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What is Bitcoin?

Bitcoin is a digital crypto-currency with no single point of failure due to its decentralized peer-to-peer architecture. The source code is publicly available and changes to the reference Bitcoin client are made via concensus within the community. Advantages of Bitcoin include irreversible transactions (i.e. no possibility of chargebacks as with credit cards), pseudo-anonymous, limited and fixed inflation, near instant transactions, multi-platform, no double-spend and little to no barriers to entry and more. It was created by an anonymous person known as Satoshi Nakamoto. Find out more at WeUseCoins.com.

Bitcoin Latest News

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Posted on 21 February 2018 | 1:23 am

Gibraltar Will Take Market-Driven Approach to ICO Rules

Top officials say Gibraltar will let the market determine what 'good' ICOs look like, and hinted that crypto investment fund regulation is to come.

Posted on 21 February 2018 | 12:00 am

Venezuela Claims $735 Million Raised in First Cryptocurrency Sale

Venezuelan president Nicolas Maduro claimed Tuesday that a presale for the country's national cryptocurrency netted $735 million on its first day.

Posted on 20 February 2018 | 9:15 pm

Tesla's Cloud Hit By Crypto Mining Malware Attack

Tesla has become the latest victim of crypto mining hacking attack, according to a report from cybersecurity software firm RedLock.

Posted on 20 February 2018 | 8:00 pm

US Securities Regulator Rejects BitConnect Records Request

The SEC has turned down a FOIA request related to BitConnect, citing an exemption commonly seen with records related to law enforcement.

Posted on 20 February 2018 | 3:15 pm

Petro Debut: What We Learned About Venezuela's Cryptocurrency Today

Venezuela revealed a new website for its petro token, releasing its technical white paper and telling potential customers how to purchase the coin.

Posted on 20 February 2018 | 2:30 pm

Bitcoin prices are back up 30 percent over the last week - Recode


Recode

Bitcoin prices are back up 30 percent over the last week
Recode
Bitcoin prices are back up to more than $11,600 today after South Korea's finance regulator said the country would support “normal” cryptocurrency trading. That's the highest it's been since the country's regulators said they would ban cryptocurrency ...

Posted on 20 February 2018 | 1:40 pm

Bitcoin nearly doubles in value from year's low hit in early February - Reuters


Reuters

Bitcoin nearly doubles in value from year's low hit in early February
Reuters
REUTERS/Brendan McDermid/File Photo. On the Luxembourg-based Bitstamp exchange, bitcoin hit a three-week high of $11,722.58 BTC=BTSP on Tuesday. It was last up 3.4 percent at $11,555. From this year's low of $5,920 in early February, bitcoin has surged ...
Bitcoin Price Ticks Higher Amid Strong Korean DemandCoinDesk
Bitcoin price broke through $11000 for first time since JanuaryUSA TODAY
Bitcoin Today: Prices Climb Toward $12000 Amid Asian Regulation DevelopmentsTheStreet.com
Money Magazine -Fortune -Bitcoinist -CoinDesk
all 180 news articles »

Posted on 20 February 2018 | 1:10 pm

Lisk Relaunches Blockchain Project With 'Accessibility' in Mind

Lisk a decentralized application platform will relaunch today with aspirations of blockchain accessibility front and center.

Posted on 20 February 2018 | 11:45 am

EU Regulators to Discuss Crypto Regulation Next Week

A group of European Union regulators will meet next week to discuss the regulation of cryptocurrencies.

Posted on 20 February 2018 | 11:00 am

Game Over: Vigilante Pulls Plug on Crypto All Stars

Only a week. That's how long Crypto All Stars, an ethereum-based collectable game modeled off CryptoKitties, lasted once founder in-fighting started.

Posted on 20 February 2018 | 10:00 am

Wyoming House Unanimously Approves Two Pro-Blockchain Bills

Wyoming House Unanimously Approves Two Pro-Blockchain Bills

In a watershed moment for United States blockchain and cryptocurrency law, Wyoming’s House of Representatives unanimously voted “aye” to pass two blockchain bills – HB 70 the “utility token bill” and HB 19 the “bitcoin bill” –  sending them to the State Senate for consideration. HB 70 defines utility tokens as neither traditional money nor securities; HB 19 exempts cryptocurrency from the 2003 Wyoming Money Transmitter Act (passed in the state before Bitcoin’s invention in 2008).

In an interview with Bitcoin Magazine, Wyoming Blockchain Coalition co-founder, and 22-year Wall Street veteran, Caitlin Long, attributed much of the bills’ successes so far to teamwork between Wyoming banking and security regulators and the efforts of House of Representatives member Tyler Lindholm, who is a co-sponsor and advocate of all five blockchain-related bills.

