r/Bitcoin - ASICMiner open sources reference designs for ...
r/Bitcoin - ASICMiner open sources reference designs for ...
Block Chain — Bitcoin
Bitcoin: A Peer-to-Peer Electronic Cash System
What is Bitcoin Mining & How Does It Work? The Complete Guide
Choosing The Best Bitcoin Mining Hardware - The Complete Guide
"Is there going to be a split?"
This question is (understandably) asked all the time by people coming to the BCHN telegram for clarity on what has become a pretty unclear situation. It's not an easy question to answer, though, so I wanted to make this post that people could refer to. Here's my take on answering that question: It's impossible to know 100% for sure if there will be a split, because it's impossible to know for sure how all the relevant parties will behave. For there to be a split, two node implementations need to irreconcilably disagree on a consensus-related issue, both need to release code with those conflicting consensus rules, and then miners need to also be split enough on the issue for both chains to have enough hashpower to be viable. The narrative that there is ALMOST DEFINITELY going to be a split seems to have been dumped on us out of nowhere a month or so ago, along with what I consider to be increasingly unreasonable behavior from Bitcoin ABC. The tin foil hat in my heart finds that suspicious. (And between the IFP and recent Grasberg proposal, it almost seems like ABC is doing it's best to propose things that make a split as likely as possible.) This political baggage doesn't really matter though, in the grand scheme of things. What matters is that BCHN is, as far as I can tell, just trying to be a reasonable and professional node implementation for Bitcoin Cash. If sticking to those principals leads to a divergence from ABC on a consensus related issue, whatever issue that actually would end up being, then that's how it will be. And it wouldn't be the case that "BCHN split the chain", nor would it be the case that "ABC split the chain". It would just be the case that two groups released node implementations with different consensus rules from each other. (And then, if a non-negligible amount of hashpower mines using both clients, then there would indeed be a chain split caused by that situation.) Keeping BCH unified is obviously a HUGE priority for BCHN. Their initial release of what was effectively a non-IFP version of Bitcoin ABC was even designed so that, if the IFP activated with a majority of the hashpower, miners mining with BCHN would follow that longer chain, instead of rejecting IFP blocks as "invalid" or anything like that. This is in stark contrast to the narrative I've seen flooding this sub recently with claims that BCHN tried to split the chain this past upgrade, and are trying to split the chain again this November. So please take the time to consider which sides of these inevitable disagreements are being reasonable, and which are not, make sure to fact check and ask for sources for any claims you see being made that you can't verify or debunk on your own, and remember that, while chain splits are messy unfortunate things (at least in the short term), if there's an irreconcilable disagreement, it's definitely better for those parties to go their separate ways. I hope that that doesn't have to happen anytime soon for BCH.
I sat thru an hour plus long video expecting to get some new ticker symbols for Paul's secret portfolio. He said in his email that he would provide "an opportunity to get the names for the ticker symbols". I should've read that closer as that means he was not going to provide them without a catch. This is a subscription that Paul charges $5k for. While I am a subscriber to his "Profits Unlimited", and have been satisfied with the results so far, I couldn’t afford the subscription if I wanted to. I took notes on the video and tried to get as much detail as I could (which is tough because he doesn't allow you to rewind or navigate the video in the interface he shows it on). I did research and think I found a couple, but I was hoping you guys confirm and potentially help identify any of these stocks that he personally invests in. I tried to type up what I saw from some of these stocks… Graphene stocks...
Graphene can filter ocean water in a single use, stop rust with graphene infused paint, and can detect cancer in the human body. He mentions gains by G6, Talga Resources, and Tunghsu Optoelectronic (so it can be assumed it's not one of these). Paul predicts Graphene industry to be 13x it's size by 2027. The company he mentions is developing a graphene-based powder that can strengthen any substance. they are a mining company based in Australia. They are also developing a new graphene-powered battery which could charge a phone in 1-2 minutes and electric vehicles in 5. After researching, I believe this is FGPHF. Let me know if you think different.
An offshoot of one of the largest industrial firms in Canada. Canada’s federal government is investing in it. A “tiny” company now that commissioned it’s first large-scale production facility with a production line that is 100% automated. This one I'm not sure of.
Blockchain stock. Soared 26,000% just for "adding blockchain to it’s name” and Paul thinks it will keep growing. I assume he is referring to the bitcoin boom in 2017. Paul states he thinks Bitcoin will hit $1mil in his lifetime. Not much detail here. Quick google search shows: Riot Blockchain, Hive Blockchain, and Long Blockchain Corp. One of these maybe?
This stock is one of the leading crypto miners in the world and the company’s revenues grew 66% last year. Not much info here.
Global energy storage market…
13x growth by 2030. Paul likes an energy storage firm that is developing a new type of battery that can last 20-25 years minimum. Flow battery company with a current value of about $30 million. They’ve done a 180 and are putting everything into a niche corner of the battery market. Completed their first full battery system 2 years ago. Company plans to provide batteries for telecom towers and is expanding into China, New Zealand, and Australia.
Company based out of France. A renewable powerhouse that owns over 100 power plants. Completed 7 renewable power plants last year and have another 10 in the works. Recently bought out another company operating 95 power plants and are expanding into Brazil, Mexico, Egypt, South Africa. Company has goal to increase energy output by 570% by 2023. I'm not sure about either of these companies.
Biotech….Paul extremely bullish stating this could eleminate cancer, diabetes and other diseases in this decade. A French biopharmaceutical company with 8 cancer-killing drugs in its pipeline. Is able to take T-cells (white blood cells) and transform them into cancer killers. In a study, 30 patients with lymphoblastic leukemia were given this treatment. Within weeks, 27 of them were in remission. This company partnered with Pfizer. Worth under $1 billion and generates less than $50 billion in revenue. If one of the eight drugs in it’s pipeline reaches the commercialization phase, it will receive up to $2.8 billion from it’s partners. I believe this is Cellectis (CLLS).
A leader in the use of psychoactive drugs for medical purposes. Wants to design drugs for international use. Recently brought in Canada’s top depression expert as CEO. One of it’s directors is a former law enforcement officer with 35 years experience in drug trafficking. I believe this is Champignon (SHRMF).
SPAC (Special-Purpose Acquisition Company)
Innovation on how companies go public. Monopolizing one of the fastest-growing entertainment markets in the world. Currently holds 60% market share. (Could soar 30k+ percent). Not sure, perhaps PSTH?
Another SPAC. A "pure play on American Infrastructure" with 90% recurring business. Again, not much information so I'm not sure on these ones.
Please let me know if you are able to find anything out and if you have opinions on any of the stocks, feel free to share em! Tldr: I got clues on 10 stocks from an expensive subscription service I can’t afford. Any help identifying the stocks 1-10 above is much appreciated!
Disclaimer: This is my editing, so there could be always some misunderstandings and exaggerations, plus many convos are from 'spec channel', so take it with a grain of salt, pls. + I added some recent convos afterward. -------------------------------------------------- 📷 Luigi Vigneri [IF]어제 오후 8:26 Giving the opportunity to everybody to set up/run nodes is one of IOTA's priority. A minimum amount of resources is obviously required to prevent easy attacks, but we are making sure that being active part of the IOTA network can be possible without crazy investments. we are building our solution in such a way that the protocol is fair and lightweight. 📷 Hans Moog [IF]어제 오후 11:24 IOTA is not "free to use" but it's - fee-less you have tokens? you can send them around for free 📷 Hans Moog [IF]어제 오후 11:25 you have no tokens? you have to pay to use the network 📷 lekanovic어제 오후 11:25 I think it is a smart way to avoid the spamming network problem 📷 Hans Moog [IF]어제 오후 11:26 owning tokens is essentially like owning a share of the actual network and the throughput it can process 📷 Hans Moog [IF]어제 오후 11:26**** if you don't need all of that yourself, you can rent it out to people and earn money 📷 Hans Moog [IF]어제 오후 11:27 mana = tokens * time since you own them simplified 📷 Hans Moog [IF]어제 오후 11:27 the longer you hold your tokens and the more you have, the more mana you have but every now and then you have to move them to "realize" that mana 📷 lekanovic어제 오후 11:28 Is there any other project that is using a Mana solution to the network fee problem ? 📷 Hans Moog [IF]어제 오후 11:28 nah the problem with current protocol is that they are leader based 📷 Hans Moog [IF]어제 오후 11:29 you need absolute consensus on who the current leaders are and what their influence in the network is that's how blockchains works 📷 Hans Moog [IF]어제 오후 11:29 if two block producers produce 2 blocks at the same time, then you have to choose which one wins and where everybody attaches their next block to IOTA works differently and doesn't need to choose a single leader we therefore have a much bigger flexibility of designing our sybil protection mechanisms in a way, mana is also supposed to solve the problem of "rewarding" the infrastructure instead of the validators in blockchain only the miners get all the money running a node and even if it's one that is used by a lot of people will only cost you won't get anything back no fees, nothing the miners get it all 📷 Hans Moog [IF]어제 오후 11:31 in IOTA, the node operators receive the mana which gives them a share of the network throughput 📷 Hans Moog [IF]어제 오후 11:32 because in blockchain you need to decide whose txs become part of the blocks and it's not really based on networking protocols like AIMD 📷 lekanovic어제 오후 11:33 And the more Mana your node have, the more trust your node has and you have more to say in the FPC, is that correct? 📷 Hans Moog [IF]어제 오후 11:33 yeah a node that has processed a lot of txs of its users will have more mana than other nodes and therefore a bigger say in deciding conflicts its a direct measure of "trust" by its users 📷 lekanovic어제 오후 11:34 And choosing committee for dRNG would be done on L1 protocol level? Everything regarding Mana will be L1 level, right? 📷 Hans Moog [IF]어제 오후 11:35 Yeah Mana is layer1, but will also be used as weight in L2 solutions like smart contracts 📷 lekanovic어제 오후 11:35 And you are not dependant on using SC to implement this 📷 Hans Moog [IF]어제 오후 11:35 No, you don't need smart contracts That's all the base layer 📷 Hans Moog [IF]어제 오후 11:37 'Time' actually takes into account things like decay So it doesn't just increase forever It's close to "Demurrage" in monetary theory 📷 lekanovic어제 오후 11:36 For projects to be able to connect to Polkadot or Cosmos, you need to get the state of the ledger. Will it be possible to get the Tangle state? If this would be possible, then I think it would be SUPER good for IOTA 📷 Hans Moog [IF]어제 오후 11:38 Yeah but polkadot is not connecting other dlts Just inhouse stuff 📷 Hyperware어제 오후 11:39 Is there still a cap on mana so that the rich don't get richer? 📷 Hans Moog [IF]어제 오후 11:39 Yes mana is capped 📷 TangleAccountant어제 오후 11:39 u/HansMoog [IF] My first thought is thatthe evolution of this renting system will lead to several big mana renting companies that pool together tons of token holders mana. That way businesses looking to rent mana just need to deal with a reliable mana renting company for years instead of a new individualevery couple of months (because life happens and you don't know if that individual will need to sell their IOTAs due to personal reasons). Any thoughts on this? 📷 Hans Moog [IF]어제 오후 11:41 u/TangleAccountantyes that is likely - but also not a bad thing - token holders will have a place to get their monthly payout and the companies that want to use the tangle without having tokens have a place to pay 📷 TangleAccountant어제 오후 11:42 Oh I completely agree.That's really cool. I'll take a stab at creating one of those companies in the US. 📷 Hans Moog [IF]어제 오후 11:42 And everybody who wants to run a node themselves or has tokens and wants use the tangle for free can do so But "leachers" that would want to use the network for free won't be able to do so I mean ultimately there will always be "fees", as there is no "free lunch". You have a certain amount of resources that a network can process and you have a certain demand. And that will naturally result in fees based on supply / demand what you can do however is to build a system where the actual users of that system that legitimately want to use it can do so for free, just because they already "invest" enough by having tokens or running infrastructure they are already contributing to the well-being of the network through these two aspects alone it would be stupid to ask those guys for additional fees and mana essentially tries to be such a measure of honesty among the users 📷 Hyperware어제 오후 11:47 It's interesting from an investment perspective that having tokens/mana is like owning a portion of the network. 📷 Hans Moog [IF]어제 오후 11:48 Yeah, you are owning a certain % of the throughput and whatever the price will ultimately be to execute on this network - you will earn proportionally but you have to keep in mind that we are trying to build the most efficient DLT that you could possibly ever build 📷 semibaron어제 오후 11:48 The whole mana (tokens) = share of network throuput sounds very much like EOS tbh Just that EOS uses DPoS 📷 Hans Moog [IF]어제 오후 11:50 yeah i mean there is really not too many new things under the sun - you can just tweak a few things here and there, when it comes to distributing resources DPoS is simply not very nice from a centralization aspect 📷 Hans Moog [IF]어제 오후 11:50 at least not the way EOS does it delegating weights is 1 thing but assuming that the weight will always be in a way that 21 "identities" run the whole network is bad in the current world you see a centralization of power but ultimately we want to build a future where the wealth is more evenly distributed and the same goes for voting power 📷 Hans Moog [IF]어제 오후 11:52 blockchain needs leader selection it only works with such a centralizing component IOTA doesn't need that it's delusional to say that IOTA wouldn't have any such centralization but maybe we get better than just a handselected nodes📷 📷 Phantom3D어제 오후 11:52 How would this affect a regular hodler without a node. Should i keep my tokens elsewere to generate mana and put the tokens to use? 📷 Hans Moog [IF]어제 오후 11:53 you can do whatever you want with your mana just make an account at a node you regularly use and use it to build up a reputation with that node to be able to use your funds for free or run a node yourself or rent it out to companies if you just hodl 📷 semibaron어제 오후 11:54 Will there be a build-in function into the node software / wallet to delegate ("sell") my mana? 📷 Hans Moog [IF]어제 오후 11:55 u/semibaronnot from the start - that would happen on a 2nd layer ------------------------------------------------------------------------------------------------------------ 📷 dom어제 오후 9:49
suddenly be incentive to hold iota?
