Wednesday, November 23, 2016

Anonymous Currencies Might Limit Financial Access

 


A recent report states that Bitcoin isn’t anonymous enough, and to an extent, the report is correct. While part of Bitcoin’s reputation has been built on the notion of privacy, the truth is that the blockchain records every transaction in real time, and nothing can escape its shuttering technology. In the long run, no matter how private Bitcoin claims to be, there always seems to be an open window to one’s financial history.

But one has to wonder if this isn’t a bad thing. Two of the cryptocurrency world’s most recent additions, Zcash and Monero, tout complete anonymity for those looking to remain duly private, but there seem to be issues emerging from the backend, and many investors and crypto-enthusiasts are having a hard time deciding where they stand.

First off, let’s look at criminal activity. Anonymity is often showered with praise, but when something is completely hidden like this, it can potentially give rise to back-door dealers looking for ways to exploit any lagging visibility. Monero, for example, is often labeled as the most popular cryptocurrency amongst drug purchasers on the dark net. Many regulators arguing against the notion of completely anonymous digital currency trading feel that the situation is likely to give rise to another Silk Road, only this time, things may be a little harder to shut down.

Zcash is another financial entity that claims to offer new waves of privacy. Again, good for some, criticized by others. Zcash recently hit new heights on cryptocurrency exchange Poloniex, hitting the $2 million per coin mark, but many argue whether this was real or caused by error or platform manipulation. If that’s the case, there’s certainly cause to worry. It was this same kind of manipulation that fired bitcoin into the $1,000 range in 2013 prior to the sudden collapse of Mt. Gox.

Lastly, the likelihood that a government or legislative system would ever be willing to regulate or fully allow the trading of anonymous currencies is particularly slim. While this may sound positive at first (cryptocurrencies were designed to offer independence), access to digital currency for third world and developing nations could wind up limited in the near future. It’s precisely because Bitcoin isn’t fully anonymous that it probably has the highest chance of ever going mainstream and reaching acceptable terms on a global scale.

As consumers, we have to ask ourselves which we’d prefer – true anonymity, or higher monetary access? The independence these currencies claim to provide is what gives us such a choice in the first place.

Wednesday, November 16, 2016

Memphis Residents Now Have Their First Bitcoin ATM

 


The city of Memphis will now have a Bitcoin ATM as the firm Coinsource installs three new machines in the state of Tennessee. The company is the largest Bitcoin ATM provider in the U.S. and has averaged over one installation per week in 2016.

Memphis Bitcoin ATM One of Three in Tennessee

logo2-id-fa176b8a-9aee-44f6-9ad5-4672e628e52e-300x300Memphis, in Tennessee’s southwest, will get its first Bitcoin automated teller machine. Additionally, the company Coinsource installed two Bitcoin ATMs in the city of Nashville. Coinsource has established 60 Genesis Coin brand cryptocurrency ATM across the U.S. since its inception.

“The demand for bitcoin ATMs has never been higher than it is today. The most rewarding part of our job is to answer the call when requests come in for new locations, so it is exciting to make history in Tennessee,” said Coinsource CEO and co-founder Sheffield Clark. “Our reach in the South is growing. So far, we have 60 machines across eight states, and look forward to gaining a foothold in even more new cities around the country.”

Bitcoin ATMs in Tennessee via Coin ATM Radar
U.S.-Based Coinsource Will Soon Focus on International Expansion

Coinsource CEO and Co-Founder Sheffield Clark According to Coin ATM Radar, there are 482 installed Bitcoin ATMs throughout the United States. Coinsource, which Clark founded in February 2015, owns a large share of these devices. Bitcoin ATMs have provided people with easier access to cryptocurrency using cash. Additionally, with an automated teller machine that dispenses bitcoin all users need is a wallet to store the funds.

