms of a loan with which to start your own business. Attempt that today, casually dropping into the conversation that you were planning your own crypto startup, and not only would you be refused credit, but you’d be liable to have your account closed.

Such is the suspicion with which the legacy financial system views crypto. They’ll be proven wrong eventually, around the same time as the last of their venerable banking houses are being converted into nightclubs and apartments.

Crypto Lending Platforms Prepare to Assail the Banking System

From Bricks and Mortar to Binary Code

Bartlomiej Wasilewski is the founder of Marshal Lion Group, a tokenized lending market that provides non-bank loans for businesses and individuals. He told “The digitization of finance is inevitable, not just within the crypto sector, but also more broadly, as shown by the rise of microloan platforms that enable individuals to lend capital to businesses, while retaining oversight over how it is deployed, and the ability to witness the benefits of their investment in action and be remunerated for their services.” He added:

Within the crypto space, lending is about more than simply attempting to mirror the products to be found in the traditional financial system. A lot of crypto businesses struggle to obtain banking facilities, and for these entities, having access to alternative sources of capital, be it as a bridging loan or to support long-term growth, is vital.

Wasilewski’s vision is slowly materializing, but the wounded banking system is not yet in its death throes. It will likely take a decade or more before digital currencies render it obsolete. In the meantime, those who have been refused credit by financial institutions are being urged to turn to crypto lending. But are crypto lending protocols and platforms enterprise-ready? And if so, what do they have to offer entities that have been turned away by the banking system?

Crypto Lending Platforms Prepare to Assail the Banking System

Anything the Banks Can Do, Bitcoin Can Do Better

Crypto lending has been a slow-burning trend this year, before exploding into life this week in a flurry of announcements. In July, for example, partnered with lending platform Cred to offer up to 10% interest on BCH and BTC holdings. The lending platform enables borrowers to obtain $25,000 or more in fiat currency, in exchange for collateralized crypto assets. Then, on Monday August 26, published an article on the changing crypto exchange landscape, which ventured that more exchanges are likely to introduce lending services in the near future. That future proved to be closer than imagined, for the very same day, Binance revealed its new lending platform.

The focus of its release was on the benefits to lenders, who will earn annualized interest of up to 15% on their BNB, USDT, and ETC. On Wednesday, the first round subscription was filled in less than 20 seconds by lenders eager to lock up their crypto assets. This feat says something about the level of interest in crypto lending, but it probably says more about the strength of the Binance brand. It may also say something about the diminishing ways for people to earn interest on their fiat holdings: thanks to negative yields, you are now likely to be penalized for purchasing 30-year government bonds.

Crypto Lending Platforms Prepare to Assail the Banking System

Following up on the launch of Binance Lending, spoke to crypto-fiat exchange service Wirex, whose co-founder Dmitry Lazarichev commented:

Having identified some interest from our customer base, Wirex has been exploring the options for crypto lending with existing regulatory frameworks. Consumer lending products are usually heavily regulated, hence we’re focused on finding the best structure for it.

Lazarichev’s carefully worded comment hints at the growth areas being explored within the lending space by crypto projects. A fortnight ago, Coinbase expressed similar intent, writing: “In addition to custody, we’re excited to explore new ways to monetize and leverage crypto assets such as staking, borrowing against crypto portfolios and lending crypto to trusted counterparties.”

To complete an intense week for crypto lending, Ethereum-based P2P platform Dharma revealed today that it will be sunsetting its existing business in favor of creating a new platform that will be integrated with Compound. With $103 million locked into its protocol, Compound is dominating the decentralized lending game.

Nothing Comes for Free in This Life

The proliferation of crypto lending products is to be welcomed, but there is something missing from all this breathless news about locking up crypto assets and filling subscription quotas in record time: what about the borrower who doesn’t have any crypto assets? Doesn’t that place them in the same situation as the man who walks into the bank with nothing but the shirt on his back and a business idea? The short answer is yes. If you don’t have crypto to collateralize, Binance Lending won’t give you the time of day.

