BITCOIN TRANSACTION MALLEABILITY THEORY IN PRACTICE

Rodolfo Novak: It's scary how traceable & privacy lacking Bitcoin is. TumbleBit is an incredible achievement. Can't wait for SegWit’s malleability fix for next level

Rodolfo Novak: It's scary how traceable & privacy lacking Bitcoin is. TumbleBit is an incredible achievement. Can't wait for SegWit’s malleability fix for next level submitted by tiestosto to Bitcoin [link] [comments]

Lightning Network Will Likely Fail Due To Several Possible Reasons

ECONOMIC CASE IS ABSENT FOR MANY TRANSACTIONS
The median Bitcoin (BTC) fee is $14.41 currently. This has gone parabolic in the past few days. So, let’s use a number before this parabolic rise, which was $3.80. Using this number, opening and closing a Lightning Network (LN) channel means that you will pay $7.60 in fees. Most likely, the fee will be much higher for two reasons:
  1. BTC fees have been trending higher all year and will be higher by the time LN is ready
  2. When you are in the shoe store or restaurant, you will likely pay a higher fee so that you are not waiting there for one or more hours for confirmation.
Let’s say hypothetically that Visa or Paypal charges $1 per transaction. This means that Alice and Carol would need to do 8 or more LN transactions, otherwise it would be cheaper to use Visa or Paypal.
But it gets worse. Visa doesn’t charge the customer. To you, Visa and Cash are free. You would have no economic incentive to use BTC and LN.
Also, Visa does not charge $1 per transaction. They charge 3%, which is 60 cents on a $20 widget. Let’s say that merchants discount their widgets by 60 cents for non-Visa purchases, to pass the savings onto the customer. Nevertheless, no one is going to use BTC and LN to buy the widget unless 2 things happen:
  1. they buy more than 13 widgets from the same store ($7.60 divided by 60 cents)
  2. they know ahead of time that they will do this with that same store
This means that if you’re traveling, or want to tip content producers on the internet, you will likely not use BTC and LN. If you and your spouse want to try out a new restaurant, you will not use BTC and LN. If you buy shoes, you will not use BTC and LN.
ROAD BLOCKS FROM INSUFFICIENT FUNDS
Some argue that you do not need to open a channel to everyone, if there’s a route to that merchant. This article explains that if LN is a like a distributed mesh network, then another problem exists:
"third party needs to possess the necessary capital to process the transaction. If Alice and Bob do not have an open channel, and Alice wants to send Bob .5 BTC, they'll both need to be connected to a third party (or a series of 3rd parties). Say if Charles (the third party) only possesses .4 BTC in his respective payment channels with the other users, the transaction will not be able to go through that route. The longer the route, the more likely that a third party does not possess the requisite amount of BTC, thereby making it a useless connection.”
CENTRALIZATION
According to this visualization of LN on testnet, LN will be centralized around major hubs. It might be even more centralized than this visualization if the following are true:
  1. Users will want to connect to large hubs to minimize the number of times they need to open/close channels, which incur fees
  2. LN’s security and usability relies on 100% uptime of relaying parties
  3. Only large hubs with a lot of liquidity will be able to make money
  4. Hubs or intermediary nodes will need to be licensed as money transmitters, centralizing LN to exchanges and banks as large hubs
What will the impact be on censorship-resistance, trust-less and permission-less?
NEED TO BE LICENSED AS MONEY TRANSMITTER
Advocates for LN seem to talk a lot about the technology, but ignore the legalities.
FinCEN defines money transmitters. LN hubs and intermediary nodes seem to satisfy this definition.
Application of FinCEN's Regulations to Persons Administering, Exchanging, or Using Virtual Currencies
“…applicability of the regulations … to persons creating, obtaining, distributing, exchanging, accepting, or transmitting virtual currencies.”
“…an administrator or exchanger is an MSB under FinCEN's regulations, specifically, a money transmitter…”
"An administrator or exchanger that (1) accepts and transmits a convertible virtual currency or (2) buys or sells convertible virtual currency for any reason is a money transmitter under FinCEN's regulations…”
"FinCEN's regulations define the term "money transmitter" as a person that provides money transmission services, or any other person engaged in the transfer of funds. The term "money transmission services" means "the acceptance of currency, funds, or other value that substitutes for currency from one person and the transmission of currency, funds, or other value that substitutes for currency to another location or person by any means.””
"The definition of a money transmitter does not differentiate between real currencies and convertible virtual currencies.”
FinCEN’s regulations for IVTS:
"An “informal value transfer system” refers to any system, mechanism, or network of people that receives money for the purpose of making the funds or an equivalent value payable to a third party in another geographic location, whether or not in the same form.”
“…IVTS… must comply with all BSA registration, recordkeeping, reporting and AML program requirements.
“Money transmitting” occurs when funds are transferred on behalf of the public by any and all means including, but not limited to, transfers within the United States or to locations abroad…regulations require all money transmitting businesses…to register with FinCEN."
Mike Caldwell used to accept and mail bitcoins. Customers sent him bitcoins and he mailed physical bitcoins back or to a designated recipient. There is no exchange from one type of currency to another. FinCEN told him that he needed to be licensed as money transmitter, after which Caldwell stopped mailing out bitcoins.
ARGUMENTS AGAINST NEED FOR LICENSING
Some have argued that LN does not transfer BTC until the channel is closed on the blockchain. This is not a defence, since channels will close on the blockchain.
Some have argued that LN nodes do not take ownership of funds. Is this really true? Is this argument based on a technicality or hoping for a loophole? It seems intuitive that a good prosecutor can easily defeat this argument. Even if this loophole exists, can we count on the government to never close this loophole?
So, will LN hubs and intermediary nodes need to be licensed as money transmitters? If so, then Bob, who is the intermediary between Alice and Carol, will need a license. But Bob won’t have the money nor qualifications. Money transmitters need to pay $25,000 to $1 million, maintain capital levels and are subject to KYC/AML regulations1. In which case, LN will have mainly large hubs, run by financial firms, such as banks and exchanges.
Will the banks want this? Likely. Will they lobby the government to get it? Likely.
Some may be wondering about miners. FinCEN has declared that miners are not money transmitters:
https://coincenter.org/entry/aml-kyc-tokens :
"Subsequent administrative rulings clarified several remaining ambiguities: miners are not money transmitters…"
FinCEN Declares Bitcoin Miners, Investors Aren't Money Transmitters
Some argue that LN nodes will go through Tor and be anonymous. For this to work, will all of the nodes connecting to it, need to run Tor? If so, then how likely will this happen and will all of these people need to run Tor on every device (laptop, phone and tablet)? Furthermore, everyone of these people will be need to be sufficiently tech savvy to download, install and set up Tor. Will the common person be able to do this? Also, will law-abiding nodes, such as retailers or banks, risk their own livelihood by connecting to an illegal node? What is the likelihood of this?
Some argue that unlicensed LN hubs can run in foreign countries. Not true. According to FinCEN: "“Money transmitting” occurs when funds are…transfers within the United States or to locations abroad…” Also, foreign companies are not immune from the laws of other countries which have extradition agreements. The U.S. government has sued European banks over the LIBOR scandal. The U.S. government has charged foreign banks for money laundering and two of those banks pleaded guilty. Furthermore, most countries have similar laws. It is no coincidence that European exchanges comply with KYC/AML.
Will licensed, regulated LN hubs connect to LN nodes behind Tor or in foreign countries? Unlikely. Will Amazon or eBay connect to LN nodes behind Tor or in foreign countries? Unlikely. If you want to buy from Amazon, you’ll likely need to register yourself at a licensed, regulated LN hub, which means you’ll need to provide your identification photo.
Say goodbye to a censorship-resistant, trust-less and permission-less coin.
For a preview of what LN will probably look like, look at Coinbase or other large exchanges. It’s a centralized, regulated and censored hub. Coinbase allows users to send to each other off-chain. Coinbase provides user data to the IRS and disallows users from certain countries to sell BTC. You need to trust that no rogue employee in the exchange will steal your funds, or that a bank will not confiscate your funds as banks did in Cyprus. What if the government provides a list of users, who are late with their tax returns, to Coinbase and tells Coinbase to block those users from making transactions? You need Coinbase’s permission.
This would be the antithesis of why Satoshi created Bitcoin.
NEED TO REPORT TO IRS
The IRS has a definition for “third party settlement organization” and these need to report transactions to the IRS.
Though we do not know for sure yet, it can be argued that LN hubs satisfies this definition. If this is the case, who will be willing to be LN hubs, other than banks and exchanges?
To read about the discussion, go to:
Lightning Hubs Will Need To Report To IRS
COMPLEXITY
All cryptocurrencies are complicated for the common person. You may be tech savvy enough to find a secure wallet and use cryptocurrencies, but the masses are not as tech savvy as you.
LN adds a very complicated and convoluted layer to cryptocurrencies. It is bound to have bugs for years to come and it’s complicated to use. This article provides a good explanation of the complexity. Just from the screenshot of the app, the user now needs to learn additional terms and commands:
“On Chain”
“In Channels”
“In Limbo”
“Your Channel”
“Create Channel”
“CID”
“OPENING”
“PENDING-OPEN”
“Available to Receive”
“PENDING-FORCE-CLOSE”
There are also other things to learn, such as how funds need to be allocated to channels and time locks. Compare this to using your current wallet.
Recently, LN became even more complicated and convoluted. It needs a 3rd layer as well:
Scaling Bitcoin Might Require A Whole 'Nother Layer
How many additional steps does a user need to learn?
ALL COINS PLANNING OFF-CHAIN SCALING ARE AT RISK
Bitcoin Segwit, Litecoin, Vertcoin and possibly others (including Bitcoin Cash) are planning to implement LN or layer 2 scaling. Ethereum is planning to use Raiden Network, which is very similar to LN. If the above is true about LN, then the scaling roadmap for these coins is questionable at best, nullified at worst.
BLOCKSTREAM'S GAME PLAN IS ON TRACK
Blockstream employs several of the lead Bitcoin Core developers. Blockstream has said repeatedly that they want high fees. Quotes and source links can be found here.
Why is Blockstream so adamant on small blocks, high fees and off-chain scaling?
Small blocks, high fees and slow confirmations create demand for off-chain solutions, such as Liquid. Blockstream sells Liquid to exchanges to move Bitcoin quickly on a side-chain. LN will create liquidity hubs, such as exchanges, which will generate traffic and fees for exchanges. With this, exchanges will have a higher need for Liquid. This will be the main way that Blockstream will generate revenue for its investors, who invested $76 million. Otherwise, they can go bankrupt and die.
One of Blockstream’s investors/owners is AXA. AXA’s CEO and Chairman until 2016 was also the Chairman of Bilderberg Group. The Bilderberg Group is run by bankers and politicians (former prime ministers and nation leaders). According to GlobalResearch, Bilderberg Group wants “a One World Government (World Company) with a single, global marketplace…and financially regulated by one ‘World (Central) Bank’ using one global currency.” LN helps Bilderberg Group get one step closer to its goal.
Luke-Jr is one of the lead BTC developers in Core/Blockstream. Regulation of BTC is in-line with his beliefs. He is a big believer in the government, as he believes that the government should tax you and the “State has authority from God”. In fact, he has other radical beliefs as well:
So, having only large, regulated LN hubs is not a failure for Blockstream/Bilderberg. It’s a success. The title of this article should be changed to: "Lightning Will Fail Or Succeed, Depending On Whether You Are Satoshi Or Blockstream/Bilderberg".
SIGNIFICANT ADVANCEMENTS WITH ON-CHAIN SCALING
Meanwhile, some coins such as Ethereum and Bitcoin Cash are pushing ahead with on-chain scaling. Both are looking at Sharding.
Visa handles 2,000 transactions per second on average. Blockstream said that on-chain scaling will not work. The development teams for Bitcoin Cash have shown significant on-chain scaling:
1 GB block running on testnet demonstrates over 10,000 transactions per second:
"we are not going from 1MB to 1GB tomorrow — The purpose of going so high is to prove that it can be done — no second layer is necessary”
"Preliminary Findings Demonstrate Over 10,000 Transactions Per Second"
"Gigablock testnet initiative will likely be implemented first on Bitcoin Cash”
Peter Rizun, Andrew Stone -- 1 GB Block Tests -- Scaling Bitcoin Stanford At 13:55 in this video, Rizun said that he thinks that Visa level can be achieved with a 4-core/16GB machine with better implementations (modifying the code to take advantage of parallelization.)
Bitcoin Cash plans to fix malleability and enable layer 2 solutions:
The Future of “Bitcoin Cash:” An Interview with Bitcoin ABC lead developer Amaury Séchet:
"fixing malleability and enabling Layer 2 solutions will happen”
However, it is questionable if layer 2 will work or is needed.
GOING FORWARD
The four year scaling debate and in-fighting is what caused small blockers (Blockstream) to fork Bitcoin by adding Segwit and big blockers to fork Bitcoin into Bitcoin Cash. Read:
Bitcoin Divorce - Bitcoin [Legacy] vs Bitcoin Cash Explained
It will be interesting to see how they scale going forward.
Scaling will be instrumental in getting network effect and to be widely adopted as a currency. Whichever Coin Has The Most Network Effect Will Take All (Or Most) (BTC has little network effect, and it's shrinking.)
The ability to scale will be key to the long term success of any coin.
submitted by curt00 to btc [link] [comments]