Wyoming aims to set the standard for blockchain-friendly regulation in the U.S. and to become a hub for blockchain-based innovation with these two bills. Long explained, “There are already bitcoin miners setting up shop because of [Wyoming’s] cheap electricity, no income tax and no franchise tax.”

HB 70: Utility Token Definition

The Wyoming HB 70 defines a utility token, or “open blockchain token,” as neither traditional money nor a security if it meets the following conditions:

  1. The token has not been marketed by the protocol developers as an investment opportunity.
  2. The token is exchangeable for goods or services. (This implies that protocols must offer a working product or service before tokens are issued, similar to Switzerland’s recent ICO framework.)
  3. The protocol developer has not entered into a repurchase agreement of any kind or entered into an agreement to locate buyers for the token.

Similarly, people who facilitate the exchange of an “open blockchain token” are not deemed traditional broker-dealers of securities.

HB 19: Cryptocurrency Exemption

HB 19 exempts cryptocurrency from the Wyoming Money Transmitter Act. A 2015 interpretation of this act by the Wyoming Division of Banking made it impractical for cryptocurrency exchanges to operate in the state. As a result, Coinbase suspended operations in Wyoming indefinitely in June 2015.

The passage of HB 19 moves Wyoming one step closer to cryptocurrency-friendly exchange regulation. Should the bill receive a majority vote in the Senate, exchanges such as Coinbase could resume operation in Wyoming.

Other Bills in the Pipeline

The Wyoming House of Representatives is also reviewing bills HB 101 and HB 126 in the House and SF 111 in the Senate.

HB 101, the “blockchain filings bill,” promises to update Wyoming’s Business Corporations Act to authorize the creation and use of blockchains to store records, the use of a network address to identify a corporation's shareholder and the acceptance of shareholder votes signed by network signatures.

At a high level, HB 101 specifies requirements for all corporations using electronic network or (blockchain) databases. HB 101 has passed the first reading in the House.

HB 126, the “series LLC bill” allows for the creation of “series LLCs.” This type of LLC structure is favorable towards decentralized protocols, as it enables LLCs to establish a compartmentalized series of members/managers, transferable interests or assets, and distributions to members.

HB 126 has also passed the first reading in the House.

SF 111, the “crypto property tax exemption bill,” has already been approved in the House, and its goal is to exempt cryptocurrency from Wyoming state property taxes. The bill is now awaiting consideration in the Senate.

Nothing Is Carved in Stone

While HB 70 and HB 19 have both passed in the House by a vote of 60–0, they must also pass in the Senate to be recognized as official acts.

Long expressed her optimism, while acknowledging the difficulties that lie ahead:

I don’t want to sugar-coat that it won’t be difficult. The Senate is a more uncertain chamber. But, we have incredible momentum, and all we need [for the bills to become acts] is a majority vote in the Senate.

Should the bill pass in the Senate and become an act in Wyoming, federal regulation and the SEC Howey Test could still nullify all of the advocates’ blood, sweat and tears. However, Long believes that Federal Law with regards to utility hasn’t been established yet — and, that there are people in the blockchain/cryptocurrency industry “flush with cash, interested in litigating this issue.”

Long and other Wyoming blockchain proponents hope for a final Senate outcome on HB 70, the “utility token bill,” and HB 19, the “Bitcoin bill,” as early as the middle next week.

This article originally appeared on Bitcoin Magazine.

Posted on 20 February 2018 | 9:42 am

NASA, ESA Considering Innovative Applications of Blockchain Technology

NASA, ESA Considering Innovative Applications of Blockchain Technology

NASA and other space agencies, such as the European Space Agency (ESA), are considering potential applications of blockchain technology to space missions and internal operations.

According to a NASA presentation titled “Bitcoin, Blockchains and Efficient Distributed Spacecraft Mission Control,” blockchain technology could have useful applications in distributed spacecraft missions involving multiple elements. Artificial intelligence (AI) and blockchain technologies could be further integrated to make space-based sensor networks more efficient and responsive.

In September 2017, NASA awarded a $333,000 grant to University of Akron (UA) Assistant Professor Jin Wei to research how to make space hardware smarter and more autonomous. The research program, titled “RNCP: A Resilient Networking and Computing Paradigm for NASA Space Exploration,” wants to improve the automation, environment awareness and intelligence of NASA space probes, which is an important requirement for deep space missions.

