Explained: What causes the Rise and Fall of Bitcoin Price ...

Testing the Tide | Monthly FIRE Portfolio Update - June 2020

We would rather be ruined than changed.
-W H Auden, The Age of Anxiety
This is my forty-third portfolio update. I complete this update monthly to check my progress against my goal.
Portfolio goal
My objective is to reach a portfolio of $2 180 000 by 1 July 2021. This would produce a real annual income of about $87 000 (in 2020 dollars).
This portfolio objective is based on an expected average real return of 3.99 per cent, or a nominal return of 6.49 per cent.
Portfolio summary
Vanguard Lifestrategy High Growth Fund – $726 306
Vanguard Lifestrategy Growth Fund – $42 118
Vanguard Lifestrategy Balanced Fund – $78 730
Vanguard Diversified Bonds Fund – $111 691
Vanguard Australian Shares ETF (VAS) – $201 745
Vanguard International Shares ETF (VGS) – $39 357
Betashares Australia 200 ETF (A200) – $231 269
Telstra shares (TLS) – $1 668
Insurance Australia Group shares (IAG) – $7 310
NIB Holdings shares (NHF) – $5 532
Gold ETF (GOLD.ASX) – $117 757
Secured physical gold – $18 913
Ratesetter (P2P lending) – $10 479
Bitcoin – $148 990
Raiz app (Aggressive portfolio) – $16 841
Spaceship Voyager app (Index portfolio) – $2 553
BrickX (P2P rental real estate) – $4 484
Total portfolio value: $1 765 743 (+$8 485 or 0.5%)
Asset allocation
Australian shares – 42.2% (2.8% under)
Global shares – 22.0%
Emerging markets shares – 2.3%
International small companies – 3.0%
Total international shares – 27.3% (2.7% under)
Total shares – 69.5% (5.5% under)
Total property securities – 0.3% (0.3% over)
Australian bonds – 4.7%
International bonds – 9.4%
Total bonds – 14.0% (1.0% under)
Gold – 7.7%
Bitcoin – 8.4%
Gold and alternatives – 16.2% (6.2% over)
Presented visually, below is a high-level view of the current asset allocation of the portfolio.
[Chart]
Comments
The overall portfolio increased slightly over the month. This has continued to move the portfolio beyond the lows seen in late March.
The modest portfolio growth of $8 000, or 0.5 per cent, maintains its value at around that achieved at the beginning of the year.
[Chart]
The limited growth this month largely reflects an increase in the value of my current equity holdings, in VAS and A200 and the Vanguard retail funds. This has outweighed a small decline in the value of Bitcoin and global shares. The value of the bond holdings also increased modestly, pushing them to their highest value since around early 2017.
[Chart]
There still appears to be an air of unreality around recent asset price increases and the broader economic context. Britain's Bank of England has on some indicators shown that the aftermath of the pandemic and lockdown represent the most challenging financial crisis in around 300 years. What is clear is that investor perceptions and fear around the coronavirus pandemic are a substantial ongoing force driving volatility in equity markets (pdf).
A somewhat optimistic view is provided here that the recovery could look more like the recovery from a natural disaster, rather than a traditional recession. Yet there are few certainties on offer. Negative oil prices, and effective offers by US equity investors to bail out Hertz creditors at no cost appear to be signs of a financial system under significant strains.
As this Reserve Bank article highlights, while some Australian households are well-placed to weather the storm ahead, the timing and severity of what lays ahead is an important unknown that will itself feed into changes in household wealth from here.
Investments this month have been exclusively in the Australian shares exchange-traded fund (VAS) using Selfwealth.* This has been to bring my actual asset allocation more closely in line with the target split between Australian and global shares.
A moving azimuth: falling spending continues
Monthly expenses on the credit card have continued their downward trajectory across the past month.
[Chart]
The rolling average of monthly credit card spending is now at its lowest point over the period of the journey. This is despite the end of lockdown, and a slow resumption of some more normal aspects of spending.
This has continued the brief period since April of the achievement of a notional and contingent kind of financial independence.
The below chart illustrates this temporary state, setting out the degree to which portfolio distributions cover estimated total expenses, measured month to month.
[Chart]
There are two sources of volatility underlying its movement. The first is the level of expenses, which can vary, and the second is the fact that it is based on financial year distributions, which are themselves volatile.
Importantly, the distributions over the last twelve months of this chart is only an estimate - and hence the next few weeks will affect the precision of this analysis across its last 12 observations.
Estimating 2019-20 financial year portfolio distributions
Since the beginning of the journey, this time of year usually has sense of waiting for events to unfold - in particular, finding out the level of half-year distributions to June.
These represent the bulk of distributions, usually averaging 60-65 per cent of total distributions received. They are an important and tangible signpost of progress on the financial independence journey.
This is no simple task, as distributions have varied in size considerably.
A part of this variation has been the important role of sometimes large and lumpy capital distributions - which have made up between 30 to 48 per cent of total distributions in recent years, and an average of around 15 per cent across the last two decades.
I have experimented with many different approaches, most of which have relied on averaging over multi-year periods to even out the 'peaks and troughs' of how market movements may have affected distributions. The main approaches have been:
Each of these have their particular simplifications, advantages and drawbacks.
Developing new navigation tools
Over the past month I have also developed more fully an alternate 'model' for estimating returns.
This simply derives a median value across a set of historical 'cents per unit' distribution data for June and December payouts for the Vanguard funds and exchange traded funds. These make up over 96 per cent of income producing portfolio assets.
In other words, this model essentially assumes that each Vanguard fund and ETF owned pays out the 'average' level of distributions this half-year, with the average being based on distribution records that typically go back between 5 to 10 years.
Mapping the distribution estimates
The chart below sets out the estimate produced by each approach for the June distributions that are to come.
[Chart]
Some observations on these findings can be made.
The lowest estimate is the 'adjusted GFC income' observation, which essentially assumes that the income for this period is as low as experienced by the equity and bond portfolio during the Global Financial Crisis. Just due to timing differences of the period observed, this seems to be a 'worst case' lower bound estimate, which I do not currently place significant weight on.
Similarly, at the highest end, the 'average distribution rate' approach simply assumes June distributions deliver a distribution equal to the median that the entire portfolio has delivered since 1999. With higher interest rates, and larger fixed income holdings across much of that time, this seems an objectively unlikely outcome.
Similarly, the delivery of exactly the income suggested by long-term averages measured across decades and even centuries would be a matter of chance, rather than the basis for rational expectations.
Central estimates of the line of position
This leaves the estimates towards the centre of the chart - estimates of between around $28 000 to $43 000 as representing the more likely range.
I attach less weight to the historical three-year average due to the high contribution of distributed capital gains over that period of growth, where at least across equities some capital losses are likely to be in greater presence.
My preferred central estimate is the model estimate (green) , as it is based in historical data directly from the investment vehicles rather than my own evolving portfolio. The data it is based on in some cases goes back to the Global Financial Crisis. This estimate is also quite close to the raw average of all the alternative approaches (red). It sits a little above the 'adjusted income' measure.
None of these estimates, it should be noted, contain any explicit adjustment for the earnings and dividend reductions or delays arising from COVID-19. They may, therefore represent a modest over-estimate for likely June distributions, to the extent that these effects are more negative than those experienced on average across the period of the underlying data.
These are difficult to estimate, but dividend reductions could easily be in the order of 20-30 per cent, plausibly lowering distributions to the $23 000 to $27 000 range. The recently announced forecast dividend for the Vanguard Australian Shares ETF (VAS) is, for example, the lowest in four years.
As seen from chart above, there is a wide band of estimates, which grow wider still should capital gains be unexpectedly distributed from the Vanguard retail funds. These have represented a source of considerable volatility. Given this, it may seem fruitless to seek to estimate these forthcoming distributions, compared to just waiting for them to arrive.
Yet this exercise helps by setting out reasoning and positions, before hindsight bias urgently arrives to inform me that I knew the right answer all along. It also potentially helps clearly 'reject' some models over time, if the predictions they make prove to be systematically incorrect.
Progress
Progress against the objective, and the additional measures I have reached is set out below.
Measure Portfolio All Assets
Portfolio objective – $2 180 000 (or $87 000 pa) 81.0% 109.4%
Credit card purchases – $71 000 pa 98.8% 133.5%
Total expenses – $89 000 pa 79.2% 106.9%
Summary
The current coronavirus conditions are affecting all aspects of the journey to financial independence - changing spending habits, leading to volatility in equity markets and sequencing risks, and perhaps dramatically altering the expected pattern of portfolio distributions.
Although history can provide some guidance, there is simply no definitive way to know whether any or all of these changes will be fundamental and permanent alterations, or simply data points on a post-natural disaster path to a different post-pandemic set of conditions. There is the temptation to fit past crises imperfectly into the modern picture, as this Of Dollars and Data post illustrates well.
Taking a longer 100 year view, this piece 'The Allegory of the Hawk and Serpent' is a reminder that our entire set of received truths about constructing a portfolio to survive for the long-term can be a product of a sample size of one - actual past history - and subject to recency bias.
This month has felt like one of quiet routines, muted events compared to the past few months, and waiting to understand more fully the shape of the new. Nonetheless, with each new investment, or week of lower expenditure than implied in my FI target, the nature of the journey is incrementally changing - beneath the surface.
Small milestones are being passed - such as over 40 per cent of my equity holdings being outside of the the Vanguard retail funds. Or these these retail funds - which once formed over 95 per cent of the portfolio - now making up less than half.
With a significant part of the financial independence journey being about repeated small actions producing outsized results with time, the issue of maintaining good routines while exploring beneficial changes is real.
Adding to the complexity is that embarking on the financial journey itself is likely to change who one is. This idea, of the difficulty or impossibility of knowing the preferences of a future self, is explored in a fascinating way in this Econtalk podcast episode with a philosophical thought experiment about vampires. It poses the question: perhaps we can never know ourselves at the destination? And yet, who would rationally choose ruin over any change?
The post, links and full charts can be seen here.
submitted by thefiexpl to fiaustralia [link] [comments]

How to Assess the Value behind Cryptocurrencies

How to Assess the Value behind Cryptocurrencies

https://preview.redd.it/5ihj6bi79dr41.jpg?width=6480&format=pjpg&auto=webp&s=babfa7255e9c017508197ec0bc7319d74b1050c9
Many of the investors and financial institutions that I talk to are hesitant to invest in cryptocurrencies, often saying that they can’t determine their real value. For example, if we were looking to buy equity in a company, we could look at its fundamentals and make a prudent decision about whether to invest in it or not. Crypto is different in that, it is in its early days and cannot present evidence of a long track record.
Admittedly, the process of value assessment may not be as straightforward for cryptocurrencies as for some of the more traditional asset classes. However, we can still refer to certain other drivers to help us form an assessment of value.
Let’s start with the original cryptocurrency, Bitcoin, and discuss how it compares to gold and commodities.
Valuing Bitcoin — Stock to Flow Ratio
Bitcoin is often valued using the stock to flow ratio, which quantifies the “hardness” of an asset. A report by Bayerische Landesbank found that:
“Applied to Bitcoin, an unusually strong correlation emerges between the market value of this cryptocurrency and the ratio between existing stockpiles of Bitcoin (“stock”) and new supply (“flow”).”
The book “The Bitcoin Standard” by Saifedean Ammous introduced the stock-to-flow approach in relation to valuing Bitcoin. The supply of Bitcoin can be engineered at will. Satoshi set into the protocol a drastic decline in supply growth (due to halving every 4 years). Price is decoupled from mining efforts, so as the price rises, the difficulty of mining Bitcoin increases. Subsequently, new supply, or flow, correspondingly reduces.
The supply profile is guaranteed by the existing setup — if the supply profile were to change, it would adversely affect the peer to peer network that holds bitcoin and dilute the value of their coins.
As a comparison, the stock to flow ratio is the way gold is valued. Gold is used as a store of value in hard times. The supply of gold cannot be increased in huge quantities, and the annual production of fresh gold (“flow”) is limited, adding only incrementally to the existing stockpile (“stock”). So gold is described as having a high stock to flow ratio. However much the price of gold increases, the amount produced will not be increased exponentially, which would dilute the stock to flow ratio.
The next Bitcoin halving is due to take place in May 2020, potentially hugely increasing the stock to flow ratio of Bitcoin. It will be interesting to see what that does to the Bitcoin price.
Valuing according to utility
A cryptocurrency must have a strong use case to incentivize people to have the coins. How useful a coin is feeds through to the value of the coin.
If we take the example of Ether, in order to execute commands and develop applications in the Ethereum blockchain, you need to own Ether. The Ether is converted into “Gas”, which is used to run the network. Ether is, therefore, the currency used to drive transactions and development on the Ethereum blockchain. The more people that are transacting with and on Ethereum, the greater the demand for Ether becomes, eventually leading to a price increase.
“Users will use the infrastructure that offers them the applications they need. And yes, at the moment this is clearly Ethereum. There are more Apps and smart contracts deployed on Ethereum than on all other application-focused blockchain protocols put together.” Max Lautenschläger, Managing Partner, Iconic Holding
Therefore, price of utility protocols is contingent upon the community engaging them and adoption of applications built on top of them. As long as they continue to build and adopt, because it is useful for them, the growing utility that will continue to drive value.
There are many other types of cryptocurrencies and crypto assets, as my colleague highlighted in a recent article. Crypto may be in its early stages and be extremely volatile, but traditionally-minded investors and financial institutions can rest easy knowing there are standard ways through which value can be calculated.
# # #
This article is strictly for educational purposes and isn’t to be construed as financial advice.
By Sara Sabin, Business Development, Iconic Holding
submitted by IconicLab to u/IconicLab [link] [comments]

