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(Bloomberg) -- Surging demand for NFTs and DeFi apps is allowing backers of Ethereum to dampen the cacophony of Bitcoin maximalists who have long claimed that only the original cryptocurrency matters.

Ether, the native token of the most-used blockchain, jumped 36% in August, more than double the 13% return for holders of the biggest digital asset by market value during the same period. So far this year, Ether is outperforming Bitcoin by the widest margin going back to at least 2018, Bloomberg data show.

The Ethereum “community has taken up that mantle to a much louder degree and that sort of blockchain development is really having a bullish moment in crypto right now,” said Stephane Ouellette, chief executive and co-founder of FRNT Financial.

Many analysts had projected that Ether would rally following a major software upgrade to the Ethereum blockchain in August. The enhancement, code-named London, trims the pace at which the supply of Ether tokens grows.

Ahead of the upgrade, many investors argued the reduction of the coin’s supply could result in higher prices due to increased scarcity. Others also said the supply could drop further once Ethereum moves to a different mechanism of verifying transactions, something that could happen in the first quarter of next year. This new verification system will use computers supporting the Ethereum network to stake Ether coins instead of miners in most cases.

“The innovation at play in the smart-contract arena had been defeating maximalist mantras for quite some time,” said Mati Greenspan, founder and CEO of Quantum Economics. Still, because a lot of the advancements -- particularly in DeFi and NFTs --are so new, it’s difficult to say exactly how much more growth there will be or what other new sectors might arise, he said.

The case for Ether surpassing Bitcoin has been been a constant theme in crypto since the alternative blockchain was created. Bitcoin maximalists maintain that it remains the purest form of digital money and point out that the original cryptocurrency has a market value of about $900 billion, or more than double that of Ether.

August marked Ether’s second consecutive monthly advance and its best monthly performance since April. The coin is up more than 350% this year, compared with Bitcoin’s 60% gain. On Wednesday, it rose about 5% to $3,558 while Bitcoin gained around 1% to $47,400.

“Ethereum is seen as a better store of value -- that’s why it has been preferred by institutions for a while now,” said Matt Maley, chief market strategist for Miller Tabak + Co. “It is now becoming preferred among all investors.”

And it’s not just Ether that’s been in the limelight recently, said Ouellette. Solana and Cardano represent projects with a similar focus and both have rallied.

Among analysts and investors, there’s little consensus as to what’s driving parts of the frenzy for smaller or alternative coins. Some posit that speculators are moving from the mainstays to newer, more exciting offshoots, as they often do after big runs. Others see a world awash in cash and ultra-low rates, which ultimately pushes investors toward ever-wonkier assets.

Wilfred Daye, chief executive officer of Enigma Securities, said Ethereum is the fabric of the tokenized economy and it has a deeply rooted and solidified programmer community. From a trading perspective, “ETH has higher volatility than Bitcoin and similar liquidity profile as Bitcoin,” he said. But, “in the long run, ETH has a real chance of outperforming.”

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It’s been a good month for Bitcoin believers. The currency of the future — or is it the future of currency? — became legal tender in El Salvador.

Some might dismiss as a publicity stunt the embrace of a digital currency by a country where only a third of the population has internet access. Some Salvadorans took to the streets to protest. But let’s not minimize this moment. Esperanto, the language of the future, never managed to become an official language in any country.

Bitcoin, for the uninitiated, is a technology that purports to solve a host of problems with old-fashioned national currencies. It is designed to safeguard wealth against the depredations of inflation, public authorities and financial intermediaries.

Unfortunately, it doesn’t work. Some products become popular because they’re useful. Bitcoin is popular despite being mostly useless. Its success rests on the simple fact that the value of a Bitcoin has increased dramatically since its introduction in 2009, making some people rich and inspiring others to hope they can ride the rocket, too.

It’s not really a virtual currency at all. It’s virtual gold, a vehicle for speculative investment made possible by some interesting technical innovations. It’s the absurd apotheosis of our financialized economy, an asset unmoored from any productive purpose. In the beginning were bonds and then synthetic bonds and then Bitcoin.

The popularity of Bitcoin and its hundreds of imitators is also a product of understandable confusion and uncertainties. In this era of technological disruption, it’s hard to tell which parts of human life might be improved by the internet, and those who didn’t foresee the rise of, say, Amazon should be hesitant to write off the future of Bitcoin.

But it’s worth being clear about what Bitcoin is right now.

The supply of Bitcoin is capped by design, which is meant to prevent inflation. That doesn’t mean the value of Bitcoin is stable. Sometimes it goes up, which is a nice benefit not generally available with traditional currencies. On the other hand, sometimes the value goes down just as fast as during a bout of hyperinflation. El Salvador, which is requiring businesses to accept Bitcoin, has promised to make it possible to rapidly convert it into real money. That’s not exactly the hallmark of a useful currency.

The rigidity of Bitcoin’s design also makes it dangerously impractical as a replacement for national currencies. It is part of a long tradition of trying to prevent politicians from making bad economic policy decisions by preventing them from making any decisions. The gold standard is an older example of this disastrous concept.

The security of Bitcoin is greatly overstated. It can be lost. Indeed, by some estimates, 20 percent of all the Bitcoin in existence is no longer accessible because the passwords have been lost or forgotten. In 2018, more than 100,000 people lost the Bitcoin and other virtual currencies they had entrusted to a Canadian company, Quadriga, after the founder died suddenly, leaving behind no record of the password to the company’s virtual vault.

Bitcoin also can be seized or stolen. During World War II, the German government relied on a code called Enigma, which its mathematicians insisted was impossible to break. The British famously broke it, basically by figuring out the password. That’s also how the federal government apparently recovered part of a Bitcoin ransom payment worth several million dollars from hackers who took down the Colonial Pipeline and blackmailed its owners this year.

Perhaps most important, Bitcoin is difficult and expensive to use as a currency. To the extent any people manage to use it, they mostly rely on a growing infrastructure that looks a lot like the traditional financial system. El Salvador hired a financial firm to create digital wallets for its citizens — which are basically what used to be called bank accounts.

Virtual currencies, much like pickup trucks, are marketed for off-road use. But the reality is that the vast majority of users choose to stay on the streets and highways.

It’s possible, but hardly evident, that this new infrastructure will improve upon the existing financial system — for example, by making it cheaper to move money across borders. But that hasn’t happened yet. For now, the people using Bitcoin are basically a bunch of cosplay libertarians participating in a game of make-believe on the playgrounds of the nanny state.

Most Bitcoin holders, of course, don’t even see it as a currency. They’re in it to get rich, which is the one service that Bitcoin has managed to deliver.

There are reasons to worry about this, too. Bitcoin mining is an environmental disaster, requiring vast amounts of electricity — more than the nation of Finland.

Speculative frenzies divert resources and attention from productive investments.

And the bigger the bubble, the greater the damage when it pops.

But until this month, I wasn’t all that worried about Bitcoin. The current frenzy is sometimes compared to other famous bubbles, like the Dutch tulip craze of the 17th century. One key commonality is that both involve a relatively small group of investors with money to burn. Most Dutch didn’t buy tulips; most Americans don’t own Bitcoin.

If politicians start taking Bitcoin seriously, however, that would be reason for greater concern. It is a pleasant illusion that the problems in the financial system can be solved by replacing it rather than doing the hard work of fixing it. That kind of escapism makes for entertaining chatter on the internet. National leaders really should know better.

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Bitcoin picked just the day to show its extraordinary volatility.

As the cryptocurrency was officially adopted as a national currency in El Salvador on Tuesday, it tumbled as low as $43,000 after breaking above $52,000 for the first time in three months.

While some traders saw the sudden crash as a "buy the rumor, sell the news" event, others say there are bigger forces at play. Most evidently, the cascading liquidations of leveraged futures are partly to blame. 

The price slump "appears to be mostly coming from highly leveraged traders trend following," as too many people anticipated new highs, Lucas Outumuro, the head of research at the blockchain-analytics firm IntoTheBlock, told Insider in an email. 

He added that the ratio of perpetual swaps open interest to bitcoin's market cap had recently reached above 1.55%, an indicator for near-term price corrections.

When traders take out a leveraged futures position in the hope of amplifying returns, they must post collateral in their margin account or risk being liquidated. The higher the leverage used, the higher the collateral amount they must deposit. As a result, sudden price moves could cause traders to quickly fall below margin requirements and get liquidated. 

As of Wednesday morning, more than $3.25 billion in crypto positions had been liquidated over 24 hours, affecting more than 300,000 traders, according to Bybit, the crypto exchange where traders can still use hundredfold leverage.

Liquidity evaporates amid a perfect storm 

While liquidation cascades moved prices, a mix of factors caused a liquidity shortage that intensified the dramatic intraday moves, according to Patrick Heusser, the head of trading at Crypto Finance Brokerage.

"On Tuesday, we had the perfect storm because you had the long US holiday weekend. You had an upward moving market, so the market makers were notoriously short cash because they had to hedge all their futures they lost to the leverage guys," Heusser told Insider, adding that these were his personal thoughts. "And then they were probably a bit too complacent on Monday, not sending enough capital quickly to their trading venues."

Against such a backdrop, when the market started to tumble, market makers ran out of dollars and stablecoins to buy tokens at some point. "If the market continues lower, you pull out, so the market makers were turning off their machines. They pulled out," he added.

As market makers and liquidity providers ran out of capital to quote, crypto exchanges also encountered various operational issues that caused them to temporarily go offline, as is typical in such sudden crashes.

A breather for altcoin season and NFT frenzy 

The latest crypto crash came amid a trading frenzy over altcoins and nonfungible tokens, but traders and analysts said that it did not spell doom for the two red-hot trends in the $2 trillion market. 

"We typically see the altcoins making all-time highs while BTC and ETH take a breather towards the end of the cycle. I'd say this is more of a local top than a cycle top," Kevin Kang, a founding principal of crypto asset hedge fund BKCoin Capital, told Insider in an email. "I'd expect the market to digest the rapid movement in the coming days trading sideways, and some of the quality altcoins will continue to rally towards the year-end."

But as crypto prices remain in retreat, there could be less risk seeking in the short term.

"In some of the NFT markets, the floor hasn't really moved much. It's just the overall dollar value has dropped 20% to 30% because coins linked to the NFTs drop that much," Heusser said. "In a market like yesterday, no one is in the mood to buy. It doesn't really trade, so the floor doesn't really change."

Altcoins worth buying on the dip 

After this week's leverage washout, some analysts are predicting more volatility ahead.

Joseph Edwards, the head of research for Enigma Securities, has been very negative on crypto-market prospects for September for a while. 

"The key thing for investors to understand is that there's no medium term here," Edwards told Insider in an email. "If you're looking to invest based on potential adoption and partnerships in the next six to 12 months, you're likely to see underperformance both in that term and after."

He believes that right now is all about getting exposure to assets that could become an integral part of crypto in five years, he said, which means going heavy into bitcoin (BTC) and ethereum (ETH) for the most part.

As for altcoins, solana (SOL) has by far the strongest pitch for that going forward, while fantom (FTM) and mina protocol (MINA) are also interesting, he said.

While predominantly long bitcoin, Heusser is also bullish on the Solana ecosystem.

"Drops like what we saw yesterday, where I feel confident that it was one of these washout drops, picking up some altcoins has even more value than trying to buy the dip for bitcoin," he said.

