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.

Monday, October 31, 2016

Walt Disney Company Goes Big On Blockchain With Dragonchain

 

The Walt Disney Company is #71 of the top 2000 companies in the world ranked by Forbes. It has an annual revenue in the tens of billions of dollars, assets near 100 billion dollars, and recently developed a keen interest in blockchain technology for use within its massive organization, which includes online retail, television endeavors, and, of course, their world-famous theme parks.

 

The most obvious benefit of a blockchain system is easier tracking of inventories, sales, shipments, and even people in the case of the parks, but Dragonchain innovates on existing blockchain implementations. According to their design document, they introduce something called “context-based verification.” Their blockchain will have various types of nodes, and a “level 5” of these nodes will interact with an existing public blockchain like Bitcoin, notably providing a “public checkpoint” or “proof of existence” for the blocks within the permissioned ledger.

 

The other levels of the Dragonchain should be noted for understanding. The first level is the business node, which will process transactions and be able to determine whether a transaction is approved or declined. Level two is an enterprise verification node, which can determine the validity of data submitted by level one nodes. The purpose of the level three nodes is to ensure requisite diversity of sources of information – it acts as a check against errant nodes which may be compromised, for one thing. Dragonchain also calls for a third-party verification/“independent witness” of data at its level 4 nodes, to whit:

 

Another feature of the Dragonchain is that it will not have a singular currency at its heart in the way that Bitcoin does. Instead, they believe that if a base currency were to be required within an organization, then a separate node should manage it. For the purpose of the Dragonchain, though, a multitude of currencies should be considered.

 

And most interesting about this is that the Dragonchain will apparently support multiple cryptocurrencies inside a private blockchain transaction, using their transaction class header field. At least at the outset, the network will use Bitcoin-based cryptographic addressing and cryptography. Part of the logic behind this is to make use of existing infrastructure, including Counterparty and hardware wallets for verification purposes within the organization.

 

Blockchain of Blockchains

Different organizations will have different purposes for Dragonchain, but one thing that may make it very useful is its ability to act as a “blockchain of blockchains.” In this way, various third-party providers can bring to market solutions based on Dragonchain or to integrate competitively with existing Dragonchain implementations. Or, perhaps easier to imagine, third-party vendors can come up with interesting applications, such as methods of tracking inventory, event attendance, line congestion at theme park attractions, and more.

 

 

Wednesday, October 26, 2016

Smart contracts for bitcoin

 

 

As we approach the release date for the SEGWIT (Segregated Witness) update to the blockchain, we were pleased to see a complete update from the BitcoinCore team about how this update will affect the network, what will change and where are we going to proceed in the future.

 

For those of you who don’t know what SEGWIT is software that is used to produce transactions for which it separates the TxID transaction signatures from the rest of the data, thus Segregated Witness. This allows miners to place the transaction signatures outside of the block-chain.

 

Pros and cons

There are benefits that we will immediately be able to enjoy once the update has been complete. The first benefit is that malleability will be ultimately eliminated, and third-parties won’t be able to interfere with the transaction process, and transaction ID’s will be hidden from everyone, while at the same time allowing the transaction software to calculate the transaction without reference to the witness. This update will open up development paths for Bitcoin, by eliminating security holes and lowering the complexity of smart contracts for Bitcoin.

 

The second benefit is that capacity of transactions will modestly increase. New-style blocks can hold more data than current versions, which means that the amount of transaction data will increase per block. That doesn’t mean that witness data is stored off-chain, but rather following this soft-fork, the data will start being signed on the new-style blocks (which include the old-style block and extra space).

Overall this update will simplify things for developers to produce new features for Bitcoin use and it improves the efficacy of running full nodes. We are happy to see that long-term benefits will come out of this update.

 

According to the blog post that the BitcoinCore team released on June 24th, 2016, SEGWIT has been extensively tested by Bitcoin developers, and this was necessary because of the way SEGWIT changes parts of the Bitcoin system. One of the most important change happens to the consensus rules that full nodes use to agree on the current state of the ledger. That shift is the primary reason for such tests to be performed, because if we come to a position where the network stops agreement on the current state, Bitcoin transactions become dangerous.

