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The problem lies in a certain parameter called the “block size limit”. First, we will spend a very quick acquaintance with the basics of Bitcoin for those who do not know. All transactions that have ever occurred on the Bitcoin network are recorded in a public and intrusion-protected registry called the “blockchain.”
The main issue
All these features of the functioning of the system led to the problem of scaling Bitcoin and limited its theoretical size. A blockchain is a sequence of blocks, each of which is a set of transactions protected by cryptographic algorithms. At the same time, Satoshi Nakamoto (about a year after the creation of Bitcoin) limited the block size to one megabyte. This was done in order to prevent possible DoS-attacks of intruders when they create large (in theory unlimited) blocks to paralyze the network.
However, such a security measure had a negative effect on the network capacity in general (in the long term). Today, bitcoin can process about 7 transactions per second (TPS). At the same time, the actual load on the Bitcoin network is 3.5 TPS. For comparison, the TPS indicator in the Visa system is 2,000 (at the moments of peak activity – 50,000).
How to solve it?
The initial simple solution was to increase the block size. But this idea was not easy. But there was no clear agreement on how much it should increase. Some were in favor of 2 MB, another advocated for 8 MB, and one developer wanted to go up to 32 MB.
At that time, an increase in the block size was the simplest solution from a technical point of view, but none of the schemes was implemented. Refusal to implement turned out to be associated more with political (within the Bitcoin ecosystem) problems than with technical ones. The presence of large blocks could lead to the centralization of Bitcoin, since their storage and processing would require even more computing power, and only large companies can allocate such amounts of resources. Thus, there would be a contradiction with the main idea of Bitcoin blockchain as user-controlled cryptocurrency.
Solution 1: SegWit
Segwit is an abbreviation for the term Segregated Witness, which can be literally translated as “separated witness”. Understanding the meaning of this term will be easier after considering the structure of a transaction on the Bitcoin network.
Solution 2: SegWit2X
In 2017, a new approach was discovered: Segwit2X. This idea — supported by several of the largest exchanges in the sector — combined SegWit with an increase in block size of up to 2 MB, which effectively multiplied the capacity of preliminary transactions up to 8 times. The proposal, which did not solve the problem, caused another wave of discord. The way it was resolved and its lack of protection against replay struck many. And the deliberate redistribution of power from developers to miner enterprises threatened to cause a fundamental split in the community.
Solution 3: Schnorr signatures
This is a way to improve network bandwidth by aggregating the signatures needed for BTC transactions. The size of the transaction becomes smaller. This means that additional transactions will be added to the network. In addition, the commission is calculated per byte.
Bitcoin scaling options
While the use of bitcoin as a payment mechanism seems to be fixed in its value as an investment asset, the need for more transactions is still relevant. After all, fees charged by miners for processing are now more expensive than equivalents in Fiat. Moreover, taking into account that we are still at the beginning of the evolution of cryptocurrency, the development of new features that enhance functionality is crucial for the implementation of the base blockchain technology.
The issue with the Bitcoin scaling options
Back in the year 2009, bitcoin cost mere pennies. However, at the moment, the rate of cryptocurrency has jumped to unprecedented heights. Therefore, the question of where to sell Bitcoin is more relevant than ever. If you are also interested in this question, then read this article. In it we will talk about all possible ways to sell bitcoin. Those are the main ways to sell your Bitcoins:
- Stock exchanges;
- Peer to peer;
- Direct deals;
- Bitcoin ATM;
Stock exchanges
Why are cryptobirds so popular? Perhaps the main advantage of such services is security. Exchange acts as an intermediary. If you want to sell a cryptocurrency, then you just need to place the appropriate application and specify the desired price. When a buyer appears who is satisfied with your price, the exchange will automatically conduct the transaction. In the end, you get the money, and the buyer – Bitcoins.
Start with creating an account
The service will ask you to answer a few questions and download identity documents. These include a passport, driver’s license, residence permit or official work permit in a particular country. You will also have to confirm your bank account. For this cryptobirge asks for an extract. Still, need to confirm the place of residence. This can be done, for example, with the help of a receipt for utilities.
As with any ordinary stock exchange, the sale of cryptocurrency takes time. During the bidding price is the amount that will be at the intersection of buyers and sellers in the so-called stock glass. Exchange glass is the volume and prices of transactions set by exchange participants. Sellers tend to sell the cryptocurrency at a higher price, buyers want to buy cheaper, therefore, orders of some will be higher than the market value, orders of others will be lower.
