FAQ


Frequent Asked Questions

These are the compiled most asked questions from out clients, investors and partners. If you have new questions that you would like to see here, please contact us.

How are you going to synchronize what’s happening in the blockchain with the rest of your enterprise systems?

Blockchain is a cost efficient application that brings immutability and by consequence trust to a set of data that is shared among different partners. The integration between blockchain based systems and enterprise systems shall be very carefully designed, checked and implemented by specialists since it has a great potential to improve the way that companies are doing business today.

How do you extend your smart contract logic — the basis of most business-oriented blockchain projects — into your other business process logic?

Smart contracts are a very interesting way to completely remove human interference from agreed conditions between partners by automating the contract execution based on triggers defined by the partners. Once deployed, smart contracts or decentralized applications (Dapps) can’t be stopped and their logic can’t be changed. Smart contracts are censorship resistant and can be implemented inside the business process to improve the transparency and the fairness among the partners in the transactions that they agree to carry out.

What is blockchain?

The blockchain is an undeniably ingenious invention – the brainchild of a person or group of people known by the pseudonym, Satoshi Nakamoto. But since then, it has evolved into something greater, and the main question every single person is asking is: What is Blockchain?
By allowing digital information to be distributed but not copied, blockchain technology created the backbone of a new type of internet. Originally devised for the digital currency, Bitcoin, the tech community is now finding other potential uses for the technology.
Bitcoin has been called “digital gold”, and for a good reason. To date, the total value of the currency is close to $112 billion US. And blockchains can make other types of digital value. Like the internet (or your car), you don’t need to know how the blockchain works to use it. However, having a basic knowledge of this new technology shows why it’s considered revolutionary.

What is the consensus algorithm and what are the different consensus methods for blockchain?

A consensus algorithm is a process in computer science used to achieve agreement on a single data value among distributed processes or systems. Consensus algorithms are designed to achieve reliability in a network involving multiple unreliable nodes. Solving that issue — known as the consensus problem — is important in distributed computing and multi-agent systems.
To accommodate this reality, consensus algorithms necessarily assume that some processes and systems will be unavailable and that some communications will be lost. As a result, consensus algorithms must be fault-tolerant. They typically assume, for example, that only a portion of nodes will respond but require a response from that portion, such as 51%, at a minimum.
Blockchain, the distributed ledger most commonly associated with Bitcoin, also relies on consensus algorithms to reach agreement among nodes. A blockchain can be thought of as a decentralized database that is managed by distributed computers on a peer-to-peer (P2P) network. Each peer maintains a copy of the ledger to prevent a single point of failure (SPOF). Updates and validations are reflected in all copies simultaneously.
Bitcoin uses the proof of work algorithm (PoW) to ensure security in a trustless network, by including mechanisms that ensure that the effort of mining is represented within the block submitted by the miner. Software on the computers of miners accesses their processing capacity to solve transaction-related algorithms. The block is an encrypted hash proof of work that is created in a compute-intensive process. Although any party can submit a chain of blocks to the ledger, the amount of computing resources required to fake consensus is too great to make it worthwhile to a dishonest party.
Other common consensus algorithms include the practical Byzantine fault tolerance algorithm (PBFT), the proof-of-stake algorithm (PoS) and the delegated proof-of-stake algorithm (DPoS).

What is the difference between the Proof of Work (PoW) and Proof of Stake (PoS)?

PoW is a protocol designed primarily to prevent and deter cyber-attacks on the network (in fact, it has an exorbitant cost to try to make attacks, much more than what someone would earn from that), and it also allows a distributed consensus of “trustless” transactions.
In particular, PoW is needed to solve exceptionally difficult math problems,PoS is also a system for validating transactions, so the purpose is the same as the PoW, but the result is obtained in a different way.
Proof-of-Stake is executed by miners who put a number of their coins on a block to check transaction blocks.

What is cryptocurrency?

A cryptocurrency is a digital or virtual currency designed to work as a medium of exchange. It uses cryptography to secure and verify transactions as well as to control the creation of new units of a particular cryptocurrency. Essentially, cryptocurrencies are limited entries in a database that no one can change unless specific conditions are fulfilled.