The main reason(s) why the BU coalition is blocking segwit according to one of their main backer

Today, I was discussing BU with somebody who claims to be one of the main persons originally behind Bitcoin Unlimited and also claims to be part of a specific group of early adopters including Roger Ver and Olivier Janssens. This person is followed by all of them, including Jihan WU on twitter and is often participating in the "debate" so I'm inclined to believe him.
Although most of his first arguments are just different variants of critiques against Core, I tried to get the bottom of it and I'm pretty sure I found it.
After hours of discussion, his main argument was that was that we need to scale bitcoin to "billions". So when I pointed out that to do that we need both increase in blocksize + onchain optimization AND layer2 scaling via smartcontracts (Such as lightning and others), he finally conceded that their group is just paying lipservice to offchain but that they think that (without being able to explain why) smartcontracts were diminishing the value of Bitcoin as money. This seems to coincide well with the fact that Roger Ver describes fixing malleability as a "non-urgent" problem. They see both fixing malleability and the new weighting of transactions in segwit as enabling of smartcontracts vs the simple use of Bitcoin as "dumb digital money" that according to them would make it more valuable.
So there you have it: Bitcoin Unlimited exists to block segwit. So If you find yourself not wanting to choose "camps", don't expect any compromise such as BU+Segwit from Bitcoin Unlimited side. That's the only reason for Bitcoin Unlimited existence in the first place. And If you want to support Bitcoin Unlimited, remember that there will be no malleability fix, no enhanced smart contracts, no enhanced fungibility. That's the price to pay for the mining pools to support bigger blocks via BU.
It seems that these pools might be afraid of competition of layer 2 smartcontracts such as lightning AND they also fear segwit will enable privacy enhancements as explained by Huang shiliang on 8btc a few months ago. As you can see here:
Huang Shiliang is sponsored by an anonymous doner (I'd bet Jihan Wu) to write theses anti-segwit, anti-lightning, anti-privacy articles. As you can see here:
That's it!
submitted by Taidiji to Bitcoin [link] [comments]

I quit btc.

TL&DR Basically rant why I don’t want to face bitcoin core supporters constant lies and I don’t want to have anything to do with bitcoin core (btc) anymore.
Bitcoin was always about sending safely digital money to anybody, anywhere and without need of central authority. It was very clearly stated in first discussions and first promoting materials, that whole idea is for it to work instantly with no fees, or very little fees and it is for everybody equally and anonymously.
Nobody was ever suggesting that bitcoin is finished product. Probably it is fair to say everybody were expecting some kind of problems and different and unforeseen circumstances that could potentially kill the project any minute and instantly. Many of users could also see potential new use cases and phenomenal possibilities for the future. Bitcoin got quickly recognised as very risky but very promising technology that could change the world. Things like that don’t happened every day.
Evolution of bitcoin was inevitable. Every aspect of bitcoin needed protection and improvement to face problems.
Oh boy, but how I’m surprised what way it all went.
Maximum blocksize was introduce by bitcoin creator as a temporary measure to mitigate problems bitcoin was vulnerable at the time. It was always suppose to be increased when needed and Bitcoin creator (Satoshi Nakamoto) even said how to do it effortlessly. That max block size was trivial temporary fix that not many at the time realised how big obstacle for bitcoin it will become. Unfortunately for all of us, Satoshi left the project, before sorting it out.
Instant transactions were removed when “replace by fee” feature and increasing transaction waiting time in mempool from, I think 3 days to 14 days, were introduced. It was done to allegedly make it easier to estimate correct fee needed to pay to get to next block. In effect though, it enabled race to the top of the fees where in order to keep up with increasing volume, it was better to increase fee above everybody else or face staying in limbo of unconfirmed transaction for two weeks or more in case some party chooses to rebroadcast transaction. What is more terrifying, transactions couldn’t be safely used as instant anymore, as a sender could potentially double spend transaction with sending funds to different than original address with higher fee and more chance to not get rejected. Instant transaction was basically killed. Now we all had to wait for confirmations, preferably 6 of them. Originally, that was only advised as extra safety measure for bigger purchases, but now thanks to rbf, it is a must. Plus fees were encouraged to go up.
Foundations for high fees were set by rbf and 1mb block size. When volume came with increasing adoption and interest from new users, fees skyrocketed to above 1000sat/byte. You could send with lower fees and get lucky, but basically fees were extremely high. Also, not every transaction is simple. This 1000sat/byte could easily result in fee on 100gbp for transaction if you were using many unspent outputs.
That killed adoption. Period. You can’t use bitcoin to send money if you have to pay transaction bigger than often value of transaction itself. Low fee or no fee aspect was killed and even vanished for a while from bitcoin.org site.
Important part is, that all of that above could have been justified. As I mentioned before, bitcoin is not finished and it is vulnerable so any changes should be tested, not rushed. I can understand that. What is more, I can not demand from bitcoin developers changes. I can propose changes myself and even show how to do it though.
But here is the tricky part. Bitcoin core developers killed all progress by censoring every discussion that was not in line with central party rhetoric. You want to talk about big blocks? Ban. You want to ask about why not? Ban. But, but… Ban. So changes can not be proposed anymore and discussed. It was possible to get ban even when taking part in discussion elsewhere or agree to something core didn’t approve and “obviously” being not in line.
Well done guys, you just created central authority that stand against everything that bitcoin was for.
How big fees were justified?
By pushing blame on users. It must be stupid to use bitcoin they said. When you using it you are taking precious resources. You are bad for bitcoin. Bitcoin is not money, it is store of value!!!
Just buy and hold. Sorry. Just buy and “hodl”. Be stupid meme reader. Than tell others to buy and hold. Create perfect ponzi. This is what bitcoin core is now being used mostly for.
Solutions proposed and introduced.
Segwit or Segregated Witness. (didn’t help)
Reorganisation of transaction record that changes the way transaction size is being counted and also fixes malleability issue. At the time of introduction it was being compared to approximately equal to increase to 1.7 mb block size. Now opinions and calculations are vary. Some give it more, but most are very confusing anyway. As misinformation is very common in bitcoin world, I leave it for everybody to check it themselves.
Segwit was mostly needed to introduce Lightning Network that required transaction malleability to be fixed. In normal bitcoin use, it wasn’t really big problem, but lightning apparently had to have it sorted this way.
Lightning network
Fascinating concept really I must admit. It is different layer working on top of bitcoin block chain. Instead of sending every transaction on chain, users were encouraged to use this so called settlement layer, where only final balancing is written on chain. In theory, when network will be big enough and everybody will connect, closing final balances will never be required or for very long time plus when something goes wrong. Lightning network is in even bigger beta than I thought and I don’t think I can say more about its technical side, but already I think it might be very interesting someday. It should not stop on chain scaling though.
My problem with Lightning network is more on idealogical level. It to much looks like trying to replicate existing banking system (I might be totally wrong on this) and there was LIE spread before introducing LN that everybody needs to run full node. It is a lie. Obvious lie.
First of all, the definition of full node has been changed. Originally full node was node that was doing all functions of node and that includes mining. Mining is now highly centralised and it has very big entry price, so normal user rather can’t run full node efficiently.
Definition has changed to call non mining nodes a full node. That implies they are important to bitcoin network. They are not. They are important for Lightning network though, as user has to be connected to it all the time via they're own node.
Not only Lightning Network is build on bitcoin chain but also on the lie and misinformation. That is very bad. Any discussion to put things straight as they are result in ban in every communication channel controlled by central authority of core devs.
Every day I come to reddit or any other social media, I see plenty of lies, usually from people that do not lie, and I am sick of it. Bitcoin is evil, bitcoin is broken, bitcoin is taken over by malicious group, that luckily forked away in August last year and is marked as btc.
Bch chain restored the original value of Bitcoin. Central authority is gone. If it happens again, we will fork away again. It is low fee or no fee system for everybody.
It is fascinating again. There is new development. Look on memo and blockpress. If you can’t see implications of this, I don’t know what to say.
Now is the time people have to choose though. Bitcoin cash has low volume. It is possible people don’t want uncensored money, social network, or network in general. Maybe they need Lambo dream and ponzi scheme? Maybe. I don’t know. But I’m off from btc and I am not coming back.
submitted by MarchewkaCzerwona to btc [link] [comments]

Unmasking the Blockstream Business Plan

Background

sidechains
Sidechains are secondary two-way "pegged" blockchains that are interoperable with the bitcoin blockchain, which allow assets to be transferred between chains and not be confined to the bitcoin blockchain policies.
Lightning Network (LN)
LN is a "caching layer" for Bitcoin, creating off-chain payment channels using a new sighash opcode which allows the Bitcoin network to scale transactions to billions of transactions which can be processed nearly instantly.

