The cryptocurrency sell-off has a number of investors singing the blues. More than a handful of individuals bought into crypto following Bitcoin Core’s (BTC) massive price gains last year, expecting to see the same explosive growth in 2018. It hasn’t happened; in fact, the numbers are down significantly from the beginning of the year with many digital currencies losing as much as 75% of their value. However, instead of looking at this as a glass-half-empty scenario, it needs to be seen as a glass-half-full situation that is going to produce great things for cryptocurrency.
Many people have forgotten why cryptocurrency was created. They have become blinded by the dollar signs, hoping to be able to convert a few Bitcoin into a new Lamborghini or oceanfront party house by seeing substantial returns. What was presented by Satoshi Nakamoto about ten years ago was designed to be a currency, a form of money that was peer-to-peer, not controlled by a central bank and which allowed for instant transactions. A currency is only good if it can be spent; as long as there are any obstacles that prevent it from reaching widespread mainstream adoption – such as massive volatility – it can never flourish.
The sell-off is a good thing. It is helping a great number of people to begin to take cryptocurrency more seriously. It is eliminating the get-rich-quick scammers operating through initial coin offerings (ICO) and new – but worthless – digital tokens that provide no utility.
It has also produced a market that is, on some levels, cleaner than before. Despite wild fluctuations, price volatility has been less than what was seen last year, meaning there is more stability in the markets. This is going to help produce an ecosystem that is able to thrive and provide the results that everyone should desire to see – a world that accepts digital currency as a legitimate currency and which removes the ability for central banks or countries to whimsically manipulate prices.
Those behind Bitcoin SV are not looking to create a cryptocurrency that sees its price head to the moon one day, only to come crashing back down the next. Instead, the goal is to create a sustainable cryptocurrency that is a viable alternative to fiat. Despite the actions of some individuals to try and derail the train from the tracks, Bitcoin SV has been able to remain true to the original Satoshi’s Vision and create a cryptocurrency that is not only looking at the long-term prospects, but which, in a sea of wanna-be digital currencies, has true, tangible utility value.
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“It’s time for Bitcoin to grow up”, said Jimmy Nyguyen in his opening remarks at the CoinGeek Week conference. That set the tone for the next three days and 30 or so presentations.
The hash war between Bitcoin ABC and SV had played out. It was fierce - and had changed the world for the combatants in just a couple of short weeks. But Jimmy, and Calvin Ayre, who introduced the conference, were confident that their team - including CoinGeek, nChain and SVPool - are now in a great place from which to build for the future around Bitcoin SV.
Since the conference was held just ahead of the tenth anniversary of the first transaction on the Bitcoin blockchain, the sense of growing up and moving on to the next chapter had an extra resonance. As to what the way forward would look like, Craig Wright came on stage later that morning and captured it in his first words: “OK, it’s really, really simple: we need transaction volume.”
During the rest of the conference at London’s Mermaid Theatre, the path to more transactions, of more kinds, was explained through a kaleidoscope of big visions and inspiring implementations that are already up and running.
One theme that jumped out was the sense that crypto is starting to work with the grain of the world as it exists - rather than trying to build a parallel universe. Just three examples: Elizabeth White announced a debit card that uses crypto and has Mastercard as a partner. Stephan Nilsson is building a supply chain ID system that works on the blockchain alongside SAP - a global data management giant.
And CentBee’s Angus Brown talked about how his wallet was part of a recent initiative with the (very real) bar chain Brewdog. Again, it was a question of working with the world as it is: “bank cards are not going away tomorrow,” said Angus. So CentBee “needs to feel like a payment card, but better.” The experience with giving people wallets to buy beer a few minutes later produced an “I get it” reaction: “it’s not Lambos, it’s just beer”.
That kind of ordinariness and familiarity is one of the aims of Ryan X. Charles’ Moneybutton. It’s designed to integrate with any online site, with an endless array of possible functions - starting with money. As Ryan put it, we’re “making payments as easy as the Facebook Like button”. Crucially, Moneybutton is “just an interface for you to use the power of the blockchain”. The end user sees money in the currency they’re familiar with - pounds, dollars or whatever. So if you want to leave a tip, you don’t need to know what it is in Bitcoin: that side of the transaction is all behind the scenes.