How my company can benefit adopting blockchain technology?

In fact, there is a particularly large uptick in blockchain adoption among small businesses looking to reap the benefits of the technology to help protect and advance their companies – all without breaking the bank. Blockchain has truly become a coveted technological tool for small businesses spanning every industry including finance, real estate, healthcare, education, medicine and more. Since blockchain technology allows for increased security and transparency, this uptick in adoption makes perfect sense.

How to use blockchain to get finance for my company or my project?

One of the most challenging aspects of the business creation is the finance. Traditional markets do not offer the possibility for you to publicly attract investors inside your business since for doing that you will need to do an expensive “IPO” (Initial Public Offering) in a stock exchange.
After the introduction of the blockchain technology, you can do an “ICO” (Initial Coin Offering) by creating and publicly offer your digital tokens to customers and investors, that will bring the finance needed for your business to flourish.
According to a report by PwC Switzerland, between January and May 2018, ICO volume was already twice as much as it was during the entire year of 2017.
“In total, 537 ICOs with a total volume of more than $13.7 billion have been registered since the beginning of the year. In comparison, in 2017 there were a total of 552 ICOs with a volume of just over $7.0 billion. Also, the average size of an ICO has almost doubled from $12.8 million to over $25.5 million since last year. “

What is needed to present my blockchain project to investors?

Presenting your project to private investors is an activity that shall be performed after you develop a deep understanding of your business and how you plan to get it off the ground (legally, commercially and technically).
Investors are very analytical when analysing business opportunities and show the right information to them with the support of a good research is key in the process of get financed privately.
A good and short pitch deck is recommended and information that supports all the claims made in this pitch deck shall be presented when required.
The last and most important due diligence made by investors is the team capacity to delivery what is promised. Be prepared to sell not only your product but also your team.

Why have venture capital investors come over to crypto-currency projects?

Simply because the crypto-industry itself is getting smarter. With each passing month, the crypto-currency market becomes more predictable. Investors learn from their mistakes, and improve their methodologies for analyzing ICO projects; screening out unreliable players becomes easier. The market is becoming more stable.
A positive factor influencing the attractiveness of blockchain projects has been trust from the government side. Forward-thinking governments, which recognize the inevitability and convenience of blockchain, are attempting to keep pace with the speed of the industry’s development and to regulate the area from the legal side.

Are cryptocurrencies legal?

The legal status of bitcoin (and related crypto instruments) varies substantially from state to state and is still undefined or changing in many of them. Whereas the majority of countries do not make the usage of bitcoin itself illegal, its status as money (or a commodity) varies, with differing regulatory implications.
While some states have explicitly allowed its use and trade, others have banned or restricted it. Likewise, various government agencies, departments, and courts have classified bitcoins differently. While this article provides the legal status of bitcoin, regulations and bans that apply to this cryptocurrency likely extend to similar systems as well.

Are cryptocurrencies forbidden in the US?

The U.S. Treasury classified bitcoin as a convertible decentralized virtual currency in 2013. The Commodity Futures Trading Commission, CFTC, classified bitcoin as a commodity in September 2015. Per IRS, bitcoin is taxed as a property. Bitcoin and similar cryptocurrencies are regulated as both currency and as a security under U.S. law. Within the U.S. many states are also pursuing legislative/regulatory efforts to cover crypto instruments.

Are cryptocurrencies forbidden in China?

Implicit ban. Regulation prohibits financial firms holding or trading cryptocurrencies. China On 5 December 2013, People’s Bank of China (PBOC) made its first step in regulating bitcoin by prohibiting financial institutions from handling bitcoin transactions.
On 1 April 2014 PBOC ordered commercial banks and payment companies to close bitcoin trading accounts in two weeks.
Cryptocurrency exchanges or trading platforms were effectively banned by regulation in September 2017 with 173 platforms closed down by July 2018.
In early 2018 the People’s Bank of China announced the State Administration of Foreign Exchange led by Pan Gongsheng would crack down on bitcoin mining.[78][79] Many Bitcoin mines in China had stopped operating by January 2018.

What is a digital token?

