Why is the number of issued Bitcoins limited to 21 million ...

Bitcoin Cash to Be Valued at $12,000,000 Each

Enjoy =)
Larry Page = $41 billion
Bill Gates = $86 billion
All Cryptocurrency's = $200 billion
Amazon = $402 billion
Apple = $730 billion
USD in circulation = $1,500 billion
Gold Market Cap = $8,200 billion
Physical Money (notes/coins) = $31,200 billion
Stock Markets = $66,800 billion
All U.S. Money (bank deposits/loans) = $83,000 billion
But why doesn't EVERYBODY just convert ALL of the world's money of the ENTIRE PLANET to paying each other in gold? Gold is a great 'store of value', isn't it? Yes, it sure has value, but because it is inconvenient, hard to transport, slow, not divisible (without a third party), and difficult to keep from being robbed (without a third party), that is why the entire planet does not transact in gold, and hence why Gold's market capitalization is only $8,200 billion.
The only way this is possible, is if gold was more convenient to transact with than everything else, especially VISA. Which is impossible. You can't pay for a $100.37 item on Amazon.com, through the internet, without a third party, in a split second, by using gold.
Bitcoin (whitepaper version), can do 1,000,000 transactions per second CHEAPER than VISA. (It can probably do even more in the future), it's also at the same time a tangible currency (that takes trillions of video cards to create one single uncounterfeitable coin) aka "store of value".
So, for example's sake, let's add up all of the money (listed above), and "flood" the entire planet into using a currency ("store of value"), that is ALSO a payment system in itself BY DESIGN, able to send money to the other side of the planet, instantly, without needing to use ANY kind of outside third party, because the coin ITSELF is the third party IF it is the Whitepaper Version of Bitcoin. But if the witness data (aka transaction signatures) are segregated from the chain, then the coin (economy itself) is no longer ITS' OWN "third party" anymore, but prone to whoever wants to take advantage of the segregated witness data (whether its blockstream, bitcoin core, AXA, miners, or banks, doesn't matter). Because when the chain of digital signatures is no longer part of the blockchain, the incentive to take advantage of the system and introduce a traditional (bankegovernment) "third party" is now profitable/possible to do so. Whereas, originally, without SegWit, anybody who tried to do this would infinitely lose money in trying to do so---aka mining coins was more profitable than trying to do a 51% attack. Hence, with SegWit, we introduce a loop-hole into Bitcoin, allowing double spending of anyone's transactions, reversing anyone's transactions, halting anyone's transactions, freezing anyone's transactions, charge-backs, etc.
Now introduce $191,659 billion (see above) of the world's money to a ONE WORLD CURRENCY, that DOES NOT REQUIRE A THIRD PARTY.
17,912 x $650 current value of Bitcoin (whitepaper version) = $11,642,800 , for one coin.
90% of people who buy Bitcoin don't even know what is "Segwit" or "Blockstream" or "Satoshi" or "Whitepaper". They think it's the 'norm' that it takes hours upon hours (or even days) to get their Bitcoin. They assume that because it's "hard to get", then that is why it is valuable. Upon all of the other reasons. It's all media. It is exactly what BitConnect is doing. The only reason people are buying it, is because everyone is gambling, but are fully convinced that it is "investing". This is why Bitcoin is not going to lose its' value instantly. Nor is it going to skyrocket to an astronomical value like $100,000 instantly. But it will most definitely NOT be used as replacement currency by Walmart, Amazon, Sams Club, Coca Cola, Target, etc, and so on, it goes on FOREVER. All of these companies use VISA.
But what about other coins that already exist with little to no fees, instant transactions and end up having little to no traction and don't look like anyone cares about them??
For example.
These are the top ones I felt like choosing. I can explain every coin on the list. But the entire point, is that for EVERY one of these coins, Bitcoin Cash does it better. Bitcoin Cash has 0-conf (Bitcoin used to have it until the system could not accept anymore transactions and started backlogging transactions---aka full blocks). Bitcoin Cash has scripting functions (aka smart contracts). Bitcoin used to have it when the transaction fees only cost 1-5 cents per block... But no one wants to use the scripting functions anymore when you have to pay $5-$100 for each block.
There is a reason why Satoshi did not design Bitcoin (whitepaper version) like any of the other coins. It is because he already thought about those other designs.
Bitcoin legacy forfeited it's security model (whitepaper version) as soon as it changed protocol to SegWit.
submitted by MartinGandhiKennedy to btc [link] [comments]

Technical Question About Bitcoin (and increasing the total number).

There's a lot of talk about the deflationary nature of Bitcoin. If the community decided that it wanted to increase the number of bitcoins, is it technically possible? Could the developers update the code to release more?
submitted by fxminer to Bitcoin [link] [comments]

What are Bitcoin and Other Cryptocurrencies Backed By?

Bitcoin was created back in 2009 and became the first cryptocurrency ever designed. Cryptocurrencies have become increasingly popular in the last few years as they offer an efficient and decentralized way of transferring money.
Cryptocurrencies have always been an alternative to banks and fiat money. But why do they have any value at all and who dictates what they are worth? The value of Bitcoin is really calculated through supply and demand. The digital asset itself is backed by nothing more than perhaps the blockchain ledger.
Every single cryptocurrency uses a blockchain ledger, a system that records transactions between two or more parties in a verifiable and permanent way. This certainly adds value to Bitcoin and cryptocurrencies. However, it is not what determines their price.
Why Things Have Value
Why does anything have any value at all? It has mostly because of supply and demand. Traditional currencies, for instance, are only backed by the government that issued them. Digital money, like Bitcoin, is not backed or linked to any physical reserves like gold and can certainly lose value due to different factors.
Cryptocurrencies have value because they require ‘work’ to exist. Cryptocurrencies are maintained thanks to the mining process, a process in which transactions are verified by different people. This process requires a certain amount of work, electricity, and money.
Key Factors That Affect The Value of Cryptocurrencies
Since most cryptocurrencies are not physically backed by anything, their value is determined through supply and demand based on a few important factors. One of the biggest advantages of cryptocurrencies is scarcity. The supply of most cryptocurrencies is fixed, and, unlike traditional currencies, no one can issue more than the maximum limit. This means that cryptocurrencies are deflationary by nature.
Another key factor that benefits cryptocurrencies is divisibility. Any cryptocurrency can be divided into smaller units. A simple change in Bitcoin’s code could allow the digital asset to be divided into infinitely smaller units at any time.
Additionally, transferring cryptocurrencies can be extremely fast and cheap compared to traditional methods. Fees are somewhat fixed no matter the amount you send, which means that theoretically you could send 1 million Bitcoins to someone and pay only a few dollars in fees (or even less).
In a way, one could say that Bitcoin and cryptocurrencies are backed by the public’s faith in them as they have realized that the current monetary system is not as robust as one might think.
Why Are Cryptocurrencies so Volatile Then?
In comparison to traditional currencies and even stocks, cryptocurrencies are far more volatile, meaning that the current price of any given crypto can change drastically in hours. It’s quite common to see Bitcoin’s price go up or down 5-10% within a few days. In fact, even in periods of low volatility, most cryptocurrencies still experience price moves of up to 1-2%, which is considered extremely high in traditional markets.
The explanation, however, is quite simple. Cryptocurrencies, in general, lack the liquidity that the rest of the markets enjoy. According to statistics from Statista, the average daily turnover in the global foreign exchange market was around $6.5 trillion daily. The cryptocurrency market, on average, sees around $80 billion in daily trading volume, and according to various sources, a lot of the volume is actually fake.
The problem with illiquidity is that someone who wants to sell or buy a huge amount of Bitcoin or any cryptocurrency will simply ‘eat’ all the orders in the order book of the exchange, catapulting the price up or crashing it. That is the only reason why cryptocurrencies, in general, are extremely volatile.
Some Cryptocurrencies Are Actually Backed by Things
There are, however, some cryptocurrencies that are backed by gold, assets, and even fiat money. Tether (USDT) became the most popular cryptocurrency backed by fiat, later known as a ‘stablecoin’.
Stablecoins
A stablecoin is designed to always be worth $1.00 by maintaining 1 dollar in some sort of reserve. The first stablecoin to become widely popular was Tether, however, there was a lot of controversy surrounding it. Most of the criticism came from the fact that Tether Limited was unable to prove they actually have the funds to cover all the Tether issued.
Additionally, on 30 April 2019, Tether Limited’s lawyer actually admitted that each coin is only backed by $0.74 in cash.
Currently, there are over a dozen stablecoins that are backed by fiat, commodities, and even cryptocurrencies. TrueUSD is similar to Tether but it is considered to be one of the most reliable stablecoins currently as the company behind it has been extremely transparent and conducted an independent audit back in March 2019.
A more complex stablecoin is Dai, which is backed by Ethereum and pegged to the dollar. The system behind Dai basically locks Ethereum in a public contract. If the value of Dai distances too far from $1, the system will make use of the contract to stabilize it back. There is, however, a small problem: Dai is not entirely decentralized as the technology behind it is being monitored by the Maker Foundation.
DigixDAO is another stablecoin and it’s backed by bars of actual gold. It is an ERC-20 token created back in 2014. The digital asset is entirely decentralized and autonomous and can in fact be extended to be backed by other precious metals and even physical assets. According to the company, the gold is stored in custodial vaults at the Singapore Safe House, and 1 DGX will always equal 1 gram of gold.
Cryptocurrencies Backed by Assets
Not all cryptocurrencies backed by assets are stablecoins. For instance, the first oil-backed cryptocurrency was introduced by Venezuelan President Nicolas Maduro back in 2017. El Petro, although highly criticized, is supposedly the first cryptocurrency to be backed by oil thanks to the country’s huge oil and mineral reserves.
Petro is, however, not pegged to anything, and its value can increase or decrease at any given time.
Tokenization of Assets
Something that has become quite popular over the last few years is the tokenization of traditional stocks and assets. There are countless blockchain startups tokenizing almost anything to represent ownership.
The tokenization of assets brings numerous benefits like greater liquidity, more transparency, cheaper and faster transactions, and more accessibility. Tokenization itself is quite difficult to regulate, and all tokenization assets have to be compliant with the law, something that issuers struggle to achieve.
Conclusion
While traditional cryptocurrencies are not necessarily backed by anything physical, they still hold a lot of value solely based on supply and demand. This is the case with numerous other assets and even fiat money.
Cryptocurrencies have come a long way and there is a wide variety of them. Stablecoins are the most popular when it comes to asset-backed cryptocurrencies. They serve as an alternative to fiat money and bring a lot of liquidity to the market. There are definitely concerns as people question their stability, however, they have become an important factor in the market.
Additionally, other projects aside from stablecoins have implemented asset-backed cryptocurrencies. There are numerous cryptocurrencies out there backed by precious metals, physical assets, stocks, and even other cryptocurrencies. We are definitely going to see even more in the near future as they bring a lot more security to investors and the crypto space in general.

SwapSpace team is always ready for discussion. You can drop an email with your suggestions and questions to [[email protected]](mailto:[email protected]) Join our social networks: Twitter, Medium, Facebook, Telegram The best rates on https://swapspace.co/
submitted by SwapSpace_co to CryptoTechnology [link] [comments]

Reclamation of unused bitcoins

Would it be feasible to implement a consensus rule that says UTXOs that are not spent within 10M blocks (or some other large number, 10M blocks is just over 190 years) can be spent without a signature (which effectively gives them to miners)?This way lost bitcoins get reintroduced once you’re sure that the original owner is dead.
Edit: the reason I think this is a good idea is because lost coins will eventually cause insufficient units for the world to be able to run. It may not happen in this century or even the next, but it will happen eventually.
Edit2: bitcoin is not “infinitely” divisible. Each UTXO has a 64-bit integer telling how many Satoshis to send. To change the way those 64-bits are encoded or to increase the number of bits available for that number would require a hard-fork.
Edit3: the lifetime of a UTXO is meant to be so high that just creating an address makes your funds yours for life. With companies that may exist for much longer, I guess there’d have to be a fee-free way to signal proof of existence. As for trusts that hold wealth over generations, they’d be locked till a certain block height or date/time so the clock would start when that expired for such transactions, not when the transaction was created.
P.S. thanks to those who offered coherent reasoning to why this wouldn’t work. It definitely helped my understanding of the core principles behind bitcoin.
submitted by darthshwin to Bitcoin [link] [comments]

What are Bitcoin and Other Cryptocurrencies Backed By?