Aside from the solana, Heusser likes the ftx token (FTT), serum (SRM), and star atlas (ATLAS), a crypto game built on the solana blockchain. 

IntoTheBlock's Outumuro said he believed that it was probably better for investors to have higher bitcoin allocations until the volatility settles.

"The only few altcoins that may continue to do well near term are smart-contract platforms with current incentive programs such as avalanche (AVAX), fantom, and celo (CELO) given that they are seeing increased usage and total value unlocked and may follow solana's path," he said.

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A lot of ICO projects have come under SEC scrutiny since 2017. The latest to get scrutinized is Enigma, a company raising roughly $45 million.

Most initial coin offerings will be scrutinized sooner or later.

Virtually all of them raised money by selling unregistered securities.

Such behavior should never go by unpunished.

For Enigma, raising $45 million during its ICO was perhaps the easy part.

The company will be forced to refund all investors accordingly, despite crypto prices plummeting hard.

Additionally, the Enigma team must pay a $500,000 fine for selling unregistered securities. 

The project raised a lot of money to provide a privacy layer for decentralized applications.

As the Enigma team will continue to operate, their tokens must now be registered with the SEC as official securities.

Contrary to what most expected, this does not mean the end for this project.

Instead, the team sees it as a positive development, as the focus can fully shift to actual development.

That approach is very rare, as most ICOs are forced to fold after the SEC hands down its verdict. 

Since its ICO, the token price of Enigma has dropped by nearly 40%.

Its market cap is only $28.5 million, despite raising $45 million just over two years ago. 

Image(s): Shutterstock.com

Enigma, a startup developing private smart contracts, settled charges with the Securities Exchange Commission for selling its ENG tokens as unregistered securities.

Enigma raised $45 million during its 2017 ICO. The startup did not register its ENG tokens as securities, nor did the ICO qualify for an exemption, said an official press release.

The San Francisco and Israel-based startup agreed to pay a $500,000 penalty, return funds to investors via a claims process, register its tokens as securities, and file periodic reports with the SEC.

John Dugan, Associate Director for Enforcement, said of the enforcement:

Enigma is down 18% on the news.

Over the last two years, the Commission has executed a number of enforcement actions against initial coin offerings.

These are only a few of the blockchain companies reprimanded by the SEC since 2019. The crackdown is expected to continue as more evidence is gathered from companies in the wake of the 2017 ICO craze.

Enigma consented to the order without admitting to or denying its findings.

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The SEC has forced crypto project Enigma to return the funds raised in a $45 million ICO in 2017 to harmed investors. It has also charged the project $500,000 for selling unregistered securities.

Enigma is a project focused on providing privacy for decentralized applications (dapps).

“All investors are entitled to receive certain information from issuers in connection with a securities offering, whether it involves more traditional assets or novel ones,” said John T. Dugan, associate director for enforcement in the SEC’s Boston Regional Office, in a statement. “The remedies in today’s order provide ICO investors with an opportunity to obtain compensation and provide investors with the information to which they are entitled as they make investment decisions.”

Enigma will now need to register its tokens as securities, and file periodic reports with the SEC.

While this might be a blow for the nascent project, it seems more like a relief.

"This settlement clears the way for our development team to focus fully on our original and continued vision: building groundbreaking privacy solutions that improve the adoption and usability of decentralized technologies, for the benefit of all," Enigma CEO Guy Zyskind wrote in a blog post.

Enigma is now focusing on its newly launched mainnet. Enigma's mainnet, which went live on February 13, is a proof-of-stake blockchain based on Cosmos—a project that has been falling apart in recent weeks.

The blockchain will support Enigma's new cryptocurrency, called Secret (SCRT). It is used for governance on the blockchain, enabling token holders to decide how it adapts over time. They can also stake Secret tokens, locking them up for periods of time in order to receive certain benefits.

However, the main thing that Enigma is focused on, is not yet ready. It's secret sauce is the notion of "secret contracts" that allow dapps to function without anyone being able to observe them. The aim is to bring greater privacy to the cryptocurrency world.

And, according to our latest feature, that is sorely needed.

Right now, there’s renewed global interest in cryptocurrencies as investment vehicles. That has a lot to do with the lengthy bull run the market has seen of late. And the addition of multiple DeFi investing platforms over the past year has helped, too. But for all of the attention the market’s getting, it remains an enigma for the average investor.

After all, cryptocurrencies are poorly understood financial instruments. The technology that makes them possible is something that requires careful study to comprehend. And the intangible nature of the assets themselves defies easy description. For that reason, a shocking one-third of all cryptocurrency investors admit that they don’t know anything about where they’re putting their money.

But crypto isn’t the only investment market that suffers from this problem. The traditional stock market, for example, is still looked at by the public as little more than a casino. And the forex market makes it look like child’s play, by comparison. The difference is – those mature markets feature countless options to help inexperienced investors navigate them and turn a profit.

And now, the crypto market is about to join them.

In response to the glaring deficiency in the crypto space for investor-focus trading solutions, a new platform has arisen. It’s called Zort , and it’s built from the ground up to help investors both large and small capitalize on investment opportunities in the crypto market. At its core, Zort works much like the automated quant solutions favored by high-end forex traders. The major difference is that it uses a custom-designed suite of AI engines that do all of the work those traders would normally do by hand.

It monitors vast troves of both historical and real-time data to identify patterns in crypto prices and uses its conclusions to create and execute trading strategies on behalf of its users. And because it does so at high speed, it can take advantage of even the smallest price fluctuations to deliver solid returns to investors. In effect, Zort offers a single-click investment option in a market that’s notoriously complex and hard to master. And it doesn’t stop there.

One of the reasons that few others have attempted to create an automated crypto investing solution like the one Zort built is simple: transaction fees. Due to the nature of the cryptocurrency market, high gas fees make most high-speed trading platforms impractical at best. But Zort developed a customized high-frequency trading strategy that minimizes fees for its users. And that’s where the platform’s native ZORT coin enters the picture.

Holders of the ZORT coin get a 50% discount on trading fees on the Zort platform. This is how the platform passes the savings on fees generated by its unique strategy to its users. In that way, investors gain a critical advantage that shortens their time-to-profitability when compared with any similar investment strategy. And that’s not all.

Holders of the ZORT coin also have the option of staking their holdings on the platform in exchange for a fixed 15% yearly yield. This allows them to earn money on their otherwise inactive capital, while simultaneously helping the platform to grow. But the unique aspect of the staking opportunity is that it doesn’t require locking. That means the investors remain free to sell or invest their ZORT coins in any way they wish, whenever it suits them, especially now that Zort has been listed on Kucoin and the team has plans to list the token on five more top exchanges in the future.

And because the staking yield is paid every month, there’s little to no penalty to pay for that flexibility. This means investors can leave their coin staked for as long as they want as a hedge against market drawdowns, and move to take advantage of more favorable investment conditions with ease.

The ZORT coin made its public sale debut on June 14th, 2021, giving interested members of the general public their first chance to get financially involved with the platform. With the listings on major CEXs, it will give the coin wide availability as well as a higher profile within the crypto community.

And in the meantime, it’s already possible to sign up for an account on the platform via a simple form on its website. Doing so will give users the ability to check out the Zort interface and to keep abreast of the latest developments going on as the platform continues to mature. They may even begin using the investment system when they’re ready – which is an attractive proposition now that it’s possible to purchase ZORT and get access to the trading fee discount.

From this moment forward, the investors in the crypto market will finally have access to an automated trading system that’s on par with the tools available to traditional investors in other, more mature markets. It’s a development that should clear the way for casual investors and even more experienced ones to go all-in on crypto with reasonable certainty that they’ll see worthwhile returns.

It should also help to increase new capital inflows into the market, too, which is good for the whole cryptocurrency ecosystem. And while it may still take some time for newcomers to recognize the value of what Zort and the ZORT coin have to offer, the wait will be worth it. And as for those already in the know – the sky’s the limit.

