From $0 to $2,900 – and seemingly everywhere in between.

Bitcoin gold, a new fork of the bitcoin software, may not have been officially launched (or distributed to users), but that isn’t stopping the cryptocurrency markets from seeking to determine its potential value (or profiting from its eventual existence).

In an interesting twist on a typical distribution, a number of exchanges are now listing a token that represents a claim on the future delivery of bitcoin gold (in advance of it becoming available to all bitcoin users). Ahead of that event, however, traders are seeking to value the asset, which proposes an alternative to the difficulty of competing for rewards on bitcoin’s mining network.

Still, it’s safe to say there’s disagreement so far.

In interview, analysts expressed a reservation about bitcoin gold, both when speaking about its developer team, and when characterizing the protocol’s potential market opportunity.

Safiri Felix, a researcher at financial publisher Empiricus, for example, believes that while bitcoin gold is likely to encourage others to clone bitcoin’s blockchain, and thus capitalize on the potential to appeal to its expansive user base, he sees this trajectory as limited.

Felix told CoinDesk:

“I think that forks and airdrops as a trend to launch new tokens [will continue], aiming to get an instant user base. Best case scenario, bitcoin gold is a potential contender for litecoin.”

Indeed, most industry observers surveyed don’t expect the project to compete with bitcoin or bitcoin cash, predicting its market capitalization would likely be similar to less valuable networks.

This belief seems reflected on exchanges, where BTG tokens traded for a high of $2,900 on Bitfinex, before dropping 96.64 percent to $97 on Tuesday. By Wednesday, prices stabilized around $137 at press time, though order books are heavy with sell orders in available markets.

At current prices, the value of all bitcoin gold (once released) would be worth a mere 43 percent of BCH and 2 percent of BTC. As such, it seems unlikely to surpass the value of those currencies in the immediate future.

Likewise, exchange interest also seems subdued. Currently, only a handful of exchanges, Bitfinex, HitBTC, Yobit, Bleutrade, Bitstar and Coinnest, support BTG/BTC and BTG/USD trading pairs.

Developer concerns

Of course, the biggest question mark for those surveyed was whether the tokens will actually be delivered by those behind the project.

Already controversial is that the team behind bitcoin gold intends to set aside a certain amount of the cryptocurrency to fund its future development, as part of what’s called a “pre-mine.” Indeed, Safiri was quick to note that the bitcoin gold team has no existing track record in the industry.

“It’s natural to dismiss their ability to deliver quality code,” he said.

Long-time industry entrepreneur and director of business and community at cryptocurrency wallet provider Jaxx, Charlie Shrem, also cited the decision to set aside funds as a suspicious one, though not one that inherently denotes any wrongdoing.

“[It] seems like an attempt to replicate bitcoin cash and give the developers a nice premine,” he said.

Overall, his remarks pointed to the idea that the low price of bitcoin gold as compared to bitcoin and bitcoin cash may be reflective of the possibility the funds never actually arrive.

Long-term potential

As for what that means for those considering how to handle their holdings, it’s worth noting that such market shifts are common when it comes to the price determination of a new asset.

For instance, bitcoin cash (BCH) – which forked off bitcoin in August – traded for highs of nearly $1,000 before dropping to trade between $300 to $400 in its first month. Likewise, at points, zcash traded for millions of dollars per token (though that was due to issues with its distribution).

But, it’s still the question of the protocol’s ultimate value proposition that seems most pertinent.

Shrem went so far as to forecast that its possible bitcoin gold could inspire cryptocurrency hobbyists to begin securing the protocol with older mining equipment, and that this could possibly jumpstart value creation, potentially leading to utility.

He noted that while older GPUs could be used to mine ether – the cryptocurrency of the ethereum network – doing so would mean a reduced chance of rewards given its existing competition.

Of course, others were more outright dismissive. Tim Enneking, managing director at hedge fund Crypto Asset Management, believes bitcoin gold proves fork currencies will likely have diminishing returns from here on out.