Talking of working with the real world, what could be more real that using the power of crypto mining to grow vegetables? Or drying, er, human waste to turn it into fuel. That’s what’s happening just outside Montreal, courtesy of BlockchainDomes. The idea is that the heat generated during the mining process shouldn’t be wasted. Is this the start of a green crypto movement?
Summing up at the end of day two, Jimmy Nyguyen reminded his audience that technical solutions are just part of the work in crypto. Alongside that, “a business-minded, real world approach is important”.
Embracing reality - that’s what crypto is doing today. Now please fasten your seatbelts for day three of the conference, whose theme is The Future.
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By now, everyone knows Bitcoin SV successfully mined a 64 MB block, the largest ever on a public blockchain. It could mine a substantially bigger one if not distracted by the wasteful Hash war Bitmain and Bitcoin.com forced on the industry because they forked away from Bitcoin to their new ABC coin. This proves that Bitcoin SV scales today as we have promised for a while now.
Why is this important to miners? The reason is the Bitcoin block reward will halve again in just over a year (from 12.5 to 6.25 coins for each block), and then halve again every several years after that. As this happens, if transaction fees do not replace the reduced block reward, Bitcoin mining will not remain profitable. We also want to ensure individual transaction fees remain low so the Bitcoin network can work for an electronic cash system and to support advanced technical features. The only way to increase overall revenue from transaction fees is for the blockchain to massively scale, and to enable huge volumes of low cost microtransactions. This is the only way to drive both Miner revenues and market demand for mining hardware. Therefore, if miners do not support Bitcoin SV and its scaling roadmap, they would be following a path that ends in their own destruction.
Bitcoin SV is the only cryptocurrency with a blockchain that massively scales, the only that has utility value, and the only one that can do it all. BSV will most likely take over and replace all other non-scaling platforms. This will then also grow real utility value in BSV.
But it is important to understand that value in a chain which has no utilitarian use is fake value, and the current dump we are seeing is the market coming to realize that the current alt-coins are all worthless.
I personally look forward to a future where there is only one chain, Bitcoin SV, and this one chain does it all. But it all starts and ends with scaling. Because of this, I believe Bitcoin SV is the only token you can retreat to and have any hope of retaining your value in the current market correction.
Everyone should come to CoinGeek Week this week in London, where thought leaders in this space will be discussing the power of original Bitcoin in Bitcoin SV.
The post Why the future of mining is tied to massive scaling and that means Bitcoin SV appeared first on Coingeek.
Now that original Bitcoin is back in the form of Bitcoin SV (BSV) and there is nobody left too object to massively scaling Bitcoin now, what does the future look like? There is going to have to be an adjustment period as BSV and ABC still need to take some measure to permanently split. You can already split the two coins using exchanges like Poloniex and BitAsiaEx, along with various tools, but most people will wait for a protocol level solution which I know is coming. We expect this to happen sometime in Q1 2019 and we are confident that ABC supporters will work together with BSV to get this done peacefully and return stability to the markets.
Then what?
BSV is the single best value haven in the crypto space during this volatile market. It is a superior technology, head and shoulders above any other chain, and this has been proven when we mined a 64 MB block on the BSV chain last week. No other crypto platform is even close to scaling this much, and this is only the beginning of BSV’s scaling road map. Now that original Bitcoin is back, it will be ALL about scaling to attract enterprise level application development.
BSV is also the only undervalued token now that there is an tokenisation and smart contract platform called Tokenized that works well, is business-friendly and has moved entirely to BSV. This means that BSV can do anything Ethereum does but can also scale for higher volume transactions and is more secure.
My prediction is that over the next few years, BSV will replace all other blockchain technologies that cannot scale, that have security problems or that are not trustless. I believe that starting in 2019, there is going to be an explosion of development on top of the BSV blockchain taking advantage of a stable platform and massively-scaled low cost secure microtransactions. This will eat up all competing chains as this is a “winner take all” race we are in.
But it gets even better for Miners and Mining hardware sales. Scaling gives us low cost microtransactions. Low cost microtransactions enable unique business models that have never existed before and drive transaction volumes and mining fees. This then drives mining revenues and mining hardware sales. This means that the one platform that uniquely drives the mining industry itself is Bitcoin SV BSV, the world’s most scalable cryptocurrency and all miners should be supporting this platform.