The more nuanced answer is that there are tools currently being developed that will enable crypto lending products to meet the needs of a broad range of borrowers, including those who possess intangible collateral – like reputation. From the social credit scoring of Bloom to the emergence of lending platforms that allow unconventional assets (like skins and NFT collectibles) to be collateralized, crypto lending is evolving. Some of these products are being built upon existing lending protocols such as Compound, or upon Bitcoin itself using layer two smart contracting solutions such as RSK and Echo. There are also microloan platforms in the works that will give businesses that lack a credit rating access to capital.

Essentially, the crypto lending space looks set to mirror Bitcoin’s trajectory:

Crypto Lending Platforms Prepare to Assail the Banking System

Right now, the legacy financial system, for all its flaws, is unavoidable for the majority of businesses and individuals. Quality and diversity of crypto products including lending services have improved, however, it will become possible to exist wholly in crypto. No more banks, no more bank managers, and no more credit agencies to appease. Crypto might not be the answer to all the world’s problems, but it’s a sight better than what’s currently on the table. Give it time, and it’ll leave the fading financial system in the dust.

What are your thoughts on crypto lending – do you think it’s a valuable use case for crypto assets? Let us know in the comments section below.

Images courtesy of Shutterstock.

You can now purchase bitcoin without visiting a cryptocurrency exchange. Buy BTC and BCH directly from our trusted seller and, if you need a bitcoin wallet to securely store it, you can download one from us here.

The post Crypto Lending Platforms Prepare to Assail the Banking System appeared first on Bitcoin News.


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Marketing Manager at Marlin Labs

Marlin is a fast-growing company building the next generation of peer-to-peer networking protocols. We are passionate about open-source software development and decentralization's potential to make you — not a few large corporations — own and control your information. We're a globally distributed team with headquarters in Singapore. We're looking for passionate and ambitious marketers and business development managers who would like to join a fast-paced organization. As a marketing manager at a pre-ICO company, you can expect to * Manage and maintain our social media channels (Twitter/Facebook/Reddit/ Bitcoin Talk) * Create, curate, and manage content for our blog * Design, create and manage promotions and ad campaigns * Develop and expand community and/or influencer outreach efforts * Supervise and maintain contact with journalists and PR agencies * Speak and network at various industry and crypto conferences * Strategize and execute email campaigns * Oversee community managers on our telegram channel Preference - Chinese speaker

Cryptocurrency is Changing The Face of Divorces, and Most People – Including Lawyers, Don’t Even Realize It…

To start, the usual legal jargon: I am not your lawyer; nothing in this article is legal advice; I most likely do not practice law in your jurisdiction; and I strongly suggest you speak to a lawyer about your specific situation.

Now, a few answers and comments on cryptocurrency and how it impacts divorces, including how not to go broke.

Are People Hiding Their Cryptocurrency Assets when Divorcing? 

If you were to ask me if I think people are using cryptocurrency to hide assets during a divorce, I would say it is a statistical certainty that people are. In the jurisdiction that I practice law there are zero cases that cite the words ‘cryptocurrency’ or ‘bitcoin’ (yes I know there are other coins) and the relevant Divorce Act. I repeat, zero cases!

Given that it is estimated that at least 5% of individuals hold cryptocurrency assets, that is an impossible statistic. This means people are getting divorced and not disclosing their cryptocurrency. Please note, I cannot stress enough that there are exceedingly large risks and consequences for not disclosing assets during a divorce.

How Can I Find Out If My Spouse is Hiding Cryptocurrency

If you suspect your spouse is hiding assets, you should look into retaining a forensic accountant, preferably one with cryptocurrency experience. One of the more obvious signs is that your spouse’s transfers out of their bank accounts may show that they are buying cryptocurrency. However, individuals who are knowledgeable about cryptocurrency will be difficult to catch.

Imagine someone trading cash for cryptocurrency during an in-person transaction, this would be nearly impossible to trace.

