cinerama

Tokenization Will Make Assets More Valuable

by cinerama
Tokenization Will Make Assets More Valuable

Click here to view original web page at www.coindesk.com

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Dr Pavel Kravchenko holds a PhD in technical sciences and is the founder of Distributed Lab.

In this opinion piece, the first of a two-part series, Kravchenko argues that tokenization of assets using blockchains will have more profound effects on the world’s markets than simply reducing back-office record-keeping costs.

Would you swallow a random pill that you saw on the counter in the pharmacy? Of course not. You don’t know anything about it!

But what if this pill came in a package with details from the manufacturer? And you had a prescription from your doctor? Further, what if you could independently test the pill’s chemical composition and make sure it matches the label and prescription? Or (flash forward to 2049), suppose you could verify that the chemical composition of the tablet is suitable for your DNA and confirmed by clinical studies.

Would that pill be more valuable to you? Undeniably. Its value increases depending on how much reliable information about it you have, even though the properties of the pill did not change.

Today, financial assets are too much like that loose pill on the counter. You don’t know enough about where it’s been, what’s in it, or what it will do to you.

But the process we call tokenization is going to make many assets a lot more attractive to a lot more investors, in part by providing an unprecedented level of information.

Why crypto took off

Stepping back, let’s consider the legacy financial system. Quite apart from information asymmetry, there are other forms of friction that discourage investment.

Even though we tend to think the global financial markets are as liquid as possible, that is only actually true for people and organizations already in the “system” – i.e. brokers and financial institutions. The end client is forced to go through all the levels of hell in the form of know-your-customer (KYC) and compliance checks at each and every opening of an account, signing of contracts, paying of commissions, etc. This also applies to investments into growing enterprises, access to which is only granted to accredited investors.

Strict regulation of the market for end users has led to demand for alternatives, which has unexpectedly let off steam through the cryptocurrency market. As soon as people started to believe that this market let them not only enter, but also withdraw freely, liquidity surged, cryptocurrency grew by factors of 10, and the number of initial coin offerings (ICOs) rose by more than hundreds per month.

Despite the hype and inevitable disappointment in investing in totally unregulated assets (where the level of fraud constitutes 90 percent, according to the People’s Bank of China), it is clear that the democratization of trade leads to a sharp increase in the attractiveness of assets. Every business or nation would, or should, like this to happen in its economy.

Barriers to exchange

As someone who, for a couple of years, was involved in the equities market, I can say red tape is the main reason why a client can change their mind about opening an account.

A secondary issue is by a low usability of trading software – it is necessary either to study up or to entrust the work to a third party.

More fundamental problems – such as the need for trust in intermediaries, poor infrastructure integration, and the speed of settlements – are in third place.

Indirectly, tokenization has created a fashion for extremely simple, convenient systems, where within 20 minutes you can get money on the exchange, trade, and withdraw capital. Of course, there is a risk that it will never be possible to withdraw money, but it is sometimes easier to accept such risk than the infinite dragging-on of undergoing compliance procedures.

The age of tokenization

One way or another, a term appeared in the blockchain space that had been coined, as it were, in the security management process. Balances of accounts on blockchains began to be called “tokens,” due to the fact that they were items to be simply and safely transmitted. In essence, tokenization is the process of transforming the storage and management of an asset, when each asset is assigned a digital counterpart.

Ideally, everything that happens in a digital accounting system should have legal implications, just as changes in a real estate register lead to a change in ownership of land. The age of tokenization introduces the important innovation that assets are managed directly by the owner instead of managing assets through issuing orders to a middleman.

The difference in approaches is easily explained by the example of the difference between the banking system and bitcoin. With a bank account, the client sends an instruction to a bank where it is executed by someone, and the client identifies themselves through their login and password. In the case of bitcoin, the transaction initiator uses their digital signature, which in itself is a sufficient condition for the transaction to be executed.

Nothing prevents the use of the same mechanism for traditional asset management. Certainly, this will require a change in infrastructure, but will bring many benefits. It will reduce costs, and increase the speed and security of trades.

Every trading infrastructure includes a depository, an exchange, a clearing house and client software. Tokenization assumes that all these components will be far more integrated. And blockchain technology will allow decentralizing the entire infrastructure, distributing the storage and processing functions between all the parties involved. This decentralization will make the system more resilient, since there will be no single point of failure; it will reduce the need for trust in a central provider; and it will allow instant audits, since multiple parties have real-time access to the ledger.

Unexpected results

In addition to the most obvious benefits from the transition to a digital domain – increased speed, security and convenience of operations, as well as less need for intermediaries – tokenization allows unexpected results.

Among them is the addition of properties of assets that are not initially inherent: the ability to prove the history of ownership, the opportunity to divide assets into the smallest fractions (bitcoin, for example, is divisible to the eighth decimal), and the ability to integrate principles of management into the asset itself. For example, suppose there are several partners in a real estate development who need to vote on a proposed renovation. With a wallet that holds their tokenized property, they can take the vote more efficiently, without having to meet face-to-face or trust a proxy to represent their wishes.

All these things will make a tokenized asset more valuable than a non-tokenized asset with the same fundamentals, just as easy access to reliable information about a pill would give you more confidence to take it.

In the next article of this series: What stands in the way of tokenization.

Pills image via Shutterstock

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In this opinion piece, the first of a two-part series, Kravchenko […]

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Source: Science of Crypto
Tokenization Will Make Assets More Valuable

Ethereum Creator Vitalik Buterin Explores Zk-STARKs In New Blog Post

Ethereum Creator Vitalik Buterin Explores Zk-STARKs In New Blog Post

Click here to view original web page at www.ethnews.com

On November 9, Ethereum creator Vitalik Buterin published a blog post exploring the class of technology known as zero-knowledge Succinct Transparent ARguments of Knowledge (zk-STARKs) and how they differ from the related and better-known mechanisms that fit under the gloss of zero-knowledge Succinct Non-interactive ARguments of Knowledge (zk-SNARKs).

The concept for zk-SNARKs (which predates Ethereum, but in the Ethereum context could be used to verify transactions) caught the attention of several of that blockchain’s developers as a result of its anonymity-enabling properties.

While currently the sending address, receiving address, and the amount of Ether involved in every Ethereum transaction is a matter of public record, zk-SNARKs would effectively mask these three data points, potentially making the platform more attractive to privacy-focused users.

Among the features that enable greater anonymity is the use of a non-zero “random secret number.” The prover of a transaction multiplies this number by the product of two mathematical functions, then sends the verifier the resulting value as well as the value of the random secret number. With this information, the recipient node can verify a transaction while knowing almost nothing about it.

As the ability to verify transactions faster has become a more central concern for Ethereum, several of the blockchain’s developers have started looking at zk-SNARKs as a means to boost scalability. In addition to their potential to enhance privacy, zk-SNARKs offer the benefit of reducing transaction verification time relative to the capacity of the current protocol.

Zk-STARKs share this feature with their more famous SNARK “cousins,” but according to Buterin, also address several shortcomings, including their “reliance on a ‘trusted setup.’” Additionally, he claims that the technology is theoretically “secure even against attackers with quantum computers.”

While he estimates zk-STARKs’ proof sizes to be “a few hundred kilobytes” relative to zk-SNARKs’ 288 bytes, he argues that the tradeoff may be worthwhile “in the context of public blockchain applications where the need for trust minimization is high,” and most certainly will be “if elliptic curves break or quantum computers do come around.”