Enneking concluded:

“It’s like an ICO, but with a head start.”

Disclosure: CoinDesk is a subsidiary of Digital Currency Group, which has an ownership stake in Zcash Company, the for-profit entity that develops the zcash protocol.

Golden dice via Shutterstock

The leader in blockchain news, CoinDesk is an independent media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. Interested in offering your expertise or insights to our reporting? Contact us at [email protected].

Disclaimer: This article should not be taken as, and is not intended to provide, investment advice. Please conduct your own thorough research before investing in any cryptocurrency.

They didn’t take questions from the audience, nor did they say much, but many people in the crowd were amazed that Kathleen and Arthur Breitman took the stage at all.

In their first public appearance since a flurry of news stories documenting the internal power struggles impacting their blockchain project, Tezos, the married couple and business partners projected confidence that despite the governance issues, their technology will endure.

“Development is moving forward,” Kathleen Breitman said during their 20-minute onstage interview at Money2020 in Las Vegas Tuesday afternoon.

Onstage, she insisted that there was no critical underlying issue with the project itself – notwithstanding the couple’s public feud with Johann Gevers, the president of the Swiss-based non-profit foundation created to foster the development and adoption of the Tezos protocol.

“This will blow over once the board meets in a few days,” she said, adding that the foundation’s board of trustees is conducting an internal investigation to decide whether Gevers will remain.

Still, she acknowledged the difficulties of the situation:

“I mean, it stinks. It stinks. We’re both really embarrassed about the situation. But we trust the process that we put in place, and I think it will be resolved in due course.”

Her husband Arthur had a succinct message for the backers of the project, who are still waiting to receive Tezos tokens after the company sold $232 million worth of the cryptocurrency in July, stating: “Bear with me.”

Hot spotlight

Stepping back, the Breitmans previously accused Gevers of self-dealing, while he, in turn, has accused them of assassinating his character and attempting an illegal coup.

The situation has turned the couple into poster children for the controversies surrounding the ICO market – a hot topic given the amount of money raised via the offerings and the broader legal questions about whether some token sales may constitute securities offerings.

On the sidelines of the conference, many attendees wondered if the Breitmans’ legal counsel had advised them not to go through with the scheduled appearance. Either way, onstage, the couple was a bit more diplomatic when talking about their adversary. But only a bit.

Gevers “is probably not a good fit for the project,” Arthur Breitman said. “I think he did some things which were bad, and honestly it would be better for the project at this point if he walked away.”

Despite the situation, much of the conversation was relatively light.

Although, the discussion turned more serious when moderator Meltem Demirors, director of development at Digital Currency Group, and herself a Tezos backer, asked why the project ended up raising more than 20 times the $10 million the couple had initially envisioned seeking in September 2016.

In response, the Breitmans cited the rising prices of ether, bitcoin and other tokens in 2017, as well as the enthusiastic response to their project.

Early in the session, the Breitmans said that one of the reasons they started the project was to solve the governance challenges faced by bitcoin.

Later, during the discussion of their own governance problems, Kathleen smiled and told the audience:

“We appreciate the irony of the situation.”

Disclosure: CoinDesk is a subsidiary of Digital Currency Group.

Photo by Marc Hochstein. Left to right: Meltem Demirors, Arthur Breitman, Kathleen Breitman.

The leader in blockchain news, CoinDesk is an independent media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. Interested in offering your expertise or insights to our reporting? Contact us at [email protected].

Disclaimer: This article should not be taken as, and is not intended to provide, investment advice. Please conduct your own thorough research before investing in any cryptocurrency.

A new cryptocurrency has been created through a hard fork of the bitcoin blockchain.

Completing a process that began in July, the bitcoin gold technical team has taken what it calls a “snapshot” of the bitcoin blockchain so it could be recreated and reconfigured with new rules, ultimately creating bitcoin gold at block 491,407 on the original blockchain.

As of now, the process is underway by which the new bitcoin cryptocurrency will be completed and released to existing bitcoin users.

