Three People Who Were Supposedly Bitcoin Founder Satoshi

The Truth about Bitcoin?

Part 1/4 - NSA Connection:
First off, the SHA-256 algorithm, which stands for Secure Hash Algorithm 256, is a member of the SHA-2 cryptographic hash functions designed by the NSA and first published in 2001.
SHA-256, like other hash functions, takes any input and produces an output (often called a hash) of fixed length. The output of a hashing algorithm such as SHA-256 will always be the same length - regardless of the input size. Specifically, the output is, as the name suggests, 256 bits.
Moreover, all outputs appear completely random and offer no information about the input that created it.
The Bitcoin Network utilises the SHA-256 algorithm for mining and the creation of new addresses.
Who is Satoshi Nakamoto? What does Satoshi Nakamoto mean?
Out of respect for their anonymity, it would be rude to speculate in a video about who Satoshi Nakamoto is likely to be. The reality is, it's not important. Let me explain: Any human being can be attacked. Jesus could come back from the dead, and there would be haters. Therefore, the Satoshi Nakamoto approach neutralises the natural human herd behaviour, exacerbated by the media, to attack and discredit. This is a very important part of Bitcoin's success thus far. Also, from a security perspective, those who wish to dox Satoshi Nakamoto in a video are essentially putting his, or her, or their, life at risk...for the sake of views.
As a genius who has produced an innovation not just from a technical perspective but also a monetary perspective, they should be treated with more respect than that.
As for the name Satoshi Nakamoto, I would speculate that it is a homage to Tatsuaki Okamoto and Satoshi Obana - two cryptographers from Japan. There is another reason for the name, but that...is confidential.
In 1996, the NSA's Cryptology Division of their Office of Information Security Research and Technology published a paper titled: "How to make a mint: The cryptography of anonymous electronic cash", first publishing it in an MIT mailing list and later, in 1997, in the American University Law Review. One of the researchers they referenced was Tatsuaki Okamoto.

Part 2/4 - 'Crypto Market':
Most of the crypto market is a scam.
By the way, this was predicted very early on in the Bitcoin Talk forums - check out this interaction from November 8th, 2010:
"if bitcoin really takes off I can see lots of get-rich-quick imitators coming on the scene: gitcoin, nitcoin, witcoin, titcoin, shitcoin...
Of course the cheap imitators will disappear as quickly as those 1990s "internet currencies", but lots of people will get burned along the way."
To which Bitcoin OG Gavin Andresen replies:
"I agree - we're in the Wild West days of open-source currency. I expect people will get burned by scams, imitators, ponzi schemes and price bubbles."
"I don't think there's a whole lot that can be done about scammers, imitators and ponzi schemes besides warning people to be careful with their money (whether dollars, euros or bitcoins)."
Now, on the one hand, lack of regulation is more meritocratic (as you don't have to be an accredited investor just to get access).
On the other hand, it means that crypto is, as Gavin said, a Wild West environment, with many cowboys in the Desert. Be careful.
This is the same with most online courses - particularly 'How to get rich quick' courses - however with crypto you have an exponential increase in the supply of victims during the bull cycles so it is particularly prevalent during those times.
In addition to this, leverage trading exchanges, which are no different to casinos, prey on naive retail traders who:
A) Think they can outsmart professional traders with actual risk management skills; and
B) Think they can outsmart the exchanges themselves who have an informational advantage as well as an incentive to chase stop losses and liquidate positions.

Part 3/4 - CBDCs:
The Fed and Central Banks around the world have printed themselves into a corner.
Quantitative easing was the band-aid for the Great Financial Crisis in 2008, and more recent events have propelled the rate of money printing to absurd levels.
This means that all currencies are in a race to zero - and it becomes a game of who can print more fiat faster.
The powers that be know that this fiat frenzy is unsustainable, and that more and more people are becoming aware that it is a debt based system, based on nothing.
The monetary system devised by bankers, for bankers, in 1913 on Jekyll Island and supercharged in 1971 is fairly archaic and also does not allow for meritocratic value transfer - fiat printing itself increases inequality.
They, obviously, know this (as it is by design).
The issue (for them) is that more and more people are starting to become aware of this.
Moving to a modernised monetary system will allow those who have rigged the rules of the game for the last Century to get away scot-free.
It will also pave the way for a new wealthy, and more tech literate, elite to emerge - again predicted in the Bitcoin Talk forums.
Now...back to the powers that be.
Bitcoin provides a natural transition to Central Bank Digital Currencies (CBDCs) and what I would describe as Finance 2.0, but what are the benefits of CBDCs for the state?
More control, easier tax collection, more flexibility in monetary policy (i.e. negative interest rates) and generally a more efficient monetary system.
This leads us to the kicker: which is the war on cash. The cashless society was a fantasy just a few years ago, however now it doesn't seem so far fetched. No comment.

Part 4/4 - Bitcoin:
What about Bitcoin?
Well, Bitcoin has incredibly strong network effects; it is the most powerful computer network in the World.
But what about Bitcoin's reputation?
Bankers hate it.
Warren Buffett hates it.
Precisely, and the public hates bankers.
Sure, the investing public respects Buffett, but the general public perception of anyone worth $73 billion is not exactly at all time highs right now amid record wealth inequality.
In the grand scheme of things, the market cap of Bitcoin is currently around $179 billion.
For example, the market cap of Gold is around $9 trillion, which is 50x the Market Cap of Bitcoin.
Money has certain characteristics.
In my opinion, what makes Bitcoin unique is the fact that it has a finite total supply (21 million) and a predictable supply schedule via the halving events every 4 years, which cut in half the rate at which new Bitcoin is released into circulation.
Clearly, with these properties, it seems likely that Bitcoin could act as a meaningful hedge against inflation.
One of the key strengths of Bitcoin is the fact that the Network is decentralised...
Many people don't know that PayPal originally wanted to create a global currency similar to crypto.
Overall, a speculative thesis would be the following:
Satoshi Nakamoto is one of the most important entities of the 21st Century, and will accelerate the next transition of the human race.
Trusted third parties are security holes.
Bitcoin is the catalyst for Finance 2.0, whereby value transfer is conducted in a more meritocratic and decentralised fashion.
In 1964, Russian astrophysicist Nikolai Kardashev designed the Kardashev Scale.
At the time, he was looking for signs of extraterrestrial life within cosmic signals.
The Scale has three categories, which are based on the amount of usable energy a civilisation has at its disposal, and the degree of space colonisation.
Generally, a Type 1 Civilisation has achieved mastery of its home planet (10^16W);
A Type 2 Civilisation has mastery over its solar system (10^26W);
and a Type 3 Civilisation has mastery over its Galaxy (10^36W).
We humans are a Type 0 Civilisation on this Scale.
Nonetheless, our exponential technological growth in the few decades indicates that we are somewhere between Type 0 and Type 1.
In fact, according to Carl Sagan's interpolated Kardashev Scale and recent global energy consumption, we are about 0.73.
Physicist Freeman Dyson estimated that within 200 years or so, we should attain Type 1 status.
As a technology that, through its decentralisation, links entities globally and makes value transfer between humans more efficient, Bitcoin could prove a key piece of our progression as a civilisation.
What are your thoughts?
Is it true...or false?
https://www.youtube.com/watch?v=1oQLOqpP1ZM
submitted by financeoptimum to conspiracy [link] [comments]

The Truth about Bitcoin?

Part 1/4 - NSA Connection:
First off, the SHA-256 algorithm, which stands for Secure Hash Algorithm 256, is a member of the SHA-2 cryptographic hash functions designed by the NSA and first published in 2001.
SHA-256, like other hash functions, takes any input and produces an output (often called a hash) of fixed length. The output of a hashing algorithm such as SHA-256 will always be the same length - regardless of the input size. Specifically, the output is, as the name suggests, 256 bits.
Moreover, all outputs appear completely random and offer no information about the input that created it.
The Bitcoin Network utilises the SHA-256 algorithm for mining and the creation of new addresses.
Who is Satoshi Nakamoto? What does Satoshi Nakamoto mean?
Out of respect for their anonymity, it would be rude to speculate in a video about who Satoshi Nakamoto is likely to be. The reality is, it's not important. Let me explain: Any human being can be attacked. Jesus could come back from the dead, and there would be haters. Therefore, the Satoshi Nakamoto approach neutralises the natural human herd behaviour, exacerbated by the media, to attack and discredit. This is a very important part of Bitcoin's success thus far. Also, from a security perspective, those who wish to dox Satoshi Nakamoto in a video are essentially putting his, or her, or their, life at risk...for the sake of views.
As a genius who has produced an innovation not just from a technical perspective but also a monetary perspective, they should be treated with more respect than that.
As for the name Satoshi Nakamoto, I would speculate that it is a homage to Tatsuaki Okamoto and Satoshi Obana - two cryptographers from Japan. There is another reason for the name, but that...is confidential.
In 1996, the NSA's Cryptology Division of their Office of Information Security Research and Technology published a paper titled: "How to make a mint: The cryptography of anonymous electronic cash", first publishing it in an MIT mailing list and later, in 1997, in the American University Law Review. One of the researchers they referenced was Tatsuaki Okamoto.

Part 2/4 - 'Crypto Market':
Most of the crypto market is a scam.
By the way, this was predicted very early on in the Bitcoin Talk forums - check out this interaction from November 8th, 2010:
"if bitcoin really takes off I can see lots of get-rich-quick imitators coming on the scene: gitcoin, nitcoin, witcoin, titcoin, shitcoin...
Of course the cheap imitators will disappear as quickly as those 1990s "internet currencies", but lots of people will get burned along the way."
To which Bitcoin OG Gavin Andresen replies:
"I agree - we're in the Wild West days of open-source currency. I expect people will get burned by scams, imitators, ponzi schemes and price bubbles."
"I don't think there's a whole lot that can be done about scammers, imitators and ponzi schemes besides warning people to be careful with their money (whether dollars, euros or bitcoins)."
Now, on the one hand, lack of regulation is more meritocratic (as you don't have to be an accredited investor just to get access).
On the other hand, it means that crypto is, as Gavin said, a Wild West environment, with many cowboys in the Desert. Be careful.
This is the same with most online courses - particularly 'How to get rich quick' courses - however with crypto you have an exponential increase in the supply of victims during the bull cycles so it is particularly prevalent during those times.
In addition to this, leverage trading exchanges, which are no different to casinos, prey on naive retail traders who:
A) Think they can outsmart professional traders with actual risk management skills; and
B) Think they can outsmart the exchanges themselves who have an informational advantage as well as an incentive to chase stop losses and liquidate positions.

Part 3/4 - CBDCs:
The Fed and Central Banks around the world have printed themselves into a corner.
Quantitative easing was the band-aid for the Great Financial Crisis in 2008, and more recent events have propelled the rate of money printing to absurd levels.
This means that all currencies are in a race to zero - and it becomes a game of who can print more fiat faster.
The powers that be know that this fiat frenzy is unsustainable, and that more and more people are becoming aware that it is a debt based system, based on nothing.
The monetary system devised by bankers, for bankers, in 1913 on Jekyll Island and supercharged in 1971 is fairly archaic and also does not allow for meritocratic value transfer - fiat printing itself increases inequality.
They, obviously, know this (as it is by design).
The issue (for them) is that more and more people are starting to become aware of this.
Moving to a modernised monetary system will allow those who have rigged the rules of the game for the last Century to get away scot-free.
It will also pave the way for a new wealthy, and more tech literate, elite to emerge - again predicted in the Bitcoin Talk forums.
Now...back to the powers that be.
Bitcoin provides a natural transition to Central Bank Digital Currencies (CBDCs) and what I would describe as Finance 2.0, but what are the benefits of CBDCs for the state?
More control, easier tax collection, more flexibility in monetary policy (i.e. negative interest rates) and generally a more efficient monetary system.
This leads us to the kicker: which is the war on cash. The cashless society was a fantasy just a few years ago, however now it doesn't seem so far fetched. No comment.

Part 4/4 - Bitcoin:
What about Bitcoin?
Well, Bitcoin has incredibly strong network effects; it is the most powerful computer network in the World.
But what about Bitcoin's reputation?
Bankers hate it.
Warren Buffett hates it.
Precisely, and the public hates bankers.
Sure, the investing public respects Buffett, but the general public perception of anyone worth $73 billion is not exactly at all time highs right now amid record wealth inequality.
In the grand scheme of things, the market cap of Bitcoin is currently around $179 billion.
For example, the market cap of Gold is around $9 trillion, which is 50x the Market Cap of Bitcoin.
Money has certain characteristics.
In my opinion, what makes Bitcoin unique is the fact that it has a finite total supply (21 million) and a predictable supply schedule via the halving events every 4 years, which cut in half the rate at which new Bitcoin is released into circulation.
Clearly, with these properties, it seems likely that Bitcoin could act as a meaningful hedge against inflation.
One of the key strengths of Bitcoin is the fact that the Network is decentralised...
Many people don't know that PayPal originally wanted to create a global currency similar to crypto.
Overall, a speculative thesis would be the following:
Satoshi Nakamoto is one of the most important entities of the 21st Century, and will accelerate the next transition of the human race.
Trusted third parties are security holes.
Bitcoin is the catalyst for Finance 2.0, whereby value transfer is conducted in a more meritocratic and decentralised fashion.
In 1964, Russian astrophysicist Nikolai Kardashev designed the Kardashev Scale.
At the time, he was looking for signs of extraterrestrial life within cosmic signals.
The Scale has three categories, which are based on the amount of usable energy a civilisation has at its disposal, and the degree of space colonisation.
Generally, a Type 1 Civilisation has achieved mastery of its home planet (10^16W);
A Type 2 Civilisation has mastery over its solar system (10^26W);
and a Type 3 Civilisation has mastery over its Galaxy (10^36W).
We humans are a Type 0 Civilisation on this Scale.
Nonetheless, our exponential technological growth in the few decades indicates that we are somewhere between Type 0 and Type 1.
In fact, according to Carl Sagan's interpolated Kardashev Scale and recent global energy consumption, we are about 0.73.
Physicist Freeman Dyson estimated that within 200 years or so, we should attain Type 1 status.
As a technology that, through its decentralisation, links entities globally and makes value transfer between humans more efficient, Bitcoin could prove a key piece of our progression as a civilisation.
What are your thoughts?
Is it true...or false?
https://www.youtube.com/watch?v=1oQLOqpP1ZM
submitted by financeoptimum to CryptoCurrency [link] [comments]

Bitcoin SV Price Prediction 2020

Bitcoin SV Price Prediction 2020
What is Bitcoin SV (BSV)?
Bitcoin SV appeared as a result of the Bitcoin Cash hard fork in November 2018.
The idea to create a new cryptocurrency came from entrepreneur Craig Wright. He tried to solve the scalability issue and increased the block size to 128MB. Later Craig Wright announced that he is the real Satoshi Nakamoto and Bitcoin SV is the original Bitcoin. SV stands for Satoshi Vision.
by StealthEX
Bitcoin SV has the plan for a stable protocol and massive on-chain scaling to become the world’s new money and the global public blockchain for enterprise. Today BSV coin is one of the TOP-10 cryptocurrencies by market capitalization.

