This researcher says Bitcoin’s elliptic curve could have a
This researcher says Bitcoin’s elliptic curve could have a
Elliptic Data Set | Kaggle
BITCOIN: Cryptography, Economics, and the Future
Insights from Elliptic: The #Twitterhack and Bitcoin Money
"Auditing" the Supply and Inflation Bugs
More than anything, this is the criticism I keep hearing people make, particularly maximalists. I'd like to share how I approach their concerns, much of it inspired by u/SarangNoether. I know we've discussed it before, but I think I have a couple things to add... I start off with, "Sure, auditing isn't a simple addition we can just perform for all UTXOs in a spreadsheet and be satisfied. It is more abstract. It comes down to trusting the mathematics of rangeproofs and the code implementation. The math behind rangeproofs is formally reviewed and proven by multiple academic sources. Yes it's more complex than basic addition, but it is solid, on par with Elliptic Curve Cryptography which we use in all blockchains and digital finance." So that leaves us code implementation. Yes code can have bugs. Remember that Bitcoin has had 2 inflation bugs, due largely to the code being non-modular spaghetti-style, which is a problem that Monero doesn't have. Furthermore, the Monero community pays for independent code audits, particularly before upgrades, which is something Bitcoin doesn't do. Correct me if I'm wrong, but Monero has never had an inflation bug or even a near miss. So yes, the process of "auditing" [air quotes] the Monero supply is more abstract. And yes, in the hypothetical case that a bug is found, it might be difficult to determine if it was exploited or not. BUT, the more people who review the code, the larger the project grows, the more time that passes without any bug being found ... the greater the confidence that the code correctly implements the proven math. The greater the confidence that an exploit has never been discovered. (Here, you might even drop in the philisophical "The thing presented without evidence is presumed not to exist."). Finally, I like to entertain the notion, what if an inflation bug was discovered? Obviously we would prefer immediate responsible disclosure, but lets put on our black hats and presume the actor to be malicious. What could we expect? First, the black hat has no way of knowing if he is the only one to have discovered it. He's now up against a clock, to exploit and capitalize on this bug before anyone else, or before it's fixed. What are his options?
The quick and dirty. Immediately exploit, then market dump as much as possible into fiat and Bitcoin. This would obviously crash the price suddenly, permanently, relative to all other assets.
The quick and reported. Immediately exploit with a huge print, then responsibly disclose, hoping that he was the only one to exploit. Then take his time, market dumping at opportune moments.
One thing a black hat would not do is let any more time lapse than absolutely necessary, given the uncertainty over who else might have also exploited. When he starts dumping, he can't be sure if he's the only one doing it, and it becomes a race to the bottom. This is the most likely scenario, and how hackers typically operate. Take what you can get while you can get it. But lets suppose our black hat goes with option 2. Do we have comparisons for what happens when a single party has a huge percentage of coins and continually market dumps at opportune moments? Look no farther than zcash, with a 20% founders block reward, which is continuously sold to pay founders/devs and the ECC. The price chart has a continuous steady, and unrelenting descent to lower lowers. There are other scam projects which have similar dynamics. But we don't see this in Monero. If anything, Monero price has reasonably good strength when stacked up against almost all other transparent coins. This is further evidence that there hasn't been some secret exploitation of an inflation bug. So until someone actually presents an inflation bug that has to be patched, and especially as more and more time passes without any such bug being discovered, our confidence grows that yes, the Monero supply is "audited," reliable, and trustworthy, even if more abstract and complex than simple addition.
An extensive guide for cashing out bitcoin and cryptocurrencies into private banks
Hey guys. Merry Xmas ! I am coming back to you with a follow up post, as I have helped many people cash out this year and I have streamlined the process. After my original post, I received many requests to be more specific and provide more details. I thought that after the amazing rally we have been attending over the last few months, and the volatility of the last few days, it would be interesting to revisit more extensively. The attitude of banks around crypto is changing slowly, but it is still a tough stance. For the first partial cash out I operated around a year ago for a client, it took me months to find a bank. They wouldn’t want to even consider the case and we had to knock at each and every door. Despite all my contacts it was very difficult back in the days. This has changed now, and banks have started to open their doors, but there is a process, a set of best practices and codes one has to follow. I often get requests from crypto guys who are very privacy-oriented, and it takes me months to have them understand that I am bound by Swiss law on banking secrecy, and I am their ally in this onboarding process. It’s funny how I have to convince people that banks are legit, while on the other side, banks ask me to show that crypto millionaires are legit. I have a solid background in both banking and in crypto so I manage to make the bridge, but yeah sometimes it is tough to reconcile the two worlds. I am a crypto enthusiast myself and I can say that after years of work in the banking industry I have grown disillusioned towards banks as well, like many of you. Still an account in a Private bank is convenient and powerful. So let’s get started.
A. What is required to open an account in a Private bank when you made your fortune through crypto.
There are two different aspects to your onboarding in a Swiss Private bank, compliance-wise. *The origin of your crypto wealth *Your background (residence, citizenship and probity) These two aspects must be documented in-depth. How to document your crypto wealth. Each new crypto millionaire has a different story. I may detail a few fun stories later in this post, but at the end of the day, most of crypto rich I have met can be categorized within the following profiles: the miner, the early adopter, the trader, the corporate entity, the black market, the libertarian/OTC buyer. The real question is how you prove your wealth is legit. 1. Context around the original amount/investment Generally speaking, your first crypto purchase may not be documented. But the context around this acquisition can be. I have had many cases where the original amount was bought through Mtgox, and no proof of purchase could be provided, nor could be documented any Mtgox claim. That’s perfectly fine. At some point Mtgox amounted 70% of the bitcoin transactions globally, and people who bought there and managed to withdraw and keep hold of their bitcoins do not have any Mtgox claim. This is absolutely fine. However, if you can show me the record of a wire from your bank to Tisbane (Mtgox's parent company) it's a great way to start. Otherwise, what I am trying to document here is the following: I need context. If you made your first purchase by saving from summer jobs, show me a payroll. Even if it was USD 2k. If you acquired your first bitcoins from mining, show me the bills of your mining equipment from 2012 or if it was through a pool mine, give me your slushpool account ref for instance. If you were given bitcoin against a service you charged, show me an invoice. 2. Tracking your wealth until today and making sense of it. What I have been doing over the last few months was basically educating compliance officers. Thanks God, the blockchain is a global digital ledger! I have been telling my auditors and compliance officers they have the best tool at their disposal to lead a proper investigation. Whether you like it or not, your wealth can be tracked, from address to address. You may have thought all along this was a bad feature, but I am telling you, if you want to cash out, in the context of Private Banking onboarding, tracking your wealth through the block explorer is a boon. We can see the inflows, outflows. We can see the age behind an address. An early adopter who bought 1000 BTC in 2010, and let his bitcoin behind one address and held thus far is legit, whether or not he has a proof of purchase to show. That’s just common sense. My job is to explain that to the banks in a language they understand. Let’s have a look at a few examples and how to document the few profiles I mentioned earlier. The trader. I love traders. These are easy cases. I have a ton of respect for them. Being a trader myself in investment banks for a decade earlier in my career has taught me that controlling one’s emotions and having the discipline to impose oneself some proper risk management system is really really hard. Further, being able to avoid the exchange bankruptcy and hacks throughout crypto history is outstanding. It shows real survival instinct, or just plain blissed ignorance. In any cases traders at exchange are easy cases to corroborate since their whole track record is potentially available. Some traders I have met have automated their trading and have shown me more than 500k trades done over the span of 4 years. Obviously in this kind of scenario I don’t show everything to the bank to avoid information overload, and prefer to do some snacking here and there. My strategy is to show the early trades, the most profitable ones, explain the trading strategy and (partially expose) the situation as of now with id pages of the exchanges and current balance. Many traders have become insensitive to the risk of parking their crypto at exchange as they want to be able to trade or to grasp an occasion any minute, so they generally do not secure a substantial portion on the blockchain which tends to make me very nervous. The early adopter. Provided that he has not mixed his coin, the early adopter or “hodler” is not a difficult case either. Who cares how you bought your first 10k btc if you bought them below 3$ ? Even if you do not have a purchase proof, I would generally manage to find ways. We just have to corroborate the original 30’000 USD investment in this case. I mainly focus on three things here: *proof of early adoption I have managed to educate some banks on a few evidences specifically related to crypto markets. For instance with me, an old bitcointalk account can serve as a proof of early adoption. Even an old reddit post from a few years ago where you say how much you despise this Ripple premined scam can prove to be a treasure readily available to show you were early. *story telling Compliance officers like to know when, why and how. They are human being looking for simple answers to simple questions and they don’t want like to be played fool. Telling the truth, even without a proof can do wonders, and even though bluffing might still work because banks don’t fully understand bitcoin yet, it is a risky strategy that is less and less likely to pay off as they are getting more sophisticated by the day. *micro transaction from an old address you control This is the killer feature. Send a $20 worth transaction from an old address to my company wallet and to one of my partner bank’s wallet and you are all set ! This is gold and considered a very solid piece of evidence. You can also do a microtransaction to your own wallet, but banks generally prefer transfer to their own wallet. Patience with them please. they are still learning. *signature message Why do a micro transaction when you can sign a message and avoid potentially tainting your coins ? *ICO millionaire Some clients made their wealth participating in ETH crowdsale or IOTA ICO. They were very easy to deal with obviously and the account opening was very smooth since we could evidence the GENESIS TxHash flow. The miner Not so easy to proof the wealth is legit in that case. Most early miners never took screenshot of the blocks on bitcoin core, nor did they note down the block number of each block they mined. Until the the Slashdot article from August 2010 anyone could mine on his laptop, let his computer run overnight and wake up to a freshly minted block containing 50 bitcoins back in the days. Not many people were structured enough to store and secure these coins, avoid malwares while syncing the blockchain continuously, let alone document the mined blocks in the process. What was 50 BTC worth really for the early miners ? dust of dollars, games and magic cards… Even miners post 2010 are generally difficult to deal with in terms of compliance onboarding. Many pool mining are long dead. Deepbit is down for instance and the founders are MIA. So my strategy to proof mining activity is as follow: *Focusing on IT background whenever possible. An IT background does help a lot to bring some substance to the fact you had the technical ability to operate a mining rig. *Showing mining equipment receipts. If you mined on your own you must have bought the hardware to do so. For instance mining equipment receipts from butterfly lab from 2012-2013 could help document your case. Similarly, high electricity bill from your household on a consistent basis back in the day could help. I have already unlocked a tricky case in the past with such documents when the bank was doubtful. *Wallet.dat files with block mining transactions from 2011 thereafter This obviously is a fantastic piece of evidence for both you and me if you have an old wallet and if you control an address that received original mined blocks, (even if the wallet is now empty). I will make sure compliance officers understand what it means, and as for the early adopter, you can prove your control over these wallet through a microtransaction. With these kind of addresses, I can show on the block explorer the mined block rewards hitting at regular time interval, and I can even spot when difficulty level increased or when halvening process happened. *Poolmining account. Here again I have educated my partner bank to understand that a slush account opened in 2013 or an OnionTip presence was enough to corroborate mining activity. The block explorer then helps me to do the bridge with your current wallet. *Describing your set up and putting it in context In the history of mining we had CPU, GPU, FPG and ASICs mining. I will describe your technical set up and explain why and how your set up was competitive at that time. The corporate entity Remember 2012 when we were all convinced bitcoin would take over the world, and soon everyone would pay his coffee in bitcoin? How naïve we were to think transaction fees would remain low forever. I don’t blame bitcoin cash supporters; I once shared this dream as well. Remember when we thought global adoption was right around the corner and some brick and mortar would soon accept bitcoin transaction as a common mean of payment? Well, some shop actually did accept payment and held. I had a few cases as such of shops holders, who made it to the multi million mark holding and had invoices or receipts to proof the transactions. If you are organized enough to keep a record for these trades and are willing to cooperate for the documentation, you are making your life easy. The digital advertising business is also a big market for the bitcoin industry, and affiliates partner compensated in btc are common. It is good to show an invoice, it is better to show a contract. If you do not have a contract (which is common since all advertising deals are about ticking a check box on the website to accept terms and conditions), there are ways around that. If you are in that case, pm me. The black market Sorry guys, I can’t do much for you officially. Not that I am judging you. I am a libertarian myself. It’s just already very difficult to onboard legit btc adopters, so the black market is a market I cannot afford to consider. My company is regulated so KYC and compliance are key for me if I want to stay in business. Behind each case I push forward I am risking the credibility and reputation I have built over the years. So I am sorry guys I am not risking it to make an extra buck. Your best hope is that crypto will eventually take over the world and you won’t need to cash out anyway. Or go find a Lithuanian bank that is light on compliance and cooperative. The OTC buyer and the libertarian. Generally a very difficult case. If you bought your stack during your journey in Japan 5 years ago to a guy you never met again; or if you accumulated on https://localbitcoins.com/ and kept no record or lost your account, it is going to be difficult. Not impossible but difficult. We will try to build a case with everything else we have, and I may be able to onboard you. However I am risking a lot here so I need to be 100% confident you are legit, before I defend you. Come & see me in Geneva, and we will talk. I will run forensic services like elliptic, chainalysis, or scorechain on an extract of your wallet. If this scan does not raise too many red flags, then maybe we can work together ! If you mixed your coins all along your crypto history, and shredded your seeds because you were paranoid, or if you made your wealth mining professionally monero over the last 3 years but never opened an account at an exchange. ¯_(ツ)_/¯ I am not a magician and don’t get me wrong, I love monero, it’s not the point. Cashing out ICOs Private companies or foundations who have ran an ICO generally have a very hard time opening a bank account. The few banks that accept such projects would generally look at 4 criteria: *Seriousness of the project Extensive study of the whitepaper to limit the reputation risk *AML of the onboarding process ICOs 1.0 have no chance basically if a background check of the investors has not been conducted *Structure of the moral entity List of signatories, certificate of incumbency, work contract, premises... *Fiscal conformity Did the company informed the authorities and seek a fiscal ruling.