 

Other notable changes happened to the peer-to-peer code that’s used by the network to distribute blocks and transactions. (This was all included in the 0.13.0 BitcoinCore Update, but it’s not going to happen be accepted on the main network until at least ver. 0.13.01) SEGWIT blocks and transactions are different from previous versions, so it’s important that the network is capable of distributing both SEGWIT and old-style data.

The complete update added about 7800 lines of code to the proprietary software, with the majority of lines relating to the SEGWIT capabilities. A large part of the code update related to the automated testing system, which enabled Bitcoin developers to test out the features on a separate network extensively, promptly called “testnet”.

SEGWIT was initially implemented by the Elements Project, led by Pieter Wuille. This initial implementation was happening in April through June of 2015. It was never intended for the main blockchain but is actually considered a side-chain. A few months later in October 2015, Luke Dashjr describes a method that allows SEGWIT to be implemented by using a soft-fork and they team up with Wuille to work on the implementation that is going to be completely compatible with the main blockchain.

 

The first version of this new code comes out in December 2015, close to the end of the year. (New year, new updates!) It’s implemented and tested extensively for the whole duration, ranging from the beginning of the year to August 23rd, 2016, when the BitcoinCore team launched the update.

 

Within this update, SEGWIT is completely implemented, but it’s sitting there in a passive state, only used for testing purposes. Like I mentioned before, it will become operational with the next update! The Bitcoin Core developers are finally convinced that implementation of SEGWIT will not cause any adverse effects and it won’t negatively influence Bitcoin, it’s value and reliability.

 

SEGWIT won’t change a lot about how you perceive Bitcoin transactions happening, well… There is one pretty perceptive change, but I’m sure you’re not going to mind it.

 

Transaction fees are going to get a little bit cheaper.

I’m sure we all can appreciate spending a little bit less on our transactions. But wait, what about Bitcoin smart contracts?

Yes, I’ve mentioned them. Well SEGWIT will not introduce any smart contracts, but it’s the first step allowing the development of the capability to support these.

 

It solves a crucial problem that currently is affecting the creation of smart contacts and script functioning. It opens up the doors to new development paths and creates new opportunities that were previously inaccessible due to security loopholes and visibility of transaction identifiers. In the future, smart contracts and scripts will use MAST, an acronym for Merkalized Abstract Syntax Trees.

 

A short description of MAST is that it allows the creation of conditional Bitcoin scripts to be utilized. For now, it’s being reserved for the extremely tech-savvy people, the developers to use these tools and potentially make them available to Bitcoin users. MAST is going to be available for use following the SEGWIT update in the future.

Sunday, October 23, 2016

ShadowCash - A new era of anonymous and untraceable payments is coming

 

 

Umbra, launched for privacy, is a new crypto currency aimed at privacy. With so many ways to use it, it's no wonder so many are using it today- it was built primarily for security and has many secondary features, like opening up a chat lobby or creating a marketplace

that's completely anonymous. Interested? Let's take a look at it.

 

Privacy

Built for privacy, the Umbra project was created open-source and has more security features than most crypto currencies do, on top of having excellent usability. Umbra allows you to stack additional security measures on top of the existing ones built into the client, so attackers have multiple barriers to break to find who you are and more. Plus, the messaging platform is built for Tor and L2P, so you can carry out your transactions with even more security!

 

Encrypted Messaging

Encryption is one thing built into the Umbra platform, and it's one of the most integral features that provide security to it. Many messages do provide good security and good quality, but many of them expose your IP to centralized servers. Umbra allows you to message with decentralized nodes that don't expose your IP, making the platform a much better choice if you plan on doing something with that

level of secrecy. As mentioned before, Umbra features L2P and Tor, so it's possible to further encrypt yourself! Their messaging platform provides most of the normal things in such a service, with private and public channels, and even direct messages!