According to a PowerPoint document by computer science professor Eli Ben-Sasson, who Buterin thanks by name in his zk-STARKs blog post, a “[computational integrity and privacy] system is transparent if setup and all verifier queries are public random coins.” Unlike this technology, zk-SNARKS require a “non-transparent setup phase.”

For further details, be sure to visit Buterin’s blog post, here.

Adam Reese is a Los Angeles-based writer interested in technology, domestic and international politics, social issues, infrastructure and the arts. Adam is a full-time staff writer for ETHNews and holds value in Ether.

Like what you read? Follow us on Twitter @ETHNews_ to receive the latest Vitalik Buterin, Ethereum or other Ethereum ecosystem news.

Source: Science of Crypto
Ethereum Creator Vitalik Buterin Explores Zk-STARKs In New Blog Post

Taming the Power-Hungry Blockchain Beast with Decentralized, Clean Energy

by cinerama
Taming the Power-Hungry Blockchain Beast with Decentralized, Clean Energy

Click here to view original web page at cointelegraph.com

Taming the Power-Hungry Blockchain Beast with Decentralized, Clean Energy

Throughout history, every great breakthrough often came with negative consequences and side effects.

Think about Marie Curie. Her research on radioactivity is what makes X-rays possible today. Unfortunately, her discoveries and remarkable research are also what killed her.

What about the Internet? It’s the most revolutionary invention for generations and holds countless opportunities that benefit billions of people around the world. However, cybercrime has never been higher and expected to reach $2 tln by 2019.

It’s the same story with Blockchain. The technology has the potential to revolutionize every industry it comes into contact with. However, its biggest application remains in the cryptocurrency industry.

And with the current excitement surrounding this industry, it’s easy to overlook the side effects that come with such a disruptive breakthrough.

Energy-craving Blockchain can have devastating consequences for the environment

Mining popular cryptocurrencies, such as Bitcoin, requires extremely powerful computer hardware that can solve complex mathematical equations. To run these computers burns up a lot of energy, mostly from non-renewable fossil fuels.

And as the price of the digital coin sores so too does the number of people looking to get in on the action.

Each and every Bitcoin transaction requires around 215 KWh (kilowatt-hours) to process. In comparison, the average American household uses 900 KWh every month. So around 30 KWh per day.

That means a single Bitcoin transaction uses the same amount of power as seven homes do in an entire day. What’s even more shocking is that a single Bitcoin mine relies on fossil fuels, like coal, can produce as much as 13,000 kg of CO2 emissions per Bitcoin mined.

With 300,000 transactions per day, it’s easy to see what a significant impact the process has on the environment.

And this is just from one cryptocurrency.

Although Ethereum is less energy reliant, a single transaction on this network still requires the same amount of power as nearly two homes. In total, the network is equivalent in power consumption as the whole of Cyprus.

Centralized mining on a decentralized network

On a platform that is inherently decentralized, centralized mining operations seem counterintuitive.

However, mining operations gravitate towards countries with cheap electricity.

For example, China does over 80 percent of Bitcoin mining due to the country’s cheap supply of electricity.

Unfortunately, the power supply comes mostly from dirty, non-renewable sources like coal. The country gets more than 70 percent of their electricity from coal. In fact, a few years ago, it was reported that China burns as much coal as the rest of the world combined.

Burning coal releases large amounts of CO2 which is one of the biggest causes of the greenhouse effect and global warming.

Apart from having a detrimental impact on the environment, large pools of concentrated mining pools spurred on by cheap electricity, have too much influence over the network. Look what happened to the price of Bitcoin when China announced their ban on ICO’s? The price becomes too reliant on single entities.

This in stark contrast to the underlying concept of cryptocurrencies and Blockchain as a whole, which adds value exactly because of its dependency on a majority consensus to verify and approve transactions.

However, people and big corporations are becoming more aware of their social responsibilities and the size of the footprint that they leave on this earth. Development and adoption of renewable energy sources have seen a dramatic increase in the last few years, including solar, wind and hydropower.

So much so that in many locations, there is an excess supply of electricity from renewable sources, that simply goes to waste. This is in great part due to the fact that the cost of building large-scale solar farms has dropped by as much as 50 percent in five years.

A three-fold solution

Envion is hoping to make cryptocurrency mining cheaper, cleaner and decentralized with their mobile data-centers.

They’ve developed automatized mining units which are installed inside shipping containers. These containers can be relocated around the world with relative ease, reducing the dependency on single governments, economies or infrastructures.

The mining units, which exclusively consume power from reusable, green sources, are placed near energy supply points, such as solar plants and wind farms, reducing the cost of “transporting” electricity and enabling them to easily tap into excess energy production.

In addition, the company developed a new, self-regulating cooling system, specifically for Blockchain mining, which is up to forty-times more energy-efficient and cost-effective than conventional, AC cooling units.

Envion further promotes environmental friendliness by recycling the energy produced from mining with the strategic placement of the mining units, close to objects and buildings that need heating, including warehouses and greenhouses. This enables them to reduce their energy costs even further.

The end result is a mining solution that is more profitable due to lower energy costs, more secure due to mobile mining that puts less reliance on single entities, and more eco-friendly due to the usage of renewable, green power.

An ICO for the environment

Many of the ICO’s we see these days are largely based on Speculation. The EVN token is however fully backed by the hardware that it represents which is already operating successfully.

The EVN token will be on sale for 31 days from Dec. 1, 2017, with a max cap of 150 mln.

Once invested, token holders will have the right to dividends from the mining operations including 100 percent from proprietary mining operations (75 percent immediately and 25 percent reinvested to boost future payouts) and 35 percent from non-proprietary operations.

Finally, token holders will also get a say in company strategy by voting on decisions.

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Think about Marie Curie. Her research on radioactivity is what makes X-rays possible today. Unfortunately, her discoveries […]

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Source: Science of Crypto
Taming the Power-Hungry Blockchain Beast with Decentralized, Clean Energy

Bitcoin Cash Up As Original Chain’s Price Recedes

by cinerama
Bitcoin Cash Up As Original Chain’s Price Recedes

Click here to view original web page at www.newsbtc.com

NewsBTC Bitcoin Cash Hard Fork

The fork of Bitcoin from August 2017 known as Bitcoin Cash (BCH) surged over 30% on Friday according to industry price analysts at Coinmarketcap. This corresponded with a marked drop in the price of the original Bitcoin’s (BTC) price to its lowest point since the start of November. Analysts are attributing the redistribution to the failed Segwit2x fork which was scheduled later this month. However, interestingly there seems a lack of consensus as to why traders are moving from BTC to BCH.

Some believe that it’s simply a matter of those traders who were holding Bitcoin to receive a dividend of new coins like what happened in August selling and moving back into various altcoins. Looking at the sea of green over Coinmarketcap immediately following the decision would suggest there’s a fair bit of truth in their opinion too. For them, part of the huge run up in price was caused by people buying in to get free coins. Now that there are no new coins, the money is flowing elsewhere. Chris Burniske, author of Cryptoassets: The Innovative Investor’s Guide to Bitcoin and Beyond believes this to be the case. He told CNBC:

You can see people playing back and forth between bitcoin and bitcoin cash trading depending on where they think near-term catalysts may be. It’s been a battle of investors versus traders that were stockpiling bitcoin to get their ‘bitcoin2x dividend’.