Bitcoin SV Statistics

Source: CoinMarketCap, Data was taken on 16 July 2020 by StealthEX
Current Price $176.3
ROI since launch 99.66%
Market Cap $3,254,911,090
Market Rank #6
Circulating Supply 18,461,896 BSV
Total Supply 18,461,896 BSV

Bitcoin SV achievements and future plans

In 2019 the project has gone through the following milestones:
• Upgraded Quasar protocol and as a result the block size was lifted from 128 MB to 2 GB.
• Bitcoin SV handled up to 20,000,000 transactions per day.
• Worked on the technical development: Paymail, Nakasendo, Keyring, sCrypt, GearSV, Datapay was launched.
• More than 300 development projects, apps were launched for the BSV network.
• Celebrated the project’s first birthday.

What to expect in the future?

According to the official roadmap, the Bitcoin SV team will continue working on:
• Stability to give enterprises the confidence to create their apps on top of BSV.
• Scalability. The developers intend to provide the capacity for BSV to act as the foundation for the entire financial world.
• Security and excellent payment experience. The BSV project will concentrate on both measurement and improvement of transactions safety, fast transaction propagation, and miner-configurable fee policies.

Bitcoin SV Technical Analysis

Source: Tradingview, Data was taken on 16 July 2020 by StealthX

Bitcoin SV Price Prediction 2020

TradingBeasts BSV price prediction

In August 2020 BSV crypto may reach a maximum price of $209.095 (+18.60%), while it’s the average price will be around $166.599 per coin (-5.50%). According to TradingBeasts forecasts, the Bitcoin SV price is going to decrease and by the end of 2020, the average BSV price is expected to be $168.674 (-4.33%).

Wallet investor BSV coin price prediction

Wallet investor.com thinks that Bitcoin SV is an awesome long-term investment and predicts a wide selection of digital coins like Bitcoin SV. The project may reach $269.566 as the maximum price by the end of December 2020 (+52.80%) while the average price will stay around $196.916 per coin (+11.69%).

Crypto-Rating BSV price prediction

Crypto-Rating says that BSV will return to the $200 mark (+13.44%), or maybe even exceed it if BTC climbs above $10,000. If not, it might remain between $200 and $100, unless a new bear market strikes.

DigitalCoinPrice BSV price prediction

According to DigitalCoinPrice Bitcoin SV price will increase in the near future. By the end of the year 2020, the average price will be $284.19 per coin (+61.19%).

Where to buy BSV coin

Bitcoin SV (BSV) is available for exchange on StealthEX with a low fee. Follow these easy steps:
✔ Choose the pair and the amount for your exchange. For example BTC to BSV.
✔ Press the “Start exchange” button.
✔ Provide the recipient address to which the coins will be transferred.
✔ Move your cryptocurrency for the exchange.
✔ Receive your coins.
Follow us on Medium, Twitter, Facebook, and Reddit to get StealthEX.io updates and the latest news about the crypto world. For all requests message us via [email protected]
The views and opinions expressed here are solely those of the author. Every investment and trading move involves risk. You should conduct your own research when making a decision.
Original article was posted on https://stealthex.io/blog/2020/07/16/bitcoin-sv-price-prediction-2020/
submitted by Stealthex_io to StealthEX [link] [comments]

MiniSwap -- A New Hybrid Incentive Model in DeFi

Cryptocurrency exchanges process over $20 billion in trade volume per day. Most of the transactions are going through centralized exchanges, where the users need to fully trust them for managing their assests and transactions. However, the risk of trusting these centralized exchanges has also been seen. For example, QuadrigaCX, which was the largest cryptocurrency exchange in Canada, lost $19 million of their customers' assets [1].
Decentralized Exchanges (DEXes) have been introduced to address this problem -- they allow traders to purchase and sell cryptocurrencies in a peer-to-peer manner, so no involvement of any trusted party is required. Atomic Swap is one of the promising technology for implementing a DEX. While it enables pure peer to peer trading, it also introduces problems such as unfairness and long confirmation latency. While existing work [2] has provided a solution towards a fair atomic swap protocol, the issue of long confirmation latency is inherent.
Another promising direction is leveraging liquidity pools. With liquidity pools, pairs of assets are reserved for trading. For any pair of assets supported by the liquidity pool, traders can exchange their assets without any third party. As traders can only perform the transactions if there are reserved assets, one core problem is how to attract liquidity providers to provide liquidity by reserving assets. It is not difficult to see that incentive [3,4], which has been a key component of all permissionless blockchains, can be equipped to incentivize liqudity providers. However, flawed incentive designs will lead to attacks and other concerns [5-13].
There are two main types of incentive designs, namely "trans-fee mining" and "liquidity mining". They are different from the Proof-of-X mining in blockchains for reaching consensus (a detailed analysis can be found in the survey [14]). Rather, they are used to incentivise users to join the ecosystem.
"Trans-fee mining" was proposed by FCoin in 2018 [15]. With FCoin, each time a transaction is created, 100% of its transaction fee will be returned in FCoin token to the payer as a reward. This is one incentive design to encourage traders to join the system. However, as FCoin may have no value to the trader, FCoin also introduces extra reward to all coin holders -- 80% of the transaction fee in its native currency (such as ETH) will be distributed to all coin holders. So, traders are incentivized to join the system, becoming a holder of FCoin token, and obtaining a share of the transaction fee of every transaction in the FCoin ecosystem.
While this had successful attracted traders, it is not sustainable. Rather than charging a trader to perform transactions, FCoin rewards traders. Profit-driven traders will create transactions at full speed to earn FCoin token and the share as a token holder. Indeed, the trading volume of FCoin was the top one among all exchange services, and the daily reward can be as high as 6000 BTC [16]. However, once all coins are minted, then the system would lose liveness as there is not enough supply to be distributed.
"Liquidity mining" aims at giving reward to the liquidity providers rather than the traders. There are different ways to implement liquidity mining. Compound [17] is a famous example of protocols deploying liquidity mining. With Compound, users become a liquidity provider by supply assets to a pool and obtain interests for its contribution (similar to depositing money into a bank). Liquidity providers first reserve some assets in the pool and obtain "cToken" of Compound which entitles the owner to an increasing quantity of the underlying asset. Users can use their "cToken" to borrow different assets available on the Compound and pay some interests to Compund. The borrowers may have some quick gains through the financial games [18]. Both borrowers and liquidity providers can withdraw their asset by trading them back with "cToken". Oners of "cToken" can also manage the business direction and decisions of Compound through weighted voting. The potential concern here is that rich users might be able to take over the control of the system.
Uniswap [19] is another popular DEX deploying liquidity mining. Uniswap incentivizes liquidity providers by giving them a share of the earned transaction fees. In particular, Uniswap changes each transaction a 0.3% fee, where 0.25% will be distributed to the liquidity providers, and 0.05% will go to the Uniswap account. One issue is how to incentivize traders. With Uniswap, traders are incentivized by the potential profit it can gain through the price difference between Uniswap and other exchanges. Uniswap price oracle is based on a constant function market makers [20,21], where the product of the number of reserved tokens is a constant. For example, if Uniswap has a pair of X token A and Y token B, then when a user using X' token A to buy Y' token B, the product of the reserved number of tokens should remain the same, i.e., XY = (X+X')(Y-Y'). The price of Uniswap (V1) is also defined in this way. This allows traders to speculate in the exchange market as the asset price on Uniswap is changed dynamically and is different from other exchanges. This, on the other hand, may have a security risk as the price can be easily manipulated. Uniswap (V2) fixed this problem by taking an accumulated price over a period of time [22]. However, as speculation/manipulation becomes harder, the trading volume may decrease.
MiniSwap [23] introduces a hybrid model (a mixture of "trans-fee mining" and "liquidity mining") to address the above issues. MiniSwap provides three types of rewards. For each trade with transaction fee f ETH in MiniSwap, a number of MiniSwap tokens (called MINI) worth 2f ETH will be minted. A (parameterized) portion of the tokens are given to the trader, and the rest are distribued to the liqudity providers. The transaction fee (f ETH) is used to exchange MINI in the liquidity pool. 50% of the obtained MINI will be distributed to all MINI holders, and the other 50% will be destroyed. In this way, both traders and liquidity providers are incentivized to join the ecosystem.
Recall that with FCoin, there is a problem when all coins are minted. MiniSwap has an upper bound (of 500,000 tokens) on the number of tokens can be created every day, and this limit reduces every month until a point where the limit (18,000 tokens) remains unchanged. This guarantees the sustainability of the system as the mining process can last for 100 years. The parameterized ratio of tokens as the reward to the trader and liquidity provider can also strengthen sustainability. It enables the system to dynamically balance the incentive of different parties in the system to make it more sustainable.
Overall, the MiniSwap hybrid model has taken the benefit of both "trans-fee mining" model and "liquidity mining" model, while eliminated the potential concerns. Formally defining and analyzing these models, e.g. through the game-theoretic approach [24], would be an interesting direction.
Reference
[1] The Guardian, Cryptocurrency investors locked out of $190m after exchange founder dies, 2019.
[2] Runchao Han, Haoyu Lin, Jiangshan Yu. On the optionality and fairness of Atomic Swaps, ACM Conference on Advances in Financial Technologies, 2019.
[3] Satoshi Nakamoto. 2008. Bitcoin: a peer-to-peer electronic cash system
[4] Jiangshan Yu, David Kozhaya, Jeremie Decouchant, and Paulo Verissimo. Repucoin: your reputation is your power. IEEE Transactions on Computers, 2019.
[5] Joseph Bonneau. Why Buy When You Can Rent? - Bribery Attacks on Bitcoin-Style Consensus. Financial Cryptography and Data Security - International Workshops on BITCOIN, VOTING, and WAHC, 2016.
[6] Yujin Kwon, Hyoungshick Kim, Jinwoo Shin, and Yongdae Kim. Bitcoin vs. Bitcoin Cash: Coexistence or Downfall of Bitcoin Cash, IEEE Symposium on Security and Privacy (SP), 2019.
[7] Kevin Liao and Jonathan Katz. Incentivizing blockchain forks via whale transactions. International Conference on Financial Cryptography and Data Security, 2017.
[8] Ayelet Sapirshtein, Yonatan Sompolinsky, and Aviv Zohar. Optimal Selfish Mining Strategies in Bitcoin. Financial Cryptography and Data Security, 2016.
[9] Ittay Eyal and Emin Gün Sirer. Majority Is Not Enough: Bitcoin Mining Is Vulnerable. Financial Cryptography and Data Security, 2014.
[10] Ittay Eyal. The Miner’s Dilemma. IEEE Symposium on Security and Privacy, 2015.
[11] Miles Carlsten, Harry A. Kalodner, S. Matthew Weinberg, and Arvind Narayanan. On the Instability of Bitcoin Without the Block Reward. ACM SIGSAC Conference on Computer and Communications Security, 2016.
[12] Kartik Nayak, Srijan Kumar, Andrew Miller, and Elaine Shi. Stubborn mining: generalizing selfish mining and combining with an eclipse attack. IEEE European Symposium on Security and Privacy, 2016.
[13] Runchao Han, Zhimei Sui, Jiangshan Yu, Joseph K. Liu, Shiping Chen. Sucker punch makes you richer: Rethinking Proof-of-Work security model, IACR Cryptol. ePrint Arch, 2019.
[14] Christopher Natoli, Jiangshan Yu, Vincent Gramoli, Paulo Jorge Esteves Veríssimo.
Deconstructing Blockchains: A Comprehensive Survey on Consensus, Membership and Structure. CoRR abs/1908.08316, 2019.
[15] FCoin, https://www.fcoin.pro
[16] The Block Crypto. Cryptocurrency exchange Fcoin expects to default on as much as $125M of users' bitcoin, 2020.
[17] Compound, https://compound.finance.
[18] Philip Daian, Steven Goldfeder, Tyler Kell, Yunqi Li, Xueyuan Zhao, Iddo Bentov, Lorenz Breidenbach, Ari Juels. Flash Boys 2.0: Frontrunning, Transaction Reordering, and Consensus Instability in Decentralized Exchanges. IEEE Symposium on Security and Privacy, 2020.
[19] Uniswap. https://uniswap.org
[20] Bowen Liu, Pawel Szalachowski. A First Look into DeFi Oracles. CoRR abs/2005.04377, 2020.
[21] Guillermo Angeris, Tarun Chitra. Improved Price Oracles: Constant Function Market Makers, CoRR abs/ 2003.10001, 2020.
[22] Uniswap V2.0 whitepaper. https://uniswap.org/whitepaper.pdf
[23] MiniSwap. https://www.miniswap.org
[24] Ziyao Liu, Nguyen Cong Luong, Wenbo Wang, Dusit Niyato, Ping Wang, Ying-Chang Liang, Dong In Kim. A Survey on Blockchain: A Game Theoretical Perspective. IEEE Access, 2019.
submitted by MINISWAP to u/MINISWAP [link] [comments]

The Truth about Bitcoin?

Part 1/4 - NSA Connection:
First off, the SHA-256 algorithm, which stands for Secure Hash Algorithm 256, is a member of the SHA-2 cryptographic hash functions designed by the NSA and first published in 2001.
SHA-256, like other hash functions, takes any input and produces an output (often called a hash) of fixed length. The output of a hashing algorithm such as SHA-256 will always be the same length - regardless of the input size. Specifically, the output is, as the name suggests, 256 bits.
Moreover, all outputs appear completely random and offer no information about the input that created it.
The Bitcoin Network utilises the SHA-256 algorithm for mining and the creation of new addresses.
Who is Satoshi Nakamoto? What does Satoshi Nakamoto mean?
Out of respect for their anonymity, it would be rude to speculate in a video about who Satoshi Nakamoto is likely to be. The reality is, it's not important. Let me explain: Any human being can be attacked. Jesus could come back from the dead, and there would be haters. Therefore, the Satoshi Nakamoto approach neutralises the natural human herd behaviour, exacerbated by the media, to attack and discredit. This is a very important part of Bitcoin's success thus far. Also, from a security perspective, those who wish to dox Satoshi Nakamoto in a video are essentially putting his, or her, or their, life at risk...for the sake of views.
As a genius who has produced an innovation not just from a technical perspective but also a monetary perspective, they should be treated with more respect than that.
As for the name Satoshi Nakamoto, I would speculate that it is a homage to Tatsuaki Okamoto and Satoshi Obana - two cryptographers from Japan. There is another reason for the name, but that...is confidential.
In 1996, the NSA's Cryptology Division of their Office of Information Security Research and Technology published a paper titled: "How to make a mint: The cryptography of anonymous electronic cash", first publishing it in an MIT mailing list and later, in 1997, in the American University Law Review. One of the researchers they referenced was Tatsuaki Okamoto.