 

ShadowCash

Umbra's system uses ShadowCash, an anonymous cash system that allows nearly completely anonymous transactions while still allowing seamlessly easy transactions to occur. Similarly to Monero, ShadowCash operates on dual-key stealth addresses and ring signatures for security. It's even possible to stake ShadowCash, at an annual rate of 2%. You an also receive transactions through both a public and secret address; funds can be seamlessly transferred to either wallet in seconds. If you wish to opt in for more secure transfers, it's recommended that you use the private wallet, and everyday transactions are more easy to use through the public wallet.

 

Marketplaces

Online marketplaces require lots of anonymity and security, and Umbra realizes this. While it is still under development and is still constantly being tested, their decentralized marketplace has already received lots of hype and support from various large media outlets, and it's expected that the marketplace will become the first of its kind - an inter-dependent, decentralized marketplace that will forever change the way people look at markets.

 

Conclusion

Umbra has many very secure and easy-to-use features that don't require lots of crypto experience, and the client GUI is especially friendly to new users in the Crypto world as well as the more experienced. With so much potential and so many ways to use their platform, Umbra is looking like it'll become a hit among the crypto community in no time!

 

ShadowCash Specifications

Block time: 60's

Difficulty re-target: every block

Nominal stake interest: 2% (PoSv3 – static inflation annually)

Min. stake age: 8 hours (no max age)

P2P port: 51737

RPC port: 51736

 

Read more about the Shadow project here. Information about Umbra can be found here. 

Thursday, October 20, 2016

HitBTC Cryptocurrency Exchange Intensifies EUR & USD Depositing

 

EE, October 11, 2016 at 13:57 BST

 

October 11, 2016 a well-established cryptocurrency exchange, HitBTC, publicly increases support for EUR and USD depositing. From now on, all new registered users can easily pass the verification process, deposit fiats on their accounts, and proceed to cryptocurrency trading.

 

While there's a number of cryptocurrencies, paired directly with USD or EUR, including most popular Bitcoin, Litecoin, and Ethereum, a whole set of more peculiar digital currencies can also be traded. Altogether, the exchange provides more than 20 trading markets, continuously listing new, promising digital assets.

 

By enhancing support for fiat currencies, HitBTC is aiming to attract professionals, engaged with conventional types of trading, like stock markets, forex trading, commodities, etc. Here are the words of Paul Clarkson, product manager at HitBTC: "After three years of hard work, we're finally ready to bring mainstream traders to cryptocurrencies, and vice versa. Сryptocurrency trading is a young, sharp, and fluctuating, yet quite established field. Like any other markets, cryptocurrencies are influenced by a plenty of factors, and follow certain patterns that can be analyzed and used professionally for making profit. Therefore, we're making steps towards traders, so that they can capitalize their knowledge in a relatively new, promising niche."

 

Despite the fact that blockchain technologies and assets arise and gain traction on an annoyingly regular basis, digital currencies still haven't crossed the gap between the tech-savvy community that plays around with blockchain technologies, and the real business world that needs cryptocurrencies to fulfill its specific needs. This is especially the case in sphere of trading, where most exchanges prefer to remain a niche playground for cyberpunk enthusiasts, rather than build a solid trading platform, which requires investments, legalization, and support for traditional financial instruments.

 

Conversely, HitBTC aims to reach the mainstream financial market, by growing into a gateway between cryptocurrencies and traditional finance. The most important components of this process are:

●     Transparency. HitBTC is a registered trademark, owned and operated by Beta Business Solutions Inc. The exchange platform and business providing tools are leased under a platform as a service (PaaS) model.

●     Due diligence. HitBTC implements KYC to identify and verify its clients. KYC allows to build bridges between virtual currencies and real fiat trading. Every registered user can verify their account to start depositing EUR/USD, and trade virtual coins for traditional currencies.

●     Dependable API. The API provides the most functional access to HitBTC facilities. It gives access to the market data, allows performing trading operations, provides funds management, and more. The API is robot-friendly and can be used for algorithmic trading.

●     Support for the FIX protocol. Unlike any other crypto exchange, HitBTC provides support for the Financial Information eXchange protocol. While FIX is a de-facto standard for trade communication in the global equity market, it hasn't been implemented for cryptocurrency trading before now.

