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Blockchain Scaling Problem: 3 Possible Solutions

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Every blockchain has one very familiar characters and that is, of course, decentralization. Why is this important to know? All cryptocurrencies such as Bitcoin, Ethereum or Ripple are very limited: every node that takes part in the network must process every single transaction. When every node processes every transaction, the node keeps a copy of all the information. So, there cannot be more transactions made than a single node that takes part in the network. This also means that if more nodes are added to the network, the blockchain will get weaker. So in order to scale, every blockchain protocol must find out a mechanism to limit the nodes that participate in each transaction and at the same time to try not to lose the network’s trust.

There have been, however, some proposed solutions from both Bitcoin and Ethereum which some have already been implemented. We’ll just name a few here:

  1. Segwit

Short for Segregated Witness is a mechanism that changes how data is stored. The way it works is by increasing the block size limit by removing signature data from BTC transactions. This way you get free space and a bigger capacity.

  1. Proof of Stake

PoS is a mechanism that allows people to validate block transactions or mine depending on how many coins a person has. Thus, the more coins owned, the bigger the mining power. PoS is one of the most common solutions.

  1. Plasma

Plasma is also a possibility to solve the scaling problem. The way it works is that Plasma removes unnecessary data in the chain. It will only transmit completed transactions to the public Ethereum chain. This way more power is saved and it lowers down the expenses.

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DC Forecasts is a leader in many crypto news categories, striving for the highest journalistic standards and abiding by a strict set of editorial policies. If you are interested to offer your expertise or contribute to our news website, feel free to contact us at editor@dcforecasts.com

Stefanie has been a Bitcoin Specialist for 5 years. Providing daily news and updates for DC Forecasts.

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Blockchain Archive

Top 3 Bitcoin Millionaires

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There are a lot of people that made money last year when Bitcoin reached its all-time high. But there are other people that made really smart investments and made a fortune with bitcoin. So it’s not just dumb luck. Here we will show you some of the people that made a fortune.

  1. Barry Silbert

Silbert is a founder of Digital Currency Group. This is a company with a mission to improve the development of the entire financial system by building blockchain companies. His company is one of the very few companies in the world that invests in bitcoin-related companies. Barry’s company also owns another company that is mainly focused on digital currencies and digital currency investing. He is one of the millionaires that also founded an investment trust and an exchange fund. His company has invested in more than 70 blockchain related companies.

  1. Blythe Masters

She is a former managing director at J.P. Morgan Chase & Co. Blythe now owns her own company that helps built encryption-based tools that help improve the security and efficiency of trading. Her companies aim to apply blockchain technology in the everyday activities of Wall Street. She earned a lot of money when she raised more than $60 million in order to test blockchain technology. Her company is continuously growing and has now more than 4 offices on many different parts of the world. The reason for this is the great reputation she has because of her connections to Wall Street.

  1. The Winklevoss Twins

These guys made tons of money by selling their Facebook lawsuit in cryptocurrencies. They became the first billionaires when the bitcoin price surged last December. According to the twins, they own about 1% of the entire bitcoin in circulation. They also made an entirely new system that stores their private keys with a higher level of security. These two millionaires are trying to create a system where many investors and day traders will be attracted to. For this reason, they created Gemini- a regulated exchange for cryptocurrencies.

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Blockchain Archive

5 Best Places For Cryptocurrency Investors

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In this article, we will show you the best climate for people who want to invest in cryptocurrencies. Most of these countries have zero taxes on cryptocurrencies. They also embrace the blockchain technology and start to implement it in their everyday lives. This is why investors love these countries.

  1. Belarus

Belarus is one of the countries that have 0% tax on Bitcoin. It is expected that this stays this way until 2023 in order to build a strong, independent economic sphere much like Silicon Valley. They also use smart contracts as real legal documents as we know them. Belarus gives a lot of opportunities for people who want to open up a blockchain company.

  1. Portugal

In Portugal, every personal income you make from cryptocurrency, you won’t be taxed. Their government stated that further sale of cryptocurrencies won’t be regulated under capital income or capital gains. But, if you were to open a business related to cryptocurrency activity, you will probably be taxed.

