Magical Crypto Conference Highlights, Day 1: Lightning & Big Brother

The first day of Magical Crypto Conference had a lot of highlights ranging from great announcements and great talks, to borderline bizarre displays of eccentricity. When was the last time anyone went to a Bitcoin event and saw a real bull next to the entrance? Or when did any conference organizer create a custom arcade machine that runs an original video game for which you pay with Lightning instead of quarters? Even Riccardo “Fluffy Pony” Spagni has showed up with a remote-controlled quasi-robotic body (described by Max Keiser as “screen on wheels”) with whom you can interact through a tablet. When was the last time an event host, co-founder and sponsor has pulled off such a strange antic?

Well, when you have immutable Bitcoin-centric discussions and accomplished developers and industry leaders attend a conference which revolves around a meme-able My Little Pony-esque characters and their YouTube show, then you know you should be expecting peculiar phenomena. First of all, it’s worth noting that the first animated cartoon short of Magical Crypto Friends has finally premiered during the event’s kickoff presentation, and it pretty much aligns with the toxicity and Blockstream spy-ness of the regular show.

Secondly, the crowd has received many exclusive announcements which include a Lightning-oriented October conference taking place in Berlin, a partnership between the Blockstream Satellite system and GoTenna’s TX Tenna, and a HTC phone which runs a full Bitcoin node. News about a Lamborghini give-away (which might turn out to become Justin Sun-esque) and a live Magical Crypto episode have also emerged, so stay tuned for a more in-depth coverage.

Magical Crypto Conference Highlight #1: The first Magical Crypto Friends cartoon

Titled “Fake Panda”, the 3-minute clip revolves around a theme of identity theft, megalomania, and possibly fraud. It’s basically about a kangaroo who walks into the Magical Crypto Friends’ house and pretends to be Whale Panda while freeloading on food. After the anthropomorphic friends agree that the impersonator is a fraud, they kick him out – but not before they find out that they’re speaking to a “mathematician, cryptographer, computer scientist, proctologist, and lawyer” who has more food than their entire country, drives a rented Lamborghini, and threatens to release research papers.

The script is witty, the animation is on par with the Magical Crypto intro, and the kangaroo is a character to contrast the otherwise innocent protagonists. However, the audio quality is inconsistent between MCF members, and you can actually tell which ones of them are into audio gears (cough cough, Fluffy Pony cough cough) and which ones most likely used a built-in microphone which pops (cough cough, Satoshi Lite).

Nonetheless, it’s great to finally see this long-time promise being delivered, and it’s always nice to hear more of the satirical work of the four bitcoiners.

Magical Crypto Conference Highlight #2: The first Lightning-oriented conference happens this fall in Berlin

During the first post-intro panel, Elizabeth Stark has been absolutely ecstatic and delighted about everything about the Lightning Network. As the head of Lightning Labs, she’s living the dream of every company creator and software developer: real steady adoption. The LN queen has taken her time to talk about all the lApps (Lightning Apps) that currently enrich the ecosystem with unique and inventive functions.

From ordering pizzas to feeding chicken and paying for the pages of a fiction book, Ms. Stark has mentioned lots of great projects and their applications. She even recommended the website LND work as a way of earning satoshis on the second layer scaling solution, so that participants all over the world can onboard the movement without worrying about financial discrepancies in terms of buying power.

However, Elizabeth Stark has also made an exclusive announcement regarding the first big Lightning Newtork conference. It will take place in Berlin later this year between October 19th and the 20th, and will create an assembly of developers, designers, Lightning companies, and users. As pointed out by co-panelist Stacy Herbert, the number of LN channels is astounding, and there are currently 1057 BTC supporting the recklessness of early adopters. Therefore, a conference dedicated to these enthusiasts is nothing short of exciting.

Magical Crypto Conference Highlight #3: HTC’s Phil Chen announces Bitcoin full node phone

Running a full node has become an essential component of Bitcoin’s decentralization model, and definitely a prerequisite of financial sovereignty. Given this demand for nodes, the high price of several retail solutions, and the rather unfriendly interface of Bitcoin Core, there is a lot of room for tech companies to step in and build great and affordable user experiences.

Phil Chen has made a presentation in which the leitmotif is owning your own keys: from the very first Android smartphone which the company released in 2008 and all the way to their current Exodus line-up, there has always been a strong emphasis on open source software. The first major announcement made by Mr. Chen is about the Zion hardware wallet vault technology, and how the code is going to get released for developers worldwide.

Furthermore, a new entry-level phone called HTC Exodus 1S is going to get launched in the third quarter of 2019. Both the S and the previous model will receive a significant software update which enables users to store the entire BTC blockchain and validate their own transactions.

“The whole Bitcoin blockchain will be on an SD card, you’ll be able to validate transactions, relay transactions when your phone is plugged in. Of course, there are more requirements regarding bandwitdh and power, and we will release more details during Q3” – Phil Chen

MCF Conference Highlight #4: Lightning Network’s present and future

While discussing the present and future of Lightning in a joint panel, Lisa Neigut, Alex Bosworth, and Will O’Beirne have put a really strong emphasis on the microtransaction potential of the network. At the same time, they debated on the cypherpunk ethos and what it really means to enable financial privacy.

Nonetheless, the strongest statement came from Ms. Neigut, as she called for the end of the ad-based revenue system which is often untransparent, dishonest, and inconvenient to the end user. Since a currency of the internet exists and is decentralized enough, while a second layer which enables instant transactions is truly blossoming, it makes a lot of sense for Lightning microtransactions to empower both users and content creators. Instead of paying for obsolete subscriptions or watching undesired ads on the considerations of a mutual compromise, now the consumers possess the power of paying small monetary amounts that should cover production costs in a fair way.

Alex Bosworth’s website Y’alls is a perfect example of this revenue model, and it’s likely that we’ll see more of this approach as the technology gets adopted at a larger scale and matures in terms of development. It will definitely be interesting to see to which extent the prophecy of Lisa Neigut gets fulfilled.

MCF Conference Highlight #5: Bitcoin without internet panel, as GoTenna partners with Blockstream for satellite communication

When you put together Proof of Work inventor Adam Back, computer scientist Rodolfo Novak, GoTenna mesh researcher Richard Myers, then have academic and engineer Elaine Ou moderate the panel, you’re guaranteed to have insightful discussions. And when the topic of choice revolves around Bitcoin’s survival outside the global network of computers where it has been given birth, then you better pay close attention and make use of all of your technical knowledge of blockchains and radio communications.

Though the individual presentations of the panelists have been impressive and reflected the staggering amount of time they spent doing empirical research, it wasn’t until they got together that it became truly magical. First of all, something newsworthy happened when Richard Myers started promoting the TxTenna project, which is meant to combat censorship through a system of GoTenna devices that get connected to the Blockstream Satellite. Just in case it wasn’t obvious, this is a partnership between the two entities, and it’s meant to produce yet another way of circumventing internet limitations. In relation to this collaboration, Adam Back has stated “I particularly like the way they integrated the Blockstream Satellite API”, thus prompting to

Secondly, it’s worth noting that the discussions aren’t simply based on hypotheses of governments shutting down the internet and are actually rooted in experiences observed throughout time in authoritarian states. Sure, the idea of doing commerce from your cabin in the woods with a mesh sounds like one of the only applications for offline Bitcoin transactions, yet there is no way to predict how Orwellian our future becomes and we currently have cases where the internet is heavily filtered and the financial sovereignty of citizens is almost impossible.

This segment is definitely a must-watch, as the questions of panel moderator Elaine Ou are direct, brutal, and somewhat challenging even for the knowledgeable panelists. It isn’t simply a matter of cool tech, but something that can change the lives of millions and may maintain the democratic framework in the face of a growing digital authoritarianism.

Magical Crypto Conference Highlight #6: Bitcoin vs Big Brother by Alex Gladstein

Human Rights Foundation CSO Alex Gladstein has really stolen the show with his presentation, and the fact that he was placed after the panel on Bitcoin without internet has only strengthened the message. From China’s social score system and all the way to the abusive data collection by tech companies, everything felt comprehensive, relevant, and rooted in real-world issues.

When Bitcoin was finally introduced as an alternative to all the censorship and digital oppression, it was like putting the smile on Gioconda’s face. It all came together really nicely, and it painted Satoshi’s invention in a positive way which transcends all the “currency for terrorists, tax evaders, and drug dealers” narrative that some politicians and media channels like to present.

Alex Gladstein’s presentation was also the least technical one in terms of engineering knowledge required to understand the topic at stake. Everyone and their mother should be able to easily digest the information and understand how their choices as consumers influence the dynamics of the internet business, how their governments might be purchasing surveillance technology from China, and why Bitcoin is very relevant in this debate. While it’s legitimate to blame the US government for irresponsibly printing money and devaluing their currency, this situation is sometimes the most convenient among other evils which deprive individuals of their human rights and liberties.

Magical Crypto Conference Highlight #7: The live MCF episode

A year ago, the four anthropomorphic animals have tried to do their seventh episode live at Consensus. They were given a small dark room, the sound setting was terrible, and the end result was disappointing for everyone trying to watch the livestream. Twelve episodes later, the quartet is able to do a proper show with a larger live audience, and great quality for both audio and video.

The only missing factor is Fluffy Pony’s physical absence, as he was replaced by a tablet on a tripod with remote-controlled wheels. It felt a lot like S16 E12 of South Park, “A Nightmare on FaceTime“, where Stan Marsh couldn’t go trick or treating with his friends on Halloween night and had to make use of an iPad to collect candy.

This nineteenth episode also marked the launch of a Magical Crypto Friends-themed puzzle mobile game for kids, and the MagicalCryptoFriends.com website. Samson Mow took advantage of the opportunity to “shill” the space strategy video game on which his company Pixelmatic is working with developers from Age of Empires and Homeworld.

In terms of actual discussions, the topics revolved around the Binance hack and all the blockchain reorg mania that their CEO had started, and Bitcoin attack vectors. At one point, Whale Panda tried to shift attention towards negative tweets about the conference, but thankfully the episode moved on to questions from the audience.

Participants inquired about the reasons behind the ongoing price pump (and the best reply involved the actual bull which the organizers brought for entertainment and barbecue), the potential interactions between Blockstream’s Liquid sidechain and the Lightning Network, Litecoin’s development, blockchain gaming, cross-chain atomic swaps for Monero, Hodlonaut’s disappearance, Litecoin’s use case, fears about Bitcoin’s exuberance, predictions on upcoming US regulations, NANO, methodology for BTC price estimation in relation to development, and the Flood XMR paper. For more details, you may watch the full episode:

 

Image: South Park Studios

 

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Preview: Magical Crypto Conference 2019

Magical Crypto Conference 2019 (because yes, the strength of the line-up suggests that there will definitely be follow-ups) is one of those peculiar phenomena that can only happen in a place as weird and norm-defying as Bitcoin’s. Not only that it follows the “we can do it better” philosophy that’s responsible for all the technological innovation that we’re witnessing on a daily basis (the idea sparked after attending the rather disappointing Consensus 2018), but it also turns a meme which emerged during the UASF era into a celebration of everything great about cryptocurrencies.

It’s just as unlikely as Dogecoin sponsoring the Jamaican bobsled team during the 2014 Winter Olympics, but definitely more productive in intellectual terms: the event allows the brightest minds in the field to get together and exchange experiences, but also empowers an extended audience (that can watch the panel discussions for free on livestream) with precious information.

In its earliest phase, Magical Crypto Friends was torn between defending Bitcoin from the proponents of the New York Agreement and providing clarity on the relentless stream of events taking place during the escalation of the raging 2017 bull market. The show first aired in a time when fraudulent projects were trying to ride the hype wave, and the choice between fundamentals and remarkable pumps seemed less obvious. Bitcoin was losing dominance due to new investments being made in questionable projects, Monero was being dismissed by the marketing departments of arguably weaker privacy coins like Verge, and Litecoin was being called obsolete and slow by forks with fragile security but quicker block times. It was then that the four anthropomorphic animals Charlie “Chikun” Lee, Riccardo “Fluffy Pony” Spagni, Whale Panda, and Samson “Excellion” Mow decided to get together

Ironically, Magical Crypto Conference returns to the same place where the SegWit2X project was formally given birth, but poses as the victor of the ideological confrontation between big blockers and second layer proponents. Furthermore, it should be noted that the speakers reflect, in an overwhelming majority, the Lightning-friendly side of the debate. Maybe it would have been useful to have more diverging discussions on the direction of Bitcoin, but the battle between chains is still ongoing, some wounds are still open, and people like Peter Todd and Andrew Poelstra can always be critical on the limitations that have to be tackled by developers and businesses alike.

Magical Crypto Conference 2019 in 4 facts

1. In the true spirit of collectibles and their potential to gain economic value in time if a certain threshold of demand is met, this first edition of the Magical Crypto Conference is filled with limited edition items. First of all, all participants will receive a silver-plated copper coin with a hologram which reveals private keys for tokens on the Liquid Network. Secondly, a random MCF doll will get added to every swag bah. Those who paid for VIP tickets will receive all four versions of the coin (which depict each member of the Magical Crypto Friends assembly) and every doll model.

2. Magical Crypto Conference 2019 will also feature a live new episode of the MCF show, as well as the first animated short involving the four anthropomorphic friends. The idea of a cartoon has been around since day one, but the strive for perfectionism and willingness to make the content really count has delayed the production and launch up until the moment when it all comes together. At this point it’s unclear how the live episode and the airing of the animation will be scheduled, but the hype is there for all fans of the show and everything is going to get livestreamed.

3. You probably won’t find the same kind of qualified, knowledgeable, influential, and high-profile speakers in any other conference which contains the word “Crypto” in its title. Given the line-up, it will probably be very difficult for the organizers themselves to replicate the success of this first edition.

4. Speaking of YouTube livestreams, it’s worth mentioning that the links have already been set up for both conference days and the exclusive live episode. At press time, the beginning of the event is about 24 hours away, but it’s admirable and remarkable to see that everything is ready for the lesser fortunate ones who couldn’t fly to New York or simply need to work. If you would like to watch the panels while you’re at home or at the office, you may use the links below.

Day 1, Lightning Network and Bitcoin without internet

Day 2, Privacy and Protocol Development

Magical Crypto Friends Live Episode

Crypto Insider at MCC 2019

Crypto Insider will participate the event as one of the media partners and offer unnique coverage on the panel talks and other various events taking place within the premises of the conference. We’ll be looking to get exclusive interviews and write in-depth analyses of the hottest topics being discussed, so stay tuned for more news about Magical Crypto Conference 2019!

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Litecoin reduces transaction fees by 10x

On May 7th 2019, a blog post of the Litecoin.org project has announced the release of a new client software version: Litecoin Core v0.17.1. The update brings slight user interface changes, a new wallet format, extended privacy features, and a significant network fee policy change which effectively reduces the minimum transaction cost from 0.001 LTC/kb (the default value of the previous client) to 0.0001 LTC/kb.

This is great news for both Keynesians who want to spend their coins, and Lightning enthusiasts who want to onboard the second layer at a fraction of the Bitcoin cost. However, according to data provided by Bitinfocharts, Charlie Lee’s coin has never really faced a lot of demand for block space: the busiest day was December 20th 2017, and the average fee was around $1.5. After the phenomenal bull run has passed, the transaction costs have returned to a price ranging from one to four cents.

