Aussie state considers blockchain tech for land registry

A land registration agency in Australia is considering blockchain for recording property transactions, in the latest example of the technology being deploying in public administration.

New South Wales Land Registry Services, which operates title to land and is responsible for recording property transactions in the state, said it was launching a new proof-of-concept trial, local news outlet CIO  reported. Providing the trial proves successful, the agency would then look to deploy the technology within New South Wales, as part of ongoing efforts to digitize public records at state government level.

The use case is yet another example of government and public sector agencies harnessing the power of blockchain technology to improve existing systems at a local level.

The agency announced it would partner with Swedish firm ChromaWay, which will help in running the initial trial. The results are expected early in 2019.

At present, property transactions are recorded manually by hand, in a labor-intensive process that authorities are keen to digitize. However, before a blockchain platform could be used in its place, regulators are required to give the all clear.

If the system is eventually rolled out to land transactions in NSW, it will replace paper records of property transactions as the definitive ledger of reference for land registration in the state.

A spokesperson for ChromaWay said the security and immutability of blockchain made it a perfect fit for the land registration use case, explaining: “It will provide a more complete and comprehensive view of land rights, restrictions, and responsibilities, which will streamline decision-making for government and land sector actors, provide increased information transparency, and reduce data duplication.”

Authorities in New South Wales are no strangers to experiments with blockchain, and this week’s announcement follows the launch of several similar programs in recent months.

In the last few weeks, it has been announced that New South Wales will be digitizing driving license records on a blockchain platform, replacing the current licensing process for all new and renewing drivers in the Aussie state. Now, with the addition of the land registration use case, the authorities in New South Wales are continuing to demonstrate the possibilities with blockchain technology.

Note: Tokens on the Bitcoin Core (segwit) Chain are Referred to as BTC coins. Bitcoin Cash (BCH) is today the only Bitcoin implementation that follows Satoshi Nakamoto’s original whitepaper for Peer to Peer Electronic Cash. Bitcoin BCH is the only major public blockchain that maintains the original vision for Bitcoin as fast, frictionless, electronic cash.

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Toyota sees drop in ad fraud with blockchain-powered campaign

An initial advertising campaign for automotive manufacturer Toyota tracked by blockchain technology saw visits to the company’s website increase by 21% compared to similar campaigns.

Blockchain advertising analytics firm Lucidity, in a press release, announced its partnership with Toyota and ad agency Saatchi & Saatchi for the pilot campaign, which it said was the “final test” to show if a blockchain-powered online ad campaign could “deliver real results for real brands.”

Toyota National Marketing Communications Manager Nancy Inouye said, “Before today, there was no way to verify with confidence what’s happening behind the scenes in a programmatic buy. We’ve had our eyes on blockchain innovation for a long time, but didn’t have a workable blockchain solution until now.”

The campaign involved an analysis of data on clicks and impressions to find discrepancies, which according to online magazine Ad Age included domain spoofing and bot traffic. With this information, certain sites and apps associated with the discrepancies were blacklisted, and funding was diverted to better performing sites.

Saatchi & Saatchi Media Director Tom Scott said, “Even with high standards of anti-fraud and viewability filters already built in, Lucidity was able to deliver significant value-add by further optimizing the campaign. The ability to have access to a transparent, clean set of data from across the programmatic supply chain is game-changing. We’re empowered to take action, and this is the first time we’ve been able to use blockchain technology to eliminate waste and optimize our ad buy in this way.”

Lucidity Chief Operating Officer Nikao Yang said, “The reality is that programmatic supply chains don’t always behave as intended, and bad behavior comes into play. Our blockchain solution gives partners like Toyota deeper, log-level optics into their ad spend at every point in the supply chain to combat these challenges.”

Yang was quoted in the Ad Age article as saying that Lucidity’s technology allowed everyone in the supply chain a say as to whether an ad impression was valid. “We are not necessarily just looking for fraud. Lucidity exposes supply chain breakdowns… Lucidity allows marketers to optimize away from these breakdowns, which yields greater performance,” he said.

Inouye hinted at a continuation of campaigns with Lucidity in the future. “We are in discussions to take it to the next step and [test] further with additional campaigns for a longer period of time. We feel that if we go longer, we would see stronger results,” she said.