Bitcoin was created back in 2009 and became the first cryptocurrency ever designed. Cryptocurrencies have become increasingly popular in the last few years as they offer an efficient and decentralized way of transferring money.
Cryptocurrencies have always been an alternative to banks and fiat money. But why do they have any value at all and who dictates what they are worth? The value of Bitcoin is really calculated through supply and demand. The digital asset itself is backed by nothing more than perhaps the blockchain ledger.
Every single cryptocurrency uses a blockchain ledger, a system that records transactions between two or more parties in a verifiable and permanent way. This certainly adds value to Bitcoin and cryptocurrencies. However, it is not what determines their price.
Why Things Have Value
Why does anything have any value at all? It has mostly because of supply and demand. Traditional currencies, for instance, are only backed by the government that issued them. Digital money, like Bitcoin, is not backed or linked to any physical reserves like gold and can certainly lose value due to different factors.
Cryptocurrencies have value because they require ‘work’ to exist. Cryptocurrencies are maintained thanks to the mining process, a process in which transactions are verified by different people. This process requires a certain amount of work, electricity, and money.
Key Factors That Affect The Value of Cryptocurrencies
Since most cryptocurrencies are not physically backed by anything, their value is determined through supply and demand based on a few important factors. One of the biggest advantages of cryptocurrencies is scarcity. The supply of most cryptocurrencies is fixed, and, unlike traditional currencies, no one can issue more than the maximum limit. This means that cryptocurrencies are deflationary by nature.
Another key factor that benefits cryptocurrencies is divisibility. Any cryptocurrency can be divided into smaller units. A simple change in Bitcoin’s code could allow the digital asset to be divided into infinitely smaller units at any time.
Additionally, transferring cryptocurrencies can be extremely fast and cheap compared to traditional methods. Fees are somewhat fixed no matter the amount you send, which means that theoretically you could send 1 million Bitcoins to someone and pay only a few dollars in fees (or even less).
In a way, one could say that Bitcoin and cryptocurrencies are backed by the public’s faith in them as they have realized that the current monetary system is not as robust as one might think.
Why Are Cryptocurrencies so Volatile Then?
In comparison to traditional currencies and even stocks, cryptocurrencies are far more volatile, meaning that the current price of any given crypto can change drastically in hours. It’s quite common to see Bitcoin’s price go up or down 5-10% within a few days. In fact, even in periods of low volatility, most cryptocurrencies still experience price moves of up to 1-2%, which is considered extremely high in traditional markets.
The explanation, however, is quite simple. Cryptocurrencies, in general, lack the liquidity that the rest of the markets enjoy. According to statistics from Statista, the average daily turnover in the global foreign exchange market was around $6.5 trillion daily. The cryptocurrency market, on average, sees around $80 billion in daily trading volume, and according to various sources, a lot of the volume is actually fake.
The problem with illiquidity is that someone who wants to sell or buy a huge amount of Bitcoin or any cryptocurrency will simply ‘eat’ all the orders in the order book of the exchange, catapulting the price up or crashing it. That is the only reason why cryptocurrencies, in general, are extremely volatile.
Some Cryptocurrencies Are Actually Backed by Things
There are, however, some cryptocurrencies that are backed by gold, assets, and even fiat money. Tether (USDT) became the most popular cryptocurrency backed by fiat, later known as a ‘stablecoin’.
Stablecoins
A stablecoin is designed to always be worth $1.00 by maintaining 1 dollar in some sort of reserve. The first stablecoin to become widely popular was Tether, however, there was a lot of controversy surrounding it. Most of the criticism came from the fact that Tether Limited was unable to prove they actually have the funds to cover all the Tether issued.
Additionally, on 30 April 2019, Tether Limited’s lawyer actually admitted that each coin is only backed by $0.74 in cash.
Currently, there are over a dozen stablecoins that are backed by fiat, commodities, and even cryptocurrencies. TrueUSD is similar to Tether but it is considered to be one of the most reliable stablecoins currently as the company behind it has been extremely transparent and conducted an independent audit back in March 2019.
A more complex stablecoin is Dai, which is backed by Ethereum and pegged to the dollar. The system behind Dai basically locks Ethereum in a public contract. If the value of Dai distances too far from $1, the system will make use of the contract to stabilize it back. There is, however, a small problem: Dai is not entirely decentralized as the technology behind it is being monitored by the Maker Foundation.
DigixDAO is another stablecoin and it’s backed by bars of actual gold. It is an ERC-20 token created back in 2014. The digital asset is entirely decentralized and autonomous and can in fact be extended to be backed by other precious metals and even physical assets. According to the company, the gold is stored in custodial vaults at the Singapore Safe House, and 1 DGX will always equal 1 gram of gold.
Cryptocurrencies Backed by Assets
Not all cryptocurrencies backed by assets are stablecoins. For instance, the first oil-backed cryptocurrency was introduced by Venezuelan President Nicolas Maduro back in 2017. El Petro, although highly criticized, is supposedly the first cryptocurrency to be backed by oil thanks to the country’s huge oil and mineral reserves.
Petro is, however, not pegged to anything, and its value can increase or decrease at any given time.
Tokenization of Assets
Something that has become quite popular over the last few years is the tokenization of traditional stocks and assets. There are countless blockchain startups tokenizing almost anything to represent ownership.
The tokenization of assets brings numerous benefits like greater liquidity, more transparency, cheaper and faster transactions, and more accessibility. Tokenization itself is quite difficult to regulate, and all tokenization assets have to be compliant with the law, something that issuers struggle to achieve.
Conclusion
While traditional cryptocurrencies are not necessarily backed by anything physical, they still hold a lot of value solely based on supply and demand. This is the case with numerous other assets and even fiat money.
Cryptocurrencies have come a long way and there is a wide variety of them. Stablecoins are the most popular when it comes to asset-backed cryptocurrencies. They serve as an alternative to fiat money and bring a lot of liquidity to the market. There are definitely concerns as people question their stability, however, they have become an important factor in the market.
Additionally, other projects aside from stablecoins have implemented asset-backed cryptocurrencies. There are numerous cryptocurrencies out there backed by precious metals, physical assets, stocks, and even other cryptocurrencies. We are definitely going to see even more in the near future as they bring a lot more security to investors and the crypto space in general.

SwapSpace team is always ready for discussion. You can drop an email with your suggestions and questions to [[email protected]](mailto:[email protected]) Join our social networks: Twitter, Medium, Facebook, Telegram The best rates on https://swapspace.co/
submitted by SwapSpace_co to CoinBase [link] [comments]

A couple of nagging worries

Forks There will be a total of 3 bitcoin forks this year AFAIK. I wonder how many there will be next year. IMO forks are bad news. They introduce uncertainty and erodes trust. I think this will be a hindrance to wider adoption. Does the bitcoin team have a plan to prevent more forks?
Fixed supply I understand that Bitcoin is designed to be deflationary and is potentially infinitely divisible. But isn't a fixed supply overdoing it? There will be coins lost due to accidents, deaths of owners, etc. So the total amount of Bitcoins in the world will actually decrease over time without a replacement supply. Once the last bitcoin has been. mined, which will be some time yet I know, the miners' only compensation will be transaction fees. So these fees will go up a lot. Won't this become too prohibitive and open the possibilty for a rival coin which does not have this problem to rise and replace bitcoin?
submitted by paullampard to BitcoinBeginners [link] [comments]

Intergalactic Money: The deep impact of a self-evolving infinitely-scalable general-purpose realtime unforkable public blockchain federation

Intergalactic Money: The deep impact of a self-evolving infinitely-scalable general-purpose realtime unforkable public blockchain federation
Prologue: This article is a strategic response to the following crypto-related papers published in 2017: 1. “An (Institutional) Investor’s Take on Cryptoassets” by John Pfeffer of Pfeffer Capital and 2. “Plasma: Scalable Autonomous Smart Contracts” by Joseph Poon of Lightning Network and Vitalik Buterin of Ethereum Foundation.
John Pfeffer in his paper titled “An (Institutional) Investor’s Take on Cryptoassets” claims that “scaling solutions for blockchains in particular and decentralized networks including (implied) DAG-based networks such as PoS, Sharding, etc. are bullish for adoption and users/consumers but bearish for token value/investors. Even without those technology shifts, the cost of using decentralized protocols is deflationary, since the cost of processing power, storage and bandwidth are deflationary.” Farther he states “ It’s a mistake to compare monopoly network effects of Facebook or other centralized platforms to blockchain protocols because blockchain protocols can be forked to a functionally identical blockchain with the same history and users up to the moment if a parent chain persists in being arbitrarily expensive to use(i.e. rent-seeking). Like TCP/IP but unlike Facebook, blockchain protocols are open-source software that anyone can copy or fork freely.” Add regulatory pressures on bitcoin and public permissionless currency and its negative impact.

https://preview.redd.it/zjyhwcacmml11.jpg?width=636&format=pjpg&auto=webp&s=ea21ea7e6957cb39dfbb57fa3193e5805578d38d

It’s obvious from his statements; John is not aware of latest R&D projects focused on improving decentralized networks and advances in decentralized protocols especially “Unforkable Realtime Blockchains” such as Algorand, Bitlattice and Orch.Network based on Recursive STARKs and FHE/SHE. He is also ignorant of the fact that there are several projects working on self-evolving censor-proof quantum safe protocols such as Orch Network (token symbol: ORC and URL: https://orch.network/). These protocols have adopted a continuous development strategy while getting ready for next paradigm shifts in technology e.g. practical quantum computing and quantum internet. He also does not understand that a futuristic protocol token with infinite-divisibility integrated with a hybrid quantum-classical computational infrastructure can easily counteract and neutralize the deflationary nature of its own tokens and its limited supply hardcap making it infinitely scalable and elastic.
While I agree with his following statement: “A non-sovereign, non-fiat, trustless, censorship-resistant cryptoasset would be a far better alternative for most foreign currency international reserves. IMF SDRs are already a synthetic store of value, so could also be easily and sensibly replaced by such a cryptoasset.”, this necessarily does not make BTC the right candidate for several reasons: 1. BTC is not a self-improving self-evolvable fully censorship-resistant cryptoasset which is a must for it to qualify as a viable reserve asset and appeal to long-term institutional and high networth investors.
Bitcoins miners are mostly corporate entities having large investments in ASIC-based mining equipments. It’s not impossible to corner 51% mining power by a centralized resourceful entity compromising double spending protection and other trustless security measures built-in. So BTC is not truly decentralized. 2. The underlying hash algorithm and encryption protocol of BTC known as SHA-256 can be broken by multi-qubit quantum circuits and quantum computers under active development in labs across the world. So BTC is not future-proof and its very existence is threatened unless its core developers continuously modify and improve its underlying security model and technology. 3. Bitcoin is not infinitely-divisible that’s it’s not only upwardly non-scalable, the same is true for its downward scalability. In fact BTC has only 8 decimal places known as Satoshis(1 satoshi = 0.00000001 BTC)
Futuristic protocol tokens such as infinitely scalable minerless Orch(ORC) should be more attractive to long-term investors looking for an alternative non-sovereign, non-fiat, and trustless, censorship-resistant privacy preserving high-velocity cryptoasset.
In their paper titled “Plasma: Scalable Autonomous Smart Contracts” Joseph Poon and Vitalik Buterin defines their proposal as “Plasma is a proposed framework for incentivized and enforced execution of ‘smart contracts’ which is scalable to a significant amount of state updates per second (potentially billions) enabling the blockchain to be able to represent a significant amount of decentralized financial applications worldwide.” Now first thing is it’s not clear what do they mean by “Autonomous Smart Contracts” and what specifically autonomous component in Plasma it refers to. For example, an autonomous weapon would set the target and hit it on its own without any humans in the loop or an autonomous self-driving car would drive down to a destination point without any human navigating it.
Now contrary to their claims, their off-chain and second-layer scaling solution with Ethereum(ETH) as the root blockchain is neither censor-proof nor truly scalable as this requires state-channel based masternodes/validators. So it’s not a feasible solution at all as trust issues will crop up at every moment.
Moreover, Scalable Multi-Party Computation is feasible only in a platform that guarantees functional encryption i.e. query, exchange and computation between encrypted objects, data and entities which is possible only via recursive STARKs and Lattice-based FHE(Fully Homomorphic Encryption). A second-layer protocol like Plasma does not have the capability of providing functional encryption to all distributed anonymous parties having zero mutual trusts.
There is a repeated effort to push some dangerous products under a guise of advanced blockchains and decentralized platforms. For instance, hidden external oracles and corporate entity-controlled decentralized platforms. Blockchain applications live in their own digital realm, totally orthogonal to the real world and environment we live in. Be it decentralized application or a smart contract, their reach is limited to the space they can control. Any use case projection in our reality eventually confronts the following hard fact: how can an app efficiently and securely interact with the physical world? Now hidden external oracles like that of oraclize.it and hardware pythias are being marketed as the solutions to this problem. But (IMHO) internal encrypted entities of Orch (ORC) platform known as Degents having access to cryptographically reliable external software/hardware sensors-actors will transparently and securely interact with the external world/environment.
Only minerless future-proof general-purpose decentralized networks such as Orch(ORC) designed from scratch as an MPC(Multiparty Computation) platform can deliver truly scalable MPC solutions flawlessly and reliably to millions of consumers simultaneously without compromising on security and trustlessness.
The far reaching impact of a self-evolving infinitely-scalable general-purpose realtime unforkable public blockchain with built-in quantum safe privacy and multicompute features will be immeasurable and profound.
It would transform the whole universe of blockchain and decentralized networks inlcuding all blockchain-based and blockchainfree platforms such as DAG-based and DHT-based platforms e.g. IOTA, Nano and Holochain.
Orch Network (native token symbol: ORC and URL: https://orch.network) will enable and power following dapps and user-cases:

  1. Privacy-preserving Infinitely-divisible Hypercurrency and Confidential Global Payment System with integrated encrypted decentralized chat service
  2. Unmanned Decentralized Cryptoasset Exchanges
  3. Large-scale Federated IoT Networks
  4. Decentralized DNS Clusters
  5. Anonymous trading of Tokenized Financial Assets and Derivatives Contracts
  6. Automated Hedge Funds
  7. Crypto darkpools
  8. Temporal Insurance Products
  9. Global Supply chain and unmanned cargo ships and drones
  10. Realtime Encrypted Video Communication capable Anonymous Web Infrastructure
  11. High-velocity Non-sovereign Reserve Asset
  12. Near-Perfect Coin Mixer
  13. Decentralized Marketplace App
  14. Transparent Robust Stable Coins
  15. Decentralized P2P Storage of functionally encrypted data
  16. Permissionless ICO Platforms
  17. Decentralized and Encrypted Facebook, gmail, Twitter and google-like search/answer engines
  18. Decentralized CDNs
  19. Customizable Decentralized Governance System for blockchains and dapps
Another important thing that will boost the price and value of Orch Network token ORC is its integrated Turing Incomplete cyber contract protocol running Turing Incomplete cyber contracts written in Crackcity(a Turing Incomplete language derived from Crack and Simplicity) that runs on top of Crack Machine(s). Crack machines are Orch’s blockchain virtual machines.
Ethereum’s main deficiency and Achilles’ heel is its Turing Complete smart contract programming language Solidity.