However, not all see it like this. There are some analysts who interpret the shift towards Bitcoin Cash as a belief in that version of the code, rather than the original – known in the industry as Bitcoin Core. For proponents of BCH like Roger Ver, the use of bigger blocks as a scaling method are closer to Satoshi Nakamoto’s original vision. Second layer scaling solutions like Segwit are not in line with the whitepaper which the mysterious Nakamoto published before disappearing early in the life of Bitcoin.

For those like director of XTB, Joshua Raymond, Segwit2x was an important step towards scaling the chain to be able to handle more transactions per second. More pragmatic than many of the hard coding, computer science-orientation anti-Segwit2x crowd, Raymond told Business Insider:

Everyone was hoping the Segwit2x would address this [transaction cost and time] but unfortunately, the delay due to a lack of consensus on the mechanics has affected confidence. Confidence on transaction speed in Bitcoin has deteriorated significantly in recent months. As Bitcoin Cash enjoys much faster transaction speeds, we have started to see a recycling of positions out of Bitcoin into Bitcoin Cash as a consequence.

For now, it’s unclear which interpretation of the numbers holds most truth. However, what is curious is that today, many alt coins like ETH and NEO are in the red as Bitcoin Cash moves higher. This casts doubt over the thesis that Bitcoin’s decline is simply down to people selling their BTC positions because there’s no longer a free dividend up for grabs. The negative growth of the rest of the market combined with the speed that BCH is rising suggests something more monumental might be afoot.

Source: Science of Crypto
Bitcoin Cash Up As Original Chain’s Price Recedes

Once An Underground Currency, Bitcoin Emerges As ‘A New Way To Track Information’

by cinerama

Click here to view original web page at www.npr.org

The digital currency’s value has gone from zero to $120 billion in nine years. Digital Gold author Nathaniel Popper says major banks are looking into the possibilities of its decentralized network.

TERRY GROSS, HOST:

This is FRESH AIR. I’m Terry Gross. There’s so much I have to learn each day in preparation for interviews that when I don’t absolutely have to know something, I sometimes give myself permission not to learn about it. And that’s been my attitude toward bitcoin until now. Or, to put it another way, when both Bjork and Microsoft are accepting bitcoin, it’s time. So we’re going to talk about what bitcoin is and how it’s used in the underground and legit marketplaces, how it’s become a vehicle for investors and how big banks are starting to copy it. My guest, Nathaniel Popper, is a technology reporter for The New York Times who’s been covering digital currency. A couple of years ago he wrote a book about bitcoin called “Digital Gold.” Nathaniel Popper, welcome to FRESH AIR. So for those of us who have never used bitcoin and don’t really understand how it works, you tell me, why should we care?

NATHANIEL POPPER: Well, I think that there are a number of layers on which this bitcoin thing is interesting. I mean, on the most sort of immediate level, people are using bitcoin in really interesting ways. I think people are using it as a sort of black market currency to buy drugs and make ransom payments, and it is allowing for essentially new types of crime. But I think it also is pointing in the direction of where money might be going, and I think it tells us something about what money is. And then, you know, to zoom out even more broadly, I think it’s really interesting because it’s not just a new kind of software or a new kind of money. It is essentially a social movement. You know, it has taken off because it has won-over thousands, tens of thousands, millions of people around the world. And I think it’s really interesting to think about what it is about this thing that has been so interesting to people.

GROSS: So just give us a sense of the scope. Like, how much money is invested in bitcoin now?

POPPER: Well, if you were to buy all of the bitcoin out in the world right now at the price this week, you would pay something like $120 billion. So that’s the sort of simple way of thinking about the size of the bitcoin economy. That is, just for comparison’s sake, larger than the value of Goldman Sachs or Morgan Stanley, larger than the value of PayPal. So that value is stored in something like 17 million bitcoins that are distributed around the world.

GROSS: OK. So what is a bitcoin?

POPPER: Well, to start with, and I think the thing that probably most people are aware of, it’s essentially a digital token that you can buy and sell. But I think one of the reasons bitcoin has remained so confusing to people is that it’s that digital token but then it’s also the network on which it lives. And it’s it’s really the network that makes it so different. And so we refer to bitcoin, we refer to that network as essentially the bitcoin network. And it’s something more like the internet. It’s a decentralized network of computers around the world where all of these bitcoin live.

GROSS: So was it created to solve certain problems with money as we know it?

POPPER: Yes. I mean, this idea when it first emerged in late 2008, actually on Halloween of 2008, was the culmination of really decades of work among a sort of small group of computer scientists and activists who were worried about – their biggest concern was around privacy. They were really worried that, you know, in the existing system when money became digital. So when we started to be able to move money around on computers with credit cards, every transaction that you made was tracked and could later be monitored by the government or by big companies. And so, you know, a big part of the work that went into this was to essentially create an anonymous digital cash.

And so that was one strain of thinking that went into this. But the other big strain when this came out was that this was essentially two months after Lehman Brothers went bankrupt. So right in the heart of the financial crisis. And there was a lot of distrust of both Wall Street and the big banks, but also of central banks. And here this was introduced as a new form of money that could exist independent of all of these institutions that people were so skeptical of.

GROSS: So the people who created bitcoin, ’cause it grew out of a movement, wanted privacy. But I’m not sure exactly where the line is between privacy and secrecy, but there’s been a lot of secrecy surrounding the use of bitcoin because the first place it really took off was the underground market, like, on the dark web, the black markets on the dark web selling drugs and sex, right?

POPPER: Right. For sure. I mean, the line between privacy and secrecy is always very, very fuzzy, and I think that a lot of the technologies that are out there to provide privacy are also sort of abused on the other side from people wanting to do things that they don’t want the government to be watching. And so yes, I mean, bitcoin sort of came out of this idealistic impulse. And, you know, after it was announced by the creator of bitcoin, this character known as Satoshi Nakamoto, it sort of stumbled along for two years, and, you know, you could send bitcoin around, but they really weren’t worth anything at that point. And it really kind of gained its first reason for being with the creation of the Silk Road, which was this, you know, online black market sort of eBay where you could buy drugs. And the Silk Road, the creator of the Silk Road realized that bitcoin made this possible for the first time. It was, frankly, quite hard to buy drugs online before this because if you did, the police would just go ask PayPal or Visa, you know, who had sent this money to buy this baggie of heroin or marijuana, and PayPal would give those records over and the person would get arrested. With bitcoin, you could send that money and nobody would know where the money came from, and that sort of gave rise to this whole new online market.

GROSS: And it’s the same phenomenon with ransomware, when somebody’s computer is basically being held hostage by malware, and the only way to get access to your computer back is to pay the designated amount of ransom money in bitcoin. But, of course, experts warn that even if you pay it, you might not necessarily get access to your computer again. But – so that’s something that’s caught on.

POPPER: Yeah. I mean, that’s been a big thing that’s risen up in the last two years, and…

GROSS: And I should say that applies not just to individual computers, but also to, like, whole networks and to hospitals and, you know, around the globe.

POPPER: Yeah. I mean, it’s created enormous problems for companies, for governments. You’ve seen, yeah, hospitals that have had to just go back to analog recordkeeping for weeks. I think it was the San Francisco Chronicle, or maybe it was a radio station here that basically had to stop using computers because their computers were all frozen by a ransomware attack. And ransomware was really something that existed before bitcoin. But, you know, in tech speak, it didn’t scale without bitcoin. Before, somebody would have to go get a money order and send it around the world physically. That’s not an easy thing to do. With bitcoin, you can now send, you know, $500 to the captor of your files in the Ukraine or Russia, and the transaction is done in 20 minutes. And, you know, that is possible because of this new way that bitcoin works, which, you know, the first sort of real-world uses of that have not been altogether positive ones for the world, I think.