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Welcome to our Enigma (ENG) coin guide, which we’ll use to tell you all you could want to know about this unique cryptocurrency. We’ll visit what Enigma is, how it works, the team behind the coin, and its potential future. You’ll also get our opinion on whether or not ENG is a worthwhile investment. However, as with all our coin reviews, please remember that this review is not financial or investment advice. Do your own research and the proper precautions prior to investing in any cryptocurrency.Enigma is a way through which data trading becomes more efficient using a decentralized platform. The company targets those that wish to buy or sell data but gives them the option to do so without the need of a middleman. Primarily, ENG wants to attract individuals and businesses which need access to data but don’t want to deal with the involvement of a central authority.One of the great features of Enigma’s platform is that any type of subscription or purchase for data is both received and paid on its blockchain. The same goes for any rewards accumulated for sales of data as well. However, it’s important to remember that both the data and data movement reside off-chain. This is similar to the Layer 2 solutions Bitcoin uses for scaling. But instead of dealing with transactions, Engima handles data.Additionally, Enigma offers its Catalyst application. With Catalyst, users have a marketplace which provides all types of information. This includes market data, bots, and strategy options. The application allows quantitative analysts and algorithmic traders to develop strategies based on allocated data. This enables users to sell their information to other participants in the marketplace.Want expert cryptocurrency knowledge and investment tips delivered straight to your inbox? Just enter your email below.A pair of top-flight MIT grads manages the Enigma team, with CEO Guy Zyskind leading the way as co-founder and CEO. Zyskind has a background in the Media Lab at MIT and brings to the table over a decade of experience in software development.Zyskind also offers a wide range of specialties, including data science, security, privacy, and blockchain. In addition to his background and expertise, he also taught the first engineering blockchain class at MIT, pioneering the education for the new technology.Chief Product Officer Can Kisagun is the other co-founder of the Enigmas coin project. While at MIT, Kisagun was part of the MIT Tech and Bitcoin clubs. He left MIT in 2016 with his Masters in Business Administration and also boasts experience in both product management and business analytics.In addition to its two co-founders, Enigma has several advisors to provide input and information centered around blockchain technology. These include Paul Veridittakit, a partner at Pantera Capital, Bill Barhydt, CEO and founder of Abra, and Jacob Gibson, COO and co-founder of Nerdwallet.Part of Enigma’s platform involves the use of secret contracts, which function in a manner similar to smart contracts. The critical difference between the two is that the protocol with a secret contract, the data stored in the protocol is kept private.Enigma’s developers use a two-party computation protocol referred to as a Multi-Party Computer (MPC) structure. This is the foundation for Enigma’s secret contracts. By using its MPC structure, Enigma can ensure that its data queries complete in a distributed manner without the need for a trusted third-party.The data splits among differing nodes, which then compute functions at the same time without sharing information with other nodes. Therefore, no single node ever has the entire data set. Every node has a random and seemingly meaningless piece.By comparison, the majority of other blockchains operate in contrast to Enigma. Not only is Enigma’s MPC solution favorable to protecting the data of individuals, but it is also useful for businesses or governments who want to control data access for other reasons.Enigma has a method which allows it to perform data computations while not revealing user data. One way to illustrate this capability is through an example of a group of students calculating their mean grade point average.Each member of the group submits their GPA while also seeing the computation of their place in the group. However, they would not have the ability to know the GPA of other students in the group. Based on Enigma’s methods, any program can be evaluated while keeping the data inputs secret.Enigma uses a structure referred to as the off-chain decentralized Distributed Hash Table so that it can support MPC. With this tool, the protocol can access information in a secure method while also ensuring the privacy of the data. The Distributed Hash Table keeps references which point to the data but not the data itself. While private information needs to be encrypted by the client prior to storage and its access protocols are written to the blockchain, Enigma does provide an API for these types of tasks.Additionally, Enigma provides a solution to the scalability issue which prevails in so many of today’s blockchains. However, unlike with typical blockchains, data storage and computations are not repeated by every node that resides on the network. Enigma’s solution only performs calculations on small subsets of data.By storing certain types of data off-chain, the burden on the network reduces, which means speeds react in a positive manner. This is ideal since Enigma’s secret contracts can handle both public and private data as needed. Data which needs to be handled privately is managed on Enigma’s protocol layer, while public data can be handled on the blockchain which does not require additional privacy.Enigma seeks to provide interoperability to its users, as it gives them the ability to provide additional privacy and scalability to existing blockchains. When Enigma moves its private computations off-chain, they accompany them by its “access control” methods which help to ensure privacy is a priority.To better demonstrate how robust its protocol is, Enigma has created two decentralized apps (DApps). It has its Data Marketplace and Enigma Catalyst. An integral portion of the protocol is the Data Marketplace, which resides on the Ethereum blockchain.Currently, the on-chain portion of the Engima implementation deals with information surrounding namespaces, subscriptions, and data-sets. The coded logic in the smart contract resides on the Ethereum blockchain and operates with the ENG tokens.This means parties can contribute their data to Enigma’s decentralized marketplace. Any users, whether they be corporations or private individuals, can have access to the data stored in the marketplace. All they have to do is pay the necessary fees.Enigma’s Catalyst is a platform meant for trading on which data sharing can happen within a community. This means anyone has the ability to build out a crypto hedge fund. Catalyst provides support for Poloniex, Bittrex, Binance, and Bitfinex.Enigma announced its ICO in July of 2017 with its presale opening in August. The token saw a successful sale taking place from the 11th of September to the 21st. During that time, the ICO raised its targeted hard cap of $45M.Enigma uses its tokens as an incentive for the project itself. If someone exchanges their data, they receive an ENG token as a reward. The token will also work for those purchasing data, as the token works for payment purposes.By using Catalyst, Engima provides a way for quantitative analysts to get the data they want through their platform. The value of the token may attract additional analysts to Engima’s platform since they are rewarded with tokens if they provide successful market strategies.Use cases for Enigma live within the subset of solutions which make the blockchain valuable but remain in check due to scalability and privacy concerns. Enigma will find its bread and butter with private computations which reside on data stores.This type of data might include identity solutions, genomics data, or healthcare information. Every one of these industries, along with others, require strict privacy and can find benefit in a decentralized platform.The reselling of data, along with data leakage, is a significant issue which can is fixable with the use of Enigma’s protocol. Data marketplaces, along with open-sourced data, are areas which can realize dramatic improvements with the integration of secret computations. This gives users the ability to interact and gather insight from their data that they don’t have the ability to duplicate.The challenge with market potential for Enigma is that it is restricted to the market potential of blockchain technology itself. As a result, some industries shy away from permissionless and immutable ledgers. This is primarily due to the high potential for errors.There are several permissionless and private blockchains occupying the same space as Enigmas, which may make it a challenge for Enigma to gain market share. Enigma needs to shine in areas in which private computing and decentralization are priorities. These are marketplaces such as identity management, healthcare, and voting systems.Even though Enigma is still a fairly nascent currency when compared to other cryptos, it is working to carve out its own niche in the data computation space. Enigma wants to focus on secret contracts, but these are built on the Ethereum blockchain, so other blockchain projects like Ethereum, EOS, NEO, and Cardano are all viewed as competitors.From a financial data sharing perspective, Enigma views Bloomberg as one of its main rivals. Bloomberg sees billions of dollars in profits based on its interactive financial information. Enigma wants to gain market share here by offering consumers lower cost with accelerated data sharing through its own decentralized ecosystem.Additionally, a few newer blockchain projects could be viewed as competition. For instance, Iconomi targets traditional strategies like value investing and indexing. With Iconomi, users will not receive the tools they’ll get with Enigma. However, it is the most advanced in terms of development at this time.Blackmoon Crypto is another project that is competitor worthy. This coin adds value for investors who want to invest in traditional asset classes without leaving the cryptocurrency sector. Blackmoon Crypto targets those who want to park funds in a temporary low-risk asset, so while it falls in the same area as Enigma, it’s not a pure competitor.Enigma has a bevy of partners with whom the platform collaborates on its privacy protocol. Every Enigma partner brings its own unique strengths to the table to help Enigma grow and gain market share. Here is a quick rundown of each partner and how they are assisting Enigma:2Key provides Enigma with a protocol that connects HTTP with the blockchain. This gives smart contracts the ability to launch from web links. Working with 2Key means Enigma can share their links via cryptographic addresses while simultaneously keeping sensitive user information private and secure.Colendi integrates with Enigma to use its secret contracts, which provide the ability to store the relationship between data providers and users. This means algorithms run over user data are private and secure.For those that want to take control of their data via a marketplace that is blockchain-based, then Datacoup is the perfect solution. By going through encrytped metadata, users can purchase other data in the marketplace. The entire Datacoup process executes while still maintaining data privacy.Datawallet provides a decentralized ecosystem for business to consumer data exchanges.  With Datawallet, users can extract value from their data by delivering it to larger companies. As a result, Enigma can identify users by their social media profiles to help show that they are not bots, while at the same time, ensuring their data is kept private.Eximchain focuses on a privacy-based ecosystem driven by the blockchain and available for global supply chains. By working with Enigma, Eximchain allows users to maintain ownership and privacy of their data as they go through the data borrowing process.Recently Enigma partnered with Intel to focus in on research and development. Both members of the partnership are pushing forth in an effort to create advanced privacy preserving in computation technologies. For their part, Enigma will use Intel’s Software Guard Extensions solution to build and develop new privacy technology.Ocean Protocol is a platform which focuses on unlocking data related to artificial intelligence. With Enigma, Ocean wants to provide private and verifiable computations within a supply chain. It’s obvious that these two projects complement one another, so the companies felt it made sense to work together.Portal Network is a completely decentralized platform which incentivized users to create blockchain protocols managed by smart contracts. The ecosystem is deploying Enigma’s Name Service, which it will use for secret auctions. This gives users the options created encrypted bids on domain names.Rebloc is a decentralized real estate and data marketplace. This project works to provide users with the ability to perform transactions without the need for a middleman. It gives users the necessary tools to confidently sell and buy real estate data without fear of data leaks or compromises. To keep this data secure and private, Rebloc works with Enigma on its secret validation.There were some concerns with ENG coin due to a security breach shortly before its ICO, especially given that this coin focuses on privacy and security. However, since that time, Enigma has delivered on its proposed roadmap without issue.Those that use the ecosystem has accepted both the Data Marketplace and Catalyst. A solid team of blockchain enthusiasts and a heavy focus on privacy within its industry make Enigma a solid choice to consider when looking at coins that may do well in the future.With a host of solid use cases for the Enigma protocol, as well as its ability to work with existing blockchains, ENG has plenty of potential.  Even though this project is not as well-known as some other blockchain projects, it’s one to keep your eye on. Having said that, at this time it’s a high-risk investment. You may consider only dedicating a small part of your portfolio to ENG.Further Reading At TotalCrypto.io1) Still On The Hunt For Innovative Crypto Projects? Learn How Modum Coin Has It’s Sight Set On Disrupting The Logistics Sector Using IoT & Blockchain.2) Are You Confused About How To Get Altcoins? Our Dedicated Article Show You How.3) Are You Storing Your ENG Coin In The Ethos Universal Wallet? Did You Know That Ethos Coin Exists? Find Out What It’s All About!Below we’ve listed some key resources relevant to Enigma coin.The safest way to store your coins is by using a hardware wallet. The two main brands are Trezor and Ledger and we are happy to recommend both. If you need help choosing between the two just read our Trezor Vs Ledger guide.As Enigma coin is a ERC-20 token, you can use any wallet that is compatible with Ethereum. Find our top two choices below:Justin earned his MBA from Baker University and enjoys learning more about blockchain and cryptocurrency real-world applications. He is an investor in the cryptocurrency space and has many years of writing experience.Want to learn even more about Enigma coin? Jump into the technical documentation and see what ENG coin is all about for yourself.Get honest, unbiased crypto content that's worth reading.we respect your privacy and take protecting it seriouslyTom is a cryptocurrency investor from Edinburgh, United Kingdom. He believes in long-term projects rather than any short term gains, and is a strong advocate of the future application of blockchain technology.TotalCrypto.io is your home of unbiased cryptocurrency knowledge. Our mission is to provide honest guides and articles to help you learn about cryptocurrency and give you knowledge safely trade coins like Bitcoin, Ripple and Ethereum. We’ll also help you navigate through crypto wallets, exchanges and more.

Bitcoin’s pseudonymous creator, Satoshi Nakamoto, is a figure surrounded by mystery, and this intrigue continues today despite many aspects of the founder’s influence being studied at length. 

A particular point of interest has been a large amount of unmoved Bitcoin mined in the early days of the blockchain’s existence that is attributed to Satoshi. Much like a sunken treasure captures the imagination of explorers, this BTC’s existence and its dormancy have been the subject of extensive research.

Over the past few years, there’s been a lot of attention whenever BTC contained in wallets mined in the years following Bitcoin’s creation is moved. Some of these transactions have warranted the attention, while others simply fall out of the timeframe when Bitcoin’s creator and other early adopters may have been mining.

A significant amount of analysis and simulations have been made in an effort to accurately identify blocks and Bitcoin believed to have been mined by Satoshi Nakamoto. Thanks to the efforts of individuals, there is a better understanding of how they went about mining, how many blocks they mined, and how much BTC they accumulated as a result.

Others have built on this work to make the picture clearer — but there is still so much interest surrounding the legacy BTC mined in the early days of the blockchain’s existence and if and when it will ever be moved.

The Patoshi Pattern

Let’s rewind the clock to early 2009 when Satoshi Nakamoto brought Bitcoin into existence by mining the genesis block. In the months that followed, the founder and other early collaborators and adopters began to use the blockchain, mining blocks and transacting with their BTC wallets.

The Bitcoin mining reward of 50 BTC meant that a large amount of the capped cryptocurrency was mined in the three years before the first-ever halving event. Satoshi Nakamoto’s role in the early Bitcoin mining ecosystem has been proved to be significant through blockchain analysis conducted by cryptocurrency security consultant Sergio Demian Lerner, which meant that the founder/s were in control of a significant amount of BTC.

Cointelegraph reached out to Lerner, who currently works at IOV Labs as their chief scientist, to better understand how he helped shed light on Satoshi Nakamoto’s involvement in the foundation of the Bitcoin network.

Lerner carried out simulation-driven research outlined in a paper titled “The Patoshi Mining Machine,” which examines what hardware Satoshi Nakamoto used to mine in the early days of Bitcoin. To try to avoid contentious debates about the Bitcoin founder and focus on the technical side of his work, Lerner dubbed the miner “Patoshi.” 

The researcher likened Bitcoin mining to buying a lottery ticket as he explained how his simulations identified this pattern: “The most interesting simulation was the re-mine of Patoshi blocks looking for other solutions to the Bitcoin proof-of-work puzzle.” He adds, “Each solution is a number (called a nonce), which is like the number of a lottery ticket. Miners ‘buy’ lottery tickets one after the other until they win.”