Litecoin Core 0.17.1, lower fees, and the Lightning Network

As soon as the 0.17.1 Litecoin Core update gets adopted by a majority of nodes, even writing your transaction in a full block cost as little as $0.15 (ten times lower than the bull run amount). This means that under regular conditions of low demand, the average fee will be lower than a cent. In terms of opening a Lightning Network channel, this is exactly what is needed to increase adoption and tackle the criticism of costs, as Atomic Swaps from LTC to BTC become possible.

In a nutshell, instead of opening a Bitcoin channel and paying the higher fee, you can go for Litecoin. As soon as you’ve joined the Network, you will be able to exchange your LTC for BTC and benefit from all the merchant adoption and network effect. This also means that there will be a lot more going on for Litecoin, to keep up with the latest developments.

More privacy for Litecoin

Also part of the Litecoin Core 0.17.1 update is the coin selection feature which enables greater privacy for user UTXOs. Furthermore, support for partially signed transactions has been added in order to “simplify workflows where multiple parties need to cooperate to produce a transaction”. This inclusion, which is an adaptation of Andrew Chow’s 2017 BIP 174, is meant to enable greater functionality for hardware wallets, multisig setups, and CoinJoin transactions.

As announced in January 2019, Litecoin has set a greater goal to attain fungibility and privacy. Part of this quest is the addition Confidential Transactions, and the solution of choice seems to be that of creating extension blocks through the Beam MimbleWimble implementation.

While the Core 0.17.1 update doesn’t swerve the protocol in this direction, it opens up the door for some tricks and fixes that will definitely improve the privacy. Furthermore, it’s going to be interesting to see to which extent the Litecoin developers are interested in forking a CoinJoin wallet such as Wasabi and allow LTC users to mix their coins. Definitely, this solution is no substitute for Confidential Transactions, but it can be a great tool for privacy nonetheless.

The economics of low fees for Litecoin

The main reason why Litecoin affords to take this risk of lowering the miner reward for writing transactions into blocks is that the creation of Charlie Lee is the leader of its mining algorithm and has no serious competition. Therefore, miners can’t really rebel and switch to something else that they might find more profitable (such as Digibyte and Dogecoin).

However, it’s very likely that this protocol change has been negotiated in advance and the financial considerations regard greater adoption and resulting economies of scale. The fee market is still in its early phase, and miners are still making most of the profits from the rewards given for discovering new blocks.

If more merchants accept Litecoin as a mean of payment and more people open LTC Lightning Channels, then there will be significant gains for those who secure the network. Furthermore, if Litecoin earns a reputation for being the major cryptocurrency with the lowest on-chain fees which also offers a gateway to the Lightning Network, then there will be much more enthusiasm surrounding digital silver.

Traders willing to get on exchanges greatly benefit from the lowered fees (especially during bull markets), Lightning enthusiasts will definitely prefer to experiment with the cheaper way of onboarding the Network, and everyday users who make transactions will love the cost reduction. It’s a win-win-win situation in a competitive environment where Bitcoin forks like BCH and BSV constantly market their low fees. Furthermore, since Litecoin is loyal to the king and actively supports it, this is good news for BTC and Lightning.

Crypto Insider has contacted Litecoin Core developer thrasher in order to comment on the changes brought by the fee reduction. His reply was the following:

The rationale was that the team and I decided that we wanted to make transaction fees cheaper for everyday use. Miners will still earn coins from the block reward, despite a reduction in the fees they collect. There always needs to be a balancing of fees, otherwise the network is at risk of getting spammed. At the same time, we also want to make it cheap enough so users don’t pay anything excessive for regular transactions or for participation in the Lightning Network. We hope to spur more adoption as time goes by.

 

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Binance no longer #safu: Hackers steal 7000 BTC

On May 7th 2019, Binance has announced the identification of a security breach which led to the withdrawal of 7000 bitcoins. According to the official blog post, the hackers have been able to obtain “API keys, 2FA codes, and potentially other info”. This marks the first time when the exchange gets hacked, and sets a precedent in terms of public relations and trust.

More specifically, the news about the incident broke from official sources, and it was after a scheduled maintenance that the information was made public by both the Binance blog and the exchange’s CEO Changpeng “CZ” Zhao.

About two hours later after this seemingly self-assuring post, it was revealed that 2% of the “hot wallet” BTC holdings have been stolen. It turned out that 7000 bitcoins were not as #safu (a meme-able jargon for “safe”) as initially expected. Yet as a way of making the situation transparent and possibly regain the trust of traders and investors, the malevolent transaction has been made public for everyone to see. You may view it on the Blockchain.info block explorer by clicking this link.

Details about the Binance hacking and its aftermath. Are funds still #safu?

According to the blog post, the hackers have used multiple accounts in order to orchestrate a well-timed attack which passed the security checks without being blocked, but rang the alarm nonetheless. Consequently, a thorough investigation will be made by the exchange’s security experts, and it’s estimated that Binance will not allow deposits and withdrawals for an entire week. On the other hand, internal trades between various cryptocurrencies will go on as usual.

In spite of this attack, CEO Changpeng “CZ” Zhao is committed to be transparent, reveal every step of the investigation, and even carry on with the scheduled Twitter AMA (Ask me anything).

Binance also promised that the #safu fund will cover the incident in full, so that no user balances and portfolios get affected. At press time, 7000 bitcoins are worth about $40.63 million.

Community reactions

While some members of the crypto community have praised the transparency and the willingness to make sure that no user suffers any losses thanks to the so-called #safu insurance fund, others were eager to point out that Binance’s clean slate has been tainted by this unexpected hacking.

For instance, prolific meme creator Crypto Meme Central has taken his time to portray a helpless Binance CEO Changpeng “CZ” Zhao whose vault of bitcoins gets raided by an anonymous thief.

On the other side of the debate, a large number of Twitter users have posted positive messages which praise the open head-on approach. Most of them can be found right below the CEO’s official announcement, and Alex Beadi’s is representative for most reactions displayed in the comments section.

Later edit: less than an hour after the announcement about the hacking incident was posted, Binance’s token (BNB) has dropped more than 10% in price and continues to plunge.

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Interview: Laurent Kratz on Scorechain and blockchain intelligence

During the second day of Paris Blockchain Week Summit 2019, Scorechain chairman and co-founder Laurent Kratz has agreed to do an interview with Crypto Insider and talk about the blockchain intelligence services his company provides. Before the recording started, Mr. Kratz has made a big claim in regards to the scope and scale of Scorechain: it’s the biggest Bitcoin and Ethereum crypto transaction analysis company in Europe, and one with greater scale and efficiency than even Neutrino – which Coinbase acquired earlier this year in spite of shady associations with human rights violations. Throughout the interview, the co-founder would reaffirm the statement with the same direct confidence.

As the conversation progressed, Laurent Kratz has clearly expressed his views on anarchy and compliance: the intelligence firm which he leads is a bridge between blockchain innovation and the rule of law, and therefore acts as an instrument which ensures that actors are honest and proper taxes get paid. To be more specific, the biggest customers of Scorechain are cryptocurrency exchanges which require further information about the origins of the funds, and audit firms interested in the transparency of their clients.

In regards to the early cypherpunk dream which laid at the foundation of ecash, b-money, bit gold, and eventually Bitcoin, Ethereum and Monero, Laurent Kratz is very direct: it’s a romantic ideal, but death and taxes are inescapable.

At the time when the interview was shot, Scorechain had just launched blockchain analysis for Litecoin and was planning to direct some resources towards Bitcoin Cash. Historically speaking, the company has started with Bitcoin, has moved on to Ethereum, and has also extended its field of expertise to cover ERC20 tokens. Basically, businesses and governments looking to do forensics and compliance can contract the services of Scorechain in order to track down certain cryptocurrency transactions and de-anonymize addresses on the public ledger.

Laurent Kratz on currencies, utilities, and Bitcoin

An interesting distinction which Laurent Kratz makes is about the fundamental difference between currencies and utilities. More specifically, he states that the exclusion of VAT (Value Added Tax) turns utilities into properly acknowledged currencies. In this regard, he states that countries like France, Belgium, and Luxembourg have already enacted the corresponding laws to recognize Bitcoin as a form of money.

The chairman and co-founder of Scorechain also made it pretty clear that their job is not to de-anonymize individuals, but to analyze legal entities – in this regard, he presented the example of the Kraken exchange and the methodology employed in order to identify potentially fraudulent transactions.

Last but not least, Mr. Kratz has made an interesting remark about the fungibility of Bitcoin and how the firm that he leads might help increase fungibility: through the analysis of Scorechain, some coins associated with criminal activities (most famously, the Silk Road) can be declared as “clean” thanks to being sold by the FBI or changing hands enough times to stop being suspicious. This helps users make use of their BTC on various exchanges without worrying about potential criminal investigations that might be unfair.

So if some bitcoins become tainted after Scorechain’s analysis, there are others that receive a clean slate for free trading. Nonetheless, this says a lot about the privacy improvements that are required in Bitcoin, and how mixing, Schnorr signatures, and other innovations that may lead to confidential transactions are vital for a truly fungible mean of exchange.

Without further ado, check out the 17-minute interview with Mr. Laurent Kratz, chairman and co-founder of Scorechain.

 

 

Cover image: Alfi European Asset Management Conference 

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Pieter Wuille publishes BIPs for Taproot & Schnorr Signatures

On May 6th 2019, prolific Bitcoin Core developer and Blockstream co-founder Pieter Wuille has formalized and sent (via bitcoin-dev mailing list) a series of significant BIPs (Bitcoin Improvement Proposals) that derive from game-changing cryptographic advancements. More precisely, the Belgian engineer has published two distinct yet complementary documents which provide more details on a potential soft fork which integrates Schnorr signatures, Taproot and Tapscript. For the sake of transparency and in order to encourage peer reviewing, all the contents are available on his GitHub repository.

Though these technologies have been discussed by community members for quite some time, this is the first formal public attempt to create a clearer and more comprehensive way of scrutinizing the ideas. Furthermore, the BIP format is excellent at setting goals and boundaries for a specific research: it’s no longer about hypothetical scenarios and envisioned applications, as pragmatic ways to put matters into practice take over the public discourse.

In plain terms, we’re speaking of a research draft for a series of good ideas whose implementation was vague until the moment someone took time to explain everything in written (and properly documented) form. Thanks to this effort, now we know exactly what Schnorr signatures and Taproot can do to Bitcoin, and what the realistic expectations should be (as opposed to the various speculations and rumors which circulated on social media and discussion forums).

The trademarked soft fork approach of Pieter Wuille

Pieter Wuille wasn’t the first Bitcoin Core developer to step into the scene, but he has been consistent in creating improvements that embellish the protocol via soft forks (without requiring a network split, through the opt-in “UASF” philosophy). Thanks to his contributions, we now have a market for BTC wallet clients outside of Bitcoin Core, we are able to use deterministic wallets that can be changed between clients (BIP 32), and the block size can be effectively increased in times of high network demand via SegWit (BIP141).

None of these upgrades create incompatibility issues with older clients, and the Bitcoin nodes are able to communicate and agree regardless if they chose to implement these benefits. Schnorr signatures, Taproot and Tapscript are set to be deployed on the basis of the same philosophy, so that the network participants can choose to use them or ignore them without schismatic consequences.

 

What are Taproot and Schnorr signatures?

According to the brief summary of Mr. Wuille from the bitcoin-dev e-mail, Taproot makes “all outputs and cooperative spends indistinguishable from each other”, and Schnorr signatures “enable wallet software to use key aggregation/thresholds within one input”. In a nutshell, we are dealing with improvements that are concerned with privacy and efficiency.

Pieter Wuille describes the two protocols in the following words: “Taproot’s advantages become apparent under the assumption that most applications involve outputs that could be spent by all parties agreeing. That’s where Schnorr signatures come in, as they permit key aggregation: a public key can be constructed from multiple participant public keys, and which requires cooperation between all participants to sign for. Such multi-party public keys and signatures are indistinguishable from their single-party equivalents. This means that under this Taproot assumption, the all-parties-agree case can be handled using the key-based spending path, which is both private and efficient using Taproot. This can be generalized to arbitrary M-of-N policies, as Schnorr signatures support threshold signing, at the cost of more complex setup protocols.

The combination of MAST (Merkelized Abstract Syntax Tree), Schnorr signatures, and Taproot can lead to the creation of very efficient and private Bitcoin smart contracts, where the participants only reveal the conditions that finalize the deal. The clauses involved in a deal should not be visible on a public ledger, and good contracts should retain a certain degree of confidentiality with the outside world. This is where Taproot and Schnorr step in and make sure that nobody else can see what the other contractual provisions were.

For instance, if Kate and her son James make a deal and decide that 2 BTC should be awarded to James by the time he turns 18 or when he becomes competent enough to make use of his part of the private key, then the intrusive eyes of blockchain analysts will only see the conditions under which the transaction occurs (but not the other terms which could have made it happen at a different time).

It’s worth mentioning that the word “scalability” is not featured in either of the BIPs, which might be a slight disappointment for those expecting to have more issues fixed via Schnorr. However, as Mr. Wuille himself states, new discoveries are bound to be made along the way.

Privacy is a delicate topic in the case of Bitcoin, as advocates either praise the transparent approach or seek to obtain more confidentiality by joining second layers or by mixing their coins. Nonetheless, it’s unlikely that Taproot and Schnorr will completely replace the need for confidential transactions and creative ways to obliterate the Big Brother approach to the blockchain.

What is evident is that Bitcoin is slowly, conservatively, and steadily growing, and not even the brightest minds in the field can envision all the future applications and the great potential of the technology. Satoshi Nakamoto has designed a framework with a great amount of potential, and the limitations constantly push brilliant engineers like Pieter Wuille to innovate and improvize. After all, the world’s biggest network which supports non-governmental money should never undergo radical changes and is bound to operate on the grounds of voluntaryist philosophy.

Image credit: Everipedia

 

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Why Tether (USDT) is necessary in crypto

As the cryptocurrency market matures and regulators break down on schemes that preserve anonymity and privacy, Tether (USDT) stands out as a bastion of cypherpunk resistance. In a world where Gemini advertises the “Revolutions need rules” tagline while pushing for their own stablecoin GUSD (the Gemini Dollar), and Coinbase tags along with Circle to promote USDC, there is very little room to avoid KYC/AML. As a matter of fact, trading on a regulated exchange which does not employ “intelligence” de-anonymizing services is also a rare occurrence.

Tether (USDT) often gets depicted as the shady villain in the space, and one which contributes to the price manipulation of various assets. The original stablecoin is paired with every major cryptocurrency on the market, and there’s a reason why TRON founder Justin Sun was bragging about the Tether partnership even during moments when the dollar-backed currency was struggling in terms of both PR and market valuation.

If anything, USDT is a bridge which invites crypto whales to start trading with various assets. According to the reading of somebody like Justin Sun, more availability translates in more market unpredictability and greater chances for various coins to pump in unforeseen moments. In a nutshell, Tether (USDT) is one of the key factors which guarantee free trade – whose side effects may include volatility and wild markets.