Part 2/4 - 'Crypto Market':
Most of the crypto market is a scam.
By the way, this was predicted very early on in the Bitcoin Talk forums - check out this interaction from November 8th, 2010:
"if bitcoin really takes off I can see lots of get-rich-quick imitators coming on the scene: gitcoin, nitcoin, witcoin, titcoin, shitcoin...
Of course the cheap imitators will disappear as quickly as those 1990s "internet currencies", but lots of people will get burned along the way."
To which Bitcoin OG Gavin Andresen replies:
"I agree - we're in the Wild West days of open-source currency. I expect people will get burned by scams, imitators, ponzi schemes and price bubbles."
"I don't think there's a whole lot that can be done about scammers, imitators and ponzi schemes besides warning people to be careful with their money (whether dollars, euros or bitcoins)."
Now, on the one hand, lack of regulation is more meritocratic (as you don't have to be an accredited investor just to get access).
On the other hand, it means that crypto is, as Gavin said, a Wild West environment, with many cowboys in the Desert. Be careful.
This is the same with most online courses - particularly 'How to get rich quick' courses - however with crypto you have an exponential increase in the supply of victims during the bull cycles so it is particularly prevalent during those times.
In addition to this, leverage trading exchanges, which are no different to casinos, prey on naive retail traders who:
A) Think they can outsmart professional traders with actual risk management skills; and
B) Think they can outsmart the exchanges themselves who have an informational advantage as well as an incentive to chase stop losses and liquidate positions.

Part 3/4 - CBDCs:
The Fed and Central Banks around the world have printed themselves into a corner.
Quantitative easing was the band-aid for the Great Financial Crisis in 2008, and more recent events have propelled the rate of money printing to absurd levels.
This means that all currencies are in a race to zero - and it becomes a game of who can print more fiat faster.
The powers that be know that this fiat frenzy is unsustainable, and that more and more people are becoming aware that it is a debt based system, based on nothing.
The monetary system devised by bankers, for bankers, in 1913 on Jekyll Island and supercharged in 1971 is fairly archaic and also does not allow for meritocratic value transfer - fiat printing itself increases inequality.
They, obviously, know this (as it is by design).
The issue (for them) is that more and more people are starting to become aware of this.
Moving to a modernised monetary system will allow those who have rigged the rules of the game for the last Century to get away scot-free.
It will also pave the way for a new wealthy, and more tech literate, elite to emerge - again predicted in the Bitcoin Talk forums.
Now...back to the powers that be.
Bitcoin provides a natural transition to Central Bank Digital Currencies (CBDCs) and what I would describe as Finance 2.0, but what are the benefits of CBDCs for the state?
More control, easier tax collection, more flexibility in monetary policy (i.e. negative interest rates) and generally a more efficient monetary system.
This leads us to the kicker: which is the war on cash. The cashless society was a fantasy just a few years ago, however now it doesn't seem so far fetched. No comment.

Part 4/4 - Bitcoin:
What about Bitcoin?
Well, Bitcoin has incredibly strong network effects; it is the most powerful computer network in the World.
But what about Bitcoin's reputation?
Bankers hate it.
Warren Buffett hates it.
Precisely, and the public hates bankers.
Sure, the investing public respects Buffett, but the general public perception of anyone worth $73 billion is not exactly at all time highs right now amid record wealth inequality.
In the grand scheme of things, the market cap of Bitcoin is currently around $179 billion.
For example, the market cap of Gold is around $9 trillion, which is 50x the Market Cap of Bitcoin.
Money has certain characteristics.
In my opinion, what makes Bitcoin unique is the fact that it has a finite total supply (21 million) and a predictable supply schedule via the halving events every 4 years, which cut in half the rate at which new Bitcoin is released into circulation.
Clearly, with these properties, it seems likely that Bitcoin could act as a meaningful hedge against inflation.
One of the key strengths of Bitcoin is the fact that the Network is decentralised...
Many people don't know that PayPal originally wanted to create a global currency similar to crypto.
Overall, a speculative thesis would be the following:
Satoshi Nakamoto is one of the most important entities of the 21st Century, and will accelerate the next transition of the human race.
Trusted third parties are security holes.
Bitcoin is the catalyst for Finance 2.0, whereby value transfer is conducted in a more meritocratic and decentralised fashion.
In 1964, Russian astrophysicist Nikolai Kardashev designed the Kardashev Scale.
At the time, he was looking for signs of extraterrestrial life within cosmic signals.
The Scale has three categories, which are based on the amount of usable energy a civilisation has at its disposal, and the degree of space colonisation.
Generally, a Type 1 Civilisation has achieved mastery of its home planet (10^16W);
A Type 2 Civilisation has mastery over its solar system (10^26W);
and a Type 3 Civilisation has mastery over its Galaxy (10^36W).
We humans are a Type 0 Civilisation on this Scale.
Nonetheless, our exponential technological growth in the few decades indicates that we are somewhere between Type 0 and Type 1.
In fact, according to Carl Sagan's interpolated Kardashev Scale and recent global energy consumption, we are about 0.73.
Physicist Freeman Dyson estimated that within 200 years or so, we should attain Type 1 status.
As a technology that, through its decentralisation, links entities globally and makes value transfer between humans more efficient, Bitcoin could prove a key piece of our progression as a civilisation.
What are your thoughts?
Is it true...or false?
https://www.youtube.com/watch?v=1oQLOqpP1ZM
submitted by financeoptimum to Money [link] [comments]

The Truth about Bitcoin?

Part 1/4 - NSA Connection:
First off, the SHA-256 algorithm, which stands for Secure Hash Algorithm 256, is a member of the SHA-2 cryptographic hash functions designed by the NSA and first published in 2001.
SHA-256, like other hash functions, takes any input and produces an output (often called a hash) of fixed length. The output of a hashing algorithm such as SHA-256 will always be the same length - regardless of the input size. Specifically, the output is, as the name suggests, 256 bits.
Moreover, all outputs appear completely random and offer no information about the input that created it.
The Bitcoin Network utilises the SHA-256 algorithm for mining and the creation of new addresses.
Who is Satoshi Nakamoto? What does Satoshi Nakamoto mean?
Out of respect for their anonymity, it would be rude to speculate in a video about who Satoshi Nakamoto is likely to be. The reality is, it's not important. Let me explain: Any human being can be attacked. Jesus could come back from the dead, and there would be haters. Therefore, the Satoshi Nakamoto approach neutralises the natural human herd behaviour, exacerbated by the media, to attack and discredit. This is a very important part of Bitcoin's success thus far. Also, from a security perspective, those who wish to dox Satoshi Nakamoto in a video are essentially putting his, or her, or their, life at risk...for the sake of views.
As a genius who has produced an innovation not just from a technical perspective but also a monetary perspective, they should be treated with more respect than that.
As for the name Satoshi Nakamoto, I would speculate that it is a homage to Tatsuaki Okamoto and Satoshi Obana - two cryptographers from Japan. There is another reason for the name, but that...is confidential.
In 1996, the NSA's Cryptology Division of their Office of Information Security Research and Technology published a paper titled: "How to make a mint: The cryptography of anonymous electronic cash", first publishing it in an MIT mailing list and later, in 1997, in the American University Law Review. One of the researchers they referenced was Tatsuaki Okamoto.

Part 2/4 - 'Crypto Market':
Most of the crypto market is a scam.
By the way, this was predicted very early on in the Bitcoin Talk forums - check out this interaction from November 8th, 2010:
"if bitcoin really takes off I can see lots of get-rich-quick imitators coming on the scene: gitcoin, nitcoin, witcoin, titcoin, shitcoin...
Of course the cheap imitators will disappear as quickly as those 1990s "internet currencies", but lots of people will get burned along the way."
To which Bitcoin OG Gavin Andresen replies:
"I agree - we're in the Wild West days of open-source currency. I expect people will get burned by scams, imitators, ponzi schemes and price bubbles."
"I don't think there's a whole lot that can be done about scammers, imitators and ponzi schemes besides warning people to be careful with their money (whether dollars, euros or bitcoins)."
Now, on the one hand, lack of regulation is more meritocratic (as you don't have to be an accredited investor just to get access).
On the other hand, it means that crypto is, as Gavin said, a Wild West environment, with many cowboys in the Desert. Be careful.
This is the same with most online courses - particularly 'How to get rich quick' courses - however with crypto you have an exponential increase in the supply of victims during the bull cycles so it is particularly prevalent during those times.
In addition to this, leverage trading exchanges, which are no different to casinos, prey on naive retail traders who:
A) Think they can outsmart professional traders with actual risk management skills; and
B) Think they can outsmart the exchanges themselves who have an informational advantage as well as an incentive to chase stop losses and liquidate positions.

Part 3/4 - CBDCs:
The Fed and Central Banks around the world have printed themselves into a corner.
Quantitative easing was the band-aid for the Great Financial Crisis in 2008, and more recent events have propelled the rate of money printing to absurd levels.
This means that all currencies are in a race to zero - and it becomes a game of who can print more fiat faster.
The powers that be know that this fiat frenzy is unsustainable, and that more and more people are becoming aware that it is a debt based system, based on nothing.
The monetary system devised by bankers, for bankers, in 1913 on Jekyll Island and supercharged in 1971 is fairly archaic and also does not allow for meritocratic value transfer - fiat printing itself increases inequality.
They, obviously, know this (as it is by design).
The issue (for them) is that more and more people are starting to become aware of this.
Moving to a modernised monetary system will allow those who have rigged the rules of the game for the last Century to get away scot-free.
It will also pave the way for a new wealthy, and more tech literate, elite to emerge - again predicted in the Bitcoin Talk forums.
Now...back to the powers that be.
Bitcoin provides a natural transition to Central Bank Digital Currencies (CBDCs) and what I would describe as Finance 2.0, but what are the benefits of CBDCs for the state?
More control, easier tax collection, more flexibility in monetary policy (i.e. negative interest rates) and generally a more efficient monetary system.
This leads us to the kicker: which is the war on cash. The cashless society was a fantasy just a few years ago, however now it doesn't seem so far fetched. No comment.

Part 4/4 - Bitcoin:
What about Bitcoin?
Well, Bitcoin has incredibly strong network effects; it is the most powerful computer network in the World.
But what about Bitcoin's reputation?
Bankers hate it.
Warren Buffett hates it.
Precisely, and the public hates bankers.
Sure, the investing public respects Buffett, but the general public perception of anyone worth $73 billion is not exactly at all time highs right now amid record wealth inequality.
In the grand scheme of things, the market cap of Bitcoin is currently around $179 billion.
For example, the market cap of Gold is around $9 trillion, which is 50x the Market Cap of Bitcoin.
Money has certain characteristics.
In my opinion, what makes Bitcoin unique is the fact that it has a finite total supply (21 million) and a predictable supply schedule via the halving events every 4 years, which cut in half the rate at which new Bitcoin is released into circulation.
Clearly, with these properties, it seems likely that Bitcoin could act as a meaningful hedge against inflation.
One of the key strengths of Bitcoin is the fact that the Network is decentralised...
Many people don't know that PayPal originally wanted to create a global currency similar to crypto.
Overall, a speculative thesis would be the following:
Satoshi Nakamoto is one of the most important entities of the 21st Century, and will accelerate the next transition of the human race.
Trusted third parties are security holes.
Bitcoin is the catalyst for Finance 2.0, whereby value transfer is conducted in a more meritocratic and decentralised fashion.
In 1964, Russian astrophysicist Nikolai Kardashev designed the Kardashev Scale.
At the time, he was looking for signs of extraterrestrial life within cosmic signals.
The Scale has three categories, which are based on the amount of usable energy a civilisation has at its disposal, and the degree of space colonisation.
Generally, a Type 1 Civilisation has achieved mastery of its home planet (10^16W);
A Type 2 Civilisation has mastery over its solar system (10^26W);
and a Type 3 Civilisation has mastery over its Galaxy (10^36W).
We humans are a Type 0 Civilisation on this Scale.
Nonetheless, our exponential technological growth in the few decades indicates that we are somewhere between Type 0 and Type 1.
In fact, according to Carl Sagan's interpolated Kardashev Scale and recent global energy consumption, we are about 0.73.
Physicist Freeman Dyson estimated that within 200 years or so, we should attain Type 1 status.
As a technology that, through its decentralisation, links entities globally and makes value transfer between humans more efficient, Bitcoin could prove a key piece of our progression as a civilisation.
What are your thoughts?
Is it true...or false?
https://www.youtube.com/watch?v=1oQLOqpP1ZM
submitted by financeoptimum to economy [link] [comments]

What is Blockchain Technology?

What is Blockchain Technology?
The original article appeared here: https://www.securities.io/what-is-blockchain-technology/
Its been almost ten years since Satoshi Nakamoto first introduced Blockchain technology to the world in his 2008 Bitcoin Whitepaper. Since that time, these revolutionary networks have gained popularity in both the corporate and governmental sectors. This growth is easily explained when you consider that blockchain technology provides the world with some unique advantages that were previously unimaginable. Consequently, today, you can find blockchain technology in nearly every sector of the global economy.

What is Blockchain Technology?

A blockchain is a network of computers that share a distributed ledger across all network participants (nodes). This strategy is far different than say, fiat currencies that originate from a centralized authority figure. Importantly, this ledger keeps an unbroken chain of transactions since the birth of the network. This “chain” of transactions grows larger as new “blocks” of transactions are approved and added to it.
Bitcoin Whitepaper
In order to approve new transactions, each node works together with others to validate new blocks. Additionally, the nodes also validate the current state of the entire blockchain. In order for a new block of transactions to be added to the blockchain, they must receive approval from 51% of the network’s nodes. Nodes are also referred to as miners. In this manner, blockchain networks are decentralized networks that provide unmatched security to the world of digital assets.

Security via Decentralization

Decentralization is an important aspect of blockchain technology because it makes these revolutionary ledgers immutable and unalterable. In fact, since there is no centralized attack vector, hacking a blockchain is nearly impossible. The larger the blockchain network, the more secure the data on it remains.
For example, let’s look at the world’s largest blockchain, Bitcoin. Currently, the Bitcoin blockchain has over 10,000 active nodes located across the globe. This distribution means that in order for an attacker to alter even just one tiny piece of information on the blockchain, they would need to successfully hack 5,000+ computers at once.
While this task may not be impossible for the quantum computers of the future, it’s so unprofitable that it makes no sense to even attempt such a monumental task. Additionally, on top of successfully hacking 5000+ computers at once, an attacker would also need a supercomputer to recalculate the new blockchain transactions in time to introduce them into the network. It would literally be more affordable to create a new cryptocurrency from scratch.