to generate Mana 📷 Hyperware오늘 오전 4:21 The only thing I can really do, is believe that the IF have smart answers and are still building the best solutions they can for the sake of the vision 📷 dom오늘 오전 4:43 100% - which is why we're spending so much effort to communicate it more clearly now we'll do an AMA on this topic very soon 📷 M [s2]오늘 오전 4:54 u/dom please accept my question for the AMA: will IOTA remain a permissionless system and if so, how? 📷 dom오늘 오전 4:57 of course it remains permissionless 📷 dom오늘 오전 5:20 what is permissioned about it? is ETH or Bitcoin permissioned because you have to pay a transaction fee in their native token? 📷 Gerrit오늘 오전 5:24 How did your industry partners think about the mana solution and the fact they need to hold the token to ensure network throughput? 📷 dom오늘 오전 5:26 u/Gerritconsidering how the infrastructure, legal and regulatory frameworks are improving around the adoption and usage of crypto-currencies within large companies, I really think that we are introducing this concept exactly at the right time. It should make enterprise partners comfortable in using the permissionless network without much of a hurdle.They can always launch their own network if they want to ... 📷 Gerrit오늘 오전 5:27 Launching their own network can’t be what you want 📷 dom오늘 오전 5:27 exactly but that is what's happening with Ethereum and all the other networks they don't hold Ether tokens either. 📷 Gerrit오늘 오전 5:32 Will be very exciting to see if ongoing regulation will „allow“ companies to invest and hold the tokens. With upcoming custody solutions that would be a fantastic play. 📷 Hans Moog [IF]오늘 오전 5:34 It's still possible to send transactions even without mana - mana is only used in times of congestion to give the people that have more mana more priority there will still be sharding to keep the network free most of the time 📷 Hans Moog [IF]오늘 오전 5:35 but without a protection mechanism, somebody could just spam a lot of bullshit and you could break the network(수정됨) you need some form of protection from this 📷 M [s2]오늘 오전 5:36 u/HansMoog [IF]so when I have 0 Mana, I can still send transactions? This is actually the point where it got strange... 📷 Hans Moog [IF]오늘 오전 5:37 yes you can unless the network is close to its processing capabilities / being attacked by spammers then the nodes will favor the mana holders 📷 Hans Moog [IF]오늘 오전 5:37 but having mana is not a requirement for many years to come currently even people having fpgas can't spam that many tps and we will also have sharding implemented by then 📷 M [s2]오늘 오전 5:39 Thank youu/HansMoog [IF] ! This is the actually important piece of info! 📷 Basha오늘 오전 5:38 ok, i thought it was communicated that you need at least 1 mana to process a transaction. from the blogpost: "... a node with 0 mana can issue no transactions." maybe they meant during the congestion**, but if that's the case maybe you should add that** 📷 Hans Moog [IF]오늘 오전 5:42 its under the point "Congestion control:" yeah this only applies to spam attacks network not overloaded = no mana needed 📷 Hans Moog [IF]오늘 오전 5:43 if congested => favor txs from people who have the most skin in the game but sharding will try to keep the network non-congested most of the time - but there might be short periods of time where an attacker might bring the network close to its limits and of course its going to take a while to add this, so we need a protection mechanism till sharding is supported(수정됨) 📷 Hans Moog [IF]오늘 오전 6:36 I don't have a particular problem with EOS or their amount of validators - the reason why I think blockchain is inferior has really nothing to do with the way you do sybil protection and with validators I mean "voting nodes" I mean even bitcoin has less mining pools and you could compare mining pools to dpos in some sense where people assign their weight (in that case hashing power) to the corresponding mining pools so EOS is definitely not less decentralized than any other tech but having more identities having weight in the decision process definitely makes it harder to corrupt a reasonable fraction of the system and makes it easier to shard so its desirable to have this property(수정됨) ------------------------------------------------- 📷 Antonio Nardella [IF]오늘 오전 3:36
u/C3PO[92% Cooless]They could also add more git repos instead of the wallet one, and we would probably be #1 there too.. ---------------------------------------------------------------------------------- Disclaimer: I'm sorry, maybe I'm fueling some confusion through posting this mana-thing too soon, but, instead of erasing this posting, I'm adding recent convos. Certain things about mana seem to be not clear, yet. It would be better to wait for some official clarification. But, I hope the community gives its full support to IF, 'cause there could be always some bumps along the untouched, unchartered way. -------------------------------------------------------------------------------------- Recent Addition;
Billy Sanders [IF]오늘 오후 1:36
It's still possible to send transactions even without mana - mana is only used in times of congestion to give the people that have more mana more priority
u/HansMoog [IF] Im sorry Hans, but this is false in the current congestion control algorithm. No mana = no transactions. To be honest, we havent really tried to make it work so that you can sent transactions with no mana during ties with no congestion, but I dont see how you can enable this and still maintain the sybil protection required. u/LuigiVigneri [IF] What do you think?📷
Dave [EF]오늘 오후 2:19
Suggestion: Sidebar, then get back to us with the verdict.(수정됨)📷2📷
dom오늘 오후 2:27
No Mana no tx will definitely not be the case(수정됨)📷5📷7***[오후 2:28]***Billy probably means the previous rate control paper as it was written by Luigi. I'll clarify with them📷
Hans Moog [IF]오늘 오후 2:29
When was this decided u/BillySanders [IF] and by whom? Was this discussed at last resum when I wasnt there? The last info that I had was that the congestion control should only kick in when there is congestion?!?***[오후 2:29]***📷 📷 📷📷
Navin Ramachandran [IF]오늘 오후 2:30
Let's sidebar this discussion and return when we have agreement. Dave has the right idea
In this piece, we will focus on the view that Bitcoin is an aspirational store of value. We explore the inherent characteristics that position Bitcoin to fulfill this role in the future, consider whether it is being used in this way today, and discuss factors that may drive greater demand for such utility.
Bitcoin’s digital scarcity
A robust store of value asset retains purchasing power over long periods of time. An emerging store of value grows purchasing power until it stabilizes. The key characteristics that are cited in reference to good stores of value are scarcity, portability, durability and divisibility. The most important of these attributes is arguably scarcity, which is essential for protecting against the depreciation of real value in the long run. Scarcity means there is a limited quantity of the asset in question, more cannot be easily created, and it is impossible to counterfeit. One of bitcoin’s most novel innovations is its unforgeable digital scarcity. Investors believe this property is foundational in understanding and appreciating bitcoin. The bitcoin supply is perfectly inelastic and is not susceptible to supply shocks. Supply does not respond to changes in production capacity (i.e. greater hash power) in response to heightened demand driving prices higher. Even gold, which has been used as a store of value for millennia, is not immune to supply shocks. While the ability for increased production in response to an increase in demand is limited, gold is not perfectly inelastic.
Decentralized checks and balances
Bitcoin’s monetary policy was established when it was created. Its credibility is enforced in part by decentralization and proof-of-work mining. Bitcoin has a leaderless network of decentralized full nodes (computers running bitcoin software), in which every node stores the ledger of transactions and performs transaction verification independently, checking that rules are being followed. Because of this redundancy, there is no central point of failure. Full nodes that verify transactions are distinct from miners who expend energy to process transactions and mint bitcoin. Unlike mining, transaction verification does not require significant resources in the form of hardware or electricity. Thus, any computer can join the distributed network to store and verify bitcoin transactions. Today tens of thousands of nodes perform this function. In addition to preventing transactions that don’t follow consensus rules, the level of decentralization that exists in the bitcoin network protects core properties such as the 21 million fixed supply by making it virtually impossible to change. No central party has sole discretion over bitcoin’s monetary policy. Rather, such a change would require significant social coordination among stakeholders (e.g. users, miners and those running full nodes). Most stakeholders believe bitcoin has value because of its digital scarcity, resulting in negligible support for such a change
Investors believe that the next wave of awareness and adoption could be driven by external factors such as unprecedented levels of intervention by central banks and governments, record low interest rates, increasing fiat money supply, deglobalization and the potential for ensuing inflation, all of which have been accelerated by the pandemic and economic shutdown. Longer-term tailwinds that could fuel adoption include the use of bitcoin to preserve wealth amidst “slow and steady” inflation and the looming generational wealth transfer to millennials, who view bitcoin more favorably than other demographics.
Current interest in bitcoin’s store of value properties
Tudor Investment Corporation’s decision to allocate to bitcoin in the Tudor BVI fund is evidence that unprecedented levels of monetary growth is driving institutional interest in bitcoin’s store of value properties. Paul Tudor Jones, founder and Chief Investment Officer, and Lorenzo Giorgianni, Head of Global Research articulated the rationale for investing in bitcoin in their May 2020 investor letter, “The Great Monetary Inflation.” The Tudor Investments team scored financial assets, fiat cash, gold and bitcoin based on four characteristics that define store of value assets – purchasing power, trustworthiness, liquidity, portability. Bitcoin’s score was 60% of the score of financial assets, but 1/1200th of the market cap of financial assets and it was 66% of the score of gold, but 1/60th of the market cap, concluding, “Something appears to be wrong here and my guess is that it’s the price of Bitcoin.” While many have expressed the same reasoning, this was seen as a watershed moment, given the thesis and investment was from a traditional hedge fund manage legendary macro investor (Paul Tudor Jones) and former Deputy Director of the Strategy, Policy and Review Department at the IMF (Lorenzo Giorgianni)ix.
Bitcoin’s inherent properties have given rise to the perspective that bitcoin has the potential to be a store of value, with complementary and interdependent components – the decentralized settlement network (Bitcoin) and its digitally scarce native asset (bitcoin). Equally important is the consideration of demand for bitcoin’s unique features – there is no long-term value to create or store if there is no sustained demand for these properties. External forces that are accelerating interest and investment in bitcoin include unprecedented levels and exotic forms of monetary and fiscal stimulus globally with unknown consequences. This is exacerbating the concerns that Bitcoin was designed to address and is leading more investors and users towards bitcoin as an “insurance policy” that may provide protection against the unknown consequences. Simultaneously, the massive transfer of wealth from the older generation to a younger demographic is a more gradual but important long-term tailwind, as younger people view bitcoin more favorably. This is an important catalyst for bitcoin adoption as they inherit and grow their wealth. While bitcoin is not guaranteed to succeed as a store of value, should sustainable long-term demand for the use case not materialize, the tailwinds mentioned above should drive incremental demand for a novel asset with unique properties. Additionally, as we will examine in future parts in our bitcoin investment thesis series, Bitcoin’s strength is that it has properties that allow it to serve multiple functions, further hardening the likelihood of its success as measured by growth in value.
Two Prime, under the radar coin worth looking into.
Two Prime has released their FF1 MacroToken. "We show how this methodology can be applied as an Open Source application, in the vein of BTC and ETH, with all the creative and value generative potential that comes along with it. We leverage store of value functions of cryptocurrencies to arrive at value creation and accretion in the real economy by the intermediary of crypto exchanges on which we propose to provide protective measures. We detail treasury and reserve formation for the Open Source Finance Foundation, describe its relation to Two Prime and detail the emission of a new crypto-asset called the FF1 Token. We seek liquidity for the FF1 treasury within the secondary exchanges for the purpose of applying M4 in the real world, both in the private and public sector. We first apply this to the vertical of cryptocurrencies while outlining the genericity and stability of the model which we indeed to apply to esoteric financial needs (e.g. Smart City financing). In so doing, we extend the scope and control of applications that a system of digital units of value stored on decentralized, public ledgers can aim to advance. We call this approach Open Source Finance and the resulting coin class a MacroToken. MODERN MONETARY THEORY FRAMEWORKModern Monetary Theory states two interdependent phenomenological axioms and the banking system operates on a resulting syllogism:
Axiom 1: in discounted cash flow analysis (axiom 1a), 0 = 1 and (axiom 1b) 1 = 1..N.
Axiom 2: Government possesses, de facto, exclusive, and perpetual right of use of Axiom 1a for Ab-Initio Money(M0) monetary creation (FIAT M0).
Syllogism 3: The creation of AssetBackedM oney(M4) is a consequence of these two axioms. The banking system creates BACKED M4 with debt-backed cash flows of type 1b: 1 = N with N ⇡ 1. Add equity to these cash flows (e.g. project finance) and you create a return of type 1 = N with N 1 or axiom1b. FIAT currencies are therefore designed to be accretive with possibility of fluctuation.
In the past 10 years, the formation and emergence of BTC and ETH has verifiably falsified Axiom 2 . The phenomenon of crypto-currencies has created ab-initio global stores of value of type 1a. Cryptoc Currencies have displaced trust by means of government violence and associated, implied violence, with instead, open source distribution, cloud computing, objective mathematics, and the algorithmic integrity of blockchain ledgers. The first “killer app” of these open source ledgers areis stores of value, e.g. Bitcoin, or “open source money” as it was first characterized by its semi-anonymous creators. Leading crypto-currencies have proven themselves as viable global stores of value. They are regulated as Gold is in the United States. However, as type 1a units of value, they have tended towards high volatility inevitably leading to speculative market behavior and near 0 “real” asset-” backing or floor price , albeit with an aggregate value of $350bn ab-initio creation. We therefore advance Axiom 2 to Axiom 2’
Axiom 2’: (spoken “Two Prime” and the reason for the company name): ab-initio value creation (type 1a) and Macro Token (type 1b) can reside outside of national powers and central banking, e.g. in Open Source Finance.