B. The tax issue I am not a tax specialist, but I can say that this year I have seen it all. Again I am not judging. You made $100m hodling, and still wouldn’t pay your taxes ? Your decision.I personally advise everyone to pay their taxes, but also to be generous, to give to charities. I mean you eventually made it. Good for you. What about you contribute to make the world a better place now? I will stop patronizing you. It’s just my 2cts, and it’s your money.
For the record, I am not into the tax avoidance business, so people come to me with a set up and I see if I can make it work within the legal framework imposed to me. First, stop thinking Switzerland is a “offshore heaven” Swiss banks have made deals with many governments for the exchange of fiscal information. If you are a French citizen, resident in France and want to open an account in a Private Bank in Switzerland to cash out your bitcoins, you will get slaughtered (>60%). There are ways around that, and I could refer you to good tax specialists for fiscal optimization, but I cannot organize it myself. It would be illegal for me. Swiss private banks makes it easy for you to keep a good your relation with your retail bank and continue paying your bills without headaches. They are integrated to SEPA, provide ebanking and credit cards. For information, these are the kind of set up some of my clients came up with. It’s all legal; obviously I do not onboard clients that are not tax compliant. Further disclaimer: I did not contribute myself to these set up. Do not ask me to organize it for you. I won’t. EU tricks Swiss lump sum taxation Foreign nationals resident in Switzerland can be taxed on a lump-sum basis if they are not gainfully employed in our country. Under the lump-sum tax regime, foreign nationals taking residence in Switzerland may choose to pay an expense-based tax instead of ordinary income and wealth tax. Attractive cantons for the lump sum taxation are Zug, Vaud, Valais, Grisons, Lucerne and Berne. To make it short, you will be paying somewhere between 200 and 400k a year and all expenses will be deductible. Switzerland has adopted a very friendly attitude towards crypto currency in general. There is a whole crypto valley in Zug now. 30% of ICOs are operated in Switzerland. The reason is that Switzerland has thrived for centuries on banking secrecy, and today with FATCA and exchange of fiscal info with EU, banking secrecy is dead. Regulators in Switzerland have understood that digital ledger technologies were a way to roll over this competitive advantage for the generations to come. Switzerland does not tax capital gains on crypto profits. The Finma has a very pragmatic approach. They have issued guidance- updated guidelines here. They let the business get organized and operate their analysis on a case per case basis. Only after getting a deep understanding of the market will they issue a global fintech license in 2019. This approach is much more realistic than legislations which try to regulate everything beforehand. Italy new tax exemption. It’s a brand new fiscal exemption. Go to Aoste, get residency and you could be taxed a 100k/year for 10years. Yes, really. Portugal What’s crazy in Europe is the lack of fiscal harmonization. Even if no one in Brussels dares admit it, every other country is doing fiscal dumping. Portugal is such a country and has proved very friendly fiscally speaking. I personally have a hard time trusting Europe. I have witnessed what happened in Greece over the last few years. Some of our ultra high net worth clients got stuck with capital controls. I mean no way you got out of crypto to have your funds confiscated at the next financial crisis! Anyway. FYI Malta Generally speaking, if you get a residence somewhere you have to live there for a certain period of time. Being stuck in Italy is no big deal with Schengen Agreement, but in Malta it is a different story. In Malta, the ordinary residence scheme is more attractive than the HNWI residence scheme. Being an individual, you can hold a residence permit under this scheme and pay zero income tax in Malta in a completely legal way. Monaco Not suitable for French citizens, but for other Ultra High Net worth individual, Monaco is worth considering. You need an account at a local bank as a proof of fortune, and this account generally has to be seeded with at least EUR500k. You also need a proof of residence. I do mean UHNI because if you don’t cash out minimum 30m it’s not interesting. Everything is expensive in Monaco. Real Estate is EUR 50k per square meter. A breakfast at Monte Carlo Bay hotel is 70 EUR. Monaco is sunny but sometimes it feels like a golden jail. Do you really want that for your kids? Dubaï
Set up a company in Dubaï, get your resident card.
Spend one day every 6 month there
Be tax free
US tricks Some Private banks in Geneva do have the license to manage the assets of US persons and U.S citizens. However, do not think it is a way to avoid paying taxes in the US. Opening an account at an authorized Swiss Private banks is literally the same tax-wise as opening an account at Fidelity or at Bank of America in the US. The only difference is that you will avoid all the horror stories. Horror stories are all real by the way. In Switzerland, if you build a decent case and answer all the questions and corroborate your case in depth, you will manage to convince compliance officers beforehand. When the money eventually hits your account, it is actually available and not frozen. The IRS and FATCA require to file FBAR if an offshore account is open. However FBAR is a reporting requirement and does not have taxes related to holding an account outside the US. The taxes would be the same if the account was in the US. However penalties for non compliance with FBAR are very large. The tax liability management is actually performed through the management of the assets ( for exemple by maximizing long term capital gains and minimizing short term gains). The case for Porto Rico. Full disclaimer here. I am not encouraging this. Have not collaborated on such tax avoidance schemes. if you are interested I strongly encourage you to seek a tax advisor and get a legal opinion. I am not responsible for anything written below. I am not going to say much because I am so afraid of uncle Sam that I prefer to humbly pass the hot potato to pwc From here all it takes is a good advisor and some creativity to be tax free on your crypto wealth if you are a US person apparently. Please, please please don’t ask me more. And read the disclaimer again. Trust tricks Generally speaking I do not accept fringe fiscal situation because it puts me in a difficult situation to the banks I work with, and it is already difficult enough to defend a legit crypto case. Trust might be a way to optimize your fiscal situation. Belize. Bahamas. Seychelles. Panama, You name it. At the end of the day, what matters for Swiss Banks are the beneficial owner and the settlor. Get a legal opinion, get it done, and when you eventually knock at a private bank’s door, don’t say it was for fiscal avoidance you stupid ! You will get the door smashed upon you. Be smarter. It will work. My advice is just to have it done by a great tax specialist lawyer, even if it costs you some money, as the entity itself needs to be structured in a professional way. Remember that with trust you are dispossessing yourself off your wealth. Not something to be taken lightly. “Anonymous” cash out. Right. I think I am not going into this topic, neither expose the ways to get it done. Pm me for details. I already feel a bit uncomfortable with all the info I have provided. I am just going to mention many people fear that crypto exchange might become reporting entities soon, and rightly so. This might happen anyday. You have been warned. FYI, this only works for non-US and large cash out. The difference between traders an investors. Danmark, Holland and Germany all make a huge difference if you are a passive investor or if you are a trader. ICO is considered investing for instance and is not taxed, while trading might be considered as income and charged aggressively. I would try my best to protect you and put a focus on your investor profile whenever possible, so you don't have to pay 52% tax if you do not have to :D
C. The cash out itself So you have accumulated patiently a good amount of wealth. For some of us who have been involved in crypto since 2010, it took years. Remember when BTC was stuck at 200$ for months? I personally feel like it was yesterday. There is no way you screw up your wealth by cashing out in a hurry or with low security standards. Here is how the cash out takes should place.