Tether (USDT) is cypherpunk

Regulators and exchanges seeking to be as compliant as possible will often point out to the 2014 OG stablecoin as a bad actor. However, it embodies the spirit of crypto better than anything else in this category. In his 1994 opus “The Cyphernomicon: Cypherpunks FAQ and more”, the late Tim May has outlined a great divide between compliance and privacy. More precisely, he implied that free speech, privacy, private property, and autonomy are much more important as fundamental human rights than operations to catch a few criminals.

As the exception to the norm, criminals should not be a justification to employ Orwellian practices. There are far more efficient ways of tracking suspicious behavior, which do not involve mass surveillance and make use of targeted techniques that are based on precedents and clear information.

The role of Tether (USDT) in this scheme is that of juggling with the provisions of multiple jurisdictions in order to remain compliant enough to be listed on most exchanges. You only need to provide KYC/AML information when you’re buying the stablecoin directly from the official website, or when you’re converting USDT to USD – but in both situations there is a $100.000 threshold which is inaccessible to most users.

Conversely, you can simply buy Tether on a decentralized exchange where you only sign up with an e-mail address. It’s a great approach to preserve anonymity, it’s still the best instrument to engage in trading by taking advantage of market volatility, and individuals seeking to avoid triggering a tax event can still make use of USDT for this purpose.

Just bear in mind that Tether (USDT) is not cypherpunk per se – it’s more of a meddling with the laws of various jurisdictions than an innovation in cryptography and privacy. It’s the boat that gets you across river Styx, as you transcend from the anarchistic hell to the other regulated, compliant, yet Orwellian side of the inferno. No matter where you stand, your soul is bound to suffer a fair share of torment.

The shady aspects of Tether (USDT)

It’s no secret that Tether avoids the harsh crypto regulations of the United States of America, where KYC/AML data collection is mandatory in order to be able to open a bank account. But in this pursuit, the company must work with payment processors such as Crypto Capital, whose practices are not very transparent.

As a matter of fact, CC is known to have problems with authorities from Portugal, Poland, and the United States of America (as reported in a previous Crypto Insider article). These situations may often result in frozen funds and prolonged investigations which act as bona fide roadblocks in the way of efficient money exchanges. If you work with banks, you must remain transparent and compliant. If you want to follow the cypherpunk route while also relying on the practices of the regulated financial world, then you must make use of this compromise.

There is absolutely nothing about Tether (USDT) that guarantees seamless operations and proper liquidity for an extended period of time. Throughout time, there have been multiple investigations regarding the amounts of US dollars that truly back the crypto asset, and the results were never really conclusive in one direction. On the official website you can find a report for 2018, where it’s claimed that every USDT token has been backed by a corresponding amount of USD.

Nevertheless, according to a recent affidavit by Tether lawyer Stuart Hoegner, only 74% of USDT is covered by fiat. This means that the company is now using the “fractional reserve” approach that banks have been employing for decades. The only issue is the uncertainty on who backs the funds and whether or not there will be some kind bailout in a situation of crisis. If the answer is “no”, then you should always manage the risk according to your needs and interests.

Should you trade with USDT?

Before proceeding to trade your cryptocurrencies for Tether (USDT), you have to ask yourself some fundamental questions. First of all, it’s a matter of time: for how long will you be holding USDT? With the ongoing lawsuit in the state of New York, difficulties in accessing proper payment processors, and constant scrutiny, it’s hard to foresee if the stablecoin will still be around in a few years. Therefore, Tether should be a mean of exchange between crypto assets, not a store of value. If your plan is to speculate the moment when Bitcoin drops in price so you can buy it at lower rates, then it’s probably a bad idea to hold onto USDT for too long.

Secondly, you must check the legislative framework in your jurisdiction and see if crypto to crypto trades on regulated exchanges trigger tax events. You definitely don’t want to end up like the California teenager who ended up accumulating a lot of debt to the IRS after making multiple trades on Coinbase without ever cashing out. Therefore, it would make sense to use OTC or decentralized exchanges in your strategy. And in this regard, Tether (USDT) can be a useful mean, since it’s listed in many places, has high volumes and is still in demand.

Just remember to be cautious and embrace financial sovereignty with due responsibility. You can never predict the future in crypto, the environment still resembles the Wild West, so you shouldn’t put too much trust in one third party. After all, Bitfinex and Tether are nothing more than intermediaries which operate as businesses. Correspondingly, they can be shut down at any point if the right evidence and legal means exist.

If you care about your privacy and refuse the idea of an overly-regulated market, then USDT is a useful mean to this end. But if you prefer safety, predictability and regulation, you’re definitely better off using USDC and GUSD. However, full compliance was never really the purpose of Bitcoin and its cypherpunk predecessors, so maybe it’s better to keep a balance between the two worlds. They both exist with very clear purposes, deliver services to different types of customers, and complete the picture of this fascinating crypto space. The battle that Tim May has outlined in “The Cyphernomicon” is still ongoing, and maybe that it’s better to not have a definitive victor.

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Ptarmigan becomes the fourth commercial Lightning Network client

On April 30th 2019, the Japanese developer group Nayuta has announced the mainnet launch of Ptarmigan, the fourth commercial protocol implementation of the Lightning Network. In the two-page press release it’s mentioned that the software follows the BOLT (Basis of Lightning Technology) specifications, is focused on building a light and accessible client. It’s also stated from the second paragraph that the current version is still buggy and “reckless” (a warning label which started out as criticism but was embraced by the community of early adopters).

Nevertheless, Ptarmigan aims to become the “small footprint” Lightning Network software, which is able to run on hardware as weak and affordable as the Raspberry Pi Zero (whose main board costs only $5). In this regard, the Japanese company invites users, developers and reviewers by preparing a software image that can be easily deployed on Microsoft Azure.

Furthermore, they are offering 100 boards in exchange for the cost of parts, so that early adopters can connect Arduino to a Raspberry Pi Zero which runs the Ptarmigan software. Shipments of these components is set to take place in early July, and those interested can apply on the Nayuta Lightning shop.

Lightning Network applications (LApps), development software which eases the process of creating new such applications, as well as crypto exchange service and token payment software are also in works. More details can be found on the Ptarmigan GitHub repository, and a demo video has been released to showcase the simplicity and lightness of the client.

Ptarmigan and other mainnet Lightning clients

So far, the other three Lightning Network clients built on the BOLT specifications are Lightning Labs’ lnd implementation, Blockstream‘s c-lightning, and ACINQ’s eclair. All of them are open-sourced, focus on specific features and characteristics of Lightning development, and are built using different programming languages (Go, C, and Scala respectively).

Ptarmigan is unique in the field thanks to its focus on low-power hardware. It’s not just about features and applications, but about building the kind of software that even a $5 computer can run. In many ways, it becomes a way of making the Lightning Network accessible to the masses.

Being the youngest of the four protocols released so far, Ptarmigan is also expected to be the buggiest and in need of most testing. Correspondingly, the team at Nayuta has made sure to create ways for the community to get involved and improve the software. While the roadmap is still unclear and we have yet to see any of the LApps vaguely mentioned in the initial press release, it’s good to have another implementation that tries to solve existing problems in an open way, so that development and mainstream interest receive a boost.

Nayuta’s launch also proves that the Lightning Network is a technology that software developers worldwide find interesting. It adds up to the credentials of the second layer protocol, and gives community members another reason to feel positive that the development is on the right way for greater adoption.

Image: DuckyDeathly on Weasyl

Read more:

Running a Bitcoin node in 2019: becoming a first-class citizen

Interview: Blockstream’s Allen Piscitello on Liquid and Lightning

Interview: Pierre Rochard on the Node Launcher, Lightning Network, and Bitcoin

 

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Interview: Jennifer D’Hoir on Gide 255 and being a blockchain lawyer

Jennifer D’Hoir and the newly-established blockchain-oriented law firm Gide 255 were by far some of the most interesting participants at Paris Blockchain Week Summit 2019. By virtue of “Loi PACTE”, which was recently ratified by the French Parliament (and which Crypto Insider has previously covered), young professionals like Jennifer have left their public office jobs in order to offer legal counsel to the bourgeoning blockchain world.

Now that a proper legislative framework exists in France, there is a high demand for lawyers who specialize in blockchain affairs and business, so that the plans for growth can really take off. Following your roadmap with a higher degree of legal certainty is definitely something that Jennifer D’Hoir and her company seek. Furthermore, being certain about the status of your cryptocurrency (whether or not it is a security) is also essential for the purpose of operating within legal boundaries.

During this 16-minute interview, you will find out more about Gide 255, how it aims to help French firms get proper advice in relation to the law, as well as defend their rights. For instance, opening a bank account as a cryptocurrency-driven business used to be a nightmare, so lots of economic actors were either deterred from running their operations or pushed to pursue the legally-grey zone.

Definitely one of the best parts of this interview revolve around a conversation about privacy and whether or not blockchain transactions should be publicly revealed. Interestingly, Jennifer D’Hoir has pointed out to GDPR as a framework which favors privacy over mass surveillance and targeted data collection, and it’s reassuring to know that law experts in the field see the fine line between compliance and fundamental human rights. It should be noted though, that the comment was personal and does not necessarily reflect the views of Gide 255. Enjoy this exclusive interview!

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Bitfinex executive Merlin: “BTC could tank to below 1k if we don’t act quickly”

In the documentation filed to support the lawsuit of New York Attorney General Letitia James against Bitfinex and Tether, one can find transcripts of conversations between a Bitfinex executive (codenamed “Merlin”) and his business partner from Crypto Capital who most likely resides in Poland (nicknamed “CCC”). More precisely, pages 12 to 15 are filled with details about the various solvency issues that the cryptocurrency exchange has faced since August 15th 2018. As previously reported by Crypto Insider, the crisis hit its peak on April 25th 2019, when the full report on the shady Bitfinex and Tether dealings has been published in support for a New York lawsuit.

“Merlin [15.08.18 11:46]: Hey Oz, sorry to bother you every day, is there any way to move at least 100M to either […]? We are seeing massive withdrawals and we are not able to face them anymore unless we can transfer some money out of Crypto Capital.

Merlin [15.08.18 11:47]: I understand some of the funds are being held by […]. but what about the rest?

Merlin [15.08.18, 11:48]: Under normal circumstances I wouldn’t bother you (I never did so far) but this is a quite special situation and I need your help. Thanks.”

The discussion began in a moment when the demand for withdrawals was high, and Bitfinex required at least $100 million to satisfy its clients. Two months later after the first call for help, the Crypto Capital person has finally responded to explain that the payment processor is dealing with bank issues, as their accounts constantly get closed “without reason” and they can’t undergo the desired operations. In response, Bitfinex executive Merlin mentioned that he must offer the customers clear answers, as stalling the moment of truth is no longer an option.

Bitfinex-executive-USDT-Tether-Investigation

Back in October 15th, the price of Bitcoin seemed to be in the process of stabilization. Source: CoinMarketCap

Merlin [15.10.18, 10:03]: BTC could tank to below 1k if we don’t act quickly.

According to the CoinMarketCap snapshot, on October 14th 2018, the average price of BTC was $6290. Though the valuation was lower than the usual $6500 we have seen for most of the third quarter of 2018, no dramatic drops would occur for another month and a half. On the other hand, Tether was losing its USD parity, as its valuation had gone as low as $0.969 just three days after the Bitfinex executive has sent the warning.

Looking back at the events, it’s hard to tell if Mr. Merlin was trying to make the situation more dramatic, or if he knows something about the market dynamics that we are unable to grasp. Nonetheless, the statements further support conspiracy theories on market manipulation and point out to a market fragility that should not exist.

The idea that a cryptocurrency exchange executive associates the solvency of his business and the truthfulness of Tether’s parity with the US dollar with the price of BTC in a private conversation that was never meant to get leaked should definitely make us all feel concerned. Even if Mr. Merlin was bluffing, we can’t help but wonder what we don’t know and to which extent whales are controlling the dynamics of the market. Find the entire section below, including the response of Crypto Capital’s CCC (or Oz):

“Merlin [15.10.18, 09:53]: I have been telling you since a while.

Merlin [15.10.18, 09:53]: Too many withdrawals waiting for a long time.

Merlin [15.10.18, 09:54]: Is there any way we can get money from you? Tether or any other form? Apart with Crypto Capital we are running low on cash reserves.

Merlin [15.10.18, 09:54]: Please help.

CCC [15.10.18, 18:09:54]: I know. We are following the banks we post as many as we can and let them process as much as possible according to them. Everytime we push them they push back with account closure without reason.

Merlin [15.10.18, 09:55]: Dozens of people are now waiting for a withdrawal out of Crypto Capital.

Merlin [15.10.18, 10:01]: I need to provide customers with precise answers at this point, can’t just kick the can a little more.

Merlin [15.10.18, 10:02]: The international, I mean.

CCC [15.10.18, 10:02]: I will keep you posted here.

CCC [15.10.18, 10:02]: On the process of all international payments.

Merlin [15.10.18, 10:02]: Please understand this could be extremely dangerous for everybody, the entire crypto community.

Merlin [15.10.18, 10:03]: BTC could tank to below 1k if we don’t act quickly.”

Polish politics regarding top governmental and regulatory figures.

The second half of the conversation is market by growing tensions and uncertainty, but also an interesting mention about the head of the Polish Financial Supervision Authority (KNF). It seems like the Crypto Capital representative was trying to take advantage of some domestic political issues in order to “get funds release asap”.

In the meantime, Merlin’s need for at least $100 million hasn’t changed, while the amount of withdrawal wires continued to stack up. Two months have passed since the initial request, yet the customers are just as dissatisfied and the doubts about Bitfinex’s solvency continue.

“Merlin [17.10.18, 22:28]: Oz, I need urgently some funds.

Merlin [17.10.18, 22:28]: Either Tethers or USD, we need at least 100M within the next week.

Merlin [17.10.18, 22:29]: The situation looks bad, we have more than 500 withdrawals pending and they keep coming in.

Merlin [18.10.18, 08:34]: Sorry to be pushy, but can you try sending something already today?

Merlin [18.10.18, 08:35]: We have about 400 small wires pending, the total amount is 5M. But we have to send them out quickly, people are enraged.

Merlin [18.10.18, 08:38]: Too much money is trapped with you and we are currently walking on a very thin crust of ice.

Merlin [15.11.18, 16:14]: I hope you will be able to send something big pretty soon. The situation is not looking good.

CCC [15.11.18, 16:17]: We are pushing everyday. The previous KNF from Poland just resigned over scandal of shaking down banks.

CCC [15.11.18, 16:17]: So it’s very good for us to get funds release asap.

CCC [15.11.18, 16:17]: We are pushing everyday. The previous KNF (Financial Supervision Authority) from Poland just resigned over scandal of shaking down banks.

CCC [15.11.18, 16:17]:https://businessinsider.com.pl/wiadomosci/marcin-pachucki-nowym-po-szefa-knf/wxsv1n5

Merlin [15.11.18, 16:19]: Any realistic estimate about Poland?

Merlin [15.11.18, 16:20]: It was July when you told me for the first time it was to be expected any time.”

 

Historical data from CoinMarketCap

Bitfinex executive still gets no money, and BTC price drops from $6400 to $4009 in only two weeks.