Consensus Mechanisms

One of the reasons why blockchain networks are so secure is the integration of consensus mechanisms. Consensus mechanisms are cryptographic protocols that leverage the participants of a blockchain network in securing its data. In the case of Bitcoin, the Proof-of-Work (PoW) consensus mechanism is used.

Proof-of-Work (PoW)

The Proof-of-Work consensus mechanism was revolutionary to the world of cryptography when it was first introduced years prior by Adam Back in his Hashcash whitepaper. In the concept, Back describes the integration of a mathematical equation to the network’s security protocols. In this way, every computer can show “proof” of their work securing the network.

Miner Rewards

It’s important to understand that nodes receive a reward for their mining efforts. These rewards adjust automatically depending on the network’s difficulty and value. In the case of Bitcoin, miners originally received 50 Bitcoin for their efforts. Today, this seems like fortune, but back in 2009, Bitcoin was only worth pennies. As the value of the token rises and the network goes, the mining rewards shrink. Today, Bitcoin miners receive 6.5 BTC if they add the next block to the chain.

SHA-256

Notably, every node validates and secures the blockchain, but only one gets to add the next block of transactions to the network. To determine who the next miner is that gets to add this block, every computer competes in a mathematical race to figure out the PoW equation. In the case of Bitcoin, the equation is known as SHA-256. Importantly, the first SHA algorithm dates back to Hashcash. This early version of the equation was known as SHA-1.
Notably, the SHA-256 equation is so difficult that it’s easier and more efficient for your computer to just make random guesses rather than attempting to figure out the equation directly. The answer to the equation must begin with a predetermined amount of 0s. In the Bitcoin blockchain, the equation’s answer must start with four zeros. However, if the network’s congestion rises, so does the difficulty of these equations. This difficulty adjusts by the addition of another zero at the beginning of the required SHA-256 answer.
Similarly to traditional commodities such as gold, there are costs that are associated with the creation and introduction of these digital assets into the market. These random guesses utilize intense computational power. This power equates to real-world costs such as electricity bills. Studies have shown that securing the Bitcoin network can use more electricity than required by entire countries. Luckily, over 80% of Bitcoin’s power consumption comes from renewable sources such as solar or hydroelectric. This cost of mining also adds measurable value to each Bitcoin.

Miners

As Bitcoin began to gain in profitability, its network’s computing power expanded significantly. In the beginning, nodes, also known as miners, could mine for Bitcoin using nothing more than your home PC. Eventually, miners realized that graphic cards were far better at the repetitive guessing required to figure out the SHA-256 algorithm. This led to a computational race in the market.

ASIC

Eventually, large blockchain firms such as Bitmain introduced Application Specific Integrated Circuit (ASIC) miners into the equation. These purpose-built miners were thousands of times more efficient at guessing the SHA-256 algorithm than the GPUs and CPUs before them. Consequently, their introduction created a scenario in which the average miner now needed to invest thousands in mining equipment to stay relevant.

Mining Pools

Luckily, some creative minds in the field began to think of ways to level the playing field out again. They developed “mining pools.” A mining pool is a network of miners that all share computational power for the common goal of mining blockchain transactions. Importantly, mining pool participants receive a percentage of the reward based on their contributions to the network’s overall hash (computational power).
Importantly, over the last three years, there has been a push to move away from power-hungry consensus mechanisms such as PoW. This desire to secure blockchains in a more efficient manner has led to the development of some truly unique consensus mechanisms in the sector.

Proof-of-Stake (PoS)

The Proof-of-Stake mechanism does away with the difficult mathematical algorithms and instead utilizes a more psychological approach to securing the network. In a PoS blockchain, users don’t need to compete mathematically to add the next block to the blockchain. Instead, PoS users “stake” their coins via network wallets to secure the network. The way staking works is simple.
Keeping a certain amount of coins in your wallet allows you to participate in transaction validations. The more coins you stake, the more likely the chances are you get to add the next block of transactions to the network. In most PoS systems, a miner from those with the most tokens staked at the time receives the chance to add the blocks.
The advantages of a PoS consensus mechanism are immediately evident. For one, you don’t need to pour tons of resources into your network to keep it safe. Additionally, since nodes are chosen based on their amount of staked coins, there is never a scenario in which a node gains anything from validating incorrect transactions. Basically, a hacker would have to fully invest in the cryptocurrency prior to attacking the network. In this way, PoS systems create a huge deterrent to attackers.

The Future of Blockchain Technology

Blockchain technology has come a long way from its early days as a means to secure cryptocurrency networks. Today, blockchain technology has numerous uses across every type of industry imaginable. Specifically, blockchain programs have impacted the logistical, financial, and data security sectors in a major way.

Blockchain Technology Logistics

Blockchain logistical systems are more efficient and cost-effective to operate than traditional paper-based models. In fact, the immutable and unalterable nature of blockchain tech makes it ideally suited to logistical tasks. Soon, you may be able to ascertain much more information regarding the creation and delivery of your products thanks to these new-age systems emerging.

Fundraising

Blockchain technology has also altered the way in which businesses raise funds. In a traditional corporate crowdfunding strategy such as an IPO, companies must balance between cost-effectiveness and participation. The inability to process smaller transactions meant that for the longest time, companies had to turn away potential investors. Nowadays, blockchain technology enables businesses to easily automate these procedures via smart contracts.

Smart Contracts

Smart Contracts feature preprogrammed protocols that execute when they receive a certain amount of cryptocurrency sent to their address. These contracts live on the blockchain and enable remarkable functionality. For example, in the case of fundraising, a smart contract can automate processes such as the approval of investors and the distribution of funds.

Blockchain Technology Today

You can expect to see further expansion of the blockchain sector in the coming months as more governments and institutions explore its benefits. For now, the blockchain revolution is well underway.
submitted by BlockDotCo to u/BlockDotCo [link] [comments]

Benefits of Blockchain Technology in the Banking Industry

Benefits of Blockchain Technology in the Banking Industry
Link to original article: https://block.co/benefits-of-blockchain-technology-in-the-banking-industry/
The rapidly growing interest around blockchain is creating an increased amount of use cases across multiple industries, and a high demand for adoption by many governments. Banking, financial services, and insurance (BFSI) industry is predicted to be drastically transformed by this disruptive technology. According to Allied Market Research 2019, the blockchain value in the BFSI market reached $277.1 million in 2018 and is projected to reach $22.46 billion by 2026. Blockchain technology has the potential to solve the pain points of the current banking systems and operations including security, transparency, trust, privacy, programmability, and performance.
What is Blockchain?
Blockchain is the technology behind the Bitcoin cryptocurrency, that was proposed by Satoshi Nakamoto in 2008, as a response to the failing financial system during the crisis. It is often associated and confused with Bitcoin, but the scope of the technology is much wider. It is also important to differentiate between the Distributed Ledger Technology (DLT) and blockchain, as the terms often used interchangeably. All blockchains are DLT, but not all DLTs are blockchains. DLT is simply a decentralized database managed on a peer-to-peer basis.
“Blockchain is a type of DLT, a subcategory of a more broad definition, much like how the word ‘car’ falls under the umbrella term ‘vehicles’ and ‘Satoshi Nakamoto’ falls under ‘geniuses’.”
In essence, blockchain is a continuous sequential chain of records (‘blocks’) that are chronologically linked together with the aid of cryptography, to ensure immutability. These records are immutable, as any change to the information recorded in a particular block is stored in a new block. Moreover, the use of modern encryption algorithms enables the security of all the records from copying or editing by other users of the system. Blockchain can be programmed to record not only financial transactions as cryptocurrency but almost anything of value (Deloitte Insights, 2019).

https://preview.redd.it/k76j8u5401751.png?width=940&format=png&auto=webp&s=e7f6573a230c816a112ae4bf561f3501c353ad32
How Blockchain Can Improve Banking Industry?
The modern banking system is not perfect and commercial banks have not changed a lot to their servicing structure since the 1970s (Haycock & Richmond, 2015). Running a bank still requires large numbers of the workforce, reliance on quite outdated systems, bloated structures with high probabilities of human error, and manual work. There are several aspects, which could be improved by the application of blockchain technology in banking operations:
1) Security Enhancement
In the UK the overall value of the financial fraud losses (e.g. payment cards, remote banking, cheques) equaled £844.8 million in 2018. The situation is even worse in the US — $170 billion average yearly losses in the financial sector. According to KPMG’s Global Banking Fraud Survey 2019 the total volume, number, and value of the fraudulent activities are drastically increasing every year.
The nature of banking operations dictates the need for centralized systems, which proved to be vulnerable and subject to cyber and hack attacks. Now, the blockchain is immutable as it operates on the principles of decentralization and transparency, and all the network participants get an identical copy of the distributed ledger of transactions. Thus, if applied in banking, blockchain can increase the validity and security of the financial transactions, eliminate the need for third-party authentication, and solve the issue of a single point of failure and hacks.
Moreover, since each transaction on the blockchain has its unique fingerprint (hash) it can be easily traced and verified. Such functionality makes blockchain a great tool to combat money laundering and reduce fraudulent or illegal transactions (Guo & Liang, 2016).
2) Improving Financial Transactions Efficiency
As we mentioned previously, the utilization of obsolete mechanisms and operational systems slows down the performance of banking institutions and provides ground for human error, delays, and system failures. All these inefficiencies could be solved by applying blockchain technology. Take for example the time-consuming bilateral exchange. The process of data reconciliation needed for it could be simplified, as on the blockchain, it is inherently part of a transaction (IBM, 2016).
Blockchain and its decentralized nature eliminate intermediaries in banking operations, which significantly cuts transaction costs and boosts efficiency (Cocco et al., 2017). Blockchain does not require intermediaries, enables cross-border transfers and micro-payments, while drastically decreasing operational costs. Such transactions in the traditional banking environment are expensive (from 1% of the amount), and constitute a huge expense on a global scale. In cryptocurrency networks, transfers may range from a few minutes down to milliseconds, and the transaction fees are decided by the market forces, meaning users have the option to set their transaction fees (Deloitte, 2017).
3) Workflow Simplification
Blockchain can simplify the current complex workflow in banking institutions. As any operation can be traced, the ability to automate processes significantly reduces costs and the need for manual work. Moreover, it is impossible to make retroactive changes on the blockchain. This guarantees data immutability and excludes the human factor, thus the probability of error, data tampering, or even leakage. Using blockchain in banking operations will digitize and automate tons of manual work, greatly boost the productivity of the financial institutions and eliminate the probability of mistakes, delays, and errors.
4) Enhanced KYC & AML
Some financial institutions find it difficult to deal with problems related to policies such as Anti-Money Laundering (AML) and Know Your Customer (KYC). Numerous organizations are not able to solve these problems, due to the rapidly escalating costs. The adoption of the blockchain technology will enable the creation of a system where all clients’ information may be stored safely, making the independent verification an easy process or even automated securely. In this way, both AML and KYC processes will become simpler and easier, as all involved organizations will share the same system and the information will be updated in real-time, perhaps through the use of Digital Identities. In addition to this, blockchain technology will assist the organizations to minimize their administrative costs and reduce the workload.

https://preview.redd.it/200e0ap701751.png?width=600&format=png&auto=webp&s=6caaf26c53786c1341b7905ca33dd340f8929059
5) Smart Contracts
Smart contracts are an innovative development of blockchain technology which enables for time and resources saving, as they do not require a third-party interaction. Traditional contracts do not differ a lot from smart contracts, however, their key benefit is that obligations are automatically enforced and cannot be avoided by anyone.
When smart contracts are integrated with blockchain technology, we enjoy benefits such as security, automation, immutability, and transparency. The integration of smart contracts in the financial sector will provide opportunities for transparent auditing and real-time remittances. Traditional contracts are paper-based and require financial institutions to invest money in paperwork and maintain records. These records can be easily manipulated as they are on paper. Smart contracts offer bank tools for bookkeeping based on blockchain. Smart contracts have already been applied to the financial industry to gain greater automation.
6) Decentralized Finance
Another application of blockchain is Decentralized Finance, also known as DeFi. This application is at an early stage but its disruptiveness enables millions of people across the world to have access to financial services. DeFi refers to decentralized applications, financial smart contracts, digital assets as well as protocols popular as DApps, which are built on public blockchains such as Ethereum and Bitcoin. The aim of DeFi is the creation of a decentralized financial system that will not depend on the traditional banking system.
Decentralized Finance offers numerous benefits to the users as it eliminates middlemen, enables everyone who does not has access to financial services to enter the global economy as it is a permission-less technology, and enables innovation with the combination of DeFi products. Besides, the use of decentralized finance increases the symmetry of information and democratizes financial services in this sense. The evolution of DeFi over the years means that most people around the world are only limited by their imagination when considering how to gain benefits from the financial ecosystem. However, there are still many complexities that need addressing to further expand the full extent of the possibilities of DeFi.
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submitted by BlockDotCo to u/BlockDotCo [link] [comments]

Spreading Crypto: In Search of the Killer Application

Spreading Crypto: In Search of the Killer Application
This is the second post of our Spreading Crypto series where we take a deep dive into what it’ll take to help this technology reach broader adoption.
Mick exploring the state of apps in crypto
Our previous post explored the history of protocols and how they only become widely adopted when a compelling application makes them more accessible and easier to use.
Crypto will be no different. Blockchain technology today is mostly all low-level protocols. As with the numerous protocols that came before, these new, decentralized protocols need killer applications.
So, how’s that going? Where is crypto’s killer application? What’s the state of application development within our industry? Today we’ll try to answer those questions. We’ll also take a close look at decentralized applications — as that’s where a lot of the developer energy and focus currently is. Let’s dive in.

Popular Crypto Applications

The most popular crypto applications today are exchanges like Coinbase and Binance — each with tens of millions of users. Other popular crypto exchanges include Kraken, Bitstamp, Gemini, and Bitfinex. In recent years, new derivatives platforms have emerged like FTX and Deribit.
The most popular crypto applications today are primarily focused on trading, speculation, and finance. This class of applications dwarfs all other types of applications in terms of users and growth. That’s either a sign of strong product/market fit, or we just haven’t yet discovered other good use-cases. Or a mix of both.
https://preview.redd.it/8rnxghfrdh551.png?width=1600&format=png&auto=webp&s=b3df8c3d87410f6b84432df79528ee4324daf04d
Beyond the fact that the most popular crypto applications are all used for speculation, another common thread is that they are all centralized.
A centralized application means that ultimate power and control rests with a centralized party (the company who built it). For example, if Coinbase or Binance wants to block you from withdrawing your funds for whatever reason (maybe for suspicious activity or fraud), they can do that. They have control of their servers so they have control of your funds.
Most popular applications that we all use daily are centralized (Netflix, Facebook, Youtube, etc). That’s the standard for modern, world-class applications today.