Motivation

In order for sidechains to work and for Blockstream to be successful, Blockstream needs to artificially keep the Bitcoin blockchain at a low capacity (max_block_size = 1MB), so that they can push users off of the Bitcoin blockchain onto a sidechain where assets (transactions, contracts, etc.) can happen. By doing this, they are forcibly (see "protocol wars") able to create an environment where their solution is more desirable, creating a second premium tiered layer. The Bitcoin blockchain will end up being for "regular" users and sidechains will be for premium users that will pay to have their assets moved with speed, consistency, and feasibility.
"While such cryptographic transfer of value is near-instantaneous, ensuring that the transaction has been included in the consensus of the shared ledger (aka. blockchain) creates delays ranging from a few minutes to hours, depending on the level of reliability required. Inclusion in the blockchain is performed by miners, who preferentially include transactions paying greatest fee per byte. Thus using the blockchain directly is slow, and too expensive for genuinely small transfers (typical fees are a few cents)." - Source
By introducing Segregated Witness (SW), Blockstream has been able to pretend to care about increasing the Bitcoin block size, when in reality, they have no desire to increase it at all. The real reason for SW is to fix tx-malleability which is a requirement to get LN to work. SW being able to increase throughput up to 1.75MB is just a byproduct and not a scaling solution. In addition, SW allows creation of unconfirmed transaction dependency chains without counterparty risk, an important feature for off-chain protocols such as LN.
Blockstream is also able to artificially create a fee market through different mechanisms (RBF) which creates a volatile experience for users on the Bitcoin blockchain. Merchants can no longer trust zero-confirmation tx’s, and users will have to fight with others by prioritizing their tx’s with higher fees to get their tx’s confirmed in the mempool before they are dropped. Creating a fee market on the Bitcoin blockchain is another incentive to push users off-chain to their second tier platform with premium scalability and ease-of-use, where zero-confirmations can be trusted again.

Putting it together

As you can see from Blockstream’s motivations and past history, it’s become very clear to the entire Bitcoin community that their intentions are to sabotage Bitcoin in order to make sidechains the go-to platform for anyone in the world to be able to transfer assets on the blockchain with speed and scalability. They have never intended on raising the block size, do not plan on it, and are creating a volatile ecosystem so they can sell their premium second tier platform to users through control and censorship.

Revenue Model

This is an update/edit as it has recently come to light from Blockstream executive Greg Maxwell that Blockstream plans to privatize sidechains through the limiting of the Bitcoin blockchain and generate revenue through subscriptions, transaction fees, support (consulting), and custom development work. Their first client as it turns out is major bank and financial firm, PWC.

References:

Edit:
To the Core dev who is harassing me over PM, I have reported you to the reddit admins.
Edit:
A redditor who wanted to remain anonymous asked me to also include this information which seems just as important and relevant to the plan:
Concerning SegWit, it would also be necessary to mention that it not just fixes tx malleability, but also makes opening and closing Lightning channels cheaper.
Lightning will use very complex scripts, so the transaction size for creating a channel will take like 2-5x more space than an ordinary transaction, resulting in an increased transaction fee. With SegWit deployed, the scripts are removed from the blocks, so the fees for ordinary tx and opening a channel will be the same.
Edit:
To those that have gifted me gold, thank you!
submitted by Gobitcoin to btc [link] [comments]

Lightning Network Will Likely Fail Due To Several Possible Reasons

ECONOMIC CASE IS ABSENT FOR MANY TRANSACTIONS
The median Bitcoin (BTC) fee is $14.41 currently. This has gone parabolic in the past few days. So, let’s use a number before this parabolic rise, which was $3.80. Using this number, opening and closing a Lightning Network (LN) channel means that you will pay $7.60 in fees. Most likely, the fee will be much higher for two reasons:
  1. BTC fees have been trending higher all year and will be higher by the time LN is ready
  2. When you are in the shoe store or restaurant, you will likely pay a higher fee so that you are not waiting there for one or more hours for confirmation.
Let’s say hypothetically that Visa or Paypal charges $1 per transaction. This means that Alice and Carol would need to do 8 or more LN transactions, otherwise it would be cheaper to use Visa or Paypal.
But it gets worse. Visa doesn’t charge the customer. To you, Visa and Cash are free. You would have no economic incentive to use BTC and LN.
Also, Visa does not charge $1 per transaction. They charge 3%, which is 60 cents on a $20 widget. Let’s say that merchants discount their widgets by 60 cents for non-Visa purchases, to pass the savings onto the customer. Nevertheless, no one is going to use BTC and LN to buy the widget unless 2 things happen:
  1. they buy more than 13 widgets from the same store ($7.60 divided by 60 cents)
  2. they know ahead of time that they will do this with that same store
This means that if you’re traveling, or want to tip content producers on the internet, you will likely not use BTC and LN. If you and your spouse want to try out a new restaurant, you will not use BTC and LN. If you buy shoes, you will not use BTC and LN.
ROAD BLOCKS FROM INSUFFICIENT FUNDS
Some argue that you do not need to open a channel to everyone, if there’s a route to that merchant. This article explains that if LN is like a distributed mesh network, then another problem exists:
"third party needs to possess the necessary capital to process the transaction. If Alice and Bob do not have an open channel, and Alice wants to send Bob .5 BTC, they'll both need to be connected to a third party (or a series of 3rd parties). Say if Charles (the third party) only possesses .4 BTC in his respective payment channels with the other users, the transaction will not be able to go through that route. The longer the route, the more likely that a third party does not possess the requisite amount of BTC, thereby making it a useless connection.”
CENTRALIZATION
According to this visualization of LN on testnet, LN will be centralized around major hubs. It might be even more centralized than this visualization if the following are true:
  1. Users will want to connect to large hubs to minimize the number of times they need to open/close channels, which incur fees
  2. LN’s security and usability relies on 100% uptime of relaying parties
  3. Only large hubs with a lot of liquidity will be able to make money
  4. Hubs or intermediary nodes will need to be licensed as money transmitters, centralizing LN to exchanges and banks as large hubs
What will the impact be on censorship-resistance, trust-less and permission-less?
NEED TO BE LICENSED AS MONEY TRANSMITTER
Advocates for LN seem to talk a lot about the technology, but ignore the legalities.
FinCEN defines money transmitters. LN hubs and intermediary nodes seem to satisfy this definition.
Application of FinCEN's Regulations to Persons Administering, Exchanging, or Using Virtual Currencies
“…applicability of the regulations … to persons creating, obtaining, distributing, exchanging, accepting, or transmitting virtual currencies.”
“…an administrator or exchanger is an MSB under FinCEN's regulations, specifically, a money transmitter…”
"An administrator or exchanger that (1) accepts and transmits a convertible virtual currency or (2) buys or sells convertible virtual currency for any reason is a money transmitter under FinCEN's regulations…”
"FinCEN's regulations define the term "money transmitter" as a person that provides money transmission services, or any other person engaged in the transfer of funds. The term "money transmission services" means "the acceptance of currency, funds, or other value that substitutes for currency from one person and the transmission of currency, funds, or other value that substitutes for currency to another location or person by any means.””
"The definition of a money transmitter does not differentiate between real currencies and convertible virtual currencies.”
FinCEN’s regulations for IVTS:
"An “informal value transfer system” refers to any system, mechanism, or network of people that receives money for the purpose of making the funds or an equivalent value payable to a third party in another geographic location, whether or not in the same form.”
“…IVTS… must comply with all BSA registration, recordkeeping, reporting and AML program requirements.
“Money transmitting” occurs when funds are transferred on behalf of the public by any and all means including, but not limited to, transfers within the United States or to locations abroad…regulations require all money transmitting businesses…to register with FinCEN."
Mike Caldwell used to accept and mail bitcoins. Customers sent him bitcoins and he mailed physical bitcoins back or to a designated recipient. There is no exchange from one type of currency to another. FinCEN told him that he needed to be licensed as money transmitter, after which Caldwell stopped mailing out bitcoins.
ARGUMENTS AGAINST NEED FOR LICENSING
Some have argued that LN does not transfer BTC until the channel is closed on the blockchain. This is not a defence, since channels will close on the blockchain.
Some have argued that LN nodes do not take ownership of funds. Is this really true? Is this argument based on a technicality or hoping for a loophole? It seems intuitive that a good prosecutor can easily defeat this argument. Even if this loophole exists, can we count on the government to never close this loophole?
So, will LN hubs and intermediary nodes need to be licensed as money transmitters? If so, then Bob, who is the intermediary between Alice and Carol, will need a license. But Bob won’t have the money nor qualifications. Money transmitters need to pay $25,000 to $1 million, maintain capital levels and are subject to KYC/AML regulations1. In which case, LN will have mainly large hubs, run by financial firms, such as banks and exchanges.
Will the banks want this? Likely. Will they lobby the government to get it? Likely.
Some may be wondering about miners. FinCEN has declared that miners are not money transmitters:
https://coincenter.org/entry/aml-kyc-tokens :
"Subsequent administrative rulings clarified several remaining ambiguities: miners are not money transmitters…"
FinCEN Declares Bitcoin Miners, Investors Aren't Money Transmitters
Some argue that LN nodes will go through Tor and be anonymous. For this to work, will all of the nodes connecting to it, need to run Tor? If so, then how likely will this happen and will all of these people need to run Tor on every device (laptop, phone and tablet)? Furthermore, everyone of these people will be need to be sufficiently tech savvy to download, install and set up Tor. Will the common person be able to do this? Also, will law-abiding nodes, such as retailers or banks, risk their own livelihood by connecting to an illegal node? What is the likelihood of this?
Some argue that unlicensed LN hubs can run in foreign countries. Not true. According to FinCEN: "“Money transmitting” occurs when funds are…transfers within the United States or to locations abroad…” Also, foreign companies are not immune from the laws of other countries which have extradition agreements. The U.S. government has sued European banks over the LIBOR scandal. The U.S. government has charged foreign banks for money laundering and two of those banks pleaded guilty. Furthermore, most countries have similar laws. It is no coincidence that European exchanges comply with KYC/AML.
Will licensed, regulated LN hubs connect to LN nodes behind Tor or in foreign countries? Unlikely. Will Amazon or eBay connect to LN nodes behind Tor or in foreign countries? Unlikely. If you want to buy from Amazon, you’ll likely need to register yourself at a licensed, regulated LN hub, which means you’ll need to provide your identification photo.
Say goodbye to a censorship-resistant, trust-less and permission-less coin.
For a preview of what LN will probably look like, look at Coinbase or other large exchanges. It’s a centralized, regulated and censored hub. Coinbase allows users to send to each other off-chain. Coinbase provides user data to the IRS and disallows users from certain countries to sell BTC. You need to trust that no rogue employee in the exchange will steal your funds, or that a bank will not confiscate your funds as banks did in Cyprus. What if the government provides a list of users, who are late with their tax returns, to Coinbase and tells Coinbase to block those users from making transactions? You need Coinbase’s permission.
This would be the antithesis of why Satoshi created Bitcoin.
NEED TO REPORT TO IRS
The IRS has a definition for “third party settlement organization” and these need to report transactions to the IRS.
Though we do not know for sure yet, it can be argued that LN hubs satisfies this definition. If this is the case, who will be willing to be LN hubs, other than banks and exchanges?
To read about the discussion, go to:
Lightning Hubs Will Need To Report To IRS
COMPLEXITY
All cryptocurrencies are complicated for the common person. You may be tech savvy enough to find a secure wallet and use cryptocurrencies, but the masses are not as tech savvy as you.
LN adds a very complicated and convoluted layer to cryptocurrencies. It is bound to have bugs for years to come and it’s complicated to use. This article provides a good explanation of the complexity. Just from the screenshot of the app, the user now needs to learn additional terms and commands:
“On Chain”
“In Channels”
“In Limbo”
“Your Channel”
“Create Channel”
“CID”
“OPENING”
“PENDING-OPEN”
“Available to Receive”
“PENDING-FORCE-CLOSE”
There are also other things to learn, such as how funds need to be allocated to channels and time locks. Compare this to using your current wallet.
Recently, LN became even more complicated and convoluted. It needs a 3rd layer as well:
Scaling Bitcoin Might Require A Whole 'Nother Layer
How many additional steps does a user need to learn?
ALL COINS PLANNING OFF-CHAIN SCALING ARE AT RISK
Bitcoin Segwit, Litecoin, Vertcoin and possibly others (including Bitcoin Cash) are planning to implement LN or layer 2 scaling. Ethereum is planning to use Raiden Network, which is very similar to LN. If the above is true about LN, then the scaling roadmap for these coins is questionable at best, nullified at worst.
BLOCKSTREAM'S GAME PLAN IS ON TRACK
Blockstream employs several of the lead Bitcoin Core developers. Blockstream has said repeatedly that they want high fees. Quotes and source links can be found here.
Why is Blockstream so adamant on small blocks, high fees and off-chain scaling?
Small blocks, high fees and slow confirmations create demand for off-chain solutions, such as Liquid. Blockstream sells Liquid to exchanges to move Bitcoin quickly on a side-chain. LN will create liquidity hubs, such as exchanges, which will generate traffic and fees for exchanges. With this, exchanges will have a higher need for Liquid. This will be the main way that Blockstream will generate revenue for its investors, who invested $76 million. Otherwise, they can go bankrupt and die.
One of Blockstream’s investors/owners is AXA. AXA’s CEO and Chairman until 2016 was also the Chairman of Bilderberg Group. The Bilderberg Group is run by bankers and politicians (former prime ministers and nation leaders). According to GlobalResearch, Bilderberg Group wants “a One World Government (World Company) with a single, global marketplace…and financially regulated by one ‘World (Central) Bank’ using one global currency.” LN helps Bilderberg Group get one step closer to its goal.
Luke-Jr is one of the lead BTC developers in Core/Blockstream. Regulation of BTC is in-line with his beliefs. He is a big believer in the government, as he believes that the government should tax you and the “State has authority from God”. In fact, he has other radical beliefs as well:
So, having only large, regulated LN hubs is not a failure for Blockstream/Bilderberg. It’s a success. The title of this article should be changed to: "Lightning Will Fail Or Succeed, Depending On Whether You Are Satoshi Or Blockstream/Bilderberg".
SIGNIFICANT ADVANCEMENTS WITH ON-CHAIN SCALING
Meanwhile, some coins such as Ethereum and Bitcoin Cash are pushing ahead with on-chain scaling. Both are looking at Sharding.
Visa handles 2,000 transactions per second on average. Blockstream said that on-chain scaling will not work. The development teams for Bitcoin Cash have shown significant on-chain scaling:
1 GB block running on testnet demonstrates over 10,000 transactions per second:
"we are not going from 1MB to 1GB tomorrow — The purpose of going so high is to prove that it can be done — no second layer is necessary”
"Preliminary Findings Demonstrate Over 10,000 Transactions Per Second"
"Gigablock testnet initiative will likely be implemented first on Bitcoin Cash”
Peter Rizun, Andrew Stone -- 1 GB Block Tests -- Scaling Bitcoin Stanford At 13:55 in this video, Rizun said that he thinks that Visa level can be achieved with a 4-core/16GB machine with better implementations (modifying the code to take advantage of parallelization.)
Bitcoin Cash plans to fix malleability and enable layer 2 solutions:
The Future of “Bitcoin Cash:” An Interview with Bitcoin ABC lead developer Amaury Séchet:
"fixing malleability and enabling Layer 2 solutions will happen”
However, it is questionable if layer 2 will work or is needed.
GOING FORWARD
The four year scaling debate and in-fighting is what caused small blockers (Blockstream) to fork Bitcoin by adding Segwit and big blockers to fork Bitcoin into Bitcoin Cash. Read:
Bitcoin Divorce - Bitcoin [Legacy] vs Bitcoin Cash Explained
It will be interesting to see how they scale going forward.
Scaling will be instrumental in getting network effect and to be widely adopted as a currency. Whichever Coin Has The Most Network Effect Will Take All (Or Most) (BTC has little network effect, and it's shrinking.)
The ability to scale will be key to the long term success of any coin.
submitted by curt00 to Bitcoincash [link] [comments]