Around the same time when the desperate requests for liquidity were being made, bitcoin was taking massive hits. In only two weeks, the king of cryptos has lost $41.6 billion in market cap – dropping from a valuation of $6400 per unit to a mere $4009. Some analysts have associated the phenomenon with the BCH hash wars and the possibility of having Roger Ver, Jihan Wu, Craig S. Wright, and Calvin Ayre sell some of their BTC holdings to finance their expanding mining operations.

However, while it’s hard to point to a single event and call it the only consequence, it’s likely that Bitfinex and Tether have also contributed to the massive drop. If the exchange’s executive Merlin worried about new lows below the $1000 threshold, then he must have known something about other market participants and their reactions. Though it sounds like conspiracy theory, it’s strange that the prediction from October 2018 came true a month later in the form of a sudden price drop. Maybe that we didn’t see the lows mentioned in the messages, but $41 billion in a time period when Tether proved to be volatile is no joking matter.

The price drop was in sync with Tether volatility. Source: CoinMarketCap

 

As we get closer to November 28th, the date of the last message, it becomes a lot clearer that the situation with Bitfinex and Tether was desperate. Even Merlin was beginning to question his good relations with the business partner and tried to emphasize on the collaborative nature of their relationship. From the records that we have, Oz hasn’t responded to any of these messages. However, the warning of having “serious problems” unless money gets delivered the following week is succeeded by one of the most dramatic drops we have seen in the price of cryptocurrencies in recent history.

“Merlin [21.11.18, 09:27]: Please update me about the situation, we have serious problems if we don’t get some funds from you within this week.

Merlin [27.11.18, 15:18]: I wish we had some clarity, it’s always very difficult to tell our customers something real and this fuels the uncertainty.

Merlin [28.11.18, 10:52]: We are at the end of the month hand you haven’t been sending out one wire, even 1 USD for the whole month.

Merlin [28.11.18, 10:54]: [Photo]

Merlin [28.11.18, 10:55]: I think you should stop playing and tell me the truth about what is going on.

Merlin [28.11.18, 10:56]: I am not your enemy. I am here to help you and have been very patient so far, but you need to cut the crap and tell me what is going on.”

When the warning about $1000 BTC has been issued by Merlin, USDT was at a new low in relation to the US dollar. Source: CoinMarketCap

Tether market manipulation by Bitfinex executive?

Bitfinex has long been accused of using Tether to manipulate the price of Bitcoin and other cryptocurrencies. Now by virtue of Attorney General Letitia James, we are able to get a fleeting glimpse of the phenomena taking place behind the curtains. Given the synchronization between USDT’s price volatility and BTC’s downtrend, it’s likely that Bitfinex’s liquidity issues were amongst the decisive factors for the prolonged bear market.

As a matter of fact, it sounds a lot more plausible that an exchange which moves a lot of liquidity on a daily basis and has high-profile customers was able to bring the price down, than the idea of having an altcoin hash war affect the entire market.

Nonetheless, all these statements are mere speculations and we will probably never find out all the factors that contributed to the dramatic price decrease of BTC during the fall of 2018. As the investigation of the New York Attorney General unveils more details, we will be able to analyze more data and make assessments that are better informed. Until then, we can only point to synchronous events and try to make sense out of them.

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Roger Ver: Bitfinex is solvent

After the news broke about the Bitfinex and Tether solvency issues, long-time Bitcoin advocate and investor Roger Ver has decided to fly to the exchange’s world headquarters in Hong Kong. Upon meeting Bitfinex executive Merlin, he has taken a close look at multiple bank statements, as well as letters from banks and lawyers. Correspondingly, the conclusion of the Bitcoin Cash proponent is that all the current withdrawal problems are being caused by the traditional banking system, and not because of a lack of liquidity at Tether or Bitfinex.

Furthermore, it turns out that the demands of the growing Bitcoin economy (Bitcoin Cash, that is) are hard to keep up with, and the traditional banking partners are having a lot of issues trying to live up to the expectations. In the meantime, the dozens of people who work at Bitfinex are doing their best to establish partnerships with Justin Sun, so that USDT pegging can be replaced by a Tesla parity (each amount corresponds to a part of a brand new Tesla automobile).

Under these circumstances, Bitfinex will soon find it easier to deal with its worldwide customers, and it will continue growing in spite of the concerns expressed by Crypto Twitter cartoon characters. Furthermore, Roger Ver has expressed his conviction that the exchange’s employees will continue to make the entire market a better place by offering discounts on Bitcoin Cash and USDT.

When asked about the lawsuit involving the New York Attorney General Letitia James, the owner of Bitcoin.com replied that he used to be friends with a very convincing lawyer who was able to persuade everyone from the BBC to Kevin Pham and Daniel Krawisz that he is the real deal. Given this mysterious man’s skills, Mr. Ver said that he is positive that Bitfinex will prove solvency.

This article is a satire and should be regarded as such. Roger Ver never made any of these statements about Bitfinex (though they are paraphrased from the Mt. Gox video for comic relief).

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NY Attorney General: Bitfinex and Tether lost $850 million to payment processor

In a file published by the Supreme Court of the State of New York on April 26th 2019, Attorney General Letitia James has revealed that Bitfinex’s Panamanian payment processor Crypto Capital has lost or stolen $850 million of the exchange’s funds. As presented on the 12th page of the report, it’s been since April 2018 that a senior Bitfinex executive (codenamed “Merlin”) has been soliciting a representative from Crypto Capital to return the money. Due to this inconvenience, the cryptocurrency exchange had been unable to honor the withdrawal requests of their customers.

As it turns out, the funds could not be returned by Crypto Capital due to issues with authorities from Portugal, Poland, and the United States of America. Consequently, in order to deal with this shortage of liquidity, $625 million have been transferred from Tether to Bitfinex (which have the same ownership) in November 2018, and a “line of credit” has been created on Tether’s reserves. None of these actions have been disclosed publicly to investors, as the decisions have been made and executed behind closed doors.

In order to determine whether or not investors and USDT holders from the State of New York have been affected by these untransparent practices, Attorney General Letitia James has filed a lawsuit against iFinex inc, BFXNA inc, Tether Holdings Limited, Tether Operations Limited, Tether Limited, and Tether International Limited, as all organizations have been proven to be operated under the same umbrella.

Correspondingly, the documents demanded for the trial include information on subpoenas, files on customers and accounts from the state of New York, communications concerning business relations with any NY entities, full disclosure of tether transactions “wherever located”, tax filings for the years 2017 and 2018, and weekly reports on issuances and redemptions of USDT – among many others.

The crypto market crashes, Tether (USDT) loses dollar parity

Following the filing of the lawsuit and all the media coverage surrounding it, all cryptocurrencies have dropped by 3 to 6 percent within the first hour. At press time, USDT has gone as low as $0.9929, once again losing its parity with the US dollar.

Compared to the historic data provided by CoinMarketCap for April 21st 2019, Bitcoin and Ethereum have both lost more than $1.5 billion from their market capital. Globally, the entire valuation of cryptocurrencies has lowered by almost $11 billion within the first hour since the Tether news broke.

Given the gravity of the situation, it’s expected that more Bitfinex customers will liquidate their accounts, while Tether gets converted into other cryptocurrencies or stablecoins. This phenomenon should hypothetically help the entire market, as the $2.8 billion invested in USDT can be used to buy bitcoin, ether, USDC, or other assets.

Nevertheless, the downtrend still continues at press time, and official reactions from Bitfinex, Tether, and Crypto Capital are yet to get published. Crypto Insider will keep you posted with the latest developments.

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Interview: David Chaum at Paris Blockchain Week Summit 2019

For longer than four decades, David Chaum has been one of the world’s leading researchers and entrepreneurs in the fields of cryptography and digital money. It was thanks to his work that people like Hal Finney, Tim May, Nick Szabo, and Zooko Wilcox-O’Hearn have found their way into this magnificent space, and without him we probably wouldn’t have game-changing innovations such as mixing (best exemplified by CoinJoin) and privacy-oriented digital cash (such as ecash and its spiritual successors Monero and Zcash).

In a previous article, I’ve had the pleasure to talk about David Chaum and his opening keynote speech at the Paris Blockchain Week Summit. After attending the event and listening to the presentation, Inbar Preiss and I have also had the privilege to sit down with the grandfather of cypherpunks and talk about various topics concerning his research interests.

As you will find out throughout this 29-minute interview, Mr. Chaum is just as passionate as ever about cryptography, privacy, and various developments in the field. As an academic, he appreciates the finesse and eloquence of peer-reviewed projects which take into account expert opinions and previous advancements in the field. At the same time, he is fond of the energy that enthusiasts bring into the space, as they increase the popularity and adoption of cryptocurrencies.

This rather candid interview reveals a more mature version of David Chaum, who retained his cypherpunkness while also embracing a broader and lesser radical world view. While he understands the perspective of governments of the world, he remains firm on privacy as a fundamental and inalienable human right which deserves no middle ground compromise.

David Chaum and Elixxir

This exclusive interview was shot about an hour after Mr. Chaum held his inaugural keynote speech at the Paris Blockchain Week Summit. Throughout the event, the cypherpunk has promoted Elixxir as a full-stack blockchain-powered transaction platform which doesn’t compromise on privacy. Later on, we found out that the efforts were meritorious and the applications to run BetaNet nodes have exceeded expectations by 350%.

You won’t be hearing much about Elixxir during the interview, but you will find out about David Chaum’s letter to Mark Zuckerberg. In a nutshell, the cypherpunk extends a helping hand to the social media giant, in order to provide better privacy for the messaging applications. This initiative also begins a discussion about inter-generational approaches to privacy, and to which extent we as individuals are willing to surrender fundamental rights in exchange for convenience.

Without further ado, you may watch this exclusive Crypto Insider interview with the legendary cypherpunk David Chaum:

 

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Activity and sleeping patterns suggest Craig Wright can’t be Satoshi

The idea that nChain scientist Craig Wright can’t be Satoshi Nakamoto has circulated around the crypto space for quite some time. Community members have gathered compelling data to point out to false statements, backdated PGP keys, and bizarre patent-seeking behavior that doesn’t reflect Satoshi’s cypherpunk ethos. However, this type of subjective analysis was not clear enough to reveal whether or not the Australian academic was behind the creation of Bitcoin.

However, after announcing the upcoming release of a detailed report which reveals new information about Craig Wright, cypherpunk Jameson Lopp has dropped a teaser. On April 24th, the Casa CTO has tweeted two graphs which indicate the times when Satoshi and CSW were most active between 2009 and 2010. In the case of the pseudonymous cypherpunk, the analysis concerns the number of Bitcoitalk posts and code commits. Conversely, Craig S. Wright’s public activity is quantified in blog posts.

Upon a clear comparative analysis, it appears that Craig Wright can’t be Satoshi Nakamoto.

Under the assumption that the nChain scientist lived in Australia and had a regular sleeping pattern, it becomes clear that he couldn’t have been behind the public activity of the Bitcoin creator. Not only that the graphs appear to be complete opposites in terms of work-sleep schedules, but assuming that Craig S. Wright is Satoshi implies that there was no sleep involved for at least a year, and the same person constantly switched between accounts.

According to Casa CTO Jameson Lopp, the data behind the graphs is public, was taken from websites and GitHub repositories, and its sources will get posted in an upcoming article. Furthermore, the cypherpunk has made an interesting geographic remark which suggests that Craig Wright can’t be Satoshi: given the work-sleep patterns, it can be assumed that the Bitcoin creator lived on the Eastern side of North America, or on the Western side of South America. Conversely, the Australian computer scientist shows patterns that confirm his whereabouts and working hours at the time.

As community members continue to speculate and bring up names such as Hal Finney, Charlie Lee, and even the NSA, more data which may confirm that Craig Wright can’t be Satoshi Nakamoto may be underway. On April 19th, Mr. Lopp has announced the release of an extended report on the nChain scientist and his claims to have invented Bitcoin. Its contents had been analyzed and temporarily held back by multiple teams of attorneys, and it’s estimated that more than a third of the findings have been removed due to legal issues.

Given this early statistical start, it’s likely that the data that Jameson Lopp will present features more quantitative analysis and fewer instances of subjective comparisons. However, whether or not the findings will be conclusive enough to put the claims to rest is yet to be seen. Crypto Insider will keep you updated with the details regarding the report and the arguments presented. If the hypothesis at stake is that Craig Wright can’t be Satoshi Nakamoto, then solid evidence is required.

Crypto Insider has contacted Jameson Lopp to comment on the graphs and his interpretation on the data. His response was the following:

It’s not conclusive proof of anything, but rather is another piece of the puzzle that should be considered along with all of the other evidence. Though if you follow Occam’s razor and don’t believe Craig was meticulously tracking his times posting as himself vs as Satoshi, it does look like the person(s) who wrote emails, forum posts, and code were either all the same person or lived in nearly the same time zone. And that time zone was on the opposite side of the world as Craig, as we know both from his post timestamps and from lots of other evidence that shows he resided in Australia during that period.

Image credit: Truthvoice, Pixabay

 

Read more:

 

The post Activity and sleeping patterns suggest Craig Wright can’t be Satoshi appeared first on Crypto Insider.

Interview: Yoni Assia on eToroX and the cryptocurrency market

On April 16th 2019, eToro founder and CEO Yoni Assia has agreed to do an exclusive interview for Crypto Insider at the Paris Blockchain Week Summit. It was on the same day that the global launch of cryptocurrency exchange eToroX took place, and the time seemed right to reflect on how far the social trading company has come in terms of integrating digital assets.

To North American audiences, eToro is the European and Asian equivalent of Robin Hood: it offers quick and easy onboarding with your credit card, and allows anyone to start trading stocks, commodities, bonds, and cryptocurrencies. And now that eToroX has gone live, Coinbase has a worthy competitor with a greater experience in the world of trading and stock markets.

In this exclusive interview, eToro CEO Yoni Assia talks about the timeline of the platform’s involvement in crypto, its various phases of switching from CFD (Contract for Differences) to real holdings, and the features of the newly-launched exchange.

On eToroX’s KYC and AML practices in relation to privacy

Another important topic that should be of interest for crypto traders concerns the KYC/AML techniques used by eToroX. As you’re about to find out from this 17-minute interview, you should definitely think twice before sending your mixed bitcoins to a regulated exchange like eToroX. While the outputs are clearly preferable to those that are associated with Silk Road, it’s better to be cautious before making such a transaction that looks suspicious.

As a way of mediating between the requirement for privacy and government regulation, Mr. Assia talks about the fine line between the two concepts and how it’s up to authorities and sovereign individuals to find a middle ground. Until then, regulated cryptocurrency exchanges must comply with the laws of multiple jurisdictions and make sure that all the provisions are being respected, which automatically removes a layer of privacy.

On Yoni Assia’s open approach to eToro and his investments

Anyone using the eToro social trading platform can see that Yoni Assia owns large amounts of Bitcoin and Ethereum, which take up a significant percentage of his portfolio. More specifically, Mr. Assia’s holdings consist of 26.81% BTC and 21.56% ETH.

This long-term investment also functions as a guarantee that the CEO is bullish on the future of crypto’s two larges assets, and believes in the underlying technology much more than he cherishes profits from trading. Furthermore, every used on the platform is able to see which version of Bitcoin Mr. Assia thinks is the real one, how much he believes in Ethereum killers, and which eToro traders he vouches for. As a matter of fact, anyone can go on and copy the trades of Yoni Assia on a smaller scale, which has been one of the features of eToro since day one.