At N < 1 we have dilutive debasement of fungible units of value, aka inflation. At 1, the new monies are therefore stable coins. At N > 1, these tokens are designed to grow with demand. Axiom Two Prime (or 2’) displaces government endorsed violence as our macro-socio organizing principle, with algorithmic objectivity and verifiable transparency. This occurs within the landscape we call Open Source Finance. THE TWO PRIME MODEL Two Prime refers to the financial management company managing the OSFF. FF1 refers to the Macro Token of the OSFF. The first stage is reserve and treasury formation, the second stage describes the mechanics of the public markets and the protective measures of the reserves and third stage is treasury liquidity via the Continuous Token Offering both in public and private markets. We will now describe these in more detail. MACRO INVESTMENT THESIS AND RATIONALE FOR FF1The FF1 MacroToken is a synthetic token based on the proven killer applications of Cryptoc-Currencies. After 110 years since the inception of the blockchain technology, the killer apps of crypto are already here and they are primarily all financial, not technical. The historical killers apps are:
Transnational Store of Value: Crypto-Currencies display a robust and transnational store-of-value function. Many crypto professionals today use the blockchain as their international bank. They maintain balances and pay with internet-based open source ledgers (a.k.a crypto). They find local FIAT liquidity on local exchanges. They speculate in crypto on global exchanges. The paradox of Axiom 1a is that in the absence of any backing the value of these stores of value is determined solely via exchanges, pure supply and demand mixed with sentiment. Their volatility is a side-effect of their lack of anchoring.
Capital Formation: Crypto-Currencies have proved very adept at capital formation both on flow and stock. The days of the ICO, where hundreds of millions of (crypto) dollars were raised seemingly overnight, need to be reborn as the Phænix from its ashes. However, the ICO faltered at capital allocation, wasting proceeds on tech no one needed and lavish parties, resulting in non accretion (N = 0.07)
Fractional Asset- Backing and Stablec Coins: Stable coins are tokens that are backed by existing assets. The first and best known example of a stable coins is Tether, which has a 60% backing ratio. We credit the crypto rally of 2017 to the conjunction of ICOs and stable coins. These instruments also have something to say to banking infrastructure. Witness the political backlash to Facebook’s Libra or the efforts of the Bank of China launching it’s own Central Bank Digital Currency. It should be noted that FIAT in the west is born as a fractionally asset- backed instrument (N = 0.07 or Basel III ratios) and matures, over time to (N > 1), as a super-backed instrument.
The FF1 MacroToken is a pot-pourri of these features, a synthetic token that mixes the best of breed practices of crypto mixing Store-of-Value, Capital Formation and Fractional Asset-Backing. MACRO INVESTMENT THESIS AND RATIONALE FOR FF1Treasury Generation: Ab-Initio Store of Value On the supply side, The OSFFTwo Prime has created is creating 100, 000, 000 FF1 Macro Tokens, which it keeps in treasury. They are pure stores of value for they have no assets backing them at birth. They are ab-initio instruments. The FF1 Macro Tokens are listed on public crypto exchanges. Two Prime manages operates market- making for these stores of value. Treasury Management: Supply- Side Tokenomics All FF1 are held in the Open Source Finance Foundation treasury. Crypto aAssets that enter into treasury are, at first, not traded. The FF1 supply will be offered upon sufficient demand. which Two Prime generates publicly and privately. The total supply will be finite in total units (100, 000, 000), but variable in its aggregate value for supply and demand will make the price move. The proceeds are the property of the OSFF (not Two Prime) and Two Prime places invests the liquid treasury (post FF1 liquidation) in crypto assets to protect against depreciation and create a macro-hedge reserve andor floor for the price. It should be noted that the price and the NAV of assets are, by design, not equal. In other words, the additional OSFF treasury is locked and can enter circulation if, and only if, there is a corresponding demand which is then placed invested in crypto assets with a target value N 1. This results in fractional asset- backing at first. EXCHANGES, CONTINUOUS TOKEN OFFERING, AND DEMAND- SIDE TOKENOMICSPublic Exchanges Two Prime will maintain listings for the FF1 Tokens on behalf of the OSFF. Two Prime maintains market- making operations in public crypto exchanges on behalf of the OSFF. Continuous Token Offering Two Prime works on creating new liquidity for the FF1 Macro Tokens to comply with the supply side constraints detailed above, namely that a token enters circulation when matched by demand. Two Prime does demand generation in public as above as well as private. This CTO results in something akin to a reverse-ICO, letting the reserves be set by public trading and then marketing to private purchasers investors (accredited US for example) after the public liquidity event. Demand generation is done via marketing to relevant audiences, e.g. as a macro way to HODL with exclusive private equity investments for crypto holders, and as a diversified and de-risked way to gain crypto exposure for FIAT holders (Sharpe ratio: 1.55, Beta to BTC: 0.75). PARTNER NETWORK, USE OF PROCEEDS, ACCRETION AND FLOOR PROTECTIONThough this mathematical approach allows for a broad and differentiated set of financial applications and outcomes, Two Prime founding Members will first apply this work to the realm of project finance within the Blockchain space via algorithmic balancing of an equity and debt based treasury consisting of real crypto assets and future cash flows. Proof of Value Mining in Partner Network Funds and projects can apply to the foundation for financing. This is the partner network and is akin to the way a network of miners secure the chain. Here a network of partners protects the value. The Foundation invests the proceeds in liquid crypto assets, interest bearing crypto assets and equity crypto assets via partner funds, creating a bridge to the real economy (crypto companies) in the last step. The foundation holds these (real economic) assets. M4 Asset Mix The funds raised are invested in public and private sector projects. We consider the following mix
Up To 30% cash and cash equivalents including crypto products (HODL)
Up To 30% debt and bonds. Including crypto products (Staking HODL)
Up To 30% deep tech including Fund of Funds
Up To 30% discretionary allocation including back to reserves.
This completes the M4 step and the flow of funds for the FF1 Token. It shows a feedback loop, for the Foundation can buy back it’s token, leading to an idiosyncratic tokenomics: the FF1 Token has a fixed (and potentially diminishing) SUPPLY alongside (potentially increasing) endogenous and exogenous DEMAND." This seems pretty interesting imo, thoughts?
Everyone and his grandma know what cryptocurrency mining is. Well, they may not indeed know what it actually is, in technical terms, but they have definitely heard the phrase as it is hard to miss the news about mining sucking in energy like a black hole gobbles up matter. On the other hand, staking, its little bro, has mostly been hiding in the shadows until recently. by StealthEX Today, with DeFi making breaking news across the cryptoverse, staking has become a new buzzword in the blockchain space and beyond, along with the fresh entries to the crypto asset investor’s vocabulary such as “yield farming”, “rug pull”, “total value locked”, and similar arcane stuff. If you are not scared off yet, then read on. Though we can’t promise you won’t be.
Cryptocurrency staking, little brother of crypto mining
There are two conceptually different approaches to achieving consensus in a distributed network, which comes down to transaction validation in the case of a cryptocurrency blockchain. You are most certainly aware of cryptocurrency mining, which is used with cryptocurrencies based on the Proof-of-Work (PoW) consensus algorithm such as Bitcoin and Ether (so far). Here miners compete against each other with their computational resources for finding the next block on the blockchain and getting a reward. Another approach, known as the Proof-of-Stake (PoS) consensus mechanism, is based not on the race among computational resources as is the case with PoW, but on the competition of balances, or stakes. In simple words, every holder of at least one stake, a minimally sufficient amount of crypto, can actively participate in creating blocks and thus also earn rewards under such network consensus model. This process came to be known as staking, and it can be loosely thought of as mining in the PoS environment. With that established, let’s now see why, after so many years of what comes pretty close to oblivion, it has turned into such a big thing.
Why has staking become so popular, all of a sudden?
The renewed popularity of staking came with the explosive expansion of decentralized finance, or DeFi for short. Essentially, staking is one of the ways to tap into the booming DeFi market, allowing users to earn staking rewards on a class of digital assets that DeFi provides easy access to. Technically, it is more correct to speak of DeFi staking as a new development of an old concept that enjoys its second coming today, or new birth if you please. So what’s the point? With old-school cryptocurrency staking, you would have to manually set up and run a validating node on a cryptocurrency network that uses a PoS consensus algo, having to keep in mind all the gory details of a specific protocol so as not to shoot yourself in the foot. This is where you should have already started to enjoy jitters if you were to take this avenu entirely on your own. Just think of it as having to run a Bitcoin mining rig for some pocket money. Put simply, DeFi staking frees you from all that hassle. At this point, let’s recall what decentralized finance is and what it strives to achieve. In broad terms, DeFi aims at offering the same products and services available today in the traditional financial world, but in a trutless and decentralized way. From this perspective, DeFi staking reseblems conventional banking where people put their money in savings accounts to earn interest. Indeed, you could try to lend out your shekels all by yourself, with varying degrees of success, but banks make it far more convenient and secure. The maturation of the DeFi space advanced the emergence of staking pools and Staking-as-a-Service (SaaS) providers that run nodes for PoS cryptocurrencies on your behalf, allowing you to stake your coins and receive staking rewards. In today’s world, interest rates on traditional savings accounts are ridiculous, while government spending, a handy euphemism for relentless money printing aka fiscal stimulus, is already translating into runaway inflation. Against this backdrop, it is easy to see why staking has been on the rise.
Okay, what are my investment options?
Now that we have gone through the basics of the state-of-the-art cryptocurrency staking, you may ask what are the options actually available for a common crypto enthusiast to earn from it? Many high-caliber exchanges like Binance or Bitfinex as well as online wallets such as Coinbase offer staking of PoS coins. In most cases, you don’t even need to do anything aside from simply holding your coins there to start receiving rewards as long as you are eligible and meet the requirements. This is called exchange staking. Further, there are platforms that specialize in staking digital assets. These are known as Staking-as-a-Service providers, while this form of staking is often referred to as soft staking. They enable even non-tech savvy customers to stake their PoS assets through a third party service, with all the technical stuff handled by the service provider. Most of these services are custodial, with the implication being that you no longer control your coins after you stake them. Figment Networks, MyContainer, Stake Capital are easily the most recognized among SaaS providers. However, while exchange staking and soft staking have everything to do with finance, they have little to nothing to do with the decentralized part of it, which is, for the record, the primary value proposition of the entire DeFi ecosystem. The point is, you have to deposit the stakable coins into your wallet with these services. And how can it then be considered decentralized? Nah, because DeFi is all about going trustless, no third parties, and, in a narrow sense, no staking that entails the transfer of private keys. This form of staking is called non-custodial, and it is of particular interest from the DeFi point of view. If you read our article about DeFi, you already know how it is possible, so we won’t dwell on this (if, on the off chance, you didn’t, it’s time to catch up). As DeFi continues to evolve, platforms that allow trustless staking with which you maintain full custody of your coins are set to emerge as well. The space is relatively new, with Staked being probably the first in the field. This type of staking allows you to remain in complete control of your funds, and it perfectly matches DeFi’s ethos, goals and ideals. Still, our story wouldn’t be complete if we didn’t mention utility tokens where staking may serve a whole range of purposes other than supporting the token network or obtaining passive income. For example, with platforms that deploy blockchain oracles such as Nexus Mutual, a decentralized insurance platform, staking tokens is necessary for encouraging correct reporting on certain events or reaching a consensus on a specific claim. In the case of Nexus Mutual, its membership token NXM is used by the token holders, the so-called assessors, for validating insurance claims. If they fail to assess claims correctly, their stakes are burned. Another example is Particl Marketplace, a decentralized eCommerce platform, which designed a standalone cryptocurrency dubbed PART. It can be used both as a cryptocurrency in its own right outside the marketplace and as a stakable utility token giving stakers voting rights facilitating the decentralized governance of the entire platform. Yet another example is the instant non-custodial cryptocurrency exchange service, ChangeNOW, that also recently came up with its stakable token, NOW Token, to be used as an internal currency and a means of earning passive income.
Nowadays, with most economies on pause or going downhill, staking has become a new avenue for generating passive income outside the traditional financial system. As DeFi continues to eat away at services previously being exclusively provided by conventional financial and banking sectors, we should expect more people to get involved in this activity along with more businesses dipping their toes into these uncharted waters. Achieving network consensus, establishing decentralized governance, and earning passive income are only three use cases for cryptocurrency staking. No matter how important they are, and they certainly are, there are many other uses along different dimensions that staking can be quite helpful and instrumental for. Again, we are mostly in uncharted waters here, and we can’t reliably say what the future holds for us. On the other hand, we can go and invent it. This should count as next. And remember if you need to exchange your coins StealthEX is here for you. We provide a selection of more than 250 coins and constantly updating the list so that our customers will find a suitable option. Our service does not require registration and allows you to remain anonymous. Why don’t you check it out? Just go to StealthEX and follow these easy steps: ✔ Choose the pair and the amount for your exchange. For example ETH to BTC. ✔ Press the “Start exchange” button. ✔ Provide the recipient address to which the coins will be transferred. ✔ Move your cryptocurrency for the exchange. ✔ Receive your coins! The views and opinions expressed here are solely those of the author. Every investment and trading move involves risk. You should conduct your own research when making a decision. Original article was posted onhttps://stealthex.io/blog/2020/09/08/cryptocurrency-staking-as-it-stands-today/
Don't blindly follow a narrative, its bad for you and its bad for crypto in general
I mostly lurk around here but I see a pattern repeating over and over again here and in multiple communities so I have to post. I'm just posting this here because I appreciate the fact that this sub is a place of free speech and maybe something productive can come out from this post, while bitcoin is just fucking censorship, memes and moon/lambo posts. If you don't agree, write in the comments why, instead of downvoting. You don't have to upvote either, but when you downvote you are killing the opportunity to have discussion. If you downvote or comment that I'm wrong without providing any counterpoints you are no better than the BTC maxis you despise. In various communities I see a narrative being used to bring people in and making them follow something without thinking for themselves. In crypto I see this mostly in BTC vs BCH tribalistic arguments: - BTC community: "Everything that is not BTC is shitcoin." or more recently as stated by adam on twitter, "Everything that is not BTC is a ponzi scheme, even ETH.", "what is ETH supply?", and even that they are doing this for "altruistic" reasons, to "protect" the newcomers. Very convenient for them that they are protecting the newcomers by having them buy their bags - BCH community: "BTC maxis are dumb", "just increase block size and you will have truly p2p electronic cash", "It is just that simple, there are no trade offs", "if you don't agree with me you are a BTC maxi", "BCH is satoshi's vision for p2p electronic cash" It is not exclusive to crypto but also politics, and you see this over and over again on twitter and on reddit. My point is, that narratives are created so people don't have to think, they just choose a narrative that is easy to follow and makes sense for them, and stick with it. And people keep repeating these narratives to bring other people in, maybe by ignorance, because they truly believe it without questioning, or maybe by self interest, because they want to shill you their bags. Because this is BCH community, and because bitcoin is censored, so I can't post there about the problems in the BTC narrative (some of which are IMO correctly identified by BCH community), I will stick with the narrative I see in the BCH community. The culprit of this post was firstly this post by user u/scotty321"The BTC Paradox: “A 1 MB blocksize enables poor people to run their own node!” “Okay, then what?” “Poor people won’t be able to use the network!”". You will see many posts of this kind being made by u/Egon_1 also. Then you have also this comment in that thread by u/fuck_____________1 saying that people that want to run their own nodes are retarded and that there is no reason to want to do that. "Just trust block explorer websites". And the post and comment were highly upvoted. Really? You really think that there is no problem in having just a few nodes on the network? And that the only thing that secures the network are miners? As stated by user u/co1nsurf3r in that thread:
While I don't think that everybody needs to run a node, a full node does publish blocks it considers valid to other nodes. This does not amount to much if you only consider a single node in the network, but many "honest" full nodes in the network will reduce the probability of a valid block being withheld from the network by a collusion of "hostile" node operators.
