Blockchain has the possibility to be used in certificates, real estate, file sharing, as well as many other real world applications. For this to happen the original token standard had to evolve. The base standard (which Bitcoin was built on) allowed for the creation of completely identical, interchangeable but also divisible tokens. Obviously that would not work on something like a certificate which states you own your house. How many people do you know with the same birth certificate?

This new invention is known as non-fungible tokens. They work in the same way within the confines of blockchain but they allow for complete uniqueness, one of the most well known examples of the use of non-fungible tokens is within Ethereum. A user has the option to create both fungible and non-fungible tokens on Ethereum using both standards, I recommend you read through our “What is Ethereum” post too. Let’s discuss the differences and why we might use each.

Fungible

Fungible tokens are the base case for cryptocurrencies. Most well known cryptocurrencies use the ERC-20 standard which allows for the creation of identical, uniform, and divisible tokens. The best real world example is standard fiat currency. If i give you $10 you can give me back two $5 dollars and it can be broken up many times into various notes and coins, but that makes no difference to the holder. This fungibility is a necessary part of a currency as its important that no $1 is worth more than someone else $1.

Non-Fungible

Non-fungible tokens started with the Ethereum protocol EIP-721 in 2017 which in 2018 was accepted as ERC-721. If you’ve heard of CryptoKitties, you’re already aware of a great use-case. These were collectables, each one unique and tradable. Each cat’s digital genetic material was stored on the blockchain with some being rarer than the rest. Other games have followed on with some utilising tokens to store unique items such as weapons and gear.

Non-fungible tokens allow you to attribute rich meta data about an item and include information about ownership. Much like a football that was used at the World Cup, these digital details can be authenticated and add to its value.

This innovation from the original blockchain standard has paved the way for an all new breed of distributed applications, games, real world certificates, and user based information.

The post Fungible Vs Non-Fungible Explained appeared first on Token Gamer.

You may have read about Bitcoin a few years back as a way to buy legally questionable items off the dark web. Or in stories about a friend of a friend who bought some five years ago and now lives on their own private island with monkey butlers.

Don’t be fooled, though! Cryptocurrency is not just a get-rich-quick scheme. It’s an ingenious next-generation technology that offers multiple benefits over our current monetary systems. It allows users to securely hold and transfer digital currency without the need for banks, and, depending on the cryptocurrency in question, allows for faster transfers and less fees.

However, as with all new technology, we must learn how to use it, and it must adapt to challenges that widespread use entails.

One of these challenges is making it easy for people to buy and hold crypto. Since cryptocurrency strays from traditional methods of storing and using currency, it’s important to understand the underlying structures of crypto and what they mean for the user. So, without further ado, let’s begin!

What is Cryptocurrency?

Cryptocurrencies are digital coins or tokens that are used to hold and transfer value and, in some cases, can be used for higher level functions (we’ll get to that in a minute). For simplicity’s sake, I’ll use the three examples of Bitcoin, Ether and Enjincoin to illustrate different properties of cryptocurrencies.

Bitcoin

Bitcoin is the original cryptocurrency, and functions similarly to gold — there is a limited max supply, so once all Bitcoins are in circulation, no more can be created (just as there is a limited supply of gold on earth). With traditional fiat currencies, more is always being minted, which over time leads to inflation (the devaluation of each unit of currency).

There is a total supply of 21 million bitcoins, and through the process of mining, participants in the system verify blockchain transactions in exchange for a block reward. It’s comparable to actual miners mining gold, releasing it from the earth and being rewarded for their hard work with said gold. With bitcoin, the act of mining (which involves solving computationally-intensive puzzles in a process called Proof-of-Work) incentivizes users to maintain the bitcoin ledger.

Ethereum

The Ethereum network uses the same PoW process as Bitcoin (for now, as the network is planning to migrate to a different consensus process called Proof-of-Stake). However, Ethereum differs from Bitcoin in that it is not simply a store of value — the Ethereum network allows for cryptocurrency-powered decentralized applications (dApps) and smart contracts.

Smart contracts contain code that automatically executes when certain conditions are met and records the results to the blockchain. For example, when purchasing a virtual item using Ether, the contract would state the agreed upon price and only release the item to the buyer and the Ether to the seller once that condition was met. This example has no need for an intermediary between the two parties (such as a payment provider/bank) because it is a trustless system.