●     Special offers for market makers. HitBTC provides special contracts for both individual market makers, and companies that know how to rule the markets. Market making is also possible through the HitBTC's APIs.

●     Advanced reporting. The exchange team is focused on creating useful trading tools, hence, all traditional reports like profit and loss report and trade analysis are featured on HitBTC, and can be used by every user.

 

Paul Clarkson continues, "Besides having a professional team of developers, we have a well-organized team of financiers, and outsourced trading experts. The massive financial expertise allows us to make our product mature for penetrating the traditional financial market. As for development, we are especially proud of our support for FIX, which is unprecedented for bitcoin exchanges."

 

As HitBTC is already finished with core development, it is now ready to engage newcomers with 0% depositing fees that can be requested by all new verified users from October 6 to October 20, 2016.

 

About HitBTC

HitBTC is one of the leading cryptocurrency exchanges, providing trading services for individual traders since 2013. The HitBTC trading platform is known for its advanced matching engine, multi-currency support and friendly customer service. Besides trading between cryptocurrencies, HitBTC provides proper markets for exchanging cryptocurrencies for fiat currencies, namely USD and EUR.

 

The innovative and technological nature of HitBTC is expressed in a stable dependable API, which satisfies the needs of algorithmic traders. Moreover, HitBTC provides support for FIX protocol through FIX trading and FIX Market data end-points.

Monday, October 17, 2016

Korean Credit Card Giant to Integrate Blockchain Identity Service

 

South Korea’s largest credit card company is set to use a blockchain identity solution developed by local bitcoin startup Coinplug.

The service will be based on what Coinplug calls FidoChain, a “private blockchain technology” aimed at providing a distributed means of verifying and maintaining digital identities. KB Koomkin Card, a subsidiary of KB Koomkin Bank, plans to complete its integration by the end of this year.

 

The startup has been working in the area of digital identity for some time, netting a $45,000 prize last year after submitting a prototype system based on the concept to a competition held by JB Financial Group.

It’s a use case that has been pursued by established enterprises as well as new companies working in the blockchain space. Now, following additional development, Coinplug is pushing ahead with what it calls the “Coinplug Identification System”, or CIS.

According to Richard Yun, director and chief operation officer from Coinplug, KB Koomkin wants to integrate the tool into its credit card onboarding services.

In addition to its enterprise blockchain projects, Coinplug operates a bitcoin exchange service. The tech, launched last month, comes just under a year after Coinplug raised $5m in a Series B funding round. The startup has raised more than $8m to date.

 

Targeting identity pain point

Using FidoChain, the identity solution allows users – in this case, KB Koomkin Card – the ability to add, verify or revoke identities tied to a credit card product.

Yun said the startup wanted to potentially resolve security and user experience problems associated with existing identity solutions in South Korea.

 

“We thought it is very important to provide secure and easy to use identification and authentication service to banking service users, and we believed that private blockchain technology can be very effective to implement secure and scalable identification/authentication service.”

It’s a prospect that, according to Yun, has attracted significant interest from KB Koomkin. The company, which reported $2.6b in operating profit for 2015, is said to be looking at applying the tech to both services it offers now as well as new ones in the future.

“They [are considering whether to] expand the coverage of CIS to other existing and new services,” Yun explained.

KB did not immediately respond to a request for comment.

Ethereum is getting ready for its second hard fork

 

 

At this moment in time, Ethereum represents the basis of a popular digital currency, alongside with a decentralized platform meant to support apps that run as they are, without facing censorship, fraud or any form of third part interference.

 

However, during its reign so far, the network was forced to implement a hard fork, to prevent the theft of millions of dollars’ worth of DAO funds, after the systems had been hacked. Whenever a fork is suggested on the digital currency market, its purpose is to divide the supporters of two different ideas, and continue the branch which has the most supporters at the time of the fork.