Disclosure Risk and Public Divorce Documents: How Not to Have Your Cryptocurrency Stolen

Now, when you are a good law abiding spouse and are disclosing your cryptocurrency assets during a separation, be sure not to have them stolen! Court cases are public information, so anyone can go down to the local courthouse and look at your family law file.

That means that if your cryptocurrency information is attached to a court document someone could steal your assets. In my jurisdiction the court has ruled in at least one case that when providing cryptocurrency documents you can partially redact any necessary information to ensure your assets are protected. So remember, disclose your assets but make sure they are protected as well!

Don’t Go Broke: The Issue with Cryptocurrency’s Large Fluctuations of Value
Imagine the following scenario:

1. You’re happily married in 2015

2. You buy bitcoin in 2016 for $5,000 per coin. You’re a believer so you bought $100,000 worth!

3. In 2017 bitcoin hits $20,000 per coin, you’re rich! However, the new-found wealth impacts the marriage and you separate that day.

4. Your divorce is contentious and your divorce goes to court. Your divorce case is not decided until 2018. Now bitcoin is worth only $4,000 per coin.
5. In my jurisdiction the relevant dates for calculating net family property are date of marriage and date of separation. According to that, all things else being equal, you owe your spouse half of $400,000 of your bitcoin assets with a per coin cost of $20,000.

I’m sure you can see the massive problem you are now facing. You owe $200,000 to your spouse on an asset that is now only worth a total of $80,000. A strict approach to calculating Net Family Property will leave you destitute and suffering. Thankfully, there are legal arguments to make that you should pay your spouse based on the actual value of the cryptocurrency, not the value of it at the date of separation. These arguments are not guaranteed though, your spouse may not agree with them, and the court may not order it.

So what are some ways to protect yourself if you hold a large amount of cryptocurrency assets? To start a marriage contract, also known as prenuptial agreement, can set out how cryptocurrency assetswill be dealt with in the event of a separation or divorce. Please note, many couples enter into marriage contracts even after they are married so just because you are already married doesn’t mean you can’t protect yourself.

There are an almost unlimited amount of creative and sound ways you can protect yourself and your cryptocurrency assets before and during a divorce. The best option for you will largely depend on your specific fact scenarios and the relevant laws of your jurisdiction. Every country, state, or province is unique in at least one aspect. I highly suggest you speak with a qualified family law lawyer if you have cryptocurrency assets. Most jurisdictions will have a free helpline that will let you speak with a lawyer for up to 30 minutes for free. The best way to find them are to contact your local bar association or regulating body.

Ronan Blake is a family law lawyer practicing in Ottawa, Ontario, Canada.
Author: Ronan Blake
Contributor - Canada

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TronWallet Play available for Desktop with Ledger Integration

TronWallet Play, the desktop version of TronWallet is ready to be released as stated in the official announcement. With the popularity of TronWallet, native mobile App for Mobile Wallets, the company were seeking new opportunities to introduce it for the desktop too. 

After starting a beta program 3 weeks back. The desktop version comes the same great design, ease of use, and high-performance experience of TronWallet mobile Apps along with Ledger integration. 

Users now have even more options to manage TRON tokens, use DApps, trade tokens on the most advanced and built-in Decentralized Exchange (DEx). One can also manage tokens and sign transactions on the Ledger hardware wallets.

This desktop app is compatible with Ledger Nano S, Ledger Blue. You can download the app on your desktop, connect the Ledger Live with the app manager and Ledger integration is good to be used.

The supported platforms are-

  1. Apple macOS
  2. Linux
  3. Windows

Once the Wallet is installed and integrated with the Ledger, Users can create/retrieve their wallets in this app. In both options, 

TronWallet Features:

  • TronWallet is a decentralized P2P crypto wallet for TRON. 
  • 12-word seed to create and restore current mobile wallets
  • 24-word seed — import Ledger wallets
  • Military-grade key encryption on the user’s desktop: transactions signed on your desktop assure private keys never leave your desktop: as safe as it gets.
  • Send, Receive TRON tokens
  • Freeze for Bandwidth and Energy
  • Vote for your favorite Super Representative

TronWallet is officially supported by TRON Foundation through TRON Accelerator and is a recommended wallet.