"Code is Law": Comedy Gold Survey on Ethereum

Survey ID: 00001 Coin: Ethereum Client: Tyler Durden

Executive summary:

Ethereum is almost certainly the number 2 coin in comedy gold. It will likely surpass Bitcoin in comedy gold long before it passes it in market cap. Thanks in large part to a spam-based marketing campaign on Reddit, it also has a dedicated base of critics.
After its IPO, it was known as “Inthereum” for a while, infinitely powerful of course, as vaporware can do anything. It had a major version release, then another. Finally, a major smart contract, in terms of valuation, came along: The DAO. Not to be confused with other DAOs, before and after. The DAO was the biggest. It was going to be the best; it already was the best! Euphoria was off the charts.
Until just a few months in, a bug was found. And the killer app became the flash point. What could they do? Well, hard fork and give the money back, of course! And so they did.
“Code is Law”; but this is actually good for Ethereum because “[a]lthough some do question the analogy ‘code is law’. I do not. We just found out that we have a supreme court, the community!” [1]
After the D'OH, Ethereum struggles to top its ATH comedy gold, but there is still a bright future for popcorn and comedy gold from Ethereum.

5 Largest Veins of Comedy Gold

Here are the largest comedy gold veins in Ethereum in potential reserves in our estimation in approximately descending order:
  • Cultlike euphoria - Now, this can certainly be said to be common to almost all cryptocurrencies. But Ethereum seems special here, even more than Bitcoin's community. There is a real belief here that this coin is going to change the world. This helps play into a "this is very good for Ethereum" mindset, wherein even the D'OH fork was a great success!
There is no greater terror than a fiend on ether.
  • Vitalik Buterin - The best name in cryptocurrency! Young genius central to Ethereum and almost universally seen as the most important leader in the project. In our view, his endorsement and leadership during the D'OH fork led to that route being taken. That is, we believe if he had opposed it from the start, he may have been able to prevent it or at least have led to what is now called ETC being the dominant of the two.
And so in our view, Mr. Buterin runs a billion dollar cryptocurrency right now. He and his team seem to have done reasonably well so far; it seems likely they'll continue to thrive. To the best of my knowledge, confirmed on /ethereum, there hasn't been a drug market implemented in Ethereum or trading with ETH so far. But while it seems like a terrible idea, because of the lack of privacy and proven mutability of contracts, it seems like eventually there's going to be a major drug market accepting ETH just because it has such a high value. And, they point out, monero and zcoin’s core privacy feature will apparently be available on ETH after this next fork, so look forward to anonymous ETH fueling drug markets!
And then the interesting question will be raised of how Chief Justice Buterin will rule on the case, whether it is worthy of an intervention or not. If not a drug market, then another buggy and hacked contract. Or a hacked exchange, and the question of whether to make it or its users whole, or "let the hacker win".
  • DAOs - From the beginning, it was proposed that Ethereum itself and its reserve fund would be turned into a DAO. How exactly this was going to happen would be figured out later of course. There was an initial estimate of 2016 for the transition.
Of course, in 2016, The DAO and the D'OH happened. I'm not aware of a current further push to put all of ETH's future funding into a DAO. But I'm sure the topic will resurface. And it will be hilarious on so many levels. The DAO actually collapsed too soon for peak comedy gold extraction. It had been predicted that there would be no consensus on any proposals and that nothing would be funded, and that there would be gold from that. But it was just a few months in when the bug was found. And while the D'OH fork was certainly a rich vein of comedy gold, it wasn't as rich as what the DAO could have been if it had floundered around for a year or so before the hack.
Surprisingly, there's actually a running, apparently working DAO on ETH that was started even before The DAO: digixDAO. If it keeps on running, it will continue to be hilarious as other DAOs fail to learn from it. If it fails, there's all the more hilarity for Ethereum, making it the platform where anything complicated enough to look like an original use case will break. The very existence of digix is proof-of-comedy-gold.
  • Immutability - The whole central notion of immutability is going to be a recurring question for Ethereum after the D'OH. While there was a lot of sentiment of "just this once and never again" at the time, there will someday be another major issue, and the precedent will mean that at least a major debate among the community will be had. Ethereum is "mostly immutable". Bitcoin is far better protected here, because while it's true they've hard forked to fix a bug before, that was years ago and the community is far more fractured now. Ethereum has a demonstrated capacity to do both routine and controversial hard forks. This strength is also a challenge, as it will invite constant legal and ethical questions about when it's appropriate to modify the chain itself with a fork: that is, rolling back some or all transactions after major bugs, thefts, frauds, and so forth.
  • Concentration of funds - This one I'm just guessing at. Although rich lists do exist, obviously one entity like an exchange could pool funds in an address without one person owning that much, or one person could splits their coins among many accounts. But it gives a rough guide. In Bitcoin, the top 113 addresses, having more than 10,000 BTC, in total are 17.46% of the current supply [ 2 ]. And in Ethereum, it's true that the top two accounts are marked as exchange accounts [ 3 ]. Still, having lots of funds concentrated in a single exchange wallet seems to still have some potential for comedy gold. In Ethereum, the top 50 addresses have more than double the proportion of the top 113 in Bitcoin, a bit over 40% of the current supply. My guess would be there are still a lot of people who invested heavily in the initial ICO who have held onto a significant portion of their initial ETH. While some of these top addresses are exchanges, I think there are probably many individuals represented in here as well, and every one of them is a multimillionaire from this account alone.
Of course, so far, because ETH is still smaller than BTC in overall market cap, these top addresses aren't as huge as the top addresses in Bitcoin in current market value. But if ETH were to overtake BTC's current position with a relatively unchanged distribution, there would be some real comedy gold coming off this factor. Cribs could have a spin-off Ethereum series.
This concentration was a part of making The D'OH what it was in my view as well: in Bitcoin, there would never have been so much of the coin tied up in one particular venture, at least not now. But in Ethereum, this concentration and groupthink can combine to hilarious effect.