 

Recent reports indicate that after the recent DDoS attack, Ethereum is planning to carry out another fork, in order to deal with the EIP150 gas cost changes being implemented. With this in mind, last month, on the 22nd of September, Ethereum representatives announced that the network was facing a strong DDoS attack, thus causing an immediate slow0down of the network. As the attacks have been quite crafty when it came down to finding vulnerabilities in the client implementations and protocol specifications, the only way to prevent future attacks like this would be to carry out a reparatory hard fork.

To prepare the network for its second hard fork, Ethereum made a couple of announcements, including:

 

To help minimize the effects of the recent attack, miners are encouraged to lower their gas limit to a total of 500k gas.

Once the fork is launched based on the EIP 150, version 1C, it will be put in effect starting with the block 2463000, thus repricing a couple of operations, and making them better respond to their particular computational complexity.

A second fork will be carried out moments later, right after revering the state-bloat that has been caused by the attacks. This one will also remove all accounts which are empty, lack code and have a balance and storage of 0.

It’s worth keeping in mind the fact that consensus for this hard fork has been reached, and that the Go Ethereum client will be released quite soon. The hard fork code has been kept under development during the last few days, and is currently facing testing and reviews. Once everything is confirmed as working properly, the Ethereum network will begin the hard fork, thus repairing the damage caused by the hackers. Fortunately, consensus is met this time, which means that another Ethereum Classic network won’t be brought back to life.

 

Once the hard fork is issued, the entire network is most likely to upgrade in the next 2-3 days. Although some bugs may be present for a while longer, each of them should be taken care of.

 

Based on everything that has been outlined so far, what do you personally think about the newest Ethereum hard fork? Let us know your thoughts in the comment section below.

The Future of Artificial Intelligence & Ethics on the Road to Superintelligence

 

The human brain, consisting of roughly 86 billion neurons, rivals the world’s best supercomputers in terms of magnitude, efficiency, and speed, using as little energy as a small 20-watt light bulb. Human evolution took tens of thousands of years to adapt noticeable brain size and architecture changes.

 

Evolution is a slow process that can take eons for changes to occur. Technology, on the other hand, is amazing in terms of how fast it is moving along, blending into the world seamlessly. The technological evolution notably occurs at a faster pace compared to biological evolution.

 

To further understand the situation, imagine a frog in a pot of water that heats up 1/10th of a degree Celsius every ten seconds. Even if the frog remained in that water for, say an hour, it would be unable to feel the minute changes in temperature. However, if the frog is dropped into boiling water, the change is too sudden and the frog jumps away to avoid fate.

 

 

Let's take a gigantic chessboard and a grain of rice, for scale, and place each grain of rice to a corresponding chess square following a sequence: for each passing square, we double the amount. Upon applying this, we get:

 

1) 1

2) 2

3) 4

4) 8

 

And so on. You must be thinking, “What difference does doubling a grain of rice for every box make?” But one must remember that, at some point, the number from which the count started will be totally indistinguishable to the end result. Still on the 41th square, it contains a mountainous 1 trillion grains of rice pile.

 

41) 1,099,511,627,776

 

What started out as a measly amount, barely feeding a single ant, has become massive enough to feed a city of 100,000 people for a year.

 

 

The development of technology over time

In the year 1959, the global output of transistor production of 60 million was huge. It was deemed a manufacturing achievement to produce such an amount. Although looking at the world today, it pales because of how far the transistor development has come. A modern i7 Skylake processor contains around

 

(Skip to 5:15 in the video, to hear the global transistor manufacturing achievement in 1959)

https://www.youtube.com/watch?v=2466CBuOxVg

 

1,750,000,000 transistors. It would take 29 years of 1959’s transistor global production to match one i7 Skylake transistor count.

 

The transistor manufacturing size in an i7 Skylake processor is 14 nm. For reference, a silicon atom is about 0.1176 nm across: 14/0.1176=119 Meaning, a transistor in an i7 Skylake processor is only about 119 atoms across.

 

Therefore, one can conclude that it takes technology to build technology. In the past, civilization was limited to the usage of paper and writing. Calculations done by hand tend to be slow and tedious.