Lerner compared the ticket numbers of the lotteries that he mined to the ones that were mined by Patoshi. When the researcher restricted the analysis to certain ranges of the lottery numbers, he realized that Patoshi had a “clear tendency” to choose the higher numbers.

“This strongly implies that Patoshi scanned the numbers downwards when looking for the winning lottery ticket. Even if we don’t know if he started with a high or low number, he always did it by decrementing the ticket number until some time had elapsed or he won the Bitcoin block lottery. The fact that in each separate range he searched there is a tendency to pick higher numbers, but combining all ranges there is not such a tendency implies that he was scanning the numbers simultaneously with five different machines (or threads), each on a certain range.”

By identifying a pattern in the nonce value of the coin base transaction of certain blocks mined in the first three years of Bitcoin’s existence, Lerner was able to shine a spotlight on blocks and BTC that was undoubtedly mined by Patoshi.

Lerner also highlighted the fact that “The Patoshi Pattern” crucially mimics the nonce pattern in almost all of the Bitcoin blocks that were mined in the first 14 days of the blockchain’s existence. This was the data-backed link that helped identify Patoshi-mined blocks and the BTC in the coin base transactions that therefore belong to Satoshi Nakamoto.

Satoshi’s largely untouched fortune

Lerner’s research provides the basis of an educated estimate of the amount of Bitcoin that Patoshi had accumulated through their early Bitcoin mining. He believes that Patoshi received around 1.1 million BTC from the rewards of some 22,000 blocks mined.

He highlighted some key characteristics that made this pattern stand out in helping identify Patoshi blocks and coins, while he also conceded that other bodies of research have arrived at lower estimates of Satoshi Nakamoto’s BTC hoard around 750,000. He adds:

“The fact that the nonce space scanned is smaller than the space scanned in the rest, the fact that those blocks were never mined very close to other blocks, the fact that they are mined at a very specific and high rate (the extranonce is incremented much faster than in other blocks), the fact that the nonce is scanned backwards instead of forward, the fact that the nonce is scanned in parallel in five threads or machines, instead of sequentially, the fact that the timestamp was updated less frequently when mining those blocks, and finally, the fact that 99.9% of those blocks have not been spent, while the remaining blocks have been mostly spent, there is no doubt those blocks are different from the rest.”

Much of Patoshi’s holdings remain unmoved and untouched, while the Bitcoin they did send has been identified through the work of researchers like Lerner and other Bitcoin aficionados. Lerner believes this provides enough evidence to make some educated assumptions about Patoshi’s BTC.

“Apart from the fact that Patoshi was the first Bitcoin miner, people other than me have connected some of the Patoshi blocks with payments made by Satoshi that early Bitcoiners have revealed over the years,” adds Lerner.

The exact payments amounts, approximate times during which those transactions occurred, or checking the transaction identification, all linked back to several of Satoshi’s payments, which included payments to the likes of Dustin Trammell, Nicholas Bohm and Mike Hearn. 

Lerner adds, “I’m used to mathematical proofs, not circumstantial evidence, so these public communications or the fact that Patoshi was the first miner do not prove Patoshi is Satoshi. However, the Occam razor would suggest that the simplest explanation, that Patoshi is in fact Satoshi, has the highest chances to be the correct one.”

Lerner told Cointelegraph that he’d identified 16 payments made by Patoshi that consumed no more than 16 coin base rewards. A coin base transaction is the BTC awarded to a successful miner, which was 50 BTC at the time. Lerner says there was a high probability that Patoshi moved around 800 BTC, while the value of these coins was negligible at the time.

“It doesn’t change much if the amount he spent is 10 Bitcoins or 800 Bitcoins, over a total of 22,000 blocks that he mined. At the time he spent them, even considering the first valuation that was established one year later, the value of 800 Bitcoins would be less than one dollar. In dollar terms, we can say he spent almost zero.”

Nevertheless, this also means that Satoshi Nakamoto did not spend the majority of the Bitcoin acquired from maintaining the network. 

Estimating BTC held in virgin wallets is still difficult

Given that around 1 million BTC attributed to Satoshi remains dormant, any movements of Bitcoin from long inactive wallets grab attention and headlines in the cryptocurrency space. Even the slightest hint that the BTC in question could belong to Bitcoin’s founder means that blockchain analysts keep a close eye on significant Bitcoin transactions from old wallets. A prime example was the movement of 50 BTC in May 2020 that had been mined in February 2009.

The coin base transaction occurred just a month after the Bitcoin mainnet went live, leaving the possibility that the coins were moved by Satoshi or one of the early cypherpunks who had been experimenting with mining and transacting in the early days of the blockchain’s existence.

Perhaps more interesting is the effect that these awakenings can have on the wider cryptocurrency markets. In May 2020, an unknown person moved BTC that Craig Wright purported to own in addition to his widely challenged claims to be Bitcoin’s founder. 

Wright never proved or disproved that he had moved the coins, but the suggestion that the real Satoshi had done it to prove Wright a fraud spooked the markets. The result was a $6.5-billion drop in Bitcoin’s market capitalization as traders unloaded holdings due to uncertainty. 

One of the more recent dormant BTC transfers took place in June 2021 and was flagged by WhaleAlert on Twitter. 791 BTC was moved from a wallet that hasn’t been active since 2012. Blockchain researcher, developer and cryptocurrency trader Kirill Kretov has been actively keeping tabs on various “virgin” wallets that hold their original BTC mining reward and have never moved these coins.

While the movement of these coins caught the attention of some in the crypto community, which suggested that this could have been Satoshi moving old coins, Kretov believes the transaction didn’t warrant the attention it received: “My parsers monitor only ‘virgin’ wallets: those that received funds but have never made any outgoing transfer. Thus, until they make it, we can’t be sure whenever the private key for it is known and whether the wallet will remain asleep forever.”

He further adds, “Once an outgoing transaction is made, I’m no longer interested in that wallet because it means ownership has already been proven in the chain. The wallet in the article has already been awakened in 2012, so it is of no interest to me.”

Kretov compiled a full list of these virgin wallets through his research, which gives a rough idea of how many wallets were created in this time frame. An estimated 21,500 wallets were created in 2009, 12,400 in 2010, 3,600 in 2011, and around 2,200 in 2012. He clarifies, “Since the moment I launched my parser in autumn of 2018, I have detected roughly 5,500 awakenings, but that is including Bitfinex-hack addresses and all virgins between 2009 and August 2017.”

Kretov admits that giving an accurate estimate of how many dormant coins exist remains a difficult endeavor mainly because there were so many different wallets created between Bitcoin’s inception in 2009 and the first reward halving three years later.

“A very rough estimate would be 2 million BTC of virgin Bitcoins created between 2009 and 2012. A more precise current figure would require me conducting a lot of lengthy calculations. And while I would be doing those, things may already change.”

Satoshi’s altruism

Ultimately, the sheer amount of dormant Bitcoin will continue to grab the imagination of the cryptocurrency community as its value continues to steadily rise over the years. This unmoved Bitcoin accounts for a significant percentage of the market supply, and this will make it increasingly more valuable as more people begin to acquire Bitcoin and the market supply dwindles.

Many wonder if Satoshi Nakamoto will ever spend their coins, considering that their holdings amount to around 1.1 million BTC. With the value of a single Bitcoin so far maxing out at $63,500, Satoshi’s holdings were at one point valued at nearly $70 billion. If Satoshi were to reawaken all of their coins, move them to exchanges, and sell them, there would undoubtedly be a steep price correction driven by simple supply-and-demand economics. 

Only time will tell if Satoshi will ever move their coins, but Lerner’s research leads him to believe that would be out of character for Bitcoin’s founder. “I’m happy that after eight years of blockchain forensics analysis, nothing alarming was found, but on the contrary, all clues lead us to believe Patoshi showed high altruism by mining Bitcoin.” He further adds:

“He refrained from mining when others did, not to hoard too many coins, and to keep the difficulty low longer so more people could earn coins when joining the network. Patoshi mined to protect the network from early double-spend attacks when the network was more fragile, and not for selfish reasons.”

Lerner also stressed that his research was driven by his passion to answer what he describes as a deep logic enigma. His endeavors uncovered how many BTC belong to Satoshi Nakamoto, but they also led to a greater understanding of the altruism displayed by Patoshi and the efforts they took to nurture the early Bitcoin network. “Personally, my research was never about Satoshi the human/group, but started as an analysis on Bitcoin wealth concentration and the risk of market manipulation.” He stated: 

“Before I learned about Patoshi, it was an ethical dilemma for me to work in Bitcoin. What if a few early adopters had the majority of coins? What if Bitcoin’s new financial system ended up having much higher wealth concentration than the current one.”

The Enigma ICO crackdown has reached a conclusion with some interesting outcomes. As the Securities and Exchange Commission increases the depth of its probe against Enigma ICO, it is unearthing more evidence. The latest ruling states that a suitable fine must be collected from Enigma, and refunds must be issued to the gullible investors.

The probe began in 2017, and the firm is charged with raising capital via an unregistered securities offering. In its official statement, SEC said that the firm has reached a settlement agreement with the agency.

Enigma has agreed to give back the investor’s funds through a transparent claims process. Also, ENG tokens will be registered as securities under the appropriate law, submit regular reports and pay a $50,000 penalty.

In 2017, Enigma launched an ICO for ENG token that managed to raise $45 Million. One year later, Enigma joined hands with a popular decentralized solutions provider for privacy solutions and more advanced features. As per SEC, Enigma mentioned that ENG tokens were securities. However, the agency did not receive any filing stating that Enigma tokens are securities during or after the said ICO.

SEC Enigma probe further found that the ICO did not comply with the appropriate rules. In its final order, the commission ordered that investors be compensated accordingly. It mentions that all investors must be provided with relevant information about the securities offering, whether it involves digital or conventional assets.

John Dugan, the Boston branch associate director for SEC, said that the order clearly states about compensation for the deceived investors. Also, Enigma is bound to provide further ICO information to its investors. ENG token has not responded to the news of SEC Enigma ICO crackdown so far. In the past year, SEC has been actively pursuing crypto frauds and suspicious ICO offerings.