“The objective here is the application of blockchain and distributed intelligence to our space and ground network communication assets,” said Thomas Kacpura, advanced communications program manager at NASA’s Glenn Research Center. “If successful, the overall objective will be to incorporate Dr. Wei’s research in our overall portfolio to ultimately optimize our communication networks."

ESA is also quietly researching innovative blockchain-powered solutions. Recently, the Agency has been investigating the applicability of blockchain technologies to key challenges for ESA’s space activities and administrative areas. A position paper titled “Distributed Ledger Technology: Leveraging Blockchain for ESA's Success,” authored by trainee Torben David and senior coordinator Gianluigi Baldesi, offers a concise summary of blockchain technology and its main applications, and then goes on to list several potential applications to the Agency’s mission.

In particular, the paper mentions faster and more accurate payments, blockchain-based smart contracts applications to streamlining procurement, audit processes and record-keeping, data traceability and access rights, and voting and direct democracy.

It’s worth noting that the ESA paper focuses on blockchain technology applications to administrative processes but doesn’t address embedded blockchain technology for space hardware and software, which is covered by NASA’s RNCP. However, since ESA’s exploration of blockchain technology is just beginning, it seems likely that applications to space missions will be considered in due course.

In conversation with Bitcoin Magazine, Baldesi confirmed that the Agency is considering potential applications of blockchain technology with keen interest and a forward-looking approach. In the framework of “the Space 4.0 era” with diverse space actors around the world, including emerging private companies and citizen groups empowered by digital technologies, ESA launched the “Exploring Threats and Opportunities through Mega Trends in the Space 4.0 Era” initiative with the support of consulting firm Frost & Sullivan, and hosted a related workshop at the ESTEC technical centre in Noordwijk, the Netherlands, on October 23, 2017.

“In the era of Space 4.0 — as in our own lives — we have to be adaptive to change and nurture a culture of pro-activeness and open-mindedness to both disruption and opportunity,” said Baldesi.

The workshop was live-streamed and is now available for public viewing. Several presentations discuss blockchain technology as a key enabler of disruptive innovation in a wide range of industries, including space. Potential space applications of blockchain technology include  mission data; smart contracts and smart procurement to optimize the supply chain; and information management where applications may include virtual spacecraft (traceability and configuration consistency) and configuration control (hardware and documentation).

Baldesi explained that the Agency is awarding exploratory research contracts related to blockchain technology, such as a Satcom Maker Space initiative that includes Internet of Things (IoT) solutions for satellite telecommunications and a “Testbed for Blockchain supporting satellite M2M/IoT,” as well as an intended “Blockchain for Space Activities” study and an intended “fintech” initiative for innovative fintech-related applications and services based on the integration of space and non-space technology.

The governance and “direct democracy” applications mentioned in the position paper are especially interesting. Baldesi explained that the current Director General of the Agency, Johann-Dietrich Wörner, known for his vigorous support of bold, visionary initiatives such as the “Moon Village,” is determined to systematically use tools such as Kahoot for crowdsourced decision making and has launched several pilot e-voting initiatives, not only internally but also with the participation of external actors.

Blockchain-based e-voting platforms are, according to Baldesi, especially promising and in line with the desired openness and inclusiveness of Space 4.0.

These sorts of Space 4.0 citizen initiatives are growing in popularity; projects like Space Decentral project are moving in a similar direction.


This article originally appeared on Bitcoin Magazine.

Posted on 20 February 2018 | 9:33 am

Finland Mandates Cold Storage, Public Auctions for Seized Bitcoins

The Finnish government has released guidelines prescribing how authorities must handle the 2,000 bitcoin confiscated since 2016.

Posted on 20 February 2018 | 8:00 am

Vitalik Has a New Idea for ICOs – And It's Being Tested

A month after ethereum creator Vitalik Buterin proposed a new twist on the ICO funding model, a Russian video game firm is putting it into practice.

Posted on 20 February 2018 | 7:00 am

Bitcoin Price Ticks Higher Amid Strong Korean Demand

Bitcoin prices passed $11,600 in the morning's session, seemingly buoyed by enthusiastic trading in South Korea.

Posted on 20 February 2018 | 6:00 am

South Korea to Support 'Normal' Crypto Trading, Says Finance Watchdog

South Korea's Financial Supervisory Service has reportedly said that the government will support "normal" cryptocurrency trading transactions.

Posted on 20 February 2018 | 5:10 am

Venezuela's 'Petro' Token Launches in Pre-Sale

Venezuela's government has reportedly launched the pre-sale of its controversial "petro" cryptocurrency, saying 82.4 million tokens are now available.