WaykiChain CSO, Wayki Sun: Vaulting Ambitions Carried Boundless Energy

“Here we must run as fast as we can just to stay in place.”.
— — — Alice in Wonderland
Once, this was just a fairy tale, but now, in the blockchain industry, it has become the reality. The fairy tale came true in the blockchain industry.
Looking back on 2019, the world’s various uncertainty still while blockchain takes the real lead Having the whole world in view, the stablecoin project Libra has become a subject of the U.S. Congress, starting off the tremendous craze in blockchain worldwide, by storm; while Chinese government introduces a new policy that lists blockchain as an important breakthrough for its innovation focus.
It is in this historical turning point that Waykichain has successfully completed its own transformation.
Coping with the times, the reflection of the trend
At WaykiChain’ inception, WaykiChain entered the industry via the most appropriate entry point prediction, which its full enthusiasm has been frustrated by the policy of cognitive. Since then, Waykichain has retreated to ecosystem co-building. By providing one-stop help for the outstanding developers from all over the world, Waykichain has launched dozens of DApps in order to build its own public chain ecosystem.
There are full of obstacles and difficulties. Waykichain team has paid great attention and affection to the whole process. From technology, operation, promotion to marketing, all of which have caught up to the front of the industry in such experience and exploration.
As Wayki Sun, the “godfather” said, said: “The old conscious classicalists are always afraid of the arrival of new things, however, the efficient and advanced new system is so unstoppable.”
The changes in the industry have made some people like falling into ice caves but crying without tears, while others have ushered in more possibilities.
The key lies in whether the pulse of the development of the industry has been observed and the opportunities given by the times have been seized. In this way, even the detours will eventually become a rainbow to success.
All previous attempts and explorations let us deeply understand that innovation is not to take shortcuts, but to take root in the deepest reality, solve the problems of specific business scenarios, and match the rigid demand that lies deep inside of our users.
Taking the ecosystem as a breakthrough, Waykichain finally set its target in the financial direction.
Huatong Securities is the first case of Waykichain successfully landing in a business application scenario. As a successful precedent for cryptocurrency cross-border finance,
Huatong Securities has brought significant returns to investors in a series of new digital currency businesses. Data shows that some investors who participated in the subscription of new shares through Huatong Securities have achieved a return of over 30% in recent months. Through WUSD as the access channel, investors who have not been able to get involved in this field can also participate in it without obstacles.
Waykichain’s long-term: based on core values
Facing the rapid changes in the market, WaykiChain innovated from time to time, constantly iterating new ways of business paths. In the face of the uncertainty of the world, Waykichain has always adhered to its long-term, and through its internal cultivation, it used its own certainty to deal with the uncertainty of the world.
Such long-term is exactly the core value of Waykichain:
Firstly, WaykiChain will continue to maintain as a global leader in public chain technology and mechanisms.
The four-letter codes “Long”, “Teng”, “Tiger”, and “Yue” signify the roadmap of the future evolution of the Waykichain public chain. In the current “Teng” stage of the public chain, Waykichain not only achieved a global leader in a number of hardcore technical indicators such as TPS (average stable at 3300, peak 7800), transfer speed but also reached the industry in terms of the underlying logic and technical architecture. Leading positions, such as the construction of stablecoin systems and DEX at the bottom of the public chain, have surpassed the general contract-based construction in terms of security, stability, scalability, the convenience of paying fees, etc. The decentralized cross-chain technology completed at the end of the quarter will bring cross-chain assets such as Bitcoin and Ethereum to Waykichain, which will stimulate tens of billions of value liquidity; and the upcoming integration of the WASM virtual machine will also allow Waykichain acquires dual virtual machine engines for higher compatibility and performance.
“Publicchain is still in the era of clash of Titans. When all goes to all, technology will win out.” As Wayki's assertion of the public chain’s technical status, these explorations of public chain technology and mechanism have not only given WaykiChain the greater commercial application potential of public chain, also allows the public chain facilities built on it to have a stronger industry competitive advantage.
Secondly, vigorously expand the supporting construction of the commercial scene around Waykichain.
Regardless of whether it was cut through my prediction at the beginning, or then focused on the application ecosystem, or currently grasping the financial direction, although the rudder is constantly adjusting, the voyage of exploring the business model has never stopped.
At present, a complete set of decentralized financial system surrounding the stable coin WUSD of Waykichain has taken shape, and the profit model and commercial development path built on this financial system have become increasingly clear, including cross-border finance, cross-border payment, decentralization currency, denominated currencies, financial derivative transactions, etc. will all be important business application scenarios for Waykichain. On the last day of 2019, the WICC’s total network mortgage volume has exceeded 16 million, and the main destination of the WUSD loan is Huatong Securities’ cross-border financial investment.
Breaking Technology Silos: High Global Consensus
Owning, without connecting, will eventually become a technology island. What Waykichain does is to link realistic business scenarios and huge users outside the circle, and finally form a high degree of global consensus.
The so-called consensus is people’s identification of the same thing and a community of unanimous beliefs. The extent to which this matter can reach consensus also determines its commercial value. It can be said that consensus is the root of the development of public chain and the entire commercial building. The global high consensus is the development direction of all blockchain projects.
And such a high degree of consensus involves many aspects, including not only the global leader in the technology and mechanism of Waykichain mentioned above, the supporting construction of business scenarios, etc., but also other important parts:
Internationalization of the Waykichain Team. At present, Waykichain has gathered a group of elite troops with great dedication, a sense of mission and a sense of belonging. This is the result of Waykichain’s long-term implementation of the introduction, cultivation and elite precipitation of outstanding personnel. In the future, the Waykichain team will be further internationalized. Through the international team, a global communication circle will be built to help the global strategic layout;
Introducing strategic investments such as top global venture capital. No matter whether the previous contact with Softbank or being invited to attend the Global Blockchain High-end Private Conference in Dubai, we are preparing for the introduction of the world’s top venture capital and this will strengthen the brand endorsement and help Waykichain’s extension Breakthrough development.
Strengthen technical cooperation with governments and large institutions. Earlier, WaykiChain had conducted returning visits with the Montenegrin government and had an in-depth exchange of views on the blockchain technology reform in the field of Montenegro International Trade and Finance. Through such high-standard technical cooperation, it can not only improve the operating efficiency of related fields but also accumulate rich experience and capital market reference for more national-level cooperation of Waykichain;
Launch more world first- and second-tier exchanges. Last year, Waykichain successfully launched Gate.io and Bithumb and other international first-tier exchanges, and other first-tier and second-tier exchanges are also actively contacting.
Through the creation of a high degree of global consensus, Waykichain will ultimately be given more business value and promote the landing of a business application ecosystem.
The magic weapon to win the future: Massive community expansion
The magic weapon to win the future is not how much resources you have, but how many resources you can mobilize. For this reason, in addition to having a high degree of consensus on a global scale, we also need a huge community as a vehicle that can be scheduled.
At present, through the global partner and ambassador system of various countries, Waykichain has formed a number of international communities around the world with Waykichain ambassadors as its core. Among them, 41 community managers (including global ambassadors) from 15 countries including U.S, the United Kingdom, France, Germany, Japan, Indonesia, Brazil, Vietnam, South Korea, Turkey, the Philippines, Russia, Spain, Ukraine, Bangladesh and Nigeria, including Nearly 30 international communities; and has held several offline events in Russia, Singapore, Turkey, Vietnam and South Korea.
On the basis of the achievements of single-point breakthroughs in some key countries and regions, we will continue to penetrate overseas markets and increase the frequency of offline meet-ups and overseas marketing activities. In the coming year, we plan to hold another 30 overseas offline meet-ups through official channels, and encourage and assist global volunteers to organize about 60 offline meet-ups on their own initiative.
Through the implementation of point-to-surface breakthroughs, we will continue to attract incremental users, and continue to expand the number of users in overseas communities while maintaining the steady growth of domestic communities, and truly form a situation of massive community expansion and a global chess market.
2020: Writing our own heroism
“Having a dream that doesn’t make you exhausted in this life, I think, is the best gift that life gives you.”
At that time, when the godfather wrote this sentence in the circle of friends, Waykichain was not born yet. But what happened in the next two years, we all know: once the seeds of dreams land, under the watering of ambition, not only take root, they are already germinating, they will grow wildly.
“To set a big goal, you must focus crazily and continue to work towards it.” This is not only the creed of Wayki but also his exhortation to the team. From top to bottom, with this “crazy energy” that constantly surpasses itself and pursues excellence, Waykichain is able to open its doors and build bridges on the road of technological evolution and in the cold winter of the industry.
On the high-speed track of the global public chains, WaykiChain built around the three dimensions of “core value as the foundation”, “global high consensus” and “mass community expansion”, the next goal will be to strive for the top five and even the top 3 positions of the global public chain. Let’s wait and see how this heroic epic belongs to us.
submitted by Waykichain to WICCProject [link] [comments]