Find out more about eToro and eToroX by watching this exclusive interview.

 

Read more:

 

 

The post Interview: Yoni Assia on eToroX and the cryptocurrency market appeared first on Crypto Insider.

Interview: Yoni Assia on eToroX and the cryptocurrency market

On April 16th 2019, eToro founder and CEO Yoni Assia has agreed to do an exclusive interview for Crypto Insider at the Paris Blockchain Week Summit. It was on the same day that the global launch of cryptocurrency exchange eToroX took place, and the time seemed right to reflect on how far the social trading company has come in terms of integrating digital assets.

To North American audiences, eToro is the European and Asian equivalent of Robin Hood: it offers quick and easy onboarding with your credit card, and allows anyone to start trading stocks, commodities, bonds, and cryptocurrencies. And now that eToroX has gone live, Coinbase has a worthy competitor with a greater experience in the world of trading and stock markets.

In this exclusive interview, eToro CEO Yoni Assia talks about the timeline of the platform’s involvement in crypto, its various phases of switching from CFD (Contract for Differences) to real holdings, and the features of the newly-launched exchange.

On eToroX’s KYC and AML practices in relation to privacy

Another important topic that should be of interest for crypto traders concerns the KYC/AML techniques used by eToroX. As you’re about to find out from this 17-minute interview, you should definitely think twice before sending your mixed bitcoins to a regulated exchange like eToroX. While the outputs are clearly preferable to those that are associated with Silk Road, it’s better to be cautious before making such a transaction that looks suspicious.

As a way of mediating between the requirement for privacy and government regulation, Mr. Assia talks about the fine line between the two concepts and how it’s up to authorities and sovereign individuals to find a middle ground. Until then, regulated cryptocurrency exchanges must comply with the laws of multiple jurisdictions and make sure that all the provisions are being respected, which automatically removes a layer of privacy.

On Yoni Assia’s open approach to eToro and his investments

Anyone using the eToro social trading platform can see that Yoni Assia owns large amounts of Bitcoin and Ethereum, which take up a significant percentage of his portfolio. More specifically, Mr. Assia’s holdings consist of 26.81% BTC and 21.56% ETH.

This long-term investment also functions as a guarantee that the CEO is bullish on the future of crypto’s two larges assets, and believes in the underlying technology much more than he cherishes profits from trading. Furthermore, every used on the platform is able to see which version of Bitcoin Mr. Assia thinks is the real one, how much he believes in Ethereum killers, and which eToro traders he vouches for. As a matter of fact, anyone can go on and copy the trades of Yoni Assia on a smaller scale, which has been one of the features of eToro since day one.

Find out more about eToro and eToroX by watching this exclusive interview.

Read more:

The post Interview: Yoni Assia on eToroX and the cryptocurrency market appeared first on Crypto Insider.

Interview: Alex Mashinsky challenges Paris banks with Celsius

At Paris Blockchain Week Summit 2019, Alex Mashinky has set a clear goal: infiltrate the banking system with Celsius and pay higher interest than any other financial institution. In his long-documented discourse against the practices of banks, the VoIP innovator and MoIP (Money over IP) proponent has always pointed to the fact that the interest rate for deposits has decreased. Sometimes the amounts barely cover the annual inflation rate, which means that the clients get the mainstream finance equivalent of “rekt” for holding their money in bank accounts.

In response to this practice, and as a consequence of the recent PACTE law that the French Parliament has ratified, Mr. Mashinsky is trying to turn Celsius into the ultimate banking tool which enables people to make crypto deposits and earn more interest. Furthermore, as a way of taking price volatility out of the way, the system will rely on stablecoins that are backed entirely by corresponding fiat amounts.

If it all goes according to Alex Mashinsky‘s plan, then the Celsius Network will take the French financial landscape by storm and provide an alternative that is both financially convenient and a gateway drug to Bitcoin and other cryptocurrencies. If, for instance, monsieur Pierre Cardin decided to give up on his deposit at the bank and move the money to a Celsius USDC-backed account, his annual returns would increase exponentially. And if the same person wanted to move his stablecoins to an exchange to buy some BTC, then his experience would be seamless.

 

Throughout this 17-minute exclusive interview, Alex Mashinsky is ecstatic, enthusiastic, and as passionate as you’d expect any financial revolutionary to be. And if his plan to take over the French banking sector with Celsius really succeeds, then you will have found out about it first from Crypto Insider!

Read more:

Why Bitcoin needs cash (and is not a byproduct of the cashless society)

Paris Blockchain Week Summit 2019 was a French tour de force

Interview: Alex Mashinsky on earning interest by HODLing with Celsius

 

 

 

The post Interview: Alex Mashinsky challenges Paris banks with Celsius appeared first on Crypto Insider.

Interview: Alex Mashinsky challenges Paris banks with Celsius

At Paris Blockchain Week Summit 2019, Alex Mashinky has set a clear goal: infiltrate the banking system with Celsius and pay higher interest than any other financial institution. In his long-documented discourse against the practices of banks, the VoIP innovator and MoIP (Money over IP) proponent has always pointed to the fact that the interest rate for deposits has decreased. Sometimes the amounts barely cover the annual inflation rate, which means that the clients get the mainstream finance equivalent of “rekt” for holding their money in bank accounts.

In response to this practice, and as a consequence of the recent PACTE law that the French Parliament has ratified, Mr. Mashinsky is trying to turn Celsius into the ultimate banking tool which enables people to make crypto deposits and earn more interest. Furthermore, as a way of taking price volatility out of the way, the system will rely on stablecoins that are backed entirely by corresponding fiat amounts.

If it all goes according to Alex Mashinsky‘s plan, then the Celsius Network will take the French financial landscape by storm and provide an alternative that is both financially convenient and a gateway drug to Bitcoin and other cryptocurrencies. If, for instance, monsieur Pierre Cardin decided to give up on his deposit at the bank and move the money to a Celsius USDC-backed account, his annual returns would increase exponentially. And if the same person wanted to move his stablecoins to an exchange to buy some BTC, then his experience would be seamless.

Throughout this 17-minute exclusive interview, Alex Mashinsky is ecstatic, enthusiastic, and as passionate as you’d expect any financial revolutionary to be. And if his plan to take over the French banking sector with Celsius really succeeds, then you will have found out about it first from Crypto Insider!

Read more:

Why Bitcoin needs cash (and is not a byproduct of the cashless society)

Paris Blockchain Week Summit 2019 was a French tour de force

Interview: Alex Mashinsky on earning interest by HODLing with Celsius

 

 

 

The post Interview: Alex Mashinsky challenges Paris banks with Celsius appeared first on Crypto Insider.

Paris Blockchain Week Summit 2019 was a French tour de force

Between April 16th and 17th, Paris Blockchain Week Summit has turned the capital of France into the epicentre of European crypto innovation. Just days after the French Parliament has passed the “loi PACTE” legislative project in order to enable domestic enterprises to get ahead of technological innovation through acceptance of cryptocurrencies, the conference has turned out to be a bona fide tour de force.

Essentially, one could easily distinguish between two different categories of companies and firms that participated PBWS: the French businesses looking to get ahead of the competition by proposing their services to the incoming speculators, and the foreign projects that were seeking to do business within the territories of the Fifth Republic. Both types of participants have been represented very convincingly, and all the exuberance regarding cryptocurrencies and industrial blockchain applications reflects a more advanced and mature stage of mainstream adoption.

By this point, it’s clear that France wants to become the first big Western power to create a business-friendly environment for everything crypto and blockchain. As previously presented in Senor Satoshi’s article “French government is clearing path for blockchain technology”, the government from Paris is willing to facilitate the tax system so that monthly declarations get replaced by yearly ones, the capital tax rate is set to be lowered by 6.2%, and crypto to crypto transactions will be exempt from this strict framework.

All of these measures are part of a plan to bring France to the forefront of technological innovation. And even if we were not aware of the ongoing legislative changes for a friendlier fiscal system, then we could still observe the large amount of French officials and trans-national businesses participating BPWS and presenting enthusiastic plans about doing business. Here are some highlights from the event:

 

Crypto takes over Paris Blockchain Week Summit 2019

In an exclusive interview with Celsius Network‘s Alex Mashinsky that Inbar and I have recorded on April 16th 2019, we were able to find out that the “earning interest by HODLing” model might receive its own French adaptation. This special crypto-centered approach involves the use of stablecoins and promises greater annual returns than traditional banks, without exposing customers to the risks of price volatility. While this is a brilliant gateway drug that will definitely generate some more Bitcoin adoption, it’s also a great tool for modern financial services. Yet most importantly, banks are pushed closer to the ropes of this boxing ring: now they’re forced to either adapt to the ongoing financial revolution or take a potentially fatal blow.

eToro CEO Yoni Assia has also expressed optimism regarding the bourgeoning business opportunities in France, and the fact that the social trading platform has invested a lot of money into promoting its brand during the event is yet another sign of bullishness. A country like France, which is a founding member of the European Union, a member of the UN Security Council, and one of the most innovative and creative places on the planet, proved to be the perfect place to make product launch. Accordingly, eToroX (a regulated cryptocurrency exchange) went live on the first day of Paris Blockchain Week Summit.

Legendary cypherpunk David Chaum talks about his influence in the space and the Elixxir project.

Yet another heavyweight who decided to take his time and promote a new project is the legendary cypherpunk David Chaum, whose influence in the field is truly inescapable and all-encompassing. Elixxir, a quick privacy-centered transaction platform which implements the blockchain technology, is still in its beta days and requires greater community support. The fact that Mr. Chaum has accepted to hold the opening keynote speech in Paris and talk to almost everybody who approached him regardless of topic, only goes to show that Paris Blockchain Week Summit has reached its most important goal – that of bringing people together and allowing for a productinve exchange of information and experiences.

The Tezos project was also a prominent presence during the event, as the project had the biggest booth of all cryptocurrencies participating PBWS. Since the French-speaking community is rather significant within the project, it made a lot of sense to take advantage of the opportunity and highlight the latest protocol advancements. Even Tezos co-founder Arthur Breitman was physically present and eager to engage with the community and the media, which was a pleasant surprise.

Furthermore, angel investor and Adaptive Holdings CEO Mrinal Manohar has also made a presentation on the state of Casper Labs, in which he highlighted the developments and advancements in the Proof of Stake protocol that is also expected to see an Ethereum implementation. After his 20-minute keynote speech, he was nice enough to talk to people interested in the projects in which he invests, and even answered all the questions in an exclusive interview for Crypto Insider.

Other big names of foreigners coming into France in order to find new business opportunities include Zcoin COO Reuben Yap, and Scorechain co-founder and blockchain intelligence expert Laurent Kratz.

Scorechain co-founder Laurent Kratz talks about potentially being one of the villains of crypto.

French crypto experts and businesses are looking to further establish their position at PBWS

Every participant to the Paris Blockchain Week Summit 2019 event has been greeted with a nice little gift: the Ledger Nano S hardware wallet. The crypto security company, whose main headquarters are in France, attended the event in order to promote their latest devices and raise awareness about the need for better private key management. Furthermore, the folks standing at the booth have been nice and patient enough to explain to everyone the differences between the Nano S and the new Nano X, and they even gave away stress balls so HODLing would become easier in this stage of the crypto market.

Also, innovation and fintech expert Jennifer D’Hoir was nice enough to talk about the lawyer firm that she co-founded, which is called GIDE 255. As a former employee of the French government, she saw the potential of cryptocurrencies and the need for legal experts in the bourgeoning field, so she decided to quit her old job and embrace the revolution. Right now, she and her firm are helping companies accept crypto payments, open bank accounts, and offer crypto-specific services. If this kind of story doesn’t convince you that there’s more to crypto than watching charts and expecting gains, then it’s unlikely that anything else will.

Furthermore, French entrepreneur Yves Laurent Kayan has presented to the world the Coinplus project, which allows cryptocurrency enthusiasts to store their coins on a credit card-shaped device which has no electronic parts and is immune to remote hacking. The concept is as simple as engraving the public key and the private key on a piece of plastic (or silver, or gold, depending on your budget), in order to enable physical cold storage that resists to most natural hazards. Unlike the Ledger, this is about having a safe place for your seed words or parts of the private key. And just in case the security model seems too simplistic, there are multisig 2 of 3 or 3 of 5 solutions to make sure that a situation like Quadriga’s would never occur.

Jennifer D’Hoir expresses her bullishness on crypto and how she believes her law firm will help create more institutional adoption.

There’s more to the picture than meets the eye, so stay tuned for the exclusive Crypto Insider interviews!

The Paris Blockchain Week Summit was a huge event which featured hundreds of speakers and took place on two stages at the same time. Given the time or resources, Crypto Insider was able to only cover a few of the launches and presentations taking place at the venue.

Correspondingly, we have good news and bad news. First of all, let’s begin with the positive side of the narrative: everybody who has been mentioned during the article is the subject of an exclusive interview that will get posted throughout the week. The bad news is that we couldn’t get more content and had to deal with time constrains. Nevertheless, we have shot video and audio of all interviews we conducted, and the footage will be accompanied by brief 300-word articles.

Therefore, you better stay tuned to Crypto Insider news if you want to find out more about eToroX, Celsius, David Chaum’s Elixxir, Tezos, Casper Labs, Scorechain’s blockchain intelligence services, Zcoin, Gide 255, and Coinplus. An interview with Ledger is also scheduled to happen in the following days.

Read more:

 

 

The post Paris Blockchain Week Summit 2019 was a French tour de force appeared first on Crypto Insider.

Paris Blockchain Week Summit 2019 was a French tour de force

Between April 16th and 17th, Paris Blockchain Week Summit has turned the capital of France into the epicentre of European crypto innovation. Just days after the French Parliament has passed the “loi PACTE” legislative project in order to enable domestic enterprises to get ahead of technological innovation through acceptance of cryptocurrencies, the conference has turned out to be a bona fide tour de force.

Essentially, one could easily distinguish between two different categories of companies and firms that participated PBWS: the French businesses looking to get ahead of the competition by proposing their services to the incoming speculators, and the foreign projects that were seeking to do business within the territories of the Fifth Republic. Both types of participants have been represented very convincingly, and all the exuberance regarding cryptocurrencies and industrial blockchain applications reflects a more advanced and mature stage of mainstream adoption.

By this point, it’s clear that France wants to become the first big Western power to create a business-friendly environment for everything crypto and blockchain. As previously presented in Senor Satoshi’s article “French government is clearing path for blockchain technology”, the government from Paris is willing to facilitate the tax system so that monthly declarations get replaced by yearly ones, the capital tax rate is set to be lowered by 6.2%, and crypto to crypto transactions will be exempt from this strict framework.