Posted on 20 February 2018 | 3:20 am

R3 Center to Train Next Generation of DLT Lawyers

Distributed ledger software provider R3 has formed a blockchain education group designed to prepare lawyers for large-scale enterprise adoption.

Posted on 20 February 2018 | 2:00 am

Regional Government in Russia to Test Blockchain Payments

Russian development bank Vnesheconombank has partnered with Kaliningrad's regions government to pilot blockchain-based payment solutions.

Posted on 20 February 2018 | 12:00 am

New Bitcoin Code Will Finally Boast Full SegWit Support

An upcoming Bitcoin Core software release is finally making it easier to use a code change called SegWit in the software's standard wallet.

Posted on 19 February 2018 | 9:05 pm

Bitcoin Price Analysis: Bitcoin Tests Pivotal Resistance Levels Following Strong Rally

Bitcoin Price Analysis

After a strong rally from the $6,000s, bitcoin ultimately saw a near 100% growth in market value as it now sits atop its rally in the low $11,000s. Currently, the market is testing well-known, strong resistance levels and is seeing quite turbulent shakeouts and rallies as it decides what the next market move will be. On a macro view, we can see that bitcoin is testing the strength of the daily 50 EMA:

fig1Figure 1: BTC-USD, Daily Candles, Macro Trend

The red square at the top of the trend represents a macro distribution trading range that ultimately led to the decline in value of the last couple months. At the time of this article, we are currently testing the lower boundary of this trading range:

fig2Figure 2: BTC-USD, 4-Hour Candles, Retest of Distribution Trading Range

In a typical markdown phase of a market cycle, it is quite common for a distribution trading range to break down through the bottom, see a strong drop in price, and then see a rally that leads to a retest of the lower limits of the prior distribution trading range.

The markdown from the top of the market cycle has been well defined by the red, dotted channel sloping downward in the image above. This current rally has the price pushing beyond the limits of the channel and shows a break of the current downward trend.

One thing that should be noted however is that a breakdown of a downward trend doesn’t necessarily mean that it will become an uptrend. It’s entirely possible that a break from the downward trend could lead into a consolidation period that yields a new downward trend — we’ve seen this time and time again.

At the time of this article we are currently seeing turbulent swings in price as the market decides what its next move will be. At the top of this rally from $6,000 to the $11,000s, we see a trading range starting to form:

fig3Figure 3: BTC-USD, 30min Candles, Possible Trading Range

A bullish case for this trading range could be considered if we manage to break above it and find support on the top of the trading range. This sign of support would be a bullish signal to the market that we are no longer interested in lower values and that the market is ready to continue its markup campaign.

However, if we break above this trading range and fall back inside the trading range, it would be a very bearish sign that the we are actually forming another distribution trading range, indicating that the top of the current rally is over. At that point we could expect to begin a new markdown campaign in the following days and weeks.

Thus, this current resistance level is pivotal and will serve to mark either the end of the uptrend or the beginning of an even stronger move to higher values.

Summary:

  1. Bitcoin has seen a strong rally since it bottomed out around $6,000.
  2. Currently, it is finding turbulent market activity as it tests well-known and established resistance levels.
  3. If we manage to find support on the trading range outlined in Figure 3, this will be a strong indication of a continuation to higher highs. However, if pushing upward we don’t find support on the top of the trading range and manage to fall back inside the trading range, this is a strong bearish signal that a potential markdown in price is in store in the next few days and weeks.

Trading and investing in digital assets like bitcoin and ether is highly speculative and comes with many risks. This analysis is for informational purposes and should not be considered investment advice. Statements and financial information on Bitcoin Magazine and BTC Media related sites do not necessarily reflect the opinion of BTC Media and should not be construed as an endorsement or recommendation to buy, sell or hold. Past performance is not necessarily indicative of future results.


This article originally appeared on Bitcoin Magazine.

Posted on 19 February 2018 | 3:20 pm

HashChain Technology Acquires Blockchain Company NODE40

HashChain Mining Operation Acquires NODE40 Blockchain Technology Company

HashChain Technology Inc. (HashChain) has acquired the blockchain technology company NODE40 for $8 million USD and 3,144,134 common shares of stock in HashChain (TSXV: KASH) (OTCQB: HSSHF).

HashChain is a Canadian-based crypto-mining company that currently operates 100 Dash mining rigs and is in the process of setting up nearly 4,000 more to mine bitcoin. By locating in Canada, they are able to take advantage of both the very low electrical rates for power and the cool climate for data center cooling.