For a more in-depth look at Ethereum and related blockchain technology, check out Martyn’s article on it here.

ERC-20 and Enjincoin

ERC-20 is a smart contract protocol that allows users to create and manage virtual tokens which can function as utility tokens, currencies, and more. Many blockchain based startups are based on Ethereum and use ERC-20 tokens. Enjincoin is an example — users can purchase ENJ tokens which have a value dependent on demand (total supply is 1 billion ENJ) and can be used to mint fungible and non-fungible ERC-1155 virtual items.

Addresses, Public Keys, Private Keys

One thing you might ask after reading the above is: if I don’t need a bank, how do I create an account to store my crypto?

What you will need is a crypto wallet. Wallets are simply an interface between you and the blockchain which allow you to keep, receive, deposit, withdraw and trade cryptocurrencies and virtual assets. When you generate a wallet, it creates a set of two keys: your public key and private key.

Your public key is essentially your wallet address — similar to a bank account number. Your private key is like your password — it is used to authenticate transactions. If your public key and private key match, it allows you to access the funds stored on that address.

Software Wallets

There are many software applications that allow you to generate and control wallets, and are available to download for mobile and PC/Mac. Here are a few good ones:

Enjin Smart Wallet

The Enjin Smart Wallet is free to download and allows users to create, import and monitor an infinite amount of wallets. It also boasts a number of security features making it the most secure software wallet currently available. It also allows you to view your collectable virtual items, complete with pictures and metadata about the item.

When creating a wallet in the Enjin Wallet app, it creates a set of 12 seed words that can be used to restore your wallet in case your device is broken or inaccessible. This is a common security feature and is recommended that you keep these seed words in writing somewhere safe.

The Enjin Wallet allows you to store Bitcoin, Litecoin, Ether and any ERC-20 coin, as well as ERC-721 and ERC-1155 virtual item tokens. In the future the Enjin Wallet will be updated to support more popular cryptocurrencies.

Download the Enjin Wallet for your smartphone or tablet on Google Play or the App Store. In future, Enjin Wallet will also be available for PC.

Metamask

Metamask is a web-based wallet client that allows users to store, send and receive cryptocurrency and blockchain virtual items. It can then connect to dApps over your browser using the Metamask plugin, which is available for Chrome, Firefox, Opera, and Brave Browser.

Metamask’s connectivity to Ethereum-based dApps allows blockchain gamers to seamlessly interact with browser based blockchain games to purchase virtual currencies and items.

Hardware Wallets

If you intend on buying and storing large amounts of cryptocurrency, you may want to consider a hardware wallet. Hardware wallets are devices that store your private keys in encrypted form and interface with computers or other devices to access your keys securely. Because they are not internet connected like phones and computers they are much more resistant to being hacked.

While hardware wallets can be a bit pricey, many would argue it’s worth it for the increased security. Popular makers of hardware wallets include Ledger (Nano S, Blue) and Trezor (Model T, Trezor One).

That about wraps up the basics! Next up: we get into the nitty-gritty of blockchain and discuss hashing and consensus algorithms.

The post Blockchain for Beginners, Part Two: Cryptocurrency and Wallets appeared first on Token Gamer.

To find out what Ethereum is, we need to go way back in time. Just as generation “Y” appeared on the scene in the early 80s, before digital privacy fears were even a thing, a computer scientist by the name of David Chaum published a paper that detailed a new form of cryptography. The information inside would be invisible to the outside user, and payments could be fully automated. In short he detailed a business to create a secure online currency that anyone could use (sound familiar?) Unfortunately for him it was unsuccessful, it never caught on, and the company ultimately went bankrupt.

However, this spark set alight the fuse of cryptocurrency innovation, and although a slow burner indeed, in the late 90s the world saw other cryptocurrency ideas, including proof-of work (which we will come to later), and using a reference to the previous transaction to help create the next… a chain if you will.

Again another decade passed, and in 2008 bitcoin.org was registered and the Bitcoin White Paper was released. In 2009 the first ever block of Bitcoins were mined, the Bitcoin software was released, and the first ever transaction of 10 BTC was sent from one address to another. 2010 was a big year for Bitcoin, exchanges were formed, and the first mining pools checked in for work. Bitcoin was born and blockchain was now cemented into the world.