Placing Order and withdraw money
When you place an order to close the purchase or sale of bitcoins at a certain price – it is considered that you have placed a limited order. The system will fulfill your demand either at the price you specify or at a price better than the one you set. You can be sure that your order will not be fulfilled at the worst price. An order can be closed in one transaction if the seller/buyer is found, with price parameters that fully satisfy your order, or in several transactions, if there are no such sellers/buyers.
In this case, you can close the transaction at once, if you place an order at market value. In this case, you spend the minimum amount of time, because someone’s application will be executed online. True, one can hardly say that this method will ensure the closing of the transaction at a good price because as a rule, we always want to sell more expensive.
Peer to Peer Bitcoin exchanges
P2P translations were created to solve / avoid problems that appeared with ordinary translations. Due to the fact that a very limited number of structures accept payments in cryptocurrency, it was necessary to exchange it for fiat currencies in order to make purchases. It was then that had to resort to using exchangers. However, a minus of such a system is that the exchangers are controlled by people, the owners of the services are both the solvers of disputes between users and the controllers of their actions. In addition, they charge a fee for their work.
When using conventional exchangers, the user places information that he intends to buy a certain amount, for example, Bitcoins, or sell. The exchanger searches for matching offers and makes a deal. Transactions with such a system can last from 5 minutes to several hours.
Bitcoin ATMs
ATMs is a good alternative to exchanges. Sale through ATMs is made very quickly. Moreover, ATMs is extremely easy to operate. They do not require any specific knowledge or trading skills from you. Nevertheless, the course in ATMs less profitable than on the stock exchanges. Moreover, ATMs may also charge a fee for the services provided. Because of this, selling bitcoin for rubles through exchange points is not very profitable.
Direct Deals
Perhaps the most profitable way to sell bitcoins is a direct deal. The bottom line is that you yourself find a buyer and offer him to buy your tokens. You can dictate your terms of the deal and sell the cue ball at the desired rate. Moreover, the transaction is carried out without commission, as for carrying out direct transactions do not need to use third-party services. However, the main problem with this method is security. The person who decided to purchase your bitcoins from Blockchain’s wallet may well turn out to be a fraud.
Many digital tokens are released every year. However, despite the growing number of currencies, only a few have succeeded. As part of an ICO team, it is very important that you take into consideration the factors influencing the success of these ICOs. One of the ways that you can distinguish yourself in the industry is to make sure that your tokens make it to the Token List on Cryptocurrency Exchanges.
The Token List
Every exchange has a token list. This token list contains all the coins traded in every exchange. You can also see other circulating cryptocurrencies.
Why get your token on the token list exchange?
Once your ICO is finished, the next step that you need to do is give value to your currency. This step is very important because this will add monetary value to your currency. It will not just keep your project afloat but will also make your investors happy.
In order to keep money coming, you need to add more utility to your currency. If your digital currency makes it to the list of token exchanges, more opportunities will definitely come your way.
ICO token listing sites that you should check out
One of the advantages of getting your token listed is that it adds more credibility and value to your currency. To get to this listing, your marketing team should explore some of the sites below.
• ICO Alert
• ListICO
• ICO Hot List
• The Tokener
• Top ICO List
• ICO Map
• BestCoins
• ICO Watchlist
• CoinMarketPlus
• Coin Schedule
Where to get listed
As of this time, there are hundreds of cryptocurrencies circulating in the market. It makes you wonder how and where you should start. However, there are some sites that will guide you on getting on the token list. You can check out The Ultimate Guide To Cryptocurrency Exchanges. Aside from this guide, check out the other top exchanges for your token listing.
• Kraken
• Coinbase
• CEX.IO
• HitBTC
• Bittrex
• KuCoin
• Binance
Things that you need to do to get listed
Each cryptocurrency exchange has its own terms and conditions. It’s a gamble on which exchange you wish to get your digital currency listed. However, you need to always remember that exchanges will always check the quality of every ICO project and their software. It is very important that you give them complete details on your digital token. It is vital that you equip your marketing team with the tools for marketing your digital token on the platform. You can also post your source code in Github. In fact, some platforms require you to post the source code there. Aside from that, make sure that your digital currency passes the Howey Test.
