What is Gnosis?
If you’re looking for an exciting new altcoin with a strong pedigree, Gnosis could well be the cryptocurrency for you. However, the coin has another advantage over competitors on the market: a sense of fun. Gnosis is the brainchild of members of the Consensys company: an entity associated with the Ethereum sphere. With a board consisting of Joseph Lubin, Ceo of Consensys, and founder of Enterprise Ethereum alliance, Jeremy Millar, there are some seriously talented crypto-enthusiasts associated with this project.
What makes this coin special is its association with prediction market applications. Lubin, Millar and co. are striving to build platform that will permit companies and users to build betting applications on its proprietary technologies, thus helping to diversify the revenue streams of token holders. The coin also aims to be user-friendly, and lower the barrier to entry for newcomers, thus improving adoption and liquidity.
If you’re the kind of crypto-trader with a gambling streak (or even if you see the potential of gambling applications and want to get a foot in the door), this could be an enticing investment opportunity. And with such a dream team behind the scenes, you know this is going to be a quality product. But how is it doing? Is this a lock of the week or a trap to snare squares? Here’s our rundown…
How Does Gnosis Work?
The idea is that, just as cryptocurrencies function by decentralising currency and exchange, Gnosis will provide a decentralised platform for prediction markets, crowdsourcing knowledge obtained by users all over the world. The platform recently held its ICO and the small percentage of GNO tokens released vanished in a mere twelve minutes. This represents the equivalent of 250,000 Ether.
Gnosis ecosystem is actually based on two tokens: WIZ (wisdom) and GNO. The latter (distributed to investors in the ICO) can be placed into a smart contract (as with Bancor) for WIZ, which will eventually be the native currency of Gnosis. This means that GNO can be algorithmically exchanged for WIZ at a price calculated internally, rather than on the open market, which will give WIZ immediate liquidity.
This project has been in the works since 2015, and comes at a time when so-called prediction markets (also known as decision markets, event derivatives, idea markets and idea futures) are claimed by some quarters to represent the biggest innovations in the capital markets since the Information Revolution.
We have entered an age in which shock developments (in the sports, financial and political spheres) have become the new normal. This opens up the space for prediction markets. For instance, one could have created a prediction market out of Brexit, by dividing shares amongst the two options (in or out) with share prices equalling a dollar each. The share price of each option thus reflects the ‘probability’ of occurrence given the collective wisdom of investors.
You might be asking, what distinguishes this process from a normal bookmaker or betting exchange where propositions are wagered using fiat? Why base Gnosis on cryptocurrency at all? In the words of Gnosis’ founding whitepaper, for a prediction market platform to be disruptive, it must be universal, draw from a global liquidity pool ‒ which in turn requires a decentralised, permissionless and trustless model. This led Gnosis’ creators to base themselves on the Ethereum network.
What is the Value of Gnosis?
At the moment, only a very small percentage of GNO tokens have been released to the investors who supported that platform during its ICO. These have now been entered into a smart contract and will eventually be exchanged for WIZ (although bitcoin and Ether will both apparently be functional on the Gnosis platform). When the WIZ are all obtained, their value will shoot up ‒ at least initially.
GNO coins during the ICO were purchased at a value of 31.25 USD, and so far 4.17 per cent have been distributed, with the Gnosis team holding the rest. The actual value of GNO is 13 million USD, divided between 10 million tokens, giving each individual token a factual value of 1.3 USD. However, due to the low liquidity each GNO has a market price of $96.5 USD ‒ which is an impressive sum for a fresh token right after the ICO.
What Can I Bet on With Gnosis?
Unlike centralised bookmakers like William hill, the decentralised hive mind of Gnosis users allows for swift and competitive betting. There are no fees for Gnosis’ base layer, which covers general (e.g. political) predictions, market fluctuations and the performance of tokens (fiat, cryptocurrencies and instruments like gold). Fees for the Futarchy services (pertaining to the actions of states, large companies and NGOs) are paid using WIZ, while predictions on insurance, information sales and the financial markets can incur optional fees.
In short, whether it’s an NFL play-off, the German general elections ‒ or even price discovery for precious pieces of Renaissance art! ‒ you will be able to create a prediction market using the Gnosis platform and lay bets using WIZ. Cool applications like a gamified prediction market for celeb and media gossip (The Hunch Game) gives just a taste of the sort of products that will be made available on the Gnosis platform in future. Hey, at least something good should be able to come out of the Jolie-Pitt divorce…Cooler still, returns are higher based on how quickly you make your predictions, so keep your eyes glued to Buzzfeed!
How to Trade Gnosis Online - Step-by-Step Guide
If you obtained GNO at the ICO, you will eventually have 70 per cent of them converted to WIZ, while the remaining 30 per cent can be exchanged via a smart contract. However, Gnosis is also available on several popular exchanges ‒ including Poloniex. Follow the step-by-step guide below to learn how to trade Gnosis with this platform. Please note, at present it can only be exchanged for Ether.
- Get over to poloniex.com and set up an account, giving standard personal details such as your name, email address, a safe password, current location and verifiable ID for higher-value trades.
