The Ethereum blockchain has done another hard fork, meaning that the network issued an update and any new transactions from anyone still running the old version will be considered invalid.

This one appears to have happened rather smoothly, unlike the second hard fork that left the network with 2 separate and mutually incompatible chains.

Read more on the latest hardfork here:
http://www.coindesk.com/ethereum-forks-again-so-far-so-good/

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The legal status of ICOs is still to be determined, however the current consensus is that the determination will ultimately come down to whether or not the coin distributed through the ICO can also be used to perform some function.

If a dApp does an ICO and simply delivers a coin for the purpose of appreciating in value it’s more likely that it will be considered and regulated like a security, which would render the ICO sale illegal.  On the other hand, if the token delivered also has some utility on the dApp, like being used to participate in the dApp, then it is less likely to be considered a security and will likely be a legitimate way  to raise funds.

Check out this great talk from Peter Van Valkenburgh from Coin Center on the subject.

Slides here https://ethereumfoundation.org/devcon…

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FirstBood is a decentralized platform for peer to peer betting on online games like as League of Legends, Dota 2, and Counter­Strike: Global Offensive.  One interesting aspect of this project is that it relies on a jury system to resolve conflicts.  Two players place a bet then complete a game and report to FirstBlood who was the winner.  Most of the time, those two users will agree on who won.  During the times when the two users both claim to be the winner, twelve other users are selected at random, presented with evidence from both players, and are compensated for delivering the correct verdict (or the verdict that agrees with the majority).  Jury members are compensated in FirstBlood tokens, whose value is tied to Ether.

This is a great example of the sharing economy that emerges from decentralized systems.  Users are compensated for their participation in the networks and for completing vital tasks such as conflict resolution.  If the size of the sharing economy continues to grow, people will be able to supplement their incomes settling disputes on FirstBlood, or doing other tasks on other dApps.  You could even imagine compensation from participation in various dApps could be a viable source of income.  It’s possible the concept of income and working will change as our economy becomes more like advanced bartering.  For example, imagine paying for a ride across town by writing an article and getting page views, where you provide value for value without money changing hands.

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Someone cashed in for 636 Ether with a bet that Trump would win the election on PredictionToken, which allows you to make and take peer-to-peer bets on a yes or no outcome with the result verified in the blockchain.

The way it works is a smart contract mints Yes and No coins on the Ethereum blockchain whose value is tied to future events. Yes or No coins can be bought and sold on an exchange like EtherDelta. Once the event comes to pass, the result will be verified and written in the blockchain by Reality Keys. After that, the winning positions’s coin can be redeemed for 1 Ether each while the losing position’s coin are not worth nothing.

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If you are new to Ethereum or Crypto in general then the best place to start is with Reddit. The Ethereum subreddit is home to discussion and news. If you are looking for trading and price new, check out the EthTrader subreddit. Also, some of the projects we will be posting about in the future have their own dedicated subreddits that are frequently updated. Augur is a good example. Another way to stay tuned is to follow Ethereum’s founder, Vitalik Buterin. He posts regularly and makes lengthy comments.

 

A few websites I like to follow for crypto related news are: Coindesk and CryptoCoinsNews.

 

You can also just check our blog 😉

 

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It’s helpful to have a basic understanding of what the blockchain is before diving in to Ethereum.  If you are not familiar with the blockchain, first check out this post (2 minute read).

What is Ethereum?

The first implementation of the blockchain was created as part of the release of Bitcoin in 2008.  Beyond all its innovations, the Bitcoin blockchain itself was made intentionally simple.  You can send and receive Bitcoins, but Bitcoin’s blockchain is pretty much limited to sending currency transactions.

The major innovation of Ethereum is that you can write complex logic inside the blockchain itself and takes the Bitcoin blockchain to the next level.  Ethereum is a more generic blockchain that allows developers to build apps– like games, social networks, financial and insurance services, etc., inside the blockchain.   The Bitcoin blockchain was limited to currency transactions, but Ethereum takes the blockchain innovations and applies them more generally, while maintaining the decentralized nature of the network. Because the Ethereum blockchain is more complex, the apps in the ecosystem will be able to solve more general problems and get the most out of decentralized technology, and the ecosystem will be able to build on itself.