Everyone who wants details on how this is going to unfold should come to CoinGeek Week this week in London. Find out more information here. There are going to be some great announcements by thought leaders in this space. I am extremely excited about what we can now do with this technology and hope you all come enjoy the show and celebrate the rebirth of original Bitcoin!
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I just do not believe there to be a more pro-Western thinker than myself. Granted, I am a creature of the West, a cultural chauvinist of the highest order. Western society, far from a plague to be overcome, is a gift to all humanity: literature, art, film, architecture, cuisine, philosophy, even religion. The Enlightenment and its resulting liberality I count as monumental achievements for the species.
That written, of all the places to flower a crypto revolution in an otherwise mostly closed society, China was for sure not high on my list. Asia is such a loose word, and doesn’t mean much but it will have to do for the purposes of this particular column. The stereotype here in the United States is of cultures and nations repressed, controlled, still fighting for basic freedoms at least politically.
And that appears to be true on some level, as any cursory look at a given Eastern or Asian country would reveal. They often lack the liberality of migration, of allowing others “in” to their societies. Speech is a careful freedom, and does not seem to be a Right in the way we imagine. All of that, and to say nothing of the political struggles for more democratic participation.
George Gilder
“Only in China! After 40 appearances in nine days in four cities,” famed futurist George Gilder explained in a social media chat, “I return exhausted and edified by this nation of engineers and entrepreneurs, all inspired by the U.S. Silicon Valley example, now wilting in green Marxism and demented diversity politics.” Gilder’s latest book, Life After Google: The Fall of Big Data and the Rise of the Blockchain Economy (Gateway Editions, 2018), a follow up to his Scandal of Money, has since been released in China, and he gave a series of talks in support.
We were to do an on-camera interview in Las Vegas this Summer at the annual Freedom Fest (I ended up with a lovely and very impromptu discussion with Jeffrey Tucker), but instead spoke from an ironically weak internet connection hideaway in the Berkshire Mountains (I in Southern California). Days away, as of this writing, from his 79th birthday, he’d come back from a morning run, as I recall, and was eager to talk about his latest book. About to hit 80, and the dude runs marathons (plural) throughout the year. Jesus.
His entire life has him in close proximity, Gump-like, to the movers and shakers of American politics and business. He’s written speeches for Nelson Rockefeller, George Romney, Richard Nixon, along with dozens of well regarded books on a variety of subjects. He was one of the key figures who developed supply-siders’ ascension to the White House by way of the Wall Street Journal editorial pages. He was said to be President Reagan’s most quoted intellectual.
China? Really? Yes
Gilder received push-back on his assessment after he returned from China recently. The country, he responded, “thrived by reducing govt spending by 80 per cent (to a level lower than the U.S. as a share of GDP) and refusing to float their currency.”
When a few folks commented the Chinese might’ve picked up hints from his supply-side days, Gilder confirmed he believed progress began “after I visited in 1988 and urged them to ‘let a billion flowers bloom.’ I also told them to lower marginal tax rates. It was Bob Mundell, though, who told them not to float their currencies, and was rewarded by having the University of Finance in Beijing named after him. I was just made an ‘esteemed honorary professor’ at Shenzhen University of Technology. Voodoo marches on, in China, and underlies their economic miracle,” he wrote, using the famous George HW Bush’s characterization of Voodoo economics to describe supply-siders.
When another commenter listed grievances against the country, Gilder asserts, “China has increased its power and wealth by a factor of 10 or more since the Maoist days. Regardless of what we do, at a minimum they are going to be dominant in Asia. Objecting to
‘island building’ in the Spratlys or naval clout in the South China seas, or foreign aid (‘hegemony building in Africa’), or infrastructural prowess (no problem with finding ‘shovel ready projects’), their ‘art of the deal’ with Western tech companies for whom they do most manufacturing, [complaining] at all this shows an incomprehension of China’s earned position as a great power.”
Undignified, hypocritical, and quixotic
“We can change our own behavior but we probably cannot change China’s determination to be number one in Asia,” Gilder assured. “Attempts to stop them are undignified, hypocritical, and quixotic and a distraction from the war against industry being conducted in the U.S. on every campus and environmental cult and blue state office,” insisting the U.S. has far more of its own problems to tend than fretting over China.