According to Lucidity, the automotive digital advertising industry was a $15-billion market this year in the U.S. alone.

Note: Tokens on the Bitcoin Core (segwit) Chain are Referred to as BTC coins. Bitcoin Cash (BCH) is today the only Bitcoin implementation that follows Satoshi Nakamoto’s original whitepaper for Peer to Peer Electronic Cash. Bitcoin BCH is the only major public blockchain that maintains the original vision for Bitcoin as fast, frictionless, electronic cash.

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Steve Wozniak tosses hat in blockchain VC ring

Apple co-founder Steve Wozniak has put his name behind EQUI Global, a blockchain-powered venture capital fund from the founders of a similarly named company that had failed to raise adequate funds earlier this year.

A blog post from EQUI Global announced the partnership, naming Wozniak as a co-founder along with entrepreneurs Doug Barrowman and Michelle Mone. The company seeks “to disrupt the venture capital industry—one that is considered to be extremely traditional.”

People can invest in the fund through the purchase of EquiTokens. Wozniak, as head of technology investments, will “help find the tech stars of tomorrow. Woz will then bring them to the table and the board of serial entrepreneurs will mentor and coach them with world class expertise and guidance,” according to the press statement.

Up to 80% of the EQUI Global fund will be placed in technology, while the remaining amount will be for assets such as real estate and collectibles such as art and vintage cars.

Wozniak said, “I get ideas pitched to me every single day in fact dozens and I always say no. Since I co-founded Apple with Steve Jobs, this is about the second time in twenty years that I actually said yes, I want to be a part of this. It has to be something I really believe in and I really believe in EQUI… I know that we have something very special with EQUI. I’ve since enjoyed giving my feedback to the technical side of the initiative and will very much be an actively involved proud co-founder.”

Barrowman and Mone launched EQUI Capital last February. A March initial coin offering (ICO) was targeted to raise $75 million. After about a month, however, the company only managed to raise about 10% of its target, and its subsequent campaign that offered “bounties” to those who promoted the ICO online, failed to generate the desired funds. Reacting to complaints of so-called bounty hunters being paid only a small amount owed to them, a spokeswoman for Mone reportedly said that another company, AmaZix, was responsible for the bounty program.

Wozniak said of the new enterprise, “I am very pleased that my business partners are the respected Michelle and Doug… I greatly admire Michelle and Doug for their huge accomplishments.” He added that EQUI Global was already looking at more than 20 businesses to invest in.

Wozniak, an outspoken advocate of cryptocurrencies, is entering the blockchain business for the first time. Last February, he admitted to being robbed of cryptocurrencies worth about $75,000 at the time, through a credit card scam.

Note: Tokens on the Bitcoin Core (segwit) Chain are Referred to as BTC coins. Bitcoin Cash (BCH) is today the only Bitcoin implementation that follows Satoshi Nakamoto’s original whitepaper for Peer to Peer Electronic Cash. Bitcoin BCH is the only major public blockchain that maintains the original vision for Bitcoin as fast, frictionless, electronic cash.

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Christie’s art auction will be recorded on blockchain

Starting this fall, art auctions will be taking the blockchain route as Christie’s is turning to the technology to encrypt the registration of its art transactions.

The London-based art auction house announced last week that it will be partnering with Artory, a blockchain-based digital registry for the art industry. The duo will be piloting encrypted storage of auction transactions and will begin the test with artwork pieces from An American Place: The Barney A. Ebsworth Collection, from Christie’s upcoming November sale of artworks.

The 20th-century Modernist American art collection is estimated to bring in as much as $300 million. The collection will be unveiled at the Rockefeller Center, New York, from November 4. The Artory blockchain platform will provide an encrypted and secure certification of the sale to the successful bidder. Each buyer will also get access to the encrypted information about the artwork they purchased.

Richard Entrup, chief information officer at Christie’s, explained: “Our pilot collaboration with Artory is a first among the major global auction houses, and reflects growing interest within our industry to explore the benefits of secure digital registry via blockchain technology.”

The blockchain technology has been catching up to the complicated industries in the world. Nanne Dekking, CEO of Artory, explained the need for adopting new technologies, saying, “We are delighted to work with Christie’s on this industry-leading collaboration. As long-standing participants and business leaders within the global art market, the Artory team innately understands the needs of today’s art collectors and the broader desire within the industry to embrace new technologies that will help the marketplace evolve.”