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HomepagecryptobroFollowSign inGet startedCrypto BroBlockedUnblockFollowFollowingSep 6, 2017ICO Review: Enigma CatalystOur guide to Enigma Catalyst ICO. Note that this is long article intending to provide comprehensive information for the upcoming ICO.What is Enigma Catalyst?Enigma Catalyst are actually two different products: 1) Enigma and 2) Catalyst. Let me explain each of them to you.Enigma is a decentralized data marketplace. The platform aims to become the central source for a standardized, reliable, and high-quality crypto data — for example, historical open-high-low-close (OHLC) data for various crypto assets. Enigma will make it easy for data curators (data provider) to monetize their data by providing easy-to-use platform for storing and selling data. At the same time Enigma will allow interested parties to subscribe and use these data easily.Catalyst is a one-stop-shop for quantitative trading. It will allow quantitative analysts (quants) to develop trading algorithms, back test their strategies with real data hosted on Enigma, and deploy their strategies for live trading. In addition to deploying their own money, quants can choose to market their algorithms to regular investors and earn “royalty” fee when their algorithms are used. Catalyst will be the first application built on top of Enigma (according to the founders, the name “Catalyst” is selected because it is intended to accelerate the adoption of the Enigma platform.) The closest analogy to Catalyst is Quantopian (www.quantopian.com) which is a successful quantitative trading platform for equity asset.Some of you might not be familiar with the concepts of quantitative trading or trading algorithm. I believe it is beneficial to some readers if I explain this idea further by providing an illustrative example. I believe the best way is to give you a sense of steps a quant has to go through as he tries to develop a winning-trading strategy. If you are already familiar with quantitative trading, you may skip the next section.Quantitative trading explained:A mean-reversion algorithm is one of the most basic strategies in a quantitative trading repertoire. The underlying idea behind mean-reversion strategy is quite simple and it goes like this: an investment will tend to “revert” to mean after a period of over or under performance. Or put it another way: what goes up tends to come back down, and what goes down tends to come back up. As a quant, you can utilize Catalyst to develop your trading strategy following the steps below:1. Develop your trading hypothesis / thesis: for example, building your thesis from a mean-reversion theory, you could hypothesize that the worst-performing crypto assets from previous week will become strongest performers this week as its performance “revert” to mean2. Define criteria and parameters: in this step, you need to start defining criteria (e.g., what does it mean for asset to be worst-performing? when does the week start and end? What are the universe of assets to consider?, etc.) and actions (conditions to buy and sell asset.) For example, you might define the followings:“worst-performing” assets to be the bottom 10% in term of %change in price over the past weekWeekly time period to start at midnight SundayUniverse of assets to consider are the top 200 assets by market capBuy condition could be to buy all assets defined as worst-performing in equal dollar amount and sell after one week of holdingNote that these criteria are based entirely on human judgment. What separate a winning vs. losing trading strategies is the ability for quants to define criteria and parameters effectively.3. Develop code: once you have all your criteria defined, this is where Catalyst comes in. You can use the Catalyst platform to translate your idea into a computer code that can execute the intended trading behaviors. Catalyst will provide you with the tools necessary to create your trading algorithms.4. Back-test and refine: This is where Enigma comes in; your code will run on real historical data hosted on Enigma. You can observe the performance of your trading strategy and refine your criteria and parameters to obtain better trading outcome.5. Deploy and monitor: After refinement and more back-testing to ensure the code’s effectiveness, you can deploy it for live trading and monitor its performance. Sometimes, as market conditions change, a strategy becomes less effective and you will need to modify it to reflect the changing environment or retire the algorithm.The example of steps provided above is grossly simplified and only meant to be illustrative. Real trading strategies can have significantly more added complexities on criteria and parameters used (e.g., sell conditions can be more sophisticated to lock-in profit or cut-loss based on what the asset does as opposed to just buy and hold for one week as given in an example above.)If you would like to learn more about this topic, I recommend you visit www.quantopian.com where you can find wealth of knowledge under their “learn” section. You can actually get your first trading code up and doing back-testing with read data set in under 30 minutes.What problem is Enigma Catalyst solving?Since we have two products being developed, I will explain each of them separately:Enigma: Enigma is trying to solve the lack of standardization and fragmentation of crypto data (e.g., Open-High-Low-Close (OHLC) data, etc.) The Enigma team believes that easy-to-access, high quality data set will lower barrier to entry for various participants in the crypto market (e.g., quants, researchers, etc.) The Enigma platform will make it easy for anyone to become a data curator. In the first instance, Enigma team itself will curate several key data-sets and makes it available for all users on the platform. With the right economic model in place, it hopes that the community will grow to populate other useful data sets.Catalyst: Catalyst is trying to make it easy for quants to operate in the crypto ecosystem. Currently, the barrier to enter for quants into this new asset class is high due to several reasons:Lack of access to high-quality set of data: high-quality, reliable data set are scarce and fragmented, making data-driven trading strategies difficult to implementPlatform-specific and complex environment: while many exchanges offer API for developers to connect and develop trading algorithms, they are platform-specific and not designed for easy experimentation and testingI believe this is a worthy problem to tackle for several reasons:Quants looking to enter crypto arena: Given high volatility nature of the crypto market, it should be an attractive ecosystem for algo traders. Providing them with a highly-functional platform to operate will likely draw significant number of quants to experiment with crypto asset class. Opportunity cost to them would also likely to be low as algorithms from equity trade could be modified for crypto trading with some adjustments.Positive effects on the crypto market dynamics: In equity market, algorithmic trading accounts for over 80% of all the trading volume. Having higher percentage of quantitative trading can provide certain positive influence to the crypto market such as lower bid-ask spread and higher liquidity as these algo traders become market makers.The Economics:Now that we understand the pain points Enigma Catalyst is attempting to solve, I will explore the economics of the platform. There are three key stakeholders that we need to consider: 1) quants, 2) investors, and 3) Catalyst platform owner. We will do this by answering the following questions:What is the potential market size for Enigma Catalyst?How much could quants be expected to earn? Is there enough incentive for them to participate in this market platform?How much can investors be expected to earn?How much money can Catalyst platform be expected to earn?Answers to above questions will inform us of the viability of this project.Taking the answer first approach, I summarize my findings below. You can also read the detail of my analyses in subsequent paragraphs:Expected # of users: 50K — 100K in the first five years (Catalyst only)Expected annual earnings for quant: USD 72.5K — 517.5KExpected return for investors: 40–120%Expected income for Catalyst platform: ~ USD 25–150Mn in the next 5 yearsConclusion: Economics is attractive for all stakeholders to participate in the platformWe can use quantopian as a good benchmark for some of the data points required for our analyses. After 4 years of operations, Quantopian has over 130,000 members and over 500,000 algorithms developed on its platform.Given crypto asset class is still relatively new, there might only be a subset of quants who are interested to participate in it. I believe a reasonable number of users would be a range between 50,000–100,000 in the first five years.Next, we will calculate how much a quant can expect to earn on the platform. To do this, we need to make several assumptions, namely:Capital under management (both own capital and investor’s capital)Portfolio leverageTrading algorithms returnRoyalty feeThe figures I use rely heavily on the discussion posted on Quantopian (see reference #5) However, I adapt some of the figures based on my judgement to reflect the specific nature of Catalyst platform.Capital under management: Unlike Quantopian, Catalyst does not plan to manage the allocation of capital to quants. Quants will instead need to rely on investors’ and their own funds for their trading algorithms. For our analysis, I will assume an allocation of USD 1–3Mn from investors to each performing algorithm (based on ranges used by Quantopian.) Quants might not have access to a lot of their own fund for investment and I will assume this amount to be USD 50k.Leverage: Algorithmic trading portfolios are leveraged to achieve higher return on capital. While the range varies greatly depending on the strategy employed and asset class being traded (e.g., Fx trades use higher leverage than equity), I will assume a leverage range of 5x — 10x which is a typical range for equity trade.Trading algorithm’s return: This figure is very difficult to estimate as return can vary greatly for different algorithms. Quantopian uses ~8% return in an example to calculate earning for a quant. Given lower competition from other algo traders in the crypto market, at least in the first few years when the market is still nascent, there might be potential to earn higher return. For this reason, I will assume 10% — 15% range of return in our calculation.Royalty fee: No detail is provided by Enigma team in regard to how much the platform plans to charge, and how much quants can expect to earn as royalty fee. As such, I will assume 20% with 50/50 split between quants and platform, which is the management fee implemented on Quantopian, as proxy.Based on our calculation above, a performing quant can expect to earn between USD 72.5K — 517.5K annually. This figure should be attractive for many of them, with top performers having potential to earn up to 10x avg. US household income. Participating on the Catalyst platform seems to be a natural extension for quants who want to have exposure in crypto asset class. The incremental effort required to be on the platform should also be relative low as existing algorithms can be adapted. For these reasons, I believe the economics incentives for quants to be strong.The investors are also well-rewarded. Even after 20% management fee, they can expect to earn 40% — 120% return on capital. This figure seems high partly because of our assumption on portfolio leverage (5x — 10x). Once track records are established for high-performing quants, I expect many investors to allocate a portion of their portfolio to quantitative trading to seek higher return.Now, I attempt to estimate how much Catalyst platform will earn. As of this writing, there is no detail provided on how much Catalyst plans to charge for the use of platform or how much profit cut (if any) it will take. The only mention is that ENG token will be needed to access data. To understand potential earning, I will assume that Catalyst takes a 10% cut of the profit (using Quantopian figure as a proxy.) Our task then comes down to estimating the total profit pool and asset under management on the Catalyst platform.If we look at the overall market, the size of hedge fund industry is at USD 3,000Bn at the end of 2016 according to Finalternative. Quantopian aims to become a USD 10Bn platform, and has agreed with Steve Cohen to allocate up to USD 250Mn to the best algorithms on its platform. While there are opposing views and on-going debates on whether Quantopian can scale up to USD 10Bn, I believe it is possible for Catalyst platform to achieve USD 1Bn AUM level if it’s properly executed.For our analysis, we just want to get estimate at an order of magnitude level, so let’s assume that the asset under management would be in the range of USD 0.5–1Bn.Based on our analysis, Catalyst platform has a potential to earn between USD 25–150Mn in the next 5 years, if it chooses to charge usage fee of the platform.Team:Enigma catalyst has well rounded talent with complementing technical (software dev, options trading, and data analysis) and business skills. Advisers are also strong on paper. Overall, the team appears to have the capability to execute this project.However, there are several concerns regarding the team:Recent announcement of 50% market cap increase combined with other incidents (hacking, postponed of token sale date) calls into question the team’s integrity level (more detail in the token sale analysis section)Level of involvement of advisers, given some of them have a role with already large responsibility (e.g., director of MIT media lab, etc.) Based on my experience working 4+ years in consulting industry, it is a common practice, unfortunately, to put down big names in project proposals for added credibility while in reality, the working team has limited interaction with those individuals listed. As of this publication date (6th September 2017), not all advisers listed on Enigma’s website have Enigma Catalyst listed on their Linkedin profile.Below is a summary of the team and advisors profile and background:Guy Zyskind (Co-founder & CEO)2+ yrs of experience as software developer at SAPMaster thesis at MIT on the development of Enigma platformCan Kisagun (Co-founder & CPO)2.5 years of management consulting at MckinseyCo-founded multiple startups — Exim Chain, Steer DustMBA from MIT SloanTor Bair (Head of Growth and Marketing)Formers option traderData scientist at SnapchatMBA from MIT SloanVictor Grau SerratCo-director at MIT D-Lab15+ years in software developmentAdvisers:Professor Alex Pentland — Director at MIT media labJacob Gibson — Co-founder and COO of NerdwalletJustin Lent — Former Director of Hedge Fund Management at QuantopianMatthew Falk — Former Software Engineer at Two SigmaBill Barhydt — CEO of AbraJosh Lim — Former VP of Treasury and Trading Operations at CircleMael Barut — Co-founder Galois CapitalKevin Zhou — Co-founder Galois Capital, Former Head of Trading at KrakenCompetition:There are several projects competing in the crypto investment platform space. However, each project focuses on different niche of investment products. I like Enigma Catalyst’s differentiating features — a one-stop-shop easy-to-use platform for quantitative traders to develop and deploy their trading algorithms.Being the first mover in the market, if the team can execute their vision successfully, should give them a strong defensible position against future newcomers. As more and more data sets are populated on Enigma and people are used to its protocol and data standard, the switching cost to new platform will be high.I provide below brief explanation of the key competing projects in this space and highlights their key differentiating features:ICONOMI: Iconomi platform is geared toward traditional investment strategies (indexing, value investing, etc.) While individuals and third-party fund managers can propose and start their own investment fund on the platform (or in Iconomi’s lingo a Digital Asset Array or DAA), Iconomi does not provide tools for quants to develop trading algorithms or data for back-testing strategy. In term of development, Iconomi is most advanced compared to others projects with platform open for public registration and two funds available for investment. You can invest in its two funds now. It has also recently announced that Columbus Capital will become its first DAA manager.Blackmoon Crypto: Blackmoon crypto focuses on tokenizing traditional assets onto crypto platform, at least initially. Their value proposition is for investors to be able to invest in traditional asset class without having to leave crypto space.The first two funds it is releasing are high-yield and low-risk fiat fixed income fund. Based on this information, it seems Blackmoon Crypto wants to target investors who might want to temporarily park their fund onto a low-risk assets without having to go through the trouble of exchanging crypto assets to fiat which is inefficient, incur high fee, and can be considered a taxable events in some jurisdictions.Other considerations:Hacking incident:A hacker managed to gain access to slack account of one of the admins as well as the Enigma website. The hacker posted a phishing pre-sale message on slack and sent out emails with fake address for contribution. Unfortunately, they were able to get away with ~USD 500,000. This incident caused some outrage in the community as the messages were posted in the slack announcement channel using admin accounts, so some members fell prey to the scam thinking it was a legitimate announcement. It did also hurt the team credibility.However, the CEO has since came out and promised to refund those affected by the scam. This is a smart move on their part to restore investors confidence, considering the amount is < 2% of the total amount raised during ICO . The team has changed their security measures to prevent any future malicious attemptsMarket cap increase:The team announced a 50% increase in amount of tokens to be created five days before the token sales which is essentially a 50% increase in market cap. This, unfortunately, appears to be a money-grabbing scheme and I am quite disappointed with their decision. More detail on this announcement can be found in token sale analysis section below.Token sale analysisWhat is the utility of tokens?According to the team, ENG tokens are used for the followings purposes:Primary purpose: ENG is used to access data sources on the decentralized Enigma Catalyst Data Marketplace. Payment is on subscription level.Secondary purpose: ENG tokens are used for incentives to grow and ensure stability of the network. ENG tokens are used to create demand in the data marketplace: Reward tokens are provided to quants with winning strategies. This incentivizes more quants to come on the platform and consume data to refine their strategies and gain an edge.“Most generally, Catalyst tokens are used to reward creation by and for the community (e.g. trading strategies, data sources) and are consumed when community members access premium services on the platform.”As you can see, the information provided by the team regarding the token is unfortunately high-level and limited. Nonetheless, I try my best below to list out some of the pros and cons of the tokens.Pros:Value of ENG directly tied to the success of the platform: as the data quality and quantity grow, there will be more demand to access it and hence increase the demand for ENG tokens. With fixed supply in circulation (or decreasing as it is “consumed”? unclear if portion of the tokens are burned as transaction fee or full amount are transferred between stakeholders)Usage token — unlikely to be classified as security: based on its description and purpose, one can see that ENG token is meant to be a usage token (i.e., tokens required to use service or transaction) as such it is relatively safe against future SEC or other regulator probes as it won’t be considered security.Cons:Difficult to value: With the available information currently, it’s practically impossible to estimate a fair value to ENG tokens. We do not know how much it will cost to subscribe to data sources, etc. thus, the price of ENG will be subjected to much speculation before real product and more information regarding its usage come outNo participation in the upside of Catalyst: the only link to Catalyst as stated are to use ENG as incentives for quants to use the platform (e.g., give away tokens to access free data) However, there is no mention whether Catalyst will charge for its platform in the future and how ENG holders will benefit from that potential upside. In my opinion, that is likely to be a lucrative part of the ecosystemWhat are the terms for token sale?Below are the terms of the token sale:Token supply: 150M fixed supply of tokens createdToken type: ERC20 on Ethereum blockchainUSD raised: $45 millionImplied market cap: $90 millionDistribution:50% in the token sale25% reserved as incentives for the Catalyst platform25% for team and advisersUse of fund:60% product and technology development15% blockchain research10% marketing10% operations5% legal and administrative costsWhile initially the term of sale is typical of recent ICOs with no red flags or things that seem out of line, the team has announced an increase of token by 50% — and hence the market cap by 50%! The reason provided was to ensure a “broad and fair token sale for our community.” The individual cap is also set at USD 3,600 or 6,000 ENG tokens per individual with potentially up to 50% refund.I am disappointed with their decisions for several reasons. The “fairness” reason provided by the team does not have much ground. I tend to believe that instead of “fairness”, the team saw an opportunity to collect more cash based on the overwhelming positive feedback from community and decided to go for it. Here are my supporting evidence:Since the beginning, Enigma team had a pre sale set up for accredited investors with minimum contribution of USD 100K. Obviously, only whales can be part of this.There is no dedicated allocation for pre sale, meaning the tokens that go to pre sale are from the same pool as crowd sale — so more money from pre sale means less for everyone elseEnigma team does not attempt to do KYC to prevent people from registering multiple accounts on Slack and apply to be on WhitelistThe concept of individual cap has only been introduced recently. Initially one can select in the Google form how much he plans to contribute when signing up to be on the whitelist.There have been other ICOs, notably 0x and Kyber Network, whose token sale philosophy of broad distribution has been consistent with the way they conducted their sale process from beginning to end. Despite their overwhelming positive response from the community (e.g. Kyber has over 30k followers on slack), they did not increase their cap and proceeded to honor their original commitment. This is not the case for Enigma.Key success factors:Team’s ability to develop a well-functioning platform as plannedData curators providing high-quality data set on the Enigma platformQuants community on Catalyst able to produce high-quality algorithmsAbility to effectively attract data curators, quants, and investors to the platformKey concerns:Team’s motivation in executing project in the long term given their recent change in token sale termsOver-valuation and recent bad feedback from community can potentially drive price down leading to big crash similar to CoinDashPricing of data access will greatly affect token value, but no detail provided currentlyFuture regulatory that might prevent / restrict investors to put money into the platformConclusions:I believe Enigma Catalyst was a good investment opportunities for the following reasons:Interesting concept, tackling real pain pointsStrong team and advisers and backing from VCsAttractive economics for all stakeholders involvedReasonable token sale terms and valuationHowever, due to recent developments, including account hacking incident, and market cap increase at the last minute before ICO, it calls into questions the team’s integrity and their capabilities to deliver.In the short term, token price could still be well supported given strong interest in the community as evidenced by over-subscription in both presale and whitelist. Even after the market cap increase, given the current “ICO hype” sentiment in the market, the token could still do well.In the medium to long-term, watch out for these key catalysts that will drive the value of token:Adoption of the Enigma platform by data curatorsAnnouncement on detail of data subscription pricing schemeCreation of essential data set for crypto trading (e.g., OHLC data)Release of Catalyst platform and adoption by quantsDisclosure: We originally planned to participate in the Enigma Catalyst crowdsale on September 11th, but due to recent developments, we are now going to pass on this opportunity.Reference:Quantopian: https://www.quantopian.com/aboutHow are ICO tokens regulated: Lindsay-X-LinPhishing Address in the hacking incident: BCompany’s statement regarding the hack: ty-3f213e099d5aHow much can a quant earn?: eloper-can-earn-in-quantopian-1Full token sale detail including announcement increasing the market cap: d70c56510baBlockchainICOInitial Coin OfferingEthereumBitcoinOne clap, two clap, three clap, forty?By clapping more or less, you can signal to us which stories really stand out.3101BlockedUnblockFollowFollowingCrypto BroFollowcryptobroCryptocurrency analysis focusing on initial coin offering (ICO)310Never miss a story from cryptobro, when you sign up for Medium. 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About Latest Posts DeanOwner, Editor, and lead writer for Cryptorials.Cryptocurrency writer and trader since 2014.AMA Anytime: 21.co/cryptorials Latest posts by Dean (see all) Crypto Coins & Tokens Which Pay Dividends To Hodlers - April 3, 2018 Invest in media for crypto rewards, with SingularDTVs Tokit platform - March 19, 2018 New exchange platform Cointrade welcomes investors through ICO - March 17, 2018 With the privacy (or lack thereof) of Bitcoin and other cryptocurrency payments once again coming to the fore CloakCoin (one of the original, first wave of privacy-centric digital currencies) has announced the upcoming release of v2.0.1.0 of its software. Going under the code name Phoenix, the new wallet will be available to the public from 18th February 2017. After the launch of Zcash, another anonymous cryptocurrency payment system, generating so much hype recently, and a wave of headlines about the privacy on Bitcoin users being compromised, it seems to be a timely release. This new version of Cloak introduces the re-branding of the coins anonymous payment system from PoSA (Proof of Stake Anonymous) to Enigma, along with a raft of enhancements and new features to make the coin more user-friendly, efficient and effective. CloakShield & Enigma: Ensuring maximum privacy in Cloakcoin Enigma offers Cloakcoin users the ability to make their payments completely anonymous for a 1.8% fee. This is made possible through an innovative off-blockchain coin mixer with end-to-end encryption. A system called CloakShield encrypts data traveling between nodes on the Cloak network. This allows for the creation of private communication channels between nodes (users wallets) which cannot be deciphered by anybody else. It makes use of onion routing to ensure that data is only visible to its intended recipient. Effectively, this is equivalent to running your wallet through the famous TOR privacy network but without the need for separate software; and since no data is needed from outside the network there is no need for exit nodes, which are perhaps the main point of weakness for the privacy protection offered by TOR itself. Enigma uses these end-to-end encrypted communication channels to create transactions using outputs from the wallets of multiple participants in addition to the actual sender and recipient, effectively obscuring who is actually sending money to whom. A user wanting to send a private transaction communicates with other nodes and selects participants from the pool of offers. The entire process is fully encrypted to prevent any observer from knowing who is participating, and only the fact that you have sent a payment for a certain number of coins will be visible on the public blockchain, not who you are sending those coins to. This creates a kind of off-blockchain mixing service baked into the protocol and available to use directly from the CloakCoin wallet. Coin mixing is the same technique currently employed by Bitcoin users who want enhanced privacy. Unlike most popular Bitcoin mixers, however, Enigma is fully decentralized therefore removing the need to trust a mixing service and enhancing the privacy and security it offers. The combination of Enigma with CloakShield encryption also offers additional privacy protection compared to a regular mixers, as the developers explained to me: the onion routing negates the worry of timing attacks too, as timings are now variable due to the time taken to onion route. Timing attacks are a method through which the anonymity of some coin mixing transactions can be broken. No masternodes, of the kind you find in Dash (which also has a built-in decentralized mixer), are used in this process all nodes remain equal. This eliminates the problem of Sybil attacks which may potentially be an issue for decentralized mixers using masternodes, especially when the majority of masternodes become concentrated on the servers of a small number of popular hosting providers whose logs could be compromised by government warrants or even hackers. It also means that anybody with a Cloak wallet containing some coins can offer themselves up as a participant in this anonymization process and earn a portion of the fee paid by the sender. You can set what percentage of your balance you want to make available for this and broadcast your desire to participate from your wallet. Because Cloak also uses a PoS consensus protocol, in which users earn 6% interest for holding coins in their wallet, there should be no shortage of available participants therefore reducing the problem of liquidity which some coin mixers suffer from. The Cloak 2.0 Upgrade I managed to get my hands on an advance copy of the v2.0.1.0 wallet currently going through testing prior to its upcoming release so that I could try it out. The first thing that is immediately obvious during the install is the blockchain downloader a new feature added with this release. Installing a new cryptocurrency wallet can be a real drag, with a long and frustrating wait between downloading the software and actually getting it synced with the network and ready to use. That is not the case here. Despite being a well established coin with a few years of transactions under its belt, this whole process is lightning fast: it took just a couple of minutes in total. To me this is a big bonus for new users, especially those with less experience using cryptocurrency, as it feels exactly the same as downloading and using any other piece of software something which often isnt the case with cyrptocurrency. Sending a private transaction using Enigma was also surprisingly fast and user-friendly. The only thing you need to do differently from a normal payment is to tick the Enigma box, select how many cloakers (mixing participants) you want to include between 3 and 25 and a timeout level between 1 and 5 minutes. My test transaction seemed to find participants for mixing pretty much straight away, broadcasting the transaction and getting it a fully confirmed payment at the other end within minutes. This is a nice contrast to Zcash, which may have even more privacy with transaction amounts hidden from public view as well who you are sending too but which can also take quite a while to send a private payment and which is currently not user-friendly in the slightest. Participation in other peoples Enigma transactions in return for a share of the fee is enabled by default with 50% of your balance. Since these transaction lock up your balance, you can change the amount, as well as toggle this feature on and off, from the options screen. In addition to the blockchain downloader and the re-branding from PoSA to Enigma, other new additions for this version include an automatic wallet backup system accessible from the file menu, faster block loading, improved PoS validation, refactoring of the CloakShield code to reduce traffic and increase reliability, improved input selection for Enigma and an Enigma message system, a new UI option to copy transaction IDs from the history page, and a switch to LevelDB database format. The Future for CloakCoin Two big developments are on the horizon for CloakCoin in the future: an Electrum version of the wallet which will open up the possibility for lite wallets and a mobile wallet, plus the potential elimination of fees for private transactions: If youre going to talk about the future the electrum wallet is really big news as it opens up lots of new possibilities, such as lite wallets and open bazaar type extras We should mention were working on a new PoS algorithm that will make Enigma free to use, while still rewarding nodes that help to cloak transactions for users. There is a high degree of sensitivity to cost among many consumers when looking at financial products. This can be seen in many of todays most popular anonymous coins, which have a low uptake of more costly private transactions even though their userbase professes to place a significant priority on privacy. So although the new wallets may be exciting the developers, it is the possibility of free anonymous transactions which still reward participating cloakers through the PoS system that really excites me. Related