GROSS: In terms of the dark web and the illegal, you know, the markets for illegal goods on the dark web that you have to pay for with bitcoin, some of those sites have been shut down, including Silk Road, the one that you mentioned, and more legit uses of bitcoin are emerging now. So what are some examples of that?

POPPER: Well, the idealism that fueled bitcoin at the beginning, the place where you’ve seen that playing out is in countries where people have their money trapped or are losing money because the local currency is, you know, is experiencing hyper inflation and so people are losing all of their savings and looking somewhere outside of the government’s control to put money. And so you’ve seen that in countries like Venezuela and Argentina. You even hear about it in Zimbabwe. You know, in those places, people have always clamored to exchange their local currency for dollars because dollars were so much more reliable, but there was, you know, a real shortage of dollars. And when you got the dollars, you frequently had to sort of put them under your mattress, which wasn’t terribly secure. You know, the vision with bitcoin is that in those sorts of places, you can now trade your local currency for bitcoin and have a somewhat more stable place to keep your money then, you know, the bolivar or the Argentine peso.

So that’s sort of, I think, one place where people like to talk about – talk up, bitcoin aficionados like to talk up. I mean, it’s also very easy to sort of move money around the globe so, you know, it takes a long time right now to make a sort of pretty basic bank transfer to India, to China. You know, that can take weeks and, you know, require sort of fees at every step along the way. The idea with bitcoin is, you know, you can send it right now and it’s there in essentially 10 minutes. And the person can log in and they don’t have to get approval from anybody. You know, that’s particularly attractive in countries where it’s hard for people to get bank accounts and where, you know, places like India, again, or Africa, where people are sort of locked out of the online economy because they can’t get a credit card, they can’t get a debit card. You know, they can’t sign up for Netflix. Now you can sign up for Netflix very easily in India or Africa, even if you don’t have a credit card, thanks to bitcoin.

GROSS: We need to take a short break here so let me reintroduce you. If you’re just joining us, my guest is Nathaniel Popper, and we’re talking about bitcoin. He’s been writing about digital currency for several years. He’s a tech reporter at The New York Times, and a couple of years ago, he wrote a book about bitcoin called “Digital Gold.” We’ll be right back. This is FRESH AIR.

(SOUNDBITE OF MUSIC)

GROSS: This is FRESH AIR, and if you’re just joining us, we’re talking about bitcoin and other digital currencies. And my guest, Nathaniel Popper, has been writing about bitcoin for several years. He’s a tech reporter for The New York Times and the author of a book about bitcoin called “Digital Gold.” So I’m not sure we know who invented money, but we do know who invented bitcoin. Except we don’t know because…

POPPER: (Laughter).

GROSS: (Laughter) Because…

POPPER: That’s a good way of putting it.

GROSS: Yeah. It’s a pseudonym. He never really revealed who he was. Even you, who have been covering this for years, don’t know who he is.

POPPER: Right.

GROSS: I’m sorry. Yeah. I don’t even know it’s a he, right?

POPPER: I was going to say that. So people frequently say he, she, they or it in case it is a sort of autonomous, you know, being that created this of some sort. But, you know, what we do know is that the person who first introduced this back in 2008 and then released the first software a few months later went by the name of Satoshi Nakamoto and communicated essentially only by email, would get on sort of chats and sort of social media forums, but always under that Satoshi Nakamoto pseudonym. And a few years into bitcoin’s existence, right as it was beginning to take off, Satoshi essentially signed off and disappeared, you know, sent the last email, gave control of the system over to the people who had been drawn to it and were, you know, working on the software at that point. And since then there’s been a sort of manhunt for, you know, to discover the true identity of Satoshi Nakamoto.

And a bunch of names have been floated over time. I wrote a story when my book came out about the person who – one of the people who was widely viewed as the most likely candidate. But all of the people who have been, you know, fingered as potential Satoshi Nakamotos have denied essentially that they are, except for, I should say, one person who claimed to be Satoshi Nakamoto and won over a certain number of people. This got a lot of news, I think, maybe a year or two back, this guy named Craig Wright from Australia who claimed that he was Satoshi. But as people looked into it and looked into the sort of electronic records – it was quite a chase – I think most people concluded that this was not in fact Satoshi Nakamoto.

GROSS: So when Satoshi Nakamoto, whoever that is, started bitcoin, he or she issued something between, like, guidelines and a manifesto. Like, a nine-page document. Can you sum up, for those of us who don’t really understand this (laughter), the principles that were laid out in those nine pages?

POPPER: Sure. Yeah, so this was the original. It’s called Satoshi’s White Paper. You know, it has this sort of iconic status, this nine-page PDF that was released in early – in late 2008. And it sort of described how this system was going to work. And it said it would be a sort of electronic cache, and there were going to be certain rules that would govern this electronic cache. There would only ever be 21 million bitcoins created. That rule was sort of stated there at the beginning. And that was created so that it would have a sort of scarcity like gold and – which might lead people to think there was going to be a value in it. If there wasn’t going to be an unlimited number of them, that might confer a certain value on bitcoin, which it has ended up doing. So that was one rule.

The other rules were about how Bitcoin would be distributed. It’s not – there wasn’t going to be a bank of bitcoin that would distribute them to everybody. They were going to be sort of slowly dripped out over time to people who joined the network. And I think that’s the most important thing about the rules around bitcoin was that it was going to be a network of computers, sort of like the Internet, that anybody could join and anybody could support this. And that would allow for bitcoin to exist independent of any sort of central source of authority. There wasn’t going to be a government here. There wasn’t going to be a company. There was going to be this network of computers that was supporting it, and that means that anybody can join that network and send money to anybody else. And so those were sort of the basic rules that were laid down.

And I should say that in the first months after this was proposed, this was not a rousing success. There were, you know, a handful of people, you know, maybe eight people who responded to this idea. Most of whom thought that there was no way that it could work.

GROSS: Well, for this to work, it really requires a level of faith. When you’re talking about, say, dollars, it’s backed up by the U.S. government. And if you have money in a bank, a certain amount of it is backed up by the FDIC. You know, if you invest in the stock market, it’s going to fluctuate, but you have shares in something whereas with bitcoin it just seems like an act of faith in bitcoin.

POPPER: Well, you are certainly right. I should note I think that, you know, all of those instances you just mentioned – the U.S. dollar is backed up by the U.S. government, by the FDIC – that’s true. I mean, if you kind of dig a little deeper, you know, what you’re expressing faith in when you express faith in the dollar is essentially the U.S. government and the FDIC. You’re believing that those are going to be around. And obviously, that’s not maybe a hard thing to believe in, but there’s some chance that it won’t happen. And certainly there are countries where the government has issued currency and then the government has fallen and the currency has turned out to be worthless.

So to a degree, money is always about faith. It’s about believing that the thing you’re holding in your hand is going to be worth something tomorrow, next week, in a month and that somebody will take it and give you something in exchange. The same is true with bitcoin. And certainly, there are not the institutions backing it up that you have for the U.S. dollar or for stocks. But what is backing it up is this network. And so you in essence are sort of expressing your faith in that network and the power of the network and the power of the rules behind bitcoin to draw people to this currency and to make people think that the network, you know, may outlive the U.S. government. I wouldn’t argue that myself. I don’t know the odds. I would say probably the odds of the U.S. government outlasting the bitcoin network are good.