But surely this will not get attention here, and will be downvoted by those people that promote the narrative that there is no trade off in increasing the blocksize and the people that don't see it are retarded or are btc maxis. The only narrative I stick to and have been for many years now is that cryptocurrency takes power from the government and gives power to the individual, so you are not restricted to your economy as you can participate in the global economy. There is also the narrative of banking the bankless, which I hope will come true, but it is not a use case we are seeing right now. Some people would argue that removing power from gov's is a bad thing, but you can't deny the fact that gov's can't control crypto (at least we would want them not to). But, if you really want the individuals to remain in control of their money and transact with anyone in the world, the network needs to be very resistant to any kind of attacks. How can you have p2p electronic cash if your network just has a handful couple of nodes and the chinese gov can locate them and just block communication to them? I'm not saying that this is BCH case, I'm just refuting the fact that there is no value in running your own node. If you are relying on block explorers, the gov can just block the communication to the block explorer websites. Then what? Who will you trust to get chain information? The nodes needs to be decentralized so if you take one node down, many more can appear so it is hard to censor and you don't have few points of failure. Right now BTC is focusing on that use case of being difficult to censor. But with that comes the problem that is very expensive to transact on the network, which breaks the purpose of anyone being able to participate. Obviously I do think that is also a major problem, and lightning network is awful right now and probably still years away of being usable, if it ever will. The best solution is up for debate, but thinking that you just have to increase the blocksize and there is no trade off is just naive or misleading. BCH is doing a good thing in trying to come with a solution that is inclusive and promotes cheap and fast transactions, but also don't forget centralization is a major concern and nothing to just shrug off. Saying that "a 1 MB blocksize enables poor people to run their own" and that because of that "Poor people won’t be able to use the network" is a misrepresentation designed to promote a narrative. Because 1MB is not to allow "poor" people to run their node, it is to facilitate as many people to run a node to promote decentralization and avoid censorship. Also an elephant in the room that you will not see being discussed in either BTC or BCH communities is that mining pools are heavily centralized. And I'm not talking about miners being mostly in china, but also that big pools control a lot of hashing power both in BTC and BCH, and that is terrible for the purpose of crypto. Other projects are trying to solve that. Will they be successful? I don't know, I hope so, because I don't buy into any narrative. There are many challenges and I want to see crypto succeed as a whole. As always guys, DYOR and always question if you are not blindly following a narrative. I'm sure I will be called BTC maxi but maybe some people will find value in this. Don't trust guys that are always posting silly "gocha's" against the other "tribe". EDIT: User u/ShadowOfHarbringer has pointed me to some threads that this has been discussed in the past and I will just put my take on them here for visibility, as I will be using this thread as a reference in future discussions I engage:
When there was only 2 nodes in the network, adding a third node increased redundancy and resiliency of the network as a whole in a significant way. When there is thousands of nodes in the network, adding yet another node only marginally increase the redundancy and resiliency of the network. So the question then becomes a matter of personal judgement of how much that added redundancy and resiliency is worth. For the absolutist, it is absolutely worth it and everyone on this planet should do their part.
What is the magical number of nodes that makes it counterproductive to add new nodes? Did he do any math? Does BCH achieve this holy grail safe number of nodes? Guess what, nobody knows at what number of nodes is starts to be marginally irrelevant to add new nodes. Even BTC today could still not have enough nodes to be safe. If you can't know for sure that you are safe, it is better to try to be safer than sorry. Thousands of nodes is still not enough, as I said, it is much cheaper to run a full node as it is to mine. If it costs millions in hash power to do a 51% attack on the block generation it means nothing if it costs less than $10k to run more nodes than there are in total in the network and cause havoc and slowing people from using the network. Or using bot farms to DDoS the 1000s of nodes in the network. Not all attacks are monetarily motivated. When you have governments with billions of dollars at their disposal and something that could threat their power they could do anything they could to stop people from using it, and the cheapest it is to do so the better
You should run a full node if you're a big business with e.g. >$100k/month in volume, or if you run a service that requires high fraud resistance and validation certainty for payments sent your way (e.g. an exchange). For most other users of Bitcoin, there's no good reason to run a full node unless you reel like it.
Shouldn't individuals benefit from fraud resistance too? Why just businesses?
Personally, I think it's a good idea to make sure that people can easily run a full node because they feel like it, and that it's desirable to keep full node resource requirements reasonable for an enthusiast/hobbyist whenever possible. This might seem to be at odds with the concept of making a worldwide digital cash system in which all transactions are validated by everybody, but after having done the math and some of the code myself, I believe that we should be able to have our cake and eat it too.
This is recurrent argument, but also no math provided, "just trust me I did the math"
The biggest reason individuals may want to run their own node is to increase their privacy. SPV wallets rely on others (nodes or ElectronX servers) who may learn their addresses.
It is a reason and valid one but not the biggest reason
If you do it for fun and experimental it good. If you do it for extra privacy it's ok. If you do it to help the network don't. You are just slowing down miners and exchanges.
Yes it will slow down the network, but that shows how people just don't get the the trade off they are doing
I will just copy/paste what Satoshi Nakamoto said in his own words. "The current system where every user is a network node is not the intended configuration for large scale. That would be like every Usenet user runs their own NNTP server."
Another "it is all or nothing argument" and quoting satoshi to try and prove their point. Just because every user doesn't need to be also a full node doesn't mean that there aren't serious risks for having few nodes
For this to have any importance in practice, all of the miners, all of the exchanges, all of the explorers and all of the economic nodes should go rogue all at once. Collude to change consensus. If you have a node you can detect this. It doesn't do much, because such a scenario is impossible in practice.
Not true because as I said, you can DDoS the current nodes or run more malicious nodes than that there currently are, because is cheap to do so
Non-mining nodes don't contribute to adding data to the blockchain ledger, but they do play a part in propagating transactions that aren't yet in blocks (the mempool). Bitcoin client implementations can have different validations for transactions they see outside of blocks and transactions they see inside of blocks; this allows for "soft forks" to add new types of transactions without completely breaking older clients (while a transaction is in the mempool, a node receiving a transaction that's a new/unknown type could drop it as not a valid transaction (not propagate it to its peers), but if that same transaction ends up in a block and that node receives the block, they accept the block (and the transaction in it) as valid (and therefore don't get left behind on the blockchain and become a fork). The participation in the mempool is a sort of "herd immunity" protection for the network, and it was a key talking point for the "User Activated Soft Fork" (UASF) around the time the Segregated Witness feature was trying to be added in. If a certain percentage of nodes updated their software to not propagate certain types of transactions (or not communicate with certain types of nodes), then they can control what gets into a block (someone wanting to get that sort of transaction into a block would need to communicate directly to a mining node, or communicate only through nodes that weren't blocking that sort of transaction) if a certain threshold of nodes adheres to those same validation rules. It's less specific than the influence on the blockchain data that mining nodes have, but it's definitely not nothing.
The first reasonable comment in that thread but is deep down there with only 1 upvote
The addition of non-mining nodes does not add to the efficiency of the network, but actually takes away from it because of the latency issue.
That is true and is actually a trade off you are making, sacrificing security to have scalability
The addition of non-mining nodes has little to no effect on security, since you only need to destroy mining ones to take down the network
It is true that if you destroy mining nodes you take down the network from producing new blocks (temporarily), even if you have a lot of non mining nodes. But, it still better than if you take down the mining nodes who are also the only full nodes. If the miners are not the only full nodes, at least you still have full nodes with the blockchain data so new miners can download it and join. If all the miners are also the full nodes and you take them down, where will you get all the past blockchain data to start mining again? Just pray that the miners that were taken down come back online at some point in the future?
The real limiting factor is ISP's: Imagine a situation where one service provider defrauds 4000 different nodes. Did the excessive amount of nodes help at all, when they have all been defrauded by the same service provider? If there are only 30 ISP's in the world, how many nodes do we REALLY need?
You cant defraud if the connection is encrypted. Use TOR for example, it is hard for ISP's to know what you are doing.
Satoshi specifically said in the white paper that after a certain point, number of nodes needed plateaus, meaning after a certain point, adding more nodes is actually counterintuitive, which we also demonstrated. (the latency issue). So, we have adequately demonstrated why running non-mining nodes does not add additional value or security to the network.
Again, what is the number of nodes that makes it counterproductive? Did he do any math?
There's also the matter of economically significant nodes and the role they play in consensus. Sure, nobody cares about your average joe's "full node" where he is "keeping his own ledger to keep the miners honest", as it has no significance to the economy and the miners couldn't give a damn about it. However, if say some major exchanges got together to protest a miner activated fork, they would have some protest power against that fork because many people use their service. Of course, there still needs to be miners running on said "protest fork" to keep the chain running, but miners do follow the money and if they got caught mining a fork that none of the major exchanges were trading, they could be coaxed over to said "protest fork".
In consensus, what matters about nodes is only the number, economical power of the node doesn't mean nothing, the protocol doesn't see the net worth of the individual or organization running that node.
Running a full node that is not mining and not involved is spending or receiving payments is of very little use. It helps to make sure network traffic is broadcast, and is another copy of the blockchain, but that is all (and is probably not needed in a healthy coin with many other nodes)
He gets it right (broadcasting transaction and keeping a copy of the blockchain) but he dismisses the importance of it
Hey all, I've been researching coins since 2017 and have gone through 100s of them in the last 3 years. I got introduced to blockchain via Bitcoin of course, analyzed Ethereum thereafter and from that moment I have a keen interest in smart contact platforms. I’m passionate about Ethereum but I find Zilliqa to have a better risk-reward ratio. Especially because Zilliqa has found an elegant balance between being secure, decentralized and scalable in my opinion.
Below I post my analysis of why from all the coins I went through I’m most bullish on Zilliqa (yes I went through Tezos, EOS, NEO, VeChain, Harmony, Algorand, Cardano etc.). Note that this is not investment advice and although it's a thorough analysis there is obviously some bias involved. Looking forward to what you all think!
Fun fact: the name Zilliqa is a play on ‘silica’ silicon dioxide which means “Silicon for the high-throughput consensus computer.”
This post is divided into (i) Technology, (ii) Business & Partnerships, and (iii) Marketing & Community. I’ve tried to make the technology part readable for a broad audience. If you’ve ever tried understanding the inner workings of Bitcoin and Ethereum you should be able to grasp most parts. Otherwise, just skim through and once you are zoning out head to the next part.
Technology and some more:
The technology is one of the main reasons why I’m so bullish on Zilliqa. First thing you see on their website is: “Zilliqa is a high-performance, high-security blockchain platform for enterprises and next-generation applications.” These are some bold statements.
Before we deep dive into the technology let’s take a step back in time first as they have quite the history. The initial research paper from which Zilliqa originated dates back to August 2016: Elastico: A Secure Sharding Protocol For Open Blockchains where Loi Luu (Kyber Network) is one of the co-authors. Other ideas that led to the development of what Zilliqa has become today are: Bitcoin-NG, collective signing CoSi, ByzCoin and Omniledger.
The technical white paper was made public in August 2017 and since then they have achieved everything stated in the white paper and also created their own open source intermediate level smart contract language called Scilla (functional programming language similar to OCaml) too.
Mainnet is live since the end of January 2019 with daily transaction rates growing continuously. About a week ago mainnet reached 5 million transactions, 500.000+ addresses in total along with 2400 nodes keeping the network decentralized and secure. Circulating supply is nearing 11 billion and currently only mining rewards are left. The maximum supply is 21 billion with annual inflation being 7.13% currently and will only decrease with time.
Zilliqa realized early on that the usage of public cryptocurrencies and smart contracts were increasing but decentralized, secure, and scalable alternatives were lacking in the crypto space. They proposed to apply sharding onto a public smart contract blockchain where the transaction rate increases almost linear with the increase in the amount of nodes. More nodes = higher transaction throughput and increased decentralization. Sharding comes in many forms and Zilliqa uses network-, transaction- and computational sharding. Network sharding opens up the possibility of using transaction- and computational sharding on top. Zilliqa does not use state sharding for now. We’ll come back to this later.
Before we continue dissecting how Zilliqa achieves such from a technological standpoint it’s good to keep in mind that a blockchain being decentralised and secure and scalable is still one of the main hurdles in allowing widespread usage of decentralised networks. In my opinion this needs to be solved first before blockchains can get to the point where they can create and add large scale value. So I invite you to read the next section to grasp the underlying fundamentals. Because after all these premises need to be true otherwise there isn’t a fundamental case to be bullish on Zilliqa, right?
Down the rabbit hole
How have they achieved this? Let’s define the basics first: key players on Zilliqa are the users and the miners. A user is anybody who uses the blockchain to transfer funds or run smart contracts. Miners are the (shard) nodes in the network who run the consensus protocol and get rewarded for their service in Zillings (ZIL). The mining network is divided into several smaller networks called shards, which is also referred to as ‘network sharding’. Miners subsequently are randomly assigned to a shard by another set of miners called DS (Directory Service) nodes. The regular shards process transactions and the outputs of these shards are eventually combined by the DS shard as they reach consensus on the final state. More on how these DS shards reach consensus (via pBFT) will be explained later on.
