What is Ethos?
Ethos is a U.S.-based company and cryptocurrency. Their mission is to make it easy for anyone to own cryptocurrencies. In order for cryptocurrency to gain acceptance in society, it needs to be simple to use. Ethos proposes an easy-to-use universal wallet and fiat gateway that makes buying, trading, and managing your crypto assets simple.
Ethos was formerly known as Bitquence since its debut in 2017. They later changed the name to Ethos in November. Under the new name, interest in the project grew steadily after the ICO. Ethos’s popularity exploded in the first week of 2018, as evidenced by the price of ETHOS coin.
The Ethos platform and underlying technology are still under development. A public version of the platform has not yet been released. However, Ethos had a limited alpha in 2017, and it will enter beta and production in 2018. The ultimate goal of the platform is to be a complete multi-asset wealth management solution. As such, the founders have focused on user experience, people-centric features, and regulatory compliance. In this article, we’ll look at what Ethos has in store and why the project is generating such excitement.
Ethos Universal Wallet
The core of Ethos’s offering, and the reason they’ve gained so much attention, is their plans for a universal wallet. This new wallet would connect with and scan hundreds of blockchains to update user balances in major cryptocurrencies and various altcoins. Ethos hopes to become the only wallet you’ll ever need, doing away with the need to create a new wallet when you purchase a new cryptocurrency.
The Ethos Universal Wallet promises to store and transfer “value of any form” for free. Its architecture is designed to be open to individuals, institutions, and developers. With development access, adding a new coin type to your wallet could be as easy as updating your version of the software or downloading a custom modification.
A Single Smart Key
In addition to consolidating all your assets in one wallet, Ethos plans to need only one key to manage your funds. You’ll still maintain complete control over your wallet. Ethos won’t be able to make any changes to your coin balances. However, authorizing transactions just got a lot simpler. You’ll only need one private key for all your various coins.
The Smart Key solution uses commonalities between the various key algorithms in use today. This root of your various individual keys becomes your smart key. The chances of someone else having the same smart key as you are tiny. Ethos claims they could create 10 billion unique Smart Keys for every atom on planet Earth.
Ethos Premium Wallet addresses are for companies and individuals who want to identify themselves publicly on the blockchain. The advantage here is reassuring customers of safe identity when requesting payment. This official registration would also allow Ethos to function more like PayPal. Brands could give customers a simple email-like address for easier payments and fewer errors than using a typical wallet address.
Intuitive, Mobile-first Design
Since Ethos wants to be a people-focused, intuitive solution for everyone, user experience is key. From this early stage, Ethos has hired UX designers to build an intuitive user experience from the ground up. This emphasis on design is a key element of Ethos’s business plan. It also sets them apart from many cryptocurrency startups. Typical ICOs focus heavily on technical problems, but gaining mass adoption is an equally important challenge for the crypto space. The intuitive design will go a long way to helping that problem.
Ethos is also designed to be mobile-first. This fits well with what we know about consumer behavior. People are increasingly using their phones over computers. The Ethos dashboard will make it easy to manage and monitor coins on the go. You can also send the ETHOS coin to any phone number, email, or Ethos ID.
Transfer & Exchange with Ethos’s Liquidity Network
In addition to a well-designed wallet, Ethos plans to offer transfer and exchange services. This is an essential part of the puzzle of becoming a complete asset management solution. Ideally, you’ll be able to rebalance your cryptocurrency holdings all from the Ethos platform.
This means exchanging cryptocurrencies instantly. It also means the ability to trade any cryptocurrency pair, using the ETHOS coin as a liquidity network. You’ll be able to deposit and withdraw funds from external wallets, and Ethos will support conversion to fiat in the near future.
A fiat gateway is another important part of the Ethos business model. Since it aims to be friendly to new investors, it will need a way to convert traditional currencies to crypto. Initially, the first versions of the Ethos platform will not support fiat conversions. However, implementing a fiat gateway is a high priority for Ethos, as it is a core functionality for the success of the platform. Plans for the fiat gateway are laid out in the Ethos white paper.
