I’m going to start by telling you all a story which has huge significance for digital currencies.
I was in a pub down south with a friend. A little while later, another gentleman came in who my friend knew. After introductions the new arrival asked me “ What do you do then?” I replied that I was involved with cryptocurrency.
“What’s that then?” he asked.
“ It’s like Bitcoin.”
“Never heard of it” he replied
I thought for a moment.
“Do you use Facebook?”
“Oh course” he said.
“ Have you heard of Libra?”
“Oh yes, I know all about Libra,” and he really did. He had read all about it.
So my point is back in say March this year there might have been 40-50 million people who knew something about crypto or digital currencies.
But NOW, a potential 2.7 BILLION do.
And that is a game changer. There’s lots of issues about Libra, not least their problems with SEC and the Senate and people dropping out, but it remains the case that it has opened up the debate that was needed
We will be having the second Advisory Board meeting next week. We have high hopes that this will prove a useful and helpful fixture as we move forward.
We are due to have a meeting with our preferred blockchain suppliers in the next couple of days, but we already have some important information in this respect.
The decision has been taken to have Scotcoin become an ERC compliant token. Our coin will have smart contract capability. We in fact have a coin running on the Ropsten testnet and expect to be able to deploy it in Alpha mode fairly shortly. There are other considerations to be taken into account, but at the very least we now have an actual beta test coin that covers what we require in terms of security, longevity and tradeability. As you probably know, Ethereum is the largest blockchain in terms of tokens sitting on it. There are other very good reasons for going down this route, quite apart from speed of transaction, the scalability and the minimal power use.
Firstly, the SEC has ruled that Ethereum (and its tokens) are NOT securities. The reasoning behind this is that the very nature of the blockchain per se – as a decentralised platform – means that no one is actually managing the token for profit. ICO considerations are somewhat different, but the baseline is that Ethereum (and Bitcoin eg) are exchange tokens with the same characteristics. Sales and purchases are NOT security transactions and therefore the SEC has no oversight. Scotcoin is and will be exactly the same.
Secondly, the basis of any blockchain covers 5 main points.
Number 1 is that it is ( or should be) decentralised. That means that no one person or small group of people can influence the profitability of the token. In essence a token has no inherent profitability – the pound in your pocket is worth a pound with no DNA to make it profitable and in excess of that £1. Number two is that the decentralised consensus means that everyone on the network has an identical copy at the same time. No one can “steal a march” on anyone else. Number 3 is that it is “add only”. You can’t alter or add to a block once it is complete. That means that number 4 new information CANNOT conflict with existing information. And finally number 5, everyone can access all the information on the blockchain simultaneously and instantly.
As a reminder, each “block” consists of three parts . The first is the hash that seeds the block, in other words the incoming hash or information. The second part is the data that gets entered into the block in other words the transactions that have taken place and are being entered to be recorded. And finally, the third part is a second hash, which is the outgoing hash covering not only what has happened in that particular block but all that has happened since block one. Just so you know we are very close to block 600,000 on the Bitcoin blockchain.
Another reason for going down the ERC route is that one of our 5 pillars for Scotcoin’s new blockchain is that it must have longevity and stability as well as security. The Ethereum chain ticks these boxes. There are already something like 250,000 tokens on it and it is the second largest crypto currency both by total market capitalisation and by daily volume.
It is frequently said that crypto currencies are a store of and do a very good job of transferring value. Why do we say that? What are the characteristics that cryptocurrencies share:
1. The supply of all the coins or tokens are clearly defined and publicly available.
2. They are permissionless: You can just download the software for free and start sending money across the internet.
3. They are self-sovereign: You don’t have to rely on a bank, payment service or other centralised organization to process the transactions. It’s all performed on the blockchain network.
4. They are highly divisible: You can divide every cryptocurrency into extremely small amounts, enabling easy day-to-day (micro) payments iup to 18 zeros after the decimal point.
5. They are extremely portable: Everyone can fly across the world carrying billions worth of cryptocurrency. Try doing that with real gold.
Other primary characteristics of cryptocurrencies are that they are interchangeable and censorship resistant — no governing authority can prevent any cryptocurrency user from spending their crypto.
Some of you may have heard of Luca Pacioli. He wrote the base treatise on what one would term modern accountancy in 1493 – yes over 520 years ago.
Quite apart from setting down the basis of double entry bookkeeping, which arguably brought about the modern financial world, what it did do was bring Trust to an area where skulduggery had been the norm. In essence, the blockchain and crypto currencies do the same thing in respect of modern finance – you can be sure that a transaction can be trusted if it is recorded on the blockchain. There does not need to be a third party noting the transaction for it to be trustable.
We at Scotcoin are particularly keen on the circular economy and heading towards Zero Waste. I am proud to announce a joint initiative to reward people using Zero Waste in Scotland. There are quite a few shops you can visit and we are putting in place a scheme to reward people who use Toogoodtogo, who recycle food. Quite recently an entire wedding for over 200 people was catered using their food. This is food that would otherwise go to landfill, but an enormous waste and cost to the shops that need to get rid of it . We will be putting up a list of those shops where you can earn SCOT for buying from them and where you can trade in your SCOT for products. Now that we very nearly have our new coin, we will also be offering other online products and services via the website tokenmarkets.com. Scotcoin will have it’s own dedicated sales site. In essence, by paying in Scotcoin you will receive up to a 30% discount on items.
One of the most important things that people need to realise is that Blockchain and its technology will put responsibility fair and square on the individual again. Lost your bank card? No problem, the bank will send you a new one. Forgotten your password? You can reset it. With crypto, NEITHER of those options are available. Where we have been used to other people and third parties backstopping us, none of that will exist. As a result we will have to be much less cavalier about what we do in relation to our wallets and Identity – because yes, Blockchain impinges on Identity as well.
Just in the last few weeks I’ve been reminded of this. We will shortly be putting up an article entitled “Time to pull on you big boy or girl pants” and it deals precisely with this problem.
So if you have a crypto wallet, make sure you have taken a photograph of the pass phrase AND written it down in not one but TWO different places. Lose that and you lose the wallet, the coins, everything. So make sure it’s safe. We will be offering a way, with the new coin, of securing your passphrase.
One of the questions I am frequently asked is why should I buy Crypto and/or Scotcoin? There are many good reasons, but there is one which does not get enough airing. That is that Crypto are a digital asset and as such have created a whole new asset class to have in the mix of your investments. This may not be of significance to lots of people, but it is a consideration which should not be ignored. The traditional classes (shares, bonds, properties, cash etc) now have another leg – digital.
Finally, in celebration of the fast approaching anniversary of the creation of Scotcoin on the Counterparty Protocol, we are running a promotion on our exchange which will give purchasers 50% off the cost. So whatever the number of SCOT you wish to buy, the cost will be cut in half during the period of this promotion. We have had some criticism of the fact that our exchange price has been higher than the DEX price. The coupon code, which we will be advising all our wallet holders of, is 50offat5. This will effectively bring the DEX price and our exchange price into line.
The other thing we are testing at the moment is the website I mentioned above which will take SCOT for product. If you have items you would like to sell, please get in touch with me . Similarly if you would like to test for us, please let me know.