It’s important to note that blockchain and Bitcoin are not the same thing. Blockchain is the technology and Bitcoin is the token (currency) that holds value. Knowing the origins is important, I realise we should be getting to the Ethereum part, but as it’s the second cousin twice removed; we are best to explore the technology behind blockchain before slapping on any extras, so bear with me.

Blockchain Explained

Problem to Solve

If someone would like to move money from A —> B, e.g. Spain to a friend in China, this typically requires a 3rd party (a middle man). The reason for this is if A was to pay B they have no way of knowing if B really is who they say they are, prove that the transaction ever took place, and in the case of exchanging money, that both A and B honored their side of the transaction.

This third party (normally a bank), plays this part perfectly well and securely transfers the money from A to B for a fee. It’s important to note that in most cases the middle party is
accepting the risk of A & B completing the transaction and currency market risk.

Humanity has accepted this method of transfer as it provides security for both parties and a centralised audit trail (ledger) that the transactions completed successfully. It only works
because there is a heavy factor of “trust” between both parties and the middle entity.

As well as a fee, the process can take a reasonable amount of time due to having complete all of the security checks.

Blockchain Evolves the Process

Blockchain aims to remove the third party, so payments (or information) is transferred directly between A and B for a small fee, and to process the transaction almost immediately (I say almost…).

Let’s imagine that all transactions between A and B are recorded in a book (ledger). This ledger will record all movements of money between both A and B, and records the sums remaining on each of their accounts. This is useful, as not only does it act as an audit trail but also if A has no funds remaining and A tries to move money to B, the ledger
wont allow it and the transaction will fail. Now imagine in the ledger, that each transaction is chained to the next. This keeps all transactions in order, and everyone that can view this central ledger can see the full history of events.

Now let’s take this central ledger. Being fully online, it is downloadable by anyone to store a copy on their machine. So both A and B now have there own copies of the ledger. The ledger has now become distributed (a distributed ledger) and we do not require the centralised ledger at all any more. Boom, problem solved… well, almost. As there are now multiple copies of the ledger, we must make sure that all copies are maintained, updated, and match in every way at all times. So, how do we do this?

Let’s start with another transaction on our newly created blockchain network. B wishes to transfer currency to A. B will broadcast the intended transaction to the network. Everyone
on the network can see the transaction appear but the transaction remains in a pending state, it will not be placed into the distributed ledgers until it is confirmed. But how do
we confirm B’s transaction?

This is where “miners” are needed. Miners are special machines (nodes) which also hold the ledger; any person’s machine can become a mining node. Let’s say that A and B have another friend C who takes up the job of a miner. C has a copy of the ledger and is going to compete with other miners to pick up the unvalidated transaction (B’s transaction to A in this case), validate it, and then place it into their ledger. Whichever miner wins the competition will also receive the financial reward (Bitcoin, Ether, or some other token).

To validate a transaction between A and B should be easy. C checks if B has the required funds and that A is the correct recipient. The second part, however, is slightly more process
intensive. Before the transaction is validated the miner must find a key that will enable them to lock the new transaction to the previous one in the chain.

Without going into too much detail (around SHA-256 hash functions and the predictability of computational time taken to mine a crypto… another article, another time) we can comfortably assume that the miner is guessing this key over and over until he finds the correct one that fits. Needless to say this can take a while, and this difficulty changes with the amount of miners available.

Let’s continue: now miner C has validated B’s transaction to A, and added the transaction to C’s own ledger. Next C must broadcast this to the rest of the network. The  computational, process heavy aspect of finding a key is important, as when the other ledgers receive this notification they also receive the key C discovered. The key not only allows the nodes to add the transaction to the ledger but also acts as proof-of-work. This
system minimizes the chance that someone could forge or duplicate a transaction and now, all ledgers remain in sync. It’s important to note that miners typically will validate more than one transaction at a time and process them in blocks and add the entire block to the chain (a blockchain!).

In summary, the transaction was made between A and B quickly and cheaply. C received a small fee for the computational work and the distributed ledger and audit trail is available for everyone to see.

We have now created a blockchain technology, that can be used for all types of transactions. Hurray!

Ethereum

Ethereum first went live in 2015. It brought with it the idea that the blockchain could be used for things other than transferring value. But instead to create distributed applications (dApps) that would interact throughout the Ethereum network and that Ether (the Ethereum currency) would be the source of processing power. Whomever owned Ether would have the power to run their dApp on the network.