Having recently gone public on the TSX Venture Exchange, the company was looking to diversify their business beyond crypto-mining and have now acquired NODE40, a company that develops Software as a Service (SaaS) products related to cryptocurrency.

HashChain CEO and Founder Patrick Gray said, “The acquisition of the NODE40 Business is an important next step of creating a global blockchain technology company."

On the hardware and mining side, NODE40 runs a managed service for running your own Dash masternode. Masternodes get paid 45 percent of the monthly block reward as incentive for providing services to the network.

On the software side, NODE40 provides the SaaS product NODE40 Balance (Balance), which determines accurate valuations for each input/output involved in a user’s transaction by using cryptocurrency transaction history and analyzing the blockchain. Once a value is assigned to each transaction, then Balance will report the users’ current total asset value, income and any realized gains or loses.

"Cryptocurrency accounting and reporting for tax purposes is a major concern in the industry at the moment,” said Gray. “The recent Coinbase subpoena from the IRS highlights the significant need for the software developed by NODE40."

The acquisition was finalized on February 15, 2018.

This article originally appeared on Bitcoin Magazine.

Posted on 19 February 2018 | 11:21 am

Sidechains: Why These Researchers Think They Solved a Key Piece of the Puzzle

Sidechains and Why These Researchers Think They Solved a Key Piece of the Puzzle

New blockchains are born all the time. Bitcoin was the lone blockchain for years, but now there are hundreds. The problem is, if you want to use the features offered on another blockchain, you have to buy the tokens for that other blockchain.

But all that may soon change. One developing technology called sidechains promises to make it easier to move tokens across blockchains and, as a result, open the doors to a world of possibilities, including building bridges to the legacy financial systems of banks.

In October 2017, Aggelos Kiayias, professor at the University of Edinburgh and chief scientist at blockchain research and development company IOHK; Andrew Miller, professor at the University of Illinois at Urbana-Champaign; and Dionysis Zindros, researcher at the University of Athens, released the paper “Non-Interactive Proofs of Proof-of-Work” (NiPoPoW), introducing a critical piece to the sidechains puzzle that had been missing for three years. This is the story of how they got there.

But, first, what exactly is a sidechain?    

Same Coin, Different Blockchain

A sidechain is a technology that allows you to move your tokens from one blockchain to another, use them on that other blockchain and then move them back at a later point in time, without the need for a third party.  

In the past, the parent blockchain has typically been Bitcoin, but a parent chain could be any blockchain. Also, when a token moves to another blockchain, it should maintain its same value. In other words, a bitcoin on an Ethereum sidechain would remain a bitcoin.  

The biggest advantage of sidechains is that they would allow users to access a host of new services. For instance, you could move bitcoin to another blockchain to take advantage of privacy features, faster transaction speeds and smart contracts.  

Sidechains have other uses, too. A sidechain could offer a more secure way to upgrade a protocol, or it could serve as a type of security firewall, so that in the event of a catastrophic disaster on a sidechain, the main chain would remain unaffected. “It is a kind of limited liability,” said Zindros in a video explaining how the technology works.

Finally, if banks were to create their own private blockchain networks, sidechains could enable communications with those networks, allowing users to issue and track shares, bonds and other assets.

Early Conversations

Early dialogue about sidechains first appeared in Bitcoin chat rooms around 2012, when Bitcoin Core developers were thinking of ways to safely upgrade the Bitcoin protocol.

One idea was for a “one-way peg,” where users could move bitcoin to a separate blockchain to test out a new client; however, once those assets were moved, they could not be moved back to the main chain.  

“I was thinking of this as a software engineering tool that could be used to make widespread changes,” Adam Back, now CEO at blockchain development company Blockstream, said in an interview with Bitcoin Magazine. “You could say, we are going to make a new version [of Bitcoin], and we think it will be ready in a year, but in the meantime, you can opt in early and test it.”

According to Back, sometime in the following year, on the Bitcoin IRC channel, Bitcoin Core developer Greg Maxwell suggested an idea for a “two-way peg,” where value could be transferred to the alternative chain and then back to Bitcoin at a later point.

A two-way peg addressed another growing concern at the time. Alternative coins, like Litecoin and Namecoin, were becoming increasingly popular. The fear was these “altcoins” would dilute the value of bitcoin. It made sense, Bitcoin Core developers thought, to keep bitcoin as a type of reserve currency, and relegate new features to sidechains. That way, “if you wanted to use a different feature, you wouldn’t have to buy a speculative asset,” said Back.

To turn the concept of sidechains into a reality, Back along with Maxwell and a few other Bitcoin Core developers formed Blockstream in 2014. In October that year, the group released “Enabling Blockchain Innovations with Pegged Sidechains,” a paper describing sidechains at a high level. Miller appears as a co-author on that paper as well.