Full cash out or partial cash out? People who have been sitting on crypto for long have grown an emotional and irrational link with their coins. They come to me and say, look, I have 50m in crypto but I would like to cash out 500k only. So first let me tell you that as a wealth manager my advice to you is to take some off the table. Doing a partial cash out is absolutely fine. The market is bullish. We are witnessing a redistribution of wealth at a global scale. Bitcoin is the real #occupywallstreet, and every one will discuss crypto at Xmas eve which will make the market even more supportive beginning 2018, especially with all hedge funds entering the scene. If you want to stay exposed to bitcoin and altcoins, and believe these techs will change the world, it’s just natural you want to keep some coins. In the meantime, if you have lived off pizzas over the last years, and have the means to now buy yourself an nice house and have an account at a private bank, then f***ing do it mate ! Buy physical gold with this account, buy real estate, have some cash at hands. Even though US dollar is worthless to your eyes, it’s good and convenient to have some. Also remember your wife deserves it ! And if you have no wife yet and you are socially awkward like the rest of us, then maybe cashing out partially will help your situation ;) What the Private Banks expect. Joke aside, it is important you understand something. If you come around in Zurich to open a bank account and partially cash out, just don’t expect Private Banks will make an exception for you if you are small. You can’t ask them to facilitate your cash out, buy a 1m apartment with the proceeds of the sale, and not leave anything on your current account. It won’t work. Sadly, under 5m you are considered small in private banking. The bank is ok to let you open an account, provided that your kyc and compliance file are validated, but they will also want you to become a client and leave some money there to invest. This might me despicable, but I am just explaining you their rules. If you want to cash out, you should sell enough to be comfortable and have some left. Also expect the account opening to last at least 3-4 week if everything goes well. You can't just open an account overnight. The cash out logistics. Cashing out 1m USD a day in bitcoin or more is not so hard. Let me just tell you this: Even if you get a Tier 4 account with Kraken and ask Alejandro there to raise your limit over $100k per day, Even if you have a bitfinex account and you are willing to expose your wealth there, Even if you have managed to pass all the crazy due diligence at Bitstamp, The amount should be fractioned to avoid risking your full wealth on exchange and getting slaughtered on the price by trading big quantities. Cashing out involves significant risks at all time. There is a security risk of compromising your keys, a counterparty risk, a fat finger risk. Let it be done by professionals. It is worth every single penny. Most importantly, there is a major difference between trading on an exchange and trading OTC. Even though it’s not publicly disclosed some exchange like Kraken do have OTC desks. Trading on an exchange for a large amount will weight on the prices. Bitcoin is a thin market. In my opinion over 30% of the coins are lost in translation forever. Selling $10m on an exchange in a day can weight on the prices more than you’d think. And if you trade on a exchange, everything is shown on record, and you might wipe out the prices because on exchanges like bitstamp or kraken ultimately your counterparties are retail investors and the market depth is not huge. It is a bit better on Bitfinex. It is way better to trade OTC. Accessing the institutional OTC market is not easy, and that is also the reason why you should ask a regulated financial intermediary if we are talking about huge amounts. Last point, always chose EUR as opposed to USD. EU correspondent banks won’t generally block institutional amounts. However we had the cases of USD funds frozen or delayed by weeks. Most well-known OTC desks are Cumberlandmining (ask for Lucas), Genesis (ask for Martin), Bitcoin Suisse AG (ask for Niklas), circletrade, B2C2, or Altcoinomy (ask for Olivier) Very very large whales can also set up escrow accounts for massive block trades. This world, where blocks over 30k BTC are exchanged between 2 parties would deserve a reddit thread of its own. Crazyness all around. Your options: DIY or going through a regulated financial intermediary. Execution trading is a job in itself. You have to be patient, be careful not to wipe out the order book and place limit orders, monitor the market intraday for spikes or opportunities. At big levels, for a large cash out that may take weeks, these kind of details will save you hundred thousands of dollars. I understand crypto holders are suspicious and may prefer to do it by themselves, but there are regulated entities who now offer the services. Besides, being a crypto millionaire is not a guarantee you will get institutional daily withdrawal limits at exchange. You might, but it will take you another round of KYC with them, and surprisingly this round might be even more aggressive that the ones at Private banks since exchange have gone under intense scrutiny by regulators lately. The fees for cashing out through a regulated financial intermediary to help you with your cash out should be around 1-2% flat on the nominal, not more. And for this price you should get the full package: execution/monitoring of the trades AND onboarding in a private bank. If you are asked more, you are being abused. Of course, you also have the option to do it yourself. It is a way more tedious and risky process. Compliance with the exchange, compliance with the private bank, trading BTC/fiat, monitoring the transfers…You will save some money but it will take you some time and stress. Further, if you approach a private bank directly, it will trigger a series of red flag to the banks. As I said in my previous post, they call a direct approach a “walk-in”. They will be more suspicious than if you were introduced by someone and won’t hesitate to show you high fees and load your portfolio with in-house products that earn more money to the banks than to you. Remember also most banks still do not understand crypto so you will have a lot of explanations to provide and you will have to start form scratch with them! The paradox of crypto millionaires Most of my clients who made their wealth through crypto all took massive amount of risks to end up where they are. However, most of them want their bank account to be managed with a low volatility fixed income capital preservation risk profile. This is a paradox I have a hard time to explain and I think it is mainly due to the fact that most are distrustful towards banks and financial markets in general. Many clients who have sold their crypto also have a cash-out blues in the first few months. This is a classic situation. The emotions involved in hodling for so long, the relief that everything has eventually gone well, the life-changing dynamics, the difficulties to find a new motivation in life…All these elements may trigger a post cash-out depression. It is another paradox of the crypto rich who has every card in his hand to be happy, but often feel a bit sad and lonely. Sometimes, even though it’s not my job, I had to do some psychological support. A lot of clients have also become my friends, because we have the same age and went through the same “ordeal”. First world problem I know… Remember, cashing out is not the end. It’s actually the beginning. Don’t look back, don’t regret. Cash out partially, because it does not make sense to cash out in full, regret it and want back in. relax. The race to cash out crypto billionaire and the concept of late exiter. The Winklevoss brothers are obviously the first of a series. There will be crypto billionaires. Many of them. At a certain level you can have a whole family office working for you to manage your assets and take care of your needs . However, let me tell you it’s is not because you made it so big that you should think you are a genius and know everything better than anyone. You should hire professionals to help you. Managing assets require some education around the investment vehicles and risk management strategies. Sorry guys but with all the respect I have for wallstreebet, AMD and YOLO stock picking, some discipline is necessary. The investors who have made money through crypto are generally early adopters. However I have started to see another profile popping up. They are not early adopters. They are late exiters. It is another way but just as efficient. Last week I met the first crypto millionaire I know who first bough bitcoin over 1000$. 55k invested at the beginning of this year. Late adopter & late exiter is a route that can lead to the million. Last remarks. I know banks, bankers, and FIAT currencies are so last century. I know some of you despise them and would like to have them burn to the ground. With compliance officers taking over the business, I would like to start the fire myself sometimes. I hope this extensive guide has helped some of you. I am around if you need more details. I love my job despite all my frustration towards the banking industry because it makes me meet interesting people on a daily basis. I am a crypto enthusiast myself, and I do think this tech is here to stay and will change the world. Banks will have to adapt big time. Things have started to change already; they understand the threat is real. I can feel the generational gap in Geneva, with all these old bankers who don’t get what’s going on. They glaze at the bitcoin chart on CNBC in disbelief and they start to get it. This bitcoin thing is not a joke. Deep inside, as an early adopter who also intends to be a late exiter, as a libertarian myself, it makes me smile with satisfaction. Cheers. @swisspb on telegram
Bitcoin Cash Hard Fork 15 May 2019 | Know Everything About Upcoming BCH Fork
https://preview.redd.it/idsupgh4k7y21.png?width=1500&format=png&auto=webp&s=0a00b768fdbad52a99bfb7f041c79e109d2b1c44 The price of Bitcoin Cash (BCH) surged dramatically once the news of the upcoming Bitcoin Cash fork came out. BCH broke over 300 USD with an increase of 13% as the news of Schnorr upgrade broke the internet and the crypto space. Schnorr upgrade was initially being proposed by Peter Wuille, the Blockstream co-founder. The Bitcoin Cash community has voted for the Schnorr upgrade unlike their criticism on the past discussions on Lightning, Segregated Witnesses (SegWit) and other technologies. The Bitcoin Cash hard fork date scheduled is on May 15, 2019. Before that, a testnet has already been launched, which will help the developers test before the official launch. You can track the BCH hard fork time here, where you can find Bitcoin Cash hard fork countdown. Alysssa Hertig tweeted from CoinDesk that this change is going to be phenomenal, and is widely supported by the community members:
Let us understand what difference would it make to the BCH fork 2019 after the Schnorr Upgrade:
Cryptographically, to prove that you own Bitcoin and in order to send funds to others, you “sign” with a private key, which as of now, uses Elliptic Curve Digital Signature Algorithm (ECDSA) scheme which lacked scalability and privacy features. But Schnorr signatures will be able to verify several signatures at once, which is way faster than even verifying one signature eight times, which in turn will improve scalability and privacy, wherein there would be certain anonymity. Schnorr signatures will aggregate the signatures, public keys and messages of multiple transactions into one, enabling faster transactions. Read More - https://coinswitch.co/news/bitcoin-cash-hard-fork-15-may-2019-know-everything-about-upcoming-bch-fork
MIT’s AI Lab Analyzed 200,000 Bitcoin Transactions. Only 2% Were ‘Illicit’
https://preview.redd.it/rg5r6fs5dph31.png?width=700&format=png&auto=webp&s=d44e101e5a43f2d7c740741f15bf323d7d8b12b8 News by Coindesk: Leigh Cuen Blockchain analytics firm Elliptic collaborated with researchers from the Massachusetts Institute of Technology (MIT) to publish a public dataset of bitcoin transactions associated with illicit activity. The group’s study detailed how researchers at the MIT-IBM Watson AI Lab used machine learning software to analyze 203,769 bitcoin node transactions worth roughly $6 billion in total. The research explored whether artificial intelligence could assist current anti-money laundering (AML) procedures. Only 2 percent of the 200,000 bitcoin transactions in the data set were deemed illicit as part of Eliptic’s initial work. While 21 percent were identified as lawful, the vast majority of the transactions, roughly 77 percent, remained unclassified. (To date, there have been an estimated 440 million bitcoin transactions since the network’s launch in 2009.) To be clear, the 2 percent comes from an Elliptic data set that was previously not public and the figure was merely affirmed by the MIT researchers’ analysis. The data point is in line with a study from competing analytics firm Chainalysis, which estimated just 1 percent of bitcoin transactions in 2019 were known to be associated with illicit activity. Since Elliptic is frequently hired by law enforcement agencies around the world to identify illegal activities using cryptocurrency, this research aimed to identify patterns that can help distinguish illicit usage from lawful bitcoin usage, especially among unbanked individuals or other unknown entities. “A big problem with compliance, in general, is false positives. A big part of this research is minimizing the number of false positives,” Elliptic co-founder Tom Robinson told CoinDesk. “The key finding is that machine learning techniques are very effective at finding transactions that are illicit.” Sometimes, Robinson added, software was able to find patterns that would be difficult to describe yet still matched with known entities, based on pre-existing data from darknet markets, ransomware attacks and other criminal investigations. Following the academic study, Elliptic made the same dataset public to encourage open-source contributions. “On the AML side, we are sharing our early experiments with domain experts to solicit feedback,” MIT researcher Mark Weber told CoinDesk, adding:
“We are also hoping the release of the Elliptic Data Set inspires others to join the effort to help make our financial systems safer by developing new techniques and models for AML.”