The post TronWallet Play available for Desktop with Ledger Integration appeared first on Cryptocurrency information | Cryptocurrency News | Bitcoin News and Crypto Guide.

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Front End Engineer at Ferrum Network

A unique opportunity to be part of a growing American Fintech startup. You will be building world-class products on the cutting edge of cryptography, security, and AI. We have immediate opportunities for extremely talented software developers who want their lines of code to have significant and measurable positive impact for users, the company's bottom line and the industry. You will be building the breakthrough products that our customers will love, adopt and use. Every software engineer at Ferrum is a leader and will architect, design, implement, and test product they are building. Regardless of your experience level, this position will be a great learning experience and will accelerate your technical and professional career. Your Impact Architect, design, implement, test and deliver innovative, and highly scalable products. Master development process and culture. Our team brings years of experience from Microsoft, Amazon, and Google and adopts it to fast-paced startup environment. Grow fast in your career and mentor, and lead future developers as the company grows Develop test strategies, write unit/functional tests to drive up code coverage. Basic Requirements Deep understanding of object-oriented programming and experience with JavaScript and TypeScript Solid understanding of data structures, algorithms, and complexity Solid understanding and experience with web technologies, such as CSS, HTML5, and React Solid understanding and experience with React Native Familiarity with native mobile application development technologies in IOS and Android. XCode, and Android Studio Experience in JavaScript testing frameworks About Us: Ferrum Network is a Fintech and blockchain startup with global reach. Founders of the Ferrum Network come from companies such as Amazon, Microsoft, Bloomberg, and Major New York City law firms. They have build a global business, from Kudi Exchange in Africa that facilitates payments and business transactions for growing African communities to a cutting edge cross-chain cryptocurrency platform that enables fast and cheap transactions of all cryptocurrencies and connects networks such as Bitcoin, Ethereum, Binance Chain, and others. Visit to learn about our company.

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Thoughts on Cryptocurrency Lending

There’s two basic models, custodial and non-custodial. The vast majority of options are custodial, and that means a third party has your coins. This entails counterparty risk.

What is a reasonable return to lend out your Bitcoin? Is 6% good? Is 15%? It entirely depends on the counterparty risk. You’re not earning money for lending out BTC, you’re earning money for lending to a specific counterparty like BlockFi.

So, what’s a reasonable yield? Junk bonds in the US have typically paid 4-6% over treasury rates. For a risky start-up, uncollateralized loans would typically be more like 15-25% over treasury yields.

Short-term treasury yields are currently 2.5%, so I’d look for ~22%+ yield to lend my BTC to a start-up at a minimum. Now, this superficial analysis is unfair to Blockfi and others who would rightly argue this isn’t a purely uncollateralized loan.

On their website, Blockfi says they “typically lends crypto on overcollateralized terms.” The specifics matter a lot here. If that collateral was legally owed to you as a specific lender, these should probably be viewed as collateralized loans. They’re probably not.

If you as the lender have no legal right to specific collateral, then you’re simply a creditor to a single company, Blockfi (or whomever else), and you might not even be a senior creditor (for Blockfi, I believe you are a senior creditor, but this should be confirmed for each platform.)

So the right way to think about making a loan on a platform like this is very similar to if a crypto start-up asked you for a loan and offered you some interest to borrow your money, and promised to keep a pile of cash representing their general obligations to investors.

Non-custodial solutions are very different. With these, you may potentially have zero counterparty risk, rather you’d be subject to some sort of liquidation risk and protocol risk. If the market gaps lower, the proceeds from liquidating collateral might not pay you back.
Additionally, using things like multisig solutions for a lending platform have serious risk of bugs. Just how serious? Ask Parity, undoubted experts on ethereum smart contracts, who twice lost tremendous sums to bugs in the simplest type of multisig smart contract.
TDLR: The growth in crypto lending markets is awesome for the ecosystem (separate topic), but is extremely risky today however it’s done, and I think the yields are far too low to price that risk from my perspective.