The collaboration between Christie’s and Artory is seen as a much-needed development in the art industry. The art industry has been plagued with stolen, forged or misrepresented artworks. Recording the art purchases on the blockchain will help curb instances of stolen artworks. The Blockchain Art Collective (BAC) has been working towards presenting a tamper-proof seal to pieces of art to let others know that the information of that particular artwork had been registered on the blockchain. Hopefully, this will inspire trust and more confidence in the art industry.

Note: Tokens on the Bitcoin Core (segwit) Chain are Referred to as BTC coins. Bitcoin Cash (BCH) is today the only Bitcoin implementation that follows Satoshi Nakamoto’s original whitepaper for Peer to Peer Electronic Cash. Bitcoin BCH is the only major public blockchain that maintains the original vision for Bitcoin as fast, frictionless, electronic cash.

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Crypto-mining church in Russia fined for excessive energy use

A Protestant church from the city of Irkutsk in Russia has been court-ordered to pay a fine of 1.1 million rubles ($16,600) after it was discovered to have been consuming large amounts of electricity for its cryptocurrency mining operations.

According to Russian news outlet RT, local utility company Irkutskenergo reported a sudden spike in the electricity consumption of the ‘Grace’ evangelical community in May 2017, reaching 2 million kWh through August. Church trustees told the utility provider that the energy was used for heating as well as to power the printing machine to copy religious materials. Inspectors from Irkutskenergo visited the building rented out to the church, and in it, they discovered a server room on the second floor, which they determined was being used to mine cryptocurrencies.

This resulted in the utility company to charge the church the same rates applicable to corporations and industrial enterprises due to ‘Grace’s’ “excessive power consumption.”

The organization, however, took the matter to court, asking for a refund of the surcharge totalling 1.1 million rubles. However, the Irkutsk Arbitration Court turned down the church’s request and instead, ordered ‘Grace’ to pay up.

In its ruling, the court noted that the energy spike happened during the summer season, and also compared the energy used ‘Grace’ with data from larger temples and printing houses in Russia. Ultimately, the judge ruled that the amount the church paid to the authorities was reasonable.

The eastern parts of Europe have seen significant numbers of home crypto mining in the last few years. This is because the region enjoys preferentially subsidized electricity rates. According to local reports, private residents and other categories of consumers pay 1.22 rubles per kWh ($0.018) during the day and 0.70 rubles ($0.010) at night, so it’s no surprise that enterprising individuals and organizations like ‘Grace’ may have been taking advantage of the cheap electrify to earn extra income.

The recent court ruling, however, could change how authorities in Russia and the surrounding areas will be handle home-based crypto mining activities. Similar to ‘Grace’s’ case, other utility companies could start charging home crypto miners the same electricity rates as those paid by industries and big organizations.

Countries with favorable electricity prices have had to take a stand to control crypto mining activities and electricity consumption. Many have taken action against miners for stealing electricity. Recently, a miner in China was charged with mining cryptocurrency using stolen electricity. The court sentenced him to three years and six months in prison for his actions.

Note: Tokens on the Bitcoin Core (segwit) Chain are Referred to as BTC coins. Bitcoin Cash (BCH) is today the only Bitcoin implementation that follows Satoshi Nakamoto’s original whitepaper for Peer to Peer Electronic Cash. Bitcoin BCH is the only major public blockchain that maintains the original vision for Bitcoin as fast, frictionless, electronic cash.

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Bitcoin SV version 0.1 goes live

Leading blockchain technology research and development outfit nChain has rolled out the beta release of its Bitcoin SV alpha client on October 15—one month ahead of the November Bitcoin Cash (BCH) network upgrade.

Available on GitHub, the Bitcoin SV 0.1 version includes support for the November upgrade, including the re-enabling of the OP_MUL, OP_INVERT, OP_LSHIFT, and OP_RSHIFT OP_Codes. The default maximum size of accept blocks has also been finally increased from the 32MB soft limit to 128MB.