The Zilliqa network produces two types of blocks: DS blocks and Tx blocks. One DS Block consists of 100 Tx Blocks. And as previously mentioned there are two types of nodes concerned with reaching consensus: shard nodes and DS nodes. Becoming a shard node or DS node is being defined by the result of a PoW cycle (Ethash) at the beginning of the DS Block. All candidate mining nodes compete with each other and run the PoW (Proof-of-Work) cycle for 60 seconds and the submissions achieving the highest difficulty will be allowed on the network. And to put it in perspective: the average difficulty for one DS node is ~ 2 Th/s equaling 2.000.000 Mh/s or 55 thousand+ GeForce GTX 1070 / 8 GB GPUs at 35.4 Mh/s. Each DS Block 10 new DS nodes are allowed. And a shard node needs to provide around 8.53 GH/s currently (around 240 GTX 1070s). Dual mining ETH/ETC and ZIL is possible and can be done via mining software such as Phoenix and Claymore. There are pools and if you have large amounts of hashing power (Ethash) available you could mine solo.
The PoW cycle of 60 seconds is a peak performance and acts as an entry ticket to the network. The entry ticket is called a sybil resistance mechanism and makes it incredibly hard for adversaries to spawn lots of identities and manipulate the network with these identities. And after every 100 Tx Blocks which corresponds to roughly 1,5 hour this PoW process repeats. In between these 1,5 hour, no PoW needs to be done meaning Zilliqa’s energy consumption to keep the network secure is low. For more detailed information on how mining works click here. Okay, hats off to you. You have made it this far. Before we go any deeper down the rabbit hole we first must understand why Zilliqa goes through all of the above technicalities and understand a bit more what a blockchain on a more fundamental level is. Because the core of Zilliqa’s consensus protocol relies on the usage of pBFT (practical Byzantine Fault Tolerance) we need to know more about state machines and their function. Navigate to Viewblock, a Zilliqa block explorer, and just come back to this article. We will use this site to navigate through a few concepts.
We have established that Zilliqa is a public and distributed blockchain. Meaning that everyone with an internet connection can send ZILs, trigger smart contracts, etc. and there is no central authority who fully controls the network. Zilliqa and other public and distributed blockchains (like Bitcoin and Ethereum) can also be defined as state machines.
Taking the liberty of paraphrasing examples and definitions given by Samuel Brooks’ medium article, he describes the definition of a blockchain (like Zilliqa) as: “A peer-to-peer, append-only datastore that uses consensus to synchronize cryptographically-secure data”.
Next, he states that: "blockchains are fundamentally systems for managing valid state transitions”. For some more context, I recommend reading the whole medium article to get a better grasp of the definitions and understanding of state machines. Nevertheless, let’s try to simplify and compile it into a single paragraph. Take traffic lights as an example: all its states (red, amber, and green) are predefined, all possible outcomes are known and it doesn’t matter if you encounter the traffic light today or tomorrow. It will still behave the same. Managing the states of a traffic light can be done by triggering a sensor on the road or pushing a button resulting in one traffic lights’ state going from green to red (via amber) and another light from red to green.
With public blockchains like Zilliqa, this isn’t so straightforward and simple. It started with block #1 almost 1,5 years ago and every 45 seconds or so a new block linked to the previous block is being added. Resulting in a chain of blocks with transactions in it that everyone can verify from block #1 to the current #647.000+ block. The state is ever changing and the states it can find itself in are infinite. And while the traffic light might work together in tandem with various other traffic lights, it’s rather insignificant comparing it to a public blockchain. Because Zilliqa consists of 2400 nodes who need to work together to achieve consensus on what the latest valid state is while some of these nodes may have latency or broadcast issues, drop offline or are deliberately trying to attack the network, etc.
Now go back to the Viewblock page take a look at the amount of transaction, addresses, block and DS height and then hit refresh. Obviously as expected you see new incremented values on one or all parameters. And how did the Zilliqa blockchain manage to transition from a previous valid state to the latest valid state? By using pBFT to reach consensus on the latest valid state.
After having obtained the entry ticket, miners execute pBFT to reach consensus on the ever-changing state of the blockchain. pBFT requires a series of network communication between nodes, and as such there is no GPU involved (but CPU). Resulting in the total energy consumed to keep the blockchain secure, decentralized and scalable being low.
pBFT stands for practical Byzantine Fault Tolerance and is an optimization on the Byzantine Fault Tolerant algorithm. To quote Blockonomi: “In the context of distributed systems, Byzantine Fault Tolerance is the ability of a distributed computer network to function as desired and correctly reach a sufficient consensus despite malicious components (nodes) of the system failing or propagating incorrect information to other peers.” Zilliqa is such a distributed computer network and depends on the honesty of the nodes (shard and DS) to reach consensus and to continuously update the state with the latest block. If pBFT is a new term for you I can highly recommend the Blockonomi article.
The idea of pBFT was introduced in 1999 - one of the authors even won a Turing award for it - and it is well researched and applied in various blockchains and distributed systems nowadays. If you want more advanced information than the Blockonomi link provides click here. And if you’re in between Blockonomi and the University of Singapore read the Zilliqa Design Story Part 2 dating from October 2017. Quoting from the Zilliqa tech whitepaper: “pBFT relies upon a correct leader (which is randomly selected) to begin each phase and proceed when the sufficient majority exists. In case the leader is byzantine it can stall the entire consensus protocol. To address this challenge, pBFT offers a view change protocol to replace the byzantine leader with another one.”
pBFT can tolerate ⅓ of the nodes being dishonest (offline counts as Byzantine = dishonest) and the consensus protocol will function without stalling or hiccups. Once there are more than ⅓ of dishonest nodes but no more than ⅔ the network will be stalled and a view change will be triggered to elect a new DS leader. Only when more than ⅔ of the nodes are dishonest (66%) double-spend attacks become possible.
If the network stalls no transactions can be processed and one has to wait until a new honest leader has been elected. When the mainnet was just launched and in its early phases, view changes happened regularly. As of today the last stalling of the network - and view change being triggered - was at the end of October 2019.
Another benefit of using pBFT for consensus besides low energy is the immediate finality it provides. Once your transaction is included in a block and the block is added to the chain it’s done. Lastly, take a look at this article where three types of finality are being defined: probabilistic, absolute and economic finality. Zilliqa falls under the absolute finality (just like Tendermint for example). Although lengthy already we skipped through some of the inner workings from Zilliqa’s consensus: read the Zilliqa Design Story Part 3 and you will be close to having a complete picture on it. Enough about PoW, sybil resistance mechanism, pBFT, etc. Another thing we haven’t looked at yet is the amount of decentralization.
Currently, there are four shards, each one of them consisting of 600 nodes. 1 shard with 600 so-called DS nodes (Directory Service - they need to achieve a higher difficulty than shard nodes) and 1800 shard nodes of which 250 are shard guards (centralized nodes controlled by the team). The amount of shard guards has been steadily declining from 1200 in January 2019 to 250 as of May 2020. On the Viewblock statistics, you can see that many of the nodes are being located in the US but those are only the (CPU parts of the) shard nodes who perform pBFT. There is no data from where the PoW sources are coming. And when the Zilliqa blockchain starts reaching its transaction capacity limit, a network upgrade needs to be executed to lift the current cap of maximum 2400 nodes to allow more nodes and formation of more shards which will allow to network to keep on scaling according to demand. Besides shard nodes there are also seed nodes. The main role of seed nodes is to serve as direct access points (for end-users and clients) to the core Zilliqa network that validates transactions. Seed nodes consolidate transaction requests and forward these to the lookup nodes (another type of nodes) for distribution to the shards in the network. Seed nodes also maintain the entire transaction history and the global state of the blockchain which is needed to provide services such as block explorers. Seed nodes in the Zilliqa network are comparable to Infura on Ethereum.
The seed nodes were first only operated by Zilliqa themselves, exchanges and Viewblock. Operators of seed nodes like exchanges had no incentive to open them for the greater public. They were centralised at first. Decentralisation at the seed nodes level has been steadily rolled out since March 2020 ( Zilliqa Improvement Proposal 3 ). Currently the amount of seed nodes is being increased, they are public-facing and at the same time PoS is applied to incentivize seed node operators and make it possible for ZIL holders to stake and earn passive yields. Important distinction: seed nodes are not involved with consensus! That is still PoW as entry ticket and pBFT for the actual consensus.
5% of the block rewards are being assigned to seed nodes (from the beginning in 2019) and those are being used to pay out ZIL stakers. The 5% block rewards with an annual yield of 10.03% translate to roughly 610 MM ZILs in total that can be staked. Exchanges use the custodial variant of staking and wallets like Moonlet will use the non-custodial version (starting in Q3 2020). Staking is being done by sending ZILs to a smart contract created by Zilliqa and audited by Quantstamp.
With a high amount of DS; shard nodes and seed nodes becoming more decentralized too, Zilliqa qualifies for the label of decentralized in my opinion.
Generalized: programming languages can be divided into being ‘object-oriented’ or ‘functional’. Here is an ELI5 given by software development academy: * “all programs have two basic components, data – what the program knows – and behavior – what the program can do with that data. So object-oriented programming states that combining data and related behaviors in one place, is called “object”, which makes it easier to understand how a particular program works. On the other hand, functional programming argues that data and behavior are different things and should be separated to ensure their clarity.” *
Scilla is on the functional side and shares similarities with OCaml: OCaml is a general-purpose programming language with an emphasis on expressiveness and safety. It has an advanced type system that helps catch your mistakes without getting in your way. It's used in environments where a single mistake can cost millions and speed matters, is supported by an active community, and has a rich set of libraries and development tools. For all its power, OCaml is also pretty simple, which is one reason it's often used as a teaching language.
Scilla is blockchain agnostic, can be implemented onto other blockchains as well, is recognized by academics and won a so-called Distinguished Artifact Award award at the end of last year.
One of the reasons why the Zilliqa team decided to create their own programming language focused on preventing smart contract vulnerabilities is that adding logic on a blockchain, programming, means that you cannot afford to make mistakes. Otherwise, it could cost you. It’s all great and fun blockchains being immutable but updating your code because you found a bug isn’t the same as with a regular web application for example. And with smart contracts, it inherently involves cryptocurrencies in some form thus value.
Another difference with programming languages on a blockchain is gas. Every transaction you do on a smart contract platform like Zilliqa or Ethereum costs gas. With gas you basically pay for computational costs. Sending a ZIL from address A to address B costs 0.001 ZIL currently. Smart contracts are more complex, often involve various functions and require more gas (if gas is a new concept click here ).
So with Scilla, similar to Solidity, you need to make sure that “every function in your smart contract will run as expected without hitting gas limits. An improper resource analysis may lead to situations where funds may get stuck simply because a part of the smart contract code cannot be executed due to gas limits. Such constraints are not present in traditional software systems”.Scilla design story part 1
Some examples of smart contract issues you’d want to avoid are: leaking funds, ‘unexpected changes to critical state variables’ (example: someone other than you setting his or her address as the owner of the smart contract after creation) or simply killing a contract.
Scilla also allows for formal verification. Wikipedia to the rescue: In the context of hardware and software systems, formal verification is the act of proving or disproving the correctness of intended algorithms underlying a system with respect to a certain formal specification or property, using formal methods of mathematics.
Formal verification can be helpful in proving the correctness of systems such as: cryptographic protocols, combinational circuits, digital circuits with internal memory, and software expressed as source code.
“Scilla is being developed hand-in-hand with formalization of its semantics and its embedding into the Coq proof assistant — a state-of-the art tool for mechanized proofs about properties of programs.”
Simply put, with Scilla and accompanying tooling developers can be mathematically sure and proof that the smart contract they’ve written does what he or she intends it to do.
Smart contract on a sharded environment and state sharding
There is one more topic I’d like to touch on: smart contract execution in a sharded environment (and what is the effect of state sharding). This is a complex topic. I’m not able to explain it any easier than what is posted here. But I will try to compress the post into something easy to digest.
Earlier on we have established that Zilliqa can process transactions in parallel due to network sharding. This is where the linear scalability comes from. We can define simple transactions: a transaction from address A to B (Category 1), a transaction where a user interacts with one smart contract (Category 2) and the most complex ones where triggering a transaction results in multiple smart contracts being involved (Category 3). The shards are able to process transactions on their own without interference of the other shards. With Category 1 transactions that is doable, with Category 2 transactions sometimes if that address is in the same shard as the smart contract but with Category 3 you definitely need communication between the shards. Solving that requires to make a set of communication rules the protocol needs to follow in order to process all transactions in a generalised fashion.
There is no strict defined roadmap but here are topics being worked on. And via the Zilliqa website there is also more information on the projects they are working on.
Business & Partnerships
It’s not only technology in which Zilliqa seems to be excelling as their ecosystem has been expanding and starting to grow rapidly. The project is on a mission to provide OpenFinance (OpFi) to the world and Singapore is the right place to be due to its progressive regulations and futuristic thinking. Singapore has taken a proactive approach towards cryptocurrencies by introducing the Payment Services Act 2019 (PS Act). Among other things, the PS Act will regulate intermediaries dealing with certain cryptocurrencies, with a particular focus on consumer protection and anti-money laundering. It will also provide a stable regulatory licensing and operating framework for cryptocurrency entities, effectively covering all crypto businesses and exchanges based in Singapore. According to PWC 82% of the surveyed executives in Singapore reported blockchain initiatives underway and 13% of them have already brought the initiatives live to the market. There is also an increasing list of organizations that are starting to provide digital payment services. Moreover, Singaporean blockchain developers Building Cities Beyond has recently created an innovation $15 million grant to encourage development on its ecosystem. This all suggests that Singapore tries to position itself as (one of) the leading blockchain hubs in the world.