Decentralized Applications

Even though the most popular crypto applications are all centralized, most of the developer energy and focus in our industry is with decentralized applications (dApps) and non-custodial products.
These are products where only the user can touch or move funds. Not even the company or developer who built the application can access or control or stop funds from being moved. Only the user has control.
These applications allow users to truly become their own bank and have absolute control of their money.
They also allow users to perform blockchain transactions and interact directly with decentralized protocols. Some of the most popular non-custodial products include Ledger, MetaMask, and MyCrypto (#ProudInvestor).
While the benefits of this type of application are obvious (user has full control of their funds), it comes with a lot of tradeoffs. We will cover that later in this post.
https://preview.redd.it/rs6tj7vsdh551.png?width=1600&format=png&auto=webp&s=86fe5bca3a9466abab5e78c9873ce3b57609f2d2

Libertarianism + Crypto

If the most popular applications tend to be centralized (inside and out of crypto), why is so much of our community focused on building decentralized applications (dApps)? For the casual observer, that’s a reasonable, valid question.
“Not your keys, not your coins.”
This meme is endlessly repeated among longtime crypto hodlers. If you’re not in complete control of your crypto (i.e. using non-custodial wallets or dApps), then it’s not really your crypto.
Engrained in the early culture of Bitcoin has always been a strong distrust for centralized authority and power — including the too-big-to-fail government-backed financial system. In the midst of the Financial Crisis, Satoshi Nakamoto included this headline in Bitcoin’s genesis block: “Chancellor on brink of second bailout for banks.” There has always been a close connection between libertarianism & cryptocurrency.
So it’s no surprise that much of the crypto developer community is spending their time building applications that are non-custodial or decentralized. It’s part of the DNA, the soul, the essence of our community.
https://preview.redd.it/fy33zhkvdh551.png?width=1600&format=png&auto=webp&s=386c741f13e9119ecfcfffe1c781d09ce58704ed

Personal Experience

When I was at Mainframe, we built Mainframe OS — a platform that developers use to build and launch decentralized applications (dApps). I’m deeply familiar with what’s possible and what’s not in the world of dApps. I have the battle scars and gray hair to prove it. We’ve hosted panels around the various challenges. We’ve even produced videos poking fun at how complicated it is for end-users to interact with.
After having spent three years in the trenches of this non-custodial world, I no longer believe that decentralized applications are capable of bringing crypto to the masses.
While I totally understand and appreciate the ethos of self-sovereignty, independence, and liberty… I think it’s a terrible mistake that as a community we are spending most of our time in this area of application development. Decentralized applications will not take crypto to the masses.
Mainframe OS

Overwhelming Friction

The user friction that comes with decentralized applications is just too overwhelming. Let’s go through a few of the bigger points:
  1. Knowledge & Education: Most non-custodial products do not abstract away any of the blockchain complexity. In fact, they often expose more of it because the most loyal users are crypto nerds. Imagine how a normie n00b feels when she starts seeing words like seed phrases, public & private keys, gas limits, transaction fees, blockchain explorers, hex addresses, and confirmation times. There is a lot for a user to learn and become educated on. That’s friction. The learning curve on this is just too damn high.
  2. User Experience: It is currently impossible to create a smooth and performant user experience in non-custodial wallets or decentralized applications. Any interaction that requires a blockchain transaction will feel sluggish and slow. We built a messaging app on Ethereum and presented it at DevCon3 in Cancun. The technical constraints of blockchain technology were crushing to the user experience. We simply couldn’t create the real-time, modern messaging experience that users have come to expect from similar apps like Slack or WhatsApp. Until blockchains are closer in speed to web servers (which will be difficult given their decentralized nature), dApps will never be able to create the smooth user experience that the masses expect.
  3. Loss of Funds Risk: There is no “Forgot Password” functionality when storing your own crypto in a non-custodial wallet. There is no customer support agent you can ping. There is no company behind it that can make you whole if you make a mistake and lose your money. You are on your own. One wrong move and your money is all gone. If you lose your private key, there is no way to recover your funds. This just isn’t the type of customer support experience people want or are used to.
Onyx Messaging App

What Our Industry Has Wrong

Decentralized applications will always have a place in the market — especially among the most hardcore crypto people and parts of the world where these tools are essential. I’m personally an active user of many non-custodial products. I’m a blockchain early-adopter, I like to hold my own money, and I’m very forgiving of suboptimal UX.
However, I’m not afraid to say the poop stinks. Decentralized applications simply cannot produce the type of product experience that mainstream consumers expect.
If the goal is growth and adoption, as a community I believe we’re barking up the wrong tree. We are trying to make fetch happen. It isn’t gonna happen. Our Netscape Moment is unlikely to arrive as long as we’re focused on decentralized applications.
\"Mean Girls\" movie
There’s a reason why the most popular consumer applications are centralized (Spotify, Amazon, Instagram, etc). There’s a reason why the most popular crypto applications are centralized (Coinbase, Binance, etc).
The frameworks, tooling, infrastructure, and services to support these modern, centralized applications are mature and well-established. It’s easier to build apps that are fast & performant. It’s easier to launch apps that are convenient and on all form-factors (especially mobile). It’s easier to distribute and promote via all the major app store channels (iOS/Android). It’s easier to patch, update, and upgrade. It’s easier to experiment and iterate.
It’s easier to design, build, and launch a world-class application when it is centralized! It is why we’ve chosen this path for Genesis Block.
---
Other Ways to Consume This Content:
We have a lot more content coming. Be sure to follow our channels: https://genesisblock.com/follow/
Have you already downloaded the app? We're Genesis Block, a new digital bank that's powered by crypto & decentralized protocols. The app is live in the App Store (iOS & Android). Get the link to download at https://genesisblock.com/download
submitted by mickhagen to genesisblockhq [link] [comments]

Bitcoin and Meritocratic Capitalism

Part 1/4 - NSA Connection:
First off, the SHA-256 algorithm, which stands for Secure Hash Algorithm 256, is a member of the SHA-2 cryptographic hash functions designed by the NSA and first published in 2001.
SHA-256, like other hash functions, takes any input and produces an output (often called a hash) of fixed length. The output of a hashing algorithm such as SHA-256 will always be the same length - regardless of the input size. Specifically, the output is, as the name suggests, 256 bits.
Moreover, all outputs appear completely random and offer no information about the input that created it.
The Bitcoin Network utilises the SHA-256 algorithm for mining and the creation of new addresses.
Who is Satoshi Nakamoto? What does Satoshi Nakamoto mean?
Out of respect for their anonymity, it would be rude to speculate in a video about who Satoshi Nakamoto is likely to be. The reality is, it's not important. Let me explain: Any human being can be attacked. Jesus could come back from the dead, and there would be haters. Therefore, the Satoshi Nakamoto approach neutralises the natural human herd behaviour, exacerbated by the media, to attack and discredit. This is a very important part of Bitcoin's success thus far. Also, from a security perspective, those who wish to dox Satoshi Nakamoto in a video are essentially putting his, or her, or their, life at risk...for the sake of views.
As a genius who has produced an innovation not just from a technical perspective but also a monetary perspective, they should be treated with more respect than that.
As for the name Satoshi Nakamoto, I would speculate that it is a homage to Tatsuaki Okamoto and Satoshi Obana - two cryptographers from Japan. There is another reason for the name, but that...is confidential.
In 1996, the NSA's Cryptology Division of their Office of Information Security Research and Technology published a paper titled: "How to make a mint: The cryptography of anonymous electronic cash", first publishing it in an MIT mailing list and later, in 1997, in the American University Law Review. One of the researchers they referenced was Tatsuaki Okamoto.

Part 2/4 - 'Crypto Market':
Most of the crypto market is a scam.
By the way, this was predicted very early on in the Bitcoin Talk forums - check out this interaction from November 8th, 2010:
"if bitcoin really takes off I can see lots of get-rich-quick imitators coming on the scene: gitcoin, nitcoin, witcoin, titcoin, shitcoin...
Of course the cheap imitators will disappear as quickly as those 1990s "internet currencies", but lots of people will get burned along the way."
To which Bitcoin OG Gavin Andresen replies:
"I agree - we're in the Wild West days of open-source currency. I expect people will get burned by scams, imitators, ponzi schemes and price bubbles."
"I don't think there's a whole lot that can be done about scammers, imitators and ponzi schemes besides warning people to be careful with their money (whether dollars, euros or bitcoins)."
Now, on the one hand, lack of regulation is more meritocratic (as you don't have to be an accredited investor just to get access).
On the other hand, it means that crypto is, as Gavin said, a Wild West environment, with many cowboys in the Desert. Be careful.
This is the same with most online courses - particularly 'How to get rich quick' courses - however with crypto you have an exponential increase in the supply of victims during the bull cycles so it is particularly prevalent during those times.
In addition to this, leverage trading exchanges, which are no different to casinos, prey on naive retail traders who:
A) Think they can outsmart professional traders with actual risk management skills; and
B) Think they can outsmart the exchanges themselves who have an informational advantage as well as an incentive to chase stop losses and liquidate positions.

Part 3/4 - CBDCs:
The Fed and Central Banks around the world have printed themselves into a corner.
Quantitative easing was the band-aid for the Great Financial Crisis in 2008, and more recent events have propelled the rate of money printing to absurd levels.
This means that all currencies are in a race to zero - and it becomes a game of who can print more fiat faster.
The powers that be know that this fiat frenzy is unsustainable, and that more and more people are becoming aware that it is a debt based system, based on nothing.
The monetary system devised by bankers, for bankers, in 1913 on Jekyll Island and supercharged in 1971 is fairly archaic and also does not allow for meritocratic value transfer - fiat printing itself increases inequality.
They, obviously, know this (as it is by design).
The issue (for them) is that more and more people are starting to become aware of this.
Moving to a modernised monetary system will allow those who have rigged the rules of the game for the last Century to get away scot-free.
It will also pave the way for a new wealthy, and more tech literate, elite to emerge - again predicted in the Bitcoin Talk forums.
Now...back to the powers that be.
Bitcoin provides a natural transition to Central Bank Digital Currencies (CBDCs) and what I would describe as Finance 2.0, but what are the benefits of CBDCs for the state?
More control, easier tax collection, more flexibility in monetary policy (i.e. negative interest rates) and generally a more efficient monetary system.
This leads us to the kicker: which is the war on cash. The cashless society was a fantasy just a few years ago, however now it doesn't seem so far fetched. No comment.

Part 4/4 - Bitcoin:
What about Bitcoin?
Well, Bitcoin has incredibly strong network effects; it is the most powerful computer network in the World.
But what about Bitcoin's reputation?
Bankers hate it.
Warren Buffett hates it.
Precisely, and the public hates bankers.
Sure, the investing public respects Buffett, but the general public perception of anyone worth $73 billion is not exactly at all time highs right now amid record wealth inequality.
In the grand scheme of things, the market cap of Bitcoin is currently around $179 billion.
For example, the market cap of Gold is around $9 trillion, which is 50x the Market Cap of Bitcoin.
Money has certain characteristics.
In my opinion, what makes Bitcoin unique is the fact that it has a finite total supply (21 million) and a predictable supply schedule via the halving events every 4 years, which cut in half the rate at which new Bitcoin is released into circulation.
Clearly, with these properties, it seems likely that Bitcoin could act as a meaningful hedge against inflation.
One of the key strengths of Bitcoin is the fact that the Network is decentralised...
Many people don't know that PayPal originally wanted to create a global currency similar to crypto.
Overall, a speculative thesis would be the following:
Satoshi Nakamoto is one of the most important entities of the 21st Century, and will accelerate the next transition of the human race.
Trusted third parties are security holes.
Bitcoin is the catalyst for Finance 2.0, whereby value transfer is conducted in a more meritocratic and decentralised fashion.
In 1964, Russian astrophysicist Nikolai Kardashev designed the Kardashev Scale.
At the time, he was looking for signs of extraterrestrial life within cosmic signals.
The Scale has three categories, which are based on the amount of usable energy a civilisation has at its disposal, and the degree of space colonisation.
Generally, a Type 1 Civilisation has achieved mastery of its home planet (10^16W);
A Type 2 Civilisation has mastery over its solar system (10^26W);
and a Type 3 Civilisation has mastery over its Galaxy (10^36W).
We humans are a Type 0 Civilisation on this Scale.
Nonetheless, our exponential technological growth in the few decades indicates that we are somewhere between Type 0 and Type 1.
In fact, according to Carl Sagan's interpolated Kardashev Scale and recent global energy consumption, we are about 0.73.
Physicist Freeman Dyson estimated that within 200 years or so, we should attain Type 1 status.
As a technology that, through its decentralisation, links entities globally and makes value transfer between humans more efficient, Bitcoin could prove a key piece of our progression as a civilisation.
What are your thoughts?
Is it true...or false?
https://www.youtube.com/watch?v=1oQLOqpP1ZM
submitted by financeoptimum to Capitalism [link] [comments]

The Truth about Bitcoin?

Part 1/4 - NSA Connection:
First off, the SHA-256 algorithm, which stands for Secure Hash Algorithm 256, is a member of the SHA-2 cryptographic hash functions designed by the NSA and first published in 2001.
SHA-256, like other hash functions, takes any input and produces an output (often called a hash) of fixed length. The output of a hashing algorithm such as SHA-256 will always be the same length - regardless of the input size. Specifically, the output is, as the name suggests, 256 bits.
Moreover, all outputs appear completely random and offer no information about the input that created it.
The Bitcoin Network utilises the SHA-256 algorithm for mining and the creation of new addresses.
Who is Satoshi Nakamoto? What does Satoshi Nakamoto mean?
Out of respect for their anonymity, it would be rude to speculate in a video about who Satoshi Nakamoto is likely to be. The reality is, it's not important. Let me explain: Any human being can be attacked. Jesus could come back from the dead, and there would be haters. Therefore, the Satoshi Nakamoto approach neutralises the natural human herd behaviour, exacerbated by the media, to attack and discredit. This is a very important part of Bitcoin's success thus far. Also, from a security perspective, those who wish to dox Satoshi Nakamoto in a video are essentially putting his, or her, or their, life at risk...for the sake of views.
As a genius who has produced an innovation not just from a technical perspective but also a monetary perspective, they should be treated with more respect than that.
As for the name Satoshi Nakamoto, I would speculate that it is a homage to Tatsuaki Okamoto and Satoshi Obana - two cryptographers from Japan. There is another reason for the name, but that...is confidential.
In 1996, the NSA's Cryptology Division of their Office of Information Security Research and Technology published a paper titled: "How to make a mint: The cryptography of anonymous electronic cash", first publishing it in an MIT mailing list and later, in 1997, in the American University Law Review. One of the researchers they referenced was Tatsuaki Okamoto.