But I think that a lot of people have – had assumed that bitcoin – that the bitcoin network wouldn’t survive to, you know, through the first year, much less the first eight years, which it’s done. And it’s sort of continued to kind of engender this faith among the people who believe in it, who follow it.

GROSS: My guest is Nathaniel Popper, a tech reporter for The New York Times and the author of a book about bitcoin called “Digital Gold.” After we take a short break, we’ll talk more about how the bitcoin system works and how bitcoin are created by huge server farms competing against each other. And David Edelstein will review the new movie “Three Billboards Outside Ebbing, Missouri” starring Frances McDormand. I’m Terry Gross, and this is FRESH AIR.

(SOUNDBITE OF MUSIC)

GROSS: This is FRESH AIR. I’m Terry Gross. We’re talking about bitcoin, the digital currency that was created in 2008. Although its roots were in idealism and libertarianism, it first became widely used for purchases on the dark web, the sites on the Internet black market selling drugs and sex. But this digital currency is now being used for more mainstream purchases. Big banks are starting to find uses for some of the innovative structure of the bitcoin system. My guest, Nathaniel Popper, is a tech reporter for The New York Times. A couple of years ago, he wrote a book about bitcoin called “Digital Gold.”

So when bitcoin was first released into the world, it was determined by the person who released it, who goes by the name Satoshi Nakamoto, he or she determined how much bitcoin there would be in this world. There’s a finite amount of bitcoin that will ever be released to make sure that, like gold, it retains its value. So it’s a kind of complicated process how bitcoin is created or mined. Mined is the word that’s used. New bitcoin is mined. So would you just tell us a little bit, like, in a comprehensive way about how new bitcoin is mined?

POPPER: It’s a dangerous question, and it’s a hard one to answer simply, but, you know, the answer to how bitcoin are created does sort of give you some glimpse into the inner workings of how this thing functions and why it has survived as long as it has. I mean, essentially, bitcoin released onto the network every 10 minutes. A new block of bitcoin is released onto the network every 10 minutes. And this started on the very first day. On the very first day, there was zero bitcoin in the world. And after 10 minutes – after about 10 minutes, 50 bitcoin were released to one of the computers that was hooked into the network, which at that point was Satoshi Nakamoto’s computers. They were almost the only computers that were hooked in at that point. But the rules of bitcoin – the software determine how those bitcoins, those new bitcoins being released, are going to be distributed to people.

And the first thing that this does is that it encourages people to join the network. You can essentially – at least early on, you could essentially get free bitcoin if you joined the network. And so it incentivized people to join the network. The other thing it did was that it got those computers to start keeping the records for the network. So if you want to win those bitcoins, essentially you have to start working as an accountant for the network and registering all the new transactions that come in. And if you are doing that – the more computers you add to help, you know, serve as accountant for the network, the better chance you have of winning bitcoins. And so that is how sort of the records are kept, and that’s how you get people to volunteer to keep the records. You give them new bitcoins. You offer these new bitcoins. So over time, that incentive system has generated this enormous network.

Right now, there’s something like 13,000 nodes or computers hooked into the network that are helping to keep these records. And a lot of those are mining, trying to win these new bitcoins. And so this complicated economic system was set up with lots of incentives in there to get people to participate and to sort of create the foundation for this decentralized network to keep all the records.

GROSS: So you can’t just say, well, I want to create new bitcoin. It’s a kind of interesting process. You’re basically competing with other people who also want to create new bitcoin. So what do you have? Do you have, like, a lot of computers competing with each other? And what’s the competition? Like, what are the…

POPPER: Yeah.

GROSS: Who decides who wins?

POPPER: You know, we’re slipping down the rabbit hole here and I…

GROSS: Yeah, that’s what I was afraid of, but…

POPPER: Let’s make sure not to go…

GROSS: Yeah.

POPPER: Let’s make sure not to go too deep data because it’s based on cryptography and encryption, which is sort of the leading edge of math, you know, basically really hard math problems you have to solve. But at the most basic, computers are trying to process all the transactions coming into the bitcoin network as quickly as possible. And the faster you do it, the more efficiently you do it, the better chance you have of winning bitcoin. There’s an element of luck in it. It’s somewhat like a lottery, but essentially the person with the most computing power has the best chance of winning the lottery.

And so what’s that – what that’s created today is a world in which you have literally server farms in outer – inner Mongolia, in Tibet, in Iceland. Anywhere where you can get cheap electricity to run computers very fast, people have set up basically server farms, big, you know, buildings just filled with computers trying to sort of unlock these new bitcoins but also sort of serving as the backbone of this network. And, you know, the more computers you have joined in, the more secure the network is, the harder it is to attack. And it’s this crazy world in which – I mean, literally in China, which has become one of the most, you know, one of the places where you have the most bitcoin mining, you know, spread all around China, you have next to – you know, next to hydroelectric dams and next to a coal plants, people have set up these server farms that are dedicated to doing nothing but mining bitcoin.

GROSS: I know you visited a server farm in Iceland. Did you go to one in China, too?

POPPER: I went a couple years ago to one in China. They have gotten a lot bigger and more sophisticated since then. I mean, there are literally sort of towns that are built around this in China where you have people just living in the bitcoin mining facility, you know, Chinese people who really – you know, the people who are working there are sort of the custodians. They – most of them have no idea really what’s going on or how the system works. But it’s – you know, it’s created this whole economy.

GROSS: So bitcoin is being used as an investment vehicle in the U.S. It’s being used for investing, in speculation. How is that playing out here?

POPPER: Well, very well for the people who bought it early on. I mean, a bitcoin this week is worth something like $7,500. You know, a year ago, it was worth less than $1,000. And that has attracted a whole bunch of new people to this. It’s attracted people around the world. Here, what you’ve seen is a lot of hedge funds getting into this game. So there are now hedge funds being set up. Something like 100 hedge funds in the last year have been set up to invest exclusively in virtual currencies, bitcoin as well as some of the competitors that have sprung up.

GROSS: Wow. Well, say this is a bubble, what happens (laughter)? I mean, like, the price of bitcoin has been shooting straight up, but things that go up sometimes come back down.

POPPER: Yes. I mean, if you look at the chart of the bitcoin price since it was born, it is just a series of spikes and then drops, and then spikes and then drops. And over time, you know, you get the spike, and it drops down to a level that is generally still higher than where it was before the spike, but lower than the spike. And so I think a lot of people are asking right now how long this can go on. And certainly, you’ve heard numerous CEOs of banks say, this is unsustainable; this is a bubble; this is going to crash.

And I think there’s no doubt that there probably is going to be some reckoning here. I mean, this meets many of the definitions of a bubble. People are speculating on the future value and desire for bitcoin. People are speculating that this will serve more purposes in the future and will be more valuable to more people in the future than it is today. And they’re betting – a lot of people are just betting that the price is going to go up without knowing anything about it. And those are a lot of the characteristics that you see in bubbles.

I mean, you know, the counterargument is that this is the first time that we’ve had a scarce digital resource. So I – the Internet, until now – most things on the Internet, you can copy and paste, right? That’s what the music industry found. You can copy and paste an MP3. You can copy and paste a movie file. Things aren’t scarce on the Internet, and one of the things that bitcoin did through this weird, complicated system of incentives is, it created a scarce digital asset for the first time.