Instant Diversification and Crypto “Mutual Funds”
In traditional investing, it’s critical that you diversify your holdings and balance your portfolio between asset types. This helps mitigate risks from one asset collapsing. The same goes for cryptocurrency. Most cryptocurrency investors intuitively understand that they need to invest in multiple projects because one could go bust at any time. However, it’s rare for investors to do so in a formal, well-monitored way.
Ethos hopes to solve this problem by automating it. They’ll offer an instant diversification service that allocates your holdings between many different currencies. You can set up your own asset allocation (in percentage of portfolio) and ask Ethos to rebalance your portfolio for you. Or, you can choose from pre-created baskets from the Ethos user community.
Investing in a basket along with other investors is similar to a mutual fund. Certain baskets that are pegged to the market could function as index funds for the cryptocommunity. Offering diversified assets like these will dampen the volatility of the cryptocurrency market and encourage more investment.
Making Crypto Investing Social
Along with the goal of being a people-centric wallet and asset manager, Ethos will also offer a social aspect to the platform. Users will be able to contribute to forums, answer questions, get rated for their advice, and rewarded for sharing insights with the community. This will allow users to follow their favorite experts to receive investing advice. They’ll also be able to poll the crowd about investment decisions.
As a contributor, you can earn rewards and trust points for helping others. Accumulate enough good ratings and reviews, and you’ll become an Ethos Expert with the ability to curate baskets and offer advising.
Built for Regulatory Compliance
Ethos billing themselves as an asset management platform means they understand most cryptocurrencies are tradable securities. According to most experts, it’s only a matter of time until the cryptocurrency market gets regulated.
Ethos is building their platform with compliance in mind. They’re U.S.-based, so they’re focusing on North American securities law. The fiat gateway will come with built-in KYC and AML measures. However, operating a basic wallet still won’t require identity verification.
You’ll also be able to easily export your account activity to make tax reporting easier.
“ETHOS is not a security, or Tokenized Security, because it does not meet the legal definition of a security applicable in the United States, Canada, Singapore, United Kingdom or any other OECD jurisdiction. In the United States, this is more commonly referred to the ‘Howey Test’”
The Ethos Token & Technical Foundation
The team has designed the Ethos Token (ETHOS) to be a functional token that fuels the Ethos platform. You’ll be able to access features and pay fees on Ethos with the coin. It will also help with liquidity, serving as a go-between for asset pairs that are traded with low frequency. Finally, developers will use ETHOS to pay for API calls when developing around the platform.
The token launched in July 2017. Before the name change, the original token was known as Bitquence (BQX). The sale distributed 30% of the tokens to the public. Another 30% went to Ethos for development. The remaining 40% is reserved to provide liquidity once the platform launches. You can buy ETHOS on Binance, Coinexchange, HitBTC, EtherDelta and Coinspot.
ETHOS token runs on Ethereum, as will many of the blockchain-based services Ethos will provide. However, Ethos is not a blockchain-only company. Much of its services will be provided as standard web interfaces hosted on servers. Doing so makes Ethos more scalable, manageable, and monetizable. Keep in mind that Ethos is a private company operating as a cryptocurrency exchange and wallet. They will not be decentralizing everything.
The payment processor, Stripe, has gained widespread usage and acclaim for its open source payment processing code. Ethos strives to do the same for the cryptocurrency market. They’ll provide liquidity, host wallets, and serve as an exchange through their Ethos Bedrock API.
Developers will also be able to call blockchain data and verify identity through the API. The goal is to create a robust financial system on the blockchain. Bedrock will integrate seamlessly with financial institutions. The Ethos team claims this will create a “new breed of FinTech” applications for banks and consumers.
19-year-old Brown University student, Shingo Lavine, leads Ethos as the CEO. He wrote the original white paper for a universal wallet and liquidity provider. Despite the CEO’s youth, Ethos has assembled a diverse, experienced team. Much of the team comes from the finance sector, including major banks, lenders, and M&A firms. They also have team members in charge of compliance and several designers working alongside code and cryptography experts to develop the platform.
The idea behind Ethos is interesting and exciting. If well executed, it could open up cryptocurrency to a whole new segment of retail investors. Keep in mind, however, that they have yet to publicly release a working product. Any judgment of Ethos’s viability should wait for the first stable release before making a long-term prediction about this startup.
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