Part 2/4 - 'Crypto Market':
Most of the crypto market is a scam.
By the way, this was predicted very early on in the Bitcoin Talk forums - check out this interaction from November 8th, 2010:
"if bitcoin really takes off I can see lots of get-rich-quick imitators coming on the scene: gitcoin, nitcoin, witcoin, titcoin, shitcoin...
Of course the cheap imitators will disappear as quickly as those 1990s "internet currencies", but lots of people will get burned along the way."
To which Bitcoin OG Gavin Andresen replies:
"I agree - we're in the Wild West days of open-source currency. I expect people will get burned by scams, imitators, ponzi schemes and price bubbles."
"I don't think there's a whole lot that can be done about scammers, imitators and ponzi schemes besides warning people to be careful with their money (whether dollars, euros or bitcoins)."
Now, on the one hand, lack of regulation is more meritocratic (as you don't have to be an accredited investor just to get access).
On the other hand, it means that crypto is, as Gavin said, a Wild West environment, with many cowboys in the Desert. Be careful.
This is the same with most online courses - particularly 'How to get rich quick' courses - however with crypto you have an exponential increase in the supply of victims during the bull cycles so it is particularly prevalent during those times.
In addition to this, leverage trading exchanges, which are no different to casinos, prey on naive retail traders who:
A) Think they can outsmart professional traders with actual risk management skills; and
B) Think they can outsmart the exchanges themselves who have an informational advantage as well as an incentive to chase stop losses and liquidate positions.

Part 3/4 - CBDCs:
The Fed and Central Banks around the world have printed themselves into a corner.
Quantitative easing was the band-aid for the Great Financial Crisis in 2008, and more recent events have propelled the rate of money printing to absurd levels.
This means that all currencies are in a race to zero - and it becomes a game of who can print more fiat faster.
The powers that be know that this fiat frenzy is unsustainable, and that more and more people are becoming aware that it is a debt based system, based on nothing.
The monetary system devised by bankers, for bankers, in 1913 on Jekyll Island and supercharged in 1971 is fairly archaic and also does not allow for meritocratic value transfer - fiat printing itself increases inequality.
They, obviously, know this (as it is by design).
The issue (for them) is that more and more people are starting to become aware of this.
Moving to a modernised monetary system will allow those who have rigged the rules of the game for the last Century to get away scot-free.
It will also pave the way for a new wealthy, and more tech literate, elite to emerge - again predicted in the Bitcoin Talk forums.
Now...back to the powers that be.
Bitcoin provides a natural transition to Central Bank Digital Currencies (CBDCs) and what I would describe as Finance 2.0, but what are the benefits of CBDCs for the state?
More control, easier tax collection, more flexibility in monetary policy (i.e. negative interest rates) and generally a more efficient monetary system.
This leads us to the kicker: which is the war on cash. The cashless society was a fantasy just a few years ago, however now it doesn't seem so far fetched. No comment.

Part 4/4 - Bitcoin:
What about Bitcoin?
Well, Bitcoin has incredibly strong network effects; it is the most powerful computer network in the World.
But what about Bitcoin's reputation?
Bankers hate it.
Warren Buffett hates it.
Precisely, and the public hates bankers.
Sure, the investing public respects Buffett, but the general public perception of anyone worth $73 billion is not exactly at all time highs right now amid record wealth inequality.
In the grand scheme of things, the market cap of Bitcoin is currently around $179 billion.
For example, the market cap of Gold is around $9 trillion, which is 50x the Market Cap of Bitcoin.
Money has certain characteristics.
In my opinion, what makes Bitcoin unique is the fact that it has a finite total supply (21 million) and a predictable supply schedule via the halving events every 4 years, which cut in half the rate at which new Bitcoin is released into circulation.
Clearly, with these properties, it seems likely that Bitcoin could act as a meaningful hedge against inflation.
One of the key strengths of Bitcoin is the fact that the Network is decentralised...
Many people don't know that PayPal originally wanted to create a global currency similar to crypto.
Overall, a speculative thesis would be the following:
Satoshi Nakamoto is one of the most important entities of the 21st Century, and will accelerate the next transition of the human race.
Trusted third parties are security holes.
Bitcoin is the catalyst for Finance 2.0, whereby value transfer is conducted in a more meritocratic and decentralised fashion.
In 1964, Russian astrophysicist Nikolai Kardashev designed the Kardashev Scale.
At the time, he was looking for signs of extraterrestrial life within cosmic signals.
The Scale has three categories, which are based on the amount of usable energy a civilisation has at its disposal, and the degree of space colonisation.
Generally, a Type 1 Civilisation has achieved mastery of its home planet (10^16W);
A Type 2 Civilisation has mastery over its solar system (10^26W);
and a Type 3 Civilisation has mastery over its Galaxy (10^36W).
We humans are a Type 0 Civilisation on this Scale.
Nonetheless, our exponential technological growth in the few decades indicates that we are somewhere between Type 0 and Type 1.
In fact, according to Carl Sagan's interpolated Kardashev Scale and recent global energy consumption, we are about 0.73.
Physicist Freeman Dyson estimated that within 200 years or so, we should attain Type 1 status.
As a technology that, through its decentralisation, links entities globally and makes value transfer between humans more efficient, Bitcoin could prove a key piece of our progression as a civilisation.
What are your thoughts?
Is it true...or false?
https://www.youtube.com/watch?v=1oQLOqpP1ZM
submitted by financeoptimum to investing_discussion [link] [comments]

Cryptocurrency Terms You Need to Know Part 1

Cryptocurrency Terms You Need to Know Part 1

https://preview.redd.it/lr264c0hms351.jpg?width=1280&format=pjpg&auto=webp&s=2ea1af59c0bcc97965300211a6c1979668fab302
On our previous blog posts, we’ve talked and introduced Bitcoin, wallets, blockchains, financial technology, and the like to our readers. For sure, some are confused as they just encountered these words for the first time. In this article, we’ve jotted down the common words or phrases that the readers will frequently encounter upon entering the world of cryptocurrency.
Airdrop — an event or process where a project distributes a cryptocurrency to different wallet addresses for free
Altcoin — or alternative coin. Any type of cryptocurrency other than Bitcoin. These coins run its own blockchain network and operate separately and differently from Bitcoin.
Bitcoin — the first successful type of cryptocurrency launched
Blockchain — a digital public ledger that allows users to securely store and send information and currency. Read our article about Blockchain here: https://sw.pe/blogblockchain
Circulating Supply — number of cryptocurrencies that are available and circulating in the market
Cryptocurrency — a virtual or digital currency (example Bitcoin, Litecoin, Swipe Token)
Cryptography — is a mathematical practice of encoding and decoding data or codes
Decentralization — a system or process powered by a group of people or team and not by any central power or authority
Delisting — a process where either a cryptocurrency requests to remove its assets on an exchange or the removal of the crypto by the exchange authority
Double-spending — a type of deceit where an amount of money is spent more than once.
Exchange — a place (website or app) where people can buy and sell cryptocurrencies (examples are Bithumb, Bilaxy, and Bittrex)
Fiat — is a currency issued by the country’s central bank (local currency)
Halving — an event where the usual block reward is reduced by half. Read our article about Bitcoin Halving here: https://medium.com/swipe/what-you-need-to-know-about-bitcoin-halving-58c39db2a487
Initial Coin Offering (ICO) — a method where a new type of cryptocurrency is being offered to the public to invest in for the first time
Know Your Customer — or KYC is a procedure in the financial industry where companies ask for identification details to verify the identity of the customers
Listing — a process where an exchange adds a new cryptocurrency on their system
Mining — a process of validating the information and create a new block in the blockchain.
Node — a computer that participates in building and maintaining the blockchain network.
Peer-to-Peer Network — or P2P a process where two or more computers are connected to share information or data directly
Private Key — a series of random words or mnemonic phrase that serves as the password to access your cryptocurrencies
Public Keys — an alphanumeric code which can be shared publicly to send cryptocurrency transactions
Roadmap — shows the short-term and long-term business goals of a certain company
Satoshi Nakamoto — an unidentified person or group who founded and created Bitcoin
Staking — the act of holding cryptocurrency in a wallet for a period of time to receive a reward
Token — a type of cryptocurrency that does not have its own blockchain.
Wallets — a device, application, or website where people can manage their cryptocurrency assets. Read our article about wallets here: https://sw.pe/blogcryptowallet
Whitepaper — a document that explains the detailed plan and strategy of a certain project. It is created to generate interest and educate people about the concept that the person (or company) is trying to introduce
These are the terminologies that will surely be helpful when familiarizing yourselves in cryptocurrencies. In the second part of this blog, we will be sharing with you more complex words that you will encounter once you fully entered the industry.
---
This blog article is also posted at: https://sw.pe/blogcryptoterms1
submitted by SwipeWallet to Swipe_io [link] [comments]

The Truth about Bitcoin?

Part 1/4 - NSA Connection:
First off, the SHA-256 algorithm, which stands for Secure Hash Algorithm 256, is a member of the SHA-2 cryptographic hash functions designed by the NSA and first published in 2001.
SHA-256, like other hash functions, takes any input and produces an output (often called a hash) of fixed length. The output of a hashing algorithm such as SHA-256 will always be the same length - regardless of the input size. Specifically, the output is, as the name suggests, 256 bits.
Moreover, all outputs appear completely random and offer no information about the input that created it.
The Bitcoin Network utilises the SHA-256 algorithm for mining and the creation of new addresses.
Who is Satoshi Nakamoto? What does Satoshi Nakamoto mean?
Out of respect for their anonymity, it would be rude to speculate in a video about who Satoshi Nakamoto is likely to be. The reality is, it's not important. Let me explain: Any human being can be attacked. Jesus could come back from the dead, and there would be haters. Therefore, the Satoshi Nakamoto approach neutralises the natural human herd behaviour, exacerbated by the media, to attack and discredit. This is a very important part of Bitcoin's success thus far. Also, from a security perspective, those who wish to dox Satoshi Nakamoto in a video are essentially putting his, or her, or their, life at risk...for the sake of views.
As a genius who has produced an innovation not just from a technical perspective but also a monetary perspective, they should be treated with more respect than that.
As for the name Satoshi Nakamoto, I would speculate that it is a homage to Tatsuaki Okamoto and Satoshi Obana - two cryptographers from Japan. There is another reason for the name, but that...is confidential.
In 1996, the NSA's Cryptology Division of their Office of Information Security Research and Technology published a paper titled: "How to make a mint: The cryptography of anonymous electronic cash", first publishing it in an MIT mailing list and later, in 1997, in the American University Law Review. One of the researchers they referenced was Tatsuaki Okamoto.

Part 2/4 - 'Crypto Market':
Most of the crypto market is a scam.
By the way, this was predicted very early on in the Bitcoin Talk forums - check out this interaction from November 8th, 2010:
"if bitcoin really takes off I can see lots of get-rich-quick imitators coming on the scene: gitcoin, nitcoin, witcoin, titcoin, shitcoin...
Of course the cheap imitators will disappear as quickly as those 1990s "internet currencies", but lots of people will get burned along the way."
To which Bitcoin OG Gavin Andresen replies:
"I agree - we're in the Wild West days of open-source currency. I expect people will get burned by scams, imitators, ponzi schemes and price bubbles."
"I don't think there's a whole lot that can be done about scammers, imitators and ponzi schemes besides warning people to be careful with their money (whether dollars, euros or bitcoins)."
Now, on the one hand, lack of regulation is more meritocratic (as you don't have to be an accredited investor just to get access).
On the other hand, it means that crypto is, as Gavin said, a Wild West environment, with many cowboys in the Desert. Be careful.
This is the same with most online courses - particularly 'How to get rich quick' courses - however with crypto you have an exponential increase in the supply of victims during the bull cycles so it is particularly prevalent during those times.
In addition to this, leverage trading exchanges, which are no different to casinos, prey on naive retail traders who:
A) Think they can outsmart professional traders with actual risk management skills; and
B) Think they can outsmart the exchanges themselves who have an informational advantage as well as an incentive to chase stop losses and liquidate positions.

Part 3/4 - CBDCs:
The Fed and Central Banks around the world have printed themselves into a corner.
Quantitative easing was the band-aid for the Great Financial Crisis in 2008, and more recent events have propelled the rate of money printing to absurd levels.
This means that all currencies are in a race to zero - and it becomes a game of who can print more fiat faster.
The powers that be know that this fiat frenzy is unsustainable, and that more and more people are becoming aware that it is a debt based system, based on nothing.
The monetary system devised by bankers, for bankers, in 1913 on Jekyll Island and supercharged in 1971 is fairly archaic and also does not allow for meritocratic value transfer - fiat printing itself increases inequality.
They, obviously, know this (as it is by design).
The issue (for them) is that more and more people are starting to become aware of this.
Moving to a modernised monetary system will allow those who have rigged the rules of the game for the last Century to get away scot-free.
It will also pave the way for a new wealthy, and more tech literate, elite to emerge - again predicted in the Bitcoin Talk forums.
Now...back to the powers that be.
Bitcoin provides a natural transition to Central Bank Digital Currencies (CBDCs) and what I would describe as Finance 2.0, but what are the benefits of CBDCs for the state?
More control, easier tax collection, more flexibility in monetary policy (i.e. negative interest rates) and generally a more efficient monetary system.
This leads us to the kicker: which is the war on cash. The cashless society was a fantasy just a few years ago, however now it doesn't seem so far fetched. No comment.