MCAP LabsBlockedUnblockFollowFollowingThe MCAP labs mission is to promote and support research; development and education to bring decentralized financial tools to the world that empower investors.Sep 1, 2017ICO Evaluation of EnigmaCatalystCatalyst is a platform for Cryptocurrency traders, data curators, developers, and investors. Traders develop powerful quantitative strategies by using community-curated data sets, and investors put capital towards the best traders and strategies. In essence, Catalyst allows anyone to build their own crypto hedge fund.Little about the CompanyEstablished by a group of MIT graduates, Enigma Project Company is an American based start-up which is successful in secured data sharing market and now they have recently announced their Catalyst project. Stimulated by the speedy development and explosion of crypto-assets, the catalyst project can be well-defined as first investment podium, which allows investors to shape, test and implement micro crypto-funds. As a point of fact, with the assistance of catalyst, developers will not only be able to access Enigmas decentralized data marketplace but can also take the assistance of the same in making and implementing new strategies. In fact, it wont be wrong to mention that Catalyst is the first application to be positioned on the top of the enigma protocol.Project IntroductionWhile most might believe the opposite, algorithmic trading and machine learning are definitely proving to be trouble making leaning in investment management. To state facts straight, traditional asset management industry was all about staying secretive and opaque, however, things are changing now. In fact, it would be reasonable to state that traditional asset management means are no more ruling the world, rather have been challenged by more free access to financial data, which has prospered in allowing the expansion of crowd-sourced venture methods.As a matter of fact, to add more in the list, even the blockades are speedily being pulled to pieces which were there while entering the algorithmic trading and new investments opportunities are offered to growing open source community of developers, quants, traders and investors.Following this ever rising demand for crypto currencies, Enigma Catalyst team believes that there is raise in interesting opportunities as well. And to make sure those opportunities are seized in the best manner, Catalyst serves with a chance to connect with crypto currency exchanges into an amalgamated, decentralized system, which has been designed to be a purposeful and straightforward way to accomplish and control funds.In words of team The main goal of our platform is to serve as a one-stop shop for developers (or quantitative traders) who are interested in developing trading strategies that operate in the expanding domain of crypto- markets.Unlike most automated trading system, Catalyst doesnt just stop here, as the founders of the same have decided to serve with the investment funds services as well. Moreover, while this project can be compared with the previous projects like Malenport, Catalyst promises to serve with the better processing time and transaction quality. All in all, it wont be wrong to state that, with new trade strategies Catalyst is enjoying a competition unrestricted field to work on.Market and Industry ReviewWe all know algorithmic trading has been used for a long time, then be it for mature financial market or amateur crypto- assets market. And just like its not that easy to select strategies, developing algorithms for the same is challenging as well. However, time and again industry has always tried to serve with recommended solutions, which assist software developer even with the basic knowledge with the creation the algorithms. Well, Catalyst is here to serve with such solutions itself. As a matter of fact, this project is primarily based on Quantopian, which means the same might work as a bridge in between crypto trader and Quantopian approaches.Technical characteristics of the platformthis project is a decentralized exchange protocol supporting cross-chain atomic swaps.TEAMGUY ZYSKINDCreator of the Enigma and a Blockchain/Multi-party Computation researcher. Previously, Guy spent 10+ years in the software industry, including a CTO role at Endor, an MIT spin-off. Guy holds a MAS from the MIT Media Lab.CONNER FROMKNECHTCryptography and distributed systems expert, Conner was a researcher at the MIT CSAIL for 3 years and spent time at Box and eBay. He obtained both of his M.Eng and B.S. from the MIT EECS.CAN KISAGUNFormer consultant turned entrepreneur in the blockchain space. Can spend 3 years working at McKinsey & Company, focusing on banking and finance and holds an MBA from the MIT Sloan School of Business.TOR BAIRHead of Growth and Marketing MIT Sloan MBA | Former options trader and data @ Snapchat, TOR manages growth and marketing of the project.VICTOR GRAU SERRATSenior Software EngineerMIT D-Lab | 15+ years of software developmentBreakdown Of What The Funds Will Go Towards And How They Are Budgeted:Funds raised through the token sale will be collected in the smart contract and will be used as follows:60% for product and technology development15% for blockchain research10% for operations10% for marketing purposes5% for legal and administrative costsIs The Idea Worth Investing?Enigma vision is to create a decentralized data marketplace and to revolutionize the way data is shared, aggregated and monetized. In the 21st century, data is the most valuable currency. At present, however, it is monopolized in the hands of few. Facebook and Google have built $1T in market capitalization on collecting and monetizing user data, Then there are companies like Bloomberg and Reuters, both with +$10bn revenue, that have been built primarily on financial data aggregation. Catalyst team is building the infrastructure of a decentralized, secure, open data marketplace and introducing Catalyst as the first application built on top of this infrastructure. The Catalyst platform enables anyone to start his / her crypto investment fund, using our data, back testing, and research tools. This will provide the initial demand for their data marketplace, and data curators will provide the supply by creating and licensing premium data sets for community use.TokensBased on Ethereum and distributed by smart contract, tokens are used to access data sources in the marketplace. Tokens flow from data consumers to data providers. Data consumers are quant traders, who wish to access data sources to create an edge either in Catalyst competitions or in real trading against the competition. Their earning potential is directly correlated to how many tokens they consume. This creates the incentive structure to consume ECAT tokensFunction and utility of tokenPrimary: ECAT is used to access data sources on the de-centralized Enigma Catalyst Data Marketplace. Payment is on subscription level.Secondary: ECAT tokens are used for incentives to grow and ensure the stability of the network.ECAT tokens are used to create demand in the data marketplace: Reward tokens are provided to quants with winning strategies. This incentivizes more quants to come on the platform and consume data to refine their strategies and gain an edge.Securitywhile Catalyst team is relying on smart contract and independent audits for security, when asked for apparent, perceived or real regulatory risk we were told that Our token is a utility token based on our legal counsel (CooleyPatrick Murck, Marco Santoni)s opinion. Cooley is one of the most reputable firms in the space. We intend to comply with all regulatory guidance.External and internal auditsas per our conversation with the team members, they are planning to get 1 or 2 independent audits on their smart contracts.Community buildingwith regular blogs and direct communication with investors and information seekers through slack and telegram, we are quite sure that the team has quite successfully built a community around their project. In words of team We currently have a strong community and user base for our productour Slack is active and growing (currently at 900+ users) and we have a live alpha available at www.enigma.co/catalyst with more than 1,500 sign ups and downloads.Our take on projectUndoubtedly, Catalyst can be mentioned as a project which has been introduced at the right time. The same does provide a solution for the current obligation and principles of the blockchain industry which make this project in demand. Also while experienced team members, high-tech solutions and project implementation can be stated as plus points of the same, absence of financial plan does provide something to be considered in the section of negative as well.For more queries contact:MCAP Labs editorial team- info@mcaplabs.comBlockchainInvestingICOTechnologyCryptocurrencyOne clap, two clap, three clap, forty?By clapping more or less, you can signal to us which stories really stand out.59BlockedUnblockFollowFollowingMCAP LabsThe MCAP labs mission is to promote and support research; development and education to bring decentralized financial tools to the world that empower investors.FollowMCAP LabsThe MCAP labs mission is to promote and support research; development and education to bring decentralized financial tools to the world that empower investors to earn huge returns in the long run by investing in one single coin rather than investing in multiple cryptocurrencies.