  1. Turing-complete languages are fundamentally inappropriate for writing “smart contracts” — because such languages are inherently undecidable, which makes it impossible to know what a “smart contract” will do before running it.
(2) We should learn from Wall Street’s existing DSLs (domain-specific languages) for financial products and smart contracts, based on declarative and functional languages such as Ocaml and Haskell — instead of doing what the Web 2.0 programmers” behind Solidity did, and what Peter Todd is also apparently embarking upon: ie, ignoring the lessons that Wall Street has already learned, and “reinventing the wheel”, using less-suitable languages such as C++ and JavaScript-like languages (Solidity), simply because they seem “easier” for the “masses” to use.
(3) We should also consider using specification languages (to say what a contract does) along with implementation languages (saying how it should do it) — because specifications are higher-level and easier for people to read than implementations which are lower-level meant for machines to run — and also because ecosystems of specification/implementation language pairs (such as Coq/Ocaml) support formal reasoning and verification tools which could be used to mathematically prove that a smart contract’s implementation is “correct” (ie, it satisfies its specification) before even running it.
Turing-complete languages lead to “undecidable” programs (ie, you cannot figure out what you do until after you run them)
One hint: recall that Gödel’s incompleteness theorem proved that any mathematical system which is (Turing)-complete, must also be inconsistent incomplete [hat tip] — that is, in any such system, it must be possible to formulate propositions which are undecidable within that system.
This is related to things like the Halting Problem.
And by the way, Ethereum’s concept of “gas” is not a real solution to the Halting Problem: Yes, running out of “gas” means that the machine will “stop” eventually, but this naïve approach does not overcome the more fundamental problems regarding undecidability of programs written using a Turing-complete language.
The take-away is that:
When using any Turing-complete language, it will always be possible for someone (eg, the DAO hacker, or some crook like Bernie Madoff, or some well-meaning but clueless dev from slock.it) to formulate a “smart contract” whose meaning cannot be determined in advance by merely inspecting the code: ie, it will always be possible to write a smart contract whose meaning can only be determined after running the code.
Take a moment to contemplate the full, deep (and horrifying) implications of all this.
Some of the greatest mathematicians and computer scientists of the 20th century already discovered and definitively proved (much to the consternation most of their less-sophisticated (naïve) colleagues — who nevertheless eventually were forced to come around and begrudgingly agree with them) that: Given a “smart contract” written in a Turing-complete language, it is impossible to determine the semantics / behavior of that “smart contract” in advance, by mere inspection — either by a human, or even by a machine such as a theorem prover or formal reasoning tool (because such tools unfortunately only work on more-restricted languages, not on Turing-complete languages — for info on such more-restricted languages, see further below on “constructivism” and “intuitionistic logic”).
The horrifying conclusion is that: the only way to determine the semantics / behavior of a “smart contract” is “after-the-fact” — ie, by actually running it on some machine (eg, the notorious EVM) — and waiting to see what happens (eg, waiting for a hacker to “steal” tens of millions of dollars — simply because he understood the semantics / behavior of the code better than the developers did.
Last but not the least, increasing regulatory pressures on Bitcoin, Ethereum and other permissionless public cryptocurrencies/cryptotokens will impact their prices negatively in the medium to long-term.
The need for a hyperfast private zero-knowledge proof cryptocurrency that keeps payer-payee and payment data private and secure along with a decentralized scalable multicomputation platform can’t be overemphasized.
submitted by OrchNetwork to u/OrchNetwork [link] [comments]

Idea: Progeny AltCoins. Think of Bitcoin as Gold and a specifically programmed AltCoin-in-a-box as currency directly redeemable for Bitcoin held in a "Fort Knox" wallet.

So I have this idea which I haven't seen anywhere else, and wanted to share it to see if it makes sense or not.
My understanding is that bitcoin has some issues with transaction speed (and/or transaction cost) which causes people to worry about its ability to go mainstream and establish itself as a core global currency.
What if instead of expecting bitcoin to be as practical as USD, EUR, GBP etc, we actually thought of it more like the Gold of crypto?
Back when we tied our national currencies to gold, the paper notes were meant to be literally redeemable for gold (or silver, or coin, etc). The currency was tied to a guaranteed asset.
Paper is much easier to carry around than gold. It is much more divisible (infinitely so) than gold. It is more practical in virtually every way possible - it just has no value outside of the promise it carries. It promises to be worth gold. So as long as people believe gold has value, the paper has value. And whether gold is convenient for handling transactions or not is irrelevant.
So why not use Bitcoin the same way?
We need to program a specific "AltCoin-In-A-Box" program which anyone could easily run and create their own AltCoin.
It would work like this:
During setup of the new AltCoin, the new blockchain programmatically ties itself to a bitcoin wallet, which we will call "Fort Knox". An exchange rate is chosen, for example, 1BTC = 1000 ProgenyCoins, and the setup is complete.
An interface is then made available which allows people to buy your newly created ProgenyCoins from the "Federal Reserve" of ProgenyCoin-istan. Register your intent to buy (provide bitcoin address where BTC are coming from, and ProgenyCoins address where your ProgenyCoins will go), then send 1BTC to "Fort Knox" and await the (slow, painful, horrific) BTC transaction to be confirmed.
As soon as the BTC transaction is confirmed, "The Federal Reserve" sends you 1000 ProgenyCoins. "The Federal Reserve" can produce as many of these coins as it needs to meet the BTC deposit in Fort Knox, and will only pay out ProgenyCoins for that reason. Similarly, sending ProgenyCoins to "The Federal Reserve" will allow you to withdraw BTC to a BTC wallet of your choosing.
Buying ProgenyCoins from the fed on this brand spanking new tiny blockchain which is optimised for rapid, free transactions has now given you a practical local currency to use in everyday transactions which doesn't require the bitcoin chain, but still benefits from all of the value held in the bitcoin chain. If bitcoin rises in value, so too will the value of your ProgenyCoins. And since all of these new progeny coins are being created by locking BTC up in "Fort Knoxes" all over the planet, the value of BTC is likely to increase to match the increased demand and lost supply.
Basically, the parent BTC blockchain is spawning lightweight, mostly-independent, children chains to do the transaction work for it. Hence the progeny reference. Obviously.
Considerations and Risk
  1. By making the original code for this concept a well established opensource piece of software, the "AltCoin-In-A-Box" certificate of BTC redeemability will guarantee the value of every new ProgenyCoin you encounter. Presumably the "AltCoin-In-A-Box" software could also include a generic platform which will handle all such coin-wallets in one place.
  2. Each new coin will need to gain enough nodes/miners to ensure security against attacks before people can be confident trusting them to not steal their money. Perhaps an international organisation can help provide early stage node hosting for a fee paid by the originator of the currency? (I haven't really put any thought into the incentivisation for 'mining' - I guess transactions would need a miner fee to ensure people did run full nodes?)
  3. Many more I haven't thought of, I am sure.
Thoughts?
submitted by Aegist to Bitcoin [link] [comments]

What are Bitcoin and Other Cryptocurrencies Backed By?

Bitcoin was created back in 2009 and became the first cryptocurrency ever designed. Cryptocurrencies have become increasingly popular in the last few years as they offer an efficient and decentralized way of transferring money.
Cryptocurrencies have always been an alternative to banks and fiat money. But why do they have any value at all and who dictates what they are worth? The value of Bitcoin is really calculated through supply and demand. The digital asset itself is backed by nothing more than perhaps the blockchain ledger.
Every single cryptocurrency uses a blockchain ledger, a system that records transactions between two or more parties in a verifiable and permanent way. This certainly adds value to Bitcoin and cryptocurrencies. However, it is not what determines their price.
Why Things Have Value
Why does anything have any value at all? It has mostly because of supply and demand. Traditional currencies, for instance, are only backed by the government that issued them. Digital money, like Bitcoin, is not backed or linked to any physical reserves like gold and can certainly lose value due to different factors.
Cryptocurrencies have value because they require ‘work’ to exist. Cryptocurrencies are maintained thanks to the mining process, a process in which transactions are verified by different people. This process requires a certain amount of work, electricity, and money.
Key Factors That Affect The Value of Cryptocurrencies
Since most cryptocurrencies are not physically backed by anything, their value is determined through supply and demand based on a few important factors. One of the biggest advantages of cryptocurrencies is scarcity. The supply of most cryptocurrencies is fixed, and, unlike traditional currencies, no one can issue more than the maximum limit. This means that cryptocurrencies are deflationary by nature.
Another key factor that benefits cryptocurrencies is divisibility. Any cryptocurrency can be divided into smaller units. A simple change in Bitcoin’s code could allow the digital asset to be divided into infinitely smaller units at any time.
Additionally, transferring cryptocurrencies can be extremely fast and cheap compared to traditional methods. Fees are somewhat fixed no matter the amount you send, which means that theoretically you could send 1 million Bitcoins to someone and pay only a few dollars in fees (or even less).
In a way, one could say that Bitcoin and cryptocurrencies are backed by the public’s faith in them as they have realized that the current monetary system is not as robust as one might think.
Why Are Cryptocurrencies so Volatile Then?
In comparison to traditional currencies and even stocks, cryptocurrencies are far more volatile, meaning that the current price of any given crypto can change drastically in hours. It’s quite common to see Bitcoin’s price go up or down 5-10% within a few days. In fact, even in periods of low volatility, most cryptocurrencies still experience price moves of up to 1-2%, which is considered extremely high in traditional markets.
The explanation, however, is quite simple. Cryptocurrencies, in general, lack the liquidity that the rest of the markets enjoy. According to statistics from Statista, the average daily turnover in the global foreign exchange market was around $6.5 trillion daily. The cryptocurrency market, on average, sees around $80 billion in daily trading volume, and according to various sources, a lot of the volume is actually fake.
The problem with illiquidity is that someone who wants to sell or buy a huge amount of Bitcoin or any cryptocurrency will simply ‘eat’ all the orders in the order book of the exchange, catapulting the price up or crashing it. That is the only reason why cryptocurrencies, in general, are extremely volatile.
Some Cryptocurrencies Are Actually Backed by Things
There are, however, some cryptocurrencies that are backed by gold, assets, and even fiat money. Tether (USDT) became the most popular cryptocurrency backed by fiat, later known as a ‘stablecoin’.
Stablecoins
A stablecoin is designed to always be worth $1.00 by maintaining 1 dollar in some sort of reserve. The first stablecoin to become widely popular was Tether, however, there was a lot of controversy surrounding it. Most of the criticism came from the fact that Tether Limited was unable to prove they actually have the funds to cover all the Tether issued.
Additionally, on 30 April 2019, Tether Limited’s lawyer actually admitted that each coin is only backed by $0.74 in cash.
Currently, there are over a dozen stablecoins that are backed by fiat, commodities, and even cryptocurrencies. TrueUSD is similar to Tether but it is considered to be one of the most reliable stablecoins currently as the company behind it has been extremely transparent and conducted an independent audit back in March 2019.
A more complex stablecoin is Dai, which is backed by Ethereum and pegged to the dollar. The system behind Dai basically locks Ethereum in a public contract. If the value of Dai distances too far from $1, the system will make use of the contract to stabilize it back. There is, however, a small problem: Dai is not entirely decentralized as the technology behind it is being monitored by the Maker Foundation.
DigixDAO is another stablecoin and it’s backed by bars of actual gold. It is an ERC-20 token created back in 2014. The digital asset is entirely decentralized and autonomous and can in fact be extended to be backed by other precious metals and even physical assets. According to the company, the gold is stored in custodial vaults at the Singapore Safe House, and 1 DGX will always equal 1 gram of gold.
Cryptocurrencies Backed by Assets
Not all cryptocurrencies backed by assets are stablecoins. For instance, the first oil-backed cryptocurrency was introduced by Venezuelan President Nicolas Maduro back in 2017. El Petro, although highly criticized, is supposedly the first cryptocurrency to be backed by oil thanks to the country’s huge oil and mineral reserves.
Petro is, however, not pegged to anything, and its value can increase or decrease at any given time.
Tokenization of Assets
Something that has become quite popular over the last few years is the tokenization of traditional stocks and assets. There are countless blockchain startups tokenizing almost anything to represent ownership.
The tokenization of assets brings numerous benefits like greater liquidity, more transparency, cheaper and faster transactions, and more accessibility. Tokenization itself is quite difficult to regulate, and all tokenization assets have to be compliant with the law, something that issuers struggle to achieve.
Conclusion
While traditional cryptocurrencies are not necessarily backed by anything physical, they still hold a lot of value solely based on supply and demand. This is the case with numerous other assets and even fiat money.
Cryptocurrencies have come a long way and there is a wide variety of them. Stablecoins are the most popular when it comes to asset-backed cryptocurrencies. They serve as an alternative to fiat money and bring a lot of liquidity to the market. There are definitely concerns as people question their stability, however, they have become an important factor in the market.
Additionally, other projects aside from stablecoins have implemented asset-backed cryptocurrencies. There are numerous cryptocurrencies out there backed by precious metals, physical assets, stocks, and even other cryptocurrencies. We are definitely going to see even more in the near future as they bring a lot more security to investors and the crypto space in general.

SwapSpace team is always ready for discussion. You can drop an email with your suggestions and questions to [[email protected]](mailto:[email protected]) Join our social networks: Twitter, Medium, Facebook, Telegram The best rates on https://swapspace.co/
submitted by SwapSpace_co to CryptoCurrencyTrading [link] [comments]

Intergalactic Money: The deep impact of a self-evolving infinitely-scalable general-purpose realtime unforkable public blockchain federation

Intergalactic Money: The deep impact of a self-evolving infinitely-scalable general-purpose realtime unforkable public blockchain federation
Prologue: This article is a strategic response to the following crypto-related papers published in 2017: 1. “An (Institutional) Investor’s Take on Cryptoassets” by John Pfeffer of Pfeffer Capital and 2. “Plasma: Scalable Autonomous Smart Contracts” by Joseph Poon of Lightning Network and Vitalik Buterin of Ethereum Foundation.
John Pfeffer in his paper titled “An (Institutional) Investor’s Take on Cryptoassets” claims that “scaling solutions for blockchains in particular and decentralized networks including (implied) DAG-based networks such as PoS, Sharding, etc. are bullish for adoption and users/consumers but bearish for token value/investors. Even without those technology shifts, the cost of using decentralized protocols is deflationary, since the cost of processing power, storage and bandwidth are deflationary.” Farther he states “ It’s a mistake to compare monopoly network effects of Facebook or other centralized platforms to blockchain protocols because blockchain protocols can be forked to a functionally identical blockchain with the same history and users up to the moment if a parent chain persists in being arbitrarily expensive to use(i.e. rent-seeking). Like TCP/IP but unlike Facebook, blockchain protocols are open-source software that anyone can copy or fork freely.” Add regulatory pressures on bitcoin and public permissionless currency and its negative impact.
It’s obvious from his statements; John is not aware of latest R&D projects focused on improving decentralized networks and advances in decentralized protocols especially “Unforkable Realtime Blockchains” such as Algorand, Bitlattice and Orch.Network based on Recursive STARKs and FHE/SHE. He is also ignorant of the fact that there are several projects working on self-evolving censor-proof quantum safe protocols such as Orch Network (token symbol: ORC and URL: https://orch.network/). These protocols have adopted a continuous development strategy while getting ready for next paradigm shifts in technology e.g. practical quantum computing and quantum internet. He also does not understand that a futuristic protocol token with infinite-divisibility integrated with a hybrid quantum-classical computational infrastructure can easily counteract and neutralize the deflationary nature of its own tokens and its limited supply hardcap making it infinitely scalable and elastic.