All of these measures are part of a plan to bring France to the forefront of technological innovation. And even if we were not aware of the ongoing legislative changes for a friendlier fiscal system, then we could still observe the large amount of French officials and trans-national businesses participating BPWS and presenting enthusiastic plans about doing business. Here are some highlights from the event:

 

Crypto takes over Paris Blockchain Week Summit 2019

In an exclusive interview with Celsius Network‘s Alex Mashinsky that Inbar and I have recorded on April 16th 2019, we were able to find out that the “earning interest by HODLing” model might receive its own French adaptation. This special crypto-centered approach involves the use of stablecoins and promises greater annual returns than traditional banks, without exposing customers to the risks of price volatility. While this is a brilliant gateway drug that will definitely generate some more Bitcoin adoption, it’s also a great tool for modern financial services. Yet most importantly, banks are pushed closer to the ropes of this boxing ring: now they’re forced to either adapt to the ongoing financial revolution or take a potentially fatal blow.

eToro CEO Yoni Assia has also expressed optimism regarding the bourgeoning business opportunities in France, and the fact that the social trading platform has invested a lot of money into promoting its brand during the event is yet another sign of bullishness. A country like France, which is a founding member of the European Union, a member of the UN Security Council, and one of the most innovative and creative places on the planet, proved to be the perfect place to make product launch. Accordingly, eToroX (a regulated cryptocurrency exchange) went live on the first day of Paris Blockchain Week Summit.

Legendary cypherpunk David Chaum talks about his influence in the space and the Elixxir project.

Yet another heavyweight who decided to take his time and promote a new project is the legendary cypherpunk David Chaum, whose influence in the field is truly inescapable and all-encompassing. Elixxir, a quick privacy-centered transaction platform which implements the blockchain technology, is still in its beta days and requires greater community support. The fact that Mr. Chaum has accepted to hold the opening keynote speech in Paris and talk to almost everybody who approached him regardless of topic, only goes to show that Paris Blockchain Week Summit has reached its most important goal – that of bringing people together and allowing for a productinve exchange of information and experiences.

The Tezos project was also a prominent presence during the event, as the project had the biggest booth of all cryptocurrencies participating PBWS. Since the French-speaking community is rather significant within the project, it made a lot of sense to take advantage of the opportunity and highlight the latest protocol advancements. Even Tezos co-founder Arthur Breitman was physically present and eager to engage with the community and the media, which was a pleasant surprise.

Furthermore, angel investor and Adaptive Holdings CEO Mrinal Manohar has also made a presentation on the state of Casper Labs, in which he highlighted the developments and advancements in the Proof of Stake protocol that is also expected to see an Ethereum implementation. After his 20-minute keynote speech, he was nice enough to talk to people interested in the projects in which he invests, and even answered all the questions in an exclusive interview for Crypto Insider.

Other big names of foreigners coming into France in order to find new business opportunities include Zcoin COO Reuben Yap, and Scorechain co-founder and blockchain intelligence expert Laurent Kratz.

Scorechain co-founder Laurent Kratz talks about potentially being one of the villains of crypto.

French crypto experts and businesses are looking to further establish their position at PBWS

Every participant to the Paris Blockchain Week Summit 2019 event has been greeted with a nice little gift: the Ledger Nano S hardware wallet. The crypto security company, whose main headquarters are in France, attended the event in order to promote their latest devices and raise awareness about the need for better private key management. Furthermore, the folks standing at the booth have been nice and patient enough to explain to everyone the differences between the Nano S and the new Nano X, and they even gave away stress balls so HODLing would become easier in this stage of the crypto market.

Also, innovation and fintech expert Jennifer D’Hoir was nice enough to talk about the lawyer firm that she co-founded, which is called GIDE 255. As a former employee of the French government, she saw the potential of cryptocurrencies and the need for legal experts in the bourgeoning field, so she decided to quit her old job and embrace the revolution. Right now, she and her firm are helping companies accept crypto payments, open bank accounts, and offer crypto-specific services. If this kind of story doesn’t convince you that there’s more to crypto than watching charts and expecting gains, then it’s unlikely that anything else will.

Furthermore, French entrepreneur Yves Laurent Kayan has presented to the world the Coinplus project, which allows cryptocurrency enthusiasts to store their coins on a credit card-shaped device which has no electronic parts and is immune to remote hacking. The concept is as simple as engraving the public key and the private key on a piece of plastic (or silver, or gold, depending on your budget), in order to enable physical cold storage that resists to most natural hazards. Unlike the Ledger, this is about having a safe place for your seed words or parts of the private key. And just in case the security model seems too simplistic, there are multisig 2 of 3 or 3 of 5 solutions to make sure that a situation like Quadriga’s would never occur.

Jennifer D’Hoir expresses her bullishness on crypto and how she believes her law firm will help create more institutional adoption.

There’s more to the picture than meets the eye, so stay tuned for the exclusive Crypto Insider interviews!

The Paris Blockchain Week Summit was a huge event which featured hundreds of speakers and took place on two stages at the same time. Given the time or resources, Crypto Insider was able to only cover a few of the launches and presentations taking place at the venue.

Correspondingly, we have good news and bad news. First of all, let’s begin with the positive side of the narrative: everybody who has been mentioned during the article is the subject of an exclusive interview that will get posted throughout the week. The bad news is that we couldn’t get more content and had to deal with time constrains. Nevertheless, we have shot video and audio of all interviews we conducted, and the footage will be accompanied by brief 300-word articles.

Therefore, you better stay tuned to Crypto Insider news if you want to find out more about eToroX, Celsius, David Chaum’s Elixxir, Tezos, Casper Labs, Scorechain’s blockchain intelligence services, Zcoin, Gide 255, and Coinplus. An interview with Ledger is also scheduled to happen in the following days.

Read more:

 

 

The post Paris Blockchain Week Summit 2019 was a French tour de force appeared first on Crypto Insider.

Interview: Nopara on Wasabi Wallet, Bitcoin privacy & fungibility

Hungarian software developer Nopara has created one of the most useful pieces of software in Bitcoin. In a nutshell, Wasabi Wallet is a great privacy-friendly and fungibility-restoring tool. It makes use of ToR routing to make sure that nobody can link your activity with a certain IP address, it doesn’t allow you to use one BTC address more than once, and it establishes a safe ecosystem where you can mix your bitcoins via Chaumian CoinJoin.

As if the features weren’t enough to raise the eyebrows of both cypherpunks and enthusiasts, Wasabi also connects to your full node and makes use of a very simple and friendly user interface. The fact that you can access all the functions without typing in a single line of code, while everything is friendly enough for any computer user to comprehend, is a great achievement in itself. Knowing just how much cryptocurrency software developers struggle to find a balance between technical features and accessibility is an extra reason to praise Nopara’s efforts.

Wasabi Wallet allows bitcoiners to benefit from a greater amount of privacy, and has a nice CoinJoin implementation too. Credit: Bitcoin Core vs Wasabi Wallet

During this exclusive hour-long interview, the Hungarian developer is firmly humble, unnecessarily technical and specific about the facts he mentions (as opposed to the general understanding of the host), but also unexpectedly critical of his own work. Even though Wasabi Wallet gets a lot of praise from the community and is held in high regards as a complement for Bitcoin Core, we are dealing with a perfectionist who knows exactly what can be improved and never settles for anything below his high standards and ambitions.

Instead of bragging with his accomplishments, Mr. Nopara feels compelled to acknowledge the merits of BTC mixing tool JoinMarket and references some of the articles that he wrote on Medium – which you are strongly encouraged to read.

Wasabi Wallet is an excellent tool, and you should definitely give it a try. The CoinJoin function allows you to mix your BTC up to 50 times, so that the previous transactions of your coins become untraceable. Furthermore, the ToR integration is excellent and makes sure that no intrusive third parties can arbitrarily check our your activity. And last but not least, the interface is one of the best you will find in the field.

Without further ado, here is the interview with the great Nopara:

Cover image credit: Understanding Bitcoin Conference, as designed by Peter Russel

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The post Interview: Nopara on Wasabi Wallet, Bitcoin privacy & fungibility appeared first on Crypto Insider.

Craig S. Wright puts bounty on Hodlonaut’s head, bitcoiners become Hodlonaut

In a strange twist of events which only proves that crypto is very much akin the Wild West, Craig S. Wright is offering $5000 worth of BSV to anyone who divulges information about Hodlonaut’s identity. This is part of the Australian businessman’s response to the entire Twitter campaign which aims to portray him as a fraud in relation to his claims of being Satoshi Nakamoto.

Shortly after the Coingeek article got published, the Norwegian bitcoiner who started the #LNTrustChain movement has deleted his social media account in order to avoid harassment and protect his identity. In response to this unexpected phenomenon, many influential people in the Bitcoin space have changed their screen names to Hodlonaut. Not only that this is a way of saying “We are all Hodlonaut and we stand for privacy as a fundamental human right”, but the initiative also makes it harder to find the real account.

In the same Coingeek article, it’s mentioned that Craig S. Wright wants to receive a public apology from the Norwegian bitcoiner, as well as an official statement in court which denies previous claims about fraudulence. In a nutshell, the Australian businessperson is targeting an influential community member who chose to hide his true identity, as a way of receiving legal acknowledgment for his self-proclaimed Satoshiness.

Lawyering up for Hodlonaut

However, given the series of events we have seen so far, the only new elements are the harassment of an individual and the nonchalant introduction of a public bounty for details on someone’s identity. If public defamation is a case which concerns civil law in most democratic jurisdictions, then malevolent interferences with “privacy, family, home or correspondence” infringe fundamental human rights, as mentioned in Article 12 of the Universal Declaration of Human Rights and Article 17 of the International Covenant on Civil and Political Rights.

This is no playing matter, and it’s important to defend the fundamental rights and dignities of all humans, in relation to wealthy individuals who make use of their money and power to hunt down one specific person. If details about Hodlonaut get revealed on the internet, then his physical safety is at risk and it’s likely for undesirable events to happen.

Had Craig S. Wright or anyone affiliated with Coingeek wanted to find the legal, ethical, and safe way of conducting this operation, they could have contacted Twitter through their attorneys, and privately conducted their lawsuit affair after being granted information about the known IP address and whereabouts of Mr. Hodlonaut. Instead, this witch hunt approach was chosen as a sensationalist way of spreading panic and silencing other critics.

Nevertheless, this initiative is a blatant attempt to infringe fundamental human rights, and Mr. Hodlonaut may appeal to the international tribunals which protect his integrity. However, this would imply a process of revealing his true identity to the world, which in many ways would be a victory for Craig S. Wright, Coingeek, and the BSV project. It’s a delicate situation, but it’s important to remember the fundamental principles on which our democratic societies were built: negative human rights which protect our speech and physical integrity.

As editor of Crypto Insider, I have removed the video interview with Hodlonaut. It’s a way of protecting his fundamental rights in the face of a ruthless bully for whom personal reputation and ego are more important than the harm they may cause. If Mr. Wright, the Coingeek team, Calvin Ayre, or anyone else wants to object this decision of actually protecting the human rights recognized by all of our jurisdictions, then they may speak to my attorney. Just remember that defamation concerns civil law in both my jurisdiction and Hodlonaut’s – on the other hand, putting a bounty on someone’s head has consequences that may concern criminal law.

Read more:

The post Craig S. Wright puts bounty on Hodlonaut’s head, bitcoiners become Hodlonaut appeared first on Crypto Insider.

Interview: Pierre Rochard on the Node Launcher, Lightning Network, and Bitcoin

Pierre Rochard is a hero among bitcoiners – thanks to his development efforts with the Node Launcher, regular users can onboard the Lightning Network within minutes. In just a few months, he has managed to integrate a competitive Lightning client, make it available for the two most popular operating systems (Windows and MacOS), and add a friendly interface that anyone can understand. All of these can be found in a piece of software that you simply download, install, and run without ever writing a single line of code.

In this exclusive interview, Mr. Rochard explains how his academic background in accounting has helped him acquire the skills needed to write Bitcoin code, why he thinks that accessible point-and-click interfaces should be developed by third party designers and coders (as opposed to software engineers), and how regular computers (such as older laptops) can outperform any mobile or Raspberry Pi-based solution when running Bitcoin and Lightning nodes.

As you’re about to discover, a longer discussion takes place in order to tackle the issue of payment channels and their reliability in relation to the consistency of the node, and then the debate moves on to Neutrino (BIP 157 and 158). Pierre Rochard establishes that onboarding the Lightning Network can be made in different ways which suit very different needs: while routing nodes should be online all the time and make use of UPS devices and back-up storage in order to preserve the channels, regular users can simply get on and off whenever they need to send or receive payments (granted that the channels don’t get force closed by the other parties).

By the end of this 40-minute interview, you will have found out many useful details about Lightning and its many intricacies, as Pierre Rochard is excellent at explaining difficult concepts in very simple words.

Special thanks to Crypto Meme Central for his work on this beautiful and surrealist cover image. You may see more of his works on Twitter by following this link.

 

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David Chaum at Paris Blockchain Week Summit 2019

On April 16th 2019, the legendary cypherpunk and digital cash pioneer David Chaum is expected to hold an opening keynote speech at the Paris Blockchain Week Summit. In rock concert terms, this is like having Paul McCartney or Bob Dylan perform the kick-off set: thrilling and most likely worth half of the admission price.

Back in the 1980s, in papers like “Untraceable Electronic Mail, Return Addresses, and Digital Pseudonyms“, “Security without Identification: Card Computers to Make Big Brother Obsolete“, and “Untraceable Electronic Cash“, Mr. Chaum was already laying the foundations of future projects like Bitcoin and Monero, that would see the light of day almost three decades later. Furthermore, the American cryptographer’s idea of blind signatures is mentioned in both Greg Maxwell’s 2013 proposal for CoinJoin, and most of Hal Finney’s body of work in the field of digital cash (“Detecting Double Spending“, “Patent Search on Blind Signatures“, “The Beauty of Ecash“, et al).

The influence of David Chaum is simply inescapable in the field of cryptocurrencies, and it’s hard to come up with something that doesn’t involve ideas from his previous works. Even cypherpunk Tim May proved to have a strange fascination with the research of Mr. Chaum and mentioned his name 12 times in “The Cyphernomicon“, with a clear emphasis on “digital mixes”. Furthermore, Hal Finney identified a somewhat ideological dimension in the Chaumian idea that individuals can make use of cryptography to get away from oppressive governments and intrusive corporations – instead of being an extension of Big Brother, the computer can be liberating and protective of liberties (as presented in a 1992 message from the cypherpunk mailing list).

Without David Chaum’s liberating research papers and essays of the 1980s (which inspired an entire generation of cypherpunks to aspire for more privacy) and ecash (the cryptographic electronic money that the DigiCash company issued in the 1990s), it’s very likely that we wouldn’t have Bitcoin today. And in the absence of Satoshi Nakamoto’s invention, there would be no blockchain industry, no multi-billion market for cryptographic financial assets, and no practical way to counter the intrusive governments and data-hungry corporations.

Mr. Chaum is responsible for starting it all and it’s admirable that he still makes contributions to improve on the existing models. The OG cypherpunk, he has been involved with the Elixxir project, which is a bona fide spiritual successor of the DigiCash initiative. However, the idea of sending anonymous transactions has received a much-required update to concern other forms of free speech that need to be protected: messaging and data transfers from decentralized applications. In his blog posts, Mr. Chaum talks about metadata and how this kind of digital information can give away some of the most intimate details about our lives and habits.

Elixxir has come into the world with a very impressive promise: that of solving the trilemma of privacy, security, and scalability. And as the BetaNet application expires and the dApp receives enough testing, it’s possible for us to discover some fascinating breakthroughs in the field. Innovation is no stranger to this dynamic field, and any project in which David Chaum gets involved is something worth following and trying.