WaykiChain CSO, Wayki Sun: Vaulting Ambitions Carried Boundless Energy

"Here we must run as fast as we can just to stay in place.".
----- Alice in Wonderland
Once, this was just a fairy tale, but now, in the blockchain industry, it has become the reality. The fairy tale came true in the blockchain industry.
Looking back on 2019, the world’s various uncertainty still while blockchain takes the real lead Having the whole world in view, the stablecoin project Libra has become a subject of the U.S. Congress, starting off the tremendous craze in blockchain worldwide, by storm; while Chinese government introduces a new policy that lists blockchain as an important breakthrough for its innovation focus.
It is in this historical turning point that Waykichain has successfully completed its own transformation.
Coping with the times, the reflection of the trend
At WaykiChain’ inception, WaykiChain entered the industry via the most appropriate entry point prediction, which its full enthusiasm has been frustrated by the policy of cognitive. Since then, Waykichain has retreated to ecosystem co-building. By providing one-stop help for the outstanding developers from all over the world, Waykichain has launched dozens of DApps in order to build its own public chain ecosystem.
There are full of obstacles and difficulties. Waykichain team has paid great attention and affection in the whole process. From technology, operation, promotion to marketing, all of which have caught up to the front of the industry in such experience and exploration.
As Wayki Sun, the “godfather” said, said: "The old conscious classicalists are always afraid of the arrival of new things, however, the efficient and advanced new system is so unstoppable."
The changes in the industry have made some people like falling into ice caves but crying without tears, while others have ushered in more possibilities.
The key lies in whether the pulse of the development of the industry has been observed and the opportunities given by the times have been seized. In this way, even the detours will eventually become a
rainbow to success.
All previous attempts and explorations let us deeply understand that innovation is not to take shortcuts, but to take root in the deepest reality, solve the problems of specific business scenarios, and match the rigid demand that lies deep inside of our users.
Taking the ecosystem as a breakthrough, Waykichain finally set its target in the financial direction.
Huatong Securities is the first case of Waykichain successfully landing in a business application scenario. As a successful precedent for cryptocurrency cross-border finance,
Huatong Securities has brought significant returns to investors in a series of new digital currency businesses. Data shows that some investors who participated in the subscription of new shares through Huatong Securities have achieved a return of over 30% in recent months. Through WUSD as the access channel, investors who have not been able to get involved in this field can also participate in it without obstacles.
Waykichain's long-term: based on core values
Facing the rapid changes in the market, WaykiChain innovated from time to time, constantly
iterating new ways of business paths. In the face of the uncertainty of the
world, Waykichain has always adhered to its long-term, and through its internal
cultivation, it used its own certainty to deal with the uncertainty of the world.
Such long-term is exactly the core value of Waykichain:
Firstly, WaykiChain will continue to maintain as a global leader in public chain technology and
mechanisms.
The four-letter codes "Long", "Teng", "Tiger", and "Yue" signify the roadmap of the future evolution of the Waykichain public chain. In the current "Teng" stage of the public chain, Waykichain not only achieved a global leader in a number of hardcore technical indicators such as TPS (average stable at 3300, peak 7800), transfer speed but also reached the industry in terms of the underlying logic and technical architecture. Leading positions, such as the construction of stablecoin systems and DEX at the bottom of the public chain, have surpassed the general contract-based construction in terms of security, stability, scalability, the convenience of paying fees, etc. The decentralized cross-chain technology completed at the end of the quarter will bring cross-chain assets such as Bitcoin and Ethereum to Waykichain, which will stimulate tens of billions of value liquidity; and the upcoming integration of the WASM virtual machine will also allow Waykichain acquires dual virtual machine engines for higher compatibility and performance.
"Publicchain is still in the era of clash of Titans. When all goes to all, technology will win out." As Waykis assertion of the public chain's technical status, these explorations of public chain technology and mechanism have not only given WaykiChain the greater commercial application potential of public chain,
also allows the public chain facilities built on it to have a stronger industry competitive
advantage.
Secondly, vigorously expand the supporting construction of the commercial scene around Waykichain.
Regardless of whether it was cut through my prediction at the beginning, or then focused on the
application ecosystem, or currently grasping the financial direction, although the rudder is
constantly adjusting, the voyage of exploring the business model has never stopped.
At present, a complete set of decentralized financial system surrounding the stable coin WUSD of Waykichain has taken shape, and the profit model and commercial development path built on this financial system have become increasingly clear, including cross-border finance, cross-border payment, decentralization currency, denominated currencies, financial derivative transactions, etc. will all be important business application scenarios for Waykichain. On the last day of 2019, the WICC's total network mortgage volume has exceeded 16 million, and the main destination of the WUSD loan is Huatong Securities' cross-border financial investment.
Breaking Technology Silos: High Global Consensus
Owning, without connecting, will eventually become a technology island. What Waykichain does is to link realistic business scenarios and huge users outside the circle, and finally form a high degree of global consensus.
The so-called consensus is people's identification of the same thing and a community of unanimous beliefs. The extent to which this matter can reach consensus also determines its commercial value. It can be said that consensus is the root of the development of public chain and the entire commercial building. The global high consensus is the development direction of all blockchain projects.
And such a high degree of consensus involves many aspects, including not only the global leader in the technology and mechanism of Waykichain mentioned above, the supporting construction of business scenarios, etc., but also other important parts:
Internationalization of the Waykichain Team. At present, Waykichain has gathered a group of elite troops with great dedication, a sense of mission and a sense of belonging. This is the result of Waykichain's long-term implementation of the introduction, cultivation and elite precipitation of outstanding personnel. In the future, the Waykichain team will be further internationalized. Through the international team, a global communication circle will be built to help the global strategic layout;
Introducing strategic investments such as top global venture capital. No matter whether the previous contact with Softbank or being invited to attend the Global Blockchain High-end Private Conference in Dubai, we are preparing for the introduction of the world's top venture capital and this will strengthen the brand endorsement and help Waykichain's extension Breakthrough development.
Strengthen technical cooperation with governments and large institutions. Earlier, WaykiChain had conducted returning visits with the Montenegrin government and had an in-depth exchange of views on the blockchain technology reform in the field of Montenegro International Trade and Finance. Through such high-standard technical cooperation, it can not only improve the operating efficiency of related fields but also accumulate rich experience and capital market reference for more national-level cooperation of Waykichain;
Launch more world first- and second-tier exchanges. Last year, Waykichain successfully launched Gate.io and Bithumb and other international first-tier exchanges, and other first-tier and second-tier exchanges are also actively contacting.
Through the creation of a high degree of global consensus, Waykichain will ultimately be given more business value and promote the landing of a business application ecosystem.
The magic weapon to win the future: Massive community expansion
The magic weapon to win the future is not how much resources you have, but how many resources you can mobilize. For this reason, in addition to having a high degree of consensus on a global scale, we also need a huge community as a vehicle that can be scheduled.
At present, through the global partner and ambassador system of various countries, Waykichain has formed a number of international communities around the world with Waykichain ambassadors as its core. Among them, 41 community managers (including global ambassadors) from 15 countries including U.S, the United Kingdom, France, Germany, Japan, Indonesia, Brazil, Vietnam, South Korea, Turkey, the Philippines, Russia, Spain, Ukraine, Bangladesh and Nigeria, including Nearly 30 international communities; and has held several offline events in Russia, Singapore, Turkey, Vietnam and South Korea.
On the basis of the achievements of single-point breakthroughs in some key countries and regions, we will continue to penetrate overseas markets and increase the frequency of offline meet-ups and overseas marketing activities. In the coming year, we plan to hold another 30 overseas offline meet-ups through official channels, and encourage and assist global volunteers to organize about 60 offline meet-ups on their own initiative.
Through the implementation of point-to-surface breakthroughs, we will continue to attract incremental users, and continue to expand the number of users in overseas communities while maintaining the steady growth of domestic communities, and truly form a situation of massive community expansion and a global chess market.
2020: Writing our own heroism
"Having a dream that doesn't make you exhausted in this life, I think, is the best gift that life gives you."
At that time, when the godfather wrote this sentence in the circle of friends, Waykichain was not born yet. But what happened in the next two years, we all know: once the seeds of dreams land, under the watering of ambition, not only take root, they are already germinating, they will grow wildly.
"To set a big goal, you must focus crazily and continue to work towards it." This is not only the creed of Wayki but also his exhortation to the team. From top to bottom, with this "crazy energy" that constantly surpasses itself and pursues excellence, Waykichain is able to open its doors and build bridges on the road of technological evolution and in the cold winter of the industry.
On the high-speed track of the global public chains, WaykiChain built around the three dimensions of "core value as the foundation", "global high consensus" and "mass community expansion", the next goal will be to strive for the top five and even the top 3 positions of the global public chain. Let's wait and see how this heroic epic belongs to us.
submitted by Waykichain to u/Waykichain [link] [comments]

How to cross “The Distance” Between Chains?

How to cross “The Distance” Between Chains?
How Important the cross-Chain Technology is? Even Vitalik didn’t Think of
The distance from my heart to yours, is one affectionate confession;
The distance from Earth to moon, is a spaceship;
The distance from CCB to ICBC, is the liquidation system of central bank;
The distance from private company to a public one, is an IPO;
The furthest distance in this world, is not the distance between Imtoken and Kcash, but when I’m using this chain with you on the other one……
What will it take to migrate or transfer from ETH To EOS?
How do we reach from Ethereum to EOS with our assets?
The answer is cross-chain technology. Current cross chain technology can deal with the former question, but the conversion of assets defined in one chain to another, that’s a whole new level of difficulty……
https://preview.redd.it/x0rcg9b2zny11.png?width=801&format=png&auto=webp&s=9718861e69bf37af3575ed4c1684cfdc0163cb14
There are different ways of storing and recording information between different chains, so how do we get across ‘the distance’?
2018 saw major contributions in the blockchain technology. With the emergence of a great number of public chains and consortium chains, this may be good news for the industry, but for Dapp developers, the choice of the right public chain has become an important issue. There are aspects like RAM cost, resource cost etc with free-to transact chains which makes the decision of the right chain for a Dapp a difficult one. In the traditional software world, there are alternate migration plans and upgrade paths available. In the case of the public blockchains forks causing change in behaviors, termination of chains itself etc are possible. Once the selected public chain comes to a premature end, Dapp developers are confronted with the problem of how to migrate the historical information and data form one chain to another.
‘Unlike a company relocation, only a van is needed to move from one place to another, The Dapp’s data migration needs more than a van, it requires a convenient and secure cross-chain technology.’ So, says Charlie, the founder of the UINP cross-chain project.
Application Implementation, Chain Interconnection
The transfer and management of cross-chain value is an important reason for the emergence of cross-chain technology.
Of course, cross-chain technology is not limited to the realization of digital asset transfer and exchange, but also includes more extensive chain-link communication, information interaction and intelligent contract migration. In addition, without affecting the internal network of each public chain, the cross-link technology should be able to achieve a zero-commission cross-link, while ensuring security and transaction efficiency.
So far, different public chains are like isolated islands of information. The new Dapp developers hope to get more technical and resource support from the numerous public chains, and the cooperation between different public chains, consortium chains and private chains is also expected to be achieved through some kind of agreement to realize the multi-chain interconnection.
At present, most people’s expectation of cross-chain technology is more about the transfer of assets, which is also an important issue for UINP to solve, including the transfer and management of assets of Dapp in the fields of finance, transaction and wallet. It is well known that exchange is the most effective way to transfer assets across the chain, but exchange is a centralized place which is an obvious target for the hackers to attack and most of exchanges can’t make sure the safety of transaction.
https://preview.redd.it/9dscrub7zny11.png?width=801&format=png&auto=webp&s=93cf62e5a74fc7e5ca57301d8c87fc3abfc5acb8
Current cross-chain solutions in blockchain industry
There are currently four mainstream cross-chain technologies in the market: Notary schemes, Sidechains/relays, Hash-locking and Distributed private key control.
https://preview.redd.it/493c82w8zny11.png?width=801&format=png&auto=webp&s=b4906384cd7cf3a8aeb252e5d2be9b451bf49498
1.Notary schemes’ mechanism: a third-party was selected to witness and record the assets transformation between chain A and B;
  1. Sidechains/relays: it focusses on the events and states of main chain / connected chains by side chain / relay;
3.Hash-locking: a method locking the hash for a period for implementation of bidirectional payment;
4.Distributed private key control: it refers to that all kinds of cryptographic financial assets are controlled by private key and require multiple triggers to complete the asset transformation.
https://preview.redd.it/en6f6hbazny11.png?width=677&format=png&auto=webp&s=cb90295cd5d8e9f933fae3d44044eb059dfafd75
There are seven common consensus mechanisms, as shown in the figure above. Due to the different consensus mechanisms, chain structures and economic systems, it is difficult to communicate among chains, and there are still many bottlenecks in the development of cross-chain technology.
UINP will adopt a new cross-chain technology, dedicated to solving the problems encountered in the cross-chain project and promoting the iteration of cross-chain technology.
https://preview.redd.it/56bzxhobzny11.png?width=801&format=png&auto=webp&s=f0880286d6e4cbf6f1928f0b7258309f0a2a64af
UINP — seamless cross chain integration & interoperability
As the world’s first decentralized cross-chain protocol on transport layer, UINP creates a cross-chain transmission,self-increment and self-decrement cross-chain mechanism, build a natural connection for different chain networks and promote the establishment of a broader blockchain Internet network.
UINP cross-chain network will realize decentralized cross-chain assets transformation and be compatible with different blockchain structures and multiple public chains to facilitate the asset management and exchange of Dapp users.
In addition to the asset management of digital currency, UINP can also facilitate the transfer of value information in the whole chain ecology, realize the information and data interconnection between public chains, consortium chains and private chains, assist Dapp in data migration across public chain, connect the island of cross-chain data, and build a real inter-chain network of blockchain.
Technical features of UINP: cross-chain transmission,self-increment and self-decrement
Current cross-chain technologies are relatively centralized because they are unable to cross multiple public chains simultaneously and require cross-chain support from a third chain. While UINP is completely decentralized. Through Quantum entanglement and perceptive hash algorithms, UINP’s observer chain can realize the data migration between two different public chains on application layer, that’s called ‘cross-chain transmission’.
Technical features of UINP: all-asset cross-chain transaction
The cross-chain requirements of Dapp include not only the exchange and migration of assets, but also the transfer of information, data and value It is difficult for Dapp developers to achieve the migration of application and user information from one chain to another without changing the original chain structure, just like different organisms with different genes arrangement are difficult to communicate with each other. There are four types of paradigm transformation of digital assets in UINP: P2P, A2A, A2P, P2A (P refers to the prevalence, A refers to the assets), creating Dapp assets cross-chain trading system.
Technical feature of UINP: Atomic cross-chain technique
Due to the different consensus mechanism among different public chains, miners have different ways of bookkeeping, which affects the difficulty and cost of crossing the chain. Most of current cross-chain technology uses blocks as the unit for accounting, while UINP adopts the POU consensus mechanism (the three-layer composite consensus mechanism -pos/pov/s-dpos) to realize atomic bookkeeping, that is, taking transactions as the unit. Dapp developers and users do not have to wait for a transaction to reach a full accounting block before transferring assets, but each transaction can be transferred across the chain in real time.
Technical feature of UINP: compatible with chains of different structures
Different public chains have different structures, such as Bitcoin and Ethereum as the block structure, while IOTA and Nano are the chains with DAG structure. The application layer protocol of UINP will carry out the paradigm transformation for the public chains with different structures through an observer chain, and each atomic transaction of Dapp will enter the destination network, so as to help developers to cross the chain with different structures.

