Some cryptocurrencies aim to become valuable through rarity and limited supply. ARK aims to become valuable by being extraordinarily useful and widely available.
It’s a complete system rather than just a token. It has a lot of defining features, but the main one is probably its bridging chains. These let the ARK system connect with existing blockchains such as Ethereum and endless others that have yet to be created.
These bridging chains let ARK adapt to include new features over time, and bring the most useful elements of other blockchains into its own ecosystem.
It’s also characterised by a very speedy 8-second block time, making for noticeably more responsive transactions than other blockchains can offer.
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Where to buy ARK
You can also get ARK on Bittrex, Bit-Z, COSS, UPbit, LiteBit, CoinSwitch and Cryptomate
What are the unique features of ARK and how does it work?
There are a lot of unique features. The most important thing to remember is probably that ARK isn’t just a token. It’s an entire system, designed to be able to function as the last cryptocurrency the world needs, based on the following:
- ARK SmartBridge: ARK is built to integrate features from other blockchains, and work across multiple chains. The most immediate application is to bring in essential features like smart contracts, but further down the line it could become even more important. As blockchains proliferate and become a standard business solution, ARK might be an essential way of integrating multiple, application-specific business chains into a single manageable framework.
- Offchain solutions: ARK aims to release its own credit and debit cards, letting people use major-brand credit and debit cards backed by ARK. This is a significant step in creating a global currency.
ARK fees, inflation and earnings
A range of usage fees apply, which may be subject to change based on the value of the coin.
- Transaction fee: 0.1Ѧ
- Voting fee: 1Ѧ (51 votes per transaction)
- Multi Signature: 1Ѧ per signature + 1Ѧ per signing account
- Registering a delegate: 25Ѧ.
All fees are paid to the forging node which processes the block containing those fees.
For this to make sense it’s worth knowing how ARK “forging” and “delegates” work.
ARK forging and delegates
Forging on ARK is equivalent to mining on other blockchains. ARK uses a delegated proof of stake (DPoS) mining algorithm to reward stakeholders semi-randomly for their contributions to the network.
These contributors are known as forgers or delegates. There are up to 51 at a time, and they’re democratically elected by other stakeholders. Their job is to maintain and run the network. In return they get any of the set fees that they happen to process, as well as a flat 2Ѧ per block reward.
There’s no set ARK coin supply limit, or built-in deflation the way there is with other systems. Instead, having a set 8-second block time and a flat 2Ѧ mining reward results in reducing inflation year-on-year.
In the first year ARK inflation was 6.31%, while the second year was 5.93%. In year ten it’s set to be 4.02%.
At its current prices, the rewards of being an ARK delegate are considerable. The 51 delegates forge a total of 10,800 blocks per day, earning a total of 422Ѧ. At US$5 per Ѧ, each delegate is earning over US$2,000 per day by being a forger, even before counting any transaction and other fees they earn in the process.
Users can put an upvote next to their delegate of choice, at the cost of 1Ѧ. To change it they can pay a further 1Ѧ.
Whichever 51 proposals have the highest number of votes at a time are eligible to force ARK blocks and collect the rewards.
Price prediction: Should I buy ARK?
The potential features and functions of ARK clearly set it apart from the crowd. SmartBridge technology has near limitless potential, and if ARK comes close to achieving its goals it might increase in value considerably.
There’s no set coin supply limit, but inflation is capped at a decreasing, clear and measurable rate. It’s also attracted a lot of interest, and many investors seem to be betting on its future success.
ARK’s flexibility and exceptionally transaction-friendly, 8-second block timer might have it very well set up for success.
But the ARK SmartBridge system won’t necessarily age too well, and in the future it might not be unique enough to drive further growth. The bitcoin Lightning Network upgrades and atomic swap projects are set to bring similar cross-chain functionality in the future.
However, despite its ability to process a huge number of transactions quickly and cheaply, ARK still has a scaling problem in the form of an easily manipulated voting system. With a cap of 51 delegates it’s almost inevitable that one group will eventually monopolise the entire network.
And once that group of delegates gets majority control, it will be almost impossible to dislodge them. They can simply keep buying votes. Not only will they be earning the majority of newly minted coins, they’ll also be earning the majority of voting fees. Any en-masse attempts to vote them out will simply profit them even further.
Plus, as a global currency there are also language barriers to consider. If a rapid influx of users suddenly leads to most delegates and voters suddenly speaking one particular language, such as Chinese or any other language, it could serve to isolate those who don’t and further diminish their voting power.
It’s possible that this vulnerability is actually what drove ARK’s sharp price rise throughout the tail end of December 2017, and that those price rises are the result of a group laying the groundwork for eventual monopolisation of the forging network.
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have holdings in the cryptocurrencies discussed.