Notably, this release has increased the limit on the number of opcodes from 201 to 500 per script, which will take effect after the upgrade. It has also disabled several features, such as the automatic replay feature, the activation logic for the May 2018 upgrade, and the graphic user interface (GUI). The beta version also reduced the maximum size of P2P messages to be closer to the excessive block size (EB) parameter.

Bitcoin SV, which stands for Satoshi’s Vision, is an open source software that enables the use of Bitcoin BCH. Considered one of the most promising Bitcoin BCH node implementation, Bitcoin SV is a project born out of the desire to empower miners so they’ll make informed decisions about critical protocol upgrades. Contrary to widely held belief, Bitcoin SV is not a fork—it will lock the “battle-tested” Bitcoin BCH protocol in place. In turn, miners will have a choice and a voice to drive the process of restoring Bitcoin to its optimal state. That of unbounded blocks and original OP_Codes.

The Bitcoin SV project was created at the request of and sponsored by Antiguan-based CoinGeek Mining, with development work initiated by nChain. The project is also owned by the Antiguan-based bComm Association on behalf of the global BCH community, and the Bitcoin SV code is made available under the open source MIT license.

This November, mining nodes running Bitcoin SV will enable the short list of upgrades on the BCH network, the most important of which is increasing the default maximum block size from 32MB to 128MB. But why now? The reason, according to nChain CEO Jimmy Nguyen is simple: There’s a direct economic need for miners.

At the recently held The Future of Bitcoin Summit Bangkok 2018 in Thailand, Nguyen explained why it is important for the block size to scale now—and scale fast: “In two years the block reward will be split in half again to 6.25 BCH. So anyone who’s mining now will in two years receive half of what they’re receiving today. In order to maintain even current profitability, what that means is in two years they have to make up that 6.25 coins worth of value in something else, which has to come in transaction fees and which has to come in higher transaction volume.”

Explore the features of Bitcoin SV version 0.1 here, and be part of the Miner’s Choice movement for Bitcoin BCH.

Note: Tokens on the Bitcoin Core (segwit) Chain are Referred to as BTC coins. Bitcoin Cash (BCH) is today the only Bitcoin implementation that follows Satoshi Nakamoto’s original whitepaper for Peer to Peer Electronic Cash. Bitcoin BCH is the only major public blockchain that maintains the original vision for Bitcoin as fast, frictionless, electronic cash.

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Make mine a double: How to get more from your mining

Cryptocurrency mining is all about performance—that is, getting maximum processing power (‘hash rate’) for every watt of energy used. Since that has a direct effect on profitability, just as ‘search engine optimizer’ was once a new job to help companies win attention on Google, now there are crypto optimizers too.

And they’re in great demand, according to Kristy-Leigh Mineham, an expert in the field. Speaking to me from Seattle, Washington, she explained that both the hardware and the software in a mining rig can be tweaked.

Working for many of the giants in the industry since 2010, Kristy-Leigh examines a rig and makes many small improvements that add up to better performance: “I’m good at looking for bottlenecks and smoothing them out—or removing them entirely,” she says.

The first job is to look at the software: “software optimization can occur at a number of levels—there’s the design level, which is all about your architecture—what hardware is the software working with? What language are you using? Then there’s the algorithmic level—my favorite—where it’s all about making the best use of the available hardware. You’d be surprised at how awful most implementations are.”

It gets more technical, the deeper into the software you go: “At the source code level, you can go in and refactor the code all the way down to the compile and assembly level, where you take what the source code was translated into and make sure things didn’t get lost in translation. And if they did? Correct it by hand, in the machine’s native language.”

It’s like having a team of engineers working on a racing car at the pit-stop: Kristy-Leigh will go in with her digital wrenches and spanners, fixing problems. Hardware optimization is different. “In hardware, you’re limited by what you get from the factory. The best you can do is tune the frequency of each individual chip. In some cases, you can do circuit board modifications to increase stability and performance. Very rarely, you can replace the entire software layer that controls it.”

It’s a role Kristy-Leigh seems born for. From a young age, she say, she’s been breaking things in order to improve them. “I was mostly into video games early on. With a hex editor, you could see a live view of a video game’s memory and manipulate bytes in real time, which meant you could see the effects instantly. And you could also set breakpoints, which let you overwrite preprogrammed game logic. Video games taught me a ton about basic command lines, Boolean algebra, binary formats, networking basics, and even cryptography. I guess that means I’ve been a hacker from the start of my life—if you take the original definition,” she laughs.