https://preview.redd.it/eskz963ezny11.png?width=700&format=png&auto=webp&s=733be0979bd10f5cb2e25c97c59331a7c71343a0
Technical feature of UINP: compatible with the Internet information set
This means that UINP is compatible with the information communication mechanism off-chain, and it breaks the data isolation between the blockchain network and the traditional Internet network. That is to say, the real-time bookkeeping of Ethereum can be synchronized with the payment information in Alipay if one day Taobao shop allows buyers purchase goods by ETH through UINP cross-chain protocol. The application layer protocol of UINP contains Information set, transport layer protocol of TCP protocols, and has the features of 0RTT, optimized congestion control, and transport layer TLS security, etc. It supports HTTP2, which can perfectly realize the synchronization and interaction of Information on and off the chain.
Global cross-chain technical community
With the mechanism of self-increment & self-decrement and automatic tracking & connection between nodes, UINP will break the inter-chain barrier and realize the interoperability of assets, information and data between different chains at the transport layer, finalize a dynamic adjustment, interconnected chain ecosystem. In the future, UINP will realize a global cross-chain technology ecological community connecting various community systems.
The UINP foundation will cooperate with universities to establish communities, with the mission of integrating quality scientific research and strategic cooperation with colleges and universities at home and abroad. We envision creating blockchain Labs promoting research and drive result oriented cross-chain technical research.
UINP will also cooperate with various distributed technical and leisure communities, and regularly co-hold cross-chain technical community activities and forums. Blockchain technology is still in its infancy. Communication and cooperation between different blockchain projects can complement each other’s advantages and create the greatest value in the open source way. UINP is willing to undertake this historic mission, accelerate the trans-chain technology upgrades and iterations, and explore the future of blockchain with the global technical peers.
In addition, UINP will also build public chain alliances to facilitate the realization of cross-chain protocols. UINP currently has carried out in-depth cooperation with Qtum, Dfinity, TRON and EOS, and jointly explored the future of cross-chain in terms of both technology and application, and promoted the promotion and implementation of UINP’s cross-chain technology in the global market.
At present, UINP has raised joint investment from Qidian capital, IDG, Liaode capital and Genesis capital. UINP will be committed to building the Internet of blockchain networks, realize the interchain communication, promote fast and sustainable development of Dapps. We determined to become the leader of cross-chain technology and the pioneer in the Internet of value.
https://preview.redd.it/9rysfnvfzny11.png?width=801&format=png&auto=webp&s=7a78c7a9235358b34c3927f1ae977e5a09b11b2d
you can find more about us on our website: UINP
you can also reach us through following channels:
FacebookTwitterTelegram
LinkedInYouTubediscord
submitted by UINP_Global to u/UINP_Global [link] [comments]

How to cross “The Distance” Between Chains?UINP

How Important the cross-Chain Technology is? Even Vitalik didn’t Think of
The distance from my heart to yours, is one affectionate confession;
The distance from Earth to moon, is a spaceship;
The distance from CCB to ICBC, is the liquidation system of central bank;
The distance from private company to a public one, is an IPO;
The furthest distance in this world, is not the distance between Imtoken and Kcash, but when I’m using this chain with you on the other one……
What will it take to migrate or transfer from ETH To EOS?
How do we reach from Ethereum to EOS with our assets?
The answer is cross-chain technology. Current cross chain technology can deal with the former question, but the conversion of assets defined in one chain to another, that’s a whole new level of difficulty……
📷
There are different ways of storing and recording information between different chains, so how do we get across ‘the distance’?
2018 saw major contributions in the blockchain technology. With the emergence of a great number of public chains and consortium chains, this may be good news for the industry, but for Dapp developers, the choice of the right public chain has become an important issue. There are aspects like RAM cost, resource cost etc with free-to transact chains which makes the decision of the right chain for a Dapp a difficult one. In the traditional software world, there are alternate migration plans and upgrade paths available. In the case of the public blockchains forks causing change in behaviors, termination of chains itself etc are possible. Once the selected public chain comes to a premature end, Dapp developers are confronted with the problem of how to migrate the historical information and data form one chain to another.
‘Unlike a company relocation, only a van is needed to move from one place to another, The Dapp’s data migration needs more than a van, it requires a convenient and secure cross-chain technology.’ So, says Charlie, the founder of the UINP cross-chain project.
Application Implementation, Chain Interconnection
The transfer and management of cross-chain value is an important reason for the emergence of cross-chain technology.
Of course, cross-chain technology is not limited to the realization of digital asset transfer and exchange, but also includes more extensive chain-link communication, information interaction and intelligent contract migration. In addition, without affecting the internal network of each public chain, the cross-link technology should be able to achieve a zero-commission cross-link, while ensuring security and transaction efficiency.
So far, different public chains are like isolated islands of information. The new Dapp developers hope to get more technical and resource support from the numerous public chains, and the cooperation between different public chains, consortium chains and private chains is also expected to be achieved through some kind of agreement to realize the multi-chain interconnection.
At present, most people’s expectation of cross-chain technology is more about the transfer of assets, which is also an important issue for UINP to solve, including the transfer and management of assets of Dapp in the fields of finance, transaction and wallet. It is well known that exchange is the most effective way to transfer assets across the chain, but exchange is a centralized place which is an obvious target for the hackers to attack and most of exchanges can’t make sure the safety of transaction.
📷
Current cross-chain solutions in blockchain industry
There are currently four mainstream cross-chain technologies in the market: Notary schemes, Sidechains/relays, Hash-locking and Distributed private key control.
📷
1.Notary schemes’ mechanism: a third-party was selected to witness and record the assets transformation between chain A and B;
  1. Sidechains/relays: it focusses on the events and states of main chain / connected chains by side chain / relay;
3.Hash-locking: a method locking the hash for a period for implementation of bidirectional payment;
4.Distributed private key control: it refers to that all kinds of cryptographic financial assets are controlled by private key and require multiple triggers to complete the asset transformation.
📷
There are seven common consensus mechanisms, as shown in the figure above. Due to the different consensus mechanisms, chain structures and economic systems, it is difficult to communicate among chains, and there are still many bottlenecks in the development of cross-chain technology.
UINP will adopt a new cross-chain technology, dedicated to solving the problems encountered in the cross-chain project and promoting the iteration of cross-chain technology.
📷
UINP — seamless cross chain integration & interoperability
As the world’s first decentralized cross-chain protocol on transport layer, UINP creates a cross-chain transmission,self-increment and self-decrement cross-chain mechanism, build a natural connection for different chain networks and promote the establishment of a broader blockchain Internet network.
UINP cross-chain network will realize decentralized cross-chain assets transformation and be compatible with different blockchain structures and multiple public chains to facilitate the asset management and exchange of Dapp users.
In addition to the asset management of digital currency, UINP can also facilitate the transfer of value information in the whole chain ecology, realize the information and data interconnection between public chains, consortium chains and private chains, assist Dapp in data migration across public chain, connect the island of cross-chain data, and build a real inter-chain network of blockchain.
Technical features of UINP: cross-chain transmission,self-increment and self-decrement
Current cross-chain technologies are relatively centralized because they are unable to cross multiple public chains simultaneously and require cross-chain support from a third chain. While UINP is completely decentralized. Through Quantum entanglement and perceptive hash algorithms, UINP’s observer chain can realize the data migration between two different public chains on application layer, that’s called ‘cross-chain transmission’.
Technical features of UINP: all-asset cross-chain transaction
The cross-chain requirements of Dapp include not only the exchange and migration of assets, but also the transfer of information, data and value It is difficult for Dapp developers to achieve the migration of application and user information from one chain to another without changing the original chain structure, just like different organisms with different genes arrangement are difficult to communicate with each other. There are four types of paradigm transformation of digital assets in UINP: P2P, A2A, A2P, P2A (P refers to the prevalence, A refers to the assets), creating Dapp assets cross-chain trading system.
Technical feature of UINP: Atomic cross-chain technique
Due to the different consensus mechanism among different public chains, miners have different ways of bookkeeping, which affects the difficulty and cost of crossing the chain. Most of current cross-chain technology uses blocks as the unit for accounting, while UINP adopts the POU consensus mechanism (the three-layer composite consensus mechanism -pos/pov/s-dpos) to realize atomic bookkeeping, that is, taking transactions as the unit. Dapp developers and users do not have to wait for a transaction to reach a full accounting block before transferring assets, but each transaction can be transferred across the chain in real time.
Technical feature of UINP: compatible with chains of different structures
Different public chains have different structures, such as Bitcoin and Ethereum as the block structure, while IOTA and Nano are the chains with DAG structure. The application layer protocol of UINP will carry out the paradigm transformation for the public chains with different structures through an observer chain, and each atomic transaction of Dapp will enter the destination network, so as to help developers to cross the chain with different structures.
📷
Technical feature of UINP: compatible with the Internet information set
This means that UINP is compatible with the information communication mechanism off-chain, and it breaks the data isolation between the blockchain network and the traditional Internet network. That is to say, the real-time bookkeeping of Ethereum can be synchronized with the payment information in Alipay if one day Taobao shop allows buyers purchase goods by ETH through UINP cross-chain protocol. The application layer protocol of UINP contains Information set, transport layer protocol of TCP protocols, and has the features of 0RTT, optimized congestion control, and transport layer TLS security, etc. It supports HTTP2, which can perfectly realize the synchronization and interaction of Information on and off the chain.
Global cross-chain technical community
With the mechanism of self-increment & self-decrement and automatic tracking & connection between nodes, UINP will break the inter-chain barrier and realize the interoperability of assets, information and data between different chains at the transport layer, finalize a dynamic adjustment, interconnected chain ecosystem. In the future, UINP will realize a global cross-chain technology ecological community connecting various community systems.
The UINP foundation will cooperate with universities to establish communities, with the mission of integrating quality scientific research and strategic cooperation with colleges and universities at home and abroad. We envision creating blockchain Labs promoting research and drive result oriented cross-chain technical research.
UINP will also cooperate with various distributed technical and leisure communities, and regularly co-hold cross-chain technical community activities and forums. Blockchain technology is still in its infancy. Communication and cooperation between different blockchain projects can complement each other’s advantages and create the greatest value in the open source way. UINP is willing to undertake this historic mission, accelerate the trans-chain technology upgrades and iterations, and explore the future of blockchain with the global technical peers.
In addition, UINP will also build public chain alliances to facilitate the realization of cross-chain protocols. UINP currently has carried out in-depth cooperation with Qtum, Dfinity, TRON and EOS, and jointly explored the future of cross-chain in terms of both technology and application, and promoted the promotion and implementation of UINP’s cross-chain technology in the global market.
At present, UINP has raised joint investment from Qidian capital, IDG, Liaode capital and Genesis capital. UINP will be committed to building the Internet of blockchain networks, realize the interchain communication, promote fast and sustainable development of Dapps. We determined to become the leader of cross-chain technology and the pioneer in the Internet of value.
submitted by Eunicezhen to btc [link] [comments]

Groestlcoin Release September 2018

Introduction

As always, the past 3 months since 22nd June have been crazy busy. The bears might still be around, but the show must go on and of course has not slowed the Groestlcoin development team in the slightest. Here’s a quick overview of what has already happened since the last release: - Integrated into the bitbns exchange, with the ability to buy Groestlcoin directly with the Indian Rupee. - Groestlcoin Rebrand Vote – Whilst there was much talk and push for a rebrand vote, the overall result was almost unanimously in favour of keeping our unique and conversation-starting name. With just 83 votes to Rebrand, and 2577 votes to No Rebrand. Thank you for all who voted, the funds raised are being used to fund ongoing hosting and development costs. - Integrated into the Cryptobridge exchange. Cryptobridge is a popular decentralised exchange where you always hold the private keys to your funds, only YOU have access to them. - Groestlcoin has been added to SimpleSwap – Groestlcoin can now be swapped with over 100 other cryptocurrencies, without signing up! - Groestlcoin has been added to UnoDax, one of the leading cryptocurrency exchanges in India, with TUSD, BTC and INR trading pairs. - Groestlcoin has been added to SwapLab.cc, where you can buy Groestlcoin using Bitcoin and over 50 other altcoins. Purchasing with VISA/Mastercard is coming VERY SOON. Discussed later: - Groestlcoin has been listed on #3 largest exchange in the world on volume, Huobi Global! More on this to come further on in the announcements. - Groestlcoin has been added to the Guarda Multi-Currency Wallet. - Groestlcoin has been added to Melis Multi-Device, Multi-Account, Multi-Platform, Multi-Signature advanced wallet! Already this list is far more than most other cryptocurrencies have achieved in the past 3 months. But this is just the tip of the iceberg of what has been developed.

What's been Happening?

GRSPay Released

We are so excited for this, that it has it's own separate reddit thread. Head over there now at https://www.reddit.com/groestlcoin/comments/9ikr5m/groestlcoin_releases_grspay/? to see more on this!
https://www.melis.io/assets/logo-navbar-4b6f0d372f15b2446d3fa4c68f346e4fb08ee113941186cee58fd6135f3f8b7d.svg

Melis Wallet

The the most advanced wallet for Bitcoin, Bitcoin Cash, Litecoin and now Groestlcoin.
With Melis you have the complete control of your bitcoins and private keys, you can define spending limits policies and make use of two or more factors authentication. Melis is open source, published on GitHub.

How Melis Works?

You can create as many accounts as you want. An account is a part of your wallet that can be customised to your requirements. You can choose how many co-signers are required to spend funds. The accounts are completely independent and act like separate wallets from each other but can be accessed via the same details. A core feature of Melis is the ability to set a ‘primary’ device. With this you can set an account as ‘Secure’ so it is only viewable (and accessible at all) from the Primary device. You can have a savings account hidden from the outside world whilst also having your ‘spending’ funds available on the go. With Melis you can create a multi-signature account between N people, where up to N signatures are required to sign a transaction, choosing if any of those should be mandatory.
Core Features:
https://guarda.co/assets/images/1PGo4ID.svg?1537791124643

Guarda Wallet

Safer than ever! Desktop Light Wallet - Anonymous and fast!
With Guarda Multi-currency Desktop Light Wallet you don’t need to register. Guarda has no access to your private keys or funds. You can receive, send, store, buy and exchange cryptocurrencies in complete anonymity and safety. All these features are available on Linux, Windows or MacOS. Choose the one that suits you!
More info about Guarda wallet on www.guarda.co
https://holytransaction.com/images/logo.png

Integrated into HolyTransaction

What is HolyTransaction?