Ultimately, in order to survive, he believes “the U.S. and China are destined to collaborate. Gratuitous trade conflicts based on ‘trade gaps’ are just self-defeating, particularly for us with most of our high tech manufacturing in China and Taiwan exporting to the U.S.”
Perhaps the biggest slur against the industrious nation is the charge it is merely faking, a Potemkin village at scale. And while some of that is no doubt true too, China is easily one of the most entrepreneurial economies going at the moment. It accounts for three times the initial public offerings (IPOs) than that of the U.S. When Taiwan is brought into the picture, whose business folk have pointed a majority of their investments at the mainland, greater China makes most of the world’s high tech goods.
Economically retarded, politically repressive, socially manipulative
“Taiwan Semiconductor Manufacturing Co.,” Gilder notes, “is the only mass producer of 7 nanometer chip geometries for the new Apple cellphone. Yes, the new government is economically retarded in some ways, politically repressive and socially manipulative. But the magnificent previous leadership under Deng Xiaoping et al provided a real foundation for an utterly solid trajectory of growth with an ever diminishing government spending as share of GDP (now at around 19 percent well below [the U.S.]). The new generation, unlike [the U.S.], is anti-socialist and throngs to their ‘free zones,’ which as I discovered in Shenzhen, have to be seen to be believed.”
He ends with a plea of sorts, an appeal to sanity. “It is foolish to deny the feats of the Chinese economy and the proliferation of entrepreneurial businesses, particularly in my areas of current focus, electronics and cryptocurrencies. For better or for worse, China is on a path to be the world’s largest and most powerful country. Making them an enemy is a suicide trip,” he concluded the chat.
South China Morning Post recently announced, as if channeling Gilder, “Hong Kong’s new regulations for cryptocurrencies have security at their heart, specifically the safeguarding of digital assets from theft or loss.” It might appear heavy handed, but the subtext is one of tacit acknowledgement crypto is here to stay, and that its people are clamoring for digital assets.
InVault
Third party custodians are key to institutional adoption in the wake of exchange hacks and wallet insecurities. “InVault,” the SCMP write, “a Shanghai-based start-up, claims to be the first such digital custodian to take advantage of the new licensing requirements to launch its services in Hong Kong.” It already holds about a million ETH on the mainland, and this new license will allow it to begin automated services next month.
They’re looking internationally as well, becoming leaders in the protection of crypto assets. CEO Kenneth Xu told the news agency, “We believe that globally, custodians for cryptocurrency assets will be regulated and operated under a trust licence.” Using the models of Coinbase and BitGo, they’re to be a kind of trust agency, a form of insurance.
“Xu said InVault is in discussion with two ‘mid-sized’ insurers which potentially could provide coverage that could be included as part of its custody services,” SCMP reports. “He said the biggest challenge for insurers today is how to accurately measure the risk profile of a custodian, and its internal systems, to price the cryptocurrency insurance premium accordingly.” It’s yet another step, albeit a quiet and unsexy one, in the country’s business culture to get economic’s future right. China! I would’ve never guessed.
C. Edward Kelso is a financial technology journalist. Follow him on Twitter.
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Any time you feel forced to square off to defend yourself or something you value you always need to have an end game plan. For CoinGeek that end game was always making sure there was a version of the original Bitcoin still able to show off its original economic design genius to the world. Bitcoin was born with a mature economic model and platform developers have consistently tinkered it to death…first by forking to Segwit BTC and now ABC has pushed the technology off to their side chain view of the world. This is fine for them to test their thinking, but not by killing Bitcoin before it’s even been tested properly so we stepped in.
It is CoinGeek’s opinion that the two chains are now so far apart and have such divergent plans ahead that there is just no path back to joining them. We also no longer want the name Bitcoin Cash BCH as to us, Bitcoin SV is the original Bitcoin not the original Bitcoin Cash (whatever that even means). We understand that having nChain no longer fighting with them over roadmaps was the single most important issue to the ABC side. nChain tells me they are happy to leave ABC chain alone if they enact replay protection and do a permanent split. This is very convenient as the definition of winning is fundamentally different to each side so there is a win-win solution here.