https://preview.redd.it/lj2bgefhmml11.jpg?width=636&format=pjpg&auto=webp&s=ce282da0942d65464d7edf2c822fff4737f0aa87
While I agree with his following statement: “A non-sovereign, non-fiat, trustless, censorship-resistant cryptoasset would be a far better alternative for most foreign currency international reserves. IMF SDRs are already a synthetic store of value, so could also be easily and sensibly replaced by such a cryptoasset.”, this necessarily does not make BTC the right candidate for several reasons: 1. BTC is not a self-improving self-evolvable fully censorship-resistant cryptoasset which is a must for it to qualify as a viable reserve asset and appeal to long-term institutional and high networth investors.
Bitcoins miners are mostly corporate entities having large investments in ASIC-based mining equipments. It’s not impossible to corner 51% mining power by a centralized resourceful entity compromising double spending protection and other trustless security measures built-in. So BTC is not truly decentralized. 2. The underlying hash algorithm and encryption protocol of BTC known as SHA-256 can be broken by multi-qubit quantum circuits and quantum computers under active development in labs across the world. So BTC is not future-proof and its very existence is threatened unless its core developers continuously modify and improve its underlying security model and technology. 3. Bitcoin is not infinitely-divisible that’s it’s not only upwardly non-scalable, the same is true for its downward scalability. In fact BTC has only 8 decimal places known as Satoshis(1 satoshi = 0.00000001 BTC)
Futuristic protocol tokens such as infinitely scalable minerless Orch(ORC) should be more attractive to long-term investors looking for an alternative non-sovereign, non-fiat, and trustless, censorship-resistant privacy preserving high-velocity cryptoasset.
In their paper titled “Plasma: Scalable Autonomous Smart Contracts” Joseph Poon and Vitalik Buterin defines their proposal as “Plasma is a proposed framework for incentivized and enforced execution of ‘smart contracts’ which is scalable to a significant amount of state updates per second (potentially billions) enabling the blockchain to be able to represent a significant amount of decentralized financial applications worldwide.” Now first thing is it’s not clear what do they mean by “Autonomous Smart Contracts” and what specifically autonomous component in Plasma it refers to. For example, an autonomous weapon would set the target and hit it on its own without any humans in the loop or an autonomous self-driving car would drive down to a destination point without any human navigating it.
Now contrary to their claims, their off-chain and second-layer scaling solution with Ethereum(ETH) as the root blockchain is neither censor-proof nor truly scalable as this requires state-channel based masternodes/validators. So it’s not a feasible solution at all as trust issues will crop up at every moment.
Moreover, Scalable Multi-Party Computation is feasible only in a platform that guarantees functional encryption i.e. query, exchange and computation between encrypted objects, data and entities which is possible only via recursive STARKs and Lattice-based FHE(Fully Homomorphic Encryption). A second-layer protocol like Plasma does not have the capability of providing functional encryption to all distributed anonymous parties having zero mutual trusts.
There is a repeated effort to push some dangerous products under a guise of advanced blockchains and decentralized platforms. For instance, hidden external oracles and corporate entity-controlled decentralized platforms. Blockchain applications live in their own digital realm, totally orthogonal to the real world and environment we live in. Be it decentralized application or a smart contract, their reach is limited to the space they can control. Any use case projection in our reality eventually confronts the following hard fact: how can an app efficiently and securely interact with the physical world? Now hidden external oracles like that of oraclize.it and hardware pythias are being marketed as the solutions to this problem. But (IMHO) internal encrypted entities of Orch (ORC) platform known as Degents having access to cryptographically reliable external software/hardware sensors-actors will transparently and securely interact with the external world/environment.
Only minerless future-proof general-purpose decentralized networks such as Orch(ORC) designed from scratch as an MPC(Multiparty Computation) platform can deliver truly scalable MPC solutions flawlessly and reliably to millions of consumers simultaneously without compromising on security and trustlessness.
The far reaching impact of a self-evolving infinitely-scalable general-purpose realtime unforkable public blockchain with built-in quantum safe privacy and multicompute features will be immeasurable and profound.
It would transform the whole universe of blockchain and decentralized networks inlcuding all blockchain-based and blockchainfree platforms such as DAG-based and DHT-based platforms e.g. IOTA, Nano and Holochain.
Orch Network (native token symbol: ORC and URL: https://orch.network) will enable and power following dapps and user-cases:

  1. Privacy-preserving Infinitely-divisible Hypercurrency and Confidential Global Payment System with integrated encrypted decentralized chat service
  2. Unmanned Decentralized Cryptoasset Exchanges
  3. Large-scale Federated IoT Networks
  4. Decentralized DNS Clusters
  5. Anonymous trading of Tokenized Financial Assets and Derivatives Contracts
  6. Automated Hedge Funds
  7. Crypto darkpools
  8. Temporal Insurance Products
  9. Global Supply chain and unmanned cargo ships and drones
  10. Realtime Encrypted Video Communication capable Anonymous Web Infrastructure
  11. High-velocity Non-sovereign Reserve Asset
  12. Near-Perfect Coin Mixer
  13. Decentralized Marketplace App
  14. Transparent Robust Stable Coins
  15. Decentralized P2P Storage of functionally encrypted data
  16. Permissionless ICO Platforms
  17. Decentralized and Encrypted Facebook, gmail, Twitter and google-like search/answer engines
  18. Decentralized CDNs
  19. Customizable Decentralized Governance System for blockchains and dapps
Another important thing that will boost the price and value of Orch Network token ORC is its integrated Turing Incomplete cyber contract protocol running Turing Incomplete cyber contracts written in Crackcity(a Turing Incomplete language derived from Crack and Simplicity) that runs on top of Crack Machine(s). Crack machines are Orch’s blockchain virtual machines.
Ethereum’s main deficiency and Achilles’ heel is its Turing Complete smart contract programming language Solidity.

  1. Turing-complete languages are fundamentally inappropriate for writing “smart contracts” — because such languages are inherently undecidable, which makes it impossible to know what a “smart contract” will do before running it.
(2) We should learn from Wall Street’s existing DSLs (domain-specific languages) for financial products and smart contracts, based on declarative and functional languages such as Ocaml and Haskell — instead of doing what the Web 2.0 programmers” behind Solidity did, and what Peter Todd is also apparently embarking upon: ie, ignoring the lessons that Wall Street has already learned, and “reinventing the wheel”, using less-suitable languages such as C++ and JavaScript-like languages (Solidity), simply because they seem “easier” for the “masses” to use.
(3) We should also consider using specification languages (to say what a contract does) along with implementation languages (saying how it should do it) — because specifications are higher-level and easier for people to read than implementations which are lower-level meant for machines to run — and also because ecosystems of specification/implementation language pairs (such as Coq/Ocaml) support formal reasoning and verification tools which could be used to mathematically prove that a smart contract’s implementation is “correct” (ie, it satisfies its specification) before even running it.
Turing-complete languages lead to “undecidable” programs (ie, you cannot figure out what you do until after you run them)
One hint: recall that Gödel’s incompleteness theorem proved that any mathematical system which is (Turing)-complete, must also be inconsistent incomplete [hat tip] — that is, in any such system, it must be possible to formulate propositions which are undecidable within that system.
This is related to things like the Halting Problem.
And by the way, Ethereum’s concept of “gas” is not a real solution to the Halting Problem: Yes, running out of “gas” means that the machine will “stop” eventually, but this naïve approach does not overcome the more fundamental problems regarding undecidability of programs written using a Turing-complete language.
The take-away is that:
When using any Turing-complete language, it will always be possible for someone (eg, the DAO hacker, or some crook like Bernie Madoff, or some well-meaning but clueless dev from slock.it) to formulate a “smart contract” whose meaning cannot be determined in advance by merely inspecting the code: ie, it will always be possible to write a smart contract whose meaning can only be determined after running the code.
Take a moment to contemplate the full, deep (and horrifying) implications of all this.
Some of the greatest mathematicians and computer scientists of the 20th century already discovered and definitively proved (much to the consternation most of their less-sophisticated (naïve) colleagues — who nevertheless eventually were forced to come around and begrudgingly agree with them) that: Given a “smart contract” written in a Turing-complete language, it is impossible to determine the semantics / behavior of that “smart contract” in advance, by mere inspection — either by a human, or even by a machine such as a theorem prover or formal reasoning tool (because such tools unfortunately only work on more-restricted languages, not on Turing-complete languages — for info on such more-restricted languages, see further below on “constructivism” and “intuitionistic logic”).
The horrifying conclusion is that: the only way to determine the semantics / behavior of a “smart contract” is “after-the-fact” — ie, by actually running it on some machine (eg, the notorious EVM) — and waiting to see what happens (eg, waiting for a hacker to “steal” tens of millions of dollars — simply because he understood the semantics / behavior of the code better than the developers did.
Last but not the least, increasing regulatory pressures on Bitcoin, Ethereum and other permissionless public cryptocurrencies/cryptotokens will impact their prices negatively in the medium to long-term.
The need for a hyperfast private zero-knowledge proof cryptocurrency that keeps payer-payee and payment data private and secure along with a decentralized scalable multicomputation platform can’t be overemphasized.
submitted by OrchNetwork to u/OrchNetwork [link] [comments]

What are Bitcoin and Other Cryptocurrencies Backed By?

Bitcoin was created back in 2009 and became the first cryptocurrency ever designed. Cryptocurrencies have become increasingly popular in the last few years as they offer an efficient and decentralized way of transferring money.
Cryptocurrencies have always been an alternative to banks and fiat money. But why do they have any value at all and who dictates what they are worth? The value of Bitcoin is really calculated through supply and demand. The digital asset itself is backed by nothing more than perhaps the blockchain ledger.
Every single cryptocurrency uses a blockchain ledger, a system that records transactions between two or more parties in a verifiable and permanent way. This certainly adds value to Bitcoin and cryptocurrencies. However, it is not what determines their price.
Why Things Have Value
Why does anything have any value at all? It has mostly because of supply and demand. Traditional currencies, for instance, are only backed by the government that issued them. Digital money, like Bitcoin, is not backed or linked to any physical reserves like gold and can certainly lose value due to different factors.
Cryptocurrencies have value because they require ‘work’ to exist. Cryptocurrencies are maintained thanks to the mining process, a process in which transactions are verified by different people. This process requires a certain amount of work, electricity, and money.
Key Factors That Affect The Value of Cryptocurrencies
Since most cryptocurrencies are not physically backed by anything, their value is determined through supply and demand based on a few important factors. One of the biggest advantages of cryptocurrencies is scarcity. The supply of most cryptocurrencies is fixed, and, unlike traditional currencies, no one can issue more than the maximum limit. This means that cryptocurrencies are deflationary by nature.
Another key factor that benefits cryptocurrencies is divisibility. Any cryptocurrency can be divided into smaller units. A simple change in Bitcoin’s code could allow the digital asset to be divided into infinitely smaller units at any time.
Additionally, transferring cryptocurrencies can be extremely fast and cheap compared to traditional methods. Fees are somewhat fixed no matter the amount you send, which means that theoretically you could send 1 million Bitcoins to someone and pay only a few dollars in fees (or even less).
In a way, one could say that Bitcoin and cryptocurrencies are backed by the public’s faith in them as they have realized that the current monetary system is not as robust as one might think.
Why Are Cryptocurrencies so Volatile Then?
In comparison to traditional currencies and even stocks, cryptocurrencies are far more volatile, meaning that the current price of any given crypto can change drastically in hours. It’s quite common to see Bitcoin’s price go up or down 5-10% within a few days. In fact, even in periods of low volatility, most cryptocurrencies still experience price moves of up to 1-2%, which is considered extremely high in traditional markets.
The explanation, however, is quite simple. Cryptocurrencies, in general, lack the liquidity that the rest of the markets enjoy. According to statistics from Statista, the average daily turnover in the global foreign exchange market was around $6.5 trillion daily. The cryptocurrency market, on average, sees around $80 billion in daily trading volume, and according to various sources, a lot of the volume is actually fake.
The problem with illiquidity is that someone who wants to sell or buy a huge amount of Bitcoin or any cryptocurrency will simply ‘eat’ all the orders in the order book of the exchange, catapulting the price up or crashing it. That is the only reason why cryptocurrencies, in general, are extremely volatile.
Some Cryptocurrencies Are Actually Backed by Things
There are, however, some cryptocurrencies that are backed by gold, assets, and even fiat money. Tether (USDT) became the most popular cryptocurrency backed by fiat, later known as a ‘stablecoin’.
Stablecoins
A stablecoin is designed to always be worth $1.00 by maintaining 1 dollar in some sort of reserve. The first stablecoin to become widely popular was Tether, however, there was a lot of controversy surrounding it. Most of the criticism came from the fact that Tether Limited was unable to prove they actually have the funds to cover all the Tether issued.
Additionally, on 30 April 2019, Tether Limited’s lawyer actually admitted that each coin is only backed by $0.74 in cash.
Currently, there are over a dozen stablecoins that are backed by fiat, commodities, and even cryptocurrencies. TrueUSD is similar to Tether but it is considered to be one of the most reliable stablecoins currently as the company behind it has been extremely transparent and conducted an independent audit back in March 2019.
A more complex stablecoin is Dai, which is backed by Ethereum and pegged to the dollar. The system behind Dai basically locks Ethereum in a public contract. If the value of Dai distances too far from $1, the system will make use of the contract to stabilize it back. There is, however, a small problem: Dai is not entirely decentralized as the technology behind it is being monitored by the Maker Foundation.
DigixDAO is another stablecoin and it’s backed by bars of actual gold. It is an ERC-20 token created back in 2014. The digital asset is entirely decentralized and autonomous and can in fact be extended to be backed by other precious metals and even physical assets. According to the company, the gold is stored in custodial vaults at the Singapore Safe House, and 1 DGX will always equal 1 gram of gold.
Cryptocurrencies Backed by Assets
Not all cryptocurrencies backed by assets are stablecoins. For instance, the first oil-backed cryptocurrency was introduced by Venezuelan President Nicolas Maduro back in 2017. El Petro, although highly criticized, is supposedly the first cryptocurrency to be backed by oil thanks to the country’s huge oil and mineral reserves.
Petro is, however, not pegged to anything, and its value can increase or decrease at any given time.
Tokenization of Assets
Something that has become quite popular over the last few years is the tokenization of traditional stocks and assets. There are countless blockchain startups tokenizing almost anything to represent ownership.
The tokenization of assets brings numerous benefits like greater liquidity, more transparency, cheaper and faster transactions, and more accessibility. Tokenization itself is quite difficult to regulate, and all tokenization assets have to be compliant with the law, something that issuers struggle to achieve.
Conclusion
While traditional cryptocurrencies are not necessarily backed by anything physical, they still hold a lot of value solely based on supply and demand. This is the case with numerous other assets and even fiat money.
Cryptocurrencies have come a long way and there is a wide variety of them. Stablecoins are the most popular when it comes to asset-backed cryptocurrencies. They serve as an alternative to fiat money and bring a lot of liquidity to the market. There are definitely concerns as people question their stability, however, they have become an important factor in the market.
Additionally, other projects aside from stablecoins have implemented asset-backed cryptocurrencies. There are numerous cryptocurrencies out there backed by precious metals, physical assets, stocks, and even other cryptocurrencies. We are definitely going to see even more in the near future as they bring a lot more security to investors and the crypto space in general.