A Brief History of Comedy Gold in Ethereum:

“Laws, like sausages, cease to inspire respect in proportion as we know how they are made” - John Godfrey Saxe
In the beginning, there was an offering. The greatest coin the world had ever seen; step right up and buy it! There was even code; this is no vaporware! Sure, there was more work to be done, but the ICO would fund that work, the founders would get a little, and create a reserve for the future and the rest would be mineable.
There was also some of the most vociferous objections on BCT, declaring that the stake allocated to the founders was too large, pointing to other coins which had done smaller or done without. Arguing against the reserve; arguing against having a presale at all. Some people, of course, completely failing to read the documentation accurately to see what was even being proposed. And an almost complete radio silence from this large team working around the clock on Ethereum.
It took some months from when the initial ANN was made until the sale actually started, but by the time they had their sale, they had perhaps the best documentation at launch to-date. Of course, there were some areas which seemed to lack some detail, like the budgeting, but never mind that, it was finally launching!
Launching the sale, at least. In July and August of 2014, Ether was first sold. It was described as “fuel” for the virtual machine they were going to build [ 4 ].
And then, a year later, Ethereum was released live. By July 2016, it had already had its first major crisis after The DAO was hacked and the D’OH fork introduced in response.
But the fact that Ethereum was ever released, and that it was released so quickly, is truly incredible. There was more than one person who thought that the stated goals of Ethereum were not possible. And, of course, many initial goals and deadlines didn’t happen. But unlike the railbirds on BCT were convinced, the team did not fail nor did it run off with the money. They were given a blank check, and they actually delivered a working product which has been successful so far financially.
Of course, having its flagship smart contract go belly-up quite so quickly after having finally gotten a “killer app” seems rather unfortunate. The oracle problem (the question of how to reliably relate smart contracts to the outside world) seems unresolved, but partial solutions are inevitable and can only serve to make increasingly complex and thus popcorn-loaded contracts possible.
Right now, all seems relatively quiet. But rest assured, there remains plenty of euphoria and gas to drive many more cycles of comedy gold production. Ether huffers need something to throw their ETH at. The more complicated; the better! Given some of the creations that have been made in NXT, for instance, a few more years of creativity on ETH should yield some very complicated and pop-corn rich smart contracts.

Researcher’s Narrative:

I was relaxing in my office, waiting for business. It was a dingy little one-room affair, but it would serve for now. Particularly with no clients. I had poured myself a double shot, and was about to enjoy it, when suddenly the door opened.
A man walked in, familiar somehow although I couldn't place him. I reached out my hand instinctively, and instead of shaking it, he handed me a dollar.
"Hello?"
He pointed at the sign in the window, advertising a promotional one dollar gold survey for the first client. Always astute, I quickly surmised he wished to hire me.
"Of course, sir! What coin would you like?"
"Ethereum."
"Certainly! And may I have your name for the log?"
"Tyler Durdan."
And with that, my newest client left. I downed my double and poured a generous triple to follow it. This was going to be a long day.
Ethereum was the ultimate prize in my line of work. The coin which proved the adage that truth is stranger than fiction; which had proved itself a lucrative source of comedy gold.
And who am I? Guy Noir, private comedy gold surveyor. I've seen things you people wouldn't believe. Premined scamcoins crashing on noname exchanges. I watched popcorn glitter in the dark on forgotten the BCT threads. Popcorn junkies strung out on a high, and I've delivered them more comedy gold, popcorn, salt and butter. There is never enough.
A dark night in a world that never sleeps and knows how to keep its secrets...But on the 12th Floor of the Acme Building, one man is still trying to find the answers to life's persistent questions: Guy Noir, private comedy gold surveyor.
Thank you, Narrator. Now, as I was saying, Ethereum is overloaded with gold. But the core is pretty straightforward:
Ethereum promised "smart contracts". Immutable. Turing-complete. This was what Bitcoin lacked. The bee's knees. Crypto 2.0. What could go wrong?
We'll skip over the "Inthereum" period. Perhaps the vaporware criticism was never fair: from their version, they had Proof-of-Concept code; they went through some iterations and eventually got to release.
Let's note clearly that there was plenty of time to determine some sort of official policy for what to do about a buggy or improperly written contract losing money. In Bitcoin, every hack has been a SFYL event, although it’s true that a bug in the coin itself was hard forked away before. Mt. Gox tried to blame malleability, but there was never a fork to try to recover funds. In Ethereum, immutability was often talked about. So far as I saw in skimming, “what if” scenarios to undo bugs wasn’t brought up front-and-center. Nor was immutability being debated that I saw.
So Ethereum releases. A major contract is launched, The DAO, which gets an astonishing portion of ETH invested. The world's largest crowd sale as they ultimately called it. All the major players in ETH buy into it, including Vitalik Buterin, the creator of Ethereum and the best name in cryptocurrency.
Just as they're starting to get into the comedy gold that The DAO doesn't really have a purpose, a bug is discovered. And just as its leader is assuring everyone that no funds are at risk, the funds start being drained out of the contract by an unknown party.
And suddenly immutable means "immutable unless we screw up on the biggest contract which everyone important has invested in heavily". Ethereum ultimately hard-forks to return investor funds and basically unwind The DAO. After claiming that the bug was in the contract, the coin itself is hard forked to fix the issue. And the first Ethereum clone results, one which simply does not follow the new hard fork.
So the natural question is: when can a contract be changed? In the first page of the Ethereum launch, this question was implied by asking about what would happen if there were an assassination market hosted by a smart contract on Ethereum. Of course, in reality, Ethereum is not really functional enough at present to enforce such a contract, but the question remains in case Ethereum were to actually attain a functioning smart contract platform.
Attempted reference to Tears in rain monologue, credit to Rutger Hauer
Guy Noir and narrator text lovingly stolen from Prairie Home Companion's Guy Noir, by Garrison B. Keillor.

Researcher’s Rant

Filed for psych eval
Twenty pages into the BCT ANN, I believe I have contracted cancer, again. I’m reminded of why I don’t generally go on BCT. As bad as altcoin forums tend to be for their circlejerking, it’s almost better than the, well, there’s really no way to put it other than FUD that inevitably appears in response to anything. Of course, it’s not paid shilling so much as it is willful and vocal ignorance. For all the critiques in that thread, most of them are utter nonsense and simply are misreading the initial information. On the other hand, it’s January 27th in the thread by now, with February 1st and the pre-sale start, and they don’t have their “prospectus” up yet. I also haven’t seen the change in mining rate yet.
Side note: eMunie; wtf? I guess I missed something? Either it’s gone through a namechange or it’s dead, because a quick coinmarketcap search didn’t find anything. A comedy gold mining project for another day.
Great; spoiler alert: fundraiser delayed apparently, so even more cancer to read through in that thread on the way to getting to a prospectus!
The first 44 pages of the thread was summarized thus: “I want to believe. Why are you not speaking to us? Throw me a bone. Just tell me what I want to hear, and I'll gladly throw my money in.” [ 5 ] Would that I had only had to read that quote rather than all 44 pages, and facing many more.
Pages and comments dragged on as I waded through the low-grade popcorn. When would this prospectus be released, so my torment would end? Oh god: a side-thread shows that by the time they get to April, there’s still no prospectus or presale date or estimate of when there may be a date [ 6 ]. It’s time to give up on reading through the cancerous mainthread on BCT and start jumping ahead pages to find the pre-sale and prospectus.
Okay, finally, in July, they release documents and start the sale [ 7 ]. Good enough.
I have mountains of links on my desk. Comedy gold is overflowing, but this is a survey expedition, not a mining operation. But by the time it’s surveyed, there’s always so much gold lined up to mine it gets hard to leave it behind and leave with the samples.
It’s time to hammer out some copy and close this file.
Folks, we hope you’ve enjoyed this descent into madness and comedy gold brought to you by the Comedy Gold Survey Company and our patron Tyler Durden. Do you need more comedy gold in your life? Of course you do! So please donate today; every $1 helps! I’ve added a new special: $5 lets you choose the next coin to be surveyed!
Thanks again to Tyler Durden, and I will now be re-watching Fight Club and questioning my sanity. Cheers y’all!
Resources:
Edit: 3/26/2020: Removed a link to a comment per request from the user.
Footnotes and other links:
submitted by coinaday to Buttcoin [link] [comments]