How Sidechains Work

One important component of sidechains is a simplified payment verification (SPV) proof that shows that tokens have been locked up on one chain so validators can safely unlock an equivalent value on the alternative chain. But to work for sidechains, an SPV proof has to be small enough to fit into a single coinbase transaction, the transaction that rewards a miner with new coins. (Not to be confused with the company Coinbase.)

At the time the Blockstream researchers released their paper, they knew they needed a compressed SPV proof to get sidechains to work, but they had not yet developed the cryptography behind it. So they outlined general, high-level ideas.

The Blockstream paper describes two types of two-way pegs: a symmetric two-way peg, where both chains are independent with their own mining; and an asymmetric two-way peg, where sidechain miners are full validators of the parent chain.

In a symmetric two-way peg, a user sends her bitcoins to a special address. Doing so locks up the funds on the Bitcoin blockchain. That output remains locked for a contest period of maybe six blocks (one hour) to confirm the transaction has gone through, and then an SPV proof is created to send to the sidechain.

At that point, a corresponding transaction appears on the sidechain with the SPV proof, verifying that money has been locked up on the Bitcoin blockchain, and then coins with the same value of account are unlocked on the sidechain.

Coins are spent and change hands and, at a later point, are sent back to the main chain. When the coins are returned to the main chain, the process repeats. They are sent to a locked output on the sidechain, a waiting period goes by, and an SPV proof is created and sent back to the main blockchain to unlock coins on the main chain.  

In an asymmetric two-way peg, the process is slightly different. The transfer from the parent chain to the sidechain does not require an SPV proof, because validators on the sidechain are also aware of the state of the parent chain. An SPV proof is still needed, however, when the coins are returned to the parent chain.

Search for a Compact Proof

In a sidechain, a compact SPV proof needs to contain a compressed version of all the block headers in the chain where funds are locked up from the genesis block through the contest period, as well as transaction data and some other data. In this way, an SPV proof can also be thought of as a “proof of proof-of-work” for a particular output.

Inspiration for the compact SPV proof comes from a linked-list-like structure known as a “skip list” developed 25 years ago. In applying this structure to a compact SPV proof, the trick was in finding a way to skip block headers while still maintaining a high level of security so that an adversary would not be able to fake a proof.

In working through the problem, Blockstream showed an early draft of its sidechains paper to Miller, who had been mulling over compact SPVs for a few years already.

In August 2012, in a post on a BitcoinTalk forum titled “The High-Value-Hash Highway,” Miller described an idea for a “merkle skip list” that a Bitcoin light client could use to quickly determine the longest chain and begin using it. In that post, he described the significance of the data structure as “absolutely staggering.”

When Miller read through the Blockstream draft, he spotted a vulnerability in the compact SPV proof described in the paper. Discussions ensued, but they “couldn’t find a way to solve that problem without compromising efficiency,” Miller said.

Miller’s non-trivial contributions to the Blockstream paper ended up being a few paragraphs in Appendix B that describe the challenges in creating a compact SPV proof.

It should “be possible to greatly compress a list of headers while still proving the same amount of work,” the section reads, but “optimising these tradeoffs and formalising the security guarantees is out of scope for this paper and the topic of ongoing work.”

That ongoing work remained stuck for three years.

Making It Non-interactive

During that ensuing time, researchers at IOHK began taking a more serious interest in sidechains. Plans were taking shape for Cardano, a new proof-of-stake blockchain that IOHK had been contracted to build.

Cardano would consist of two layers: a settlement layer, launched in September 2017, where the money supply would be kept, and a smart contract layer. Those two layers would be two sidechain-enabled blockchains. In this way, the settlement could remain simple and secure from any attacks that might occur on the smart contract layer. But if IOHK was to get Cardano to work as intended, it needed to solve sidechains.

In February 2016, Kiayias, then a professor at the University of Athens, and two of his students, Nikolaos Lamprou and Aikaterini-Panagiota Stouka, released “Proofs of Proofs of Work with Sublinear Complexity” (PoPoW).

The paper was the first to formally address a compact SPV proof. Only, the proof described in the paper was interactive; whereas, to work for sidechains, it needed to be non-interactive.

In an interactive proof, the prover and the verifier enter into a back-and-forth conversation, meaning there could be more than one round of messaging. In contrast, a non-interactive proof would be a simple, short string of text that would fit neatly into a single transaction on the blockchain.