Above we discussed that transactions contain a certain amount of token (currency). Imagine now that as well as value, the transaction could store code too. These new types of transactions are called smart contracts, and allow the user to write code and distribute this code via transaction on the network.

These smart contracts can be used to execute automatically when certain criteria is met. The easiest analogy is a payment contract that releases payment equally amongst employees once work is complete. The address of the payees could be stored within the contract itself and payment would be fully automated. The smart contracts may also interact with each other, calling functions and transferring funds or information from one to another automatically.

I like to think of this as building an open source application with everyone building a library of APIs and packages, but the library is formed of contracts instead and they exist purely
on the Ethereum network.

Ethereum can also be used to create other tokens using the same protocol but a different blockchain, thus Ethereum’s value may fluctuate inline with other Ethereum based tokens, as they rely on the Ethereum network and thus Ether to operate. For now just know blockchain, Ethereum and a bunch of other coins are looking to disrupt many different markets, one of them being gaming. Teams are already working to be the first pioneers in dApps gaming, whether it be utility or gameplay based. Some of the industries ideas are amazing and if only a handful of these gems make it to market, there will be a greater
market shift towards game content sharing through a total ownership of the user’s game world.

The post What Is Ethereum And How Can It Change The Gaming Industry Forever? appeared first on Token Gamer.

I remember when my family first got a dial-up internet connection. I was probably about 8 years old. The strange bleeps, bloops and scratches of whirring, chaotic cacophony created by the computer had me completely baffled. Why did that happen? I couldn’t tell you, but over time, the connection dial tone became etched in my brain like a hieroglyph. Ask most people in my generation and they will recall the sound with fondness. It signified a whole new world of possibilities — and at the same time, a vast unknown.

I still don’t quite understand really how the internet works. All I know is that is has shaped my existence.

It’s easy to be intimidated by new tech. We’re living in an accelerated hyper-reality, where new technologies emerge and dissipate wildly, an endless barrage of information and ideas. It’s hard to know what’s worth your time.

If you’re reading this, it probably means you have heard about blockchain and cryptocurrency, but you are unsure about what it is. To understand the benefits, it’s important to first understand the basics of how blockchain works.

Blockchain is still a relatively new technology, and I am the first to admit that upon learning of it, I was confused — I still am in a lot of ways. However, I know enough to see that blockchain, like the internet, has the potential to change the world as we know it. Even if you don’t understand it at first, I hope this article helps you envision the kind of possibilities blockchain brings.

What is Blockchain?

“Blockchain” is a term used to describe a chain of cryptographically-linked “blocks” containing a ledger of transactions or other information that is stored on a decentralized internet network. Essentially, a block is created as a group of transactions (in the case of Bitcoin, a full block is 1MB of transaction data), which is verified by a majority of users on the network and then “published” to the blockchain.

Blockchain technology has several benefits when being used to record transaction data:

Decentralized

Blockchain networks rely on individuals or groups of users to verify transactions and achieve “consensus” on the order in which they occur (preventing double spending and other duplication errors). This is a decentralized, democratic process which rewards users (“miners”) for creating blocks using what’s called a consensus algorithm (more on these later). Essentially, the longest chain wins and is considered the true order of transactions, so if most of the users are honest and not working together to manipulate the system, the network remains decentralized, and is safe.

For blockchain networks with very small numbers of users, this can be problematic if a majority decides to team up to reverse or rewrite the order of events. But with networks like Bitcoin, with millions of users, this is a near-impossible feat.

Transparent

Most people these days keep at least some of their money in a bank. As a society, we have come to trust banks to handle our cash. However, events like the 2008 financial crisis have led to widespread disillusionment in financial institutions. Really, when our money’s in the bank, we don’t know what’s happening with it. We simply have to trust that they will keep it safe.

With blockchain, the ledger of transactions and balances is transparent. For Bitcoin and Ethereum (and soon, Enjincoin!), there exists blockchain explorers that allow you to view all the transactions that have ever occurred on that particular blockchain. Every Bitcoin and Ether token in existence can be accounted for, ensuring that your coins are safe.