History Lesson for new VIA Viacoin Investors

Viacoin is an open source cryptocurrency project, based on the Bitcoin blockchain. Publicly introduced on the crypto market in mid 2014, Viacoin integrates decentralized asset transaction on the blockchain, reaching speeds that have never seen before on cryptocurrencies. This Scrypt based, Proof of Work coin was created to try contrast Bitcoin’s structural problems, mainly the congested blockchain delays that inhibit microtransaction as this currency transitions from digital money to a gold-like, mean of solid value storage. Bitcoin Core developers Peter Todd and Btc have been working on this currency and ameliorated it until they was able to reach a lightning fast speed of 24 second per block. These incredible speeds are just one of the features that come with the implementation of Lightning Network, and and make Bitcoin slow transactions a thing of the past. To achieve such a dramatic improvement in performance, the developers modified Viacoin so that its OP_RETURN has been extended to 80 bytes, reducing tx and bloat sizes, overcoming multi signature hacks; the integration of ECDSA optimized C library allowed this coin to reach significant speedup for raw signature validation, making it perform up to 5 times better. This will mean easy adoption by merchants and vendors, which won’t have to worry anymore with long times between the payment and its approval. Todd role as Chief Scientist and Advisor has been proven the right choice for this coin, thanks to his focus on Tree Chains, a ground breaking feature that will fix the main problems revolving around Bitcoin, such as scalability issues and the troubles for the Viacoin miners to keep a reputation on the blockchain in a decentralized mining environment. Thanks to Todd’s expertise in sidechains, the future of this crypto currency will see the implementation of an alternative blockchain that is not linear. According to the developer, the chains are too unregulated when it comes to trying to establish a strong connection between the operations happening on one chain and what happens elsewhere. Merged mining, scalability and safety are at risk and tackling these problems is mandatory in order to create a new, disruptive crypto technology. Tree Chains are going to be the basis for a broader use and a series of protocols that are going to allow users and developers to use Viacoin’s blockchain not just to mine and store coins, but just like other new crypto currencies to allow the creation of secure, decentralized consensus systems living on the blockchain The commander role on this BIP9 compatible coin’s development team has now been taken by a programmer from the Netherlands called Romano, which has a great fan base in the cryptocurrency community thanks to his progressive views on the future of the world of cryptos. He’s in strong favor of SegWit, and considers soft forks on the chain not to be a problem but an opportunity: according to him it will provide an easy method to enable scripting upgrades and the implementation of other features that the market has been looking for, such as peer to peer layers for compact block relay. Segregation Witness allows increased capacity, ends transactions malleability, makes scripting upgradeable, and reduces UTXO set. Because of these reasons, Viacoin Core 0.13 is already SegWit ready and is awaiting for signaling.
Together with implementation of SegWit, Romano has recently been working on finalizing the implementation of merged mining, something that has never been done with altcoins. Merged mining allows users to mine more than one block chain at the same time, this means that every hash the miner does contributes to the total hash rate of all currencies, and as a result they are all more secure. This release pre-announcement resulted in a market spike, showing how interested the market is in the inclusion of these features in the coin core and blockchain. The developer has been introducing several of these features, ranging from a Hierarchical Deterministic key (HD key) generation that allows all Viacoin users to backup their wallets, to a compact block relay, which decreases block propagation times on the peer to peer network; this creates a healthier network and a better baseline relay security margin. Viacoin’s support for relative locktime allows users and miners to time-lock a transaction, this means that a new transaction will be prevented until a relative time change is achieved with a new OP code, OP_CHECKSEQUENCEVERITY, which allows the execution of a script based on the age of the amount that is being spent. Support for Child-Pays-For-Parent procedures in Viacoin has been successfully enabled, CPFP will alleviate the problem of transactions that stuck for a long period in the unconfirmed limbo, either because of network bottlenecks or lack of funds to pay the fee. Thanks to this method, an algorithm will selects transactions based on federate inclusive unconfirmed ancestor transaction; this means that a low fee transaction will be more likely to get picked up by miners if another transaction with an higher fee that speeds its output gets relayed. Several optimizations have been implemented in the blockchain to allow its scaling to proceed freely, ranging from pruning of the chain itsel to save disk space, to optimizing memory use thanks to mempool transaction filtering. UTXO cache has also been optimization, further allowing for significant faster transaction times. Anonymity of transaction has been ameliorated, thanks to increased TOR support by the development team. This feature will help keep this crypto currency secure and the identity of who works on it safe; this has been proven essential, especially considering how Viacoin’s future is right now focused on segwit and lightning network . Onion technology used in TOR has also been included in the routing of transactions, rapid payments and instant transaction on bi directional payment channels in total anonymity. Payments Viacoin’s anonymity is one of the main items of this year’s roadmap, and by the end of 2017 we’ll be able to see Viacoin’s latest secure payment technology, called Styx, implemented on its blockchain. This unlinkable anonymous atomic payment hub combines off-the-blockchain cryptographic computations, thanks to Viacoin’s scriptin functionalities, and makes use of security RSA assumptions, ROM and Elliptic Curve digital signature Algorithm; this will allow participants to make fast, anonymous transfer funds with zero knowledge contingent payment proof. Wallets already offer strong privacy, thanks to transactions being broadcasted once only; this increases anonymity, since it can’t be used to link IPs and TXs. In the future of this coin we’ll also see hardware wallets support reaching 100%, with Trezor and Nano ledger support. These small, key-chain devices connect to the user’s computer to store their private keys and sign transactions in a safe environment. Including Viacoin in these wallets is a smart move, because they are targeted towards people that are outside of hardcore cryptocurrency users circle and guarantees exposure to this currency. The more casual users hear of this coin, the faster they’re going to adopt it, being sure of it’s safety and reliability. In last October, Viacoin price has seen a strong decline, probably linked to one big online retailer building a decentralized crypto stock exchange based on the Counterparty protocol. As usual with crypto currencties, it’s easy to misunderstand the market fluctuations and assume that a temporary underperforming coin is a sign of lack of strength. The change in the development team certainly helped with Viacoin losing value, but by watching the coin graphs it’s easy to see how this momentary change in price is turning out to be just one of those gentle chart dips that precede a sky rocketing surge in price. Romano is working hard on features and focusing on their implementation, keeping his head low rather than pushing on strong marketing like other alt coins are doing. All this investment on ground breaking properties, most of which are unique to this coin, means that Viacoin is one of those well kept secret in the market. Minimal order books and lack of large investors offering liquidity also help keep this coin in a low-key position, something that is changing as support for larger books is growing. As soon as the market notices this coin and investments go up, we are going to see a rapid surge in the market price, around the 10000 mark by the beginning of January 2018 or late February. Instead of focusing on a public ICO like every altcoin, which means a sudden spike in price followed by inclusion on new exchanges that will dry up volume, this crypto coin is growing slowly under the radar while it’s being well tested and boxes on the roadmap get checked off, one after the other. Romano is constantly working on it and the community around this coin knows, such a strong pack of followers is a feature that no other alt currency has and it’s what will bring it back to the top of the coin market in the near future. His attitude towards miners that are opposed to SegWit is another strong feature to add to Viacoin, especially because of what he thinks of F2Pool and Bitmain’s politics towards soft forks. The Chinese mining groups seem scared that once alternative crypto coins switch to it they’re going to lose leveraging power for what concerns Bitcoin’s future and won’t be able to speculate on the mining and trading market as much as they have been doing in the past, especially for what concerns the marketing market.
It’s refreshing to see such dedication and releases being pushed at a constant manner, the only way to have structural changes in how crypto currencies work can only happen when the accent is put on development and not on just trying to convince the market. This strategy is less flashy and makes sure the road is ready for the inevitable increase in the userbase. It’s always difficult to forecast the future, especially when it concerns alternative coins when Bitcoin is raising so fast. A long term strategy suggestion would be to get around 1BTC worth of this cryptocoin as soon as possible and just hold on it: thanks to the features that are being rolled in as within 6 months there is going to be an easy gain to be made in the order of 5 to 10 times the initial investment. Using the recent market dip will make sure that the returns are maximized. What makes Viacoin an excellent opportunity right now is that the price is low and designed to rise fast, as its Lightning Network features become more mainstream. Lightning Network is secure, instant payment that aren’t going to be held back by confirmation bottlenecks, a blockchain capable to scale to the billions of transactions mark, extremely low fees that do not inhibit micropayments and cross-chain atomic swap that allow transaction across blockchain without the need of a third party custodians. These features mean that the future of this coin is going to be bright, and the the dip in price that started just a while ago is going to end soon as the market prepares for the first of August, when when the SegWit drama will affect all crypto markets. The overall trend of viacoin is bullish with a constant uptrend more media attention is expected , when news about the soft fork will spread beyond the inner circle of crypto aficionados and leak in the mainstream finance news networks. Solid coins like Viacoin, with a clear policy towards SegWit, will offer the guarantees that the market will be looking for in times of doubt. INVESTMENT REVIEW Investment Rating :- A+
https://medium.com/@VerthagOG/viacoin-investment-review-ca0982e979bd
submitted by alex61688 to viacoin [link] [comments]

Hijacking Bitcoin: Routing Attacks on Cryptocurrencies

arXiv:1605.07524
Date: 2017-03-24
Author(s): Maria Apostolaki, Aviv Zohar, Laurent Vanbever

Link to Paper


Abstract
As the most successful cryptocurrency to date, Bitcoin constitutes a target of choice for attackers. While many attack vectors have already been uncovered, one important vector has been left out though: attacking the currency via the Internet routing infrastructure itself. Indeed, by manipulating routing advertisements (BGP hijacks) or by naturally intercepting traffic, Autonomous Systems (ASes) can intercept and manipulate a large fraction of Bitcoin traffic. This paper presents the first taxonomy of routing attacks and their impact on Bitcoin, considering both small-scale attacks, targeting individual nodes, and large-scale attacks, targeting the network as a whole. While challenging, we show that two key properties make routing attacks practical: (i) the efficiency of routing manipulation; and (ii) the significant centralization of Bitcoin in terms of mining and routing. Specifically, we find that any network attacker can hijack few (<100) BGP prefixes to isolate ~50% of the mining power---even when considering that mining pools are heavily multi-homed. We also show that on-path network attackers can considerably slow down block propagation by interfering with few key Bitcoin messages. We demonstrate the feasibility of each attack against the deployed Bitcoin software. We also quantify their effectiveness on the current Bitcoin topology using data collected from a Bitcoin supernode combined with BGP routing data. The potential damage to Bitcoin is worrying. By isolating parts of the network or delaying block propagation, attackers can cause a significant amount of mining power to be wasted, leading to revenue losses and enabling a wide range of exploits such as double spending. To prevent such effects in practice, we provide both short and long-term countermeasures, some of which can be deployed immediately.