HolyTransaction gives users access to the crypto world with a universal cryptocurrency wallet and instant exchange.

Features

For more information, visit Holy Transaction here.
https://www.groestlcoin.org/wp-content/uploads/2018/09/next-grs-groestlcoin.jpg

Integrated into NEXT Wallet

What is NEXT?

NEXT is a modern, next-generation stylish open-source Desktop wallet.

Features

For more information, visit NextWallet here.
https://blockchainfinancial.com/mediaserve2018/09/admin-06143647-bcf_logo_vec_256x256.png

Integrated into Blockchain Financial

What is Blockchain Financial?

Blockchain Financial is a set of web based services for individuals and companies that want to make things happen with the Cryptocurrencies Ecosystem. - For those that don't know anything about cryptocurrencies, we offer tools that will let them receive, send and operate with an assortment of coins. - For those that are already riding the wave, we offer tools that will let them do all those things that they weren't able to do.

Blockchain Financials mission

We're not here to reinvent the wheel. We're here to make it run smoother for you, and we provide some of the most useful services you'll find on the internet, made in a way that is easy to understand and use on a daily basis. In short, we're a bunch of people that claim to be Crypto Evangelists. We strongly believe in cryptocurrencies, and our main promise is to push them up so more people get involved and take all the advantages they offer.

More information from Blockchain Financial

Back in 2014, the world was taken by storm when Facebook approved the first cryptocurrencies tipping apps. The first was for Dogecoin, and the second was for multiple coins.
The project was hosted on whitepuma.net, and persisted for almost two years, built up a massive user community and gave a home to Bitcoin, Litecoin, Dogecoin and dozens of other bitcoin-based altcoins.
After very active months, the tipping hype started to fade away. Then, the developers decided to jump into the next stage: bringing not only tipping, but also mining and a widget that could be embedded on websites to allow everyone to accept payments. Sadly, the work was never completed because the project started to require an unsustainable amount of resources. Then, in a painful decision, a shutdown was announced by December 2015.
A couple of months after whitepuma.net was closed, the source code was released by its creator as Open Source on GitHub. But it wasn't maintained.
Now, some of the original members of the dev and admin teams gathered up with a handful of the WhitePuma's elite users, and decided to make something good with the best pieces of the old source code. That, with fresh new ideas and the power of the BardCanvas engine, synthesized the core of Blockchain Financial.
More info about Blockchain Financial wallet on .
For more information, visit [Blockchain Financial](www.blockchainfinancial.com)
https://www.huobi.com/image/logo.aeb4723.svg

Groestlcoin Listed on Huobi

Who are Huobi?

Huobi was founded in China and is now based in Singapore, with offices in Hong Kong, South Korea, Japan and the North America, currently sitting #3 in volume on Coinmarketcap. Huobi is a great leap forward for our growing presence in Asia and we are very excited to be listed here!
You can find the official Huobi announcement here.

Groestlcoin Core v2.16.3 - Please Update ASAP

A new major Groestlcoin Core version 2.16.3 is now available for download which includes both a Denial of Service component and a critical inflation vulnerability, so it is recommended to upgrade to it if you are running a full Groestlcoin node or a local Groestlcoin Core wallet.
v2.16.3 is now the official release version of Groestlcoin Core. This is a new major version release with a very important security updates. It is recommended to upgrade to this version as soon as possible. Please stop running versions of Groestlcoin Core affected by CVE-2018-17144 ASAP: These are 2.13.3 and 2.16.0.
As a result in this, all exchanges and services have been asked to upgrade to this version, so please be patient if wallets go in to maintenance mode on these services.

What's new in version v2.16.3?

This is a major release of Groestlcoin Core fixing a Denial of Service component and a critical inflation vulnerability (https://nvd.nist.gov/vuln/detail/CVE-2018-17144) exploitable by miners that has been discovered in Groestlcoin Core version 2.13.3 and 2.16.0. It is recommended to upgrade to 2.16.3 as soon as possible. If you only occasionally run Groestlcoin Core, then it's not necessary to run out and upgrade it right this second. However, you should upgrade it before you next run it. If you know anyone who is running an older version, tell them to upgrade it ASAP. Stored funds are not at risk, and never were at risk. At this time we believe over half of the Groestlcoin hashrate has upgraded to patched nodes. We are unaware of any attempts to exploit this vulnerability. However, it still remains critical that affected users upgrade and apply the latest patches to ensure no possibility of large reorganizations, mining of invalid blocks, or acceptance of invalid transactions occurs.

The Technicals

In Groestlcoin Core 2.13.3, an optimization was added (Bitcoin Core PR #9049) which avoided a costly check during initial pre-relay block validation that multiple inputs within a single transaction did not spend the same input twice which was added in 2012 (Bitcoin Core PR #443). While the UTXO-updating logic has sufficient knowledge to check that such a condition is not violated in 2.13.3 it only did so in a sanity check assertion and not with full error handling (it did, however, fully handle this case twice in prior to 2.1.0.6). Thus, in Groestlcoin Core 2.13.3, any attempts to double-spend a transaction output within a single transaction inside of a block will result in an assertion failure and a crash, as was originally reported. In Groestlcoin Core 2.16.0, as a part of a larger redesign to simplify unspent transaction output tracking and correct a resource exhaustion attack the assertion was changed subtly. Instead of asserting that the output being marked spent was previously unspent, it only asserts that it exists. Thus, in Groestlcoin Core 2.16.0, any attempts to double-spend a transaction output within a single transaction inside of a block where the output being spent was created in the same block, the same assertion failure will occur. However, if the output being double-spent was created in a previous block, an entry will still remain in the CCoin map with the DIRTY flag set and having been marked as spent, resulting in no such assertion. This could allow a miner to inflate the supply of Groestlcoin as they would be then able to claim the value being spent twice.
Groestlcoin would like to publicly thank Reddit user u/Awemany for finding CVE-2018-17144 and reporting it (https://lists.linuxfoundation.org/pipermail/bitcoin-core-dev/2018-Septembe000064.html). You deserve gratitude and appreciation from cryptoworld, and you have ours. If you want to support him for his work, please consider donating to him on his bitcoin cash address: bitcoincash:qr5yuq3q40u7mxwqz6xvamkfj8tg45wyus7fhqzug5
http://i.imgur.com/3YhyNZK.png

Groestlcoin Electrum-GRS 3.2.2 - Ledger & Trezor Edition

What is Electrum-GRS?
Electrum-GRS is a lightweight "thin client" groestlcoin wallet Windows, MacOS and Linux based on a client-server protocol. Its main advantages over the original Groestlcoin client include support for multi-signature wallets and not requiring the download of the entire block chain.

Changes:

http://i.imgur.com/3YhyNZK.png

Electrum-GRS Mobile Android

What is Electrum-GRS Mobile?

Electrum-grs is a lightweight "thin client" groestlcoin wallet Android based on a client-server protocol. Its main advantages over the original Groestlcoin client include support for multi-signature wallets and not requiring the download of the entire block chain.

Changes

Groestlcoin EasyVanity Released

Groestlcoin EasyVanity is a Windows app is built from the ground-up in C# and makes it easier than ever before to create your very own bespoke Groestlcoin address(es), even whilst not connected to the internet! You can even generate multiple keys with the same prefix and leave it on overnight whilst your CPU or GPU collects and stores these addresses locally.
If you're tired of the random, cryptic addresses generated by regular groestlcoin clients, then Groestlcoin EasyVanity is the right choice for you to create a more personalized address.

Features

• Ability to continue finding keys after first one is found • Includes warning on startup if connected to the internet • Ability to output keys to a text file (And shows button to open that directory) • Ability to make your match case sensitive (Where possible) • Show and hide the private key with a simple toggle switch, and copy the private key straight to your clipboard • Show full output of commands • Includes statistics whilst the application is running • Ability to choose between Processor (CPU) and Graphics Card (GPU) • Automatically detects 32 or 64 bit systems • Features both a Light and Dark Material Design inspired Themes • EasyVanity's search is probabilistic, and the amount of time required to find a given pattern depends on how complex the pattern is, the speed of your computer, and whether you get lucky. • EasyVanity includes components to perform address searching on your CPU (vanitygen) and your OpenCL-compatible GPU (oclvanitygen). Both can be built from source, and both are included in the Windows binary package. • Prefixes are exact strings that must appear at the beginning of the address. When searching for prefixes, Easyvanity will ensure that the prefix is possible, and will provide a difficulty estimate. • The percentage displayed just shows how probable it is that a match would be found in the session so far. If it finds your address with 5% on the display, you are extremely lucky. If it finds your address with 92% on the display, you are unlucky. If you stop EasyVanity with 90% on the display, restart it, and it finds your address with 2% on the display, your first session was unlucky, but your second session was lucky. • EasyVanity uses the OpenSSL random number generator. This is the same RNG used by groestlcoin and a good number of HTTPS servers. It is regarded as well-scrutinized. Guessing the private key of an address found by EasyVanity will be no easier than guessing a private key created by groestlcoin itself. • To speed up address generation, EasyVanity uses the RNG to choose a private key, and literally increments the private key in a loop searching for a match. As long as the starting point is not disclosed, if a match is found, the private key will not be any easier to guess than if every private key tested were taken from the RNG. EasyVanity will also reload the private key from the RNG after 10,000,000 unsuccessful searches (100M for oclvanitygen), or when a match is found and multiple patterns are being searched for. • Free software - MIT. Anyone can audit the code. • Written in C# - The code is short, and easy to review.

Groestlcoin Sentinel (Android & Blackberry) – Mainnet + Testnet

What is Sentinel?

Groestlcoin Sentinel is the easiest and fastest way to track/receive/watch payments in your offline Groestlcoin Wallets. Groestlcoin Sentinel is compatible with any standard Groestlcoin address, BIP44 XPUB (Extended Public Key) BIP49 YPUB and BIP84 ZPUB
Groestlcoin Sentinel is a great solution for anyone who wants the convenience and utility of a hot wallet for receiving payments directly into their cold storage (or hardware wallets). Sentinel accepts XPUB's, YPUB'S, ZPUB's and individual Groestlcoin address. Once added you will be able to view balances, view transactions, and (in the case of XPUB's, YPUB's and ZPUB's) deterministically generate addresses for that particular wallet.

What's New?

The P2SH paperwallet supports creating P2SH paperwallets in bulk, keypair generation with QR codes and sweeping tool. Groestlcoin believes strongly in privacy, the live version does not collect and store IP or transaction data.
Changes
Features
The BECH32 paperwallet supports creating BECH32 paperwallets in bulk, keypair generation with QR codes and sweeping tool. Groestlcoin believes strongly in privacy, the live version does not collect and store IP or transaction data.
Features
![WebWallet](https://i.imgur.com/Z2oj7bj.png)

Groestlcoin Web Wallet Update 1.4

What is Groestlcoin Web Wallet?
Groestlcoin Webwallet is an open source, multisignature, HD Wallet and more! Webwallet is a a open source browser based Groestlcoin webwallet.
Webwallet is a playground for Groestlcoin in javascript to experiment with. It supports multisig, OP_HODL, RBF and many more. Groestlcoin believes strongly in privacy, the live version does not collect and store IP or transaction data.
Changes:
submitted by Yokomoko_Saleen to groestlcoin [link] [comments]

