Lisk is one of the newer cryptocurrencies on the market. It made its appearance in May 2016 as a fork of Crypti. Since appearing, Lisk has grown to become the 8th largest Altcoin by capitalization. It’s ICO raised an astounding $5.8 million and for a time the digital coin was a serious challenger to Bitcoin on numerous cryptocurrency exchanges. While the interest in this digital asset has cooled somewhat, Lisk remains a major player with investors who regularly trade.
The History of Lisk
Lisk is overseen and developed by the Lisk Foundation. Between February and March of 2016 the developers accepted contributions through crowdfunding. More than 14,000 Bitcoin (BTC) was raised to support the ICO and on May 24, 2016 the Lisk Network went live. 100,000,000 LSK tokens were distributed to participants in the ICO.
Max Kordek and Oliver Beddows originally envisioned the Lisk cryptocurrency as an application platform that would simplify and accelerate the blockchain. They managed this with Lisk through the implementation of sidechains. It takes approximately ten seconds for a transaction to be processed through the Lisk blockchain. Sidechains also add flexibility to the platform and open up the door to many applications.
LSK tokens are the digital units of the Lisk platform. These tokens are stored by each user in a Lisk Nano wallet. Those who wish to buy Lisk can do so on a number of cryptocurrency exchanges by using other digital assets. There is no way to purchase LSK directly with traditional currencies at the present time, but the developers have stated that this is an ultimate goal.
Lisk, like Bitcoin and other cryptocurrencies, is decentralized. It is also trustless. This simply means that no one individual controls the Lisk network. The Lisk Foundation democratically elects 101 delegates who have the job of overseeing and maintaining the network. These delegates are tasked with confirming transactions and maintaining the blockchain. Lisk is an open source network, meaning that anyone can obtain access to the source code. This helps to build trust because developers from all over the world can inspect the platform and provide verification of how it works.
Another unique aspect of Lisk is that it uses what is known as a brain wallet. A brain wallet functions on the use of a single passphrase. This passphrase is what allows users to access their wallet. It is important that users create a passphrase that is long and complex. A drawback to this system is that anyone who types in the same passphrase could gain access to a user’s account.
The Lisk Foundation is based in Switzerland. This positioning confers multiple benefits to the foundation. Chief among these are added security for the developers and founders as well as a government that is amenable to cryptocurrency development.
Lisk cannot be mined by the general public. All mining of the coin is restricted to the 101 delegates who are elected by the Lisk Foundation and holders of the LSK coin. These delegates may at their discretion set up mining pools in which other people can participate and share the rewards.
What some individuals have chosen to do is mine Ethereum and then exchange it for LSK on a number of cryptocurrency exchanges. This can be a profitable endeavor but the number of coins received will depend upon current values and exchange rates. Taking this approach carries a certain amount of risk due to the volatility of the cryptocurrency market.
Those who wish to mine digital assets would perhaps be better served by exploring a mining pool like the one offered by Genesis Mining. This company maintains high tech mining farms in secure locations all over the world. They bear all of the expense that comes from operating and maintaining mining equipment. All participants must do is purchase a contract which grants them a certain amount of hash power. They can then reap the rewards of mining at a much lower cost.
Today, mining for the individual hobbyist is not practical in many cases. It uses a vast amount of resources, requires specialized computer equipment, and can be very expensive.
Lisk Use and Acceptance
At the present time there are few traditional merchants who are accepting Lisk as a form of payment for goods and services. It was falsely reported in 2016 that Apple would be adding Lisk to its list of accepted cryptocurrencies. This may happen at some point in the near future but is not a reality at the time of this writing.
New cryptocurrencies take a while to be embraced by the general public and by retailers. While this is happening it is still possible to use Lisk in a profitable way. The answer for many is to invest in the coin and adopt a buy and hold strategy. Those who used a similar strategy with Bitcoin have seen their initial investments skyrocket over time.
There is also some optimism that the sidechain technology which is a part of the Lisk platform will encourage business entities to develop their own applications with Lisk as a foundation.