The PoPoW paper was presented at BITCOIN’16, a workshop affiliated with the International Financial Cryptography Association’s (IFCA) Financial Cryptography and Data Security conference. Miller, who was at the conference, approached Kiayias and shared an idea for making the protocol non-interactive.

It was a “nice observation,” Kiayias told Bitcoin Magazine, but making the proof secure was “not obvious at all” and would require significant work.

Zindros, who had just started working on his PhD under Kiayias, was also at the conference, and he needed a topic for his thesis. Kiayias saw a good fit, “so we pressed on, the three of us, and adapted the PoPoW protocol and its proof of security to the non-interactive setting,” Kiayias said.

In October 2016, Kiayias officially joined IOHK, and a year later, Kiayias, Miller and Zindros released “Non-Interactive Proofs of Proof-of-Work,” introducing a compact SPV proof five years after sidechains had first been talked about on Bitcoin forums.

“If it were interactive, I don’t know if it would have worked; with a non-interactive proof, it is really smooth,” Zindros told Bitcoin Magazine.

More Work to Be Done

Even with NiPoPoW, sidechains are still not fully specified. Several questions remain, including, how small can the proofs be made? After a transaction is locked up on one chain, how much time needs to pass before it can be spent on the other? And, will it be possible to move a token from a sidechain directly to another sidechain?

“A lot of theory still needs to be defined,” IOHK CEO Charles Hoskinson said in speaking to Bitcoin Magazine.

Also, while NiPoPoW is designed to work for proof-of-work blockchains, some believe that if blockchains are to take their place in the world on a grand scale, the future rests in proof-of-stake protocols like Ouroboros, Algorand or Snow White, which promise to be more energy-efficient than Bitcoin.

In particular, if Cardano, which is based on Ouroboros, is to work according to plan, IOHK researchers still need to discover a non-interactive proof of proof-of-stake (NiPoPoS).

Hoskinson is confident. “We can definitely do that,” he said. “We can definitely have a NiPoPoS. The question is how many megabytes or kilobytes is it going to be? Can we bring it down to 100 KB? That is really the question.”

This article originally appeared on Bitcoin Magazine.

Posted on 19 February 2018 | 7:12 am

Bitcoin broke through $11000 for the first time since January - CNBC


CNBC

Bitcoin broke through $11000 for the first time since January
CNBC
Bitcoin broke through the $11,000 mark over the weekend for the first time since the end of January as its price continues to slowly rise following a violent sell-off at the start of the month. The price of the cryptocurrency went as high as $11,279.18 ...
Vitalik Buterin on Twitter: "Reminder: cryptocurrencies are still a new and hyper-volatile asset class, and could ...Twitter

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Posted on 19 February 2018 | 4:06 am

Decentralized Exchanges Stake Their Claim in the Cryptocurrency Ecosystem

Decentralized Exchanges Stake Their Claim in the Cryptocurrency Ecosystem

The cryptocurrency ecosystem has continued to take some major hits lately, causing many investors and holders to rethink the way they trade their crypto assets. Several high profile cryptocurrency hacks have made the news in the past few years. In one of the most recent hacks, the Japanese cryptocurrency exchange, Coincheck lost more than $500 million dollars worth of digital coins, adding to a growing perception that cryptocurrencies are particularly vulnerable to hackers.

Yet, as the total market capitalization of cryptocurrencies continues to increase (now above $4 billion), the most recent Coincheck hack may finally be a wake up call for crypto investors and holders.

As the vulnerability of centralized cryptocurrency exchanges is becoming more and more apparent to the cryptocurrency community, some are looking to alternatives in the form of decentralized exchanges.

Unlike a centralized exchange system that handles the trading of cryptocurrencies for its users, decentralized exchanges allow users to control their own funds within their own wallets. Decentralized exchanges do not rely on a third party service to hold a user’s funds, making them less vulnerable to large hacks. This also means that trades on a decentralized exchange happen directly between users in a peer-to-peer manner. These features make decentralized exchanges less vulnerable and much more transparent than centralized exchanges.

Decentralized exchanges such as AirSwap, Bisq, EtherDelta and Hodl Hodl — the newest player to enter the scene — have sparked the interest for crypto enthusiasts looking to control their own assets with little hand holding involved. Users on these decentralized exchanges keep their own private keys and transact directly with each other, demonstrating a truly decentralized form of trading crypto assets.

“We believe that there will be a huge liquidity migration from centralized exchanges to decentralized exchanges when it comes to token-to-token trading,” AirSwap strategist, Sam Tabar, told Bitcoin Magazine. “AirSwap’s mission is to let people trade crypto assets without a middleman involved and blockchain technology allows for just this.”