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submitted by dj-gutz to myrXiv [link] [comments]

Very good summary about the status of Moin (ripped from bitcointalk.org)

As I found a lot of relevant and useful information about moin fron the bitcointalk.org user Xanatos I'm going to shamelessly paste them here:
*Low market cap crypto with high growth potential which has been around for the long haul with active development throughout. Extremely professional looking HTML5 interface with the coin itself being moved over to the open-sourced PARTCL blockchain.
To sum it up briefly, Particl is a privacy-focused blockchain/P2P hybrid ecosystem that will host a decentralized and anonymous marketplace as well as an array of apps using a native cryptocurrency. This can lead to fully decentralized and anonymous marketplaces which allows buyers and vendors to securely transact between each other without the need to ever interact with a third-party. It also encompasses a fully anonymous messaging system built similarly to BitMessage. The platform is currency and protocol agnostic. MOIN's full utilization of this code is still being worked on and from what I've heard our main dev is compiling something that no other coin currently has. File verification is my bet. We're still in the early stages, and what makes this coin so exciting.
While MOIN is mainly a privacy-focused project, the use of a public token (default token) is very important in terms of management, integration, and security. One of the problems with exclusively anonymous currencies is that it can be hard to confirm the authenticity of the block creation process. What if an attacker had the key to generate an infinite amount of coins? What if no one noticed the hack until the attacker dumps large orders of fraudulently created coins on the trading market? These are very serious threats that are a reality with some of the 100% private coins. ZK SNARKS, for example, a crypto privacy protocol, also has this “hidden inflation problem”. In fact, the chain is initially generated from a set of master keys which could theoretically be used to generate an infinite amount of coins at any time without anyone ever noticing. This is why people say this protocol relies on “trusted setups”; you actually need to trust the party who spawned the chain would successfully destroy the master keys. There is, of course, no way to know for sure whether they didn’t keep copies somewhere or that they were not compromised during any step of the process (software, hardware, network, OS, BIOS, ME chip exploits). After all, cryptocurrencies are now worth a lot and they have become the primary target for hackers around the world.
It is precisely for these reasons that the team opted for a fully transparent coin generation process. Because all newly generated coins are public, a hackebug would instantly be detected and measures could be taken to fix the problem.
Additionally, since the public token is built in a very similar way as Bitcoin, it is much easier for third-parties such as exchanges, websites, and wallets (Jaxx, Exodus, Ledger Wallet, etc.) to integrate. They do not need to go out of their way and spend many dev hours without knowing if it will be economically worth it to integrate that coin. The best example I could find concerning this, in particular, is the case of Monero and Jaxx. Jaxx is a well-known multi-cryptocurrency wallet and they tried to integrate Monero earlier this year. After trying to add the coin to their wallet, they announced they would finally not do it because it was too complicated and they didn’t feel the amount of dev time required for this project would be worth it. This would not happen with MOIN as the BTC codebase is what everybody is used to working with and can integrate it without much effort.
This public token is also very useful for people who do not necessarily require a permanently anonymous experience. Fully-anonymous currencies can sometimes hinder one’s ability to effectively keep track of financial records and transactions. Some services ask for extra information (i.e. a payment ID for Monero) in order for a transaction to be accepted and there are many situations where one could forget to note that transaction ID down or lose it afterward. There’s also a lot of scenarios where one would need to go back several months into the past to see specific transaction details. In most cases, it is simply harder to keep track of things with fully private coins so having one that does possess great accountability tools is definitively a plus.
On top of this, a transaction using any privacy coin is generally going to cost more in fees than a public transaction on a non-bloated BTC codebase currency as it typically involves more data movement and computation. A “public user”, one that does not necessarily want to be anonymous, should not have to pay for privacy features he does not need. By making the public token the default coin, this ensures that only users seeking privacy options will use the privacy token, while the public users (which will probably end up being the majority of MOIN users if the platform becomes mainstream) default to the public token. This also has the non-negligible effect of putting less stress on the network (as public transactions are more lightweight and do not fill blocks as much as private ones), keeping the network efficient.
MOIN’s private token has a variable degree of privacy which can be adjusted by users according to their preferences. In fact, when making a private transaction, it will be possible to send it using Confidential Transactions or RingCT (which is a blend of ring signatures and Confidential Transactions). It is noteworthy to mention that this is the first time both these protocols are being implemented on the Bitcoin codebase. While a few coins use Confidential Transactions as their privacy protocol, only one uses an implementation of RingCT on their main net: Monero.
Confidential Transactions, or CT, is a privacy protocol initially developed for Bitcoin that hides amounts sent from the public and makes it visible only to parties involved in the actual transaction. While it is very efficient to obfuscate most regular person-to-person transactions, its most interesting use case is when used in a marketplace decentralized escrow system. If the market’s escrow system worked using the public token, it would be trivial for determined attackers to detect patterns in the public escrow contracts and match them to potential users. On a long enough timeline, users could be identified with particular marketplace orders with a high degree of certainty. With the help of Confidential Transactions, this cuts off this attack vector and makes the escrow system fully anonymous.
RingCT, on the other side, is an even better privacy protocol combining ring signatures to the aforementioned confidential transaction protocol. Applied on double stealth addresses, not only transaction amounts are hidden but the sender and receiver addresses as well, making RingCT transactions completely untraceable. One useful feature of the MOIN wallet is that users are actually presented with the option to choose the privacy protocol they want to use according to their needs. Public transfer has good privacy protocol for basic privacy, but RingCT is even better as it makes transactions unlinkable. However, the latter is much more expensive in fees than the first one, and people who do not require a “paranoid” level of privacy may not want to pay larger fees.
In my subjective opinion, MOIN will offer the best privacy experience on the market as it is very flexible but makes no compromise. RingCT is considered top-of-the-line technology and it simply works fantastically in preserving one’s privacy. Some could argue that ZK-SNARKS offers a better solution, and that is rightfully debatable. They do offer an interesting privacy solution, but they do have their share of problems and vulnerabilities as mentioned above. Centralized coin mixers are obviously not to be trusted as there is no way to know the legitimacy of the website owner, and coinjoin services are demonstrably weak and exploitable by determined adversaries.
The hidden inflation problem is also one of the reasons why I believe MOIN, with its dual token system, has a “safer” (and easier to integrate) implementation of RingCT than Monero. Don’t get me wrong, there are good arguments people could make about Monero having the better integration. For example, RingCT being mandatory and by default on all transactions makes it impossible to make a basic human mistake (they do happen), but it also makes Monero a more expensive currency to use and a blockchain less likely to be able to support a huge influx of users (as transactions are heavy and would bloat the blockchain faster). This is the kind of debate where both sides have pros and cons, so I will let you make your own conclusion on this topic.
Also related to MOIN’s privacy but not its private coin, it is possible to route the wallet’s connection through TOR in order to keep your node IP address private. This is absolutely needed if you want a secure staking setup (unless you used OpenVPN with solid network rules) as broadcasting the real IP address of a staking node to the world is asking for trouble.
Another sweet feature of the blockchain is that it has a native implementation of Segwit, which I believe is a first in crypto. One small inconvenience with blockchain projects forking their chain to add Segwit is that witness blocks aren’t compatible with blocks prior to the fork. While this is not a critical problem, it sure makes things smoother and easier to have a fully compatible Segwit implementation.
Having segregated witness on MOIN gives its blockchain a couple of interesting features. Among many of these, some notable ones are the Lightning Network, transaction malleability vulnerability fixes, and block capacity/size increase.
Lightning Network is a payment channel protocol first proposed by Joseph Poon and Tadge Dryja and now scheduled for implementation on Bitcoin as well as some altcoins such as Vertcoin. LN gives interesting features to whatever coin decides to implement it such as reduced transaction fees, increased transaction speed, better privacy, and atomic swaps.
As it is becoming more and more likely as time goes by that the Lightning Network will be implemented in various different coins, its atomic swap feature is getting more relevant. Atomic swapping is the ability of an LN-enabled blockchain to be made inter-operable through multi-signature addresses and time-locks with many other LN-enabled blockchains in order to allow trust-less coin exchange between two parties (i.e. Alice can trade 100 LTC to Bob for 1 BTC in a 100% decentralized and counterparty-free fashion). This could even be used to create decentralized multi-coin payment processors or exchanges, effectively spawning a brand new and potentially breakthrough LN-focused ecosystem in which MOIN could be part of. It also seems plausible that the MOIN platform would eventually leverage this feature to allow trust-less currency exchange on its marketplace as well as other Dapps, effectively replacing Shapeshift with a cheaper and decentralized alternative, even though the team hasn’t made any statement on the matter.*
submitted by pandavr to Moin [link] [comments]

Are G. Andrew Stone and Roger Ver actually against fungibility in BTC?

Bitcoin's awaited privacy upgrade requires Schnorr signatures, which cannot be implemented into bitcoin without SegWit.
More about Schnorr sigs for fungibility via Bitcoin Magazine:
With the impending release of Segregated Witness, implementation of the Schnorr cryptographic signature algorithm might follow soon after, potentially improving Bitcoin's scalability, efficiency and privacy, all in one go.
Many cryptographers consider Schnorr signatures the best in the field, as they offer a strong level of correctness, do not suffer from malleability, are relatively fast to verify, and ‒ importantly ‒ support multisignature: several signatures can be aggregated into a single, new signature.
However, until now it has not been possible to utilize Schnorr in Bitcoin. Another type of signature scheme, Elliptic Curve Digital Signature Algorithm (ECDSA), is baked into the Bitcoin protocol, and changing that would require a hard fork.
That's where Segregated Witness comes in.
With Segregated Witness, all signature data is moved to a separate part of the transaction: the witness, which is not embedded in the “old” Bitcoin protocol. And thanks to script versioning, almost any rule applied in the witness can be changed through a soft fork. Including the type of signature scheme used.
Both Roger Ver and Andrew Stone seem to be anti-segwit for inexplicable reasons. BU supporters seem to think SegWit is favorable, but only as a hard fork - an argument that I don't think is smart and is quite frankly disingenuous. If anything it seems they simply object to it because Core developers designed and implemented it (the responsible way IMO, as a soft-fork).
Why does Andrew Stone largely dismiss the desire for segwit integration into BU? He claims there's too much "technical debt" w/ SegWit @~ 52 minutes into the interview; example given is a ridiculous cop-out. He also claims "if we're going to do a hardfork anyway, why not take SegWit and make it into a hard fork?" as an argument against Core's implementation, yet his software is the software that is actually set to hard-fork, yet he hasn't ported SegWit in to activate when/if his miner-controlled blocksize hard-fork activates! At least he encourages everyone that's not a sock-puppet and can demonstrate that to register on their forum to propose any changes they want to BU which will be voted up or down by the members. Whether your membership will be rejected outright if you have voiced any pro-core opinions or not is an open question.
On to Ver. Why has Roger Ver chosen a demonstrably anti-segwit approach (despite his politically safe, but practically meaningless rhetoric about not blocking SegWit), even though I have yet to find a single retail/wallet/actual-nonminer-btc-adoption-entity that is against the SegWit approach? It enables so many pro-fungibility features in the future that it seems to me to be a no-brainer to activate. My suspicion about Ver is that he's hedging his bets with massive investments in altcoins with better anonymity features anyway, such as ZCash, Monero and DASH, so even if Bitcoin fails or falters due to fungibility issues, his anon-coin investments will offset his BTC losses.
What do you think?
submitted by burnitdownforwhat to Bitcoin [link] [comments]

[Index] Scaling Conference Overview: Day 1

Conference Topic \ Speaker \ Time Link
Privacy \ Fungibility
Scalability
Smart Contracts
Proof of Work
submitted by KarmaNote to Bitcoin [link] [comments]

PART 1: Summary (transcript) of Wednesday's AMA given by the Particl Team - Thank you to all who participated!