Her love of secrets led to an interest in cryptography and from there, she was naturally drawn to the ideas behind the original Satoshi white paper when it was dropped into an online chat room she frequented. “I thought, here’s the kind of technology that’s really going to disrupt the world.”

Armed with her limited knowledge, Kristy-Leigh started mining Bitcoin—chasing high scores in hashrate rather than gaming points. When she’d maximized the hashrate numbers, she went into the source code, just as she’d done with video games: “I think I shaved a few instructions down into one—and then I was like ‘oh, hang on, that actually changed something. It’s faster now’. It was just like a video game. I was hooked.”

She started doing odd bits of contractor work under many pseudonyms, often getting paid in Bitcoin—in numbers that looked impressive but at the time amounted to cents. Of course, having a stake in Bitcoin at those values turned out to be a good investment, as long as you hung on to most of it. And yes, Kristy-Leigh admits, she did. It’s provided the initial investment for her own startup companies and worldwide travels.

Today, there’s growing demand for people who understand crypto technology as intimately as Kristy-Leigh does. “There are more and more coins out there, every day, and each of them requires fine-tuning and tweaking,” she says.

Kristy-Leigh is bullish about the long-term prospects for crypto and blockchain technology, but believes it will only come of age when it’s been embedded in three big sectors: banks, ecommerce, and gaming.

“Banks are easy—the promise of more efficient, cheaper transactions makes blockchain a natural. But the banks that are already pursuing it are less established than their more conservative counterparts.” Once a big bank in the States, Canada or the United Kingdom begins to adopt blockchain, Kristy-Leigh believes, it won’t affect the user experience but will be a big change behind the scenes, resulting in a sharp decrease in fees.

“Then, we’ve got ecommerce. When online retailers start to cut out the fees now charged for handling and transacting, we’re going to see the true power of blockchain hitting the biggest markets. And smart contracts will help retailers, too, with inventory and delivery tracking and with warranties and services. Smart contracts are going to revolutionize the retail space.”

Finally, perhaps more surprisingly, there’s gaming: “Gaming has become a critical part of everyday life for all ages. Every year more resources are put into cyber protection and anti-cheating mechanisms. If you could use the blockchain to track and verify virtual assets in an MMO [massive multiplayer online game], you’d cut down on a lot of unnecessary overhead and be able to track purchases and refute chargebacks in a pretty streamlined manner—instead of the current system that costs Apple alone millions of dollars each month.”

More stable cryptocurrency prices will help speed up adoption. Kristy-Leigh says their volatility has been like “stocks on steroids”, but notes that values are already less volatile than they have been. “We’ve got more historical data to play with now. We know that in the last financial quarter of the year, crypto prices swell. Christmas is a big facilitator of that.”

When it comes to the inevitable question about being a woman in the field, Kristy-Leigh laughs. “It’s never affected me,” she says. “The only people who ever cared about my gender were people who didn’t care about my code. In the space I come from, people only judge you from the quality of your commits*, not the quality of your… sorry, pardon my Australian!”

* In software development, a commit is the making permanent of a set of proposed changes.

Kristy-Leigh Mineham will be speaking at the CoinGeek Week Conference in London on Friday November 30, along with other industry leaders.

Note: Tokens on the Bitcoin Core (segwit) Chain are Referred to as BTC coins. Bitcoin Cash (BCH) is today the only Bitcoin implementation that follows Satoshi Nakamoto’s original whitepaper for Peer to Peer Electronic Cash. Bitcoin BCH is the only major public blockchain that maintains the original vision for Bitcoin as fast, frictionless, electronic cash.

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Bitfinex now makes it easier for users to track their activities

The Bitfinex cryptocurrency exchange has come under fire for a lot of issues lately. Last week, it was accused of being insolvent, which it vehemently denied, and was the target of a cyber-attack this past June. Perhaps in an effort to appease customers, the exchange is introducing new tools designed to give users more control, as well as greater activity insight, over their trades.

Hong Kong-based Bitfinex announced the new tools via a blog post published last week. The tools will allow greater flexibility in reviewing account data and users will now be able to “instantly compile an overview of necessary account information stemming as far back as account history goes.”