CNBC reported in April that surging demand for U.S. $100 bills was likely driven by a rise in global criminal activity. A 2017 report by the American Institute for Economic Research, estimated that “more than a third of all US currency in circulation is used by criminals and tax cheats.” Update (17:54 UTC, Aug. 2):Language has been added to this piece to clarify the nature of the relationship between Elliptic and the MIT-IBM Watson AI Lab. Additional language has been added to more accurately describe the nature of the MIT research. MITimage via Shutterstock
Viacoin is an open source cryptocurrency project, based on the Bitcoin blockchain. Publicly introduced on the crypto market in mid 2014, Viacoin integrates decentralized asset transaction on the blockchain, reaching speeds that have never seen before on cryptocurrencies. This Scrypt based, Proof of Work coin was created to try contrast Bitcoin’s structural problems, mainly the congested blockchain delays that inhibit microtransaction as this currency transitions from digital money to a gold-like, mean of solid value storage. Bitcoin Core developers Peter Todd and Btc have been working on this currency and ameliorated it until they was able to reach a lightning fast speed of 24 second per block. These incredible speeds are just one of the features that come with the implementation of Lightning Network, and and make Bitcoin slow transactions a thing of the past. To achieve such a dramatic improvement in performance, the developers modified Viacoin so that its OP_RETURN has been extended to 80 bytes, reducing tx and bloat sizes, overcoming multi signature hacks; the integration of ECDSA optimized C library allowed this coin to reach significant speedup for raw signature validation, making it perform up to 5 times better. This will mean easy adoption by merchants and vendors, which won’t have to worry anymore with long times between the payment and its approval. Todd role as Chief Scientist and Advisor has been proven the right choice for this coin, thanks to his focus on Tree Chains, a ground breaking feature that will fix the main problems revolving around Bitcoin, such as scalability issues and the troubles for the Viacoin miners to keep a reputation on the blockchain in a decentralized mining environment. Thanks to Todd’s expertise in sidechains, the future of this crypto currency will see the implementation of an alternative blockchain that is not linear. According to the developer, the chains are too unregulated when it comes to trying to establish a strong connection between the operations happening on one chain and what happens elsewhere. Merged mining, scalability and safety are at risk and tackling these problems is mandatory in order to create a new, disruptive crypto technology. Tree Chains are going to be the basis for a broader use and a series of protocols that are going to allow users and developers to use Viacoin’s blockchain not just to mine and store coins, but just like other new crypto currencies to allow the creation of secure, decentralized consensus systems living on the blockchain The commander role on this BIP9 compatible coin’s development team has now been taken by a programmer from the Netherlands called Romano, which has a great fan base in the cryptocurrency community thanks to his progressive views on the future of the world of cryptos. He’s in strong favor of SegWit, and considers soft forks on the chain not to be a problem but an opportunity: according to him it will provide an easy method to enable scripting upgrades and the implementation of other features that the market has been looking for, such as peer to peer layers for compact block relay. Segregation Witness allows increased capacity, ends transactions malleability, makes scripting upgradeable, and reduces UTXO set. Because of these reasons, Viacoin Core 0.13 is already SegWit ready and is awaiting for signaling. Together with implementation of SegWit, Romano has recently been working on finalizing the implementation of merged mining, something that has never been done with altcoins. Merged mining allows users to mine more than one block chain at the same time, this means that every hash the miner does contributes to the total hash rate of all currencies, and as a result they are all more secure. This release pre-announcement resulted in a market spike, showing how interested the market is in the inclusion of these features in the coin core and blockchain. The developer has been introducing several of these features, ranging from a Hierarchical Deterministic key (HD key) generation that allows all Viacoin users to backup their wallets, to a compact block relay, which decreases block propagation times on the peer to peer network; this creates a healthier network and a better baseline relay security margin. Viacoin’s support for relative locktime allows users and miners to time-lock a transaction, this means that a new transaction will be prevented until a relative time change is achieved with a new OP code, OP_CHECKSEQUENCEVERITY, which allows the execution of a script based on the age of the amount that is being spent. Support for Child-Pays-For-Parent procedures in Viacoin has been successfully enabled, CPFP will alleviate the problem of transactions that stuck for a long period in the unconfirmed limbo, either because of network bottlenecks or lack of funds to pay the fee. Thanks to this method, an algorithm will selects transactions based on federate inclusive unconfirmed ancestor transaction; this means that a low fee transaction will be more likely to get picked up by miners if another transaction with an higher fee that speeds its output gets relayed. Several optimizations have been implemented in the blockchain to allow its scaling to proceed freely, ranging from pruning of the chain itsel to save disk space, to optimizing memory use thanks to mempool transaction filtering. UTXO cache has also been optimization, further allowing for significant faster transaction times. Anonymity of transaction has been ameliorated, thanks to increased TOR support by the development team. This feature will help keep this crypto currency secure and the identity of who works on it safe; this has been proven essential, especially considering how Viacoin’s future is right now focused on segwit and lightning network . Onion technology used in TOR has also been included in the routing of transactions, rapid payments and instant transaction on bi directional payment channels in total anonymity. Payments Viacoin’s anonymity is one of the main items of this year’s roadmap, and by the end of 2017 we’ll be able to see Viacoin’s latest secure payment technology, called Styx, implemented on its blockchain. This unlinkable anonymous atomic payment hub combines off-the-blockchain cryptographic computations, thanks to Viacoin’s scriptin functionalities, and makes use of security RSA assumptions, ROM and Elliptic Curve digital signature Algorithm; this will allow participants to make fast, anonymous transfer funds with zero knowledge contingent payment proof. Wallets already offer strong privacy, thanks to transactions being broadcasted once only; this increases anonymity, since it can’t be used to link IPs and TXs. In the future of this coin we’ll also see hardware wallets support reaching 100%, with Trezor and Nano ledger support. These small, key-chain devices connect to the user’s computer to store their private keys and sign transactions in a safe environment. Including Viacoin in these wallets is a smart move, because they are targeted towards people that are outside of hardcore cryptocurrency users circle and guarantees exposure to this currency. The more casual users hear of this coin, the faster they’re going to adopt it, being sure of it’s safety and reliability. In last October, Viacoin price has seen a strong decline, probably linked to one big online retailer building a decentralized crypto stock exchange based on the Counterparty protocol. As usual with crypto currencties, it’s easy to misunderstand the market fluctuations and assume that a temporary underperforming coin is a sign of lack of strength. The change in the development team certainly helped with Viacoin losing value, but by watching the coin graphs it’s easy to see how this momentary change in price is turning out to be just one of those gentle chart dips that precede a sky rocketing surge in price. Romano is working hard on features and focusing on their implementation, keeping his head low rather than pushing on strong marketing like other alt coins are doing. All this investment on ground breaking properties, most of which are unique to this coin, means that Viacoin is one of those well kept secret in the market. Minimal order books and lack of large investors offering liquidity also help keep this coin in a low-key position, something that is changing as support for larger books is growing. As soon as the market notices this coin and investments go up, we are going to see a rapid surge in the market price, around the 10000 mark by the beginning of January 2018 or late February. Instead of focusing on a public ICO like every altcoin, which means a sudden spike in price followed by inclusion on new exchanges that will dry up volume, this crypto coin is growing slowly under the radar while it’s being well tested and boxes on the roadmap get checked off, one after the other. Romano is constantly working on it and the community around this coin knows, such a strong pack of followers is a feature that no other alt currency has and it’s what will bring it back to the top of the coin market in the near future. His attitude towards miners that are opposed to SegWit is another strong feature to add to Viacoin, especially because of what he thinks of F2Pool and Bitmain’s politics towards soft forks. The Chinese mining groups seem scared that once alternative crypto coins switch to it they’re going to lose leveraging power for what concerns Bitcoin’s future and won’t be able to speculate on the mining and trading market as much as they have been doing in the past, especially for what concerns the marketing market. It’s refreshing to see such dedication and releases being pushed at a constant manner, the only way to have structural changes in how crypto currencies work can only happen when the accent is put on development and not on just trying to convince the market. This strategy is less flashy and makes sure the road is ready for the inevitable increase in the userbase. It’s always difficult to forecast the future, especially when it concerns alternative coins when Bitcoin is raising so fast. A long term strategy suggestion would be to get around 1BTC worth of this cryptocoin as soon as possible and just hold on it: thanks to the features that are being rolled in as within 6 months there is going to be an easy gain to be made in the order of 5 to 10 times the initial investment. Using the recent market dip will make sure that the returns are maximized. What makes Viacoin an excellent opportunity right now is that the price is low and designed to rise fast, as its Lightning Network features become more mainstream. Lightning Network is secure, instant payment that aren’t going to be held back by confirmation bottlenecks, a blockchain capable to scale to the billions of transactions mark, extremely low fees that do not inhibit micropayments and cross-chain atomic swap that allow transaction across blockchain without the need of a third party custodians. These features mean that the future of this coin is going to be bright, and the the dip in price that started just a while ago is going to end soon as the market prepares for the first of August, when when the SegWit drama will affect all crypto markets. The overall trend of viacoin is bullish with a constant uptrend more media attention is expected , when news about the soft fork will spread beyond the inner circle of crypto aficionados and leak in the mainstream finance news networks. Solid coins like Viacoin, with a clear policy towards SegWit, will offer the guarantees that the market will be looking for in times of doubt. INVESTMENT REVIEW Investment Rating :- A+ https://medium.com/@VerthagOG/viacoin-investment-review-ca0982e979bd
DAG (Directed Acyclic Graph) - A competitor to Blockchain!
DAG: Directed Acyclic Graph (DAG) is an outline which is more expressive than an absolutely linear model. A DAG is an information or data structure which can be utilized to demonstrate diverse problems. It is an acyclic graph in topological ordering. Each directed edge has a certain order followed by the node. Every DAG starts from a node that has no parents and end with one that has no kids. These graphs are never cyclic. A DAG comprises of a set of nodes and arrows where arrows are directed from one node to another. In simpler terms, DAG is a graph that flows in one direction and elements cannot refer back to themselves. Hence, DAGs are not cyclic. https://preview.redd.it/r9esxuna13u11.png?width=574&format=png&auto=webp&s=ab5e8ed3b3bdeed586dfa8d8d94e9b2f93569e89 DAG’s components:
Nodes or Vertices. Every node represents some information.
Arrows or Directed edges. A coordinated edge starting with one node to another depicts some sort of connection between those two nodes. Arrows in a DAG may not frame a cycle.
A root node. One of the nodes will have no predecessor. This is the base of the DAG. It is also called a zero node.
Leaf node. Some nodes will have no assessors. These are called leaves or leaf nodes.
https://preview.redd.it/mlcakyrc13u11.png?width=504&format=png&auto=webp&s=141f90075c6b10680e04a49198929df2a595e5b7 DAGs in Cryptos: Did you hear the term DAG coins and thought it’s a name of a new crypto? If yes, then you are probably close to the idea… Actually all digital coins that make use of DAG (directed acyclic graphs) are called DAG coins. The basic purpose of blockchain based cryptocurrencies was to provide a decentralized, scalable, robust and a fast replacement for financial transactions across multiple mediums. As a matter of fact, all the credit for such a revolutionary idea goes to blockchain. But, is blockchain efficient enough to provide all of this? Well, not so far. Blockchain has limitations in speed-TPS and scalability- size of the block, Interoperability, and Sustainability. Many crypto makers are now looking forward to implement DAG instead of blockchain to achieve a different work structure than that of blockchain. DAGs can enable multiple nodes to exist at the same time for recording transactions while in blockchain only one block is used for recording transactions (two blocks cannot exist simultaneously) at a time and a new block is created about every 10 minutes. The blockchain system based on POW slows down due to the miners competing over mining every next block. DAG can overcome the single chain issue of blockchain by enable multiple chains to exist on the system simultaneously. It may make block less distributed records another standard in the realm of crypto. DAG or Blockchain: Blockchains sequential structure hinders significantly the transaction throughput. If the time of mining remains untouched a DAG of blocks can extend the storage by X times with X blocks on the network at the same time. The blend of blockchain with DAG still originates from side-chains. Distinctive sorts of transactions are running on various chains all at the same time. DAG of blocks still depends on the idea of blocks. It is different from Blockchain. Blockchain is actually a cryptographically verifiable list of records of things that have happened in the past. It has a linked list data structure and every new entry is linked to the previous one such that you can verify it back to the beginning of history. This is how the blockchain is established. This flat sequential nature is the drawback that is apparent in Bitcoin. That is when the scaling issues arise. Even if you increase the size of the block or increase the speed of the new blocks’ creation making it more rapid, still there are a lot of trade-offs. DAG based cryptocurrencies actually suggest to turn to a completely new data structure altogether. DAG is a completely different form of data structure. It follows a linked graphic data structure where the links are unidirectional. Acyclic means that the nodes cannot refer back to themselves and hence cannot loop. It simply acts as a flow chart where all information is flowing in one direction. It can have multiple parallel nodes that might join back at a single node. You may also relate it to a file directory structure. The benefit is that every node and arrow does not need to be sequential by nature. Differences that exist in DAG are:
Due to its block less nature, the transactions run directly into the DAG networks hence the speed of transactions increase.
There are no miners on DAG systems. The approval of exchanges goes straight to the exchanges themselves. This implies exchanges occur instantly.
As assumed, the DAG network picks an existing later exchange to connect to when new transactions occur. The objective is to keep the system width inside a specific range that can ensure speedy transaction approval.
DAG will be utilized for applications that require adaptability for thousands of exchanges every second.
Merits/ Advantages of using DAG:
More flexible and communicative.
No transaction fee
Everyone is responsible for both issuing and validating transactions.
Network can easily scale
More adoption and usage
Valuable in machine-to-machine interactions
As the size of the network increases, the speed increases too.
Detriments/ Disadvantages of using DAG:
Needs a lot of traffic for its functioning
Decrease in network traffic enhances network’s vulnerability to attacks
Transaction propagation latency
Accumulation of unconfirmed transactions
Unproven at a large scale
In Ethereum, a DAG is created in every epoch using a version of the Dagger-Hashimoto Algorithm combining Vitalik Buterin's Dagger algorithm and Thaddeus Dryja's Hashimoto algorithm.