So a lot of people think about this now as something like digital gold. You know, this is a place where you can keep your money because there’s only going to be so many of them, and the system works, and it’s in some ways better than gold because, you know, gold, you can’t carry across a border secretly. You can’t – you can try to stuff it in your underwear.

But, you know, gold, people can – it’s hard to travel with gold. Bitcoin – as long as you have that password, you can go somewhere else with internet access and you have access to your money. So that’s the sort of thesis on this. But I think that the sort of expectations and the types of people who are getting into this right now, a lot of them are not terribly sophisticated.

GROSS: So of the maximum 21 million bitcoin that can be released by – what were – year was it, 2040?

POPPER: 2140, yeah.

GROSS: 2140, right – oh, 21 – wow, 2140.

POPPER: We got a while.

GROSS: Wow.

POPPER: We’re talking about a distant future.

GROSS: I’m hearing, like, 2040. That’s, like – that’s so far away.

POPPER: It is.

GROSS: OK, so how many bitcoin have already been released?

POPPER: We’re getting close to 17 million. So the reward to people who are helping to support the network falls in half every four years. So initially, it was 50, and then 25 and now we’re down to 12 1/2, and it’ll sort of keep going down like that until it approaches zero. And I think, obviously, part of the idea is, they will be worth more, so the 12 1/2 that are released now are actually worth a lot more than the 25 that you were getting a year ago.

GROSS: OK, it’s time for a short break. Let me reintroduce you. My guest is Nathaniel Popper. We’re talking about bitcoin, and he’s been writing about bitcoin for several years. He’s a tech reporter for The New York Times who wrote a book a couple of years ago about bitcoin called “Digital Gold.” Back after this short break – this is FRESH AIR.

(SOUNDBITE OF JAY-Z SONG, “DECEMBER 4TH”)

GROSS: This is FRESH AIR. And if you’re just joining us, my guest is Nathaniel Popper. He’s a tech reporter at The New York Times. And we’re talking about bitcoin – digital currency – and he’s been covering bitcoin for several years. A couple of years ago, he wrote a book about it called “Digital Gold.”

So, you know, whether you use bitcoin or not, whether you think it’s going to last or not, the architecture of the system seems pretty ingenious. And there are major banks and even the New York Stock Exchange, you know, that are picking up on some of the architecture to borrow it for their own purposes, and what they’re borrowing from is what’s called the blockchain. Would you explain what that is and how, like, major banks are trying to borrow that system?

POPPER: Sure. Well, I think the blockchain, in the simplest sense, is the record of all the bitcoin transactions. It’s a ledger, a sort of a spreadsheet on which bitcoin transactions are recorded. But what’s special about the bitcoin ledger – the bitcoin blockchain – is that it’s not kept by a central institution. It’s kept by a bunch of people, and part of the idea is that it’s a bunch of people who don’t trust each other but can use this system to have a sort of shared record of their assets.

And so this blockchain idea, this idea of keeping records in a decentralized way so that anybody can consult it and that nobody is in charge – that idea of the blockchain is something that’s piqued a lot of interest in the financial industry but also in a whole bunch of other industries. IBM has made this one of their biggest pushes over the last few years to kind of try to regain relevance. They have made a big move into the blockchain industry, as has Microsoft. And they’re essentially making a bet that this is a new way to track information.

And, you know, we live in an information economy, and so if you can come up with new ways to track and store information more reliably, it has the potential to recreate some of the foundations of the information economy. It really sounds rather vague.

You know, when you just look at something like the financial industry, the banks are looking at this as, you know – maybe instead of paying the New York Stock Exchange to buy and sell stocks there, and then transfer the money for us, and move the stocks back and forth and make sure all the records are kept, maybe we – all the banks – we can just set up a blockchain where we can all trade, and we don’t have to pay anybody in the middle, and we can keep track of all those records, and all of us can do it without trusting any of the other people in the system. And that’s the sort of basic idea that I think has given rise to this whole new industry.

GROSS: So you’re not allowed to invest in bitcoin because you cover it for The New York Times. Are you allowed to use it, and have you used it?

POPPER: Yes. I mean, our take at The New York Times has basically been, I can have enough to play with and understand it. And I think the understanding has generally been that, you know, those bitcoins essentially belong to The New York Times so that I don’t get any big ideas.

But yeah, I mean, I’m in there on a daily basis trying to understand how these things work, how you move between different currencies, how it can move around the world. And that’s been an important part of reporting on this.

GROSS: So if you want to get bitcoin to make purchases, how do you get it?

POPPER: Well, companies – not surprisingly, companies have sprung up to make this very easy for you to take your money and give you bitcoin. You know, there’s – probably the biggest company in the United States is a company called Coinbase, which is essentially a sort of Charles Schwab or an E-Trade for bitcoin. You send them money, and then you can trade on their platform. You can move in and out of bitcoin. And then you can take your money out and transfer it back to your bank.

And they’ve made it very easy so that anybody – you know, so it’s as easy as – probably easier than buying a stock is through E-Trade. And part of what’s interesting there – I guess that’s not too surprising. What’s interesting is that the government and regulators have essentially allowed this to happen, have said, this is OK.

New York – state of New York has created a BitLicense that Coinbase has, and that makes it easier for them to do this and easier to get bank accounts. And so at least in the United States, the government has sort of said, we’re going to let this happen; we realize there might be something of value here, so we’re not going to try to kill this.

GROSS: Have you had any great bitcoin adventures in researching your book or writing for The New York Times that you could share for – share with us?

POPPER: I mean, this whole thing has been such an incredible story. I mean, that’s why I was drawn to it. I mean, the number of people who have gone to jail – often shortly after getting fabulously wealthy – is incredible. And so a lot of the stories I talk – tell in my book are these stories of these astronomic rises followed by these incredible falls. And oftentimes, I was there.

You know, I – you know, one of the main characters in my book, I met him in this bar that he had essentially bought a piece of using bitcoin and where he would have these bitcoin parties, where he met his girlfriend. You know, they took bitcoin for – the waiters and waitresses took bitcoin. And he was on top of the world. He had just come back from Argentina. He was traveling around. A week later, he got stopped at the airport by the police, went to trial, ended up in jail. And, you know, I was talking to him at every stage along the way.

And I’ve had that experience in so many different realms – you know, in Iceland, in China, in Argentina. And just to see the way that this technology has created these little universes of – it’s only – they’re like little science fiction cells where these people are imagining these new futures, and, you know, in each place – in China, Argentina, everywhere you go – it has evolved in different ways.

And so just to see the way that this software, you know, it – that this piece of program that this anonymous person wrote – the way it can sprout up and create all these things in the real world – you know, going to these gorges in China where there are now people just living in these enormous industrial sites, working on this – it’s – that’s, I think, what’s been the most incredible to see.

GROSS: Well, Nathaniel Popper, I want to thank you so much for talking with us.

POPPER: Thank you so much for having me.

GROSS: Nathaniel Popper is a tech reporter for The New York Times and the author of a book about bitcoin called “Digital Gold.” After we take a short break, David Edelstein will review the new movie “Three Billboards Outside Ebbing, Missouri.” This is FRESH AIR.