From where CoinGeek sits right now, us permanently splitting the chains by ABC enacting replay protection will give both sides a WIN. Bitcoin will live on with Bitcoin SV and will finally have a chance to show off the true power of the original economic model. Similarly, ABC can join with the rest of the new chain/coin models to demonstrate what they believe they can do. The models can then all compete in the marketplace and this lets actual users vote with their actions.
I am confident that CoinGeek can enforce civility if the other side wants this in any permanent split. We believe this is in the best interests of all and call on all the exchanges and payment processors and others who have an interest in making this all go away to help us convince everyone to accept this solution so we can all focus on our visions for the future and get rid of this wasteful distraction.
I have instructed my team to start working with everyone to roll out the new Bitcoin SV coin. I hope this can be the end of this episode and look forward to the CoinGeek Week Conference next week being the launch party for the return of the original Bitcoin and all that this will enable. Look forward to seeing everyone there and especially discussing the future of the original Bitcoin.
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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If the only defence of your policies is to silence your critics, the chances of your ideas being the wrong ones are pretty high.
Over the past week, CoinGeek.com has suffered through several distributed denial of service attacks (DDoS). The first one was a big one, and we had to upgrade our defences. Thank-you to the beautiful people at Cloud Flare, subsequent attacks have caused minimal disruptions.
On Thursday BitcoinSV.io was hit with a massive DDoS attack.
The attack comes soon after the website published a listing of wallets, block explorers and other business and services that have chosen to add their support for Bitcoin SV after the ABC decision to move away from Bitcoin BCH.
The timing of these attacks could be coincidental, but the timing of the attacks is somewhat suspect. We won’t cast aspersions towards any of the bastions of free speech in the bitcoin community, but it does highlight a problem with society in recent years.
I was always led to believe that you let your opponent talk and you listen. You present your well-reasoned arguments and allow the better ideas to succeed for the betterment of the society.
With their most recent changes, 5th since the upgrade, ABC’s critics continue to grow. People are critical on social media, and now the mainstream tech press is starting to join the chorus of critics admonishing the Bitmain and Bitcoin.com funded group of developers.
TNW, formerly known as The Next Web, has written a scathing article titled “Bitcoin Cash ABC update exposes potentially catastrophic vulnerability” where it highlights the vulnerabilities opened up by ABC’s slapdashed approach to blockchain development.
For many on Twitter, the checkpoints are a bridge too far as it removes the security provided by the proof of work principal as laid out in the original whitepaper, with many saying and we agree, that ABC is no longer Bitcoin.
The move removes the trustless decentralized system, and it allows a “trusted central authority” to publish these checkpoints. Ask yourself, whom do you trust? Roger Ver, Jihan Wu or Amaury Sechet, I’m sure they’re all nice people to share a meal with but do you trust them with all your money?
DDoS attacks, several updates untested updates and all manner of collusion with wallets and exchanges seem like the actions of desperate men.
There are rumours that the Chinese government is behind this or there is a secretive cabal trying to control the chain for nefarious reasons. I believe it’s much simpler than a crazy conspiracy; this is about plain old-fashioned greed.
The group is desperate to make Wormhole token a thing. Back in August, there was an offer, 1000 wormhole tokens for every BCH burned. This 1000-1 ratio isn’t for everyone, the general public would be and will be offered 10-1 rate when wormhole becomes a widely accepted token.
My sources tell me that Jihan, Roger and a few trusted allies either orchestrated or took advantage of this 1000-1 proposal.
Despite crowing from Ver, the hash war isn’t over and as the chorus of dissent against ABC’s move away from Bitcoin grows louder, and the support for SV swells, we expect more attempts to silence the critics but you can’t DDoS the planet.
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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The crypto community is libertine, candid, permissive. Wish to imbibe your way through life, slamming heroin while snorting cocaine, be our guest. Want to sell your ass to the highest bidder, go for it, Jack.
There’s something about acts of privacy, the secrecy baked-in to cryptography, that leaves the ecosystem comfortable with others doing things we’re not exactly thrilled about endorsing in the personal sense. At the root of crypto as currency is the ability to make cash an instrument of caprice, whim, desire, subjectivity.