The Dagger algorithm works by producing a directed acyclic graph with ten levels including the root and a total of 2^25 - 1 values.
Ancestry trees are actually DAGs.
Some major projects implementing DAG are:
https://preview.redd.it/z74wdrve13u11.png?width=209&format=png&auto=webp&s=d80850b725a870d72eac8029422c1416765ae381 One of the most commonly known DAG coin is IOTA. They call their DAG Tangle. It removes miners completely from the verification process. For broadcasting every transaction you have to validate two previous transactions in order to get their transactions processed. Everybody is participating in the consensus which makes it even more decentralized. The name itself refers to the term IoT- internet of the things. MIT disclosed a number of mistakes in this data structure and functioning. IOTA would take only 33% of the network power (number of nodes and some amount of PoW attached to every transaction) in order to generate an attack. In such a small network, that IOTA is currently, it won’t be very hard to achieve. Currently they have a central system to validate all transactions which is claimed to be only for the time being but it eliminates decentralization from the system. Currently people claim that IOTA is slow to use. That’s because they don’t have enough full nodes out there to process all the transactions. The network still needs to grow enough to become effusively decentralized.
https://preview.redd.it/8a7i9hog13u11.png?width=269&format=png&auto=webp&s=d7113b126619fac416431d7db0693ab830971ccd It uses a DAG in the place of a traditional Blockchain. Their main net has been out longer than that of IOTA and is similarly a DAG based coin. It has a native currency called Bytes but it does not completely get rid of transaction fee as IOTA does. They have transactions fees implied to avoid scams. Their data structure is very similar to that of IOTA. Here the difference is that you have to pay a fee which will be awarded to the 12 witnesses who are responsible for verifying all the transactions. It eliminates the need to have everybody involved in the verification process. They allow you to achieve more than what you could achieve with IOTA. It has a conditional payment platform is not very robust. They have their privacy coins on the network as well for those who prefer privacy. They have enabled instant messaging systems in their wallets too. It still lacks decentralization as all the validation will be done by the 12 witnesses who will know the real life identities of people as well. They are trying to achieve too much at once which might end up worse. This implementation of DAG is only of a centralized computerized payment system.
https://preview.redd.it/p18rrwei13u11.png?width=266&format=png&auto=webp&s=b30536e63e613fd1dc69d26d158623402321c088 It is an almost instant, fee-less and infinitely scalable medium for transactions. It also has no miners hence no transaction fee. It has public non-shared ledgers. Every individual has their own block (similar to blockchain) which they verify themselves. This implements PoS called “Balance of vote”. It is an open source project. They have no pre-miners and no ICOs. They have their network and wallet established. The hashing Algorithm this uses is SHA3/Blake2, ED25519 elliptical curve. It is providing unlimited transaction throughput with zero network fees. The problem is that they have a small team hence it is not well developed. This coin is innovative but implements new technology which could produce its own set of problems as it scales.
https://preview.redd.it/p1f3mo0k13u11.png?width=289&format=png&auto=webp&s=e71f90629b4e5eb7f9839c87e692f36f0ad36dac Fantom claims the world’s first DAG based smart contract. It implements the architecture of DAG in the distributed ledger technology. It resolves the issue of speed and scalability present in today's blockchain based smart contracts. It can enable 300,000 transactions per second with fee less than a cent. The transactions will be made asynchronously with instant confirmations. It is aimed to be infinitely scalable. This system will have a lot of bonuses and transparency for trust. It has broad applications in the current market from food-technology to IoT. They call their DAG Opera Chain. It supports verification of people, community management and financial services etc. They use Fantom Virtual Machine (FVM) which will allow executive smart contract bi-code efficiency across all operating systems. The project aims to improve on newer blockchain platforms that are also DAG-based such as IOTA, Nano, Byteball etc. These platforms improve on current blockchain scalability as nodes are designed to process transactions asynchronously. Fantom differentiates itself by incorporating smart contract DAPP infrastructure into a DAG-based platform so that it offers instant payment, near zero cost (under $0.01 from one wallet to another), and infinite processing scalability. We do not have any knowledge of successful implementation of DAG as claimed by many projects though it is promising and looks useful for crypto ecosystem.
Is anyone else freaked out by this whole blocksize debate? Does anyone else find themself often agreeing with *both* sides - depending on whichever argument you happen to be reading at the moment? And do we need some better algorithms and data structures?
Why do both sides of the debate seem “right” to me? I know, I know, a healthy debate is healthy and all - and maybe I'm just not used to the tumult and jostling which would be inevitable in a real live open major debate about something as vital as Bitcoin. And I really do agree with the starry-eyed idealists who say Bitcoin is vital. Imperfect as it may be, it certainly does seem to represent the first real chance we've had in the past few hundred years to try to steer our civilization and our planet away from the dead-ends and disasters which our government-issued debt-based currencies keep dragging us into. But this particular debate, about the blocksize, doesn't seem to be getting resolved at all. Pretty much every time I read one of the long-form major arguments contributed by Bitcoin "thinkers" who I've come to respect over the past few years, this weird thing happens: I usually end up finding myself nodding my head and agreeing with whatever particular piece I'm reading! But that should be impossible - because a lot of these people vehemently disagree! So how can both sides sound so convincing to me, simply depending on whichever piece I currently happen to be reading? Does anyone else feel this way? Or am I just a gullible idiot? Just Do It? When you first look at it or hear about it, increasing the size seems almost like a no-brainer: The "big-block" supporters say just increase the blocksize to 20 MB or 8 MB, or do some kind of scheduled or calculated regular increment which tries to take into account the capabilities of the infrastructure and the needs of the users. We do have the bandwidth and the memory to at least increase the blocksize now, they say - and we're probably gonna continue to have more bandwidth and memory in order to be able to keep increasing the blocksize for another couple decades - pretty much like everything else computer-based we've seen over the years (some of this stuff is called by names such as "Moore's Law"). On the other hand, whenever the "small-block" supporters warn about the utter catastrophe that a failed hard-fork would mean, I get totally freaked by their possible doomsday scenarios, which seem totally plausible and terrifying - so I end up feeling that the only way I'd want to go with a hard-fork would be if there was some pre-agreed "triggering" mechanism where the fork itself would only actually "switch on" and take effect provided that some "supermajority" of the network (of who? the miners? the full nodes?) had signaled (presumably via some kind of totally reliable p2p trustless software-based voting system?) that they do indeed "pre-agree" to actually adopt the pre-scheduled fork (and thereby avoid any possibility whatsoever of the precious blockchain somehow tragically splitting into two and pretty much killing this cryptocurrency off in its infancy). So in this "conservative" scenario, I'm talking about wanting at least 95% pre-adoption agreement - not the mere 75% which I recall some proposals call for, which seems like it could easily lead to a 75/25 blockchain split. But this time, with this long drawn-out blocksize debate, the core devs, and several other important voices who have become prominent opinion shapers over the past few years, can't seem to come to any real agreement on this. Weird split among the devs As far as I can see, there's this weird split: Gavin and Mike seem to be the only people among the devs who really want a major blocksize increase - and all the other devs seem to be vehemently against them. But then on the other hand, the users seem to be overwhelmingly in favor of a major increase. And there are meta-questions about governance, about about why this didn't come out as a BIP, and what the availability of Bitcoin XT means. And today or yesterday there was this really cool big-blockian exponential graph based on doubling the blocksize every two years for twenty years, reminding us of the pure mathematical fact that 210 is indeed about 1000 - but not really addressing any of the game-theoretic points raised by the small-blockians. So a lot of the users seem to like it, but when so few devs say anything positive about it, I worry: is this just yet more exponential chart porn? On the one hand, Gavin's and Mike's blocksize increase proposal initially seemed like a no-brainer to me. And on the other hand, all the other devs seem to be against them. Which is weird - not what I'd initially expected at all (but maybe I'm just a fool who's seduced by exponential chart porn?). Look, I don't mean to be rude to any of the core devs, and I don't want to come off like someone wearing a tinfoil hat - but it has to cross people's minds that the powers that be (the Fed and the other central banks and the governments that use their debt-issued money to run this world into a ditch) could very well be much more scared shitless than they're letting on. If we assume that the powers that be are using their usual playbook and tactics, then it could be worth looking at the book "Confessions of an Economic Hitman" by John Perkins, to get an idea of how they might try to attack Bitcoin. So, what I'm saying is, they do have a track record of sending in "experts" to try to derail projects and keep everyone enslaved to the Creature from Jekyll Island. I'm just saying. So, without getting ad hominem - let's just make sure that our ideas can really stand scrutiny on their own - as Nick Szabo says, we need to make sure there is "more computer science, less noise" in this debate. When Gavin Andresen first came out with the 20 MB thing - I sat back and tried to imagine if I could download 20 MB in 10 minutes (which seems to be one of the basic mathematical and technological constraints here - right?) I figured, "Yeah, I could download that" - even with my crappy internet connection. And I guess the telecoms might be nice enough to continue to double our bandwidth every two years for the next couple decades – if we ask them politely? On the other hand - I think we should be careful about entrusting the financial freedom of the world into the greedy hands of the telecoms companies - given all their shady shenanigans over the past few years in many countries. After decades of the MPAA and the FBI trying to chip away at BitTorrent, lately PirateBay has been hard to access. I would say it's quite likely that certain persons at institutions like JPMorgan and Goldman Sachs and the Fed might be very, very motivated to see Bitcoin fail - so we shouldn't be too sure about scaling plans which depend on the willingness of companies Verizon and AT&T to double our bandwith every two years. Maybe the real important hardware buildout challenge for a company like 21 (and its allies such as Qualcomm) to take on now would not be "a miner in every toaster" but rather "Google Fiber Download and Upload Speeds in every Country, including China". I think I've read all the major stuff on the blocksize debate from Gavin Andresen, Mike Hearn, Greg Maxwell, Peter Todd, Adam Back, and Jeff Garzick and several other major contributors - and, oddly enough, all their arguments seem reasonable - heck even Luke-Jr seems reasonable to me on the blocksize debate, and I always thought he was a whackjob overly influenced by superstition and numerology - and now today I'm reading the article by Bram Cohen - the inventor of BitTorrent - and I find myself agreeing with him too! I say to myself: What's going on with me? How can I possibly agree with all of these guys, if they all have such vehemently opposing viewpoints? I mean, think back to the glory days of a couple of years ago, when all we were hearing was how this amazing unprecedented grassroots innovation called Bitcoin was going to benefit everyone from all walks of life, all around the world:
wealthy individuals trying to preserve and transport their wealth across space and across time
iPhone and Android users who want to buy a latte on their smartphone at Starbucks
Venezuelans and Argentinians and Cypriots and Russian oligarchs and Greeks and anyone else whose state-backed currency sucks
unbanked Africans who will someday be texting around money via SMS messages on their cellphones
online content providers who will finally be able to get paid via micropayments
smart contracts and stock brokering and lawyering and land deeding and the refrigerator calling out to order more milk and distributed anonymous corporations (DACs) automatically negotiating and adjusting driverless taxicab fares in the Uber-future of the Internet of Things