(SOUNDBITE OF JUSTIN HURWITZ’S “SURPRISE”)

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Source: Science of Crypto
Once An Underground Currency, Bitcoin Emerges As ‘A New Way To Track Information’

Richard Browning Flies at 32 MPH in Iron Man Suit

by cinerama
Richard Browning Flies at 32 MPH in Iron Man Suit

Click here to view original web page at themerkle.com

Themerkle Richard Browning Iron Man

With so much progress being made in the world of science and technology, it is not surprising that we would see some very strange developments from time to time. Power suits capable of flight are not all that uncommon these days. A new Guinness World Record for the fastest speed attained in such a suit was recently recorded by English inventor Richard Browning – or as most people know him, the real-life Iron Man.

Human Flight is Coming a lot Closer

One of the things our species has never been able to successfully achieve on our own is flight. More specifically, we can’t fly by ourselves without relying on helicopters, airplanes, kites, and whatnot for even brief amounts of time. Flying on demand whenever and wherever we want is not something most consumers will get to enjoy anytime soon. Then again, Richard Browning recently showed it can be done, even though there are certain risks involved.

More specifically, Browning made a lot of media headlines for developing his very own Iron Man suit. Although this may sound like an overstatement – he doesn’t look as technologically advanced as Tony Stark in this regard – all of the functionality seems to be there. Browning’s power suit is capable of flight over pretty decent distances and at a shockingly high speed. In fact, his suit recently set a new speed record which was promptly recorded in the Guinness World Record book.

The record was set at Lagoona Park, Reading, where Browning achieved a top speed of 32.02 miles per hour while flying in his power suit. It took three runs to do so successfully, as this power suit isn’t without its flaws whatsoever. The first and second attempts failed due to a mistimed run and even a drop into a lake. This just highlights how difficult it is to not only create a working power suit but also control it effectively. Achieving such a high speed with nothing to break one’s fall if things go awry is pretty scary, to say the very least.

As of this week, Browning is the proud holder of the Guinness World Records title for “fastest speed in a body-controlled jet engine power suit”. As this is a brand new title, it’s not entirely surprising that few people will have heard of it before. It will be interesting to see whether or not anyone will try and take the crown from Browning in the future. There will be plenty of people who will look at this feat and think they can improve upon his power suit in general.

Rest assured Browning will not sit idly by. His goal is to ensure his power suit achieves a speed of several hundred miles per hour. This is a speed which is achieved by wearing a metal suit, which will not entirely protect one’s body from crashing into things. Daedalus, as the suit is known, should be capable of flying at thousands of feet as well. It sounds incredibly dangerous, which would explain why there are only a handful of people planning to work on similar technology.

Daedalus’s further development will be funded through parent company Gravity. The firm has raised hundreds of thousands of dollars to keep working on the suit’s design and improve its functionality. The plan is still to create a commercially viable suit in the near future, which will effectively give birth to flying humans. An interesting future lies ahead in this regard, assuming things ever get to that level.

About The Author

JP Buntinx is a FinTech and Bitcoin enthusiast living in Belgium. His passion for finance and technology made him one of the world’s leading freelance Bitcoin writers, and he aims to achieve the same level of respect in the FinTech sector.

Source: Science of Crypto
Richard Browning Flies at 32 MPH in Iron Man Suit

Charlie Shrem “Among The First” To Apologize Over SegWit2x Bitcoin Fork

by cinerama
Charlie Shrem “Among The First” To Apologize Over SegWit2x Bitcoin Fork

Click here to view original web page at cointelegraph.com

Charlie Shrem
Charlie Shrem ‘Among The First’ To Apologize Over SegWit2x Bitcoin Fork

The botched attempt to upgrade the Bitcoin network via SegWit2x is settling quickly. However, some in the Bitcoin community are bent on making its crusaders feel the heat.

They took to Charlie Shrem‘s Twitter page to vent their displeasure as he apologizes for supporting the upgrade. The SegWit2x upgrade was abruptly called off yesterday, about a week before its proposed launch, due to lack of consensus.

Mea culpa

Shrem tweeted:

I will be among the first to admit I was wrong. When I was told #SegWit2x I thought there would be consensus in everyones best interest, but over time learnt this wasnt the case. In the long term, I hope you all can see my (and most of our) intentions were good. I <3 #Bitcoin

— Charlie Shrem (@CharlieShrem) November 9, 2017

For many, his words didn’t have the intended effect. Several commenters showed disdain for Shrem because of his support of the software upgrade. Vake‏ @vakeraj notes it would have been better if Shrem had realized this long ago, rather than wasting countless hours of developer time.

It would’ve been nice if you had figured that out months ago, instead of wasting countless hours of developer time.

— Vake (@vakeraj) November 9, 2017

Another respondent, Hunter Shields‏ @huntershieldz, claims it would be hard to trust Shrem in the future, asserting that he’d lied about consensus. The tweet says: “You didn’t follow the BIP process of SCIENCE/CONSENSUS. You almost rushed a HARD FORK costing billions of OTHER people’s money. And wasted time/energy/money of others the past six months. Someone lied about consensus.”

how can we trust people like you if you lied about consensus? you didn’t follow the BIP process of SCIENCE/CONSENSUS. you almost rushed a HARD FORK costing billions of OTHER people’s money. and wasted time/energy/money of others the past 6 months. someone lied about consensus

— Hunter Shields (@huntershieldz) November 9, 2017

Others reference his previous roles in the community and credit his ability to come out and make a public apology.

ARD‏ @ar_d2012 tweets: “Charlie I watched documentaries about you when I was learning about Bitcoin. I made my girlfriend watch. You were a hero for me. If I see you I WANT to take a picture with you.. But I was devastated to know you supported #segwit2x.”

Charlie I watched documentaries about you when i was learning about bitcoin. I made my girlfriend watch. You were a hero for me. If i see you I WANT to take a picture with you.. But I was devastated to know you supported #segwit2x

— ARD (@ar_d2012) November 9, 2017

Others like Chris Ani‏ @Christianani1 and 1X Gonzo‏ @gonzoucab praise Shrem’s “good heart” what he has done for Bitcoin. A. Hannan Ismail‏ @A_Hannan_Ismail simply states: “You’re a good man.”

Charlie I have always knows you have a good heart. You can’t be against bitcoin …you are indeed a leader.. love you all you do 4 btc

— Chris Ani (@Christianani1) November 9, 2017

We know what you did. and we love you.

— 1X Gonzo (@gonzoucab) November 9, 2017

You’re a good man.

— A. Hannan Ismail (@A_Hannan_Ismail) November 9, 2017

A Bitcoin entrepreneur and advocate, Shrem is a founding member of Bitcoin Foundation. He was made the business development director for Jaxx, a multi-platform cryptocurrency wallet, in May.

Shrem’s hope in his apology that his intentions – as well as that of others – would be seen in the long term as good, as this was also questioned. Two respondents refer him to the saying that “the way to hell is paved with good intentions.”

There have also been calls for crypto users to push for signers of the New York Agreement such as BitPay, BitGo, Coinbase and Gemini to start using SegWit.

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Source: Science of Crypto
Charlie Shrem “Among The First” To Apologize Over SegWit2x Bitcoin Fork

Bitcoin Isn’t ‘Too Expensive,’ Says BTCC Boss Bobby Lee

by cinerama
Bitcoin Isn’t ‘Too Expensive,’ Says BTCC Boss Bobby Lee

Click here to view original web page at www.coindesk.com

“There was a joke on social media, some guy lost his sex drive because he sold bitcoin after the China ban.”