Humility seems to be in the cryptocurrency ethical melange as well. The ecosystem has plenty of opinions, and on about every topic imaginable. All the good and shittyness of any given society finds its way into crypto, for sure. The difference between it and other forms of money issued by bodies with legal monopolies on violence is we cannot force folks to use our version. This can lead to an orientation of leaving people alone because we must, but it also encourages doing so because we simply do not know what is best for them. They’re left to make their own decisions, for better or worse.
Nascent
And so it was with all this in mind, a young Ross Ulbricht helped create the notorious underground marketplace Silk Road. It was an ideological move. Forget the goings-on within the site for now, and understand Ulbricht did this on purpose. Dark or deep web sites were nothing new. Lots already existed.
Instead, it was a chance to merge at least two technologies within a firm philosophical grounding. Bitcoin, then the plaything of cypherpunks, themselves very ideological, was still finding a use case, something to prove its viability as a peer-to-peer electronic cash. And since legacy payment systems, credit cards and their less friction involved sister platforms such as PayPal, involve lacks of privacy, bitcoin might be an attractive alternative for an online bazaar.
Bitcoin was enticing tech because it allowed a digital form of pseudo anonymity in the paper money sense. Silk Road, the eBay of products and services run afoul of government prohibitions, married the nascent tech with a Tor-laden, privacy zealous community in dire need.
Silk Road
Ulbricht’s insight was merging crypto with overt, radical free marketism. Silk Road brought buyers and sellers together, each allowed to be as open and transparent as they’d like. There’s plenty of anecdotal study to suggest Bitcoin thrived under such an arrangement, signaling to early adopters cryptocurrency was for real. Everyone was watching.
And, sure enough, Ross Ulbricht’s arrest sent the price into free fall, confirming as much. The evidence, however, was impossible to deny: it was too late for those who might’ve hoped the crypto experiment would die by sending Ulbrichts of the world a nasty message.
The community divided over what it all meant, and still does although less so now. Some blanched at the idea Silk Road could be credited with jump-starting crypto. Great, they outwardly lamented, now we’re forever tied to drugs and scofflaws—no one will ever take us seriously.
Ross Ulbricht
Maybe they were right. Certainly mainstream press outlets ran with the narrative, and it has been hard to shake this reputation. I’ll concede that right away. But crypto enthusiasts have to know better ultimately.
Again, we’re agnostic on prohibition and petty legalisms. Bitcoin and the broader world Satoshi Nakamoto gave intellectual birth to is and was an illegal endeavour on its face. If crypto zealots are going to use government laws of their barometer for what is right and wrong, stop using crypto right now and return to fiat.
There’s plenty to speculate about Ross Ulbricht. The murder for hire trope is tossed around loosely and rarely followed up upon (charges were dropped). That he was something of a monster fits well with the overall storyline, but it is not true. Click over to FreeRoss.org, and have a look around. Obviously, it’s a site keen on defending him, but at least readers know that going-in and can account for bias. Agents involved in his arrest and conviction were themselves sent to prison for direct wrongdoing in his case—and that’s just one twist rarely given attention.
Clemency petition
He’s a compelling fellow, and at worst he provided an online market where people were able to meet in relatively safety. He’s now serving a double-life sentence without the possibility of parole. From my understanding, his appeals and legal challenges have exhausted all the way through a U.S. Supreme Court remand. That part of the case appears to be over.
As a last ditch effort his mother and supporters launched at Change.org petition, asking President Trump to grant Ross Ulbricht clemency. Online signatures recently passed 100,000 thousand, and more can only mean better. For all his perceived ills, Trump has shown a remarkable sensitivity to a few incarcerated cases and a willingness to act. Crazier things have happened.
He’s crypto’s first real martyr. Lay the facts out for yourself. Chew them over. The realization of what he’s suffering versus the crimes committed do not mesh. I believe our world would be a much better place if Ross Ulbricht was out of prison and allowed to create and build with us. It’s only a digital signature, and won’t take long. It’s a small gesture that could lead to a man’s life being spared. Thanks for even considering.
Edward Kelso is a financial technology journalist based in Southern California. Follow him on Twitter.
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 Silk Road, Ross Ulbricht, half a decade and 100,000 signatures later appeared first on Coingeek.