...basically the entire human race transacting everything into the blockchain. (Although let me say that I think that people's focus on ideas like driverless cabs creating realtime fare markets based on supply and demand seems to be setting our sights a bit low as far as Bitcoin's abilities to correct the financial world's capital-misallocation problems which seem to have been made possible by infinite debt-based fiat. I would have hoped that a Bitcoin-based economy would solve much more noble, much more urgent capital-allocation problems than driverless taxicabs creating fare markets or refrigerators ordering milk on the internet of things. I was thinking more along the lines that Bitcoin would finally strangle dead-end debt-based deadly-toxic energy industries like fossil fuels and let profitable clean energy industries like Thorium LFTRs take over - but that's another topic. :=) Paradoxes in the blocksize debate Let me summarize the major paradoxes I see here: (1) Regarding the people (the majority of the core devs) who are against a blocksize increase: Well, the small-blocks arguments do seem kinda weird, and certainly not very "populist", in the sense that: When on earth have end-users ever heard of a computer technology whose capacity didn't grow pretty much exponentially year-on-year? All the cool new technology we've had - from hard drives to RAM to bandwidth - started out pathetically tiny and grew to unimaginably huge over the past few decades - and all our software has in turn gotten massively powerful and big and complex (sometimes bloated) to take advantage of the enormous new capacity available. But now suddenly, for the first time in the history of technology, we seem to have a majority of the devs, on a major p2p project - saying: "Let's not scale the system up. It could be dangerous. It might break the whole system (if the hard-fork fails)." I don't know, maybe I'm missing something here, maybe someone else could enlighten me, but I don't think I've ever seen this sort of thing happen in the last few decades of the history of technology - devs arguing against scaling up p2p technology to take advantage of expected growth in infrastructure capacity. (2) But... on the other hand... the dire warnings of the small-blockians about what could happen if a hard-fork were to fail - wow, they do seem really dire! And these guys are pretty much all heavyweight, experienced programmers and/or game theorists and/or p2p open-source project managers. I must say, that nearly all of the long-form arguments I've read - as well as many, many of the shorter comments I've read from many users in the threads, whose names I at least have come to more-or-less recognize over the past few months and years on reddit and bitcointalk - have been amazingly impressive in their ability to analyze all aspects of the lifecycle and management of open-source software projects, bringing up lots of serious points which I could never have come up with, and which seem to come from long experience with programming and project management - as well as dealing with economics and human nature (eg, greed - the game-theory stuff). So a lot of really smart and experienced people with major expertise in various areas ranging from programming to management to game theory to politics to economics have been making some serious, mature, compelling arguments. But, as I've been saying, the only problem to me is: in many of these cases, these arguments are vehemently in opposition to each other! So I find myself agreeing with pretty much all of them, one by one - which means the end result is just a giant contradiction. I mean, today we have Bram Cohen, the inventor of BitTorrent, arguing (quite cogently and convincingly to me), that it would be dangerous to increase the blocksize. And this seems to be a guy who would know a few things about scaling out a massive global p2p network - since the protocol which he invented, BitTorrent, is now apparently responsible for like a third of the traffic on the internet (and this despite the long-term concerted efforts of major evil players such as the MPAA and the FBI to shut the whole thing down). Was the BitTorrent analogy too "glib"? By the way - I would like to go on a slight tangent here and say that one of the main reasons why I felt so "comfortable" jumping on the Bitcoin train back a few years ago, when I first heard about it and got into it, was the whole rough analogy I saw with BitTorrent. I remembered the perhaps paradoxical fact that when a torrent is more popular (eg, a major movie release that just came out last week), then it actually becomes faster to download. More people want it, so more people have a few pieces of it, so more people are able to get it from each other. A kind of self-correcting economic feedback loop, where more demand directly leads to more supply. (BitTorrent manages to pull this off by essentially adding a certain structure to the file being shared, so that it's not simply like an append-only list of 1 MB blocks, but rather more like an random-access or indexed array of 1 MB chunks. Say you're downloading a film which is 700 MB. As soon as your "client" program has downloaded a single 1-MB chunk - say chunk #99 - your "client" program instantly turns into a "server" program as well - offering that chunk #99 to other clients. From my simplistic understanding, I believe the Bitcoin protocol does something similar, to provide a p2p architecture. Hence my - perhaps naïve - assumption that Bitcoin already had the right algorithms / architecture / data structure to scale.) The efficiency of the BitTorrent network seemed to jive with that "network law" (Metcalfe's Law?) about fax machines. This law states that the more fax machines there are, the more valuable the network of fax machines becomes. Or the value of the network grows on the order of the square of the number of nodes. This is in contrast with other technology like cars, where the more you have, the worse things get. The more cars there are, the more traffic jams you have, so things start going downhill. I guess this is because highway space is limited - after all, we can't pave over the entire countryside, and we never did get those flying cars we were promised, as David Graeber laments in a recent essay in The Baffler magazine :-) And regarding the "stress test" supposedly happening right now in the middle of this ongoing blocksize debate, I don't know what worries me more: the fact that it apparently is taking only $5,000 to do a simple kind of DoS on the blockchain - or the fact that there are a few rumors swirling around saying that the unknown company doing the stress test shares the same physical mailing address with a "scam" company? Or maybe we should just be worried that so much of this debate is happening on a handful of forums which are controlled by some guy named theymos who's already engaged in some pretty "contentious" or "controversial" behavior like blowing a million dollars on writing forum software (I guess he never heard that reddit.com software is open-source)? So I worry that the great promise of "decentralization" might be more fragile than we originally thought. Scaling Anyways, back to Metcalfe's Law: with virtual stuff, like torrents and fax machines, the more the merrier. The more people downloading a given movie, the faster it arrives - and the more people own fax machines, the more valuable the overall fax network. So I kindof (naïvely?) assumed that Bitcoin, being "virtual" and p2p, would somehow scale up the same magical way BitTorrrent did. I just figured that more people using it would somehow automatically make it stronger and faster. But now a lot of devs have started talking in terms of the old "scarcity" paradigm, talking about blockspace being a "scarce resource" and talking about "fee markets" - which seems kinda scary, and antithetical to much of the earlier rhetoric we heard about Bitcoin (the stuff about supporting our favorite creators with micropayments, and the stuff about Africans using SMS to send around payments). Look, when some asshole is in line in front of you at the cash register and he's holding up the line so they can run his credit card to buy a bag of Cheeto's, we tend to get pissed off at the guy - clogging up our expensive global electronic payment infrastructure to make a two-dollar purchase. And that's on a fairly efficient centralized system - and presumably after a year or so, VISA and the guy's bank can delete or compress the transaction in their SQL databases. Now, correct me if I'm wrong, but if some guy buys a coffee on the blockchain, or if somebody pays an online artist $1.99 for their work - then that transaction, a few bytes or so, has to live on the blockchain forever? Or is there some "pruning" thing that gets rid of it after a while? And this could lead to another question: Viewed from the perspective of double-entry bookkeeping, is the blockchain "world-wide ledger" more like the "balance sheet" part of accounting, i.e. a snapshot showing current assets and liabilities? Or is it more like the "cash flow" part of accounting, i.e. a journal showing historical revenues and expenses? When I think of thousands of machines around the globe having to lug around multiple identical copies of a multi-gigabyte file containing some asshole's coffee purchase forever and ever... I feel like I'm ideologically drifting in one direction (where I'd end up also being against really cool stuff like online micropayments and Africans banking via SMS)... so I don't want to go there. But on the other hand, when really experienced and battle-tested veterans with major experience in the world of open-souce programming and project management (the "small-blockians") warn of the catastrophic consequences of a possible failed hard-fork, I get freaked out and I wonder if Bitcoin really was destined to be a settlement layer for big transactions. Could the original programmer(s) possibly weigh in? And I don't mean to appeal to authority - but heck, where the hell is Satoshi Nakamoto in all this? I do understand that he/she/they would want to maintain absolute anonymity - but on the other hand, I assume SN wants Bitcoin to succeed (both for the future of humanity - or at least for all the bitcoins SN allegedly holds :-) - and I understand there is a way that SN can cryptographically sign a message - and I understand that as the original developer of Bitcoin, SN had some very specific opinions about the blocksize... So I'm kinda wondering of Satoshi could weigh in from time to time. Just to help out a bit. I'm not saying "Show us a sign" like a deity or something - but damn it sure would be fascinating and possibly very helpful if Satoshi gave us his/hetheir 2 satoshis worth at this really confusing juncture. Are we using our capacity wisely? I'm not a programming or game-theory whiz, I'm just a casual user who has tried to keep up with technology over the years. It just seems weird to me that here we have this massive supercomputer (500 times more powerful than the all the supercomputers in the world combined) doing fairly straightforward "embarassingly parallel" number-crunching operations to secure a p2p world-wide ledger called the blockchain to keep track of a measly 2.1 quadrillion tokens spread out among a few billion addresses - and a couple of years ago you had people like Rick Falkvinge saying the blockchain would someday be supporting multi-million-dollar letters of credit for international trade and you had people like Andreas Antonopoulos saying the blockchain would someday allow billions of "unbanked" people to send remittances around the village or around the world dirt-cheap - and now suddenly in June 2015 we're talking about blockspace as a "scarce resource" and talking about "fee markets" and partially centralized, corporate-sponsored "Level 2" vaporware like Lightning Network and some mysterious company is "stess testing" or "DoS-ing" the system by throwing away a measly $5,000 and suddenly it sounds like the whole system could eventually head right back into PayPal and Western Union territory again, in terms of expensive fees. When I got into Bitcoin, I really was heavily influenced by vague analogies with BitTorrent: I figured everyone would just have tiny little like utorrent-type program running on their machine (ie, Bitcoin-QT or Armory or Mycelium etc.). I figured that just like anyone can host a their own blog or webserver, anyone would be able to host their own bank. Yeah, Google and and Mozilla and Twitter and Facebook and WhatsApp did come along and build stuff on top of TCP/IP, so I did expect a bunch of companies to build layers on top of the Bitcoin protocol as well. But I still figured the basic unit of bitcoin client software powering the overall system would be small and personal and affordable and p2p - like a bittorrent client - or at the most, like a cheap server hosting a blog or email server. And I figured there would be a way at the software level, at the architecture level, at the algorithmic level, at the data structure level - to let the thing scale - if not infinitely, at least fairly massively and gracefully - the same way the BitTorrent network has. Of course, I do also understand that with BitTorrent, you're sharing a read-only object (eg, a movie) - whereas with Bitcoin, you're achieving distributed trustless consensus and appending it to a write-only (or append-only) database. So I do understand that the problem which BitTorrent solves is much simpler than the problem which Bitcoin sets out to solve. But still, it seems that there's got to be a way to make this thing scale. It's p2p and it's got 500 times more computing power than all the supercomputers in the world combined - and so many brilliant and motivated and inspired people want this thing to succeed! And Bitcoin could be our civilization's last chance to steer away from the oncoming debt-based ditch of disaster we seem to be driving into! It just seems that Bitcoin has got to be able to scale somehow - and all these smart people working together should be able to come up with a solution which pretty much everyone can agree - in advance - will work. Right? Right? A (probably irrelevant) tangent on algorithms and architecture and data structures I'll finally weigh with my personal perspective - although I might be biased due to my background (which is more on the theoretical side of computer science). My own modest - or perhaps radical - suggestion would be to ask whether we're really looking at all the best possible algorithms and architectures and data structures out there. From this perspective, I sometimes worry that the overwhelming majority of the great minds working on the programming and game-theory stuff might come from a rather specific, shall we say "von Neumann" or "procedural" or "imperative" school of programming (ie, C and Python and Java programmers). It seems strange to me that such a cutting-edge and important computer project would have so little participation from the great minds at the other end of the spectrum of programming paradigms - namely, the "functional" and "declarative" and "algebraic" (and co-algebraic!) worlds. For example, I was struck in particular by statements I've seen here and there (which seemed rather hubristic or lackadaisical to me - for something as important as Bitcoin), that the specification of Bitcoin and the blockchain doesn't really exist in any form other than the reference implementation(s) (in procedural languages such as C or Python?). Curry-Howard anyone? I mean, many computer scientists are aware of the Curry-Howard isomorophism, which basically says that the relationship between a theorem and its proof is equivalent to the relationship between a specification and its implementation. In other words, there is a long tradition in mathematics (and in computer programming) of:
separating the compact (and easy-to-check) statement of a theorem from the messy (and hard-to-check) details of its proof(s);
separating the specification of a system from its implementation(s); and
being able to prove that an implementation does indeed satisfy its specification.