Immutable

Once a block has passed consensus and is added to the blockchain, it is permanently linked to the one previous. This is achieved using a hash function to encrypt the data, creating a digital signature unique to that block, which encompasses the signature of the previous block. What this means is that if any data prior to an existing block changes, it will not match up with the accepted chain, and will be considered invalid. This protects the integrity of the chain and prevents fraudulent activity.

I’ll explain hashes and hash functions in more detail later, but essentially this means that the ledger, once recorded, cannot be changed. This immutability is yet another assurance of security that blockchain ledgers offer.

Not only are blockchain ledgers more secure, transparent, and decentralized than traditional methods, their unique properties allow for all sorts of possibilities in many industries.

Uses for Blockchain

Blockchain (and blockchain-inspired) technology can be employed in more areas than just currency and value transfer. The immutable record-keeping powers of blockchain are useful in all sorts of fields and industries. Here are just a few –

Voting

With growing distrust in traditional democratic processes (one need only refer to the 2016 US election vote tampering scandal), there is high demand for new ways to approach voting. Blockchain allows for transparent, tamper-proof voting and offers new systems of governance beyond the dated term representative system we have today.

Blockchain voting has the potential to make paper ballots obsolete. Not only does the immutable nature of blockchain make vote tampering virtually impossible, but it allows voters to easily cast their votes over the internet. In addition, some blockchain voting platforms are developing systems that will allow voters to vote on specific policy issues in real time rather than electing representatives, giving voters more agency in the political process and creating a truer democracy.

Supply Chain Management

Our commerce systems have grown exponentially in the last century. In many ways, they have become impossibly complex and opaque. Blockchain offers new ways of tracking commercial goods and supplies, which could have positive results for consumers and businesses alike (making it easier to track parts and ingredients, informing the customer so that they can make ethical purchases, improving inventory management, and more).

Virtual Item Ownership

Blockchain virtual items allow users to take virtual items out of games or other applications and store them in their crypto wallets, which users solely possess (unlike items that you buy in-game that cannot be removed or easily exchanged for currency). Blockchain virtual items give users an unprecedented level of control of their items, allowing them to freely and safely trade, buy, sell and even rent items. Virtual item ownership has long been riddled with fraud and centralization, however the use of blockchain technology has the potential to solve these issues.

A fair quantity of blockchain gaming platforms are built on the Ethereum network, and use token protocols ERC-20, ERC-721 and ERC-1155 to create virtual currencies and game items. However, there are several other platforms with their own blockchains.

While gaming seems the natural first stop for this technology, it has the potential to expand beyond into all realms of virtual items (virtual reality items, digital art, certificates of authenticity, and more).

That’s it for part one — hopefully this has helped you to grasp the basics of blockchain and its uses. In part two, I will discuss cryptocurrency and show you how to use a wallet!

The post Blockchain for Beginners, Part One: Introduction appeared first on Token Gamer.

What Is a Blockchain?

A blockchain is basically a ledger of transactions which is shared on a decentralized Internet network, and contains a record of all the transactions that have occurred on that network in chronological order. The official order of transactions on the network is verified by a majority of users on the network and encoded into blocks. Each block will be cryptographically linked to the previous, so that once a block is created, it becomes immutable (cannot be changed). In this way each transaction on the blockchain can be viewed and verified.

In our current monetary system, we rely on trust in centralized authorities such as banks, payment providers, and other institutions to verify and keep track of transactions and balances. But there’s no way to know if they are doing this job perfectly. With blockchain ledgers, records of transactions and balances are decentralized, trustless, and replace financial institutions with automatically executing computer code, ensuring that only legitimate transactions are completed. Blockchain ledgers make transactions simpler, faster and more secure.

What Is Enjincoin?

Enjincoin (ENJ) is a cryptocurrency token created on the Ethereum network using the ERC-20 token standard and is the basis of the Enjin economy. Enjin’s ecosystem allows you to “mint” and “melt” items backed by Enjincoin tokens, storing them on the blockchain.

For example:

You mint a set of 10 of a special item — a golden sword.
Each sword is backed by 10 ENJ — think of the ENJ backing value as the raw materials used to make those swords (1 pound of gold = 1ENJ).
The details of each item are stored on the blockchain as an ERC-1155 token, backed by Enjincoin ERC-20 tokens (I’ll go into more detail on the different token standards later). Now, this special sword can be looked up by anyone on EnjinX Blockchain Explorer — they can see how many of each item exists, when it was created, and other details. If you are the owner of the sword, you will be able to see it in your Enjin Smart Wallet as well as in your game inventory.
These swords are now unique, their provenance verified, and are backed by a cryptocurrency with real value. Depending on the demand of the market, this item may be worth many times its ENJ backing.