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New Zealand Regulators Rule Businesses Can Offer Employee Paychecks in Crypto Starting Sept 1st…

New Zealand's financial regulators at the IRD released a ruling telling employers how they can legally pay their staff in cryptocurrencies.  While there were no laws banning it before, it was considered a grey area until now.

Now with clear guidelines, starting Sept 1st - it's absolutely allowed! If the employer offers it, and the employee chooses it over a regular fiat paycheck.

Employers will have to pay their staff in fixed regular amounts, the payment must be able to be converted directly into a government issued currency.

One part we weren't able to make sense of - the taxes may not be the same for each coin.  No reasons for this, or examples were given.

Video Courtesy of 1 News

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Fintech & Crypto News in the Enterprise

There was a LOT of news this week in the cryptocurrency and marketplace lending world so this week I'm going to hit on 5 of the more important stories of the week. Many involve enterprise size businesses. Here they are... Binance Hack Binance is the largest crypto exchange out there. They got hacked for $40 ... Read moreFintech & Crypto News in the Enterprise

Community Ambassador at Fesschain

July has been very exciting so far and we are good to go for our IEO launch very soon. In the last few months, we have built a strong tight-knit community that truly believes in our project. In order to realise our vision and ensuring the expansion of Fesschain, we are elated to announce our new ‘Fesschain Ambassador Program’. Fesschain Ambassadors will be helping us to connect to as many people possible on the Internet. They will be responsible for helping us to spread the word about Fesschain, educate the new entrants about our vision and community, and also share our Intent of existence. Responsibilities: · Be ready, capable and motivated to nurture awareness about Fesschain and connect Fesschain to people all around the world. · Help us build and maintain a Local community of supporters (online and offline) · Find, share, and engage with newcomers to Fesschain. We believe in the magic of word-of-mouth and wish to create the person-to-person bonding via our global ambassador initiative · Expand Fesschain influence on key social media platforms such as Twitter, Telegram, YouTube and so on. · Produce and publish useful content as directed · Help translation for App / Website / PR language · Organize local meetups and other community events (if needed) · Connect Fesschain to interesting opportunities, partners, and individuals · Collect and share feedback from the community in coordination with the Fesschain Core Marketing team · Be willing to participate in community building, help to solve problems, and help to maintain an open, inviting atmosphere for constructive discussions. Benefits : · Fesschain Token rewards for marketing, promoting and developing the Local Fesschain community. · Opportunity to gain knowledge of blockchain tech · Networking opportunities with Fesschain team, partners, investors, and other ambassadors · Additional Token rewards based on your contribution · Fesschain Goodies and much more… Note : Preference will be given to the individuals having prior experience in building blockchain project communities, such as social opinion leaders, as well as individuals recommended by other Fesschain Ambassadors. Fesschain welcomes all community members (other than residents and citizens of the United States) to apply and participate in developing a better community and world powered by Fesschain. You will become a part of the Fesschain family and it will also give you a chance to become a leader in your local Cryptocurrency community The program is open to all members of the Fesschain community (except India and US). Final Confirmation will be done over a Video Call. Telegram Username - @priyankg3 Email id - [email protected]

Alameda Research: Bitwise Report on Fake Bitcoin Trading Volume Inaccurate

Despite recent testimony from Bitwise to the U.S. Securities and Exchange Commission (SEC), which stated that up to 95% of Bitcoin trading volume is fake, quant trading firm Alameda Research deny the validity of this claim, instead of arguing that the truth is far less clear.

Bitwise Asset Management, an American self-styled authority on crypto trading and one of the largest providers of index and beta crypto-asset funds, offered its view in a lengthy report, drafted as supporting information to a presentation to the SEC on March 2019.

Aggregating data from over 80 exchanges, Bitwise researchers claim that of these exchanges, just 10 could claim to have 100% genuinely reported trading volumes; with these top ten exchanges only accounting for 5% of Bitcoin’s trading volume collectively.