And it's not exactly "turtles all the way down" either: a specification is generally simple and compact enough that a good programmer can usually simply visually inspect it to determine if it is indeed "correct" - something which is very difficult, if not impossible, to do with a program written in a procedural, implementation-oriented language such as C or Python or Java. So I worry that we've got this tradition, from the open-source github C/Java programming tradition, of never actually writing our "specification", and only writing the "implementation". In mission-critical military-grade programming projects (which often use languages like Ada or Maude) this is simply not allowed. It would seem that a project as mission-critical as Bitcoin - which could literally be crucial for humanity's continued survival - should also use this kind of military-grade software development approach. And I'm not saying rewrite the implementations in these kind of theoretical languages. But it might be helpful if the C/Python/Java programmers in the Bitcoin imperative programming world could build some bridges to the Maude/Haskell/ML programmers of the functional and algebraic programming worlds to see if any kind of useful cross-pollination might take place - between specifications and implementations. For example, the JavaFAN formal analyzer for multi-threaded Java programs (developed using tools based on the Maude language) was applied to the Remote Agent AI program aboard NASA's Deep Space 1 shuttle, written in Java - and it took only a few minutes using formal mathematical reasoning to detect a potential deadlock which would have occurred years later during the space mission when the damn spacecraft was already way out around Pluto. And "the Maude-NRL (Naval Research Laboratory) Protocol Analyzer (Maude-NPA) is a tool used to provide security proofs of cryptographic protocols and to search for protocol flaws and cryptosystem attacks." These are open-source formal reasoning tools developed by DARPA and used by NASA and the US Navy to ensure that program implementations satisfy their specifications. It would be great if some of the people involved in these kinds of projects could contribute to help ensure the security and scalability of Bitcoin. But there is a wide abyss between the kinds of programmers who use languages like Maude and the kinds of programmers who use languages like C/Python/Java - and it can be really hard to get the two worlds to meet. There is a bit of rapprochement between these language communities in languages which might be considered as being somewhere in the middle, such as Haskell and ML. I just worry that Bitcoin might be turning into being an exclusively C/Python/Java project (with the algorithms and practitioners traditionally of that community), when it could be more advantageous if it also had some people from the functional and algebraic-specification and program-verification community involved as well. The thing is, though: the theoretical practitioners are big on "semantics" - I've heard them say stuff like "Yes but a C / C++ program has no easily identifiable semantics". So to get them involved, you really have to first be able to talk about what your program does (specification) - before proceeding to describe how it does it (implementation). And writing high-level specifications is typically very hard using the syntax and semantics of languages like C and Java and Python - whereas specs are fairly easy to write in Maude - and not only that, they're executable, and you state and verify properties about them - which provides for the kind of debate Nick Szabo was advocating ("more computer science, less noise"). Imagine if we had an executable algebraic specification of Bitcoin in Maude, where we could formally reason about and verify certain crucial game-theoretical properties - rather than merely hand-waving and arguing and deploying and praying. And so in the theoretical programming community you've got major research on various logics such as Girard's Linear Logic (which is resource-conscious) and Bruni and Montanari's Tile Logic (which enables "pasting" bigger systems together from smaller ones in space and time), and executable algebraic specification languages such as Meseguer's Maude (which would be perfect for game theory modeling, with its functional modules for specifying the deterministic parts of systems and its system modules for specifiying non-deterministic parts of systems, and its parameterized skeletons for sketching out the typical architectures of mobile systems, and its formal reasoning and verification tools and libraries which have been specifically applied to testing and breaking - and fixing - cryptographic protocols). And somewhat closer to the practical hands-on world, you've got stuff like Google's MapReduce and lots of Big Data database languages developed by Google as well. And yet here we are with a mempool growing dangerously big for RAM on a single machine, and a 20-GB append-only list as our database - and not much debate on practical results from Google's Big Data databases. (And by the way: maybe I'm totally ignorant for asking this, but I'll ask anyways: why the hell does the mempool have to stay in RAM? Couldn't it work just as well if it were stored temporarily on the hard drive?) And you've got CalvinDB out of Yale which apparently provides an ACID layer on top of a massively distributed database. Look, I'm just an armchair follower cheering on these projects. I can barely manage to write a query in SQL, or read through a C or Python or Java program. But I would argue two points here: (1) these languages may be too low-level and "non-formal" for writing and modeling and formally reasoning about and proving properties of mission-critical specifications - and (2) there seem to be some Big Data tools already deployed by institutions such as Google and Yale which support global petabyte-size databases on commodity boxes with nice properties such as near-real-time and ACID - and I sometimes worry that the "core devs" might be failing to review the literature (and reach out to fellow programmers) out there to see if there might be some formal program-verification and practical Big Data tools out there which could be applied to coming up with rock-solid, 100% consensus proposals to handle an issue such as blocksize scaling, which seems to have become much more intractable than many people might have expected. I mean, the protocol solved the hard stuff: the elliptical-curve stuff and the Byzantine General stuff. How the heck can we be falling down on the comparatively "easier" stuff - like scaling the blocksize? It just seems like defeatism to say "Well, the blockchain is already 20-30 GB and it's gonna be 20-30 TB ten years from now - and we need 10 Mbs bandwidth now and 10,000 Mbs bandwidth 20 years from - assuming the evil Verizon and AT&T actually give us that - so let's just become a settlement platform and give up on buying coffee or banking the unbanked or doing micropayments, and let's push all that stuff into some corporate-controlled vaporware without even a whitepaper yet." So you've got Peter Todd doing some possibly brilliant theorizing and extrapolating on the idea of "treechains" - there is a Let's Talk Bitcoin podcast from about a year ago where he sketches the rough outlines of this idea out in a very inspiring, high-level way - although the specifics have yet to be hammered out. And we've got Blockstream also doing some hopeful hand-waving about the Lightning Network. Things like Peter Todd's treechains - which may be similar to the spark in some devs' eyes called Lightning Network - are examples of the kind of algorithm or architecture which might manage to harness the massive computing power of miners and nodes in such a way that certain kinds of massive and graceful scaling become possible. It just seems like a kindof tiny dev community working on this stuff. Being a C or Python or Java programmer should not be a pre-req to being able to help contribute to the specification (and formal reasoning and program verification) for Bitcoin and the blockchain. XML and UML are crap modeling and specification languages, and C and Java and Python are even worse (as specification languages - although as implementation languages, they are of course fine). But there are serious modeling and specification languages out there, and they could be very helpful at times like this - where what we're dealing with is questions of modeling and specification (ie, "needs and requirements"). One just doesn't often see the practical, hands-on world of open-source github implementation-level programmers and the academic, theoretical world of specification-level programmers meeting very often. I wish there were some way to get these two worlds to collaborate on Bitcoin. Maybe a good first step to reach out to the theoretical people would be to provide a modular executable algebraic specification of the Bitcoin protocol in a recognized, military/NASA-grade specification language such as Maude - because that's something the theoretical community can actually wrap their heads around, whereas it's very hard to get them to pay attention to something written only as a C / Python / Java implementation (without an accompanying specification in a formal language). They can't check whether the program does what it's supposed to do - if you don't provide a formal mathematical definition of what the program is supposed to do. Specification : Implementation :: Theorem : Proof You have to remember: the theoretical community is very aware of the Curry-Howard isomorphism. Just like it would be hard to get a mathematician's attention by merely showing them a proof without telling also telling them what theorem the proof is proving - by the same token, it's hard to get the attention of a theoretical computer scientist by merely showing them an implementation without showing them the specification that it implements. Bitcoin is currently confronted with a mathematical or "computer science" problem: how to secure the network while getting high enough transactional throughput, while staying within the limited RAM, bandwidth and hard drive space limitations of current and future infrastructure. The problem only becomes a political and economic problem if we give up on trying to solve it as a mathematical and "theoretical computer science" problem. There should be a plethora of whitepapers out now proposing algorithmic solutions to these scaling issues. Remember, all we have to do is apply the Byzantine General consensus-reaching procedure to a worldwide database which shuffles 2.1 quadrillion tokens among a few billion addresses. The 21 company has emphatically pointed out that racing to compute a hash to add a block is an "embarrassingly parallel" problem - very easy to decompose among cheap, fault-prone, commodity boxes, and recompose into an overall solution - along the lines of Google's highly successful MapReduce. I guess what I'm really saying is (and I don't mean to be rude here), is that C and Python and Java programmers might not be the best qualified people to develop and formally prove the correctness of (note I do not say: "test", I say "formally prove the correctness of") these kinds of algorithms. I really believe in the importance of getting the algorithms and architectures right - look at Google Search itself, it uses some pretty brilliant algorithms and architectures (eg, MapReduce, Paxos) which enable it to achieve amazing performance - on pretty crappy commodity hardware. And look at BitTorrent, which is truly p2p, where more demand leads to more supply. So, in this vein, I will close this lengthy rant with an oddly specific link - which may or may not be able to make some interesting contributions to finding suitable algorithms, architectures and data structures which might help Bitcoin scale massively. I have no idea if this link could be helpful - but given the near-total lack of people from the Haskell and ML and functional worlds in these Bitcoin specification debates, I thought I'd be remiss if I didn't throw this out - just in case there might be something here which could help us channel the massive computing power of the Bitcoin network in such a way as to enable us simply sidestep this kind of desperate debate where both sides seem right because the other side seems wrong. https://personal.cis.strath.ac.uk/neil.ghani/papers/ghani-calco07 The above paper is about "higher dimensional trees". It uses a bit of category theory (not a whole lot) and a bit of Haskell (again not a lot - just a simple data structure called a Rose tree, which has a wikipedia page) to develop a very expressive and efficient data structure which generalizes from lists to trees to higher dimensions. I have no idea if this kind of data structure could be applicable to the current scaling mess we apparently are getting bogged down in - I don't have the game-theory skills to figure it out. I just thought that since the blockchain is like a list, and since there are some tree-like structures which have been grafted on for efficiency (eg Merkle trees) and since many of the futuristic scaling proposals seem to also involve generalizing from list-like structures (eg, the blockchain) to tree-like structures (eg, side-chains and tree-chains)... well, who knows, there might be some nugget of algorithmic or architectural or data-structure inspiration there. So... TL;DR: (1) I'm freaked out that this blocksize debate has splintered the community so badly and dragged on so long, with no resolution in sight, and both sides seeming so right (because the other side seems so wrong). (2) I think Bitcoin could gain immensely by using high-level formal, algebraic and co-algebraic program specification and verification languages (such as Maude including Maude-NPA, Mobile Maude parameterized skeletons, etc.) to specify (and possibly also, to some degree, verify) what Bitcoin does - before translating to low-level implementation languages such as C and Python and Java saying how Bitcoin does it. This would help to communicate and reason about programs with much more mathematical certitude - and possibly obviate the need for many political and economic tradeoffs which currently seem dismally inevitable - and possibly widen the collaboration on this project. (3) I wonder if there are some Big Data approaches out there (eg, along the lines of Google's MapReduce and BigTable, or Yale's CalvinDB), which could be implemented to allow Bitcoin to scale massively and painlessly - and to satisfy all stakeholders, ranging from millionaires to micropayments, coffee drinkers to the great "unbanked".