Bitcoin Origins - part 2

Afternoon, All.
This is a continuation from the previous reddit post:
Bitcoin Origins
The following are a few notes I've been making on the original development of the tech behind Bitcoin.
This is still in early draft form so expect the layout and flow to be cleaned up over time.
Also be aware that the initial release of the Bitcoin white paper and code was what we had cut down to from earlier ideas.
This means that some of the ideas below will not correspond to what would end up being made public.
As I'm paraphrasing dim memories some of the sections are out-of-order whereby some things occurred earlier rather than later. As I recall more I'll be updating this story elsewhere for uploading when it appears more substantial.
As noted on the first post ( link supplied above ):
There is no verification of truth here.
There is absolutely no evidential proof that I had any part in the project.
Take this as just a fictional story if you wish.
Bitcoin Logo
BitCoin Origins
Six Months In A Leaky Boat
continued ...
“You’re saying that we can use this proof-of-work thing to inject electronic cash into the network and have it tied to fiat currencies, but how would the network know what the local fiat currency is to figure out the correct fiat-currency-to-electronic-cash exchange rate ?”, (2) asked.
“Maybe we could have a server that keeps a record of what the various electricity companies charge and have the software get the values from there ?”, I suggested. “Some of these new mobile phones, the smart phones, the cellular network phones in folks pockets, have GPS chips incorporated into them, right ? And everyone has them or will be getting them as they become more popular. This means everyone will have a device on them which will allow the software to include a GPS location so that the network knows which exchange rate to use for that particular minted cash.
“But how will the network know that the GPS coordinates haven’t been changed and set to another location ?”, (2) asked. “Wouldn’t that mean relying on a trusted third party again ? I thought you said we have to get away from that ? If we cannot trust a single computer for minting cash into the network then maybe we shouldn’t trust any at all ?”
“Uhh… dunno,” I replied. “I’ll get back to that later”, I said.
“Ok, ” (2) said. “How are we going to have the transactions sent to other people on the network ? All the other white papers are expecting people to connect directly to one of the trusted computers to purchase the electronic cash and to transfer it to someone else through them. If we’re not going to use a trusted computer for this and will have the proof-of-work generate the cash, then how do people receive or pay the cash ? Also: How would the network trust that the cash is valid if no computer is being used for time-stamping and validating the cash ?”
I told him I’d have to think about it.
Multiple ideas were given and discarded. He consulted with (3) about every possible solution and every one was a failure.
They either resulted in having to rely on at least one server to hook everything together or would break if multiple transaction messages were sent at the same time to different computers.
After a week or so of this I’d finally burnt myself out and decided that it’s quite possible that everyone else was correct when they said that you couldn’t solve double-spending in a digital world without depending upon a trusted third party.
I stopped emailing (2) at that point, hoping it’d all go away.
After a week he emailed me asking if I’d come up with another solution for testing.
I told him that I don’t think there is a solution and maybe he should just use part of what he had in his original white paper and rely on a trusted third party like everyone else.
He said something along the lines of “Like [redacted] I will ! You’ve taken me down this path of not trusting a single computer and that’s what I want. No-one's done that before and if we break it, it will probably change everything ! ”
I told him I’m taking a break from it all for a while.
Another week passes and he emails me again.
He said, “How are you feeling ? Sorry to be so harsh on you but I really need this to work. I’ll leave you be if that’s what you want. Just let me know when you’re able to continue.”
Another week goes by and whenever I begin to think of the problem I just say to myself “To [redacted] with him and his electronic cash problem.”
For comfort I turn to perusing through some of my old Win32 Asm proggys (I called them “proggys” because I thought of them as small, incomplete computer programs - kind of like examples and tutorials).
I also begun reminiscing about the Amiga 500 days and the proggys I made back then (late 1980’s through to mid 1990’s).
Knowing that one of the most difficult issues with electronic cash revolved around the networking architecture and how data would be propagated by the networked computers I began going through some of the discussions I had back in 2005 and 2006 with someone who was attempting to make a tank game.
I explained to him the main difference between TCP and UDP ( Transmission Control Protocol User Datagram Protocol ).
If you need data packages to arrive in a particular order with confirmation that they’ve arrived then you’d use TCP.
If you need velocity of data packets you can throw all the protocol error checking out and use UDP.
That’s one of the reasons great online multi-player games uses UDP. It reduces the latency with the data being transmitted around the network.
The main difficulty is in building the gaming system in such a way so that the data the servers and clients transmit and receive work when data packets never arrive.
TCP guarantees delivery if the network is functioning while with UDP you do not know if a particular packet ever arrived or if packets arrived in a different order to transmission due to separate packets traversing the internet via different pathways.
Many online games were usually built for single-player first and the multi-player code would be chucked into the codebase near the end of development.
This would mean that all of the game code objects and classes were made to use known values at any particular time and could not work in a UDP environment without re-architecting the entire code base from scratch.
You’d find many of the games that also included multi-player gameplay options ended up using TCP for the network communications and this made all of these games slow over the network with high latency and unplayable lag as the gameplay would be faster than the network data packets telling your computer where your opponents are located.
The various tanks games around 2005 were built as above. I convinced this person to focus on the multi-player aspect of the game because he could always add in single-player later on.
Multiple players would have to drive and fire tanks around a field while being updated continuously about the complete state of the network.
This is usually accomplished by having a single server that receives all of the current data from all the player clients and dishes out the official game state back to all of those player clients so that everyone knows who went where, who fired at what and who has been hit.
However even with using UDP there is a bottleneck in the network with the server itself only being able to process a peak number of connections and data throughput every second. It could only scale so high.
We had talked about different ways to improve this by possibly having relay servers on some of the players computers or having a more peer-to-peer like structure so that each player client only had to get the latest data from its nearest neighbours in the network and only transmit to their peers so that a fully server-less multi-player game could be created.
How the data could be moved about without someone creating a hack that could change the data packages in their favour couldn’t be figured out.
In the end he went with using a central server with both TCP and UDP depending upon what data packages were needed to be sent - general gameplay data (tank movements) via UDP and server state (for confirming who hit what) via TCP.
If a peer-to-peer network was to be used for electronic cash then to be scalable the data packages must be able to be transmitted with as high a velocity as possible. It must work with the majority of transmissions using UDP.
If two-way communication is required then a return ip/port can be included within a UDP data package or a TCP connection could be used.
I had also read and reread this thing that has been going around the crypto community for ages called the Byzantine Generals Dilemma (or worded in a similar way).
It’s supposed to be impossible to solve and at least a couple of well-known academics and crypto folks had “proven” it was impossible to solve only a few years previously. They had pretty much staked their reputations on the fact that it was unsolvable.
I thought “Wouldn’t it be absolutely hilarious if the solution to this double-spending problem is also the solution to the impossible Byzantine Generals Dilemma and could be found using ideas from the Amiga days and 3D programming and uses multi-player gaming techniques ? That would annoy the [redacted] out of the crypto community and take those elitists down a peg or two !”
(This is where you’d see the screen go all watery-wavy as the scene morphs to a time in the past when I was a moderator of the Win32 Asm community)
The assembly community and the crypto community share a lot in common.
They’re made up of some of the most brilliant folks in the computing industry where huge egos do battle against one-another.
You’d also find folks in one community existing within the other.
Both communities are made up of both light and dark actors.
The light actors are those who are very public.
They are academics, researchers, security professionals, and so on.
The dark actors are … (and that’s all I’ll say about them).
Except to say that the light crypto actors are usually doing work to undo what the dark assembly actors are doing.
It’s one [redacted] of a game !
To have a message board that was able to accommodate all actors required a few tough rules and stiff execution of them if the forum was to continue to exist.
Many of the other assembly boards were being snuffed out by government actors forcing the hosting service to shut them down.
This was mainly due to the assembly forums insistence of allowing threads to exist which showed exactly how to break and crack various websites/ networks/ software/ etc.
Whenever one of these sites were shut down the members would disperse to the various remaining assembly boards.
So we received an influx of new members every few months whenever their previous venue went up in smoke.
However they never learned from the experience ( or, at least, some of them never learned ) and they would continue to openly chat about dark subjects on our board, which put our board in danger as well.
The moderators had to be strong but fair against these new-comers, especially knowing that they (the moderators) could be actively attacked (digitally) at any time.
Occasionally one of these new members would decide to DDOS ( Distributed Denial Of Service ) us, however they apparently forgot what message board they were attempting to DDOS, and it always ended very badly for them.
We would also occasionally get someone with quite a bit of knowledge in various subjects - some of it very rare and hard-to-come-by. It would be terrible if that member left and took their knowledge with them.
They would complain that there were too many noobs asking questions on the message board and it would be better if there was a higher level of knowledge and experience needed before the noobs could enter the message board or post a question.
Once I told one of these members, “Ok then. Let’s say that thing you’ve been talking about for the past two weeks, and calling everyone else a noob for not understanding it, is the knowledge limit. I know that you only first read about it two and a half weeks ago. Let’s say I make that the limit and predate it three weeks ago and kick your butt out of this community ?"
“That’s not very fair”, he protested.
I told him, “None of us know where the next genius is coming from. The main members of this community, the ones that input more than everyone else, have come from incredibly varied environments. Some with only a few weeks knowledge are adding more to the community every week compared to members who have been with us for years. One of the members you’ve dissed in the past couple of weeks could in turn create the next piece of software that all of us use. We don’t know that. What we need to do is have a community that is absolutely inclusive for every single person on the planet no matter where they’ve come from, what their wealth is, what their nation state does, and to keep our elitism in check.”
“Ok, fair enough, I’m sorry, please don’t kick me out.” was the usual result.
These were very intelligent folks, however they had to be reminded that we are a single species moving through time and space together as one.
(This is where you’d see the screen go all watery-wavy as the scene morphs back to me figuring out this double-spending problem)
As you may tell, I don’t tolerate elitist attitudes very well.
Which also helped when I turned towards the elitist attitudes I read in some of these academic papers and crypto white papers ( some of which were more like notes than white papers ) and messages on the crypto forums and mailing lists.
“ ‘It’s impossible to solve the Byzantine Generals Problem’ they say ? Let’s see about that !”
Byzantine General’s Dilemma
The problem is written a little bit differently depending upon where you read it.
An occasional academic may be more well-read than others and becomes the “official” wording used by many others.
I’ll paraphrase it a wee bit just so you get a general idea of the problem (pun intended).
We go back to the time of the city-states.
This is before the notion of sovereign states - there’s just a bunch of individual city-states that control the surrounding nearby country side.
Every so often a bunch of these city-states would get together and form something called an empire.
Alliances would change and friends would become enemies and enemies friends on a month-to-month and year-to-year basis.
To expand the empire the bunch of city-states would send armies controlled by generals to take over an adjacent city-state.
These city-states are huge (for their time) walled cities with armies in strong fortifications.
Let’s say there are six generals from six empire city-states that surround an adjacent city-state - all generals and their armies are equidistant from each other.
They cannot trust one another because at any moment one of them may become an enemy. Or they could be an enemy pretending to be a friend.
Due to the defensive forces of the defending city-state, the six generals know that they could take the city if every one of them attacked at the same time from around the city.
But if only a few attacked and the others retreated then the attackers would be wiped out and the surviving city-states, with their generals and their armies intact, would end up over-powering and enslaving their previous friendly city-states.
No-one could trust any other.
(This has massive parallels with modern day sovereign nations and their playing of the game with weapons, armies/air forces/navies, economics, currency, trade agreements, banks, education, health, wealth, and so on)
The generals have to send a message to the other generals telling them if they’re going to attack or retreat.
The problem is that a general could send a message to the general to his left saying that he’ll attack and send a second message to the general to his right that he will retreat.
Some possible solutions said that there should be two lieutenants to receive the message from the general and that they could check each others message to confirm that they are indeed identical before passing the messages onto the left and right messengers.
However the messengers in turn could change the message from “attack” to “retreat” or vice versa or not deliver the message at all.
Plus the generals, once a message has been sent out as “attack” could turn around and retreat, or vice versa.
I thought to myself, “I bet the folks who thought up this problem are feeling pretty damn smug about themselves.”
However I was a moderator of an assembly community.
I’d translated the DirectX8 C++ COM headers into their x86 assembly equivalent (using techniques built by others far more smarter than me, and with help for some files when DX8.1 was translated), built a PIC micro controller assembler in x86 assembly language, and many other things.
And because I've done six impossible things this morning, why not round it off with creating a solution to the Byzantine Generals Dilemma !
Elitist ego ? What elitist ego ? They’re all amateurs !
Let us begin:
“Ok,” I thought to myself. “let’s start at the beginning. We need a network. What does that look like ?”
The Generals are going to be represented as computers. The servers in the network. The nodes.
The messages are going to be the data travelling between them.
Transactions will be used as the first example of data.
For those reading, hold your hands in front of you - touch the bottom of the palms together with the fingers far apart, thumbs touching each other, twist your elbow and wrists so that the fingers are pointing upwards - slightly curved.
Fingers as Nodes
These are the nodes in the network.
The node where the thumbs touch is your own node.
No node can trust each other.
For this network structure to work, it must work even with every single node actively hostile toward one another.
“Surely the network can trust my node. I’m good ! “, you may say to yourself.
But you would be wrong.
This network is not about you. It must exist even when you don’t.
If there were a hundred nodes then it’d be ninety-nine to one against you.
As far as the network is concerned, there’s ninety-nine nodes that cannot trust you compared to your one.
So accepting that all nodes cannot trust one another, plus they are actively hostile toward one another, we can …
“But hang on ! ”, you say. “What do you mean ‘actively hostile’ ? Surely they’re not all hostile ? ”
Even if most of the time nodes will play nice with one another, the rules of the game must be structured in such a way that they will work even if all participants were actively hostile toward one another .