Crypto Insider and David Chaum’s speech at the Paris Blockchain Week

During his 20-minute keynote speech at the Paris Blockchain Week Summit, which is scheduled to begin at 9:15 AM, Mr. Chaum is expected to brilliantly encompass almost four decades of experience in computer science, cryptography, and the continuous pursuit for privacy. From academic research papers that influenced an entire generation of coders, to the first commercial implementation of cryptographic money, and all the way to the more complex Elixxir project, there is plenty of fascinating information that the father of cypherpunks can present.

As a reader of cypherpunk discussions that even precede my birth, I am delighted to be a part of the privileged few who get to see David Chaum deliver this speech. There’s a lot more going on at the event with prominent industry figures, developers, regulators, and investors. However, given my background and interests, nothing with the exception of a live revealing of the real Satoshi Nakamoto can top this experience.

Now here’s the better part: you can join us too and be among the selected few who get to listen to Mr. Chaum and potentially interact with him. Therefore, if you’re in Paris on April 16th 2019 and want to see David Chaum, then you may use the code CRYPTOINSIDER30 to get a 30% percent discount on your ticket purchase. It’s even better than the default 20% price reduction when you use BTC, as you get to preserve your precious satoshis for times when the market looks better, and you actually pay less in fiat terms. Furthermore, getting full 2-days access grants you access to all events, a Ledger Nano S, and meals at a nearby restaurant. Find out more on the Paris Blockchain Week Summit page.

If you also want to meet the Crypto Insider team, exchange ideas, do some networking, and possibly shoot an interview for our YouTube channel, then you may find us there on both days of the conference – April 16th and 17th.

*This post is partially sponsored by the Paris Blockchain Week Summit organizers, as they have granted Crypto Insider free press passes to attend the event.

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Bitcoin and Friends: The animation we didn’t know we needed

The true beauty of Bitcoin is that one can’t describe it in a complete and all-encompassing definition. Depending on their backgrounds and life experiences, some people will see in it a mean for economic empowerment and financial transparency, or a refuge from their oppressive governments. However, the makers of the unlikely hit cartoon show “Bitcoin and Friends” have portrayed the beloved cryptocurrency as a conscious and self-aware oddity that socializes and seeks agency.

Complete this image with a Jungian father complex and a permanent search for identity and purpose, and you get the recipe for an intriguing series that reminds us all about the humble beginnings of Bitcoin and its unlikely rise to success.

“Bitcoin and Friends” isn’t, by any means, the definitive show that everyone should watch in order to better understand this global financial phenomenon. However, it summarizes some technical aspects in a friendly way which combines (rather grotesque) humor with romanticized historical facts about Satoshi Nakamoto’s creation.

For instance, Bitcoin comes into the world in a time of financial crisis, when honest individuals find themselves in a difficult situation where they can no longer pay their bills. Nobody can really see any potential and value in this odd creation, and it’s not until a part-time drug dealer named Jones discovers the insecure coin-shaped creature that the adventure really begins.

From this early stage of easing black market trades to the moment when computer nerds like Mitalik (a comical and slightly exaggerated portrayal of Vitalik Buterin) and Harold (probably a tribute to Harold “Hal” Thomas Finney, who actually worked as a video game developer) discover the brilliant qualities of Bitcoin, there is only a small leap to make. And it’s only after Bitcoin finds some friends that this long and winding journey of existential crisis truly begins.

The beauty and charm of the show aren’t really to be found in the story – which is better told by the dozens of documentaries which present most known facts about Satoshi Nakamoto and his revolutionary cryptocurrency. “Bitcoin and Friends” is all about the entertainment value and ability to encapsulate as many events and phenomena in a 20-minute comedy show.

This kind of presentation is extremely valuable because it resembles the format of hit cartoons with adult humor like South Park or Futurama. It’s the perfect pill for no-coiners to swallow and become intrigued about Bitcoin, but also holds some entertainment value for old-timers who simply want to have a laugh.

Just take notice that “Bitcoin and Friends” is not, by-any means, children-friendly. It makes use of a very adult sense of humor, tells stories about times that kids won’t remember anyway, contains some swear words, and even features images of penises that urinate on the innocent invention of Satoshi.

But by the time you get to the end of the pilot episode, you will realize that all of this is worth it: an old and wise representation of Hal Finney (renamed as Pal Fifty) will drop the ultimate piece of wisdom about Bitcoin’s potential – in the end, nobody will have to exchange any amount of BTC for fiat anymore.

It’s very likely that we will be having a follow-up pretty soon, but the release depends entirely on community support via donations: at press time, 4.95 more BTC are required in order to unlock the public availability of the continuation. As a matter of fact, an entire first season consisting of eight episodes is planned on the project’s homepage.

Therefore, if you want to show your friends an edgy South Park-esque animation about Bitcoin and its tumultuous history, you may either donate or wait for other community members to reach the quota. But regardless of your choice, you should consider screening this episode to your no-coiner friends the next time you hang out at your place. Worst case scenario, they will laugh at the toilet humor and forget all about it. But there is also a chance for you to irreversibly change their lives.

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Running a Bitcoin node in 2019: becoming a first class citizen

Running your own node is one of the most important premises which enables Bitcoin’s decentralization. It empowers every user to validate their own transactions, it increases security and privacy by storing the blockchain activity on your own device (so that nobody knows which addresses are yours and which ones belong to someone else), and it strengthens the network by further pressuring participants to remain honest. Furthermore, the node is an essential prerequisite for onboarding the Lightning Network.

In a system of checks and balances, the miners play the role of block producers, while full nodes validate each transaction and prevent arbitrary changes of consensus protocols. If this were physical gold, you could say that the former category waste valuable resources to mint new amounts of the precious metal, while the latter folks check its authenticity according to the chemical properties of gold.

To paraphrase the great bitcoiner Melik Manukyan, the past and the future must be secured simultaneously:

The good news for us non-technical users is that specialized developers have created friendly interfaces which allow us to run a full validating node without writing a single line of code. The bad news is that the process still isn’t as user-friendly as one might expect, and the system requirements might be a little deterring for some.

However, in a world where financial sovereignty is the supreme value, good security and decentralization come with a great responsibility. We shouldn’t expect others to run honest nodes for us, and it’s best to not rely on BIP37 light wallets. True bitcoiners will understand that these costs outweigh the benefits of convenience.

The DIY approach to running your own node

In the year 2019, you can simply spend $300 on a box that comes with a pre-synced Bitcoin node and allows you to onboard the Lightning Network with just a few clicks. However, an external high-speed SSD and 2 days of electricity are way cheaper and offer greater educational benefits about financial sovereignty.

On one hand, you get to learn how it’s done and actually enrich your bitcoiner knowledge by doing something useful. On the other hand, running the software yourself gives you more options than the simplified dashboard developed by a Bitcoin-friendly company (for instance, the Casa Node won’t let you set transaction fees and most likely uses the momentary network average, which means that you may always pay more satoshis than you would like). Choosing a Lightning implementation of your choice is also empowering.

Another option is to buy a Raspberry Pi, a hard drive, and some sort of enclosure. The RaspiBlitz DIY project is popular among community members, but the limited hardware capacity may prove to be slow and unreliable. Synchronizing a full Bitcoin node will take longer on a system which has a slower processor and less RAM, so it’s more efficient to make use of the computer you already own.

In order to conduct this experiment, I’ve bought a 512 gigabyte Adata SD600 SSD, which I can connect to one of the USB 3.1 ports in my computer. It’s cheap (somewhere between $80 and $100 on Amazon), small-sized, covered in rubber to absorb potential shocks, and pretty rugged. Naturally, there are plenty of other options (it’s said that the Samsung SSDs are most reliable and durable), but I’ve just picked the cheapest one I could find, and it also came with 3 years of warranty.

Also, given the fact that the Bitcoin blockchain size is about 246 GB at press time, with a conservative expectation of 1 MB/block every 10 minutes, then the remaining 266 GB will be occupied in approximately 1891 days (5.1 years). It will most likely take less due to SegWit and increasing demand, and I still haven’t taken into consideration Lightning clients. However, I expect about 3 years of service until I move on to a 1-2 TB device that will be much cheaper by that time.

Synchronizing the node

After you get a storage device that you can use only for the node and you also have the computer that you use on a daily basis, it’s time to run Bitcoin Core. Right now you can download version 0.17.1 of the client on the Bitcoin.org website, and install it on Windows, MacOS, or Linux (ARM, Tgz, and Ubuntu).

As Tom Petty once said, the waiting is the hardest part. It’s not difficult to save Bitcoin Core on your computer and run the installation steps, but the Initial Block Download can look intimidating. Depending on your internet speed, RAM availability, and processing power, it can take anywhere from a day (on a modern desktop with more than 8GB of RAM) to a few weeks (on a weak device like the Raspberry Pi).

In my case, it took 35 to 40 hours on a late 2015 iMac (i5 quad core processor, 8 GB of RAM) with a 300 mbps (37.5 MB/s) internet connection. I had to leave the computer on all this time, disable the screensaver and power saving features, and allow Bitcoin Core to use as much as 4 GB of the RAM so I could also surf the internet in the background.

The Initial Block Download could have been reduced significantly if I allowed the client to use more RAM from the very beginning. Sadly, I didn’t start toggling with the settings until the synchronization got to mid-2016. Given the fact that the default amount is 300 MB of RAM, it’s very likely that the process could have been reduced to 30 hours or less had I known about this little trick.

Andreas Antonopoulos has taken some time to explain the Initial Blockchain Download process, and he recommended a modern quad core processor, at least 4 GB of RAM, and a fast SSD drive in order to have a quick synchronization. In the case of a Raspberry Pi, the process can even take a few weeks – which is fine if the only purpose of that device is to run the full node, but it can get annoying if you want to become a first class citizen a lot faster and would rather use your computer than buy another device.

A clean synchronization from scratch on a Casa Node, RaspiBlitz project, or even Nodl takes a lot longer than on the average computer which fulfils the hardware specifications above. The only issue with using your desktop or laptop for running a full node will be encountered once you start using the Lightning Network, as your channels won’t be active at all times unless you leave your device permanently on (which definitely consumes more energy than a Raspberry Pi).

In Lightning Labs’ LND, there is a 24-hour clause which automatically closes down channels and returns the satoshis to their last owners unless you reactivate the connection on time. Also, you definitely won’t route too many payments and earn rewards if you’re only a part-timer. But if you only use Lightning when you need it, it’s all fine and you will find the service more than satisfactory.

I’ve synced my full node. Now what?

Congratulations, you’re a first class citizen who validates his own transactions and doesn’t trust third parties. The next logical step towards financial sovereignty is to also use your node on both your desktop and mobile devices.

For maximum privacy, you may run Wasabi Wallet, mix your BTC via CoinJoin, and also make every transaction under the protective veil of ToR. Thankfully, the implementation also connects to your full node, which means that you’re getting the maximum amount of privacy, security, and fungibility. The Bitcoin Core wallet is also a sturdy and time-tested option, but you definitely benefit from more functions with Wasabi.

Furthermore, a hardware wallet like Trezor can also connect to your full Bitcoin node, but requires some toggling: the backend must be compiled and ran next to the node. You may find more details on their GitHub, but it’s not recommended to do this kind of experimentation unless you know what you’re going. Ledger has yet to announce such an implementation, but we’re in the middle of an awakening where the fundamentals get discovered by a larger number of users, so it’s likely that the process will be sped up by increasing demand.

In terms of mobile wallets, it’s recommended that you use either Samourai Wallet or Blockstream Green. The issue is that, at press time, only the Android versions allow you to connect to your full node (developers from both team have made promises about iOS implementations, but it’s more difficult to make Apple allow certain features and settings for the apps in their store). Nevertheless, you can get a cheap phone with a clean installation of Android which doesn’t have any bloatware, and take advantage of your increased privacy – just be sure to not give away too much data to Google.

You’re also eligible to onboard the Lightning Network, but this discussion requires an entire article of its own and I’m planning to publish it after I experiment with some of the clients available (Lightning Labs’ LND, Blockstream’s C-Lightning, Pierre Rochard’s Node Launcher, et al).

But until the follow-up gets written, feel free to comment by mentioning how long it took to synchronize the full node on your system. If you feel comfortable with sharing the information with a research project which rewards you with Lightning tips, feel free to get in touch with Bitcoin IBD on Twitter.

Image by Colin Behrens from Pixabay

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Interview: Bisq Network’s Steve Jain on peer to peer crypto trades & privacy

The Bisq Network can be described in very simple terms as the BitTorrent of cryptocurrency exchanges. Instead of creating a central point of failure that exists by virtue of governmental mercy, the enthusiastic coders behind the project have built an ecosystem where you store your own data locally and transact with other users under a powerful veil of privacy.

In this exclusive Crypto Insider interview, Steve Jain (who does technical writing and documentation for Bisq) talks about the nature of the network, its upcoming ambitious plans which also involve a Bitcoin DAO, and the main differences between this decentralized service and competitors like Local Bitcoins and HodlHodl.

What is Bisq and why does it matter?

Bisq is less of a service and more akin a protocol that makes use of existing technologies in order to enable fast, peer to peer, and private transactions. Signing up doesn’t even require an e-mail address, as participation is the sum of interactions between autonomous actors.

Furthermore, once you create an account, you have no idea with whom you are transacting, which increases the fungibility of the coins. In order to protect this privacy feature, all operations are protected under the mighty cloak of ToR onion routing.

One important feature of Bisq involves crypto to fiat exchanges where you become the only person to know with whom you are trading, and there are systems in place which prevent money laundering. Not even the bank will know why you are sending the fiat, which makes it all more exciting.

Steve Jain explains really concisely that the mechanism was conceived to avoid controversies, and make sure that no funds get lost or stolen. An escrow system insures the validity of transactions by taking into account network confirmations, but at the same time the data does not get stored on a central server and only the participants will be able to keep records of their activity.

If this concept sounds intriguing, then you will definitely enjoy listening to this 38-minute interview with Steve Jain, as some of the most fundamental cypherpunk principles get described in relation to actual functionalities on the Bisq Network.

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JP Morgan drops JPM Coin, embraces XRP

On April 1st 2019, JP Morgan Chase Chairman and CEO Jamie Dimon has announced the end of the JPM Coin project. The vocal Bitcoin critic, whose bearish statements are still considered to be responsible for the BTC price drop from September 2017, is nevertheless positive that another cryptocurrency will take over the world of finance by becoming the new standard.

In an official statement that he made exclusively for Crypto Insider, Mr. Dimon said “I genuinely thought that a cryptocurrency of the bankers and by the bankers was the solution that we needed to increase our institutional efficiency. However, as soon as I saw a couple of tweets from XRP Trump and Tiffany Hayden, I instantly FOMO’d and thought to myself ‘What is XRP is actually the standard?’. I mean, if Bill Clinton agreed to hold a speech at their Swell Conference, then they must be up to something, right?”.

When asked about his favorite feature of XRP, the JP Morgan Chase executive replied “It’s the supply management. The fact that 60% of the coins are being held by the Ripple company and the unquestionable utility of the XRP token within the greater Ripple ecosystem have convinced me that this is the right choice for us as a financial institution.”

Truth to be told, the idea of being exempt from market volatility is just not as fun as exposing yourself to the greed of big bagholers. If JP Morgan Chase acquires the remaining 60% of the XRP coins, they make a wise investment which costs them 18.4 billion dollars. Conversely, printing a new coin would bring lots of operational and advertising costs. Why create something that suits your needs when you can have a coin that you can’t control and puts you at financial risk?