Part 4/4 - Bitcoin:
What about Bitcoin?
Well, Bitcoin has incredibly strong network effects; it is the most powerful computer network in the World.
But what about Bitcoin's reputation?
Bankers hate it.
Warren Buffett hates it.
Precisely, and the public hates bankers.
Sure, the investing public respects Buffett, but the general public perception of anyone worth $73 billion is not exactly at all time highs right now amid record wealth inequality.
In the grand scheme of things, the market cap of Bitcoin is currently around $179 billion.
For example, the market cap of Gold is around $9 trillion, which is 50x the Market Cap of Bitcoin.
Money has certain characteristics.
In my opinion, what makes Bitcoin unique is the fact that it has a finite total supply (21 million) and a predictable supply schedule via the halving events every 4 years, which cut in half the rate at which new Bitcoin is released into circulation.
Clearly, with these properties, it seems likely that Bitcoin could act as a meaningful hedge against inflation.
One of the key strengths of Bitcoin is the fact that the Network is decentralised...
Many people don't know that PayPal originally wanted to create a global currency similar to crypto.
Overall, a speculative thesis would be the following:
Satoshi Nakamoto is one of the most important entities of the 21st Century, and will accelerate the next transition of the human race.
Trusted third parties are security holes.
Bitcoin is the catalyst for Finance 2.0, whereby value transfer is conducted in a more meritocratic and decentralised fashion.
In 1964, Russian astrophysicist Nikolai Kardashev designed the Kardashev Scale.
At the time, he was looking for signs of extraterrestrial life within cosmic signals.
The Scale has three categories, which are based on the amount of usable energy a civilisation has at its disposal, and the degree of space colonisation.
Generally, a Type 1 Civilisation has achieved mastery of its home planet (10^16W);
A Type 2 Civilisation has mastery over its solar system (10^26W);
and a Type 3 Civilisation has mastery over its Galaxy (10^36W).
We humans are a Type 0 Civilisation on this Scale.
Nonetheless, our exponential technological growth in the few decades indicates that we are somewhere between Type 0 and Type 1.
In fact, according to Carl Sagan's interpolated Kardashev Scale and recent global energy consumption, we are about 0.73.
Physicist Freeman Dyson estimated that within 200 years or so, we should attain Type 1 status.
As a technology that, through its decentralisation, links entities globally and makes value transfer between humans more efficient, Bitcoin could prove a key piece of our progression as a civilisation.
What are your thoughts?
Is it true...or false?
https://www.youtube.com/watch?v=1oQLOqpP1ZM
submitted by financeoptimum to Libertarian [link] [comments]

Bitcoin (BTC)A Peer-to-Peer Electronic Cash System.

Bitcoin (BTC)A Peer-to-Peer Electronic Cash System.
  • Bitcoin (BTC) is a peer-to-peer cryptocurrency that aims to function as a means of exchange that is independent of any central authority. BTC can be transferred electronically in a secure, verifiable, and immutable way.
  • Launched in 2009, BTC is the first virtual currency to solve the double-spending issue by timestamping transactions before broadcasting them to all of the nodes in the Bitcoin network. The Bitcoin Protocol offered a solution to the Byzantine Generals’ Problem with a blockchain network structure, a notion first created by Stuart Haber and W. Scott Stornetta in 1991.
  • Bitcoin’s whitepaper was published pseudonymously in 2008 by an individual, or a group, with the pseudonym “Satoshi Nakamoto”, whose underlying identity has still not been verified.
  • The Bitcoin protocol uses an SHA-256d-based Proof-of-Work (PoW) algorithm to reach network consensus. Its network has a target block time of 10 minutes and a maximum supply of 21 million tokens, with a decaying token emission rate. To prevent fluctuation of the block time, the network’s block difficulty is re-adjusted through an algorithm based on the past 2016 block times.
  • With a block size limit capped at 1 megabyte, the Bitcoin Protocol has supported both the Lightning Network, a second-layer infrastructure for payment channels, and Segregated Witness, a soft-fork to increase the number of transactions on a block, as solutions to network scalability.

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1. What is Bitcoin (BTC)?

  • Bitcoin is a peer-to-peer cryptocurrency that aims to function as a means of exchange and is independent of any central authority. Bitcoins are transferred electronically in a secure, verifiable, and immutable way.
  • Network validators, whom are often referred to as miners, participate in the SHA-256d-based Proof-of-Work consensus mechanism to determine the next global state of the blockchain.
  • The Bitcoin protocol has a target block time of 10 minutes, and a maximum supply of 21 million tokens. The only way new bitcoins can be produced is when a block producer generates a new valid block.
  • The protocol has a token emission rate that halves every 210,000 blocks, or approximately every 4 years.
  • Unlike public blockchain infrastructures supporting the development of decentralized applications (Ethereum), the Bitcoin protocol is primarily used only for payments, and has only very limited support for smart contract-like functionalities (Bitcoin “Script” is mostly used to create certain conditions before bitcoins are used to be spent).

2. Bitcoin’s core features

For a more beginner’s introduction to Bitcoin, please visit Binance Academy’s guide to Bitcoin.

Unspent Transaction Output (UTXO) model

A UTXO transaction works like cash payment between two parties: Alice gives money to Bob and receives change (i.e., unspent amount). In comparison, blockchains like Ethereum rely on the account model.
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Nakamoto consensus

In the Bitcoin network, anyone can join the network and become a bookkeeping service provider i.e., a validator. All validators are allowed in the race to become the block producer for the next block, yet only the first to complete a computationally heavy task will win. This feature is called Proof of Work (PoW).
The probability of any single validator to finish the task first is equal to the percentage of the total network computation power, or hash power, the validator has. For instance, a validator with 5% of the total network computation power will have a 5% chance of completing the task first, and therefore becoming the next block producer.
Since anyone can join the race, competition is prone to increase. In the early days, Bitcoin mining was mostly done by personal computer CPUs.
As of today, Bitcoin validators, or miners, have opted for dedicated and more powerful devices such as machines based on Application-Specific Integrated Circuit (“ASIC”).
Proof of Work secures the network as block producers must have spent resources external to the network (i.e., money to pay electricity), and can provide proof to other participants that they did so.
With various miners competing for block rewards, it becomes difficult for one single malicious party to gain network majority (defined as more than 51% of the network’s hash power in the Nakamoto consensus mechanism). The ability to rearrange transactions via 51% attacks indicates another feature of the Nakamoto consensus: the finality of transactions is only probabilistic.
Once a block is produced, it is then propagated by the block producer to all other validators to check on the validity of all transactions in that block. The block producer will receive rewards in the network’s native currency (i.e., bitcoin) as all validators approve the block and update their ledgers.

The blockchain

Block production

The Bitcoin protocol utilizes the Merkle tree data structure in order to organize hashes of numerous individual transactions into each block. This concept is named after Ralph Merkle, who patented it in 1979.
With the use of a Merkle tree, though each block might contain thousands of transactions, it will have the ability to combine all of their hashes and condense them into one, allowing efficient and secure verification of this group of transactions. This single hash called is a Merkle root, which is stored in the Block Header of a block. The Block Header also stores other meta information of a block, such as a hash of the previous Block Header, which enables blocks to be associated in a chain-like structure (hence the name “blockchain”).
An illustration of block production in the Bitcoin Protocol is demonstrated below.

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Block time and mining difficulty

Block time is the period required to create the next block in a network. As mentioned above, the node who solves the computationally intensive task will be allowed to produce the next block. Therefore, block time is directly correlated to the amount of time it takes for a node to find a solution to the task. The Bitcoin protocol sets a target block time of 10 minutes, and attempts to achieve this by introducing a variable named mining difficulty.
Mining difficulty refers to how difficult it is for the node to solve the computationally intensive task. If the network sets a high difficulty for the task, while miners have low computational power, which is often referred to as “hashrate”, it would statistically take longer for the nodes to get an answer for the task. If the difficulty is low, but miners have rather strong computational power, statistically, some nodes will be able to solve the task quickly.
Therefore, the 10 minute target block time is achieved by constantly and automatically adjusting the mining difficulty according to how much computational power there is amongst the nodes. The average block time of the network is evaluated after a certain number of blocks, and if it is greater than the expected block time, the difficulty level will decrease; if it is less than the expected block time, the difficulty level will increase.

What are orphan blocks?

In a PoW blockchain network, if the block time is too low, it would increase the likelihood of nodes producingorphan blocks, for which they would receive no reward. Orphan blocks are produced by nodes who solved the task but did not broadcast their results to the whole network the quickest due to network latency.
It takes time for a message to travel through a network, and it is entirely possible for 2 nodes to complete the task and start to broadcast their results to the network at roughly the same time, while one’s messages are received by all other nodes earlier as the node has low latency.
Imagine there is a network latency of 1 minute and a target block time of 2 minutes. A node could solve the task in around 1 minute but his message would take 1 minute to reach the rest of the nodes that are still working on the solution. While his message travels through the network, all the work done by all other nodes during that 1 minute, even if these nodes also complete the task, would go to waste. In this case, 50% of the computational power contributed to the network is wasted.
The percentage of wasted computational power would proportionally decrease if the mining difficulty were higher, as it would statistically take longer for miners to complete the task. In other words, if the mining difficulty, and therefore targeted block time is low, miners with powerful and often centralized mining facilities would get a higher chance of becoming the block producer, while the participation of weaker miners would become in vain. This introduces possible centralization and weakens the overall security of the network.
However, given a limited amount of transactions that can be stored in a block, making the block time too longwould decrease the number of transactions the network can process per second, negatively affecting network scalability.

3. Bitcoin’s additional features

Segregated Witness (SegWit)

Segregated Witness, often abbreviated as SegWit, is a protocol upgrade proposal that went live in August 2017.
SegWit separates witness signatures from transaction-related data. Witness signatures in legacy Bitcoin blocks often take more than 50% of the block size. By removing witness signatures from the transaction block, this protocol upgrade effectively increases the number of transactions that can be stored in a single block, enabling the network to handle more transactions per second. As a result, SegWit increases the scalability of Nakamoto consensus-based blockchain networks like Bitcoin and Litecoin.
SegWit also makes transactions cheaper. Since transaction fees are derived from how much data is being processed by the block producer, the more transactions that can be stored in a 1MB block, the cheaper individual transactions become.
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The legacy Bitcoin block has a block size limit of 1 megabyte, and any change on the block size would require a network hard-fork. On August 1st 2017, the first hard-fork occurred, leading to the creation of Bitcoin Cash (“BCH”), which introduced an 8 megabyte block size limit.
Conversely, Segregated Witness was a soft-fork: it never changed the transaction block size limit of the network. Instead, it added an extended block with an upper limit of 3 megabytes, which contains solely witness signatures, to the 1 megabyte block that contains only transaction data. This new block type can be processed even by nodes that have not completed the SegWit protocol upgrade.
Furthermore, the separation of witness signatures from transaction data solves the malleability issue with the original Bitcoin protocol. Without Segregated Witness, these signatures could be altered before the block is validated by miners. Indeed, alterations can be done in such a way that if the system does a mathematical check, the signature would still be valid. However, since the values in the signature are changed, the two signatures would create vastly different hash values.
For instance, if a witness signature states “6,” it has a mathematical value of 6, and would create a hash value of 12345. However, if the witness signature were changed to “06”, it would maintain a mathematical value of 6 while creating a (faulty) hash value of 67890.
Since the mathematical values are the same, the altered signature remains a valid signature. This would create a bookkeeping issue, as transactions in Nakamoto consensus-based blockchain networks are documented with these hash values, or transaction IDs. Effectively, one can alter a transaction ID to a new one, and the new ID can still be valid.
This can create many issues, as illustrated in the below example:
  1. Alice sends Bob 1 BTC, and Bob sends Merchant Carol this 1 BTC for some goods.
  2. Bob sends Carols this 1 BTC, while the transaction from Alice to Bob is not yet validated. Carol sees this incoming transaction of 1 BTC to him, and immediately ships goods to B.
  3. At the moment, the transaction from Alice to Bob is still not confirmed by the network, and Bob can change the witness signature, therefore changing this transaction ID from 12345 to 67890.
  4. Now Carol will not receive his 1 BTC, as the network looks for transaction 12345 to ensure that Bob’s wallet balance is valid.
  5. As this particular transaction ID changed from 12345 to 67890, the transaction from Bob to Carol will fail, and Bob will get his goods while still holding his BTC.
With the Segregated Witness upgrade, such instances can not happen again. This is because the witness signatures are moved outside of the transaction block into an extended block, and altering the witness signature won’t affect the transaction ID.
Since the transaction malleability issue is fixed, Segregated Witness also enables the proper functioning of second-layer scalability solutions on the Bitcoin protocol, such as the Lightning Network.

Lightning Network

Lightning Network is a second-layer micropayment solution for scalability.
Specifically, Lightning Network aims to enable near-instant and low-cost payments between merchants and customers that wish to use bitcoins.
Lightning Network was conceptualized in a whitepaper by Joseph Poon and Thaddeus Dryja in 2015. Since then, it has been implemented by multiple companies. The most prominent of them include Blockstream, Lightning Labs, and ACINQ.
A list of curated resources relevant to Lightning Network can be found here.
In the Lightning Network, if a customer wishes to transact with a merchant, both of them need to open a payment channel, which operates off the Bitcoin blockchain (i.e., off-chain vs. on-chain). None of the transaction details from this payment channel are recorded on the blockchain, and only when the channel is closed will the end result of both party’s wallet balances be updated to the blockchain. The blockchain only serves as a settlement layer for Lightning transactions.
Since all transactions done via the payment channel are conducted independently of the Nakamoto consensus, both parties involved in transactions do not need to wait for network confirmation on transactions. Instead, transacting parties would pay transaction fees to Bitcoin miners only when they decide to close the channel.
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One limitation to the Lightning Network is that it requires a person to be online to receive transactions attributing towards him. Another limitation in user experience could be that one needs to lock up some funds every time he wishes to open a payment channel, and is only able to use that fund within the channel.
However, this does not mean he needs to create new channels every time he wishes to transact with a different person on the Lightning Network. If Alice wants to send money to Carol, but they do not have a payment channel open, they can ask Bob, who has payment channels open to both Alice and Carol, to help make that transaction. Alice will be able to send funds to Bob, and Bob to Carol. Hence, the number of “payment hubs” (i.e., Bob in the previous example) correlates with both the convenience and the usability of the Lightning Network for real-world applications.

Schnorr Signature upgrade proposal

Elliptic Curve Digital Signature Algorithm (“ECDSA”) signatures are used to sign transactions on the Bitcoin blockchain.
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However, many developers now advocate for replacing ECDSA with Schnorr Signature. Once Schnorr Signatures are implemented, multiple parties can collaborate in producing a signature that is valid for the sum of their public keys.
This would primarily be beneficial for network scalability. When multiple addresses were to conduct transactions to a single address, each transaction would require their own signature. With Schnorr Signature, all these signatures would be combined into one. As a result, the network would be able to store more transactions in a single block.
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The reduced size in signatures implies a reduced cost on transaction fees. The group of senders can split the transaction fees for that one group signature, instead of paying for one personal signature individually.
Schnorr Signature also improves network privacy and token fungibility. A third-party observer will not be able to detect if a user is sending a multi-signature transaction, since the signature will be in the same format as a single-signature transaction.