SwapSpace team is always ready for discussion. You can drop an email with your suggestions and questions to [[email protected]](mailto:[email protected]) Join our social networks: Twitter, Medium, Facebook, Telegram The best rates on https://swapspace.co/
submitted by SwapSpace_co to CoinTelegraph [link] [comments]

What are Bitcoin and Other Cryptocurrencies Backed By?

Bitcoin was created back in 2009 and became the first cryptocurrency ever designed. Cryptocurrencies have become increasingly popular in the last few years as they offer an efficient and decentralized way of transferring money.
Cryptocurrencies have always been an alternative to banks and fiat money. But why do they have any value at all and who dictates what they are worth? The value of Bitcoin is really calculated through supply and demand. The digital asset itself is backed by nothing more than perhaps the blockchain ledger.
Every single cryptocurrency uses a blockchain ledger, a system that records transactions between two or more parties in a verifiable and permanent way. This certainly adds value to Bitcoin and cryptocurrencies. However, it is not what determines their price.
Why Things Have Value
Why does anything have any value at all? It has mostly because of supply and demand. Traditional currencies, for instance, are only backed by the government that issued them. Digital money, like Bitcoin, is not backed or linked to any physical reserves like gold and can certainly lose value due to different factors.
Cryptocurrencies have value because they require ‘work’ to exist. Cryptocurrencies are maintained thanks to the mining process, a process in which transactions are verified by different people. This process requires a certain amount of work, electricity, and money.
Key Factors That Affect The Value of Cryptocurrencies
Since most cryptocurrencies are not physically backed by anything, their value is determined through supply and demand based on a few important factors. One of the biggest advantages of cryptocurrencies is scarcity. The supply of most cryptocurrencies is fixed, and, unlike traditional currencies, no one can issue more than the maximum limit. This means that cryptocurrencies are deflationary by nature.
Another key factor that benefits cryptocurrencies is divisibility. Any cryptocurrency can be divided into smaller units. A simple change in Bitcoin’s code could allow the digital asset to be divided into infinitely smaller units at any time.
Additionally, transferring cryptocurrencies can be extremely fast and cheap compared to traditional methods. Fees are somewhat fixed no matter the amount you send, which means that theoretically you could send 1 million Bitcoins to someone and pay only a few dollars in fees (or even less).
In a way, one could say that Bitcoin and cryptocurrencies are backed by the public’s faith in them as they have realized that the current monetary system is not as robust as one might think.
Why Are Cryptocurrencies so Volatile Then?
In comparison to traditional currencies and even stocks, cryptocurrencies are far more volatile, meaning that the current price of any given crypto can change drastically in hours. It’s quite common to see Bitcoin’s price go up or down 5-10% within a few days. In fact, even in periods of low volatility, most cryptocurrencies still experience price moves of up to 1-2%, which is considered extremely high in traditional markets.
The explanation, however, is quite simple. Cryptocurrencies, in general, lack the liquidity that the rest of the markets enjoy. According to statistics from Statista, the average daily turnover in the global foreign exchange market was around $6.5 trillion daily. The cryptocurrency market, on average, sees around $80 billion in daily trading volume, and according to various sources, a lot of the volume is actually fake.
The problem with illiquidity is that someone who wants to sell or buy a huge amount of Bitcoin or any cryptocurrency will simply ‘eat’ all the orders in the order book of the exchange, catapulting the price up or crashing it. That is the only reason why cryptocurrencies, in general, are extremely volatile.
Some Cryptocurrencies Are Actually Backed by Things
There are, however, some cryptocurrencies that are backed by gold, assets, and even fiat money. Tether (USDT) became the most popular cryptocurrency backed by fiat, later known as a ‘stablecoin’.
Stablecoins
A stablecoin is designed to always be worth $1.00 by maintaining 1 dollar in some sort of reserve. The first stablecoin to become widely popular was Tether, however, there was a lot of controversy surrounding it. Most of the criticism came from the fact that Tether Limited was unable to prove they actually have the funds to cover all the Tether issued.
Additionally, on 30 April 2019, Tether Limited’s lawyer actually admitted that each coin is only backed by $0.74 in cash.
Currently, there are over a dozen stablecoins that are backed by fiat, commodities, and even cryptocurrencies. TrueUSD is similar to Tether but it is considered to be one of the most reliable stablecoins currently as the company behind it has been extremely transparent and conducted an independent audit back in March 2019.
A more complex stablecoin is Dai, which is backed by Ethereum and pegged to the dollar. The system behind Dai basically locks Ethereum in a public contract. If the value of Dai distances too far from $1, the system will make use of the contract to stabilize it back. There is, however, a small problem: Dai is not entirely decentralized as the technology behind it is being monitored by the Maker Foundation.
DigixDAO is another stablecoin and it’s backed by bars of actual gold. It is an ERC-20 token created back in 2014. The digital asset is entirely decentralized and autonomous and can in fact be extended to be backed by other precious metals and even physical assets. According to the company, the gold is stored in custodial vaults at the Singapore Safe House, and 1 DGX will always equal 1 gram of gold.
Cryptocurrencies Backed by Assets
Not all cryptocurrencies backed by assets are stablecoins. For instance, the first oil-backed cryptocurrency was introduced by Venezuelan President Nicolas Maduro back in 2017. El Petro, although highly criticized, is supposedly the first cryptocurrency to be backed by oil thanks to the country’s huge oil and mineral reserves.
Petro is, however, not pegged to anything, and its value can increase or decrease at any given time.
Tokenization of Assets
Something that has become quite popular over the last few years is the tokenization of traditional stocks and assets. There are countless blockchain startups tokenizing almost anything to represent ownership.
The tokenization of assets brings numerous benefits like greater liquidity, more transparency, cheaper and faster transactions, and more accessibility. Tokenization itself is quite difficult to regulate, and all tokenization assets have to be compliant with the law, something that issuers struggle to achieve.
Conclusion
While traditional cryptocurrencies are not necessarily backed by anything physical, they still hold a lot of value solely based on supply and demand. This is the case with numerous other assets and even fiat money.
Cryptocurrencies have come a long way and there is a wide variety of them. Stablecoins are the most popular when it comes to asset-backed cryptocurrencies. They serve as an alternative to fiat money and bring a lot of liquidity to the market. There are definitely concerns as people question their stability, however, they have become an important factor in the market.
Additionally, other projects aside from stablecoins have implemented asset-backed cryptocurrencies. There are numerous cryptocurrencies out there backed by precious metals, physical assets, stocks, and even other cryptocurrencies. We are definitely going to see even more in the near future as they bring a lot more security to investors and the crypto space in general.

SwapSpace team is always ready for discussion. You can drop an email with your suggestions and questions to [[email protected]](mailto:[email protected]) Join our social networks: Twitter, Medium, Facebook, Telegram The best rates on https://swapspace.co/
submitted by SwapSpace_co to CryptoMarkets [link] [comments]

What are Bitcoin and Other Cryptocurrencies Backed By?

Bitcoin was created back in 2009 and became the first cryptocurrency ever designed. Cryptocurrencies have become increasingly popular in the last few years as they offer an efficient and decentralized way of transferring money.
Cryptocurrencies have always been an alternative to banks and fiat money. But why do they have any value at all and who dictates what they are worth? The value of Bitcoin is really calculated through supply and demand. The digital asset itself is backed by nothing more than perhaps the blockchain ledger.
Every single cryptocurrency uses a blockchain ledger, a system that records transactions between two or more parties in a verifiable and permanent way. This certainly adds value to Bitcoin and cryptocurrencies. However, it is not what determines their price.

Why Things Have Value

Why does anything have any value at all? It has mostly because of supply and demand. Traditional currencies, for instance, are only backed by the government that issued them. Digital money, like Bitcoin, is not backed or linked to any physical reserves like gold and can certainly lose value due to different factors.
Cryptocurrencies have value because they require ‘work’ to exist. Cryptocurrencies are maintained thanks to the mining process, a process in which transactions are verified by different people. This process requires a certain amount of work, electricity, and money.

Key Factors That Affect The Value of Cryptocurrencies

Since most cryptocurrencies are not physically backed by anything, their value is determined through supply and demand based on a few important factors. One of the biggest advantages of cryptocurrencies is scarcity. The supply of most cryptocurrencies is fixed, and, unlike traditional currencies, no one can issue more than the maximum limit. This means that cryptocurrencies are deflationary by nature.
Another key factor that benefits cryptocurrencies is divisibility. Any cryptocurrency can be divided into smaller units. A simple change in Bitcoin’s code could allow the digital asset to be divided into infinitely smaller units at any time.
Additionally, transferring cryptocurrencies can be extremely fast and cheap compared to traditional methods. Fees are somewhat fixed no matter the amount you send, which means that theoretically you could send 1 million Bitcoins to someone and pay only a few dollars in fees (or even less).
In a way, one could say that Bitcoin and cryptocurrencies are backed by the public’s faith in them as they have realized that the current monetary system is not as robust as one might think.

Why Are Cryptocurrencies so Volatile Then?

In comparison to traditional currencies and even stocks, cryptocurrencies are far more volatile, meaning that the current price of any given crypto can change drastically in hours. It’s quite common to see Bitcoin’s price go up or down 5-10% within a few days. In fact, even in periods of low volatility, most cryptocurrencies still experience price moves of up to 1-2%, which is considered extremely high in traditional markets.
The explanation, however, is quite simple. Cryptocurrencies, in general, lack the liquidity that the rest of the markets enjoy. According to statistics from Statista, the average daily turnover in the global foreign exchange market was around $6.5 trillion daily. The cryptocurrency market, on average, sees around $80 billion in daily trading volume, and according to various sources, a lot of the volume is actually fake.
The problem with illiquidity is that someone who wants to sell or buy a huge amount of Bitcoin or any cryptocurrency will simply ‘eat’ all the orders in the order book of the exchange, catapulting the price up or crashing it. That is the only reason why cryptocurrencies, in general, are extremely volatile.

Some Cryptocurrencies Are Actually Backed by Things

There are, however, some cryptocurrencies that are backed by gold, assets, and even fiat money. Tether (USDT) became the most popular cryptocurrency backed by fiat, later known as a ‘stablecoin’.

Stablecoins

A stablecoin is designed to always be worth $1.00 by maintaining 1 dollar in some sort of reserve. The first stablecoin to become widely popular was Tether, however, there was a lot of controversy surrounding it. Most of the criticism came from the fact that Tether Limited was unable to prove they actually have the funds to cover all the Tether issued.
Additionally, on 30 April 2019, Tether Limited’s lawyer actually admitted that each coin is only backed by $0.74 in cash.
Currently, there are over a dozen stablecoins that are backed by fiat, commodities, and even cryptocurrencies. TrueUSD is similar to Tether but it is considered to be one of the most reliable stablecoins currently as the company behind it has been extremely transparent and conducted an independent audit back in March 2019.
A more complex stablecoin is Dai, which is backed by Ethereum and pegged to the dollar. The system behind Dai basically locks Ethereum in a public contract. If the value of Dai distances too far from $1, the system will make use of the contract to stabilize it back. There is, however, a small problem: Dai is not entirely decentralized as the technology behind it is being monitored by the Maker Foundation.
DigixDAO is another stablecoin and it’s backed by bars of actual gold. It is an ERC-20 token created back in 2014. The digital asset is entirely decentralized and autonomous and can in fact be extended to be backed by other precious metals and even physical assets. According to the company, the gold is stored in custodial vaults at the Singapore Safe House, and 1 DGX will always equal 1 gram of gold.

Cryptocurrencies Backed by Assets

Not all cryptocurrencies backed by assets are stablecoins. For instance, the first oil-backed cryptocurrency was introduced by Venezuelan President Nicolas Maduro back in 2017. El Petro, although highly criticized, is supposedly the first cryptocurrency to be backed by oil thanks to the country’s huge oil and mineral reserves.
Petro is, however, not pegged to anything, and its value can increase or decrease at any given time.

Tokenization of Assets

Something that has become quite popular over the last few years is the tokenization of traditional stocks and assets. There are countless blockchain startups tokenizing almost anything to represent ownership.
The tokenization of assets brings numerous benefits like greater liquidity, more transparency, cheaper and faster transactions, and more accessibility. Tokenization itself is quite difficult to regulate, and all tokenization assets have to be compliant with the law, something that issuers struggle to achieve.

Conclusion

While traditional cryptocurrencies are not necessarily backed by anything physical, they still hold a lot of value solely based on supply and demand. This is the case with numerous other assets and even fiat money.
Cryptocurrencies have come a long way and there is a wide variety of them. Stablecoins are the most popular when it comes to asset-backed cryptocurrencies. They serve as an alternative to fiat money and bring a lot of liquidity to the market. There are definitely concerns as people question their stability, however, they have become an important factor in the market.
Additionally, other projects aside from stablecoins have implemented asset-backed cryptocurrencies. There are numerous cryptocurrencies out there backed by precious metals, physical assets, stocks, and even other cryptocurrencies. We are definitely going to see even more in the near future as they bring a lot more security to investors and the crypto space in general.