Bitfinex explains, “As institutions and professional traders enter the digital asset trading space, Bitfinex remains committed to creating the tools required to thoroughly meet their needs. We are of the belief that our suite of tools work to accelerate the rate of global adoption and help facilitate an increasingly mature market.”

Users of the platform can now work offline, facilitated by local storage of their databases. The new system is, according to the announcement, going to be converted to an open-source solution that will allow for the development of customized tools that can better serve individual needs.

The new reporting platform also contains a wallet that is added to end-point ledgers. This provides users with the ability to see which wallets are involved in transactions. End-point currencies have also been added. The announcement further states, “End-points ‘accountTrades’, ‘orderHistory’, ‘fundingOfferHistory’, ‘fundingLoanHistory’ and ‘fundingCreditHistory’ were modified, adding the option to return all the data without filtering by pair/coin when no pair/coin is sent.”

The introduction of the tools coincides with a global effort on the part of regulators to try and prevent tax evasion through cryptocurrencies. More financial authorities around the world are putting pressure on exchanges to have them play a larger role in controlling the cryptocurrency ecosystem. This has resulted in more exchanges, and even some cryptocurrency wallets, adopting policies requiring that their users adhere to Know Your Customer and anti-money laundering regulations.

On October 11, Bitfinex suspended deposits amidst a massive cryptocurrency selloff. As of this writing, deposits are still offline, but withdrawals are reportedly active.

Note: Tokens on the Bitcoin Core (segwit) Chain are Referred to as BTC coins. Bitcoin Cash (BCH) is today the only Bitcoin implementation that follows Satoshi Nakamoto’s original whitepaper for Peer to Peer Electronic Cash. Bitcoin BCH is the only major public blockchain that maintains the original vision for Bitcoin as fast, frictionless, electronic cash.

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Blockchains in the enterprise: The different types of blockchains

This is a guest contribution by Jeri DeBitto. If you would like to submit a contribution please contact Bill Beatty or submission details. Thank you.

In this series, I’d like to evaluate and explore the value of blockchains in the enterprise, and the obstacles that most enterprises face in adopting a blockchain strategy. This will be a comprehensive study of all the issues that surround the adoption of blockchains in the enterprise.

Enterprises have very unique requirements when it comes to blockchains. Of course the appeal of having a shared ledger in which one party does not need to be the sole administrator nor supporter of the network is very appealing. There is much potential to saving costs and also removing a whole class of errors that could occur in a system that is centrally administered.

This article will discuss the considerations of enterprise blockchain use, starting with the general classes of blockchains and distributed ledgers that are under consideration and their ideal use cases, the tradeoffs that the different blockchains make in comparison with traditional databases, and finally, the unique considerations that any enterprise must consider when evaluating whether or not to utilize a blockchain strategy.

The different types of blockchains

Private or public ledger?

The issue of whether or not to use a public or private ledger is the most fundamental question that your enterprise needs to grapple with. They are fundamentally different in terms of the use case that they address. Private blockchains or permissioned blockchains (shared within a group of trusted parties) are more synonymous with a multiparty shared database, with a signed transaction history. Therefore we will mostly be speaking about permission-less blockchains, such as Bitcoin, Ethereum or Ripple. It is worth mentioning that each of these blockchains have different degrees of permission-less participation, which we will speak more on later.

Do you need your data to be publicly verified? Or do validators need to be approved by a central authority? The answer depends on whether or not you want to have central administrative control over the ledger, shared control, or no control? Are you interested in blockchains simply because of their fail-over data resiliency? Should the costs of the infrastructure be shared between participants? Or run for free by the network itself?

Permissioned vs permission-less blockchains

Most of the time when dealing with enterprises with an existing association of partners, a permissioned blockchain is sufficient as the information need not be trusted beyond the closed circle of validators.

In the case where the information needs to incorporate outside information or tokens, then the use of a permission-less blockchain is more appropriate as the possibility of atomic swaps between asset tokens on the public blockchain will greatly simplify settlement in tokens other that the native one.

What are the benefits of permissioned blockchains? For one they have very fast transaction finality. Ledger inconsistencies can be resolved by a quorum of the validators.