Zilliqa seems to already take advantage of this and recently helped launch Hg Exchange on their platform, together with financial institutions PhillipCapital, PrimePartners and Fundnel. Hg Exchange, which is now approved by the Monetary Authority of Singapore (MAS), uses smart contracts to represent digital assets. Through Hg Exchange financial institutions worldwide can use Zilliqa's safe-by-design smart contracts to enable the trading of private equities. For example, think of companies such as Grab, Airbnb, SpaceX that are not available for public trading right now. Hg Exchange will allow investors to buy shares of private companies & unicorns and capture their value before an IPO. Anquan, the main company behind Zilliqa, has also recently announced that they became a partner and shareholder in TEN31 Bank, which is a fully regulated bank allowing for tokenization of assets and is aiming to bridge the gap between conventional banking and the blockchain world. If STOs, the tokenization of assets, and equity trading will continue to increase, then Zilliqa’s public blockchain would be the ideal candidate due to its strategic positioning, partnerships, regulatory compliance and the technology that is being built on top of it.
What is also very encouraging is their focus on banking the un(der)banked. They are launching a stablecoin basket starting with XSGD. As many of you know, stablecoins are currently mostly used for trading. However, Zilliqa is actively trying to broaden the use case of stablecoins. I recommend everybody to read this text that Amrit Kumar wrote (one of the co-founders). These stablecoins will be integrated in the traditional markets and bridge the gap between the crypto world and the traditional world. This could potentially revolutionize and legitimise the crypto space if retailers and companies will for example start to use stablecoins for payments or remittances, instead of it solely being used for trading.
Zilliqa also released their DeFi strategic roadmap (dating November 2019) which seems to be aligning well with their OpFi strategy. A non-custodial DEX is coming to Zilliqa made by Switcheo which allows cross-chain trading (atomic swaps) between ETH, EOS and ZIL based tokens. They also signed a Memorandum of Understanding for a (soon to be announced) USD stablecoin. And as Zilliqa is all about regulations and being compliant, I’m speculating on it to be a regulated USD stablecoin. Furthermore, XSGD is already created and visible on block explorer and XIDR (Indonesian Stablecoin) is also coming soon via StraitsX. Here also an overview of the Tech Stack for Financial Applications from September 2019. Further quoting Amrit Kumar on this:
There are two basic building blocks in DeFi/OpFi though: 1) stablecoins as you need a non-volatile currency to get access to this market and 2) a dex to be able to trade all these financial assets. The rest are built on top of these blocks.
So far, together with our partners and community, we have worked on developing these building blocks with XSGD as a stablecoin. We are working on bringing a USD-backed stablecoin as well. We will soon have a decentralised exchange developed by Switcheo. And with HGX going live, we are also venturing into the tokenization space. More to come in the future.”
Additionally, they also have this ZILHive initiative that injects capital into projects. There have been already 6 waves of various teams working on infrastructure, innovation and research, and they are not from ASEAN or Singapore only but global: see Grantees breakdown by country. Over 60 project teams from over 20 countries have contributed to Zilliqa's ecosystem. This includes individuals and teams developing wallets, explorers, developer toolkits, smart contract testing frameworks, dapps, etc. As some of you may know, Unstoppable Domains (UD) blew up when they launched on Zilliqa. UD aims to replace cryptocurrency addresses with a human-readable name and allows for uncensorable websites. Zilliqa will probably be the only one able to handle all these transactions onchain due to ability to scale and its resulting low fees which is why the UD team launched this on Zilliqa in the first place. Furthermore, Zilliqa also has a strong emphasis on security, compliance, and privacy, which is why they partnered with companies like Elliptic, ChainSecurity (part of PwC Switzerland), and Incognito. Their sister company Aqilliz (Zilliqa spelled backwards) focuses on revolutionizing the digital advertising space and is doing interesting things like using Zilliqa to track outdoor digital ads with companies like Foodpanda.
Zilliqa is listed on nearly all major exchanges, having several different fiat-gateways and recently have been added to Binance’s margin trading and futures trading with really good volume. They also have a very impressive team with good credentials and experience. They don't just have “tech people”. They have a mix of tech people, business people, marketeers, scientists, and more. Naturally, it's good to have a mix of people with different skill sets if you work in the crypto space.
Marketing & Community
Zilliqa has a very strong community. If you just follow their Twitter their engagement is much higher for a coin that has approximately 80k followers. They also have been ‘coin of the day’ by LunarCrush many times. LunarCrush tracks real-time cryptocurrency value and social data. According to their data, it seems Zilliqa has a more fundamental and deeper understanding of marketing and community engagement than almost all other coins. While almost all coins have been a bit frozen in the last months, Zilliqa seems to be on its own bull run. It was somewhere in the 100s a few months ago and is currently ranked #46 on CoinGecko. Their official Telegram also has over 20k people and is very active, and their community channel which is over 7k now is more active and larger than many other official channels. Their local communities also seem to be growing.
Moreover, their community started ‘Zillacracy’ together with the Zilliqa core team ( see www.zillacracy.com ). It’s a community-run initiative where people from all over the world are now helping with marketing and development on Zilliqa. Since its launch in February 2020 they have been doing a lot and will also run their own non-custodial seed node for staking. This seed node will also allow them to start generating revenue for them to become a self sustaining entity that could potentially scale up to become a decentralized company working in parallel with the Zilliqa core team. Comparing it to all the other smart contract platforms (e.g. Cardano, EOS, Tezos etc.) they don't seem to have started a similar initiative (correct me if I’m wrong though). This suggests in my opinion that these other smart contract platforms do not fully understand how to utilize the ‘power of the community’. This is something you cannot ‘buy with money’ and gives many projects in the space a disadvantage.
Zilliqa also released two social products called SocialPay and Zeeves. SocialPay allows users to earn ZILs while tweeting with a specific hashtag. They have recently used it in partnership with the Singapore Red Cross for a marketing campaign after their initial pilot program. It seems like a very valuable social product with a good use case. I can see a lot of traditional companies entering the space through this product, which they seem to suggest will happen. Tokenizing hashtags with smart contracts to get network effect is a very smart and innovative idea.
Regarding Zeeves, this is a tipping bot for Telegram. They already have 1000s of signups and they plan to keep upgrading it for more and more people to use it (e.g. they recently have added a quiz features). They also use it during AMAs to reward people in real-time. It’s a very smart approach to grow their communities and get familiar with ZIL. I can see this becoming very big on Telegram. This tool suggests, again, that the Zilliqa team has a deeper understanding of what the crypto space and community needs and is good at finding the right innovative tools to grow and scale.
To be honest, I haven’t covered everything (i’m also reaching the character limited haha). So many updates happening lately that it's hard to keep up, such as the International Monetary Fund mentioning Zilliqa in their report, custodial and non-custodial Staking, Binance Margin, Futures, Widget, entering the Indian market, and more. The Head of Marketing Colin Miles has also released this as an overview of what is coming next. And last but not least, Vitalik Buterin has been mentioning Zilliqa lately acknowledging Zilliqa and mentioning that both projects have a lot of room to grow. There is much more info of course and a good part of it has been served to you on a silver platter. I invite you to continue researching by yourself :-) And if you have any comments or questions please post here!
SODL. It's been swell, but the swelling's gone down.
Those familiar with this username already know that I've been involved with Bitcoin since 2012. I purchased my first satoshi before $1k/BTC had ever been seen. I spent years creating developer solutions and electronic products designed to leverage Bitcoin's capability to facilitate frictionless Internet payments and that same time explaining Bitcoin to family, friends, internet buddies, fellow gamers, and anyone else that would listen. Over time, that capability for frictionless payment dried up. First lack of space in blocks rendered the primary consumer solution I'd been developing as totally useless. There is no point in developing a risk assessment system when the thing being assessed is too risky to justify instant commerce. I feared Bitcoin had met an untimely end at the hands of self-important developers and lazy entitled miners, but was relieved to know that the BTCFORK project was alive and ready to continue the Bitcoin experiment in the form of what would later be called Bitcoin Cash (BCH). When the fork hit, I was all in from day one. I traded out everything, forked my coins and recovered every satoshi of BCH I could muster. At one lofty point in my life, I had the rare claim to have actually possessed 21 BCH in the same wallet at the same time. I continued developing and introducing people to BCH. I explained to my family and friends the schism and the thought processes that lead me to use BCH instead of BTC. I spent countless hours justifying its existence to a general public that is uninterested in technical details or freedom from potential government seizures and simply want money that works. Unfortunately, no crypto has never seemed to hold this goal in high esteem. As time has marched onward and progress has continued to be stymied by drama between more self-important developers and lazy entitled miners, I have finally realized why the Bitcoin experiment failed, and how we got here. Bitcoin's design relies on one very important aspect: that miners behave as rational, long-term-invested economic actors. This would infer that over time, mining organizations will dedicate resources to developing in-house mining solutions and manage them with the same level of interest as a big box store manages their inventory. In short, it would make sense for miners to invest in their own closed-source development, based on the open-source reference client. This would create competition between compatible implementations maintained by groups that are self-invested in their interoperability and suitability for consumer use. This did not happen, of course. Miners took the lazy, short-term-interested approach of "just run the software, don't care how it works or how well" and left the actual work of looking out for and maintaining the security of the chain to the unpaid open-source developers. This was a recipe for failure years ago and is the same recipe BCH has chosen to follow today. The IFP is simply a physical manifestation of this problem: since devs are not miners, Amaury et. al. are now expecting pay for their work in keeping those miners afloat, and rightly so. But they never should have been doing it in the first place; that was the miners' responsibility the whole time. If you're in an emergent industry running emergent software, you kind of have a responsibility to maintain that software out of pocket. This applies double for high-security software such as financial software. Lazy miners that can't even invest in their own software infrastructure are not trustworthy enough to be relied upon for the security of my funds. Bitcoin has already failed; and with that clearly observable failure I have sold the remainder of my cryptocurrency, unsubscribed from this and other subreddits, removed various forum accounts, and ceased usage of any remaining services built to work with Bitcoin-style digital signatures. It's been a wild ride. I even made a nice chunk of money along the way. It was fun and fascinating and eye-opening and educational and profitable; but for me, it's over. The success of global peer-to-peer digital cash has already been thwarted, and that's all I ever came for. Greg Maxwell didn't do this. Amaury Sechet didn't do this. Jihan Wu didn't do this. Roger Ver didn't do this. Theymos didn't do this. All those miners, all those mining pools, all those people that have been actively profiting off the system by running freely provided software and giving back only blocks in return: they are at fault for this failure. It is too late to turn back; the IFP is effectively a cork in a crumbling dam, a half-assed solution to a double-donkey problem. The dream is over, at least for me, and so I'll be moving on now. The transition to crypto was troublesome and full of problems. I was on a 100% crypto budget for years and even found myself paying a premium for the "convenience". Funnily enough, the transition back to fiat was amazingly smooth and I actually made money on the way back. Sorry, guys - at the end of the day, fiat does what crypto doesn't. I see the writing on the wall - and now I add my final scrawl. Goodbye, everyone.
When you hear about bitcoin “mining,” you envisage coins being dug out of the ground. Butbitcoinisn’t physical, so why do we call itmining? Similar to gold mining, bitcoins exist in the protocol’s design just as the gold exists underground, but they haven’t been brought out into the light yet, just as the gold hasn’t yet been dug up. The bitcoin protocol stipulates that a maximum of 21 million bitcoins will exist at some point. What miners do is bring them out into the light, a few at a time. Once miners finish mining all these coins, there won’t be more coins rolling out unless the bitcoin protocol changes to allow for a larger supply. Miners get paid in transaction fees for creating blocks of validated transactions and including them in the blockchain. To understand how bitcoin mining works, let’s backtrack a little bit and talk about nodes. A node is a powerful computer that runs the bitcoin software and fully validates transactions and blocks. Since the bitcoin network is decentralized these nodes are collectively responsible for confirming pending transactions. Anyone can run a node—you just download the free bitcoin software. The drawback is that it consumes energy and storage space – the network at time of writing takes hundreds of gigabytes of data. Nodes spread bitcoin transactions around the network. One node will send information to a few nodes that it knows, who will relay the information to nodes that they know, etc. That way, the pending transaction ends up getting around the whole network pretty quickly. Some nodes are mining nodes,usually referred to as miners. These chunk outstanding transactions into blocks and add them to the blockchain. How do they do this? By solving a complex mathematical puzzle that is part of the bitcoin program, and including the answer in the block. The puzzle that needs solving is to find a number that, when combined with the data in the block and passed through a hash function (which converts input data of any size into output data of a fixed length, produces a result that is within a certain range. For trivia lovers, this number is called a “nonce”, which is an abbreviation of “number used once.” In the blockchain, the nonce is an integer between 0 and 4,294,967,296. How do they find this number? By guessing at random. The hash function makes it impossible to predict what the output will be. So, miners guess the mystery number and apply the hash function to the combination of that guessed number and the data in the block. The resulting hash starts with a certain number of zeroes. There’s no way of knowing which number will work, because two consecutive integers will give wildly varying results. What’s more, there may be several nonces that produce the desired result, or there may be none. In that case, the miners keep trying but with a different block configuration. The difficulty of the calculation (the required number of zeros at the beginning of the hash string) is adjusted frequently, so that it takes on average about 10 minutes to process a block. Why 10 minutes? That is the amount of time that the bitcoin developers think is necessary for a steady and diminishing flow of new coins until the maximum number of 21 million is reached (expected some time in 2140). The first miner to get a resulting hash within the desired range announces its victory to the rest of the network. All the other miners immediately stop work on that block and start trying to figure out the mystery number for the next one. As a reward for its work, the victorious miner gets some new bitcoin. At the time of writing, the reward is 6.25 bitcoins per block, which is worth around $56,000 in June 2020. However, it’s not nearly as cushy a deal as it sounds. There are a lot of mining nodes competing for that reward, and the more computing power you have and the more guessing calculations you can perform, the luckier you are. Also, the costs of being a mining node are considerable, not only because of the powerful hardware needed, but also because of the large amounts of electricity consumed by these processors. And, the number of bitcoins awarded as a reward for solving the puzzle will decrease. It’s 6.25 now, but it halves every four years or so (the next one is expected in 2024). The value of bitcoin relative to cost of electricity and hardware could go up over the next few years to partially compensate for this reduction, but it’s not certain. If you’ve made it this far, then congratulations! There is still so much more to explain about the system, but at least now you have an idea of the broad outline of the genius of the programming and the concept. For the first time we have a system that allows for convenient digital transfers in a decentralized, trust-free and tamper-proof way.