SwapSpace team is always ready for discussion. You can drop an email with your suggestions and questions to [[email protected]](mailto:[email protected]) Join our social networks: Twitter, Medium, Facebook The best rates on https://swapspace.co/
submitted by SwapSpace_co to SwapSpace [link] [comments]

What happens when there's no more Bitcoin to mine?

I've been following the bitcoin saga from a distance for some time. I'm technical and I think I understand how it works, but I'm definitely no expert on the subject. I've got a couple of questions. I've noticed that baked into the system is a fundamental limit on the total number of bitcoins. I haven't seen any articles addressing the two main questions that arise for me relating to this fundamental limit on total circulating bitcoins: Question 1: Fiat currency like US dollars don't limit the amount in circulation so as to manage inflation of the currency. Currencies in the past that don't do this are usually subject to runaway inflation or deflation at some point. Why won't bitcoin be subject to this economic condition? I understand that bitcoins are infinitely divisible so perhaps that is the way bitcoin inflation/deflation is handled? Question 2: I believe the bitcoin network processes it's transactions by incentivizing miners with new currency in exchange for processing the transactions (I think that's how it works). What happens when there are no more bitcoins for miners to mine? How will all the transactions be processed? What are the incentives to support the transaction network without new bitcoins as incentives? I definitely appreciate any insights into the economic mechanics of the network along these lines!
submitted by DuckSicked to Bitcoin [link] [comments]

Jeffrey "the friar" Tucker is getting excited about Bitcoin

Jeffrey submitted by Patrick5555 to Anarcho_Capitalism [link] [comments]

Bitcoin as Gold reserve to AltCoins

So I have this idea which I haven't seen anywhere else, and wanted to share it to see if it makes sense or not.
My understanding is that bitcoin has some issues with transaction speed (and/or transaction cost) which causes people to worry about its ability to go mainstream and establish itself as a core global currency. What if instead of expecting bitcoin to be as practical as USD, EUR, GBP etc, we actually thought of it more like the Gold of crypto?
Back when we tied our national currencies to gold, the paper notes were meant to be literally redeemable for gold (or silver, or coin, etc). The currency was tied to a guaranteed asset.
Paper is much easier to carry around than gold. It is much more divisible (infinitely so) than gold. It is more practical in virtually every way possible - it just has no value outside of the promise it carries. It promises to be worth gold. So as long as people believe gold has value, the paper has value. And whether gold is convenient for handling transactions or not is irrelevant.
So why not use Bitcoin the same way?
We need to program a specific "AltCoin-In-A-Box" program which anyone could easily run and create their own AltCoin.
It would work like this:
During setup of the new AltCoin, the new blockchain programmatically ties itself to a bitcoin wallet, which we will call "Fort Knox". An exchange rate is chosen, for example, 1BTC = 1000 ProgenyCoins, and the setup is complete.
An interface is then made available which allows people to buy your newly created ProgenyCoins from the "Federal Reserve" of ProgenyCoin-istan. Register your intent to buy (provide bitcoin address where BTC are coming from, and ProgenyCoins address where your ProgenyCoins will go), then send 1BTC to "Fort Knox" and await the (slow, painful, horrific) BTC transaction to be confirmed.
As soon as the BTC transaction is confirmed, "The Federal Reserve" sends you 1000 ProgenyCoins. "The Federal Reserve" can produce as many of these coins as it needs to meet the BTC deposit in Fort Knox, and will only pay out ProgenyCoins for that reason. Similarly, sending ProgenyCoins to "The Federal Reserve" will allow you to withdraw BTC to a BTC wallet of your choosing.
Buying ProgenyCoins from the fed on this brand spanking new tiny blockchain which is optimised for rapid, free transactions has now given you a practical local currency to use in everyday transactions which doesn't require the bitcoin chain, but still benefits from all of the value held in the bitcoin chain. If bitcoin rises in value, so too will the value of your ProgenyCoins. And since all of these new progeny coins are being created by locking BTC up in "Fort Knoxes" all over the planet, the value of BTC is likely to increase to match the increased demand and lost supply.
Basically, the parent BTC blockchain is spawning lightweight, mostly-independent, children chains to do the transaction work for it. Hence the progeny reference. Obviously.
Considerations and Risks
  1. By making the original code for this concept a well established opensource piece of software, the "AltCoin-In-A-Box" certificate of BTC redeemability will guarantee the value of every new ProgenyCoin you encounter. Presumably the "AltCoin-In-A-Box" software could also include a generic platform which will handle all such coin-wallets in one place.
  2. Each new coin will need to gain enough nodes/miners to ensure security against attacks before people can be confident trusting them to not steal their money. Perhaps an international organisation can help provide early stage node hosting for a fee paid by the originator of the currency? (I haven't really put any thought into the incentivisation for 'mining' - I guess transactions would need a miner fee to ensure people did run full nodes?)
  3. Many more I haven't thought of, I am sure.
Thoughts?
submitted by Aegist to btc [link] [comments]

INT - Comparison with Other IoT Projects

What defines a good IoT project? Defining this will help us understand what some of the problems they might struggle with and which projects excel in those areas. IoT will be a huge industry in the coming years. The true Internet 3.0 will be one of seamless data and value transfer. There will be a tremendous amount of devices connected to this network, from your light bulbs to your refrigerator to your car, all autonomously transacting together in an ever growing network in concert, creating an intelligent, seamless world of satisfying wants and needs.
.
Let’s use the vastness of what the future state of this network is to be as our basis of what makes a good project.
.
Scalability
In that future we will need very high scalability to accommodate the exponential growth in transaction volume that will occur. The network doesn’t need to have the ability to do high transactions per second in the beginning, just a robust plan to grow that ability as the network develops. We’ve seen this issue already with Bitcoin on an admittedly small market penetration. If scaling isn’t a one of the more prominent parts of your framework, that is a glaring hole.
.
Applicability
Second to scalability is applicability. One size does not fit all in this space. Some uses will need real-time streaming of data where fast and cheap transactions are key and others will need heavier transactions full of data to be analyzed by the network for predictive uses. Some uses will need smart contracts so that devices can execute actions autonomously and others will need the ability to encrypt data and to transact anonymously to protect the privacy of the users in this future of hyper-connectivity. We cannot possibly predict the all of the future needs of this network so the ease of adaptability in a network of high applicability is a must.
.
Interoperability
In order for this network to have the high level of applicability mentioned, it would need to have access to real world data outside of it’s network to work off of or even to transact with. This interoperability can come in several forms. I am not a maximalist, thinking that there will be one clear winner in any space. So it is easy, therefore, to imagine that we would want to be able to interact with some other networks for payment/settlement or data gathering. Maybe autonomously paying for bills with Bitcoin or Monero, maybe smart contracts that will need to be fed additional data from the Internet or maybe even sending an auto invite for a wine tasting for the wine shipment that’s been RFID’d and tracked through WTC. In either case, in order to afford the highest applicability, the network will need the ability to interact with outside networks.
.
Consensus
How the network gains consensus is often something that is overlooked in the discussion of network suitability. If the network is to support a myriad of application and transaction types, the consensus mechanism must be able to handle it without choking the network or restricting transaction type. PoW can become a bottleneck as the competition for block reward requires an increase in difficulty for block generation, you therefore have to allow time for this computation in between blocks, often leading to less than optimal block times for fast transactions. This can create a transaction backlog as we have seen before. PoS can solve some of these issues but is not immune to this either. A novel approach to gaining consensus will have to be made if it is going to handle the variety and volume to be seen.
.
Developability
All of this can be combined to create a network that is best equipped to take on the IoT ecosystem. But the penetration into the market will be solely held back by the difficulty in connecting and interacting with the network from the perspective of manufacturers and their devices. Having to learn a new code language in order to write a smart contract or create a node or if there are strict requirements on the hardware capability of the devices, these are all barriers that make it harder and more expensive for companies to work with the network. Ultimately, despite how perfect or feature packed your network is, a manufacturer will more likely develop devices for those that are easy to work with.
.
In short, what the network needs to focus on is:
-Scalability – How does it globally scale?
-Applicability – Does it have data transfer ability, fast, cheap transactions, smart contracts, privacy?
-Interoperability – Can it communicate with the outside world, other blockchains?
-Consensus – Will it gain consensus in a way that supports scalability and applicability?
-Developability – Will it be easy for manufactures to develop devices and interact with the network?
.
.
The idea of using blockchain technology to be the basis of the IoT ecosystem is not a new idea. There are several projects out there now that are aiming at tackling the problem. Below you will see a high level breakdown of those projects with some pros and cons from how I interpret the best solution to be. You will also see some supply chain projects listed below. Supply chain solutions are just small niches in the larger IoT ecosystem. Item birth record, manufacturing history, package tracking can all be “Things” which the Internet of Things track. In fact, INT already has leaked some information hinting that they are cooperating with pharmaceutical companies to track the manufacture and packaging of the drugs they produce. INT may someday include WTC or VEN as one of its subchains feeding in information into the ecosystem.
.
.
IOTA
IOTA is a feeless and blockchain-less network called a directed acyclic graph. In my opinion, this creates more issues than it fixes.
The key to keeping IOTA feeless is that there are no miners to pay because the work associated with verifying a transaction is distributed to among all users, with each user verifying two separate transactions for their one. This creates some problems both in the enabling of smart contracts and the ability to create user privacy. Most privacy methods (zk-SNARKs in specific) require the one doing the verifying to use computationally intensive cryptography which are outside the capability of most devices on the IoT network (a weather sensor isn’t going to be able to build the ZK proof of a transaction every second or two). In a network where the device does the verifying of a transaction, cryptographic privacy becomes impractical. And even if there were a few systems capable of processing those transactions, there is no reward for doing the extra work. Fees keep the network safe by incentivizing honesty in the nodes, by paying those who have to work harder to verify a certain transaction, and by making it expensive to attack the network or disrupt privacy (Sybil Attacks).
IOTA also doesn’t have and may never have the ability to enable smart contracts. By the very nature of the Tangle (a chain of transactions with only partial structure unlike a linear and organized blockchain), establishing the correct time order of transactions is difficult, and in some situations, impossible. Even if the transactions have been time stamped, there is no way to verify them and are therefore open to spoofing. Knowing transaction order is absolutely vital to executing step based smart contracts.
There does exist a subset of smart contracts that do not require a strong time order of transactions in order to operate properly. But accepting this just limits the use cases of the network. In any case, smart contracts will not be able to operate directly on chain in IOTA. There will need to be a trusted off chain Oracle that watches transactions, establishes timelines, and runs the smart contract network
.
-Scalability – High
-Applicability – Low, no smart contracts, no privacy, not able to run on lightweight devices
-Interoperability – Maybe, Oracle possibility
-Consensus – Low, DAG won’t support simple IoT devices and I don’t see all devices confirming other transactions as a reality
-Developability – To be seen, currently working with many manufacturers
.
.
Ethereum
Ethereum is the granddaddy of smart contract blockchain. It is, arguably, in the best position to be the center point of the IoT ecosystem. Adoption is wide ranging, it is fast, cheap to transact with and well known; it is a Turing complete decentralized virtual computer that can do anything if you have enough gas and memory. But some of the things that make it the most advanced, will hold it back from being the best choice.
Turing completeness means that the programming language is complete (can describe any problem) and can solve any problem given that there is enough gas to pay for it and enough memory to run the code. You could therefore, create an infinite variety of different smart contracts. This infinite variability makes it impossible to create zk-SNARK verifiers efficiently enough to not cost more gas than is currently available in the block. Implementing zk-SNARKs in Ethereum would therefore require significant changes to the smart contract structure to only allow a small subset of contracts to permit zk-SNARK transactions. That would mean a wholesale change to the Ethereum Virtual Machine. Even in Zcash, where zk-SNARK is successfully implemented for a single, simple transaction type, they had to encode some of the network’s consensus rules into zk-SNARKs to limit the possible outcomes of the proof (Like changing the question of where are you in the US to where are you in the US along these given highways) to limit the computation time required to construct the proof.