As profiled in our explainer, the project aims to tackle the perceived problem that miners as a group have too much influence over the direction of the bitcoin network. To lessen their control, bitcoin gold replaces bitcoin’s current mining algorithm with one that cheaper graphics processing units (GPUs) are able to mine.

The idea stems from the competitive nature of bitcoin mining, which now relies solely on expensive application-specific integrated circuits (ASICs). In part because of this, mining has centralized into the hands of large mining companies, which bitcoin gold supporters feel works against bitcoin’s key value proposition: decentralization.

Still, while the hard fork has been initiated, that doesn’t mean users can yet claim their funds.

Until they can, bitcoin gold developers will operate the new blockchain in isolation, with the first round of block rewards being set aside for allocation to the development team.

According to group representatives, the new cryptocurrency network is aiming to be open to the public by November 1st.

Saw blade image via Shutterstock

The leader in blockchain news, CoinDesk is an independent media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. Have breaking news or a story tip to send to our journalists? Contact us at [email protected].

Bruce Fenton is the CEO of Chainstone Labs and Atlantic Financial. He has worked in the investment management industry for over 25 years and is a board member of the Bitcoin Foundation and Medici Ventures, and is the host of the Satoshi Roundtable event.

In this opinion piece, Fenton offers a set of criteria by which investors can analyze ICOs and cryptocurrencies, with a mnemonic device inspired by one of the industry’s favorite slogans.

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Before bitcoin came along, I was a financial advisor for many years. So I really don’t like to see people make foolish decisions that cost them a lot of money.

Clearly, digital assets are here to stay. The opportunity is exciting, but we should also be concerned about the rampant proliferation of low-quality offerings and scams.

To make things worse, digital assets don’t even have a common set of criteria by which we evaluate them. With public companies, we can compare earnings, balance sheets and other similarly calculated metrics. For digital assets, there might not even be a balance sheet; you might be making a donation to a non-profit or purchasing an API key.

There is a need for a uniform set of criteria that people can to evaluate the merit of various assets. To help investors sort the rare gems from the abundance of junk, I’ve made a simple tool called Spacesuit X for analyzing the investment merits of coins, tokens, ICOs and similar projects.

What is it?

Spacesuit X is a rating scale of 0–100 which is based on an acronym for 10 categories that investors and analysts might consider regarding tokens, coins and ICO offerings. The tenth category is “X Factor” which allows analysts to assign their own criteria for evaluation.

The default value for each category is 10. Analysts score each category on a 0–10 scale, with 10 being the highest. For example, if an analyst felt bitcoin had very good security they might rate it a 9 or higher.

Each category is then added up and totaled. This gives projects a final score of 0–100, with higher scores being better. The default weighting for each category is 10, so 10 points each in 10 categories add up to a maximum score of 100. Analysts who wish to weight a category differently can do so. For example, if someone thinks security should make up 20 percent of a project’s rating, not just 10 percent, they can change the weighting to 20, and adjust the others downward so the total remains at 100 points.

Alternatively, analysts can keep the default weighting and apply their own additional screens or metrics. For example: “Use the default weighting of 10 for security, but I won’t consider any project which has a security score of less than 7 and an overall score of below 75.”

There is a great deal of flexibility for analysts to adjust the system for their own preferences. For example, the section called “community and management” only lists criteria that should be considered. This analysis protocol doesn’t make a judgement call on whether something is good or bad. That is up to the individual analyst. So, if an analyst strongly prefers open source versus a corporate model they can reflect that in their rating. One analyst might place a heavy importance on a fixed supply, another may rate a coin highly on accounting and legal, depending on the jurisdiction that they are in. This allows each analyst to rate each category according to their own preferences.

Without further ado, here are the categories of analysis:

Security

How secure is this? Security is the foundation of any crytpo or blockchain project. Factors to be considered are the security of the blockchain being used, centralization, control and an analysis of attack vectors on the chain, coin, project and any related smart contracts.