By comparison, permission-less blockchains due to their lack of coordinated governance, their consistency is only eventually guaranteed, but not immediately guaranteed. Some permission-less blockchains have come very close to rivaling the finality of permissioned ones, by way of sacrificing some other aspects of the design.

As all of the aforementioned blockchains (or more correctly termed distributed ledgers, as Ripple and Stellar are not blockchains) are ostensibly permission-less to a degree, we should examine the differences between each in terms of their permissioned status.

Bitcoin (Bitcoin Cash):

1. Permission-less validation
2. Permission-less participation
3. Infrastructure is self-supported by validators through built-in economic model
4. Highly available
5. Highly partition resilient
6. Eventually Consistent (~10m)
7. Highly Scalable

Ripple (Stellar)

1. Somewhat Permission-less validation
2. Permission-less participation
3. Infrastructure is funded by participants and validators alike.
4. Highly available
5. Somewhat partition resilient
6. Highly consistent
7. Somewhat Scalable

Ethereum:

1. Permission-less validation
2. Permission-less participation
3. Infrastructure is self-funded by validators through built-in economic model
4. Highly available
5. Highly partition resilient
6. Very good consistent (~30sec)
7. Poor Scalability

In a chart summary:

You can see that depending on the needs of the enterprise, the different blockchain technologies may be appropriate. All of the above technologies are permission-less, but they all make some tradeoffs to achieve this. If your enterprise needs a solution that is highly available, consistent, partition resistant and scalable then the best solution is to run a completely private database system, which is accessible only by permissioned users.

Bitcoin:
Bitcoin is the base line for comparison as it was the first blockchain. It sacrifices some consistency for the fact that only validators need to run full network nodes and the fact that the validators need not coordinate with each other. It sacrifices scalability in exchange for keeping the requirements for running a full network node low, so that participants still have the option to keep the whole ledger, without being validators for the network. Attempts to make up for the scalability sacrifice by pushing transactions to off-chain payment channel networks such as Lightning.

Bitcoin Cash:
Bitcoin Cash is largely the same model as Bitcoin with the exception that it does not sacrifice forward scalability for the option to cheaply run full network nodes by network users. Instead it focuses on the use of SPV (light) clients which only validate their own transactions, for users, and only network miners need to run full nodes (although many businesses such as exchanges may still opt to).

Ripple:
Not a blockchain proper, but a distributed ledger. Partition resistance is sacrificed for high consistency (within a partition). Nodes keep a list of the other nodes that it knows about and trusts and only messages from those nodes which are on the trusted list are validated and further passed along to a node’s peers. Therefore, the most efficient network topology of a Ripple network would be a group of nodes which all trust each other. (This is the same for a Bitcoin network of miners). Scalability suffers somewhat by the fact that there are no light clients, and all clients need to be consistent and in sync with the rest of the network in order to create a transaction. There is no such thing as an offline transaction creation. (Therefore removing some use cases where the offline creation and private sharing of transactions may be useful). Ripple is unlike the other blockchains evaluated because it does not have a native economic model. Its native token is a virtual token created privately and distributed to partners of Ripple Labs directly.

Ethereum:
A cross between Bitcoin and Ripple, it shares the same general validation model as Bitcoin (mining) though developers want to transition it to be a staked system. (With time locked bonded stakes earning the right to validate and earn inflation interest). Ethereum was initially planned to be a smart contract layer on top of Bitcoin, but due to the restrictions that the BTC core developers put onto the system the founders of Ethereum decided to create their own blockchain and fund the development with an ICO of its own token network instead. Ethereum sacrifices forward scalability for flexibility in smart contract expressivity, enforcing that every validator execute every smart contract code independently and redundantly.

Economic model? Or just a ledger infrastructure?
Does it matter if the blockchain has its own economic model? Most permission-less blockchains come with their own economic model, that is because of the decentralized nature of the validators (miners in a PoW system) there must be a way for the validators to be reimbursed for their resources committed to building out the network infrastructure. For a permissioned blockchain this is not necessary, nor even desired. Any economic model (such as controlled distribution of native tokens) is normally controlled out-of-system. This is acceptable because there is an implied level of trust between the validators and their cohorts. Normally the native token in such a system, has little intrinsic value beyond that of a utility token for the use of the network paid by the participants who do not contribute infrastructure themselves.