Applicable Fees
Most people usually think that getting their digital currency listed won’t cost them a penny. In reality, however, you need to shell out money for that. Crypto Exchanges have a list of fees in their platform. The fees depend on the popularity of your currency in the market. Some exchanges even charge 1,000,000 BTC just to get the token in the list. Once you submit your ICO token for evaluation, it will take some time before you can get the results.
Listing services for Crypto Exchanges
Another way to get your currency is listed is to check crypto agencies that offer this service. It can mean less hassle on your end and can be very helpful. Although it can cost you a certain amount, these agencies’ platforms can help you market your currency. However, you need to take note that even if you get your listing, it is still not a guarantee for your currency to succeed.
If you wish to get the services of a crypto agency, make sure that you prepare the following information:
- The details your company and the owner/s
- The name and description of your token and your logo,
- Name of your blockchain platform
- The date of your ICO launch
- YourGithub link
- Listing fee (Note: The listing fee vary from site to site)
An ICO token listing is usually competitive. However, the tips listed above might just help you get the listing that you wanted.
ICO teams continue to grow in number in recent years. However, not all of these teams were able to succeed in making a successful ICO token. ICO tokens come in different types and names. If you plan on making your own ICO token, it is best that you know what the token is really all about.
ICO Token
ICO tokens are products that have a specific value assigned to it. Usually, when giving value to a token, the creator assigns an equivalent to it. One token can be equal to a certain monetary value or service.
In Making an ICO Token
Making your own digital token is a big leap in creating an ICO. An ICO is a fundraising project that usually funds ICO projects in exchange for the cryptocurrency. Many platforms like Stellar and Ethereum allow traders to create their own cryptocurrency. It also helps to have your own blockchain in making your ICO token.
Make sure that you are able to address the questions below. to help you scale the success rate of the ICO token that you plan on making.
• What is your business’ overall goal?
• Can your business profit from using blockchain technology? How?
• Is it necessary to have a token system for your business?
• What value does this token give to its users?
• Does it conform to all the legal requirements of an ICO token?
• Can you list your token in a cryptocurrency exchange?
• Do you have competitors? If so, identify them and their products.
Types of ICO Tokens
In creating your own ICO tokens, you also need to classify what type of ICO token it should be and the purpose it will serve. There are three categories for ICO tokens:
Equity Tokens
Equity tokens are the newest type of tokens in the market. These tokens are similar to investment shares in IPOs. Investors get Equity Tokens in exchange for the money that they invest. In addition, these tokens allow the investor to vote and decide on matters relevant to the ICO Company. However, Equity Tokens do not have clear regulations and can be a high-risk investment.
Security Tokens
You can issue Security Tokens for almost everything. They are often used on products that are tangible. They are used to tokenize properties and other material assets. Many ICO companies often offer this type of token. Security tokens are covered by strict security regulations. Make sure that you take the time to read and study these regulations if you plan on issuing them.
Utility Tokens
However, before you start dispensing and creating Utility Tokens, be sure that they pass the Howey Test. The Howey Test helps you determine if your Utility Coin is able to meet the security requirements mandated by the government. Utility Tokens play an important role in a blockchain application or platform and allow users to enjoy special benefits from it.
Initial Supply of your ICO Tokens
ICO teams usually decide on the number of tokens that will be made available in the market. They also have a say on how these tokens will be distributed. Down below are some of the options on how you can create a number of digital tokens to be released and how they will be distributed:
- ICO Sale
- Private Sale
- Pre-ICO sale
- Post-ICO sale
Furthermore, you have to allocate tokens for your advisory board and ICO team. You also need to set aside a number of tokens for your business reserves and expenses. Having a specific amount that you want your tokens to reach also helps determine the initial supply of your digital token. You can set a hard cap and soft cap on the amount that you want to raise.
How to create your ICO token
Many ICOs often use Ethereum as their primary platform. It doesn’t take a lot of time in creating a digital token on Ethereum. It usually takes about 20 minutes to issue tokens through the platform. There are also other alternatives that you can use in creating tokens. There are times that Ethereum networks would set a limit to their platform transactions. You can also use other platforms like Stellar to create your own cryptocurrency.
In making an ICO token, always take into consideration the uses and types of
the tokens. In this way, it will be easier for you to conceptualize and scale
up its functionality. Always remember that a worthless coin is easily replaceable
in the world of cryptocurrency trading.