  1. Hong Kong

Hong Kong is a great place for investors. They offer 0% capital gains tax making it a lot easier for future investors. Despite being a tax paradise, Hong Kong’s regulators brought up the news on increasing security and declaring some exchanges as a fraud. However, it didn’t really change the climate for potential investors as much as it was believed to.

  1. Netherlands

This is one of the countries that don’t offer a 0% tax rate. They do, however, offer low-tax options. Thus, the highest tax rate goes to 5% but keep in mind that the taxes may vary year to year as the entire market expands.

  1. Germany

Germany is a great place for setting up a blockchain company. Their industry is booming in the past 10 years. Also, their cryptocurrency regulations allow for Germany to stay in the center of trading in Europe. Another great thing is that, if you hold on to your coins, you will not be taxed at all.

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Cryptocurrencies With Biggest Trading Volume Ranked By Countries

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If you are an experienced trader or just starting, you must keep up with news on trading no matter where you are in the world. This kind of news brings you the biggest impact on the coin value. If you consider how little effect the ban on Bitcoin in smaller countries had, it’s important to see the difference it makes in bigger ones. This is why you have to follow each country’s trading volume in order to keep up.

  1. South Korea

It makes sense why South Korea is on this list. It’s one of the most advanced countries technology related. This country was ranked as the fifth most high-trading country in the world, especially for trading Bitcoin. After 11th of January of last year, the South Korean Government announced that they were planning to ban cryptocurrency trading. Seconds after the announcement more than $100 billion was wiped from the coin market. Many users started to massively sell their coins in the months that followed, bringing bitcoin to an all-time low.

  1. China

Despite China being the second-largest economy in the world, it’s also a place where residents seem to love cryptocurrencies. In 2017 China took the title for world’s leading coin market. Chinese citizens bought coins and held on to them as a safe option instead of their own fiat currency. Last year in January, the PBoC announced that they started investigating every major exchange in the country. This was an immediate hit and led Bitcoin to drop in value over 30. China is now on the number 19th in trading volume. The good thing is that Chinese citizens still buy a lot of coins.

  1. The United States

The USA showed great interest in buying crypto coins. In June you could see the SEC starting to regulate ICOs which led to a rise in the coins value. Another sign that the US has a huge market share is by the number of the many popular exchanges in the country.

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Blockchain Archive

Andreas Antonopoulos: Top 5 Famous Quotes

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Andreas Antonopoulos is a very famous face in the cryptocurrency world. He is an expert in Bitcoin and a writer. He gives great explanations and shows exceptional knowledge in this field. We choose some of his best quotes about Bitcoin so we can share his wisdom with you.

  1. “Content creators now have a new way of financing their creativity, without depending on advertisers or media channels. Bitcoin can help with the evolution of Kickstarter, Indiegogo, and other crowdfunding tools into global, borderless and massive systems for funding the arts and creative content. I can’t wait!”
  2. “There are almost 200 currencies of the world, but there’s only one international currency. There are almost 200 currencies controlled by central banks and governments, but there is only one mathematical currency today, and that is bitcoin. We are going to build more of them. Cryptographic currencies are going to be a mainstay of our financial future. They are going to be a part of the future of this planet because they have been invented. It’s as simple as that. You cannot un-invent this technology. You cannot turn this omelet back into eggs.”
  3. “Bitcoin is often mistakenly characterized as “anonymous” currency. In fact, it is relatively easy to connect identities to bitcoin addresses and, using big-data analytics, connect addresses to each other to form a comprehensive picture of someone’s bitcoin spending habits.”
  4. “Bitcoin will remain, in my opinion, a relentless anomaly that refuses to go away – a black swan that cannot be ignored or extinguished.”
  5. “Bitcoin’s consensus algorithm requires a very conservative approach to change, so I certainly think it is best to solve problems when they are actually problems and not before.”

Make sure you follow Andreas Antonopoulos on his social media platforms for some great insights!

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