Ethereum and ICOs – the hackers keep getting rich. On Sunday, hackers stole nearly $500,000 in Ethereum from Enigma, a cryptocurrency investment platform provider that was preparing to raise money through an initial coin offering. The hackers took control of Enigma’s website, social accounts and its community email list. While Enigma itself hasn’t lost any money, hackers posted Slack messages and sent emails to the community making people send money to their wallet. Enigma had apparently shared with its followers that it would not be collecting any money before the ICO next month, set for September 11. However, many fell for the trick as hackers managed to get 1,492 in ether, worth around $500,000. RelatedMillions of Dollars in Ether Remain at Security Risk – 34,200 Vulnerable Smart Contracts Discovered Hacked probably using dumped credentials Some on Reddit have reported that the hackers accessed the email of Enigma CEO Guy Zyskind whose details were apparently dumped in one of the previous data leaks. However, he hadn’t changed the password in the aftermath. “thats what happens when MIT kids think they are just TOO smart to do basic fucking website security measures” – Reddit user While the company hasn’t said if it was Zyskind’s email, it has admitted that “certain team passwords were compromised for the enigma.co landing page and Slack.” Enigma Project has now implemented new security measures and has also assured to have adopted two-factor authentication for all employee email accounts. Hmm, too late and a little embarrassing for the company to not have followed these basic security measures. The company also ensures that the website for the Enigma token sale was not accessed. “It resides on a separate, more secure server which was never compromised.” RelatedCryptocurrency Startup Claims Hackers Stole $31 Million in US Dollar Token (USDT) Enigma Project has now taken back the control of its websites and has deactivated Slack for the time being. In a statement on Twitter, it said: IMPT: read the following info from Enigma re: recent scam attempt. Join our Telegram to speak with team admins: https://t.co/SSGIsJ2ZWe pic.twitter.com/mM5mcaAzqG — Enigma Project (@EnigmaMPC) August 21, 2017 This isn’t the first time that hackers have targeted an Ethereum related ICO. In July alone, CoinDash lost over $7 million while Veritaseum over $8.4 million. In the same month, hackers managed to make over 32 million in US dollars exploiting a flaw in an Ethereum wallet client, Parity. CoinDash attack was similar to the latest attack on Enigma as scammers had hijacked the website replacing the wallet address with their own. While CoinDash had agreed to issue tokens to all those who had sent the money to the hackers, it’s unclear at the moment if/how Enigma plans to compensate the victims.