Digital token offerings are typically managed over the internet, allowing people to visit a website and purchase digital tokens using a fiat currency (such as Canadian dollars) or another cryptoasset like bitcoin or ether.
The digital tokens sold may have a planned future use, such as allowing buyers to access a digital platform, use an alternative cryptoasset or access other types of products and services.

What is a security token?

So what exactly are they? A crypto token that passes the Howey Test is deemed a security token. These usually derive their value from an external, tradable asset. Because the tokens are deemed a security, they are subject to federal securities and regulations. If the ICO doesn’t follow the regulations, then they could be subject to penalties. However, if all the regulations are properly met, then these tokens have immensely powerful use-cases.

What is a utility token?

Because most of the ICOs are investment opportunities in the company itself, most tokens qualify as securities. However, if the token doesn’t qualify according to the Howey test, then it classifies as utility tokens. These tokens simply provide users with a product and/or service. Think of them like gateway tokens.
As Jeremy Epstein, the CEO of Never Stop Marketing, explains, Utility tokens can:
Give holders a right to use the network
Give holders a right to take advantage of the network by voting
Since there is an upper cap on the maximum token availability, the value of the tokens may go up because of the supply-demand equation.

What is a payment token (cash token)?

In credit card tokenization, the customer’s primary account number (PAN) is replaced with a series of randomly-generated numbers, which is called the “token.” These tokens can then been passed through the internet or the various wireless networks needed to process the payment without actual bank details being exposed.

What is a stable coin?

A “stable coin” is a cryptocurrency that is pegged to another stable asset, like gold or the U.S. dollar. It’s a currency that is global, but is not tied to a central bank and has low volatility. This allows for practical usage of using cryptocurrency like paying for things every single day.

What is the best jurisdiction to launch an ICO?

ICOs and token sales are currently unregulated in many nations. However, that does not mean this will always be the case. Furthermore, laws regarding securities, tax, AML/KYC, commodities laws, general fraud and tort, and other areas have the potential to affect ICOs. ICOs are also inherently international. Securing legal opinions in every country whose laws could potentially affect the ICO would be prohibitively expensive. Even if it were possible for a startup to seek legal counsel in every jurisdiction, doing so will not guarantee that the startup will avoid legal action. Plus, countries continuously change their laws. So, the best and most ICO friendly country today may not be the same one tomorrow. For these reasons, it is essential that startups interested in launching an ICO seek advice from experts with experience in multiple jurisdictions.
The following jurisdictions are considered favorable for hosting initial coin offerings:
Nevis, Russian Federation, Switzerland, Singapore, Gibraltar, Israel, France, Spain, Lichtenstein, Luxembourg, Costa Rica, Argentina, Slovakia, Slovenia and Myanmar.

How to launch a successful marketing campaign for an ICO?

Successful marketing campaigns for ICOs are based on a combination of traditional marketing and PR. To be efficient, an ICO marketing campaign must apply a totally coordinated and collaborative effort. This involves community media bursts, innovative guidance, comprehensive study, and a high level of reliability. A project should hire an ICO manager who knows which crypto community meetings and occasions you should be present at. This will allow building relations with the right people. By the way, exceptional ICO marketing managers might also have connections to get you into these events at a lower cost.
From a perfunctory point of view, here are the tenets of triumphant ICO marketing:

    1. Promotion via cryptocurrency communities, PR, social media, and regular press is the perfect way to introduce a product/service to the world (Reddit, Github, etc.)
    1. The power of social media plays a great part in upgrading an ICO marketing scheme. This might be a hard task, though, because some leading social media has already banned crypto advertising (Facebook, LinkedIn).
    1. Creating high-quality content is a crucial mission that should emerge on every ICO marketing task list.
    1. Targeting market research and primary consumer needs analysis is another important task.
    1. Word of mouth power. You need to tell everybody about your idea and the current problem you are going to solve at each particular meet-up or conference, on YouTube, and even on TV/radio.

How to choose the best blockchain for my project?

The market is full of options of public and private blockchains where each one has its advantages and disadvantages. Have a capable technical consultant that knows all options in the market and understands what technology is more suitable for the solution that you are trying to build is key. Wrong picking the blockchain technology could lead to delays, future integration issues and sometimes also to complete the failure of your idea.