Reactions from the XRP community

The news has been received with unparalleled enthusiasm by the XRP Twitter community, as lots of them posted the exact same message “We can’t wait for $3 so we can dump our bags on the bankers”. The only two individuals who stood out by tweeting something different were Tiffany Hayden and XRP Trump.

In contrast to Ms. Hayden’s positive and enthusiastic message, XRP Trump was more philosophical and incisive. He basically inquired “Why care about so-called stablecoins when you can make mad gains from highly volatile assets like Ripple’s XRP?”.

Ripple CEO Brad Garlinghouse and cryptographer David Schwartz have also announced that their collaboration with JP Morgan Chase means that the 2019 Swell conference would feature Barack Obama, Thomas Piketty, Bill and Hilary Clinton, Nouriel Roubini, Joseph Stiglitz, and every other left-wing politician or Keynesian economist who ever expressed criticism on Bitcoin.

Furthermore, the entire community has agreed that the joint effort with JP Morgan Chase would make the $589 price prediction irrefutably accurate in the coming inflationary years.

At press time, it seems like the JPM Coin project has been completely abandoned, as development efforts are being directed towards XRP in order to implement Plasma, Sharding, Raiden, and Schnorr Signatures.

Disclaimer: Happy April Fools’ Day! This article is a satire and should be treated as such.

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Satoshi Nakamoto returns to Bitcointalk: “I am not Craig S. Wright”

On April 1st 2019, a new post has popped out on the Bitcoin Discussion forum of Bitcointalk.org. In an unexpected turn of events, Satoshi Nakamoto himself has reactivated his account for the first time in years to deliver a clear message: he is not Craig S. Wright and is still among us patiently waiting for the last BTC to be mined in 2140.

This is really great news for cryptocurrency fans all around the world, as the Australian academic and businessman can no longer claim that he has “the vision” with his forked coin, and we all know that Satoshi is alive and kicking.

Uncharacteristically for his style, yet in line with contemporary culture, the cypherpunk has also attached a cryptic meme which depicts a three-way collage of the BSV altcoin leader, Carlos Matos of Bitconnect, and Elizabeth Holmes of Theranos. The text on this prophetic delivery simply reads “What do these people have in common?”. However, the meaning is yet to be deciphered.

In order to better understand the peculiar phenomenon and make sure that this isn’t just another case of an April Fool’s joke on a potentially hacked forum account, we have contacted Ashton University lecturer Jake Greeve.

The academic, who previously ran a thorough analysis of Satoshi Nakamoto’s writing, has confirmed to us that the use of punctuation and phrasing are indeed a match, so whoever posted the message is either Satoshi or somebody who has spent hundreds of hours practicing in order to appropriate the style.

In regards to the cryptic meme, Dr. Greeve said that it represents a natural evolution of Satoshi’s linguistic expression. “The thin frames, the large pictures which acknowledge some of the best known lying sociopaths of our time, and the open-ended question are all signs of authenticity”, he added.

Crypto Insider’s team of digital image specialists have generated a higher-resolution version of Mr. Nakamoto’s meme, as a way of trying to identify hidden details. You may find the result below.

If Satoshi wants to see us in 2140, does that mean that he’s immortal alien?

According to Ancient Aliens producer and Erich von Daniken ancient aliens theory expert George Tsokaloos, it’s very likely that Bitcoin was created by “Anunnaki astronauts who decided to help the humankind move away from gold”.

When asked about the legitimacy of nChain scientist Craig S. Wright, Mr. Tsoukaloos simply replied “He’s most likely a reptilian shapeshifter who undergoes an undercover sabotage of galactic proportions. It’s likely that it was him and Satoshi Nakamoto who were depicted on the Great Pyramid of Giza.

This forgotten image suggests that the Bitcoin creator has been among us for millennia, and may be anything from a benevolent alien to a time-traveling astronaut. “Anything and anyone but Craig Wright”, says the reputed alien researcher.

Crypto Insider has contacted Satoshi Nakamoto to comment on the strange message he posted. At press time, he hasn’t replied.

Disclaimer: Happy April Fools’ Day! This article is a satire and should be treated as such.

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Magical Crypto Friends Episode 17: Coinbase, Lightning, JPM Coin & one obscure conference

The seventeenth episode of Magical Crypto Friends begins with a brief presentation of stylish cartoony sneakers that use the show’s graphics. Though it’s unlikely that the world of fashion would embrace this design, it would be unwise to doubt the eccentricity of the crypto community.

After this humorous introduction, the four Bitcoin lovers (who also indulge in appreciating some certain altcoins to which they might just be affiliated) talk about the Magical Crypto Conference. In a nutshell, they brag about having the best speakers in the industry, not compromising on the quality in order to give sponsors some talking slots, and covering most areas of interest in the crypto world.

Cypherpunks like Adam Back, Peter Todd, and Andrew Poelstra will be covering the technical and development side, then there will be a dedicated section for Lightning developers who even kick-off the event, and the event even features some mainstream finance participants such as former SEC commissioner Troy Paredes and Deloitte Tax Partner Rob Massey. If you would like to find out more about the guests who will be holding presentations during the event, check out the exclusive Crypto Insider coverageor go straight to the official websiteand maybe buy some tickets. 

As a disclaimer, you should know that Crypto Insider is a media partner of the event and will also provide coverage during this year’s Blockchain Week.

If all of this sounded a little too good to be true, then Charlie Lee ruins it with a joke about potentially having a dedicated panel for scammers. The four friends laugh at the idea of inviting people who (more or less secretly) hate Bitcoin, and then move on to an important issue: some folks don’t distinguish between the show and the conference, then assume that the $300 ticket is an admission fee to watch a live episode of Magical Crypto Friends. This is wrong, and if you still didn’t understand what the concept is about, you should check the link of the official website above.

Though Whale Panda, Charlie Lee, Riccardo Spagni, and Samson Mow agree that it’s unlikely that they will break even with the costs for hosting such an event in New York, they still confess to hoping to have a similar show on all continents of the world, preferably as frequently as passible. Of course, the fruition of such a project depends on the success of this first attempt which Crypto Insider also supports.

Fifty Shades of Coinbase: Cloud storage, more BCH, XRP, and then the Neutrino-Hacking Team saga

As Whale Panda and Samson Mow point out, Jesse Powell (CEO of the Kraken exchange) has basically mocked Coinbase’s poor decisions by presenting a company report about the risks involved in acquiring various blockchain intelligence teams worldwide: Hacking Team wouldn’t have made the cut for both competence and ethical reasons, but could have been the cheapest to overtake.

Charlie Lee, a former Coinbase engineer, agrees that the company shouldn’t have doubled down on their decision to acquire Neutrino (whose leaders are associated with the controversial Hacking Team group). He mentions the days when employees would be able to sit in the same room with CEO Brian Armstrong and confront his potential bad decisions, and affirms that there are definitely people who dislike the acquisition of Neutrino for both ethical and professional reasons – the intelligence group might even modify their code on the go or track it in unpleasant ways.

Nevertheless, Mr. Chikun thinks that the people joining the #DeleteCoinbase movement are mostly users who no longer use the exchange. Whale Panda agrees and mentions how Coinbase has been one of the exchanges of his choice thanks to the higher listing price, though he stopped using it after the bear market began (and eventually deleted his account after liquidating it).

Riccardo “Fluffy Pony” Spagni adds that many Coinbase users have onboarded the exchange thanks to referral links and recommendations from non-technical people who found the interface convenient. However, he believes that the recent events will deter many of these recommendations and switch them to another service.

According to the leading Monero developer, Neutrino is the last straw that broke the camel’s back, after a long series of issues from the past (including Brian Armstrong’s controversial positions in relation to Bitcoin and the decision to list XRP despite regulatory uncertainty).

Samson Mow contributes by saying that Hacking Team has previously gotten hacked, which means that their services aren’t as groundbreaking and security-proof as the PR departments might say. He also states that the weakness of Brian Armstrong can be found in his excessive amount of doubling down on decisions and never taking a step back to aplogize and resolve issues.

Binance’s DEX and decentralization

If an exchange is owned by Binance and makes use of their native token, then can it still be called a decentralized platform? This is a dilemma which Whale Panda introduces by implying that the DEX name exists more due to marketing considerations.

Charlie Lee opens up a discussion about the meaning of the word “decentralized”, and how a company like Binance might regard a lesser amount of control as actually eligible for the label. Centralization and decentralization, after all, depend on the individual’s perception and expectations of the terms.

Whale Panda implies that a project that asks $100k dollars to list other coins cannot be called decentralized. In this context, Charlie Lee mentions that he would never pay to have Litecoin listed, then proceeds to tell an anecdote about obscure exchange representatives messaging him on Telegram to indirectly ask for compensations. The Litecoin creator’s answer is usually “Go ahead, list it!”

Riccardo “Fluffy Pony” Spagni takes it even farther by suggesting that he once asked money from the exchange in order to have the privilege of listing Monero – and this funny situation came as a response after receiving a pricing offer from a cryptocurrency exchange.

This mention sparks a humorous exchange about Monero finally getting traction on social media with a hashtag that is as catchy as #XRPtheStandard. The four friends finally settle for #XMRNavi as a reference to navigation and Fluffy Pony’s tragic boating accident which made him lose all of his private keys.

JPM Coin announces a new stablecoin, challenges XRP

The main argument here revolves around Jamie Dimon’s change of heart, as he spent quite some time criticizing Bitcoin in 2017 and 2018, but now decides to create a cryptocurrency for the specific needs of JP Morgan (on a private blockchain, that is).

Riccardo “Fluffy Pony” Spagni mentions that despite the apparent internal use case, the long-term plan should be that of extending the monetary service to other banking institutions too.

Samson Mow suggests that JPM Coin is a better version of Ripple, and then Charlie Lee quickly replies that he doesn’t really see it. This leads to a funny reply where the Litecoin creator gets called an XRP maximalist. Whale Panda also contributes to the discussion by saying that the planned stablecoin project is made by the bankers for the bankers, and has greater chances than XRP to get traction within the traditional financial sector.

For a few moments, the discussion returns to the conference and the difficulties of financing all operations. That’s why the Magical Crypto Friends jokingly imply that they should issue a pre-mined utility token of which they hold 90%, just to really get rich off of their event.

Whale Panda changes the topic to cover the Coinomi wallet hack via Google spellchecker API

As previously reported by Crypto Insider in 2017, the Coinomi wallet is far from perfect. Yet the events that took place in late February with the spellchecker API truly demonstrate a lack of sound security measures: in a nutshell, several desktop wallets have been hacked after the Google spell checking tool has sent the seed keys (or mnemonics) to a third party server from where someone could simply access the funds.

Charlie asks if the spell-checking function was enabled for everything that was being typed, or if that was an exclusive feature. Then the situation turns into a joke which questions the need for such functions in wallets that are meant to be secure. Mr. Lee even mentions that he Googles his seed keys just to make sure that they’re unique and nobody uses them. 

Riccardo “Fluffy Pony” Spagni takes it farther by suggesting that a similarly-unwise security choice would be to post all mnemonics on Twitter, with the exception of one – just to see if anyone else has the exact same.

Charlie also mentioned that there are plenty of bad ways to store your seed keys. Then WhalePanda brought to attention the conspiracy theory according to which every line of the Bitcoin Whitepaper contains a letter of a secret seed key which unlocks a big treasure wallet. 

Samson inquires, in the same humorous tone that characterizes this whole discussion, if someone has tried to input “Banks on brink” and try to figure out how to get to the secret Satoshi funds. After Fluffy Pony implies that it’s all a hash of Craig Wright, Whale Panda suggests a topic change to the Lightning Torch.

#LNTrustChain, Hodlonaut’s torch as a Lightning proof of concept, and LN FUD

The consensus about Hodlonaut’s LN torch is that it pushes the Lightning developers to increase the channel limit. Samson acknowledged that after a certain threshold, the game has become a challenge even for cypherpunk Adam Back, as the maximum amount had to be changed from the code or the invoice had to be split. 

Whale Panda adds that the fact that people debug and put their programming knowledge to good use is great for the project. Furthermore, Charlie Lee implies that Proof of Work inventor Adam Back has cheated when he split the invoice in two parts, to which Samson replies that the cypherpunk has segregated the torch (a reference to SegWit and the UASF days which ignited the Magical Crypto Friends show).

Whale Panda adds that the fact that people debug and put their programming knowledge to good use is great for the project. Furthermore, Charlie Lee implies that Proof of Work inventor Adam Back has cheated when he split the invoice in two parts, to which Samson replies that the cypherpunk has segregated the torch.

Mr. Panda also approaches the topic of Lightning FUD that altcoins push as a way of surviving on a market that deems them obsolete. Fluffy Pony goes on to mention the issues with bad technical analyses where facts get made up to build a narrative that favors a certain cryptocurrency. 

Whale Panda then goes on to read about the story of Jason Smith, who claims he can’t pay salaries via Lightning while the BTC on-chain fees are about 5 cents. Samson points out that the account must be trolling, as sending monthly payments worth thousands should automatically imply a couple of dollars in fees. 

Charlie adds that Lightning could eventually support large transactions, but that defeats the purpose. Furthermore, Riccardo Spagni presents the case of Bitrefill and how they innovated the market in ways that weren’t initially envisioned. The argument is meant to emphasize on the fact our present-day Lightning Network that we have now is not the final form and we should be looking forward to greater innovations that we don’t even see right now. 

As a response, Whale Panda brought forward the case of the internet in 1990 and how it was thought to be a completely different network. Also, the situation of Alex Bosworth of Lightning Labs and the way he annoyed one of the main writers of the LN whitepaper with his ideas for changes is yet another example of continuous innovation. 

Samson Mow references Christian Decker who was also one of the founders of Lightning and currently works at Blockstream on c-Lightning. In a nutshell, the innovative developer who invented duplex micropayment channels before the first Lightning whitepaper was drafted, has acknowledged that the initial LN design wasn’t perfect and needs constant refinements.

In response, Riccardo Spagni mentions that Lightning is game-changing because it doesn’t follow the same consensus rules as Bitcoin, has multiple teams developing it, and can be patched quickly and without the risk of causing inflation bugs or other issues found in the first layer. 

Samson goes on to compare Lightning with the early dial-up internet connections which were only a phase of the network, and not the final state which onboarded most people. 

Whale Panda decides to briefly change the topic and ask the audience which one of the four Magical Crypto Friends is the oldest, and then proceeds to make dial-up modem sounds along with Fluffy Pony.

Facebook Coin?

The next important news that gets discussed is Facebook’s rumored cryptocurrency, which was presented in a New York Times articleas the invention which succeeds to attain the mainstream adoption that Bitcoin didn’t get.  

Charlie Lee is the first to mention that a centralized coin is uninteresting, then ironically implies that Bitcoin has obviously failed. Samson Mow points out that Nathaniel Popper, the author who came up with the controversial editorial conclusion, has also written a book about Bitcoin which is called “Digital Gold”.

Furthermore, the cute anthropomorphic lion suggests that this attempt to create a Facebook currency is not even new: before Facebook Coin, there were the Facebook Credits that failed as an internal currency.

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