A cryptocurrency project gives away $500000 to smart hackers.  The attackers could not have found a better smuggling space than a start-up crowdfunding platform.  It seems the ICO (Initial Coin Offering) hackers had an edge over the unfortunate enterprise.  The scamming activity was noted over an Enigma Blockchain Project.  It had been a joint venture of experienced MIT graduates. The cyber theft was observed on August 21.  The fraudsters managed to get through the social media handles and the website of Enigma.  Services such as Slack chat and emails of Enigma were found to be compromised.  A weak password on part of the CEO helped them crash down these sites easily. Immediately on gaining access, the virtual thieves invited the subscribers and investors to move funds into the hacker’s accounts.  They achieved this by sending out spam mails.  They posted slack messages urging the Enigma supporters to join in the ICO pre-sales.  However, these phishing content, corrupt as they are, were perceived as official.  This was an easy bait for the solicited members to get defrauded. The perpetrators who orchestrated the attack grabbed money from over 9000 users.  They were able to nab around $600K in bitcoin using this hoax approach.  The investors were thereby duped out of 1492 Ethereum, which is one of the most valuable and famous cryptocurrency.  The hackers quite well tricked the victims to send ETH to a fake ETH address. The incident occurred a week after Enigma alerted its users against spammers, scammers and phishers during the token sale. When the scam was detected, Enigma officials took to Telegram and Twitter to advice its members against moving funds around the web.  They requested its solicitors to avoid jumping into the defrauding plan.  They have deactivated its Slash account. Further, they announced that all wallets are safe.  They also proclaimed that this scam cannot be classified as a database breach.  Enigma issued an open declaration regarding the fake publishing.  They have assured its customers of an official notice until which they would have to wait for the sale. Also, critical security measures are claimed to be taken by the Enigma team.  They have reset all passwords to a strong unique code with two-factor authentication.  The crowd sale is set to live stream by September 11. As a precautionary step, it would also be a good option to back out of such illegal crowdfunding platforms to save yourselves from more trouble.

Loud Sound From Fire Alarm System Shuts Down Nasdaq's Scandinavian Data CenterInternet Explorer Zero-Day Exploited in the Wild by APT GroupTwitter Bans Kaspersky From Advertising on the Platform Citing DHS BanThe Week in Ransomware - April 20th 2018 - Reveton Charges, GandCrab, and MoreAre WiFi Network Names Protected by the First Amendment?SunTrust Bank Says Former Employee Stole Details on 1.5 Million CustomersThe Week in Ransomware - April 20th 2018 - Reveton Charges, GandCrab, and MoreTwitter Bans Kaspersky From Advertising on the Platform Citing DHS BanSkype ClassicGPU-ZInsaneCrypt (desuCrypt) DecrypterGIBON Ransomware DecryptorAdwCleanerComboFixRKillJunkware Removal ToolRemove the Stabers.club Search RedirectRemove TheSearch Chrome ExtensionHow to Remove Hqfok.com Browser RedirectsRemove the Relieve Stress Paint TrojanRemove Security Tool and SecurityTool (Uninstall Guide)How to remove Antivirus 2009 (Uninstall Instructions)How to Remove WinFixer / Virtumonde / Msevents / Trojan.vundoHow to remove Google Redirects or the TDSS, TDL3, or Alureon rootkit using TDSSKillerLocky Ransomware Information, Help Guide, and FAQCryptoLocker Ransomware Information Guide and FAQCryptorBit and HowDecrypt Information Guide and FAQCryptoDefense and How_Decrypt Ransomware Information Guide and FAQHow to Use Cortana As Your Virtual Assistant in WindowsRestrict What Personal Data Is Shared on the Facebook API PlatformHow to Delete Your Facebook AccountHow to Deactivate a Facebook AccountHow to start Windows in Safe ModeHow to remove a Trojan, Virus, Worm, or other MalwareHow to show hidden files in Windows 7How to see hidden files in WindowseLearningIT Certification CoursesGear + GadgetsSecurityAn unidentified hacker (or hackers) has taken control of the Enigma Project website, Slack channel, and mailing list, and tricked users into sending funds to a wrong Ethereum account.The hack took place during the company's ICO. An ICO (Initial Coin Offering) is similar to a classic IPO (Initial Public Offering), but instead of stocks in a company, buyers get tokens in an online platform. Users can keep tokens until the issuing company decides to buy them back, or they can sell the tokens to other users for Ethereum.During the last few days, Enigma was holding an ICO pre-sale in preparation for the main token sale, set for September 11.The hacker took over the Enigma Project website yesterday and replaced the Ethereum pre-sale address where users had to send money to buy their ICO tokens.The attacker also gained access to the company's mailing list and sent out emails to some of Enigma's mailing list subscribers. A copy of this email is available below.In addition, the hacker also appears to have compromised the account of a Slack admin and used this access to send messages to users via the company's official Slack channel, urging users to visit the compromised site and buy tokens in the ongoing pre-sale event.A copy of the message is available below, and appears to belong to Guy Zyskind, the Enigma Project's CEO.The company tried to warn users about the hack via Twitter, Facebook, and a message on its site. Users also tried to warn each other on Twitter, Reddit, and personal blogs [1, 2, 3].Hours later, the company's IT staff managed to regain access over the hacker servers. In a statement on Twitter, the Enigma Project admitted the hack.IMPT: read the following info from Enigma re: recent scam attempt. Join our Telegram to speak with team admins: https://t.co/SSGIsJ2ZWe pic.twitter.com/mM5mcaAzqGA similar incident happened to CoinDash in mid-July. A hacker hijacked its website during its ICO and replaced the token sale Ethereum address. Hackers stole over $7 million from CoinDash ICO participants.For the Enigma Project hack, the attackers used the following Ethereum address, currently holding 1,487.9 Ethereum, which is just over $475,000 at today's exchange rate.In the end, CoinDash agreed to issue tokens to almost all the persons who sent money to the hacker's wallet. Enigma has not published any information about how it intends to handle the hack's aftermath.Ethereum Cryptocurrency Forum Suffers Data BreachHacker Returns $26 Million Worth of Ethereum Back to Hacked Company81% of Recent ICOs Were Scams, Research FindsGoogle Bans Cryptocurrency-Related AdsHackers, Not Users, Lose Money in Attempted Cryptocurrency Exchange HeistNot a member yet? Register NowLoud Sound From Fire Alarm System Shuts Down Nasdaq's Scandinavian Data CenterAre WiFi Network Names Protected by the First Amendment?To receive periodic updates and news from BleepingComputer, please use the form below. User Agreement - Privacy PolicyCopyright @ 2003 - 2018 Bleeping Computer LLC - All Rights ReservedNot a member yet? Register NowLearn more about what is not allowed to be posted.

A few weeks before its initial coin offering, the cryptocurrency investment platform Enigma Catalyst was hacked by an unknown group! The ICO hackers are back, and this time, the decentralized platform Enigma Catalyst is their latest victim. According to reports, the company website and some of its social accounts were compromised. The cyber criminals were said to get away with over $500,000 USD worth of Ethereum. @EnigmaMPC was hacked! Do not send any cryptocurrency! Do not trust anyone!Click To Tweet Enigma, a startup digital currency investment platform was started by a group of MIT graduates headed by its CEO, Guy Zyskind. It was reported that Enigma Catalyst itself didn’t lose any money and that the stolen funds were taken from the people who joined the company’s mailing list and Slack group. Pending its ICO in September, Enigma Catalyst was able to gather a pool of over 9,000 users in its Slack group. According to the announcement posted on the official website of the company, an ‘unknown entity’ was able to infiltrate their website, slack group, and email newsletter accounts. The hackers also uploaded a fake pre-sale page with a fake Ethereum address (0x29D7d1dd5B6f9C864d9db560D72a247c178aE86B) to send money. Upon checking with Etherscan.io, the fake address now has only $20.39 USD in Ethereum, with over $600,000 USD already moved to other accounts. The perpetrators were able to spam their fake address in Enigma’s newsletter and slack accounts to advertise the pre-sale of coins, thus tricking community members to send virtual currencies to the hacker’s address. Enigma Catalyst’s Fake Pre-Sale | thehackernews.com The spam email seriously looks legitimate as shown in the screenshot below obtained from an Enigma Catalyst’s Slack group member. Enigma Catalyst’s Spam E-mail | cryptoiskey | steemit.com In a tweet sent by Enigma Catalyst through the company’s official Twitter account, they shared some information regarding the hacking incident. “At this time, the Enigma team has retaken control of all compromised accounts, including the website. Some pages will remain deactivated for the time being while the team works. Please continue to be vigilant and check our communications across ALL channels. Do not send any money or personal information to anyone,” a part of the announcement read. IMPT: read the following info from Enigma re: recent scam attempt. Join our Telegram to speak with team admins: https://t.co/SSGIsJ2ZWe pic.twitter.com/mM5mcaAzqG — Enigma Project (@EnigmaMPC) August 21, 2017 In a deleted blog post published in Medium a few days ago, the Enigma Catalysts team tried to educate their users on how to avoid phishers, scammers, spammers, and stay safe during a token sale. A portion of the post read: “As we work hard to build the future of data and crypto trading and investing, we want to take a few moments to talk about safety. Due to our strong growth, our community has become a target. The worst elements of the crypto scene—scammers and phishers—are attracted to good projects and good communities.” A spokesperson for the team confirmed that the dedicated website for the Enigma token sale was not affected by the heist since it resides on a separate and more secure server. The hacking of Enigma Catalyst is said to be the fifth incident within two months and the third among a series of ICO sabotages, after Veritaseum and CoinDash in July. Right now, it is still unclear how the hackers were able to infiltrate Enigma’s network. As of writing, there are still people sending Ethereum to the fake address, so we are encouraging everyone to share this story with family and friends. Are cryptocurrency investment platforms too lax with their cyber security or hackers are just too smart nowadays? What do you think? Let us know in the comment section below! SOURCETHEHACKERNEWS TAGSCoinDashcyber criminalsEnigma CatalystethereumGuy ZyskindICOInitial Coin OfferingVeritaseumvirtual currencies Previous articleMercedes Goes Long and Electric With its Maybach Vision 6 CabrioletNext articleVolkswagen I.D. Buzz is the Microbus of the Future! Rechelle Ann Fuertes