Previously I wrote about how INT is using the Double Chain Consensus algorithm to allow easy scaling, segregation of network traffic and blockchain size by breaking the network down into separate cells, each with their own nodes and blockchains. This is building on lessons learned from single chain blockchains like Bitcoin. Ethereum, which is also a single chain blockchain, also suffers from these congestion issues as we have seen from the latest Cryptokitties craze. Although far less of an impact than that which has been seen with Bitcoin, transaction times grew as did the fees associated. Ethereum has proposed a new, second layer solution to solve the scaling issue: Sharding. Sharding draws from the traditional scaling technique called database sharding, which splits up pieces of a database and stores them on separate servers where each server points to the other. The goal of this is to have distinct nodes that store and verify a small set of transactions then tie them up to a larger chain, where all the other nodes communicate. If a node needs to know about a transaction on another chain, it finds another node with that information. What does this sound like? This is as close to an explanation of the Double Chain architecture as to what INT themselves provided in their whitepaper.
.
-Scalability – Neutral, has current struggles but there are some proposals to fix this
-Applicability – Medium, has endless smart contract possibilities, no privacy currently with some proposals to fix this
-Interoperability – Maybe, Oracle possibility
-Consensus – Medium, PoW currently with proposals to change to better scaling and future proofing.
-Developability – To be seen
.
.
IoTeX
A young project, made up of several accredited academics in cryptography, machine learning and data security. This is one of the most technically supported whitepapers I have read.They set out to solve scalability in the relay/subchain architecture proposed by Polkadot and used by INT. This architecture lends well to scaling and adaptability, as there is no end to the amount of subchains you can add to the network, given node and consensus bandwidth.
The way they look to address privacy is interesting. On the main parent (or relay) chain, they plan on implementing some of the technology from Monero, namely, ring signatures, bulletproofs and stealth addresses. While these are proven and respected technologies, this presents some worries as these techniques are known to not be lightweight and it takes away from the inherent generality of the core of the network. I believe the core should be as general and lightweight as possible to allow for scaling, ease of update, and adaptability. With adding this functionality, all data and transactions are made private and untraceable and therefore put through heavier computation. There are some applications where this is not optimal. A data stream may need to be read from many devices where encrypting it requires decryption for every use. A plain, public and traceable network would allow this simple use. This specificity should be made at the subchain level.
Subchains will have the ability to define their needs in terms of block times, smart contracting needs, etc. This lends to high applicability.
They address interoperability directly by laying out the framework for pegging (transaction on one chain causing a transaction on another), and cross-chain communication.
They do not address anywhere in the whitepaper the storage of data in the network. IoT devices will not be transaction only devices, they will need to maintain data, transmit data and query data. Without the ability to do so, the network will be crippled in its application.
IoTeX will use a variation of DPoS as the consensus mechanism. They are not specific on how this mechanism will work with no talk of data flow and node communication diagram. This will be their biggest hurdle and why I believe it was left out of the white paper. Cryptography and theory is easy to elaborate on within each specific subject but tying it all together, subchains with smart contracts, transacting with other side chains, with ring signatures, bulletproofs and stealth addresses on the main chain, will be a challenge that I am not sure can be done efficiently.
They may be well positioned to make this work but you are talking about having some of the core concepts of your network being based on problems that haven’t been solved and computationally heavy technologies, namely private transactions within smart contracts. So while all the theory and technical explanations make my pants tight, the realist in me will believe it when he sees it.
.
-Scalability – Neutral to medium, has the framework to address it with some issues that will hold it back.
-Applicability – Medium, has smart contract possibilities, privacy baked into network, no data framework
-Interoperability – Medium, inherent in the network design
-Consensus – Low, inherent private transactions may choke network. Consensus mechanism not at all laid out.
-Developability – To be seen, not mentioned.
.
.
CPChain
CPC puts a lot of their focus on data storage. They recognize that one of the core needs of an IoT network will be the ability to quickly store and reference large amounts of data and that this has to be separate from the transactional basis of the network as to not slow it down. They propose solving this using distributed hash tables (DHT) in the same fashion as INT, which stores data in a decentralized fashion so no one source owns the complete record. This system is much the same as the one used by BitTorrent, which allows data to be available regardless of which nodes will be online at a given time. The data privacy issue is solved by using client side encryption with one-to-many public key cryptography allowing many devices to decrypt a singly encrypted file while no two devices share the same key.
This data layer will be run on a separate, parallel chain as to not clog the network and to enable scalability. In spite of this, they don’t discuss how they will scale on the main chain. In order to partially solve this, it will use a two layer consensus structure centered on PoS to increase consensus efficiency. This two layer system will still require the main layer to do the entirety of the verification and block generation. This will be a scaling issue where the network will have no division of labor to segregate congestion to not affect the whole network.
They do recognize that the main chain would not be robust or reliable enough to handle high frequency or real-time devices and therefore propose side chains for those device types. Despite this, they are adding a significant amount of functionality (smart contracts, data interpretation) to the main chain instead of a more general and light weight main chain, which constrains the possible applications for the network and also makes it more difficult to upgrade the network.
So while this project, on the surface level (not very technical whitepaper), seems to be a robust and well thought out framework, it doesn’t lend itself to an all-encompassing IoT network but more for a narrower, data centric, IoT application.
.
-Scalability – Neutral to medium, has the framework to address it somewhat, too much responsibility and functionality on the main chain may slow it down.
-Applicability – Medium, has smart contract possibilities, elaborate data storage solution with privacy in mind as well has high frequency applications thought out
-Interoperability – Low, not discussed
-Consensus – Low to medium, discussed solution has high reliance on single chain
-Developability – To be seen, not mentioned.
.
.
ITC
The whitepaper reads like someone just grabbed some of the big hitters in crypto buzzword bingo and threw them in there and explained what they were using Wikipedia. It says nothing about how they will tie it all together, economically incentivize the security of the network or maintain the data structures. I have a feeling none of them actually have any idea how to do any of this. For Christ sake they explain blockchain as the core of the “Solutions” portion of their whitepaper. This project is not worth any more analysis.
.
.
RuffChain
Centralization and trust. Not very well thought out at this stage. DPoS consensus on a single chain. Not much more than that.
.
.
WaltonChain
Waltonchain focuses on tracking and validating the manufacture and shipping of items using RFID technology. The structure will have a main chain/subchain framework, which will allow the network to segregate traffic and infinitely scale by the addition of subchains given available nodes and main chain bandwidth.
DPoST (Stake & Trust) will be the core of their consensus mechanism, which adds trust to the traditional staking structure. This trust is based on the age of the coins in the staker’s node. The longer that node has held the coins, combined with the amount of coins held, the more likely that node will be elected to create the block. I am not sure how I feel about this but generally dislike trust.
Waltonchain's framework will also allow smart contracts on the main chain. Again, this level of main chain specificity worries me at scale and difficulty in upgrading. This smart contract core also does not lend itself to private transactions. In this small subset of IoT ecosystem, that does not matter as the whole basis of tracking is open and public records.
The whitepaper is not very technical so I cannot comment to their technical completeness or exact implementation strategy.
This implementation of the relay/subchain framework is a very narrow and under-utilized application. As I said before, WTC may someday just be one part of a larger IoT ecosystem while interacting with another IoT network. This will not be an all-encompassing network.
.
-Scalability – High, main/subchain framework infinitely scales
-Applicability – Low to medium, their application is narrow
-Interoperability – Medium, the framework will allow it seamlessly
-Consensus – Neutral, should not choke the network but adds trust to the equation
-Developability – N/A, this is a more centralized project and development will likely be with the WTC
.
.
VeChain
\*Let me preface this by saying I realize there is a place for centralized, corporatized, non-open source projects in this space.* Although I know this project is focused mainly on wider, more general business uses for blockchain, I was requested to include it in this analysis. I have edited my original comment as it was more opinionated and therefore determined not to be productive to the conversation. If you would like to get a feel for my opinion, the original text is in the comments below.\**
This project doesn't have much data to go off as the white paper does not contain much technical detail. It is focused on how they are positioning themselves to enable wider adoption of blockchain technology in the corporate ecosystem.
They also spend a fair amount of time covering their node structure and planned governance. What this reveals is a PoS and PoA combined system with levels of nodes and related reward. Several of the node types require KYC (Know Your Customer) to establish trust in order to be part of the block creating pool.
Again there is not much technically that we can glean from this whitepaper. What is known is that this is not directed at a IoT market and will be a PoS and PoA Ethereum-like network with trusted node setup.
I will leave out the grading points as there is not enough information to properly determine where they are at.
.
.
.
INT
So under this same lens, how does INT stack up? INT borrows their framework from Polkadot, which is a relay/subchain architecture. This framework allows for infinite scaling by the addition of subchains given available nodes and relay chain bandwidth. Custom functionality in subchains allows the one setting up the subchain to define the requirements, be it private transactions, state transaction free data chain, smart contracts, etc. This also lends to endless applicability. The main chain is inherently simple in it’s functionality as to not restrict any uses or future updates in technology or advances.
The consensus structure also takes a novel two-tiered approach in separating validating from block generation in an effort to further enable scaling by removing the block generation choke point from the side chains to the central relay chain. This leaves the subchain nodes to only validate transactions with a light DPoS allowing a free flowing transaction highway.
INT also recognizes the strong need for an IoT network to have robust and efficient data handling and storage. They are utilizing a decentralize storage system using DHT much like the BitTorrent system. This combined with the network implementation of all of the communication protocols (TCP/IP, UDP/IP, MANET) build the framework of a network that will effortlessly integrate any device type for any application.
The multi-chain framework easily accommodates interoperability between established networks like the Internet and enables pegging with other blockchains with a few simple transaction type inclusions. With this cross chain communication, manufactures wouldn’t have to negotiate their needs to fit an established blockchain, they could create their own subchain to fit their needs and interact with the greater network through the relay.
The team also understands the development hurdles facing the environment. They plan to solve this by standardizing requirements for communication and data exchange. They have heavy ties with several manufacturers and are currently developing a IoT router to be the gateway to the network.
.
-Scalability – High, relay/subchain framework enables infinite scalability
-Applicability – High, highest I could find for IoT. Subchains can be created for every possible application.
-Interoperability – High, able to add established networks for data support and cross chain transactions
-Consensus – High, the only structure that separates the two responsibilities of verifying and block generation to further enable scaling and not choke applicability.
-Developability – Medium, network is set up for ease of development with well-known language and subchain capability. Already working with device manufacturers. To be seen.
.
.
So with all that said, INT may be in the best place to tackle this space with their chosen framework and philosophy. They set out to accomplish more than WTC or VEN in a network that is better equipped than IOTA or Ethereum. If they can excecute on what they have laid out, there is no reason that they won’t become the market leader, easily overtaking the market cap of VeChain ($2.5Bn, $10 INT) in the short term and IOTA ($7Bn, $28 INT) in the medium term.
submitted by Graytrain to INT_Chain [link] [comments]