He pointed out that AirSwap doesn’t hold any user assets. The platform uses the Ethereum blockchain and atomic swaps based on smart contracts to make sure assets cannot be traded without another asset coming to a user.  

“In a way, centralized exchanges act as a bank, broker and clearing house because they hold all your money and charge fees. This is problematic though, and hacks are happening quite often because of this model,” said Tabar.

What About Crypto to Fiat Trades?

Most decentralized exchanges allow for crypto-to-crypto trading. While this model is common, Bisq is one of the few decentralized exchanges that lets users buy and sell bitcoins in exchange for national fiat currencies as well as alternative cryptocurrencies.

“Crypto-to-fiat exchange transactions are inherently difficult to decentralize, because fiat itself is under the centralized control of banks and governments,” Bisq co-founder, Chris Beams, told Bitcoin Magazine. “This means that any system designed to automate the process of trading crypto for fiat must get permission from these gatekeepers, and all too often they choose to close their gates to Bitcoin and cryptocurrency-related transactions — just as we saw last month with Visa shutting down all Bitcoin-based debit cards on its network.”

Bisq, however, solves this problem by coordinating out-of-band, manual fiat payments. It’s important to note that Bisq does not directly integrate with banks or other national currency payment systems in any way. Rather, Bisq’s trading protocol orchestrates the process of buyer and seller working together to settle fiat payments outside of the Bisq application — for example, via normal person-to-person SEPA payments in Europe or via a person-to-person payment system like Zelle in the U.S.

Bisq is also impressive in that their peer-to-peer network ensures a high level of user security.

“Centralized exchanges require users to ‘deposit’ cryptocurrency and fiat funds, putting them in the control — or custody — of the centralized exchange. Bisq is entirely non-custodial, meaning that you, the user, stay in control. You never hand over your private keys to a third party, meaning that they cannot be lost or stolen by that third party. This makes Bisq a fundamentally more secure way to exchange,” said Beam.

Most recently, the beta version of Hodl Hodl was launched. Hodl Hodl is another peer-to-peer crypto exchange that allows users to trade directly with each other, without holding user funds.

Instead, funds on Hodl Hodl are locked in multisig escrow.

Each time a contract is created between two parties, a multisig escrow cryptocurrency address is generated. The seller sends cryptocurrency from his wallet to this account and when the cryptocurrency is locked in escrow, the buyer sends fiat to the seller. The seller then releases the locked cryptocurrency from escrow and the buyer receives it directly in their wallet.

Enhanced Privacy

Furthermore, because decentralized exchanges do not hold funds and because the exchanges are all peer-to-peer, there are no AML/KYC requirements for users to set up accounts.

“AML/KYC type of compliance, in combination with the transparent nature of Bitcoin's blockchain, represents a significant loss of privacy,” said Manfred Karrer, founder of Bisq, when it first launched as Bitsquare.

“By piecing together the data collected by these exchanges, it can become trivial to figure out how much someone earns, or saves, or spends, and often even what the money is spent on. That’s not just inconvenient; it really makes Bitcoin unsuitable for all sorts of transactions ‒ including perfectly legal ones.”



This article originally appeared on Bitcoin Magazine.

Posted on 16 February 2018 | 3:11 pm

Bitcoin tops $10,000 milestone

Posted on 29 November 2017 | 2:30 am

Bitcoin price climbs over $4,000

Posted on 14 August 2017 | 1:16 am

CRYENGINE now accepts Bitcoin

Posted on 29 March 2017 | 1:24 am

Consulting firm EY Switzerland accepts Bitcoin

Posted on 26 November 2016 | 12:47 am

Bitcoin Trading Bots

There have been a wide variety of situations in which algorithmic trading programs have proven to be beneficial for investors. However, investors who only trade a cryptocurrency can also take advantage of bitcoin trading bots. Through bitcoin bot trading, traders can become more flexible and prompt, minimize errors and process information more rapidly. At this… Read More »

Posted on 8 November 2016 | 6:20 pm

Steam accepts Bitcoin

Posted on 29 April 2016 | 1:09 am

Major Magazine Publisher to Accept Bitcoin Payments

Posted on 18 December 2014 | 12:43 pm

Wikimedia Foundation Now Accepts Bitcoin

Posted on 30 July 2014 | 3:14 pm

German Newspaper "taz" accepts Bitcoin

Posted on 22 July 2014 | 1:32 pm

airBaltic - World’s First Airline To Accept Bitcoin

Posted on 22 July 2014 | 11:03 am

February 21, 2018 -
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