Because if it still worked with everyone having a go at each other then you would’ve built something that could last for a very long time.
You could build something whereby sovereign nations could no-longer undermine other sovereign nations.
It would be the great equaliser that would allow stronger nations to stop screwing around with weaker nations.
It’s the ultimate golf handicapping system. Everyone could play this game.
Kind of like my moderating style from the assembly days.
So we have these hostile nodes.
It has to be able to work with any type of message or data package. Initially it will be built for electronic cash transactions.
I will type it as "messages (transactions)" below to indicate that the messages are the messages in the Byzantine Generals Dilemma and that the message could be any data whatsoever - "transactions" just being the first. Plus in a roundabout way a message is also a transaction whereby a transaction doesn't have to be only for electronic cash - it's just an indication of what items are being transacted.
We want to send messages (transactions) between them and make sure everyone agrees that the messages (transactions) are correct.
That implies that every single node would have to store an exact copy of all the messages (transactions) and be able to read through them and confirm that they are valid.
And whenever a node receives a message (transaction) it would check it for validity and if it’s ok then that message (transaction) would be passed onto the adjacent nodes.
But how to stop a node changing the message (transaction) contents and sending different results to two adjacent nodes ?
How about taking the possibility of messages (transactions) being able to be changed out of the problem completely ?
We could using private/public keys to sign the messages (transactions) so that they couldn’t be changed.
The owner could sign a message (transaction) with the owners private key and everyone could check its validity with the owners public key, but not be able to change it.
Right. The messaging ( transactions/ data/ etc ) part of the problem is partially solved.
Now how do I solve the generals problem so that they all play nicely with one another ?
If we can make sure all generals (nodes) can get the identical data and that they can all validate that the data is identical and unchanged then the Byzantine Generals Dilemma would be solved.
Data Chunks
It became apparent that every major node on a network would have to store an entire copy of all of the data so that they could verify that the data was correct and hadn’t been modified.
The data would probably end up looking like a list or stack, with each incoming valid message (transaction) placed on top of the previous messages (transactions).
What looks like a stack but hasn’t got the memory restrictions like a normal assembly stack ?
When I was reminiscing about the Amiga 500 days I recalled having to muck about with IFF.
That’s the Interchange File Format.
The basics of it is like this:
In a plain text file there are chunks of data.
Each chunk of data begins with a chunk identifier - four characters that indicate to a program what type of data resides within that chunk (example “WAVE”, “FORM”, “NAME”).
An IFF file can have many data chunks of differing types.
The .AVI (audio/video), .ILBM (bitmap) and .WAV (audio wave) file formats are based upon the IFF.
I thought, “What if one of these data chunks was called ‘MSG ’, ‘DATA’ or ‘TSTN’ (TranSacTioN) ? ”
That might work.
Where would the proof-of-work thing come into play ?
Let’s say we replace the four-character-identifier with a header so that the proof-of-work can be done on it ?
That means the header would now include an identifier for what type of data is included within the chunk, plus a value used to modify the difficulty for generating a hash (the number of zeros needed to prepend the generated hash), a random value which increments as hashes are attempted so that the header data is slightly different for each hash attempt, plus the data itself.
But once a correct hash is generated, that particular node would mint electronic cash to pay for the electricity used.
Remember: The electronic cash is supposed to cover the actual fiat currency costs involved in doing the proof-of-work computations.
As the owner of the node computer is paid by an employer in fiat currency and has paid personal tax on it, and they have used that fiat currency to pay their electricity provider (which in turn pays company, state and value-added or goods&service taxes), then the electronic cash is equivalent to swapping your own money for a soft drink can from a vending machine.
Except, due to the media of this system, you’d be able to go to another vending machine and reenter your soft drink can for a refund in fiat currency again ( minus a restocking fee ) and the vending machine could be anywhere on the planet.
That means an extra message (transaction) would have to be included within the chunks data for the minted electronic cash.
If there must be at least two messages (transactions) within a data chunk - the actual message (transaction) plus the message (transaction) for the node that generates the hash - then maybe there could be more messages (transactions) stored in each data chunk ? How would a bunch of messages (transactions) be stored inside a data chunk ?
I remembered learning about binary space partitioning around 2006.
BSP trees were used to store 3D graphic polygons that were able to be quickly traversed so that a game could decide which scenery to display to the game player.
Quake 3 Arena and Medal of Honour: Allied Assault ( which uses Q3A codebase) used BSP trees for storing the scenery. Wherever the player was looking the tree would be traversed and only the polygons (triangles) that were viewable would be rendered by the graphics chip. Try to think of the players view in a game was like a searchlight beam and whatever the light touches is rendered onto a persons computer screen and everything else is ignored- unseen and not rendered.
“I wonder if I could break the transactions up into a binary space partitioned tree ?”
For those interested, a wee bit of light reading is here: Binary Space Partitioning
A binary space partitioned tree begins at one polygon and uses its surface as a plane to cut throughout the rest of the scene.
This kind of plane: Geometry Plane
Each polygon the plane hits gets sliced in two.
Note: The ‘node’ word used below is used for talking about the nodes in a BSP tree - not nodes in a computer network. Think of nodes as where an actual tree branch splits into two smaller branches.
All the polygons in front of the plane go into the left branch (node) and all the polygons behind the plane go into the right branch (node).
Traversing each branch (node) in turn, a polygon is chosen closest to the middle of the remaining branch (node) scenery and another plane slices the branch (node) in two.
The traversal continues until the entire scenery has been sliced up into left/ right (or up/ down) branches (nodes) and they all end up at the leaves (nodes) which store the actual polygon geometry.
If we use the messages (transactions) as the equivalent of the polygon geometry then we could have a bunch of messages (transactions) in the leaf nodes at the bottom of a tree-like structure inside a data chunk.
Instead of a group of triangle vertices ( polygon geometry ) there would be a single message (transaction).
But how to connect them all up ?
A BSP tree is linked up by having a parent node pointing to the two child nodes, but that’s in memory.
The BSP file that’s stored on a disc drive can be easily modified ( easy as in it’s possible instead of impossible ).
The messages (transactions) within a chunk cannot be allowed to be changed.
What if, instead of memory pointers or offsets pointing parents to children we use one of those crypto hashing functions ?
The bottom-most leaf nodes could use data specifically from their message (transaction) to generate a node hash, right ?
Parent Branch nodes could create a hash using the hashes of their two children hashes.
This would create a tree-like structure within a data chunk where the topmost parent hash could be included within the data chunks proof-of-work header.
This would allow all the messages (transactions) to be locked into a tree that doesn’t allow them to be modified because all parent node hashes would have to be recalculated and the trees root hash would be different from the original generated hash.
And that would mean that the entire proof-of-work hash value would be changed.
The same mechanism used to transfer the transaction data around the network would also be used to send the chunks of data.
If a network node received a changed dataChunk and compared it with one they already held then they’d notice the proof-of-work is different and would know someone was attempting to modify the data.
Bloody [redacted] ! I think this might actually work.
I email (2) to inform him that I was again making progress on the issue.
I explained the idea of having a simplified BSP tree to store the messages (transactions) into a dataChunk and have them all hashed together into a tree with the proof-of-work plus parent hash at the top.
He said, “If I change the transaction stuff to use this method I’m going to have to throw out half my white paper and a third of my code”.
“Well, “ I replied. “You can keep using your current transaction stuff if you want. It can never work in a no-trust environment but if that makes you happy then stay with it. For me - I’m going to take the red pill and continue down this path and see where it gets me. I’m also working on solving the Byzantine Generals Dilemma.”
“Ok. ok”, he said. “I’ll go with what you’ve come up with. But what are you stuffing about with the Byzantine problem ? It’s an impossible crypto puzzle and has nothing to do with electronic cash.”
“It has everything to do with an actual working electronic cash system”, I said. “If it can be solved then we could use a peer-to-peer network for transferring all the data about the place ! Kinda like Napster.”
“Didn’t Napster get shut down because it used a central server ?”, (2) retorted.
“What’s another peer-to-peer network ? IRC ? Tor ?, BitTorrent ?”
“I think we can use IRC to hold the initial node addresses until such time the network is big enough for large permanent nodes to appear”, (2) suggested.
(2) asked, “What’s to stop nodes from sending different dataChunks to other nodes ? If they’re just stacked on top of one-another then they can be swapped in and out at any time. That’s why a third party server is needed for setting the official time on the network for the transactions. Someone could create different transactions and change the time to whatever they want if they can use whatever time they choose.”
I said I’ll think on it some more.
A Kronos Stamp Server
If a third party cannot be used for a time stamp server then we’d have to reevaluate what is meant by time in a computer network.
What if how people think about time is actually wrong and everyone is assuming it to be something that it really isn’t ?
If you hold one fist in front of you to represent time - call it ‘now’ time.
Now Time
If you hold another fist after the first fist you can call it ‘after now’ time.
After Now Time
If you hold another fist before the first fist you can call it ‘before now’ time.
Before Now Time
What we’re actually looking at is a chronological order stamp. The actual time itself is pretty much irrelevant except for when comparing two things in their chronological order.
It should work whether the ‘now’ time is the time shown on your clock/watch right now, or on a date two hundred years from now, or 1253BC ( Tuesday ).
The before/ now/ after can be adjusted accordingly:
after ( Wednesday )
now ( 1253BC Tuesday )
before ( Monday )
And if the time value used is the time shown on your clock, is it the same as the time value shown on your watch ? On the microwave ? DVD player ? Computer ? Phone ? You may find that all the time pieces inside your own home vary by a few seconds or even a few minutes !
In an office almost every single person has a timepiece that has a different time to everyone else - even if it’s only different by a few milliseconds.
Does that mean as you walk from your kitchen ( showing 2:02pm on the wall ) into the lounge ( showing 2:01 on the DVD player ) that’s you’ve just entered a time portal and been magically transported back in time by a minute ?
Of course not. They’re all equally valid time values that humans have made up to be roughly synchronised with one-another.
All that really matters is the range of valid time values used to indicate “This is Now”, “This is Next” or “This was Before”.
If the network nodes all agree on what range of time values should be valid to be “now” or “near now” then each node could use its own time value in any data messages (transactions or dataChunks) and no third party timestamp server would be required.
I email (2) and let him know the time-stamp server issue has been resolved by having the nodes use a Kronos-Stamp.
“What the [redacted] is a ‘Kronos-Stamp’ ? ”, (2) asked.
I give him the explanation I gave to you ( the Reader ) above.
“But what’s this ‘Kronos’ word mean ?”, (2) asked.
“It’s short for “Chronological Order. It’s a Chronological Order Stamp. We don’t need a Time-Stamp any more,” I replied.
“But what’s with the ‘K’ ?”
“To annoy all those folks who’d rather get furious about misspelt words than try and understand the concept that’s being explained. ”
“Well, the crypto community won’t like it spelt like that. We’re going to have to call it a Time-Stamp server because that’s what they understand,” (2) said.
I said, “Time-Stamps are for systems using third party servers. Chronological Order Stamps are for peer-to-peer networks.”
“Ok,” (2) said. “We can use this time thing for making sure the dataChunks are in a chronological order but what stops someone from just changing the time of their computer to be a little earlier than someone else and having their version of the data accepted by everyone else?”
I said I’ll think on it some more.
A Chain of Data Chunks
On another project I was rereading some information about rendering graphical data.
In 3D graphics triangles are used to create any object you see onscreen.
Example of Triangle types:
Triangle Types
Each numbered dot represents a vertex.
The data for the vertices are placed into arrays called buffers.
They’re just a long list of data points which are loaded onto a graphics card and told to be drawn.
Triangle Strip
A triangle strip is a strip of triangles which share the data points from the previous triangle.
Each triangle in the strip is drawn alternating between clockwise/counter-clockwise (indicated by the red and green arrows)
The very first triangle must have all of its vertices added (all three vertices 1,2,3)
Every other triangle in the strip only has to add one more single vertex and reuse the previous two vertices.
The second triangle just adds the data for the vertex (4) and reuses vertices 2 and 3 that’s already embedded inside the strip.
This makes the strip incredibly compact in size for the data it’s meant to represent plus locks each triangle inside the strip and they cannot be accidentally used elsewhere.
If a triangle was wanted to be drawn in a different order then an entirely new triangle strip would have to be created.
A key side affect is that a triangle strip can be set to start drawing at any vertices (except vertices 2 and 3) and the entire strip from that data point onwards will be drawn.
I was staring at this for a long time thinking “This could be used for the electronic cash project somehow, but how exactly ?”
I kept going through the explanation for the triangle strip again and again trying to understand what I was seeing.
Then it dawned on me.
The triangles were the data in a triangle strip.
The chunks were the data in the electronic cash project.
If the triangles were actually the dataChunks then that means the vertices were the proof-of-work header, with the embedded root hash for the messages/ transactions.
The lines in the triangle strip represented the reuse of previous vertex data.
So that means I could reuse the proof-of-work hash from a previous dataChunk and embed that into the next proof-of-work as well !
And just like a triangle strip the dataChunks couldn’t be moved elsewhere unless all the surrounding proof-of-work hashes were redone again.
It reinforces the Kronos Stamp by embedding the previous proof-of-work hash into it so we know what came before now and what was next after previous.
If the entire network was using their cpu power to generate these proof-of-work hashes then a hostile actor would need half the processing power to get a fifty percent chance of generating the proof-of-work hash for a block and modifying the data.
However every second block on average would be generated by an opposing hostile actor and so whatever the fifty percent hostile actor was attempting to do wouldn’t last for very long.
DataChunk Chain
I needed to have some of the math for this looked at to see if I was on the right track.
I email (2) and let him know about this idea of hooking together the dataChunks like a chain so that they couldn’t be modified without redoing the proof-of-work hashing.
He liked the idea of a chain.
I said, “You see how all the appended dataChunk headers reuse the hash from the previous dataChunk header ? Take a look at the very first dataChunk.”
“What’s so special about that” , (2) asks.
“Well,” I say. “The first dataChunk header hasn’t got any previous hashes it can use, so in the beginning it will have to use a made up ‘previous hash’ in its header. In the beginning it has to use a manually create hash. In the beginning… get it?”
“What ?”, (2) asks.
“The very first data chunk is the Genesis dataChunk. In the beginning there is the Genesis dataChunk”, I reply.
He said he likes that idea very much as he’d just started being involved in a church in the past year or so.
I ask him to get the other cryptos he’s in contact with to play around with the numbers and see if this would work.
(2) asked, “Hang on. How would this solve the double-spending problem ?”
I'll stop this story here for now and post a follow-up depending upon its reception.
I guess I've found reddit's posting character limit. 40,000 characters. There was going to be another 10,000 characters in this post however that will have to wait till next time.
Bitcoin Origins - part 3
This is a continuation from the previous reddit post:
Bitcoin Origins
Cheers,
Phil
(Scronty)
vu.hn
submitted by Scronty to Bitcoin [link] [comments]