Blockchain to fix horribly broken e-mail system like it is today?

E-mail as it is, is horribly broken. Horrendously broken.
It wasn't that many years ago that you could be assured your e-mail reaches whoever you were mailing to. Today it is a mere suggestion, that perhaps this should be delivered to this person, at least for any automated e-mail. This seems to be creeping to manual, organic email as well. Hell, we are seeing even internal e-mails being flagged by spamassassin as spam, organic, human written conversations! In that instance, the spamassassin is also maintained by one of the largest hosting providers in the world...
Hotmail/MS services has been for years (atleast about 4 years now!) been silently dropping email, not all, but some. There's a bit of relief lately, as they have started to favor a bit more marking as spam, rather than silently dropping.
I know, most email users don't see this problem, but those who use email a lot to do their work, and those who need to send automated emails (say, welcome e-mails for a service) this is a big problem. (Disclaimer, for us, our niche of hosting probably causes flagging as well. Our site is blocked by many corporate firewalls for example)
Blockchain to the rescue?
This is an idea i've been toying around with a few years. What if any single e-mail would cost a faction of a cent, and who receives the e-mail, gets paid for it? Now that would solve a lot of problems. I realize there has been some half assed attempts on blockchain based e-mail, but they are about replacing email (never going to happen). Using blockchain to enhance the current experience, with least minimal friction should be the goal, not re-inventing the wheel.
Imagine a say 0.01 cent (0.0001 USD) cost per e-mail. This price would not be cost prohibitive even for free e-mail service providers (Ad revenue etc. should exceed this value), never mind any legit e-mail users. Especially considering you get paid for receiving. So all legit e-mail services would work rather well regardless of the cost. (never mind free email service could profit from this)
Spam however? To send 1 million emails you would need to pay 100$. How many spammers would continue doing so? At least it makes things much harder, not so easy to use a botnet to send your email when you need to include your private key(s) to the botnet, or make some kind of private key management system, makes more complicated.
Small business newsletters? Say you need to send 100k e-mails to legit customers, 10$ is nothing. To human time crafting that newsletter is order (possibly orders) of magnitude greater than that.
Price would also fluctuate as per the market. The most difficult thing would probably be setting the self balancing mechanisms to keep per mail cost sensible. As such, the biggest hurdle in this might not be technical at all.
Technically, how could this work?
Sender sends a TX for e-mail they are sending for recipient. This TX contains message with mail ID, and a segment which can be used with the email contents to unlock the private key for the payment. This way it is verified that recipient mail servers receives and reads the email. Once the recipient server has calculated the private key, they can either TX the received sum to their wallet, or this needs to be formatted so that once the sender has sent it, they cannot recover the private key and double spend (technical hurdle A. For someone who knows their stuff unlikely to be an major hurdle)
Step by step repeat: * Sender checks if recipient has "MailCoin" capability * Sender sends TX to recipient * Sender sends the email to recipient * Recipient notices on mail header (say x-mailcoin-tx: TXID_HERE) that this is a "mailcoin" mail * Recipient checks TX if it has been received * Recipient puts the mail on delivery queue, antispam is instructed of heavy negative score (MTA admin configurable) * Recipient claims the value of the TX (this is the hurdle A). Recipient can only claim the TX value in case they have received the full e-mail. (Question, can this step be pushed even further down the delivery chain, but still remain MTA only level without mail client support?). Most likely solution is that the header contains the encrypted private key, and chain TX contains the key to decrypt that private key to claim the coins, or vice-versa?
Once recipient has the email & payment, they simply mark on their Antispam a automatic lower score and deliver it normally.
E-mail server side we have several components:
Most typical scenario would be the Recipient server works as outgoing as well, with single wallet. So depending on your mail volume, do you send or receive more on that wallet you might never need to worry about the coins (except for value going skyhigh and having like 10k $ worth of "MailCoins").
So perhaps additional components on per use case are needed, or more likely rudimentary scripting capability (ie. "MailCoin" daemon api) to keep the balances in check.
Technical hurdle B: This needs to be super super simple to setup. Or sufficient financial incentive. One would need to develop standard components & configs for exim, postfix, and other MTAs. Infact, make it autogenerate wallet ID etc. and easy to replace or import private keys etc. to put in coins for sending if you need to.
Privacy: On the blockchain you would not see the e-mail contents, only that e-mail likely took place (TX with mail UUID) to recipient. If sender can be deciphered it depends on them if it can be traced who they were. Automatic mixers? :) Recipient can also keep cycling the receive addresses to keep things private if they want to.
The biggest problem i see here, is that if an attacker can deduce the sender and/or recipient, it might to lead to some issues out of the scope of technical solutions. If attacker could read the emails, they would already have accomplished MitM and could just grab all e-mails.
Default implementation should be so, that from recipient address outsider cannot deduce the recipient server nor hostname.
Also, if attacker gains access to your mail with full headers, they could see the TXs in blockchain. MTA might need to scrub mailcoin related headers (yuck, scrubbing headers ....) for paranoid users, but most likely solution is that recipient retransmits those mailcoins as soon as they got the private key for the balance.
Blockchain: Blocks needs to be done every 10seconds or so, it needs to be fast. Preferrably even every 5 seconds, as not to cause any undue delay. Then again, if your application is reliant on receiving email within seconds, one should consider another means for communicating. Imho, email should be considered a little bit like snail mail, but on internet pace: Couple minutes delay is just OK.
Block size given the e-mail volume needs to be fairly large as well, considering the time between blocks. This is technical hurdle C: Hosting the full blockchain. I can easily foresee that this would grow to be terabytes in size. However, any large email operator would have vested interest in ensuring smooth operation of the blockchain, and for them, running a full node would have neglible cost.
(Technical hurdle C) Single email sent using the system could easily have TX contents of 100 bytes + TX headers + block headers etc. Say 100 bytes, and 100 million emails per day: 9.31GiB per day, 3 399GiB per year, 5 years later: 16.60 TiB just for the mail TXs.
Some estimate there is 200+ billion emails per day, but we all know large portion of this is spam. But even at 50 billion emails a day, 100 bytes per mail TX would add to 4.55TiB per day! So optimizing the blockchain size is obviously going to be important. The volume will be obviously much smaller as semi-spam (those daily half opt-in spamvertising from companies you know) will be lower as well. So probs 100+ billion emails per day at 100% adoption.
Blockchain should then be compressed, the whole block. Algorithm probably should favor speed over compression rate, and should be task specifically optimized (needs a simple reference release, where you can just stream the block contents into it and get output as compressed or uncompressed). The more compression there is, the more full nodes will be hosted by smaller operators :)
For large e-mail server clusters there should be central store for the blockchain, but this can be accessed on the system administratoconfig level already. The MTA components will just remotely talk to single full node daemon (so not really different from many implementations in existence right now), instead of each one running locally a full node.
At today's cheapest hosting rates 16.60TiB is roughly around 85-100€ a month. Purchase cost per 8TB drive is around 230€ mark right now, externals are cheaper. Not an issue for any even semi serious mail provider. Not even issue for datahoarder individuals.
However at 100 billion mails per day: 9.09TiB per day added, which is prohibitively large! We should be targeting something like 20bytes per mail final storage spent, or even less.
If it looks like it is going to grow really large, full node needs to have configurable multiple storages, so they can store parts of the blockchain on multiple different devices (ie. individual might choose to have it on 4 different external drives).
Filesystem side optimizations are needed as well, but these are fairly simple, just split into multiple subdirectories by the 10 thousand blocks or so, ie. 1 for blocks 1-10k, 2 for blocks 10 001 to 20k etc. Filesystems get exponentially slower the more files there is per directory. 10k might start to show slowing down, but is not significant yet.
Nodes could also implement secondary compression (compress multiple blocks together), if the blockchain starts to become stupid large. If it starts to become impossible to maintain, we could possibly implement a scrubbing methodology, where very old blocks get the TX contents wiped as they are not necessary anymore. Should not be an issue
Blocks with 10second target generated per annum: 3 153 600 Mails per 10second: 115 740 e-mails per 10second block. Final compressed size (say 20 bytes per mail): 2.20MiB + headers etc. per block Let's start small and allow linear growth to this, say 0.1% per day (36.5% annual) and start from 20k / 512KiB. After 3 years: 41.9k / 1072.64KiB per block, After 10 years: 93k / 2380.8KiB. (2027 we should have HDDs in the size of 30TB and daily max size for chain growth is 19.61TiB)
On the positive side every problem is an opportunity in disguise. If the blockchain is large, once again botnets will have a hard hard time to spamming, they can't host the full blockchain on infected machines. They will need to develop centralized mechanisms on this regard as well. One method i can see is by having TOR client built in, and via .onion domain to anonymize, but this is two way street, security researchers could exploit this (see above about the private keys) as well. Even without botnets, spammers will need to dedicate significant resources to host the full blockchain.
On the flip side, if spammer has also mining operation on the same local area network, they have both the income for mailcoins + full blockchain, and could leverage economies of scale, but this too would increase cost. And after all: This is all about increasing cost for spamming, while having the price in vicinity where real e-mail users, real businesses it is not a significant impact, or may even be an income source
Client side
Zero, Nada changes. No changes to outlook, thunderbird etc. Everything works under the hood at the MTA level. Very easy adoption for the end user. Everything is in the backend, server side.
Economics for users
Cost of operation has above been shown to increase wildly for spammers. But how about normal use cases?
Joe Average: They receive e-mail a lot more than they send, all kinds of order confirmations, invoices, newsletters and other automated e-mail. They will actually earn (however tiny amounts) from using this system. So for the masses, this is a good thing, they will see the earning potentials! which brings us to ....
New business opportunities! I could foresee a business setting up spam traps, the more e-mail you receive the more you earn! So it pays to get your receiver into spam lists. You don't ever need to read these, just confirm receive of them. All of sudden we could see even greater numbers of invalid e-mail addresses in spam lists, making spamming ever more expensive!
Free email services might proof to be extremely profitable, to the point of potential revenue sharing with Joe Averages (and above spamtraps). Because free email is mostly joe averages, they will have greater influx than outgoing. On the caveat, free email needs to have limits, but due to the low cost and potential of earnings, they could implement "mail credits" system, base is like 20 emails a day, but each received email could increase this credit limit. As such, it makes actually sense for free email services to implement this at the very least on the receiving side.
Business mass emailings. A business which has 100k valid e-mails on their database will not have a problem with paying few dozen bucks to have their mass mailing delivered. BUT they will make extra sure the content is good and targeted, something the recipient wants to receive. These will be the biggest spenders on email, apart from spammers.
ISPs, hell they get paid to provide e-mail. And they are on the same spot as free email service providers, they stand to earn more than spend!
Blockchain economics
This is where things might get interesting, there is so much potential.
However, there are several things definitively should not be done:
1 & 2 are easy, just do not mine outside of testnet prior to launch. (If devs get paid by companies, there is conflict of interest as well, but let's not get into that right now)
3: Miners and/or full node maintainers decide what goes on. Probably miners like bitcoin is supposed to.
4: Infinite & preferential supply: No after the launch "contracts" etc. to give coins to preferential parties, it should remain as on the launch unless majority consensus says there will be a change. Proof of stake is gray area imho, but then again also proof of work is the rich gets richer.
Mining: Storage requirement is a blessing in disguise, the massive storages required for this to function means that there will be no central hardware developer who sells all the shovels, without significant other markets. Ie. WD, Seagate, Toshiba the main players.
This means algo needs to be based on the full blockchain being hosted. The hashing needs to be so that GPUs are the king most likely, since almost anything good for CPUs is also doable in GPUs. Eventually someone will likely come with ASIC alternative, but due to masses of data it WILL require high bandwidth, high memory. Nothing like bitcoin currently, where low bandwidth, no memory requirement for the ASIC. There needs to be some expensive commodity components in there (RAM, Storage), and as such GPUs are the most likely candidate, and the bottleneck will not likely be computation, but I/O bandwidth.
Quickly thinking, previous block could include number of blocks to be included on the next for verification, in a highly compressible format. Let's say difficulty is number of blocks to be hashed, or from difficulty you can calculate number of blocks to be included. Previous blocks miner just chooses on random blocks to be included on the next one. Listing 10 series of blocks to be included, which can include series instructions. It could request block #5729375+100, or #357492+500 stepping 5 (every 5th block). Hell the random generator could use last block as seed for the next one to make it deterministic YET random as the emails and TXs change. (WTF, Did i just solve how the algo needs to work?!?) Only blocks which would differentiate is the first few, and obviously Genesis, for which an "empty" block would be what is to be hashed.
Hashing algo could be SHA256 because of the high requirement of streaming data, and most ASIC miners lacking in bandwidth (infact, it could be made compatible with bitcoin, but only those ASICS with higher I/O bandwidth than storage/ram I/O bandwidth is could actually boost the perf)
Different hashable list operations could be (on the block list what to be hashed on the next one): * Single block * Block # + number of blocks * Block # + (number of blocks with stepping) * Block # + number of blocks chosen by random using each hashed block as the seed for choosing next one (makes prefetch, preread, caching not work efficiently) * Number of previous blocks mined (ie. 50 last blocks) * Above but with stepping operator * Above but with choose random next X blocks, with variations based on the last hashed, sum of the hashed * All random pickers would have operation modes for the seed to be used: From hashed sum, the whole block, block contents, block header
These modes would ensure the blocks are there and makes it a lot dependable on variable factors, RAM speed, I/O seek time, I/O bandwidth.
This way we have proof that the miner has access to those blocks in efficient manner and the full blockchain is stored there, even if it is not practically retrievable from him / her over the internet for others to obtain a copy. HOWEVER, due to the data volumes, i think it is given they have fast access, but a miner would probably prefer not to share their blockchain contents to have bandwidth free for their mining, as the deadlines are tight. It could be built into the full node spec that they do not accept new blocks from sources which are not ready to supply any given block, and perhaps even periodic test of this. However, this would be unenforceable if people start running custom coded nodes which disables this, as it is not part of the blockchain calculation. It is not miner's benefit to "waste" precious bandwidth to serve others the vast blockchain, meanwhile it is end users benefit those running full nodes without mining to get them fast. So an equilibrium might be reached, if miners start loosing out because other miners will not share their blocks, they will start offering them, even if prioritized.
At 2MiB blocks, 10 second deadline, a miner would preferentially want the new block within 500ms, which would be barely sufficient time for a round trip across the globe. 500ms for 2MiB is 4MiB/s transfer rate inbound, and when block found you want it out even faster, say 250ms you'll need 8MiB/s burst which very very few have at a home. At more usual 1MiB/s it would take 2secs to submit your new block. On the other hand, if you found the block, you'd have immediate access to begin calcing the next one.
Block verification needs to be fast, and as such the above difficulty setting alone is not sufficient, there needs to be nonce. Just picking the right block is not guarantee there will be match, so traditional !???? nonce needs to be set as well most likely. As such, a lot of maths needs to be done to ensure this algorithm does not have dead ends, yet ensures certain blocks needs to be read as full and stored fully by the miners, just plain hashes of the blocks is not sufficient.
Perhaps it should be block data + nonce, then all the blocks hashes (with nonce, or pre-chosen salt) and to be generated block combined hash with nonce needs to have certain number of zeroes. Needs testing and maths :)
So there are many ways to accomplish proof of storage, we'd need just to figure out the which is the best.
Sidenote, this same algo could potentially be used with different settings for immutable, forever storage of data. Since there is no continuing cost to store data, TX Fee for every message (data) byte should be very high in such a coin.
Supply. Needs to be predictable and easy to understand. It would be preferential the standard mailing out is always 1x MailCoin, albeit coin itself should be practically infinitively divisable, and as such supply needs to be in the trillions eventually. But these things get complicated really fast, so we need to set a schedule.
Current email use is very large, so we should have something in the same magnitude. 8640 blocks per day - so maybe 10 000 coins per block == 86 400 000 new coins per day == 31 536 000 000 new coins per year, halving every 2 years. First halving: 63 072 000 000, Second halving: 94 608 000 000, Third (6 years): 110 376 000 000, but only halving 4 or 5 times to keep some new supply for ever increasing adoption and lost coins.
Got all the way here? :D
Thanks for reading up. Let me know what you think, and let's start a discussion on the feasibility of such a system!
I cannot develop this myself, but i would definitively back an effort up in the ways i can if anyone attempts to do something like this :) And i know i got probably many of the details incorrect
The main point of the methods described above is ease of adoption. Without adoption any system is worthless, and with email, you just cannot replace it like that (see the attempts trying to replace IPv4 with IPv6 ...), but you can enhance it. adoption is very critical in communications systems. (No one would have a phone if no one else had a phone)
Addendum 1: Forgot to add about pricing and markets, read comment here
Addendun 2: Bad actors and voting
submitted by PulsedMedia to Bitcoin [link] [comments]

BitCoin Debunked in 2 Minutes A Scam That Will Collapse BTCSpinner.io Script Hack Infinite rotation 2019 Is Bitcoin divisible... and if so, how? Bitcoin Mining Difficulty – Description, Example, Calculator, BTC Bitcoin - Intro to Political Economy, Lecture9

Because Bitcoins are traded electronically, unlike gold, they are infinitely divisible and enjoy a high velocity, so a deflationary spiral can only reduce the scope of bitcoin to the function of a store of value, a more practical process than is used for gold. In fact, the deflationary spiral would have adverse economic consequences only if bitcoins were the exclusive currency in a given ... 5.5. It’s Divisible. Also, while Bitcoin supply is fixed at 21 million, since Bitcoin doesn’t physically exist, it is infinitely divisible. For example, you can have .1 Bitcoin, .01 Bitcoin, and so on and not just whole number amounts of Bitcoin. Thanks to its divisibility, Bitcoin is easier to obtain and move around than assets like gold. Infinitely-Divided We Stand. Published on October 26th, 2013 by george. Setting Standards Today is an Investment in Bitcoin's Future By George Ettinger Bitcoin has been accused more than once of being ultra-exclusive. With our market cap of 21,000,000 bitcoins a century away, our current twelve million in print puts us already halfway there. 21 million already isn't a lot to share among seven ... Economically, because the currency is effectively infinitely divisible, then the precise amount doesn’t matter, as long as the limit remains fixed. Since Bitcoin is often compared to gold, total coins match the total amount of gold mined in human history which can be imagined as a cube 21 m on a side. As it is not entirely so important how many Bitcoins will exactly be mined. Satoshi could ... r/Bitcoin: A community dedicated to Bitcoin, the currency of the Internet. Bitcoin is a distributed, worldwide, decentralized digital money … Press J to jump to the feed. Press question mark to learn the rest of the keyboard shortcuts. r/Bitcoin. log in sign up. User account menu. 0. This is a big "if" but if so, significant price rise in BTC inevitable. Close. 0. Posted by. u/jrm2007. 4 ...

[index] [16022] [336] [12669] [28054] [19103] [32896] [9274] [29390] [9461] [29314]

BitCoin Debunked in 2 Minutes A Scam That Will Collapse

The participants are owners, buyers, and "miners," or people who transmit and check transactions. 3. The maximum number of Bitcoins will be about 21 million. A bitcoin is a unit of measurement ... You are being LIED TO about BITCOIN 🚨DON'T BE FOOLED! Cuban Gates O'Leary conspire against crypto - Duration: 13:24. FUD TV Recommended for you www.bitcoinrigmining.com Hash: 1) A unique identifier of a Bitcoin transaction. 2) A mathematical function that Bitcoin miners perform on blocks to make the ... Difficulty is a value used to show how hard is it to find a hash that will be lower than target defined by system. The Bitcoin network has a global block difficulty. Valid blocks must have a hash ... Bitcoin Genesis Mining Promo Code 4M0anS https://www.genesis-mining.com/a/1007701 How Bitcoin, Gold and FIAT money compares Category / Bitcoin / Blockchain /...

#