As one might imagine, among the 10 honest exchanges were major names in the cryptocurrency markets, including Binance, Bittrex, Kraken, and Gemini. However, is Bitwise’s expert opinion strictly true, or could it have misjudged real vs. reported Bitcoin trading volumes?

Alameda Research

Alameda Research, founded in October 2017 in the U.S., is a quantum trading firm managing over $100 million in digital assets, and trading an enormous $600 million to $1.5 billion per day across thousands of digital asset pairs. Similarly, the firm currently takes 2 of the top 10 spots for the highest profits on the BitMEX leaderboard.

Like Bitwise, the firm produces its own research and reports on the state of the digital asset industry, including a dedicated volume monitor as part of its cryptocurrency derivatives exchange FTX.

Alameda’s Trading Tops Reported Fake Volume

So, why is Alameda Research so sure that Bitwise’s claim is inaccurate? Speaking to YouTube crypto channel Venture Coinist on July the 17th, CEO and Co-Founder of Alameda Research, Sam Bankmanfried, claimed that the data Bitwise provided could not be accurate.

In the interview, Bankmanfried explained:

“We ourselves trade more on some of these exchanges each day than [Bitwise] claim trades total”

Responding to this, the interviewer pointed out that if this is the case, Bitwise’s claim within its report falls dramatically short of the real trading volume.

Bankmanfried continued to say that:

“If you’re really deep in crypto and trading on all these platforms, you know the answer already, if you trade on Huobi, you trade on OKex, you trade on Binance, you know that there’s a lot of real volume there. You try and trade Bitcoin to Tether on OKex, you can do it – there’s liquidity, there’s size.”

Those who regularly trade on digital asset exchanges, Bankmanfried argues, will know that real volume exists, as they are able to fill their orders – although to what extent wash trading affects markets is unknown.

A Balanced Approach

However, Bankmanfried did admit that some exchanges were likely to have fake volumes. Taking a balanced approach, he explained that it was easy for two groups to adopt contrasting narratives.

On one side, there are parties such as Bitwise who believe that the majority of reported trading volume is fake or wash traded, and on the other side there are those who vehemently deny any notion of fake volume reporting.

The truth, Bankmanfried says, is somewhere in between:

“You look at the headlines from Bitwise, and basically it says there’s no real crypto volume outside of America… There’s a lot of fake volumes, and there’s also a lot of real volumes, and humans are really bad at expressing that. Subconsciously, it’s just really easy to buy into a narrative.”

Bankmanfried also pointed out geographic bias when reporting on volume, stating that those in the USA or Europe would be more predisposed to accusing Asian volume of being fake, and vice versa. Expanding on this, Bankmanfried says that in fact, most fake crypto volume likely does originate in Asia, but conversely so does most of the real volume.

All Real, or All Fake?

It might not be wise to accept Bitwise’s view that the majority of the reported volume is fake, as both anecdotal evidence and other firm’s digital asset reports seem to show otherwise. Instead, like Alameda Research, it might be better to adopt a balanced approach to crypto trading volume.

Likewise, when assessing the total volume of the digital asset markets, and specifically Bitcoin, it’s best to leave geographical bias behind, as much real crypto volume comes from Asian countries despite the popular narrative that much of this volume is in fact fake.

Alameda Research: Bitwise Report on Fake Bitcoin Trading Volume Inaccurate was originally found on Cryptocurrency News | Tech, Privacy, Bitcoin & Blockchain | Blokt.

The Fifth Protocol

In this episode featuring AngelList and CoinList Co-Founder Naval Ravikant , you’ll learn:

  • Why machines could be a major catalyst for Bitcoin protocol adoption
  • Why it has taken so long to create the internet’s first protocol for exchanging value, and why it’s here to stay
  • Why Bitcoin has an advantage as an exchange of value protocol versus incumbents
  • Why dozens of app coins could proliferate on networks that must allocate resources (storage, cache, and more)
  • What some of the future real-world applications of blockchain-related protocols could be