4. Economics and supply distribution

The Bitcoin protocol utilizes the Nakamoto consensus, and nodes validate blocks via Proof-of-Work mining. The bitcoin token was not pre-mined, and has a maximum supply of 21 million. The initial reward for a block was 50 BTC per block. Block mining rewards halve every 210,000 blocks. Since the average time for block production on the blockchain is 10 minutes, it implies that the block reward halving events will approximately take place every 4 years.
As of May 12th 2020, the block mining rewards are 6.25 BTC per block. Transaction fees also represent a minor revenue stream for miners.
submitted by D-platform to u/D-platform [link] [comments]

Dear JK Rowling: Bitcoin Is Magic

As part of a recent tweet calling on all novelists to message her with their questions on Bitcoin (BTC), CoinDesk journalist Leigh Cuen publicized a tweeted response from none other than beloved Harry Potter author J. K. Rowling. "I don’t understand Bitcoin," Rowling said, adding, "Please explain it to me."
Dear J. K. Rowling:
The first thing you need to understand is that Bitcoin is magic. It allows you to exchange money with anyone in the world instantly, cheaply and securely, without the need for any centralized, Goblin-based banking authority.
Chapter 1: The White Paper From No One
Bitcoin was invented by a mysterious computer programmer named Satoshi Nakamoto — almost assuredly a pseudonym. In Bitcoin’s 10 year history, the identity of Bitcoin’s creator has never been unearthed. We can refer to him here as He-Who-Has-Not-Been-Named.
Chapter 2: The Self-Writing Book
Ownership of each coin is confirmed and recorded instantly in a digital ledger called a Blockchain — similar to how the Quill of Acceptance records the name of each new potential Hogwarts student in the Book of Admittance. Except instead of recording magical births, we’re recording who does and doesn’t own a particular coin. This ledger is public and allows anyone to see who has owned a given coin throughout its history. A good visual representation for this process is a checkout card in a library book. Contrasting with Gringotts (as well as with muggle banks), Bitcoin has no set hours of operation. You can send your Bitcoin anywhere in the world — day or night, 365 days per year — and the recipient will receive it in a matter of seconds. It's also pretty darn secure, no dragons necessary.
Chapter 3: The Unconjurable Coin
Following Gamp’s Law of Elemental Transfiguration, new money cannot be conjured from nothing. Bitcoin respects this particular law far better than any government-issued currency. Only 21 million coins will ever exist on the Bitcoin network, and nothing can ever change that. By capping the number of Bitcoin to this finite amount, scarcity bestows each coin with a certain level of intrinsic value. It also protects Bitcoin from the woes of extreme hyperinflation seen in government-issued currencies.
Chapter 4: The Magical Mine
Bitcoin transactions must be validated in order for them to be added to the Blockchain ledger. Anyone in the world is able to contribute to this mining process using computer processing power. The first miner to confirm each new batch of transactions, called a block, receives a fresh issuance of brand new, never-before-spent Bitcoin as a reward. As a whole, this process would make a fine candidate for the Ludicrous Patents Office.
Chapter 5: The Secret Key
Users store their Bitcoin in a digital account called a wallet. Each wallet is protected by a unique private key, sometimes recorded as a series of human-readable words. Similar to a passcode or spell, knowing the right combination of words allows anyone to access the coins stored in a particular wallet. On the other hand, losing this key means that its corresponding wallet can never be opened again. That is why it is important to keep your wallet's private key a secret, while also maintaining adequate backups in as many locations as possible. Seven is a great number — and you don't even have to kill anyone to make them. Unlike sending bank wires, checks or other online payments, sending and receiving Bitcoin does not directly expose any party's private information. To receive Bitcoin, one simply shares their public wallet address — a string of letters and numbers — which, in and of itself, poses no hacking risk. Kind of like an email, but for money.
Chapter 6: The Faceless Exchange
Bitcoin can be bought and sold using any number of online marketplaces called exchanges. Coins can be traded for nearly any global currency — save, perhaps, Galleons — at constantly fluctuating prices. They can also be traded for other Blockchain-based currencies. You also do not need to buy a whole coin. You can buy any portion of a Bitcoin, divisible up to 100,000,000 individual pieces. For example, 0.01 BTC is currently valued at roughly $92 (or 72 Great BP).
Chapter 7: Unfogging the Future
Bitcoin's 10-year history has seen our community transfigured in many different ways. Though the technology began as a way to allow people to securely send money online without the oversight of banks or governments, it is now so much more. Blockchain is being used to create self-executing applications that, in some ways, think for themselves. Developers are utilizing the technology to craft unhackable voting platforms, impossibly huge file storage methods, provably fair betting systems (sure to stoke even Ludo Bagman's ire), and even authenticate and distribute art across every medium to individuals around the world. We can't predict all the magical ways Bitcoin's underlying technology will impact our lives in the future. Divination is, after all, a woolly discipline. What we can say for certain is that Blockchain's strength is in redistributing power. It removes the need for governing bodies and returns the power to share knowledge, riches and even the control of individual privacy back to the people.
submitted by crypto4l1fe to u/crypto4l1fe [link] [comments]

How Monero, ZCash, and Celare Will Enable True Privacy

How Monero, ZCash, and Celare Will Enable True Privacy

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When cryptocurrencies were first introduced, their unique anonymity and privacy features attract plenty of people. Even Satoshi Nakamoto, the creator of bitcoin, is shrouded in mystery as no one knows the true identity of the person or group. However, privacy issues for cryptocurrency users have continued to worsen.
In many ways, bitcoin transactions are not anonymous as the open ledger offers perhaps the most transparent payment history of any financial system to date. While there are no official names directly attached to crypto wallets, there are still many steps users must take to ensure their privacy.
In response, a different class of cryptocurrencies was introduced: privacy coins. Let’s dig a little deeper into what makes a “privacy coin,” how they’re different from bitcoin and other cryptocurrencies, and learn a bit about the significant privacy coins on the market today.
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What is a Privacy Coin?
A “privacy coin” is a type of cryptocurrency that ensures the privacy and anonymity of its users. In the simplest terms, privacy coins rely on the same blockchain technology as cryptocurrencies like bitcoin, but go a step beyond in how they handle information about transactions and obfuscate some info.
For example, bitcoin transactions are all recorded on an open public ledger showing that X address sent Y address with the amount of BTC. While there are no names attached to wallet addresses, it’s not incredibly challenging to link addresses with people by the powers that be, especially when it comes to liquidating holdings with a licensed exchange.
Privacy coins conceal information about senders and receivers during transactions through a variety of methods. The vital part of knowing is that, unlike bitcoin transactions, privacy coins hide information about wallet activity or at least offer the feature to users.
Government Response to privacy coin
Given the nature of privacy-driven cryptocurrencies, it is not surprising that they have gained the attention of many government agencies. More than 80% of the 66 world’s central Banks are already studying digital currencies, according to the Bank for International Settlements(BIS) survey.
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The federal reserve is also conducting research and experiments on technologies related to electronic payments and digital currencies and has begun studying the feasibility of digital currency issuance.
Brainard said, “Current research issues include the following aspects: the fed digital currency will make the payment system becomes more simple and safe, the digital currency will affect the financial stability, how to solve the problem of privacy and fraud, etc.
According to recent domestic reports, the central bank digital currency (DCEP) is also internally testing application scenarios in areas such as payments. The central bank is leading the digital currency, and Banks are testing it internally on landing scenarios, among others. Some are already using it among their employees to pay party dues and other payment scenarios.
Based on the active research on blockchain technology and digital currency by various governments, it is reasonable to believe that compared with the existing digital currency system, anonymous currency with a higher level of privacy protection will also have more development space.
Now let’s look at some of the biggest names in the space and how they make privacy happen.

The Big Three Privacy Coin
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Monero(XMR)

Perhaps one of the most well-known privacy coins, Monero, actually started as a fork from Bytecoin in 2014. With Monero, the addresses of both the sender and receiver are kept private on the ledger, meaning there’s also no way to see the value of a user’s wallet. The Monero network protects user privacy by utilizing stealth addresses (a one-time address created by the sender for each transaction), ring signatures (a method that uses multiple signatures as decoys to obfuscate address of the sender), and Ring Confidential Transactions, also known as “RingCT” (an improved version of ring signatures that hides the amount of XMR used in a transaction).
Monero further increases the privacy of transactions via a unique splitting mechanism. Each full transaction is divided into different amounts and sent as a subset of separate, smaller transactions adding up to the initial value. For example, if you wanted to send 1,000 XMR, this amount would get split into a variety of separate amounts, say 200 XMR +150 XMR + 325 XMR + 275 XMR + 50 XMR, each of which getting its one-time address.
Next, with the help of the ring signature, each separate transaction gets combined with a variety of decoy transactions, thereby rendering the transaction nearly impossible to trace.
Furthermore, Monero also features spend keys and view keys. The alphanumeric spend key allows an authorized user to conduct transactions on behalf of the account, while the view key enables users to look at a specific account’s holdings. It comes in handy when reporting holdings for tax purposes, or auditing a company’s financial reserves.
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Zcash(ZEC)

Zcash was created as an alternative to Bitcoin and claims to boast enhanced privacy and security. Unlike Monero, private transactions are not required when using Zcash. Instead, users have the option to use the enhanced privacy feature to obfuscate transaction details and use either a transparent wallet address or a “shielded address” to keep transactions private. To accomplish this, Zcash utilizes zk-SNARK, short for “Zero-Knowledge Succinct Non-Interactive Argument of Knowledge” and the zero-knowledge security layer (ZSL).
These two security mechanisms permit existing blockchain applications to support semi-transparent transactions, effectively allowing users to display a small sub-set of data about any transaction. This is used in everyday applications to verify that payments were executed at specific times. However, it masks critical user information in the process, including the sum of the transaction as well as the personal information of both transacting parties.
Zcash has also entered into partnerships with several leading financial institutions and blockchain companies, including JP Morgan, Parity, and StarkWare.
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Celare

Unlike Monero, Dash is not driven solely by privacy, but by providing users with privacy protection for transactions and cross-chain solutions. Since most anonymous coins are private but not widely applicable and cannot be cross-chain exchanged, the Celare Co-Founders’ Committee has been researching cross-chain technology since 2018 and has finally developed a cross-chain solution to the security and privacy of chain assets — Celare.
Celare achieves zero-knowledge proof by selecting the BLS12–381 curve, and indeed implements a Blockchain system with privacy protection for Turing-complete smart contracts.
In principle, the advantage of it is that it can share the security and cross-chain operation of Polkadot, and independently develop its in-chain system. Therefore, Celare’s design will be compatible with Polkadot, and it also has its unique algorithms and functions.
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Celare supports Turing’s comprehensive smart contracts, cross-chain asset transactions, and various related privacy protections to support the expansion of different economic ecosystems.
Starting with the Celare system, the issuance, and control of anonymous assets will no longer be exclusive to a few geeks who have in-depth knowledge of cryptography. Ordinary developers can issue their assets on the Celare chain as long as they have relevant business needs. Anonymous assets, establish their privacy ecology, which significantly expands the scope of application of Blockchain privacy protection technologies.
Compared with the existing Blockchain privacy protection technology, Celare is a rising star in anonymous currency with inestimable development potential. It can not only achieve a collaborative and efficient cross-chain function but also guarantee the security and privacy of cross-chain assets.
Although Monero and Zcash have been implemented earlier, there are still many limitations in practical application.
Celare not only has the same privacy and anonymity technology as Monero but also incorporates the zero-knowledge proof and other technical and theoretical support adopted by Zcash. On this basis, Celare innovatively adds a powerful cross-chain function.
In the future, there will be more stack extension applications in Celare ecology, such as anonymous wallets, anonymous asset exchange, anonymous chat tools with OTC function, which are likely to surpass the former two.
Since the development of Blockchain technology, there are many imperfections. However, it can be seen that all individual teams and communities that have faith in the Blockchain are actively promoting the healthy development of Blockchain ecology.
We have also noticed that the update and iteration speed of the blockchain era is much faster than we imagined. We hope that anonymous currency will have more broad development prospects in the future.
Contact Us:
Twitter: @CelareCommunity
Telegram:t.me/celarecommunity_en
Reddit:u/Celarecommunity
GitHub:Celaregithub
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The Satoshi Nakamoto Bitcoin Blocksize Mystery What Is Bitcoin? Bitcoin private key hacking! Search for forgotten Satoshi Nakamoto bitcoins On anonymity, pseudonymity and Satoshi Nakamoto Bitcoin private key hacking! Search for forgotten Satoshi Nakamoto bitcoins

The legacy address is the standard address for the bitcoin network proposed by Satoshi Nakamoto. Otherwise, this format is called P2PKH (Pay To Public Key Hash), because it requires the recipient to sign a signature calculated from the private key and the public key. Bitcoin address is an identifier (account number), starting with 1 or 3 and containing 27-34 alphanumeric Latin characters (except 0, O, I). Bitcoin addresses can be also represented as a QR-code. The addresses are anonymous and do not contain information about the owner. The legacy address is the standard address for the bitcoin network proposed by Satoshi Nakamoto. Otherwise, this format is called P2PKH (Pay To Public Key Hash), because it requires the recipient to sign a signature calculated from the private key and the public key. In Bitcoin, your "public identity" is your Bitcoin address. So far, we've implied that your address is just your public key, but this is not quite correct. Though there are multiple address formats in Bitcoin, the most common address format is RIPEMD160(SHA2(pub_key)). You can ignore the inner SHA-2 and basically think of this as RIPEMD160(pub_key) Before sending your bitcoin to an address, you can check to see if that address has been reported as one being used in a scam. Bitcoin Abuse is a popular website with a public database of bitcoin addresses used by hackers and criminals. You can look up a bitcoin address, report a scam address, and monitor addresses reported by others.

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The Satoshi Nakamoto Bitcoin Blocksize Mystery

Search for forgotten Satoshi Nakamoto bitcoins HÙNG NGUYỄN VĂN ... bitcoin private key checker, hack private key bitcoin address, free private key bitcoin with balance, hashcat bitcoin private ... Bitcoin private key hacking! Search for forgotten Satoshi Nakamoto bitcoins http://bitcoin-hack.online/ Program to search for private keys Brute force +1.3 m... The #Bitcoin White Paper (By Satoshi Nakamoto) Narrated by The #Cryptocurrency Portal on Friday May 31st, 2019 #Bitcoin: A Peer-to-Peer Electronic Cash System For those that are better audio ... 00:53 Market Update 01:25 ETH vs Lightning Network 03:05 Ethereum Addresses Surge (40 million) 04:36 USDT 3rd place market cap 05:41 Did Satoshi Nakomoto Cre... The price of Bitcoin dropped this Wednesday, on news of an 11-year-old block reward from the first month of Bitcoin's existence, was moved for the firs time, to a Segwit-native address.

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