Wednesday, December 12, 2018

Sharding to Scale 📈

December 12, 2018

Sharding: What the Heck is it and Why is it Important?

The race to scale

While blockchains have proved that they are worthy of solving a number of problems, they are still hindered by a few challenges. One of the most important challenges is scaling.

Scaling refers to a blockchain's ability to handle more transactions, but with similar performance. The solutions to scaling differ between different blockchains.

For Ethereum, it's called sharding.

What is sharding?

Sharding is a complex concept that has been around long before blockchains.

In short, it's the idea that instead of having one united network, with each node connecting to another node, the network is actually broken into segments called shards. In this structure, each segment contains its own, smaller network, but also connects to other segments to form a larger network.

1000x more efficient

Though Ethereum has a long road ahead of it before it accomplishes sharding, Ethereum's founder, Vitalik Buterin, now believes the concept could make Ethereum "a thousand times more efficient," according to a recent tweet thread.

This means the blockchain would not only work faster and be able to handle more transactions, but would also cost less electricity to run.

Still, sharding needs significant development before adoption and is currently slated for implementation in 2020.

OPINION

Mike Novogratz is not Ready to Give Up on Bitcoin

Refresher on Novogratz

Mike Novogratz is a former hedge fund manager at Fortress Investment Group and entered into the crypto industry earlier this year by raising $250 million to develop a "cryptocurrency merchant bank" in Canada.

In May, Novogratz launched a cryptocurrency index with Bloomberg called the Bloomberg Galaxy Crypto Index.

Novogratz is known for his bold predictions about the crypto market. In the past, he has set lofty price targets for Bitcoin and continuously called the bottom on the crypto bear trend. More recently, Novogratz has tamed his predictions and has shown patience rather than proclaiming 'moon' price targets.

'Revolutions don't happen overnight'

Novogratz recently spoke to Bloomberg to update the public about his predictions for where the cryptocurrency market is headed. He remains very bullish on the potential of cryptocurrencies, especially Bitcoin.

The bull emphasized that people need to show patience in the cryptocurrency market. It takes time for a new currency to gain mass adoption and with the run-up of 2017, investors thought that it would come too easy. Novogratz told Bloomberg, "revolutions don't happen overnight."

Believer in the digital gold analogy

A lot of crypto enthusiasts compare Bitcoin to gold, but in a digital format. This is due to its scarcity and store of value use case.

Novogratz is a big believer that Bitcoin will one day act as digital gold. He gave his opinion on the matter:

"I do believe Bitcoin is going to be digital gold. That means it's the only one of the coins out there that gets to be a legal pyramid scheme — just like gold is."

CRIME

Prosecutors Want 10 Years in Jail for Former Mt. Gox CEO

According to a new report from local Japanese paper The Mainichi, prosecutors in the Mt. Gox case are seeking a 10-year sentence for former CEO Mark Karpeles.

Part of the sentence stems from an accusation that Karpeles embezzled more than $3 million in customer money from the exchange he ran back in 2013.

Allegedly, he used the money to invest in a "software development business for personal interest."

Data Manipulation

Alongside that accusation, Karpeles allegedly manipulated data on the exchange to cover up the entire mess.

And it is a mess. Since 2014, when Mt. Gox was allegedly hacked for 850,000 Bitcoin and subsequently filed for bankruptcy, both customers and creditors have fought back.

Fast forward to 2018, the case is still going on as Mt. Gox creditors slowly begin to get their investments back.

REGULATION

CFTC Announces Desire to Learn More About Ethereum

'Request for Input'

On Tuesday, the Commodity Futures Trading Commission (CFTC) published a 'Request for Info', indicating that it would like to learn more about the mechanics and markets of Ethereum.

The CFTC is looking for public feedback to educate itself about Ethereum. Experts on the topic are urged to respond to the CFTC's request by answering questions contained in the 'Request for Info'.

An excerpt from the publication gives more detail on its intent:

"The input from this request will advance the CFTC's mission of ensuring the integrity of the derivatives markets as well as monitoring and reducing systemic risk by enhancing legal certainty in the markets. The RFI seeks to understand similarities and distinctions between certain virtual currencies, including here ether and bitcoin, as well as ether-specific opportunities, challenges, and risks."

What this could mean for ETH

Ether investors should not be at all concerned that the CFTC wants to take a deeper look into the cryptocurrency. Rather, this is probably a good signal for Ethereum.

The big question facing most cryptos right now is whether they are a commodity or security. Being classified as a commodity is much more favorable for cryptocurrencies because there is less strict reporting regulations.

The CFTC and SEC have already proclaimed that Ether is most likely a commodity. This 'Request for Input' most likely indicates that the CFTC is considering the approval of Ether derivatives, such as futures.

BITS

But wait, there's more...

💸 U.S. crypto exchange Kraken is seeking new investors that would put the business at a valuation over $4 billion.
🐻 Denmark authorities are targeting 2,700 Bitcoin traders for evading taxes after a tip-off from a Finnish exchange.
🔌 Crypto miners are packing up shop to move to new places with cheaper power cost such as Iran.

MEME