Coinsource says its mission is to make “buying and selling bitcoin as immediate and natural as withdrawing or depositing fiat from a traditional ATM.” The company claims it has first-class customer support and some of the lowest transaction fees in the market. The company aims to continue to be a forerunner amongst American Bitcoin ATM providers and will soon reveal its blueprint for inter

Sunday, November 13, 2016

Ethereum Smart Contract Issues Frustrate Developers with Fatal Bugs

 
Only weeks after the execution of a hard fork to mitigate various DoS (denial-of-service) attacks, the Ethereum network and its developers are struggling to deal with yet another major flaw. This time, major issues in regards to smart contracts have emerged, which have rendered the efforts of decentralized applications in the Ethereum network purposeless.

On November 1, the Ethereum development team and the founder of Solidity warned users and developers against a bug that allowed variables to be overwritten in storage.
Variables in a smart contract are agreements made between two or more parties. Thus, if an attacker can gain access to the storage and alters the variables, crucial agreements in decentralized applications can be affected and funds may be extracted, which may pressure developers to discard previous smart contract-based projects to recompile contracts.


Ethereum developers including Ansel Lindner stated that the development of an Ethereum application is failing to operate because of this bug.
"Imagine spending a year building an app for eth, just to find out the thing doesn't work," wrote Lindner.

He further noted that much like the memory bugs in Geth that continued to negatively affect the network for weeks, the recent smart contract bug will most likely lead to a series of other potentially fatal bugs.
"I could agree that it's a molehill on the side of a big mountain of other similar potentially fatal bugs," Lindner added.

Reitwiessner explains that luckily, Ethereum multi-signature wallet contracts are not affected. However, contracts containing two or more contracts will high likely be affected.
"The following contracts may be affected: Contracts containing two or more contiguous state variables where the sum of their sizes is less than 256 bits and the first state variable is not a signed integer and not of bytesNN type," Reitwiessner wrote.
Reitwiesnner recommended developers to deactivate and remove funds from already deployed smart contracts and compile new agreements using the Solidity release 0.4.4. Failure to do so may result in the loss of funds and may hugely impact decentralized applications that rely on these contracts.

To date, the Ethereum development team have discovered 10 vulnerable Ethereum smart contracts, 7 of which were exploitable.

Sunday, November 6, 2016

Stolen Bitcoin? Anti-Theft Feature Gets Second Life on Sidechains

 

At its core, bitcoin is about giving users better control of their money.

Often called "programmable money", bitcoin has scripts that limit how future bitcoin transactions can be spent (and that control variables like who can spend them). One such script ensures the correct person is spending the bitcoin by checking if the correct signature was used before unlocking and sending the funds.  This week, Blockstream core tech developer Russell O'Connor revealed he's been testing a couple of new scripts on an Elements Alpha sidechain (which is pegged to the bitcoin testnet) that could add new functionality.

Called "covenants", the new style of scripts potentially opens up possibilities for how bitcoin users can control, or restrict, spending of their money — possibly for their protection. (This is an idea that was previously explored by researchers Malte Möser, Ittay Eyal, and Emin Gun Sirer). One use case for these scripts is to help users rein in their coins in the case of a hack (an all too common occurrence in bitcoin).

When asked what he thinks of the new covenant work, Eyal said it was potentially a boon to bitcoin users who may be worried about losing their bitcoins or otherwise having them compromised or stolen.

Extending bitcoin's scripts
The idea is notable as a script that can limit how bitcoins can be spent hasn't been implemented in bitcoin before, a fact noted by Eyal.

In particular, there are two new covenant scripts that Blockstream explored, each of which take parameters and outputs whether the script is valid, or whether or not the transaction is currently spendable based on its restrictions.
It's worth noting that bitcoin's scripting system is currently quite simple for security's sake. There aren't limitless rules in bitcoin right now because new additions can be potentially dangerous and developers note that they take time to test.

This is where sidechains may come in handy, although they are not yet pinned to the main blockchain.
Bitcoin startup Blockstream has been working on these interoperable blockchains for experimenting with new features that could potentially be added to bitcoin since June of last year, and this is an example of how these new chains can be used to test new features.

These new proposed opcodes may work as the foundations for new functionalities, ones that could even come to help stop bitcoin exchanges and users from losing stolen funds.