Why UMI Will Not Fall Victim to Inflation: Dispelling Myths of “Deadly Issue”
https://preview.redd.it/lr1w0ukh2ik51.jpg?width=1024&format=pjpg&auto=webp&s=b413e6e6b2e94d2e9522571040151826b7874e77 With UMI staking, anyone anywhere in the world can generate new coins at the rate of up to 40 % a month, or up to 5,669 % a year, with no risk of falling victim to fraudsters. It means new opportunities for humanity which never existed before. However, many people who are used to miserable interests on bank deposits and financial pyramids that last a few months at most cannot understand what makes this possible. How can you safely earn up to 40 % a month with no risk of losing it all? Sceptics cannot wrap their minds around this which makes them suspect there’s a catch to it. Therefore, it should come as no surprise that you can find various myths about UMI's “deadly issue” on forums and social networks. The most popular among them say that you simply cannot ensure long-term operation with this kind of “super-high income” and no one has any idea what will happen to this cryptocurrency in 10 or more years. Here's a forecast from sceptics, briefly: “deposits” with this percentage are simply impossible, it will inevitably cause hyperinflation, UMI cryptocurrency will devalue, and will share the fate of currencies in some of the less fortunate countries, such as Zimbabwe or Venezuela. To counter these allegations, we've prepared a detailed article with arguments dispelling all these myths, nullifying all “forecasts” and putting the lid on this issue. Here we go! What's the value behind the forecasts? First of all, 10 or more years is too much of a long term, and forecasting so far in advance is simply impossible. Don't take us wrong here: it's not just about cryptocurrencies; it's about anything in the world. There was a time when people thought pagers, faxes, and landline phones had cheerful prospects, but look at what happened to them. They have been replaced by smartphones and the Internet accessible to all which no one believed was possible in the first place. New technologies emerge out of the blue and transform the world beyond recognition. The old — something everyone is used to — is replaced with something new and more convenient. Something better. 10 years ago people believed in developing bank technologies, but then, all of a sudden, Bitcoin was created and transformed people's understanding of financial payments. It turned out anyone in the world can make payments with no intermediaries and generate new digital money. It's true that Bitcoin is not perfect, but millions use it all over the world. This number is also growing fast with each passing day. Do you remember forecasts made for Bitcoin when it first appeared? Both ordinary people and respected world-class experts predicted it would soon die. No one believed it could last for even 10 years. https://preview.redd.it/q1kzcxfw2ik51.png?width=800&format=png&auto=webp&s=17a12d73b9046a357cf6ecd77253472215c8bb24 Typical article predicting the end of Bitcoin from respected mass media.Source. Here're some graphic examples from the leading world-class mass media: “That's the End of Bitcoin.” Forbes, 2011, BTC price — $15. “Bitcoin is headed to the ash heap.” USA Today, 2015, BTC price — $208. “R.I.P., Bitcoin. It’s time to move on.” The Washington Post, 2016, BTC price — $382. “Stay away from bitcoin and ethereum — they are complete garbage.” This is garbage." MarketWatch, 2017, BTC price — $2,345. “Is Bitcoin Going To Zero?” Forbes, 2018, BTC price — $3,432. In 2020, the BTC price is almost $12,000. The respected mass media have “declared Bitcoin dead” over 400 times (!!!) referring to its lack of backing, high issue rate, super-high price growth, and the like — just like the skeptics “declaring UMI dead” right now. However, despite all the discouraging forecasts, Bitcoin continues to successfully grow and rapidly gain in popularity. https://preview.redd.it/6z60xwd13ik51.png?width=791&format=png&auto=webp&s=25a6799fe551c6e7f91aa016907e95ce032d7e5e Over 12 years, Bitcoin has been declared dead 381 times, but it only grows stronger with each passing year.Source. All of the above is proof that you shouldn't put blind trust in various forecasts, even coming from respected sources. Forecasts are mere opinions and arguments, but no one can know for sure what will happen in 10, 100, or 1,000 years. No expert can know that. Similarly, no one knows what will happen to UMI many years from now. UMI can solve any issues on the fly We cannot know the future, but we did all we could to make our coin last forever. Most existing cryptocurrencies have a very important problem — they cannot support high-quality growth and rapidly become obsolete. To explain this, we'd like to quote our Whitepaper: "Despite the apparition of new technology solutions, the Bitcoin blockchain still holds only about 2,000 transactions, and it takes about 10 minutes to create a block. In 11 years, developers still did not manage to come to an agreement and implement a solution that would allow scaling the system and upgrade performance. Most other cryptocurrencies face a similar problem. They are launched and keep operating in an almost initial state even after numerous innovative solutions become available. For example, the Ethereum network has been attempting to switch to the PoS algorithm for over two years now, but due to code complexity, security threats, and issues of reaching consensus, this causes great inconvenience." https://preview.redd.it/ezxzrpx43ik51.png?width=800&format=png&auto=webp&s=207f8a27a59fac760fc541dae6abd30d148296f5 Screenshot of a page in the UMI Whitepaper. Have you read it? It answers a lot of questions.Link. Bitcoin itself is technically obsolete. This is besides the fact that it has a load of other problems. For instance, BTC is supposed to completely stop coin mining in 2140, meaning miners will lose motivation to support the network. What happens then? The hope is that the main source of income for miners will be transfer fees, but will they want to maintain powerful equipment for a reward in the form of small fees? If fees are big, will people want to pay those? Will they find a different solution? Will users just leave the Bitcoin ecosystem and join more high-tech cryptocurrencies like UMI? When we designed UMI, we accounted for all these issues and launched a promising project with a conveniently scalable ecosystem. Even if UMI faces some challenges in the future, we will make amendments as the network grows. We will act as appropriate judging from the project's current status. They will be based on the situation and the current state of the project. It's true that upgrade decisions have been and are being made by all leading crypto projects, including Bitcoin and Ethereum, but UMI supports really safe and rapid innovation. The network can be easily modified and scaled with cutting edge technology solutions. While other cryptocurrencies simply become obsolete, we can handle all kinds of challenges on the fly. The UMI network will grow and improve to be always up to date, keep up with the times, and prevent problems in 10, 100, or 1,000 years. At this point, the UMI network is in excellent shape, and the smart contract offers you relevant and actionable staking opportunities. We've thought out every detail, and the brisk growth of our community proves it best of all. There is no "deadly inflation" And, lastly, let's bring an issue with supposedly too-high emission to a close. UMI is typically accused of paying a too high reward for staking — as much as 40% a month, or 5,669% a year — which no one and nothing else in this world can pay. Eventually, it might end up with inflation as it happened in Zimbabwe and Venezuela, etc., Let us look at real facts. Those who consider a 40% monthly growth impossible should look at bitcoin again as the most outstanding example which has proven that nothing is impossible. Imagine how many times your deposit would have grown if 10 years ago you had bought bitcoins or inexpensive mining equipment producing a reward of 50 BTC several times a day. Please consider the following: In March 2010, BitcoinMarket.com started operating as the first bitcoin exchange, and 1 BTC cost a lot less than a cent — $0.003. At the time of writing this article, the price for 1BTC was about $12,000. It means those who bought bitcoins 10 years ago have increased their "deposit" by nearly 400,000,000% (!!!). Four hundred million percent in ten years! This is a real fact. Those who bought bitcoins when the price was a few cents or dollars also achieved the perfect result by increasing their "deposit" by thousand or million times. Well, now the percentage in UMI staking doesn't seem so crazy, does it? The only difference is that BTC "deposit" grows in line with the BTC price while UMI deposit growth is ensured the growth of the number of UMI coins, which in turn doesn't prevent the price from surging. In fact, both cases demonstrate a multiple growth of the "deposit". All of the above is proof that the reason for inflation in Zimbabwe, Venezuela, etc is a bad economy, not a high emission. In late March. roughly speaking, in one day, the FED (U.S. Federal Reserve System) released 2.2 trillion dollars to support the economy during the coronavirus pandemic. Similar financial injections are regular in the USA, the country which is the most advanced world's economy. These facts indicate that UMI has no "deadly issue" at all and, unlike the USA, it doesn't "print" anything. Here is bare statistics form the UMI blockchain: The UMI cryptocurrency was launched on June 1. Since the launch, it's been 3 months. 18,000,000 UMI coins were initially issued. In total, there are now about 18,800,000 UMI coins. In other words, in three months, the total number of UMI coins increased by only 4.4%. Does it look like "deadly inflation"? https://preview.redd.it/gsdjbwp83ik51.png?width=800&format=png&auto=webp&s=8d4591a24b3ddc63f8501f1b7fe7a4c02b7da89c In 3 months, the number of UMI coins has shown a few percent increase.Source. Let's move on: We'd like to reiterate that the total number of UMI coins is almost 18,800,000. There are about 14,500,000 coins on the genesis address today. Almost 4,000,000 coins are involved in staking. Thus, only 300,000 UMI (!)are freely circulated on the market. The remaining 18,500,000 coins are either used in staking or have not yet been released to the market. https://preview.redd.it/f7b28jid3ik51.png?width=800&format=png&auto=webp&s=5ff8338121ebfe398cfb498a0cfcc00446ea6225 The number of coins stored on the genesis address at the time of writing the article.Source. In real fact, UMI has no super-high emission. This fact has been proven. For a three-month period, which is a quarter of a year, the number of UMI has hardly changed and equals about 1.5% of the total number of coins on the market. The truth is that UMI economy depends on a lot of factors. For example, burning 50,000 coins to create a structure. However, from a more general point of view, the UMI economic model itself is designed to encourage people to "save" rather than sell UMI coins. This is a crucial point that allows us to make progress, even with a high emission. Moreover, it will take a billion-dollar staking structure that will be able to provide the highest possible emission on the UMI network a lot of years to appear. While it doesn't happen, all these forecasts can be regarded as irrelevant for today. Keep in mind that a 40% monthly profit will be available to the most successful structures and only after many years of development. To have your coins increased by 40% per month, your structure must have over 50 (!) times more coins than the number of coins initially generated by the network. And since this structure will do everything possible for the benefit of the UMI cryptocurrency, even 40% per month will not pose a risk to UMI's sustainable development. Conclusions are as follows: UMI offers no kind of "killing sky-high returns". Please don't take this myth seriously. UMI is growing. The current smart contract offers reasonable and up-to-date opportunities for UMI staking and poses no problem. If, however, a problem arises — we have all the tools to find an immediate solution. All these negative forecasts are not worth a brass farthing. They always have been and always will be. At all times and in all places. But they are highly unlikely to come true. Bitcoin outsmarted the most reputable and shrewd financial analysts. Why don't UMI, which is a lot more advanced than bitcoin, try to do the same? UMI is a decentralized, strong, and high-tech network. It can exist the way it is now forever. But as it grows, it will improve to be always up to date, keep up with the times and prevent any problems. We are contributing to a great thing — we're creating a free economic system that will profitable for the entire human family. This is an opportunity to overcome social inequality and make regular people financially independent. So let's make every effort to make things go well. Ignore all evil-wishers and their predictions. Just join other users and go towards your dream. Then we will certainly succeed in it all. Sincerely yours, UMI team
As a sequel to the first paper of Blockchain & Law article series titled 'A New Digital Order - Unveiling the Interplay of Law & Blockchain Technology', this paper explores the inter-operability of India's data privacy regime and blockchain technology. In this regard, recording of a webinar conducted on 'Blockchain & Data Privacy: An India Perspective' by the AKS Partners can be viewed on YouTube here.
B. Data privacy in India
Constitution of India
Article 21 of the Indian Constitution is a comprehensive, all-encompassing provision that inheres within itself basic, fundamental rights that are absolutely essential to the existence of a human being with dignity and personal liberty. In the judgment of K.S. Puttaswamy v. Union of India,1 a nine-judge bench of the Honourable Supreme Court of India held that the right to privacy falls within the contours of Article 21 and is incidental to life and personal liberty. This right to privacy includes the right to data protection and privacy.
Information Technology Act, 2000
In India, data privacy is governed by the Information Technology Act, 2000 ("IT Act") and the Information Technology (Reasonable security practices and procedures and sensitive personal data or information) Rules, 2011 ("SPDI Rules"). Sections 43A (Compensation for failure to protect data) of the IT Act provides a statutory right to a data provider to claim compensation for unapproved disclosure of information (including in breach of a contract). Under Section 72A (Punishment for disclosure of information in breach of lawful contract) of the IT Act, wherever any person including an intermediary discloses information obtained under a lawful contract without consent shall be punished with imprisonment or with fine or both.
The SPDI Rules constitute a set of basic obligations to be adhered to in circumstances where sensitive data is being collected. It may be noted that the SPDI Rules apply only to 'Sensitive Personal Data or Information'.2 The SPDI Rules lay down guidelines for collection (Rule 5) and transfer of information (Rule 7) and also mandatorily require body corporates to adopt and implement a policy for privacy and disclosure of information (Rule 4). On 24 August 2011, the Ministry of Electronics and Information Technology issued a clarification to the SPDI Rules ("Regulatory Clarification"). The Regulatory Clarification states that the SPDI Rules are applicable only to body corporates or persons located within India. Also, where a body corporate deals in data of any legal entity located within or outside India under a contractual arrangement, the SPDI Rules pertaining to collection (Rule 5) and disclosure of information (Rule 6) would not apply. It was also clarified that requirement to obtain written consent under Rule 5(1) of the SPDI Rules includes electronic consent as well.