Participation

What are you participating in with this token or coin? What portion of earnings or equity of a project does my token represent (if any)? Have you purchased a security? An app API key? A share of future of revenue? Have you simply donated to a non-profit tech foundation? What portion has been diluted and how? How fair and transparent was the issuance process?

Accounting and legal

How are holdings calculated? On a public, open blockchain or by a central party? What, if any, is the corporate structure of this project? Is it open source? Are there significant legal risks for any key contributors, managers or entities involved in this project? Is this project legal in the jurisdictions important to you? What user rights (if any) are a natural part of the code?

Community, management and team

Who is working on this project? Is there a community? For FOSS (free and open-source software), who contributes how when and why? Is it open or controlled? For corporate, non-open-source projects, who is the team and what is their track record? Who are the executives behind this? What have they done before? Have they ever managed similar amounts of money and numbers of employees successfully?

Earnings

What is the economic size of transactions in this asset? What are the earnings and projected earnings of this project and/or this part of the industry (if any)? Projected growth rates? Is this being used or bought for something other than speculation? Who is buying? What do they pay? What will those amounts be in the future? Most importantly, how does my token tie to these earnings (if at all)?

Supply and demand

Is supply fixed or limited? How many coins or tokens will be issued? How? Who can change this? Who controls large amounts of coins? What is the real market strength and market cap value? Is there enough market depth to actually support significant sales at a similar price or is it too thinly traded?

Usability

What will the project, coin or token be used for? If not usable directly, what is the share of equity it gives you? Is the project a useful application? Does the token represent something else of value? What? How? What does this token, coin or project do? What is the problem solved by this? Do people or will people use it? Why?

Industry/institutional backing

Are corporations or venture capitalists participating? Do exchanges list this token or coin? Do companies build businesses around this? Does the project have any major industry or non-industry partners? What is the overall market direction? How about for this type of project? What’s the state of the industry? Who is the competition? What is this project’s leadership in the space for this use case?

Technical

What are the technical details? If this is using a blockchain, does it need one? How much has this been tested? Are the speed and efficiency drawbacks of a blockchain worth it for this project? Why? Is this blockchain open or permissioned? How resistant to censorship is this blockchain? What anonymity features does the tech offer?

X factor

What other factors would you like to include in your analysis? What is the overall thesis? Why will the markets place value on it? What other risks are there?

The X factor slot is your chance to add any criteria that I’ve missed.

Then you tally it all up.

Overall score

Security:  Score 0–10 ___

Participation:  Score 0–10 ___

Accounting and legal:  Score 0–10 ___

Community, management and team: Score 0–10 ___

Earnings:  Score 0–10 ___

Supply and demand:  Score 0–10 ___

Usability:  Score 0–10 ___

Industry/institutional:  Score 0–10 ___

Technical:  Score 0–10 ___

X factor: Score 0–10 ___

Total: Score (0–100) ____

Hopefully other analysts will use the Spacesuit X method to rate tokens and explain their own decisions. This tool is published under the Creative Commons license and is free and open source. I’ve tried to make it flexible enough for anyone to use and publish an analysis. You are welcome to use and adapt as you see fit.

Just remember: If you’re doing something as brave, ­and risky, as flying to the moon, bring your spacesuit.

Astronaut image via Shutterstock

The leader in blockchain news, CoinDesk strives to offer an open platform for dialogue and discussion on all things blockchain by encouraging contributed articles. As such, the opinions expressed in this article are the author’s own and do not necessarily reflect the view of CoinDesk.

For more details on how you can submit an opinion or analysis article, view our Editorial Collaboration Guide or email [email protected].

Noelle Acheson is a 10-year veteran of company analysis, corporate finance and fund management, and a member of CoinDesk’s product team.

The following article originally appeared in CoinDesk Weekly, a custom-curated newsletter delivered every Sunday, exclusively to our subscribers.

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The gambling world is no stranger to disruption. Just as online platforms are pushing aside evocative, casino-based settings, they themselves are starting to face big change.

The threat – or the opportunity – comes from two trends, one cultural and one technological.