 

 

Whyfuture.com - Lets think about the future

Artifical Intelligence - Artificial Intelligence & Ethics on the Road to Superintelligence

 

Could Bitcoin Be the Future of Blockchain Post Trade?

 


Conventional thinking about blockchain technology's use in stock markets may be wrong, according to one academic.

The argument was put forward by Professor David Yermack, chairman of the finance department at New York University, this week at Imperial College London's first FinTech-focused academic conference.
There, Yermack presented an unpublished report that argues blockchains will evolve differently in capital markets than widely expected. For example, according to Yermack, functions such as stock settlements will one day be carried out on public blockchains like bitcoin, as opposed to private or premissioned alternatives.

Overall, Yermack, who teaches a cryptocurrency course at NYU’s Stern School of Business, offered a much broader vision for the use of blockchain in finance than what the industry is considering, as well as more critical takes on how incumbents are exploring the tech. Taking a dig at DTCC, for instance, Yermack said its report "Embracing Disruption" did little to show or illustrate how blockchain could change the current state of affairs.

Agents of change
That's not to say that Yermack didn't take a measured view of public blockchains. On the contrary, Yermak acknowledged the limitations of bitcoin's throughput and its proof-of-work consensus system today, but noted that it's something he believes the industry will need to work out better solutions for.

Still, he insisted that the future of finance will be brought about by a real decentralized blockchains that don’t have monopolies that guard access to stocks, bonds and currencies. Speaking of the direction where the disruption will come from, Yermack sees three potential players. These include challengers (complete outsiders looking for disruption); collaborators (like the DTCC and R3); and regulators (countries like the UK, Australia, and Canada).

Overall, he believes that the challengers were the most likely to succeed, but that some regulators (like those in the UK) are better positioned to bring about change than others.

Quick wins
Interestingly, Yermack believes one of the easiest and quickest ways for the industry to move to a blockchain model is by exploring use cases in corporate elections by shareholders, an avenue already being pursued by Nasdaq. Yermack said shareholder voting on corporate elections is currently inefficient when it comes to vote counting, and that the voting results are often plus or minus 5% of what they should be.

Further, in the current model, there are many challenges when it comes to corporate elections, he said. There are various different ledgers of ownership, maintained by the company, the broker, and the market in general, which gives rise to different voting results. Broadridge, which has what he called "a monopoly that is very inefficient" administers corporate elections voting, is also interested in blockchains.

But, Yermack went beyond words, showing that corporate elections are prone to favor management proposals. Such issues, he believes, could be eliminated with the help of blockchain-based voting systems.

In China, Two Cities Mirror Blockchain-Bitcoin Divide

 


Beijing and Shanghai, China's two most populous and developed cities, are often reminiscent of two siblings. They are similar, but each has its own distinct character.

In this light, some rivalry is as inevitable, and it's now spilling over into the country's blockchain industry.

In Beijing, visitors are likely to meet "bitcoin maximalists", those who shrug at the idea an alternative blockchain or bank consortium could challenge the network effect of a $10bn digital economy. In Shanghai, the difference of attitude is pronounced – there, you are more likely to be told that bitcoin is passé. Metaverse, a company based in the Shanghai's Huangpu district, is in many ways representative of the city's new blockchain startups.

Relatively unknown even in its home country, Metaverse has over 20 employees – no small feat for a blockchain startup that has been around for less than a year, and it recently held a blockchain token crowdsale, raising over ¥10m within weeks. The sight of a roomful of busy developers gives the impression the startup is onto something big – which is exactly what Eric Gu, CEO and co-founder, wanted to convey in interview. But he is also candid about his personal transition and what it says about the state of the blockchain industry.

According to Gu, support from local officials is strongest when they are presented with a project that he said avoids the revolutionary stigma that has surrounded bitcoin. "If you expect the government to back a blockchain project, it will at least be one that they feel more comfortable with," Gu explained.