The Personal Data Protection Bill, 2019 ("Bill")
The Bill is inspired from and is in many ways a replica of the European Union's General Data Protection Regulations ("GDPR"). The Bill lays down several provisions including in relation to crossborder transfer of data, sandboxing, privacy by design and introduces a more robust set of obligations for entities handling sensitive personal data. The Bill is currently pending before a Joint Parliamentary Committee. The Bill applies to and categorises data into 'Personal Data', 'Sensitive Personal Data' and 'Critical Personal Data'.
Regulated sectors such as telecom and financial services have separate obligations of confidentiality which restricts disclosure and transfer of customer personal information and mandates use of such information only in the manner agreed with the customer. Certain sectoral regulators (like Reserve Bank of India) also mandate data localisation.
C. Blockchain technology and data privacy
For details on the working of a blockchain network, please refer to our previous paper here. Coverage The Bill defines 'Personal Data') as 'data about or relating to a natural person who is directly or indirectly identifiable'. This means where the origins of the data cannot be traced down to a natural person, the data would cease to be 'Personal Data'. Resultantly, storing the data in a manner where it cannot be traced to a natural person (including by introducing and implementing robust methods to address re-identification risks) may prove beneficial in reducing a blockchain network's interaction with data privacy regulations (such as by encryption or anonymisation of Personal Data). Public v. Private Blockchain Private blockchain which restricts and regulates network participation appears to be a more preferable fit when it comes to ensuring compliance with data privacy laws. Public blockchains with permissionless borders pose greater difficulty in procuring every participant to agree on and comply with relevant rules on protection of personal data. Stakeholders The Bill identifies three categories of stakeholders (similar to GDPR) viz. Data Principals, Data Fiduciary and Data Processor. The SPDI Rules only provides for data provider and body corporate or person collecting data. The term 'Processing' has been defined to include collection, storage, retrieval, adaptation, disclosure etc. (Section 3(31)). Accordingly, any data stored or transmitted on blockchain will amount to processing. Blockchain network is a decentralised system with each node / miner (i.e. network participant) spread all over the world. There is no clear demarcation between a Data Principal and a Data Fiduciary or a Data Processor over a blockchain network. The way the network functions, no single person can be said to be in-charge of the network thereby making it all the more problematic for regulators to fix the compliance burden on a party. Accordingly, the question of determining the identity status and fixing liability of various participants attains significance and complexity over a distributed ledger network like blockchain. Each node over the network functions as a Data Processor on account of participation in the verification of the data. At the same time one or more of such nodes may also be acting as a Data Principal. With respect to mining over the network while it is a single miner who is able to formulate a valid hash, all the other miners also participate in the mining activity when they attempt to arrive at the winning lottery number. Thus making such miner also a Data Processor. While fixing liability on a private blockchain network that restricts the number of network participants is comparatively less complex, the same would be quite challenging on a public blockchain network, such as Bitcoin. With regard to identifying the status and roles, the guidance issued by French data protection authority ("CNIL Guidance")3 in the context of GDPR is useful. The CNIL Guidance categorises blockchain actors into the following groups: (a) participants with full read and write access to the data; (b) participants with read only access; and (c) miners that validate the transactions. Participants falling in category (a) above are Data Controllers (equivalent to a Data Fiduciary under the Bill) while categories (b) and (c) are not. Collection and processing of data over a blockchain network The Bill sets out a number of obligations that have to be performed by the Data Fiduciaries, some key compliances being, obtaining consent of the data principals, retaining the data only till absolutely necessary (Storage Limitation), providing notice to the Data Principals, ensuring data is used only for the purpose (which has to be specific, clear and lawful) for which it has been taken (Purpose Limitation). Rule 5 of the SPDI Rules also lays down similar obligations for collection of data. Key concerns that the inherent and intrinsic nature of the blockchain technology raises are as under: Firstly, with respect to the Storage Limitation principle, the immutable nature of the technology prevents the data from being deleted once the purpose has been fulfilled. Secondly, given the decentralised nature of blockchain, it becomes challenging to determine the exact purpose for which data is collected over such a widespread network and who is to keep a check that the data so collected is used only for such predefined purposes. Thirdly, it is commonly argued that the network participants over a blockchain impliedly consent while sharing their data. This may not however fulfil the requirements under the Bill which requires consent to be clear, through an affirmative action. This gives birth to concomitant regulatory issues over a decentralised system as to who shall oblige with these compliances under the law and who should be made responsible / liable for any lapses in compliance. Lastly, the Bill also proposes certain additional requirements such as transparent and fair processing and the Purpose Limitation. The blurred distinction in the status of identities in blockchain makes determining purpose and manner of processing challenging. A detailed governance framework setting out roles and responsibilities, off-chain and on-chain personal data, may provide useful guidance towards addressing the aforementioned concerns. Key rights of Data Principals
Right to Confirmation and Access
The Bill entitles the Data Principals to seek information regarding the types and nature of personal data stored with the Data Fiduciaries, or to ascertain the nature of processing activities that has been undertaken on his/her data, or seek a brief summary of processing activities undertaken. While enforcement of this right may not be technically difficult, however, blockchain networks may establish a proper governance framework that delineates a specific authority to pass over the requisite data to the data principal as and when asked for. The network may also consider laying out methods of searching and accessing the necessary information which may be de-encrypted with the use of the private key.
Right to Correction
Section 18 of the Bill and Rule 5 of the SPDI Rules provides the right to rectify or correct the data. Given the immutable nature of the decentralised ledger maintained on a blockchain, exercising this right may not be compatible. To accomplish alteration/correction of data would be a burdensome task since it will require a majority of nodes to come together to identify the data, alter and re-hash not just the concerned block but also all previous blocks as well. Alternatively, a new block with corrected information may be added once verified through the consensus mechanism.
Right to be Forgotten
The Bill introduces 'Right to be Forgotten' ("RTF"). RTF entitles data principals to request the removal of his/her personal data, without undue delay, from any business's storage. RTF has been in loggerheads with the inherent immutability of blockchain technology. Across jurisdictions the term 'forgotten' has been pegged with erasure and is construed in various senses in different jurisdictions, ranging from data anonymisation,4 destruction of hardware,5 putting data beyond use.6 Given the distinction within the types of blockchain, the modes for exercising RTF are uniform by and large. A widely discussed solution is the destruction of the private key, thereby rendering the data encrypted by a public key inaccessible.7 Owing to the setup of blockchain, a Data Principal may reach out to any entity in the chain that qualifies as a Data Fiduciary to enforce their rights. Similar to the Google-Spain case,8 wherein data subject's action against Google remained unaffected by the fact that the data could have been removed by the newspaper's website itself.9 However, the nature of a public blockchain network that does not identify a central authority might prove somewhat problematic where the data principal seeks to enforce his/her right. As countries are yet to formulate policies with respect to regulation of blockchains, some other alternatives for exercising RTF can be programming chameleon hashes, zero knowledge proofs or a censorable blockchain, as the same would be 'forgetful'.10 Cross-Border Transfer of Data Chapter VII of the Bill, which deals with restrictions on cross-border transfer of data, requires a copy of the Sensitive Personal Data to be stored domestically while Critical Personal Data must exclusively be processed and stored in India. However, these clear demarcations blur when applied to a blockchain ecosystem where storage and processing of data can be universal. Transfer of Sensitive Personal Data, requires explicit consent and the transfer must be under a contract or an intra-group scheme approved by the data protection authority (envisaged to be established under the Bill). While both of these requirements may get fulfilled over a private blockchain easily, a public blockchain due to undefined groups and lack of a central entity / authority may find it more challenging to implement adequate safeguards on restricting such transfer. Over a private blockchain the central body may enter into e-contracts with any number of participants and also obtain their explicit consent. Under the present regime, Rule 7 of the SPDI Rules provides that a transfer outside India may only be allowed where the country offers the same level of protection to the data. Again, enforcing this may be challenging over a public blockchain network comprising of thousands of nodes across borders. An in-built cross-border transfer consent clause in the governance framework or otherwise may also provide the needed legitimacy from the perspective of data privacy.
D. Jurisdictional Issues
The present uncertainty in law (including lack of adequate legal provisions) has resulted in jurisdictional issues concerning the domestic and transnational presence of the blockchain network. While Section 1(2) read with Section 75 of the IT Act accords limited extra-territorial applicability to the Act, the SPDI Rules, as mentioned in the Regulatory Clarification are applicable only to body corporates or persons located in India. Consequently, blockchain technology may need to comply with the IT Act to a certain extent, while, the mandate under the SPDI Rules will bind only the nodes/miners operating from India. As a result, the network participants operating outside India on the same blockchain will not be required to comply with the SPDI Rules or IT Act. Section 2 of the Bill affords extra-territorial application but only in certain limited circumstances viz. where the processing which takes place outside India is in connection with any business in India, or which involves the profiling of individuals within India. This will result in a subjective assessment of blockchains and its purposes in order to ascertain the applicability of the provisions of the Bill. The Civil-Commercial Courts in India, have applied the test as to whether a website is an 'interactive website'11 for determination of jurisdiction, in relation to websites that do not have a physical place of business in a jurisdiction.12 In other words, wherever a website facilitates or even intends to facilitate active trade / commercial transactions in jurisdictions where it does not have a physical place of business, in such cases cause of action, if any, arises in all such jurisdictions where the website operates interactively. However, applying such a test on a blockchain network may not be so straightforward. The intrinsic nature of the blockchain technology allows for processing and storage of data at multiple domestic and international jurisdictions simultaneously. Resultantly, in both domestic as well as international, identification of the place of cause of action becomes complex. The complexity increases as identification of the individuals processing and storing data (nodes) would require de-anonymisation. The determination of applicable laws will also depend on the nature of a blockchain network. It is practically more difficult to regulate a public blockchain network than a private blockchain network. In a private blockchain the architect/controlling entity may determine the governing laws or the governance framework may provide for a governing law. In light of the foregoing, it may come as a mammoth task for governments to enforce their respective data protection and cyber-security legislations against such transnational networks without consensus on a multi-national treaty suggesting a model law to regulate the use of blockchain networks. In the alternative, laws may promote self-regulation by merely identifying basic tenets of regulations like governing law, data privacy, certification etc. Non-compliance may include compulsory suspension/termination of participation rights of nodes or blocking access to blockchains which do not provide for adequate self-regulation. The developers of blockchain networks may consider incorporating dispute resolution and regulatory mechanisms as integral parts of the networks. The developers may also consider coding networks with peer-to-peer decentralized courts such as 'kleros' or 'codelegit' as part of a network's dispute resolution process.
E. Way forward
Blockchain technology carries the potential of disrupting business operations right from supply, manufacturing, logistics and final consumption especially in a post Covid-19 era. Please refer to our previous article on use cases of blockchain here. Accordingly, it is crucial that data privacy laws (with adequate concessions, where necessary) be treated as an enabler and not inhibitor to continued adoption of blockchain technology. Certain additional rights like data portability and right to withdraw consent adds to the complexity of having a compliant blockchain network. Certain obligations like mandatory registration may also be problematic if the government notifies certain blockchain network as a significant data fiduciaries. Set out below are few indicative measures towards harmonious application of data privacy laws and blockchain technology: 1) Every blockchain network must provide a detailed governance framework that is in alignment with the basic requirements under data privacy regulations. Such a framework would have to be binding on all participants over a blockchain network, stating all rights, obligations and duties of parties, including a detailed mechanism for communication, security measures, cross-border data transfer, and grievance redressal and may even set out applicable laws etc. 2) Such a self-governance framework could also include a privacy by design policy and provisions for Data Protection Impact Assessment (as set out in Chapter VI of the Bill). 3) 'Pruning' is used for situations where historical blocks of data beyond a certain timeline are deleted. Similarly, where data has to be altered or rectified, the same may be done by 'forking' where data is altered or deleted, the hash changed and a new fork is created. However, over a public blockchain Pruning and Forking can be challenging and may require a huge amount of computing consensus. 4) To ensure the safeguarding of right to privacy a Memory Optimized and Flexible Blockchain (MOF-BC) can be considered as an effective measure. It enables the IoT (Internet of Things) users and service providers to edit their transactions, thereby altering the details of data entry.13
Bitcoin's design makes it easy and efficient for the spender to specify how much fee to pay, whereas it would be harder and less efficient for the recipient to specify the fee, so by custom the spender is almost always solely responsible for paying all necessary Bitcoin transaction fees. When a miner creates a block proposal, the miner is ... Lots of Bitcoin miners try to solve the problem at the same time, but the miner that solves it first is the one who is rewarded with the new Bitcoin. It’s just like a race! Bitcoin miners keep data of all the past transactions of Bitcoin that have ever happened. ASIC vs CPU mining . An ASIC Bitcoin miner is designed exclusively for the purpose of mining bitcoin. Though significantly more expensive to purchase, they are far more powerful (higher hash rate) and electricity-efficient than CPUs and GPUs (graphics cards) – used for mining in the early days of bitcoin – and even FPGAs (field programmable gate arrays), which were, in 2011, the most ... The block time is a Unix epoch time when the miner started hashing the header (according to the miner). Must be strictly greater than the median time of the previous 11 blocks. Full nodes will not accept blocks with headers more than two hours in the future according to their clock. 4 Bitcoin’s infrastructure is more centralized than ever before --raising alarms about the security and viability of what is championed as a decentralized network.
FREE bitcoin miner 2020 (Best and easiest way to mine bitcoin for free) Free bitcoin in 2020
The daily adjusted USD transaction value for the top proof of work coins. Please note that this does not include some privacy coins such as Monero and Grin because of the design of their ... Why Bitcoin IS sustainable In this video, I explain why Bitcoin Mining is sustainable. Bitcoin can become the new store of Value for digital money, which tra... This video is unavailable. Watch Queue Queue. Watch Queue Queue #mining #ethereum #bitcoin As seen on The Crypto Coyote , Miner No. 27 . A AMD GPU Mining Rig with 5 Sapphires RX 590 Nitro + . This is my First Rig for hopefully a farm called Facility no.27 and ... Start - https://bit.ly/30dX0Vn Start Bitcoin Mining for FREE with Investment 2020 For a limited time, you can start bitcoin mining for free. Its super simple. Sign up and get started for free ...