The missing explanation of Proof of Stake Version 3 - Article by earlz.net

The missing explanation of Proof of Stake Version 3

In every cryptocurrency there must be some consensus mechanism which keeps the entire distributed network in sync. When Bitcoin first came out, it introduced the Proof of Work (PoW) system. PoW is done by cryptographically hashing a piece of data (the block header) over and over. Because of how one-way hashing works. One tiny change in the data can cause an extremely different hash to come of it. Participants in the network determine if the PoW is valid complete by judging if the final hash meets a certain condition, called difficulty. The difficulty is an ever changing "target" which the hash must meet or exceed. Whenever the network is creating more blocks than scheduled, this target is changed automatically by the network so that the target becomes more and more difficult to meet. And thus, requires more and more computing power to find a hash that matches the target within the target time of 10 minutes.

Definitions

Some basic definitions might be unfamiliar to some people not familiar with the blockchain code, these are:

Proof of Work and Blockchain Consensus Systems

Proof of Work is a proven consensus mechanism that has made Bitcoin secure and trustworthy for 8 years now. However, it is not without it's fair share of problems. PoW's major drawbacks are:
  1. PoW wastes a lot of electricity, harming the environment.
  2. PoW benefits greatly from economies of scale, so it tends to benefit big players the most, rather than small participants in the network.
  3. PoW provides no incentive to use or keep the tokens.
  4. PoW has some centralization risks, because it tends to encourage miners to participate in the biggest mining pool (a group of miners who share the block reward), thus the biggest mining pool operator holds a lot of control over the network.
Proof of Stake was invented to solve many of these problems by allowing participants to create and mine new blocks (and thus also get a block reward), simply by holding onto coins in their wallet and allowing their wallet to do automatic "staking". Proof Of Stake was originally invented by Sunny King and implemented in Peercoin. It has since been improved and adapted by many other people. This includes "Proof of Stake Version 2" by Pavel Vasin, "Proof of Stake Velocity" by Larry Ren, and most recently CASPER by Vlad Zamfir, as well as countless other experiments and lesser known projects.
For Qtum we have decided to build upon "Proof of Stake Version 3", an improvement over version 2 that was also made by Pavel Vasin and implemented in the Blackcoin project. This version of PoS as implemented in Blackcoin is what we will be describing here. Some minor details of it has been modified in Qtum, but the core consensus model is identical.
For many community members and developers alike, proof of stake is a difficult topic, because there has been very little written on how it manages to accomplish keeping the network safe using only proof of ownership of tokens on the network. This blog post will go into fine detail about Proof of Stake Version 3 and how it's blocks are created, validated, and ultimately how a pure Proof of Stake blockchain is possible to secure. This will assume some technical knowledge, but I will try to explain things so that most of the knowledge can be gathered from context. You should at least be familiar with the concept of the UTXO-based blockchain.
Before we talk about PoS, it helps to understand how the much simpler PoW consensus mechanism works. It's mining process can be described in just a few lines of pseudo-code:
while(blockhash > difficulty) { block.nonce = block.nonce + 1 blockhash = sha256(sha256(block)) } 
A hash is a cryptographic algorithm which takes an arbritrary amount of input data, does a lot of processing of it, and outputs a fixed-size "digest" of that data. It is impossible to figure out the input data with just the digest. So, PoW tends to function like a lottery, where you find out if you won by creating the hash and checking it against the target, and you create another ticket by changing some piece of data in the block. In Bitcoin's case, nonce is used for this, as well as some other fields (usually called "extraNonce"). Once a blockhash is found which is less than the difficulty target, the block is valid, and can be broadcast to the rest of the distributed network. Miners will then see it and start building the next block on top of this block.

Proof of Stake's Protocol Structures and Rules

Now enter Proof of Stake. We have these goals for PoS:
  1. Impossible to counterfeit a block
  2. Big players do not get disproportionally bigger rewards
  3. More computing power is not useful for creating blocks
  4. No one member of the network can control the entire blockchain
The core concept of PoS is very similar to PoW, a lottery. However, the big difference is that it is not possible to "get more tickets" to the lottery by simply changing some data in the block. Instead of the "block hash" being the lottery ticket to judge against a target, PoS invents the notion of a "kernel hash".
The kernel hash is composed of several pieces of data that are not readily modifiable in the current block. And so, because the miners do not have an easy way to modify the kernel hash, they can not simply iterate through a large amount of hashes like in PoW.
Proof of Stake blocks add many additional consensus rules in order to realize it's goals. First, unlike in PoW, the coinbase transaction (the first transaction in the block) must be empty and reward 0 tokens. Instead, to reward stakers, there is a special "stake transaction" which must be the 2nd transaction in the block. A stake transaction is defined as any transaction that:
  1. Has at least 1 valid vin
  2. It's first vout must be an empty script
  3. It's second vout must not be empty
Furthermore, staking transactions must abide by these rules to be valid in a block:
  1. The second vout must be either a pubkey (not pubkeyhash!) script, or an OP_RETURN script that is unspendable (data-only) but stores data for a public key
  2. The timestamp in the transaction must be equal to the block timestamp
  3. the total output value of a stake transaction must be less than or equal to the total inputs plus the PoS block reward plus the block's total transaction fees. output <= (input + block_reward + tx_fees)
  4. The first spent vin's output must be confirmed by at least 500 blocks (in otherwords, the coins being spent must be at least 500 blocks old)
  5. Though more vins can used and spent in a staking transaction, the first vin is the only one used for consensus parameters.
These rules ensure that the stake transaction is easy to identify, and ensures that it gives enough info to the blockchain to validate the block. The empty vout method is not the only way staking transactions could have been identified, but this was the original design from Sunny King and has worked well enough.
Now that we understand what a staking transaction is, and what rules they must abide by, the next piece is to cover the rules for PoS blocks:
There are a lot of details here that we'll cover in a bit. The most important part that really makes PoS effective lies in the "kernel hash". The kernel hash is used similar to PoW (if hash meets difficulty, then block is valid). However, the kernel hash is not directly modifiable in the context of the current block. We will first cover exactly what goes into these structures and mechanisms, and later explain why this design is exactly this way, and what unexpected consequences can come from minor changes to it.

The Proof of Stake Kernel Hash

The kernel hash specifically consists of the following exact pieces of data (in order):
The stake modifier of a block is a hash of exactly:
The only way to change the current kernel hash (in order to mine a block), is thus to either change your "prevout", or to change the current block time.
A single wallet typically contains many UTXOs. The balance of the wallet is basically the total amount of all the UTXOs that can be spent by the wallet. This is of course the same in a PoS wallet. This is important though, because any output can be used for staking. One of these outputs are what can become the "prevout" in a staking transaction to form a valid PoS block.
Finally, there is one more aspect that is changed in the mining process of a PoS block. The difficulty is weighted against the number of coins in the staking transaction. The PoS difficulty ends up being twice as easy to achieve when staking 2 coins, compared to staking just 1 coin. If this were not the case, then it would encourage creating many tiny UTXOs for staking, which would bloat the size of the blockchain and ultimately cause the entire network to require more resources to maintain, as well as potentially compromise the blockchain's overall security.
So, if we were to show some pseudo-code for finding a valid kernel hash now, it would look like:
while(true){ foreach(utxo in wallet){ blockTime = currentTime - currentTime % 16 posDifficulty = difficulty * utxo.value hash = hash(previousStakeModifier << utxo.time << utxo.hash << utxo.n << blockTime) if(hash < posDifficulty){ done } } wait 16s -- wait 16 seconds, until the block time can be changed } 
This code isn't so easy to understand as our PoW example, so I'll attempt to explain it in plain english:
Do the following over and over for infinity: Calculate the blockTime to be the current time minus itself modulus 16 (modulus is like dividing by 16, but then only instead of taking the result, taking the remainder) Calculate the posDifficulty as the network difficulty, multiplied by the number of coins held by the UTXO. Cycle through each UTXO in the wallet. With each UTXO, calculate a SHA256 hash using the previous block's stake modifier, as well as some data from the the UTXO, and finally the blockTime. Compare this hash to the posDifficulty. If the hash is less than the posDifficulty, then the kernel hash is valid and you can create a new block. After going through all UTXOs, if no hash produced is less than the posDifficulty, then wait 16 seconds and do it all over again. 
Now that we have found a valid kernel hash using one of the UTXOs we can spend, we can create a staking transaction. This staking transaction will have 1 vin, which spends the UTXO we found that has a valid kernel hash. It will have (at least) 2 vouts. The first vout will be empty, identifying to the blockchain that it is a staking transaction. The second vout will either contain an OP_RETURN data transaction that contains a single public key, or it will contain a pay-to-pubkey script. The latter is usually used for simplicity, but using a data transaction for this allows for some advanced use cases (such as a separate block signing machine) without needlessly cluttering the UTXO set.
Finally, any transactions from the mempool are added to the block. The only thing left to do now is to create a signature, proving that we have approved the otherwise valid PoS block. The signature must use the public key that is encoded (either as pay-pubkey script, or as a data OP_RETURN script) in the second vout of the staking transaction. The actual data signed in the block hash. After the signature is applied, the block can be broadcast to the network. Nodes in the network will then validate the block and if it finds it valid and there is no better blockchain then it will accept it into it's own blockchain and broadcast the block to all the nodes it has connection to.
Now we have a fully functional and secure PoSv3 blockchain. PoSv3 is what we determined to be most resistant to attack while maintaining a pure decentralized consensus system (ie, without master nodes or currators). To understand why we approached this conclusion however, we must understand it's history.

PoSv3's History

Proof of Stake has a fairly long history. I won't cover every detail, but cover broadly what was changed between each version to arrive at PoSv3 for historical purposes:
PoSv1 - This version is implemented in Peercoin. It relied heavily on the notion of "coin age", or how long a UTXO has not been spent on the blockchain. It's implementation would basically make it so that the higher the coin age, the more the difficulty is reduced. This had the bad side-effect however of encouraging people to only open their wallet every month or longer for staking. Assuming the coins were all relatively old, they would almost instantaneously produce new staking blocks. This however makes double-spend attacks extremely easy to execute. Peercoin itself is not affected by this because it is a hybrid PoW and PoS blockchain, so the PoW blocks mitigated this effect.
PoSv2 - This version removes coin age completely from consensus, as well as using a completely different stake modifier mechanism from v1. The number of changes are too numerous to list here. All of this was done to remove coin age from consensus and make it a safe consensus mechanism without requiring a PoW/PoS hybrid blockchain to mitigate various attacks.
PoSv3 - PoSv3 is really more of an incremental improvement over PoSv2. In PoSv2 the stake modifier also included the previous block time. This was removed to prevent a "short-range" attack where it was possible to iteratively mine an alternative blockchain by iterating through previous block times. PoSv2 used block and transaction times to determine the age of a UTXO; this is not the same as coin age, but rather is the "minimum confirmations required" before a UTXO can be used for staking. This was changed to a much simpler mechanism where the age of a UTXO is determined by it's depth in the blockchain. This thus doesn't incentivize inaccurate timestamps to be used on the blockchain, and is also more immune to "timewarp" attacks. PoSv3 also added support for OP_RETURN coinstake transactions which allows for a vout to contain the public key for signing the block without requiring a full pay-to-pubkey script.

References:

  1. https://peercoin.net/assets/papepeercoin-paper.pdf
  2. https://blackcoin.co/blackcoin-pos-protocol-v2-whitepaper.pdf
  3. https://www.reddcoin.com/papers/PoSV.pdf
  4. https://blog.ethereum.org/2015/08/01/introducing-casper-friendly-ghost/
  5. https://github.com/JohnDolittle/blackcoin-old/blob/mastesrc/kernel.h#L11
  6. https://github.com/JohnDolittle/blackcoin-old/blob/mastesrc/main.cpp#L2032
  7. https://github.com/JohnDolittle/blackcoin-old/blob/mastesrc/main.h#L279
  8. http://earlz.net/view/2017/07/27/1820/what-is-a-utxo-and-how-does-it
  9. https://en.bitcoin.it/wiki/Script#Obsolete_pay-to-pubkey_transaction
  10. https://en.bitcoin.it/wiki/Script#Standard_Transaction_to_Bitcoin_address_.28pay-to-pubkey-hash.29
  11. https://en.bitcoin.it/wiki/Script#Provably_Unspendable.2FPrunable_Outputs
Article by earlz.net
http://earlz.net/view/2017/07/27/1904/the-missing-explanation-of-proof-of-stake-version
submitted by B3TeC to Moin [link] [comments]

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