Not quite a battle
Meanwhile, in Beijing, the city's outlook is defined by the notable startups that call it home, including bitcoin mining giant Bitmain and major exchanges like OKCoin and Huobi. Da Hongfei, CEO of Shanghai-based Onchain, argues that this has made for "a very different community and industry landscape" in each city. The creator of a "universal" blockchain platform that aims at adoption in both public and private markets, he acknowledges his firm would be an outsider in this location. "Beijing is well-known as an established bitcoin center. It enjoys a comprehensive bitcoin ecosystem," he acknowledged.

Like Metaverse, Onchain has also differentiated from the venture-backed startup model common in Beijing, raising more than $4.5m in a public token sale, while inking a partnership with Microsoft and contributing to the Linux-led Hyperledger project. By contrast, Beijing firms have often elected foreign venture capital over the token sale model, sometimes called an initial coin offering (ICO), whereby unaccredited investors back a firm by purchasing cryptographic assets.

Despite this investor approval (and the heated debate around ICOs), Da went on to argue there is still a greater "stigma" associated with bitcoin, one his company has sidestepped. "As for blockchain technology, or DLT, a large extent, it's free from this burden," he said.

Trend or fad
But as for which brand of blockchain is winning, it might be too early to say. Da, for example, hinted he believes other cities are now following Shanghai's lead, in what could be a sign its view on the technology could win out. "Hangzhou is taking the lead in the lower-layer, distributed ledger technology R&D," he said, "not necessarily everything bitcoin."

Companies seem to be following their lead, as well. Metaverse, for instance, is utilizing this strength to tackle the country's collectable calligraphy and painting market, where collectors have been searching for tools to enable them to record their transactions and check previous ownership of art pieces to ensure authenticity. Onchain, on the other hand, is working with Everbright Bank, a major Chinese commercial bank, to build a blockchain-based reputation point system. Both projects see value in enterprise markets, particularly because there have been strong signals of interest from leading domestic firms.

In this way, Da argued that he believes "blockchain" might bring about the most benefits for Chinese consumers, though he sought to stress that there's a larger, more important goal that unites innovators in both Shanghai and Beijing, in bitcoin and blockchain.

Friday, October 14, 2016

Pros and Cons of Blockchain

 

 

Blockchain is almost always right, and has an incredible number of associated opportunities – from storage, to coding, and far beyond. The most popular and supported example is the Ethereum smart contract, which has revolutionized the coding and cryptocurrency world forever. It showed thousands that crypto isn’t just for payments, but for coders and programmers alike. With so many choices, programmers or cryptocoiners may be wondering – what’s so great about the blockchain? In this article, we have all the information you need so you can make your own decision.

 

Blockchain has many pros – the fact that data can be stored on it is a huge one. A notable example is in the very beginnings of Bitcoin – the genesis block. What’s interesting about this specific block is that it doesn’t reference any other block, because there were not any blocks to reference, and so it has a lot of zero bytes. All blocks have a special section called the coinbase, which is the area that is capable of storing the actual data.

 

Blockchain isn’t only present in Bitcoin, though; Ethereum is another notable example, with smart contracts that can execute any input code for a small fee. This allows for elaborate plans and security check systems to be put in place. The fact that those lines of code cannot be interfered with is also amazing. Coding isn’t the only pro with cryptocurrency, however; the blockchain can also support transfer of funds, which is what most people are familiar with. Funds can be transferred using blocks, which are mined. They also have a set difficulty to control blocktime, and with a low enough difficulty, funds can be transferred almost instantaneously. The blocks also create a ‘confirmation’ system that makes sure double-spends, which are discussed below, don’t occur. This means that the blockchain not only offers permanent storage of code, but also of funds. Nothing like this has ever been created prior to the creation of cryptocurrencies.

 

Now onto the cons: we’ll only cover double-spending here, which is a huge disadvantage. Double spending is the reversal of a transaction to another address, and is a huge factor as to why confirmations are required with most bitcoin-based payment systems. There are lots of double-spends happening, but fortunately, most are very minor and only deal with a few cents. This is still an issue, however, and will likely never disappear completely. Confirmations do help prevent this, but it’s still not a guarantee.

 

With these listed cons and pros, we hope we’ve provided you an accurate view of blockchain. Nothing is perfect, but the system keeps improving and gets better every day.

 

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