Below is a summary (PART 1) of our AMA held Wednesday, 2017.06.28. Thank you for everyone who participated!
Please refer to /Particl/wiki/faq for our maintained collection of questions. We ask you make sure your question hasn't already been answered before submitting. Thank you.

QUESTIONS:

Where are we as far as the mainnet release?

we are waiting for Particl foundation to be approved. Paperwork is in Swiss regulator's hands and we're waiting for them to approve so they can oversee us create PART tokens and distribute PART tokens

Did they say anything as far as when they will approve like an approximate date or just when they get to it?

once foundation is formed we'll use a couple days to do final prep for mainnet setup and then release the clients, source and tokens

and you guys are 100% sure they will approve and is just a matter or time?? Are you guys sure of the Swiss foundation approval, that they will approve?

our legal counsel is Swiss based and have been through this process before so we're trusting they have all the right docs to get the job done. We were only told it takes 2 weeks to receive the answer once they have paperwork

Since Micah seems not to be present, is he still part of the team?

micah is still a member of the team as an adviser. he has and will continue to contribute to the Particl project. On top of that, his fiance just said yes, so he's pretty busy

Can I ask how much did you guys raise and currently holdings you have (mainly asking if you have enough for years to come) ?

the team has raised 591 btc and roughly 250k particl. this will last the team for an expected 9 months, which is more than what we need to come up with a working marketplace. there will be a 2nd crowdfunding early next year and we will be expecting particl to be self funding after that.

What is particl

to put it simply, Particl will be an anonymous, crypto-agnostic marketplace. this will be a self-governed decentralized system

Hey Particl team, can you comment on whether or not the fact that it's taking the Swiss Regulator so long to approve has anything to do with any problems that have surfaced, and if so, what those problems are, or is it typical for it to take this long?

I know Zug is getting bombarded with cryptocurrency startups.

Hi there team at Particl, will the GUI be released alongside mainnet?

we have started testing the GUI internally. There will be a testnet with the GUI prior to mainnet

Who do you see as your biggest competitor in blockchain and in traditional sense of the way atm?

there have been markets around for a while. We are focusing on anonymity and decentralized governance.
Particl in it's current state is a privacy platform, so we would be in competition with privacy coins. We are testing Confidential Transactions and RingCT on our TESTNET3 atm. Monero is the only other currency using RingCT and only a view others are using CT. Particl is the first to use this tech on Bitcoin codebase. We also have a decentralized voting mechanism so projects like Decred who are excelling at governance are projects we would also be similar too.
Once our market is out we'd have competition from other decentralized marketplaces like bitbay, OpenBazaar, Syscoin's blockmarket and a couple ethereum projects in early phases of development. We'd also be competing against ecommerce sites on clearnet that are strictly centralized models.
The cool thing with the market is it'll be crypto-agnostic so no crypto would be competition. OB also will offer a crypto-agnostic market and I don't recall if Syscoin's does at this time.

So if it's crypto agnostic where does the value of PART come from?

what's good about particl is that buyers can pay in whatever coin they want, provided it's available in shapeshift. it will automatically be converted to particl. it will be the receiver's choice to sell, hold or stake particl

When can we expect a working beta of the marketplace? Is the team focused on developing a mobile app version that can do staking on a mobile platform as well?

In terms of our timeline, we anticpate the beta to be out mid October, that's without the reputation system.
we intend to have the reputation system in place towards the end of October, at the same time we will have the protocols and codebase audited

Long time supporter for Shadowcash/Particl since the early days. The biggest gripe I have with the transparency and delays between the team and the community/supporters/investors. This has stemmed from the Shadowcash days - do you have any plans to change the way you address any delays? NB. Nothing against your team, I love the work produced - as a long term supporter I would like to see a company take a more proactive approach to issues that have stemmed in the past and not release hype/release dates until 100% certain.

as you can probably see on twitter, blogs, 3rd party media etc, we are actively informing the community about the status of particl. good or bad. you can see this on https://particl.news

Can you explain your exchange mechanism somewhat? What exactly takes place in the background? Explain the client server side of that token being exchanged to the customer receiving that different coin

what we want for particl marketplace to be is a seamless system where buyer doesn't even know he's buying particl to transact. this will be beneficial to normal users who are not familiar with crypto

Any plans to integrate fiat gateway? I don´t see how particl can go mainstream without this feature!

yes there is a plan. there are ideas but not limited to coordinating with companies like changelly, so buyers can use credit cards. but priority is still the marketplace

will Particl team implant feature similiar to delegatation (dPoS) in order for small staker to vote on propsoal without setting a node? I quite like the delegate feature in ARK. Will Particl team implant feature similiar to delegatation (dPoS) in order for small staker to vote for their delegate on propsoal without setting a node?

currently there is no plan on changing the PoS structure. I agree dPoS has their upsides, but for the product that particl is setting up, PoS is the perfect choice currenctly

Hi there, long-term supporter. I bought SDC back in February of 2015 and have been following the project closely the whole time. One thing I have a problem with is that you have announced the marketplace launch a number of times. For the first half of 2015 you continually said that it would be ready by the end of the year, then the same message was communicated in 2016. The constant missed deadlines have caused me concern, and now I'm still not sure what to believe about the market launch. So why now should we believe in the October date?

back then we barely had a functioning team. In 2015 the SDC team pretty much fell apart. Funding dried up and there was no real teamwork.. People work working on what they wanted to work on, and there were constantly issues arising that would take priority over the MP. Particl has a team now, as well as funding, a project manager, and we are busy growing.
there have been governance issues that have arisen that have delayed the project but now there is a dedicated team of 15 people of which 10 are working full time

How will you approach sellers to use particl market?

there are a lot of upsides for sellers to use particl market. less paper works, tax breaks (depending on location), more security for seller, not to mention cheaper. we will approach them on more than 1 way. 1 st priority however will be existing crypto sellers

what do you mean with "existing crypto sellers" as your 1st priority?

sorry, let me clarify. currently, there are a lot of existing sellers who are also sellers on amazon/ebay etc, also people capitalizing on selling crypto merchandize, these will be our initial users and we'll work on that growth

thanks for clarifying, that makes sense. Will there be any mechanisms in place to ensure that no illegal products are sold?

yes, we will put in a governance model where stakers can vote whether they are ok with putting a product in. as there are grey areas for products, this will be based on votes

Will you guys release with ringCT due October?

ringCT is currently in testnet 3

Will the marketplace allow the ability to create a private market that would require either registration or invitation?

will users be able to create a 'private market' or is everything 100% public? Yes there will be support for Private Markets

thanks! Has this feature been fully fleshed-out in terms of development? Like will there be an integrated invitation system or ability to create user credential authentication information? And also, will the private market be subject to its own separate governance?

conceptually it is not much different to the public market other than the key to access the private channel is a secret and shared by the creator with those he wishes to invite .. there will be no governance on the private market as its impossible to govern something you cannot access
particl platform itself is a private marketplace. no one will be able to know what anyone buys/sells, thanks to the CT, RingCT features and encrypted msgs

so the answer is no? People won't be able to create sub-markets within the main marketplace? like with authentication restriction

yes

What will be the main differences between the Part wallet and the old Umbra?

Particl is being built on the bitcoin core 0.14 codebase. We are building the GUI from the ground up, using Angular (2), and electron. Umbra used QtWebkit, and native html5 + jquery. The UI is new, as well as a way healthier backend inherited from bitcoin core
The main difference is codebase. Umbra was built on bitcoin .08. Particl is built on bitcoin .14. So we'll have native segwit, malleability fixes, increased security, bip65, lightning network readiness.
The privacy is increased as well. Umbra used ring-sigs and Particl is using Confidential Transactions and is testing RingCT.

Is Crz here with a different username? if not can you guys tell us how the GUI of Part is going? What is he working on now?

here is a link to their GitHub, you can see the progress: https://github.com/particl/partgui
crz is working on the GUI wireframes still, as well as the new website design. He will be helping out with the GUI as soon as he is finished with his current tasks, to give it some polish

Will their be a 3rd party Audit for RingCT feature before forking it, and do you have an idea how much time this audit could take?

Yes, definitely. It was one of our funding milestones and it'll be around 3 months to audit and correct major bugs. TESTNET3 currently has RingCT on it but we'll probably remove it for TESTNET4 because it's so raw and we're focusing on mainnet.

When's Particl expected to reach exchanges?

we are in ongoing conversations with majority of the exchanges, in an ideal scenario we would be listed on launch date, this is a work in progress and has been given priority by team
we are waiting for foundation to be finalized first before we can release the mainnet, then exchange. same as other coins, it has to be the exchange's discretion when to add a coin, but we have already communicated with numerous exchanges to list this, and we are seeing positive replies

Do you guys have an idea of when the new website will be released? which Domain will it be Particle.io still or what?

We’re working on it right now. It’ll be https://particl.io

In June 1st - blog update - you told us there was 3 new faces who joined to the team. Can you reveal who they are? What's their background?

Our new members are:

Will mainet be released with implemented ringct?

Original mainnet (this first one) won't have ringct. We'll need to audit the code first jeffjam so it'll be on testnet for a while before going live. we haven't contracted any party yet to do this. I'd imagine a 3 month window to audit is to be expected jeffjam Will mainet be released with implemented ringct?

It seems the business side of particl (picking up more clients, instead of customers to use the service) is moving faster then the developers. Any explanation on this?

by saying clients, do you mean contributors? if so, this is exactly what we expect, as this indicates speculations. same with other successful projects
our dev team is working full steam ahead and making sure we are testing properly. We are in the final stages of the GUI development. The Blockchain and daemon are working and in public testing.

So do you blame the advertising side of particl, for these announcements, or does the finger point mostly toward the developers for not meeting there timeline? What is causing the team to not work insync (as one) What improvements or changes have been made in this area?

i think it's a product of the fast paced crypto ecosystem. when people's money is on the line, deadlines and firm dates are expected and we want to be as transparent as possible so we try to accomadate, but roadbumps happen and deadlines sometimes get pushed
there certainly are challenges we are expecting like any other team/company, but we believe we are working better than an average team. now that the team is well funded, we can expect faster project and more deadlines to be met. as a matter of fact, the team has already contributed more that 100k lines on github
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