On the cultural side, we have the explosive growth of eSports, which now spans a range of online venues, genres and demographics. Analysts insist that the recent surge is a small foretaste of what is to come. There is even talk of them becoming a medal event at the Olympic Games.

From technology, we have blockchain. While gambling with cryptocurrencies has been around since the early days of bitcoin (and is expected to grow strongly as customers get more comfortable with the concept), an interesting twist appears to be emerging from platform tokens.

Combine these trends with national legislation and economic strategy, and you begin to see a fundamental shift that has the potential to transform a massive segment of the leisure economy.

And in the process, it could also give a big boost to the development of distributed ledgers and digital tokens.

Rolling the dice

As an example, this past week U.S.-based eSports betting platform Unikrn got an online gambling license from Malta. This enables it to offer real-money betting to most of Europe, and token-based betting to the rest.

What makes this noteworthy is the platform’s new crypto token. A couple of years ago, the company created a platform-only digital token to enable users to place bets on the outcomes of games such as League of Legends. The new version, however, will run on the ethereum blockchain.

This means that it can be traded between players, sold on an exchange and converted to fiat money in many jurisdictions. It also points to the emergence of a community of developers that in theory could extend its utility by creating additional apps and add-ons.

A more intriguing aspect, though, is the strategy of the Maltese government, and where this could lead.

To help offset the decline in manufacturing, the Maltese government over the past few years has focused on attracting technology businesses to the island, offering relatively lenient legislation, low tax rates and lots of sunshine. The efforts have largely centered on the gaming industry, given its potential to foster related sectors such as finance and film.

Malta was the first state in the EU to regulate online gaming platforms, back in 2001. Since then, the industry has grown to be one of the world’s largest, accounting for over 10 percent of its domestic GDP.

By incorporating the potential for eSports gambling and cryptocurrency tokens into the mix, the island is not only signaling a future-first approach to gaming legislation. It also appears to be setting the stage for a broader development of blockchain technology.

All in?

To see an example of this strategy in practice, we only need to hop over to the Isle of Man.

Like Malta, it was an early legislator of online betting (which grew to account for almost 20 percent of GDP). This, combined with fast internet and a zero percent corporate tax rate, encouraged an influx of technology businesses, which in turn helped to foster a strong cryptocurrency ecosystem. Official support for blockchain technology was not far behind.

In 2015, the Isle of Man was the first government in the world to trial a blockchain platform – fittingly, for registering digital currency companies. It was also one of the first to regulate bitcoin businesses. Last year, it became the first jurisdiction to officially recognize bitcoin gambling, and just last month it announced its intention to foster a friendly framework for token sales.

Malta appears to be following in the Isle of Man’s footsteps.

It recently announced its intention to legalize bitcoin gambling, and last month unveiled a blockchain advisory board to steward its national strategy around the adoption of the technology. It also is contemplating testing the impact of cryptocurrencies on the national economy, and last week revealed a trial for putting academic credentials on the blockchain.

However, the potential impact of Malta’s moves is much greater than that of its larger counterpart.

Malta is part of the EU, while the Isle of Man (a self-governing dependency under the British crown) is not. Any licensed business domiciled in Malta can offer its services in other EU countries, without needing a domicile in each one.

While this is interesting for eSports betting sites such as Unikrn, it could be especially compelling for other cryptocurrency startups. Malta has not yet made an official announcement on digital token sales, but it is likely to be only a matter of time.

And its support for blockchain experimentation – both in the private and public sector – points to the development of a forward-thinking ecosystem that in turn will breed further innovation and growth.

Who said that big change needs to come from big players?

Online gambling image via Shutterstock

The leader in blockchain news, CoinDesk strives to offer an open platform for dialogue and discussion on all things blockchain by encouraging contributed articles. As such, the opinions expressed in this article are the author’s own and do not necessarily reflect the view of CoinDesk.

For more details on how you can submit an opinion or analysis article, view our Editorial Collaboration Guide or email [email protected].