Searching for investment criteria in the functionality stack

In “Fat Protocols”, my fellow Brooklynite Joel Monegro insightfully draws parallels between the Internet protocols of the 1990s and the blockchain-based protocols of the 2010s. Early Internet protocols have provided massive value, but have been “thin” – meaning that monetization has historically occurred in an industrious, “fat” application layer built on the protocol. As scarce digital assets enable decentralized value and information networks, the protocols which they implement are now “fat” – monetizable at the network level using a cryptoeconomics or token – while the application layer is “thin”. Decentralized applications can still be monetized, but are much more focused on interoperability with the underlying data layer.

This view of blockchain networks observes that it is usually sub-optimal to invest in decentralized networks with private equity of centralized companies. However, there are now cryptofunds which can invest in token and hedge fund investments, SAFTs, smart contract vesting, options for cryptoassets, and token-based engagement agreements which provide exposure to the growth of value networks.

There has been a lot of discussion recently about “fat protocols” and whether or not investing in them is a good idea. The general consensus seems to be that it is easy to misunderstand the concept of a fat protocol and that investors are often mistakenly treating them as if they are a criteria for investment.

According to some investors, there is an investment thesis based on the idea of fat protocols which goes something like this:

If you want to minimize your risk of failure, you should invest in tokens for protocols rather than tokens for individual applications. By investing in a protocol token, you are effectively investing in every application that uses that protocol. This diversification will help to protect you against the high failure rate of individual applications.

The thesis that decentralized networks will never make it down into the base protocol layers is highly imprecise, subjective, and therefore sub-optimal. We should try to get more precise on the interaction and value flows between layers of the functionality stack of network software.

Alice doesn’t know where the protocol ends

In a blockchain investing context, a protocol is simply a collection of rules, behaviors, and formats that specify a communication standard between two or more nodes on a network. That’s extraordinarily general, and we can therefore regard a large number of decentralized applications or platforms as protocols in their own right.

It is obvious that every layer of functionality is both a protocol for the stack above it and an application of the stack below it. For example, TCP/IP is an application of a complicated stack of network hardware while also being a protocol for data transfer between computers. Similarly, HTTP is a protocol for serving structured data on the Web, but it is also an application of TCP/IP. Augur is a dapp that is built on Ethereum’s protocol, but it also functions as a data storage protocol like IPFS. Twitter is a microblogging protocol with thousands of applications built on its API, including Twitter’s own app. Finally, James Childs-Maidment’s stateless smart contracts are an application of Ethereum, but they also serve as the protocol for Leeroy’s centralized UX application.

Protocols can be thought of as fat or thin depending on how much value they capture. Fat protocols capture more value than thin protocols. This is because fat protocols are open networks that maintain compact ownership of data which they are able to monetize through cryptoeconomics.

This abstract separator is known as the protocol-application boundary. It separates two sections of the functionality stack.

If Protocols are to be the filter for better investment decisions, then we should be able to explain how they function and why one boundary has better characteristics than another.

Good luck with TCP/IP-proximate protocol investing

The idea that protocols lower in the stack are more widely applicable and offer more diversification is not always correct. In fact, being ‘proximity to TCP/IP’ is not a good criteria for an investment expecting enhanced diversification. To diversify across the functionality layers above it, a protocol must first capture some market share to serve them.

Blockchains are different from TCP/IP in that there are many competing protocols with similar functionality. The widespread speculation in token values creates disincentives for interoperability as everyone wants to develop their own protocol to capture more value. For example, there are numerous decentralized protocols for stable currencies, asset-backed lending, exchange, and social media.

Investors who try to create portfolios of interconnected companies in the same industry will not be successful because protocol nepotism will not work. This is because there are many protocols that are all successful, so it is better to invest in different protocols.

RADIOLAB CRYPTOCURRENCY BLOCKCHAIN.INFO TO HOLD OTHER CRYPTOS

A solid cryptocurrency project that listed on Binance from ICO, interesting technology aiming to combine the best of both private best altcoin under 1 penny ethereum ether centralised exchanges. The coin has near-instant transactions and very low fees. The platform is marketed to Chinese cryptocurrency investors at first, but they also have versions of the platform in English, Korean, Japanese, French, Spanish, and Russian. The coin was first released to the world in July by then year-old Vitalik Buterin. The coin has quickly risen from obscurity to cryptocurrency celebrity status. Skip to content. Binance is a solid cryptocurrency project that listed on their site from ICO. It is interesting because it is technology that is aiming to combine the best of both private and centralised exchanges.Litecoin was created to process the small everyday transactions that we make. Its mining process is designed to be more accessible to hobbyists than Bitcoin, whose professional miners use more expensive hardware. Why is blockchain technology important? Tezos has a few technological differences from Ethereum when it comes to things like the use of dPoS and formal verification. IOTA is a cryptocurrency that is trying to penetrate the cryptomarket in UAE.A fork in the blockchain occured in order to recoup losses from an attack, but a small portion of the community did not want to change the original blockchain. For more information on Bytecoin, see the “Features and tradeoffs” article by Myles Snider. Bitcoin Gold came about as a fork from the Bitcoin blockchain, and was originally announced in late July. Stellar Lumens is focusing on the developing world, specifically the multi-billion dollar industry of migrant workers who send money back to their families in impoverished countries. However, he says it wasn’t until he learned about Bitcoin that he really understood what money was. Each Dai is backed by Ether tokens as collateral and is secured with an Ethereum smart contract.Reducing energy consumption and wastefulness is an important aspect of sustainability Our goal is to guide you towards putting your retirement money into Bitcoin, to pique your interest to do more research, and to warn you about potential scams. While there are potential scam coins among the top 50 cryptocurrencies.

EVERY ONE IS UNIQUE, BUT THEY HAVE ONE THING IN COMMON: INVESTORS THINK THEY’RE WORTH BILLIONS.

Niklas Arvidsson, from Sweden, is the creator of Zcash, a value transfer protocol forked off the Bitcoin blockchain. Like Cardano, Zcash will use a proof-of-stake protocol instead of proof of work, theoretically making transactions faster and more efficient. The BNB coin is used to pay exchange fees, withdrawal fees, listing fees, and all other possible transaction expenses on the Binance platform. For more information on Aurora, users can visit their website and Medium page. Users of the Aurora platform will also receive a share of BAT tokens for the time they spend viewing advertising. Aurora has recently achieved a very notable accomplishment with the first successful atomic swap. In order to incentivize new users to do their cryptocurrency trading on Binance, the team is offering discounts when BNB is used to pay fees. The current rate of Dogecoin creation is over 5,,, coins a year. Inflation and participation in stake-based token protocols by Doug Petkanics https:

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