The post originally appears on Medium and we republished with permission.
On the 18th of November, 2018, deadalnix pushed the following commit to the bitcoin-abc repository which was publicly released yesterday: https://github.com/Bitcoin-ABC/bitcoin-abc/commit/917d65774c40c6bfad500a660e581c8ea5e20df0
The theory behind this is a defense against hostile reorganizations (there is no actual evidence of such actions having been taken) with a rolling checkpoint system. A block was finalized once it had received ten confirmations — even if an alternate chain had more proof-of-work, if it conflicted with a checkpoint, the node would not switch over to the longest chain.
In doing do Amaury Sechet has not only abandoned any pretense of Bitcoin ABC following the Bitcoin model of blockchain security. He has opened it up to new attacks that require centralised decision-making to engage in permissioned mining by ignoring the longest chain to defend against. If the below attacks are carried out it will not be miners that decide which transactions are considered canonical according to bitcoin rules, but a central committee most likely made up of Amaury, Jihan and Roger.
It is important to note that at this time none of the other ABC compatible implementations include this change. It appears that it was implemented unilaterally and without consultation by Amaury Sechet in a continuation of a well established pattern. This is the past, present and future of ABC coin.
If ABC want to go down this road and implement the rest of their roadmap that is their prerogative. But please do not try to call it Bitcoin whilst undermining the most fundamental principles that make Bitcoin what it is.
Overview of the Commit
There are two chains — an honest chain (that follows the majority of the mining consensus), and a shadow chain (that follows the attacker).
The game theory behind the defense is that if a hostile miner produces the shadow chain, once it diverges from the honest chain by more than ten blocks it is considered useless, as it cannot reorganize the honest chain — even if it has more work. The attacker would give up and stop extending the shadow chain.
Checkpoints are maintained by node operations themselves, and this behavior of checkpointing is enabled on all nodes by default.
The Double-Spend Attack
If an attacker controls more than 50 percent of the processing power driving the ABC blockchain, they can submit a set of 10 blocks to the network by reorganizing the ten honest blocks. If this attack is executed at the same time as the network finds the 10th block in that submitted a sequence (and thereby selecting it as an honest checkpoint), it can cause ABC to suffer a chain split. ABC is currently open to being maliciously hard forked.
Since not all information gets propagated over the network at the exact same time, some nodes will see a 10-block reorganization — which they will reject — and others will see a 9-block reorganization, which they will accept. The network will then fork into two.
If there is two exchanges on different forks, an attacker is able to sell the same coin twice on both exchanges for a double-spend attack.
The Sybil Attack
Cost of Attack: 
0K (Rental Hash)
A minority hash rate miner can perform a network attack. Normally, if they mine ten blocks in a sequence and submit their own blocks for processing while ignoring other miner’s blocks, it becomes a minority chain split that nodes (who only recognize the longest chain) will inevitably ignore. However, if a node that is out of sync reconnects to the network — for instance, if it has gone offline for a few hours — it could receive data related to the wrong blockchain first, leading to the real chain being rejected from that point onward. The attacker would then have full control over what transaction a node accepts, and what can be exploited to execute double-spend attacks.
As a rule of thumb in developing node infrastructure, you cannot rely on the timestamped data to be synced with other nodes.
Note: The original white paper appeared to imply that the ability for nodes to be switched off, and then verify what happened when it was offline, was important:
“Nodes can leave and rejoin the network at will, accepting the proof-of-work chain as proof of what happened while they were gone.”
BCHABC requires a node to be online 24×7.
FURTHER GAME THEORY
Bob and Alice are trading BTC for BCH.
Bob says he sent Alice the BTC, so Alice should send the BCH. Alice starts up her full node that has been online during the day and syncs the latest blocks. When her node has stopped syncing, it says that Alice received BTC — she then sends Bob BCH. Later, she finds out that she has synced a malicious 10-block fork that has become immutable, and the actual BTC she received were spent on something else on the main chain.
While the attack relies on Bob getting the malicious 10-block fork to Alice before another honest miner has sent her the real chain, there are ways to optimize this scenario. For instance, he may be spawning Sybil nodes to maximize his odds of this happening.