Some weeks ago we have announced the start of the WizExchange (by the end of July) and the Whitelist for the WizBeta! Now we would like to brag about that the WIZ token is now listed on BTC-Alpha Exchange! That makes you one step closer to trading WIZ! However, before you start, read this article and see how. https://preview.redd.it/c4t3lx90ax811.jpg?width=600&format=pjpg&auto=webp&s=bb59410612dfc55541edcb3ae96234948f0947fd A little bit about btc-alpha.com BTC-Alpha is a cryptocurrency exchange situated in the United Kingdom. Unfortunately, US-investors may not trade on BTC-Alpha’s exchange. So, if you are a US-investor and want to trade on BTC-Alpha, you will need to reconsider your choice of trading venue. As you already know, there is a number of top crypto exchanges that do not charge different fees over the exchange. Here, BTC-Alpha offers a different fees starting with 0.10% to 0.20% regardless of your action. This is quite good because is slightly below the industry average which is usually around 0.25%. BTC-Alpha charges a withdrawal fee of 0.001 BTC when you withdraw BTC. The maker and taker fees are priced the same and range from 0.20% for a 30 day trading volume of less than 100 BTC to 0.10% for a 30 day trading volume of 5000 BTC or more. As for deposit and withdrawal fees all crypto deposits are free of charge, and crypto withdrawals vary between cryptos but are in line with industry standards. On the other hand, fiat currency deposits are 6% for deposits via Perfect Money and AdvCash. This is extremely high and very disappointing considering the other fees are relatively low. Fiat currency withdrawal fees are 5.5% for Perfect Money and 3.5% for AdvCash. BTC-Alpha is a cryptocurrency exchange which allows both crypto-to-crypto and fiat-to-crypto trading USD supported using an advanced web-based platform. It also offers a coin listing service, which is very useful. Like most crypto-exchanges, BTC-Alpha has a two-step verification system (2FA), despite the fact that completely anonymous trading is not allowed. BTC-Alpha offers trading in Litecoin, Ethereum, Ethereum Classic, Monero, Zcash, PRISM, and now WIZ. Currently, there are lots of pairs available on its platform, the most popular are BTC/USD and ETH/USD judging by their trading volumes. In fact, this exchange supports only one long-established currency, but it is the most popular one — US dollar. So, as we already said before, on BTC-Alpha you can buy some coins with your dollars, or cash out your Bitcoins. BTC-Alpha commissions: There are two options available — “Gradation of Commission for trading” and “Commission for Deposit and withdrawal”. In the first one you can comprehend at what volumes of trading within 30 calendar days you will be available discounts from 0.2% to 0.1%. It can significantly reduce the cost of activity if you operate in large amounts. The second column is a little more informative, it contains all the trading pairs, and for each specified amount, the Commission that will be retained by the exchange for the input or output of this coin. In order to make a secure registration BTC-Alpha will offer you to write a password consisting of 8 or more latin characters which will be numbers and letters, capital and capital. You need to write down somewhere all the data that you leave on the BTC-Alpha cryptocurrency exchange just for any case. As well as for better security, you can save a list of settings on a remote data store, or on a flash card, with access only to you. The WIZ token within the BTC-Alpha Exchange After completing the token sale and raising the equivalent of 7,234,387 USD, the total token supply is 11,169,314 WIZ. This accomplishment is a huge success for our team! We would like to thank all of you for your support and appreciation. We couldn’t have done it without you — our community, the early-adopters, believers and evangelists! The listing of the WIZ token on btc-alpha.com is a vital step for making CrowdWiz one of the leading crypto projects around! We believe it is important to bring rigor and easily accessible information for the early-adopters and the new users looking to use blockchain technology and especially the ones who have chosen CrowdWiz! As we know BTC-Alpha provides guides of varying depth, from an in depth look at the maths of elliptic curve cryptography to how hashing actually work or to a simple look at what is money. So it suits each customer, from beginners to hodlers, flippers and investors. BTC-Alpha offers its services using its sophisticated browser-based trading platform equipped with technical indicators, charting options and add-ons, provided by TradingView. There is a neat order book, Trade history window, Chatbox, as well as the latest tweets of the company. As we said above BTC-Alpha offers trading in proper number of digital cryptocurrencies and also supports USD fiat currency, which is great. So, go there, prepare your wallets regardless of what you own and start trading WIZ. Here are direct links to WIZ/BTC and WIZ/USD — so go and get it.
An example of how hashes/second can be a poor measure of general computational power
I have seen many articles lately about the amazing hash rate of the bitcoin network. http://blockchain.info/charts/hash-rate The articles that compare this rate to general supercomputers are misleading and I would like to give a simple example from the bitcoin protocol and EC cryptography.
Elliptic curve point multiplication is the operation of successively adding a point along an elliptic curve to itself repeatedly. It is used in elliptic curve cryptography (ECC) as a means of producing a trapdoor function
In this scheme: private key * G = n * G = public key where * is defined by repeated addition. Suppose there are two simple machines that are being compared. Machine A: point add or point double: a ops/sec Machine B: point add: b ops/sec Let's say a= 1 and b=1 billion so machine B is 1 billion times 'faster' than machine A. If we wish to compute nG with B then we will need n steps. On the other hand, machine A can compute nG using only log2(n) steps.
The straightforward way of computing a point multiplication is through repeated addition (with the exception of the first addition since adding a point to itself is usually undefined since the slope of the line through the point is 0). However, this is a fully exponential approach to computing the multiplication. The simplest method is the double-and-add method similar to multiply-and-square in modular exponentiation. The algorithm works as follows: Compute nG with the following representation: n = d0 + 2 * d1 + 22 * d2 + 23 * d3...
Let's say we use a 256 bit key as bitcoin does. Then we know the maximum number of operations each machine must consume. A - 256 steps B - 2256 steps time for A to calculate = 256 / a =256 seconds = about 4 and a half minutes time for B to calculate = 2256 / b = 1.16 * 1068 seconds = 3.6 * 1060 years So even though machine B is 1 billion times 'faster' than machine A, you can see there is no contest when it comes to computing nG. http://en.wikipedia.org/wiki/Elliptic_curve_point_multiplication Although this is just an example relevant to bitcoin, it is true in general it seems that the number of operations/second cannot be compared between machines unless each operation is the same or they can be put into proportion.
We will be having a Google Hangout with Dr. Tim Schlaefer, Co-founder and CEO of CryptoFacilities Derivatives exchange. The panel is made of traders from WhaleClub TeamSpeak http://www.whaleclub.org/live-stream/ , TradingView Chat, Reddit and IRC #CoinMarkets. Event Page: https://plus.google.com/events/c07n3btrgmff89a9gcuaihbmcks YouTube: http://www.youtube.com/watch?v=mHA6fgF5WJ4 Prior Exchange/BTC Trading Related Hangouts: http://www.whaleclub.org/videos-hangouts/ Raw Google Document Outline/Notes Background Tell us who you are, your background, and the background of your team. Are you a trader ? Do you trade BTC/crypto actively ? What products have you used in the past or currently use? What made you decide founding the company and offering a futures derivative product on BTC was a good idea ? How do you set yourself apart from the other 4 futures platforms ? Do you have any VC backing ? Tell us about your insurance option and why this is important and who do you think this appeals to ? What is Elliptic and why are they special ? How was this relationship formed? What is the rate of insurance that someone has to pay on their account ? http://www.awesomescreenshot.com/image/410960/b131dfe2ec6d3c31144203d03d9360fe What are the current KYC/AML requirements? What is your edge ? How do you plan to challenge the offshore exchanges that currently have a very large majority of the order flow? Currently it appears you only are offering 4:1 leverage is that correct ? Why so low ? how are you going to compete against the heavy hitters offering 10x 20x ? For a long Forward position, you need to deposit Initial Margin (IM) of 0.50 bitcoins. This means that if you have 1 bitcoin in your account, you can buy up to 2 Forwards, giving you a total long exposure of 3 bitcoins. You say 4x leverage but that sounds like 2x ? How does your margin call system work ? what do you think of socialize loss systems like OKC ? Why do they have all the users ? What appeal do you have to very active retail traders ? Any plans to a front week future currently you only have 3 longer dated contracts how do you plan on winning over active retail ? Index calculation and criteria -- you have some criteria as to how you qualify an exchange -- I notice OKCoin.com BTCUSD fee’ed exchange isn’t on there but LakeBTC is ? I have yet to ever meet anyone to trade on LakeBTC that is based in China as well https://www.lakebtc.com/s/about?locale=en What is the rationale behind this ? Fees -- not too bad but still higher than OKC because they only charge 0.03% on opening -- it appears you charge both ways API -- rest API -- yes I know that is what BFX has currently but they are moving toward websocket and ultimately FIX which is the standard of legacy financial institutions -- any thoughts here ? “'while they go a half step forward in having a higher then average standard of encryption of all data sent , they are still using REST which means they are behind the ball in speed and realtime data compared to okcoin....or even coinbase" UI/UX http://www.awesomescreenshot.com/image/410952/95b2c39214b7aa3b2cbcf7264b6d70e9 The never ending debate of XBT VS BTC -- XBT just will never grow on me Any plans to get charts listed on Cryptowatch or TradingView ? why or why not Why does the formatting of the contract not include the actual expiration date ? Your combination lock kind of way of doing things is not appealing and hard to easily digest -- I would hate staring at that everyday http://bikereviews.com/wp-content/uploads/2009/12/trek-dreadlocks-resettable-combination-cable-lock.jpg What kind of order types are you offering ? any plans for icebergs and algos? Order book is on the opposite side as Time and Sales? why ? Why does it log me out if I navigate to another page ? at times
The first online purchase using bitcoin was performed by Laszlo Hanyecz in 2010. He bought Papa John's pizza for 10,000 coins (25 USD – Bitcoin value was 0.0025 cents for 1 coin). The real name of the Bitcoin developer remains unrevealed to this day.; On January 19, 2014, a fundraiser was established by the Dogecoin community to raise $50,000 for the Jamaican Bobsled Team, which had Bitcoin history price chart since 2009 to 2018. On the price chart there is shown historical value of BTC cryptocurrency, log graph of Bitcoin market capitalization and the most reasonable historical dates. January Elliptic Vault, the first bitcoin safe storage, opens in London. Bitcoin begins to oust euro in Ireland. The Elliptic Data Set maps Bitcoin transactions to real entities belonging to licit categories (exchanges, wallet providers, miners, licit services, etc.) versus illicit ones (scams, malware, terrorist organizations, ransomware, Ponzi schemes, etc.). The task on the dataset is to classify the illicit and licit nodes in the graph. Specifically, the Bitcoin protocol uses the Elliptic Curve Digital Signature Algorithm (ECDSA), a variant of the Digital Signature Algorithm (DSA). A group is an abstract mathematical entity “consisting of a set together with an operation * defined on pairs of elements of ” . The operation * must guarantee the following four properties But who were the victims? Using Elliptic’s tracing capabilities, we can determine where these funds came from and where the victims might be located. The chart below shows the geographical headquarters of the service (usually an exchange), that the bitcoin payments to the scam addresses originated from.
Most Realistic Bitcoin Price Prediction for December 2020 Best Bitcoin Price Prediction 2020 Chart
For Daily Trading support, trading ideas, trading education, access to my personal trades and much more consider joining the Jim of All Trades Telegram. To do so, just become a Patreon supporter ... Welcome to Team Underground, I (Thomas) do weekly BTC price analysis on YouTube. I've been full time trading bitcoins for over a year now and I've decided to share some of my analysis on YouTube ... BITCOIN TODAY: In this video, I'll go through the Bitcoin news today & I'll make a Bitcoin price analysis. ... INCREDIBLE BITCOIN CHART SHOWING A HUGE MOVE AND THIS $1,000,000,000 WHALE IS GETTING ... incredible bitcoin chart showing a huge move and this $1,000,000,000 whale is getting ready!!! - duration: 16:40. the moon 30,051 views. 16:40. bitcoin pumped as expected!! - 15.000$ target soon!!? This bitcoin chart could change everything (critical level on BTC). In this video we explain the important of a key level on the higher timeframe chart of bitcoin and we focus on the likely wave ...