Why should I care?

Logic that is written inside the blockchain is called a smart contract.  With smart contracts you can create and interact with electronic agreements with pre-determined terms with actions that run autonomously.  Using smart contracts, the Ethereum platform allows people to solve problems in unique ways that reduce the reliance on human trust and central authorities.  It has the potential to fundamentally alter the way we do business on the internet and think about employment and interact with the economy.

One great innovation already built on top of Ethereum is the DAO.  The DAO is a decentralized autonomous organization and a kind of venture capital fund lead by the investors themselves.  The DAO allows for individual entities to build their own cryptocurrency on top of Ethereum and use this cryptocurrency to issue shares.  One outcome of this feature is a sort of IPO meets crowdfunding allowing startups to do an ICO or initial coin offering, and raise funds from individual investors in exchange for shares in the form of the newly minted cryptocurrency.  This turns the IPO on its head and allows crowdfunding contributors to receive a token that has monetary value in exchange for their contribution.  Compared this to many Kickstarters where you might get a free T-Shirt.

There are many other possibilities for new business models and solving new problems in Ethereum that we touch on in other posts, like the ability to be compensated for discovering an artist or a company (and funding them by buying their token, which may rise in value if they hit it big), to the emerging sharing economy, and cost saving measures that cut out the middle man.

It will allow complex interactions by any two parties anywhere in the world and reduce the reliance on expensive centralized infrastructure. This has the potential to be a game-changer not only in financial institutions in industrialized nations but also provide access to services that have previously been denied to those in poor, isolated countries. It could provide financial solutions for the 400 million people in India without a bank account.

Because of the nature of complex logic being written in the blockchain, the Ethereum ecosystem will build upon itself as developers continue to publish for dApps. The blockchain has the potential to fundamentally change society and finance and dApps on the Ethereum blockchain are uniquely poised to solve global problems in a scalable and cost-effective way.

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UPDATE: Inflekt has pivoted a bit and is now more events and organization focused.  I’ll post a full update once I have the full story.

A really cool project built on Ethereum is Inflekt.  Inflekt is a community based reputation system that allows facilitates the sharing economy using resources and reputation instead of money.  Say for example you have own a pickup truck and another member of your community needs help moving.  You can lend your truck (or your time and labor) to help this person, increase your own reputation in the community, and then later be able to use your reputation score to solicit help from other community members for something you need assistance with.

The first iteration of Inflekt will be a simple bank of resources where people can list, browse and find resources available in their community.  When you list an item it is given an approximate value.  If someone would like to use a resource you listed, they can choose to simply barter with you and give you something that you might value, or that person can choose to deduct points from their community reputation.  You, as the giver, will gain points to your reputation system.  Charity and kindness are quantified and you are rewarded directly to the monetary value of your generosity.

The whole reputation system is built on top of Ethereum.  Reputation points are stored in Ethereum tokens that is used like a mutual credit system.  It’s more of an IOU than a currency and the key feature is that actions and transactions are logged so that there is an accurate measure of who did what, and when.

An interesting fallout from this sort of alternative economic organization is that it empowers communities with the ability to assign value.  Say for instance you live in a community with very poor health.  In theory, such a community could increase the value of providing access health services (with equipment, or rides to the doctor, etc.) or initiating fitness programs, and incentivize community members to participate.  Since community members have little control over the cost of goods and services as it relates to the US dollar value, this gives unique authority for communities to decide what is valuable to them and provide services that otherwise would be completely economically infeasible, like say a youth fitness program in a small, poor, unhealthy community.  It empowers communities to assign value as it pertains to the ‘good of the community’ instead of value always being assigned by the US dollar.

Inflekt is doing it’s pilot program in Sullivan County, New York.  It will be interesting to see where this project goes and how the platform adopts to the needs of different communities.

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