In a typical Bitcoin scenario, Sybil attacks are hard to perform because just one of the nodes you connect to needs to be honest for the attackers to fail. In this case, an attacker just has to get to you first. Furthermore, if an attacker is able to place his node in closer proximity to you or the seed nodes, he can optimize his chances of you getting a response from him faster than the honest nodes. This attack doesn’t need to rely on partitioning to work. Bob could be the owner of several block explorers, too, so even if Alice double-checked, Bob could still be able to trick her.
Bob may have even generated more blocks than 10. He could have 16 blocks. He would feed Alice 6 others using a 10-minute average Poisson distribution.
While this attack is in theory absurd, with enough money on the line, this attack could be executed.
Solution
Disable finalizing during the initial block download, and only enable it after the most active chain has been fully synced for x amount of hours.
Conclusion
The most fundamental principle of Bitcoin confirmation is proof of work, that is underpinned by proof of investment. By enabling the investment of miners to be sidestepped that fundamental principal is thrown out the window. It is now up to a central authority to decide and once you take that step there is no longer any need for a block chain. A MySQL database will achieve the same result.
This is an ill thought out change executed in an incredibly rushed and reckless manner with almost zero chance it was properly tested. The fact that a new consensus rule can be introduced in such a unilateral manner by a single developer is alarming. What is more alarming is that one developer can throw out the entire foundation of Bitcoin security without opposition. This is the future of ABC coin. In August last year Bitcoin died on the BTC chain with the introduction of Segwit. It survived in the form of Bitcoin Cash until yesterday when it was killed off again by Bitcoin ABC. If Bitcoin SV had not stood it’s ground and preserved the rules of Bitcoin in SV, yesterday would have been the last day Bitcoin existed in this world.
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 When Bitcoin ceases to be Bitcoin (the 2nd death) appeared first on Coingeek.
When cryptocurrency first really started to become a household word around the globe, it was immediately assigned a dark stigma due to the media’s infatuation with Silk Road, the black market that was facilitated through the use of cryptocurrency. This connection made many erroneously believe that crypto and illegal activity were intrinsically intertwined and prevented crypto adoption at the levels that should have been seen. Although the cryptocurrency community has fought hard to release the Silk Road binds, the introduction of the DSV OP_Code could possibly cause a resurgence in negative opinions of digital currency.
A week ago, Dr. Craig Wright of nChain appropriately pointed out, “Adoption didn’t happen because of Silk Road. If you looked at other centralized coins that happened in the 90s and things like this within the first three years, you actually had banks starting to use them; Deutsche Bank was using DigiCash, others were using it. So Silk Road actually killed adoption in Bitcoin. Right now, we would be in a world with probably 500 million people using Bitcoin at least on a daily basis if it wasn’t for Silk Road.”
Bitcoin BCH was created, in part, because a growing number of crypto enthusiasts, developers, proponents and visionaries realized that, for a cryptocurrency to function properly, it cannot be entirely anonymous, a trait that has been available with other cryptocurrencies and which allowed Silk Road to flourish. They rightfully support the belief that cryptocurrency can be private and not anonymous at the same time, which will lead to BCH being accepted more easily by regulators.
DSV reverses this position and can turn BCH into a blockchain that supports complete anonymity. It removes all legal protections a cryptocurrency could afford and revives the almost buried misconception of crypto being good for nothing more than illicit activity.
Roger Ver of Bitcoin.com totally supports DSV, as does Jihan Wu of crypto mining equipment manufacturer Bitmain. Their ability to push for what can only be described as an anarchist implementation of a blockchain has to make people wonder what ulterior motives are behind their position.
Silk Road was inarguably the go-to forum for illegal activity – that much has been confirmed. Ross Ulbricht, founder of Silk Road, has already been put away for his actions, sentenced to a life in prison in 2015 (he was actually given two life terms with no possibility of parole). More recently, James Ellingson was arrested in Canada on warrants for drug dealing and being a hitman for hire. All of his activity had been conducted on Silk Road and it is reported that Ulbricht once hired him to take out someone, but this has never been confirmed.
Given that DSV will introduce anonymity into BCH, the move is extremely concerning. Does the BCH community really want a blockchain that can be used for arranging murders and selling drugs? I hope not.
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 Resurgence of Silk Road imminent because of DSV? appeared first on Coingeek.