- Transfer some Ether from any wallet into your balance, or purchase directly from the exchange with another cryptocurrency like bitcoin.
- Hit the “Exchange” tab in the top menu to review the cryptocurrency markets. To check on the current going price for GNO against Ether, select GNO/Ether from the right side of the charts.
- If you are an experienced trader, you might wish to make use of Poloniex’s various features and functions. These include a tool for reviewing the performance of any given cryptocurrency over different lengths of time, alongside a number of data points and statistics taken from the markets, which can help you make informed trading decisions. If you like, you can review data such as market depth and GNO’s recent trade history as well.
- Underneath the chart, you will be given the option to buy or sell your Ether. Simply set your limits and you can immediately start trading, or set a minimum price at which to sell up.
Why Are Some Investors Angry about the ICO?
The Gnosis ICO was controversial, to say the least. Mechanisms of the initial sale rewarded investors for late purchases a Dutch auction), ultimately pushing total valuation of the token supply to 300m USD, despite the fact that only a small number of tokens were sold. The price of each token was determined by the length of time it took for $12.5m in Ether to reach the sale contract, which sought to keep the value of each token as high as possible as the cap was approached. At the end of the sale, investors got tokens at the lowest price.
The idea behind the small percentage of tokens released, according to a statement by Gnosis, was to endure that there are sufficient tokens remaining to incentivise further growth over the coming period while the Gnosis platform is still finding its feet. In effect, the trickle of tokens aims to tide over investors while developers get to work on applications using the platform.
The problem, for investors who purchased GNO at 31.25 USD each, is that the net return on their investment at the time of writing is -95 per cent. However, this is due to the rationale of keeping the number of GNO tokens in circulation low until a requisite momentum has built up. We can see what the developers were going for, and while we understand some peoples’ frustrations, we really do recommend a little patience until Gnosis and its native currency gather steam.
Future of Gnosis Trading
The value of GNO against bitcoin on Poloniex doubled after just a few hours of trading, assisted by the fact that other reputed exchanges like Kraken soon got in on the action. However, it seems that the high price means that the coin is struggling to find demand, and this problem will only increase as the value of the coin is pressed up. The value of GNO will be highly responsive to news on the remaining 96 per cent of tokens still being sat on by the Gnosis team.
Some advantages of Gnosis include the fact that it is already basically operational ‒ if a little thin-on-the-ground, applications-wise. However, it will diversify its revenue streams as it attracts further developments, which will be good news for people currently holding GNO. Plus, the fact that GNO tokens (and later WIZ) are used exclusively and actively within the Gnosis platform means it is unlikely to catch the attention of the Securities and Exchange commission.
There are also exciting developments promised by the Gnosis team, including a hackathon to support and encourage developers for the platform. Later, clever features including an AMA Dap will add new tools for developers, permitting anyone to take to twitter for a market estimate on the likelihood of financial developments (‘will bitcoin lift the 1 meg ceiling?’, for example).
The record-breaking support for the new token, coupled with these plans bode well for the prospects of Gnosis and its dedicated cryptocurrencies.
How to Buy Gnosis with Credit Card
At the moment, the only way to get hold of GNO is if you were an investor in the ICO, or with Ether.
We recommend that you create an account on an Ether compatible platform, such as Coinbase, where you can link your bank account and grab some Ether to trade for GNO on the exchange. However, you might also wish to purchase Ether using a credit or debit card (this is actually necessary for smaller transactions). Doing so will incur a small fee, but will eliminate tedious waiting times and comes with a high level of security.
If you wish to make a credit card your preferred payment method, simply select it as such and input your card details, then save these details to your account. Purchases operate in exactly the same way as a direct bank transfer: just choose how much Ether you would like to purchase and start trading!
How to Buy Gnosis with PayPal
Users from the United States also have the option of linking their PayPal accounts to their Coinbase accounts, simply by selecting PayPal as their preferred payment method and following the instructions. Users will be asked to manually verify their PayPal accounts using Coinbase, but will subsequently be able to withdraw directly into PayPal!
PayPayl is a highly popular payment method that allows users to instantly purchase cryptocurrency on Coinbase, and which provides very high security. For now, this useful feature is only available to users inside the USA. But don’t despair! Coinbase have pledged to roll the service out to other territories in future, after the service has completed its beta phase. This means that users all over the world will soon be able to purchase cyrptocurrencies safely and swiftly at this reputable platform!
Cryptocurrency Guide list
Enjoyed this Bitcoin guide? Then see our other cryptocurrency guides:
- How to buy and trade Bancor
- How to buy and trade Bitcoin
- How to buy and trade Bitcoin Cash
- How to buy and trade Dash
- How to buy and trade Dogecoin
- How to buy and trade EOS
- How to buy and trade Ethereum
- How to buy and trade Ethereum Classic
- How to buy and trade Factom
- How to buy and trade GameCredits
- How to buy and trade Gnosis
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- How to buy and trade IOTA
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- How to buy and trade Steem
- How to buy and trade Storjcoin X
- How to buy and trade Stratis
- How to buy and trade Tezos
- How to buy and trade Waves
- How to buy and trade Wings
- How to buy and trade Zcash