However, if your game flops, or if people no longer play it, they may decide to melt your gold swords. In doing so, they release the ENJ tokens from the item, of which 50% or more are then returned to their wallet (devs can set up the melt fee to return up to 50% of the ENJ backing to themselves). Even though an item may be worthless to other players, you can still retrieve some value for it in the form of ENJ tokens, which can be spent on any game with a marketplace built on the Enjin ecosystem.
Never before have gamers and developers had this level of control over their items. Enjin allows gamers true ownership of their in-game items, and allows developers to monetize their games while virtually eliminating fraudulent transactions.

Boldly Going Where No one Has Gone Before

Enjin’s innovative system has a staggering variety of use cases over all sorts of industries. First, let’s look at some possibilities that Enjincoin brings to gaming.

Verifiable Rarity of On-Chain Items

Backing game items with ENJ effectively records them on the Ethereum blockchain network, along with metadata relating to their creation. If a developer mints five limited edition shields, this mint run will be recorded together so anyone looking it up can see there is only five in existence. Even if the developer decides down the line that they want to mint more of the same item, players will be able to see which ones were in the original run based on the block they were created in. This preserves the history of the item and thus its rarity value.

With Enjin, it’s possible to discover all sorts of information relating to your items. If your item was once owned by a high-profile professional gamer, this information can be shown in the game. Custom signatures can be appended to items in much the same way as you would engrave a physical item. Enjin’s SDKs will make it simple for developers to display this info within their games. Enjin allows for truly unique and verifiably rare items, increasing their value to players and developers alike.

Trustless p2p Trading and In-Game Marketplaces

The use of Ethereum smart contracts for in-game transactions has opened many avenues for both gamers and developers to benefit from games. With the Unity SDK, developers can seamlessly implement ENJ-powered in-game marketplaces where users can buy, sell, trade, and rent items. And with the ability to charge transaction fees, it’s a simple way to monetize a game. In addition, backing items with ENJ makes it possible to restrict which marketplaces they are sold on, eliminating grey market transactions which devs don’t benefit from and are often fraudulent.

Automatically Executing Lending Contracts

Another innovation made possible by Enjincoin is the ability to loan your items to other players. If you have a rare item which you don’t use, you can offer it up for rent. ERC-1155 token standard smart contracts allow users to enter an agreement specifying the item to be lent, the loan period, and the loan rate. Once the loan period expires, the contract automatically returns the item to the lender along with the lending fee. This function allows owners of Enjin-backed items to extract maximum value from their in-game assets.

Token Bundling

The ERC-1155 token standard brings many innovations to the crypto space — one of the most useful being the ability to bundle together tokens. This feature allows for more efficient transactions that require less computation (as transactions are being processed in groups, rather than individually). In addition, the token bundling feature allows for in-game mechanics such as crafting unique items (eg. five steel ingots backed with 1ENJ each and a 5ENJ jewel being crafted into a unique socketed breastplate with 10ENJ backing). This has myriad implications for in-game economies — pretty soon we could be seeing players with crafting or enchanting expertise being sought after for their unique items, giving them the ability to sell their products for a premium and actually make a living crafting game items.

Gaming Multiverses

With Enjincoin, tokenized items are stored within the player’s Enjin Smart Wallet. Because these items are no longer locked within the games they are made for, tokens can be recognized in more than one game. This allows developers to create rich gaming multiverses, enabling inter-game quests (a player might need a special key from one game to unlock a secret area in another) or even cross-promotional items (a sword in one game which if transferred to another becomes a wand). No longer will your items be confined to one game — the Enjin ecosystem allows the true potential of item ownership to be realized.

The Possibilities Are Endless

This is just the tip of the iceberg. As more games are announced, we will start to see all sorts of innovative game mechanics utilizing Enjin’s unique capacities. Stay tuned for new game announcements, news, and information relating to Enjincoin and crypto gaming.

The post Enjin Is Changing the Game,  in Every Sense of the Word appeared first on Token Gamer.