Transaction immutability or reversibility
Do you need the transactions to be irreversible? (If no, then evaluate whether or not your business case can be served with just a database. If you need immutability then the permissioned blockchain will do if you are okay with the notion that transactions are only as immutable as having the verifiers of the blockchain agree on changes. Permission-less blockchains will have validators or miners which are operating under their own economic model which is separate from your business, and thus would be effectively immutable.

Validators vs miners
Distributed ledgers have validators. The same role is performed by miners in a blockchain. The difference between the 2 is that validators are necessarily participants in the network as primarily users, (albeit likely large ones), while miners operate as their own businesses with their own economic model.

This provides for a measure of isolation for the businesses that want to use the blockchain, because you can be relatively certain that the miners will act independently and in their own best interests, instead of interfering with users. In fact, the economic model of mining on blockchains is such that miners which are seen to be violating the consensus rules or even social ones can be easily identified, and the network will penalize them. This is much harder to detect in distributed ledger systems, as the validators do not publish a proof of their work in a form which is public and transparent for the world to see. It would be much more difficult to determine if a cartel of validators were to deliberately censoring certain transactions from certain users.

This concludes the overview of the blockchains technologies which are popular considerations for enterprises, and gives a sufficient introduction to the general characteristics of each. In part II of this series, I’ll explore some of the common application use cases that enterprises look for and evaluate how each of the technologies fairs in these applications in turn.

Note: Tokens on the Bitcoin Core (segwit) Chain are Referred to as BTC coins. Bitcoin Cash (BCH) is today the only Bitcoin implementation that follows Satoshi Nakamoto’s original whitepaper for Peer to Peer Electronic Cash. Bitcoin BCH is the only major public blockchain that maintains the original vision for Bitcoin as fast, frictionless, electronic cash.

The post Blockchains in the enterprise: The different types of blockchains appeared first on Coingeek.

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Adult industry payment platform saves own ass after getting spanked

SpankChain, blockchain-based payment service solution for the adult industry, has disclosed the details of a hack that resulted in losses equivalent to $38,000.

As a result of a broken smart contract, a hacker was able to break into the SpankChain platform and siphon funds from some of its users, through deploying a reentrancy bug—the same bug that has previously been used to attack the DAO.

The scam saw losses of 165.38 ETH, as well as $4,000 worth of BOOTY on the platform immobilized, with the total balance divided between SpankChain and some of its users, with the organisation coming in for sharp criticism over the event.

Explaining the nuts and bolts of the attack, the firm posted an update on Medium: “In short, the attack capitalized on a ‘reentrancy’ bug, much like the one exploited in The DAO. The attacker created a malicious contract masquerading as an ERC20 token, where the ‘transfer’ function called back into the payment channel contract multiple times, draining some ETH each time.”

According to SpankChain, “The malicious contract first called createChannel to set up the channel, then called LCOpenTimeout repeatedly via reentrancy. The LCOpenTimeout is there to allow users to quickly exit payment channels which have not yet been joined by the counter-party.”

On Thursday, SpankChain CEO Ameen Soleimani confirmed that “the stuck BOOTY has been recovered.”

The now-resolved SpankChain hack comes as only the latest example of a significant hacking event affecting a crypto platform, with scams and hacks rapidly increasing in number over the last few months.

SpankChain acknowledged that it could have commissioned a security audit on the smart contract, which may have identified the weakness before it was exploited. However, this would have cost around $50,000, more than the total of the losses incurred.

Either way, SpankChain committed to tightening security as it continues to expand, saying, “As we move forward and grow, we will be stepping up our security practices, and making sure to get multiple internal audits for any smart contract code we publish, as well as at least one professional external audit.”

Note: Tokens on the Bitcoin Core (segwit) Chain are Referred to as BTC coins. Bitcoin Cash (BCH) is today the only Bitcoin implementation that follows Satoshi Nakamoto’s original whitepaper for Peer to Peer Electronic Cash. Bitcoin BCH is the only major public blockchain that maintains the original vision for Bitcoin as fast, frictionless, electronic cash.

The post Adult industry payment platform saves own ass after getting spanked appeared first on Coingeek.

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