And with that, Bobby Lee, the CEO of China’s oldest cryptocurrency exchange BTCC, launched into a scheduled speech extolling the virtues of bitcoin. Coming at the end of day one of the two-day technical conference Scaling Bitcoin last weekend, the talk amounted to a pep rally largely aimed at classical bitcoin bogeymen – the state, ICO scammers and those who don’t get it.

But while he was speaking to just a few hundred of the foremost technical experts on the subject, it’s ironically those in the wider world who Lee might have been better off addressing in his full remarks.

“Bitcoin’s value does not come from the endorsement, acceptance or regulation from governments. Bitcoin’s value comes from the inherent failures, limitations and inconveniences of the fiat money system,” Lee said in a tone befitting a grade school science teacher.

From there, he proceeded to defend the price of bitcoin – up more than 600 percent on the year – not as a bubble, but as evidence the protocol is proving its utility as the best way to hold value in the digital age.

Far from being tepid about the market, Lee argued those who have been on the fence should invest in bitcoin today, telling the crowd:

“The last year, bitcoin has proven itself. What I tell my friends now, is as long as bitcoin is under $10,000, it’s your chance to get in. For those of you [who] think it’s too expensive, if you look in the rearview mirror, bitcoin has gone up 10x in the last year.”

Lee went on to describe bitcoin as “very cheap,” arguing that prospective buyers shouldn’t look at the current price, but rather conceive of the potential the protocol could have when more of the world’s assets migrate to the blockchain.

“Bitcoin is like buying gold at a 98 percent discount. If you think it’s too late, if I had thought that back in 2012, I would not own bitcoin,” Lee continued.

Jam-packed with no shortage of attempts to entertain, the speech went on to outline common “mistakes” made by more novice bitcoin traders, including four that Lee cited as the most detrimental. These included: “indecisiveness,” “not buying enough,” “selling after a small gain” and “selling during a panic crash.”

“When you first learn about bitcoin you hesitate, the answer is to not be hesitant,” he said.

On China

Still, the talk was not without its more serious moments.

For example, Lee opened up at length about the difficult situation for his startup, which has pivoted internationally after finding itself on the receiving end of the negative actions that can occur when bitcoin “challenges governments.”

This September, the Chinese government moved abruptly to shut down ICOs (the sale of custom cryptocurrencies for fundraising), at the time, allegedly acting behind the scenes to take exchanges offline.

In response to the news, the market reacted strongly – dropping below $3,000 after hitting a new all-time high of $4,000 in the weeks before. Lee went on to note that “no one dares talk about” what happened next: the effective doubling of the price.

And while no formal ban was made, Lee affirmed his belief that China still “doesn’t want to see bitcoin anymore,” and that to his knowledge, no trading or price information can be displayed to consumers.

“No ICOs, no bitcoin, ethereum, litecoin, no more. That’s the rule right now. I don’t know where you buy bitcoin in China. It’s like buying guns and pornography in China,” he said.

That’s not to say he doesn’t see the market ever coming back, but he’s not optimistic about the timeline.

State cryptos are coming

While there was focus on China, the remarks are perhaps best seen as part of a broader point: state actors will and are trying to infringe on bitcoin.

Lee made clear he believes the actions in China are simply the first sign of what the bitcoin community has long suspected will occur, that central banks will try to issue “digital crypto versions of their money system.”

“Those will be state-controlled, state-supplied. Today bitcoin accounts are freely generated, those will be assigned to you and assigned identity. I don’t think we’ll be close to a decentralized cryptocurrency,” he said.

Lee, however, was adamant in his belief that bitcoin – and by extension, its developers or businesses – shouldn’t bend the knee in response.

He concluded:

“I don’t think bitcoin needs to cater to any culture or nationality of its users. Bitcoin is global, it cuts across all language and cultural barriers.”

Bobby Lee image via Pete Rizzo for CoinDesk

The leader in blockchain news, CoinDesk is an independent media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. Have breaking news or a story tip to send to our journalists? Contact us at news@coindesk.com.

Disclaimer: This article should not be taken as, and is not intended to provide, investment advice. Please conduct your own thorough research before investing in any cryptocurrency.

And with that, Bobby Lee, the CEO of China’s […]

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Source: Science of Crypto
Bitcoin Isn’t ‘Too Expensive,’ Says BTCC Boss Bobby Lee

Money Psychology: How Cryptocurrency Makes Us More Compassionate (Part 2)

by cinerama
Money Psychology: How Cryptocurrency Makes Us More Compassionate (Part 2)

Click here to view original web page at news.bitcoin.com

Money Psychology How Cryptocurrency Makes Us More Compassionate (Part 2)

Fiat currencies make us mean and inhumane, according to most money research. On the other hand, cryptocurrencies might bootstrap humankind with more compassion, tenderness, and love. These digital assets could disrupt our psychology and increase human happiness. It’s in the nature of how these currencies function.

Also read: Bitcoin Markets Rebound as More Chinese Exchanges Plan to Close Operations

Money Psychology: How Cryptocurrency Makes Us More Compassionate (Part 2)

That said, if fiat currencies do exacerbate or even cause the money-empathy gap, and other negative psychological phenomena, how does cryptocurrency negate that? Before delving into the psychology of cryptocurrencies, it is important to examine how cryptocurrencies are different from fiat monies.

Cryptocurrency: A New Kind of Money

Cryptocurrencies by their nature were meant to alter human psychology. They were created by crypto-anarchists for the purposes of reshaping the social order — by undermining a system that was erected on the blood and sweat of the people. In this sense, whenever someone creates technology to alter society, it also augments human behavior. Digital currencies do this because they have several properties that fiat currencies do not possess.

Decentralization

Cryptocurrencies are decentralized. This means there is no single point of failure. There is not a centralized honeypot for bureaucrats, thieves, or bankers to collect data from or steal from.

Money Psychology: How Cryptocurrency Makes Us More Compassionate (Part 2)

Decentralization is the crux of this technology. It means cryptographic systems are spread throughout a vast network of interacting and cross-communicating computers. In this manner, if one computer — or node on the network — fails, the network will still chug along.

Peer-2-Peer

Another important aspect of blockchain-based cryptocurrency is they are peer-to-peer networks. This suggests all transactions occur between Alice and Bob. There is no trusted intermediary needed to intercede on behalf of the transactors. They simply make the exchange and go about their business.

This sounds like a simple idea, but it is really grand in the current financial environment. Most credit and electronic transactions that take place within the fiat system pass through a gatekeeper. This is a company or institution than skims profits off the top off all exchanges that occur within the system. It is a middleman that hijacks part of the value exchanged between two people.

Borderless and Permissionless

Furthermore, cryptocurrencies like bitcoin are also borderless and permissionless. This means transactions can travel beyond artificial constraints such as national borders, and generally at low cost. This automatically instills people with the idea the dollar or other fiat currencies aren’t superior kinds of money.

Money Psychology: How Cryptocurrency Makes Us More Compassionate (Part 2)

These digital currencies are also permissionless, which means that anyone can build them or change them. In this regard, many of them are open source. They do not require permission from authorities to build or upgrade. Anyone can write some python code and create new money to their heart’s content.

In the future, there may be Alice coin or Bob coin. There might be a digital token for anyone who wants them. This radically changes the way humans relate to each other concerning exchanges of value.

Psychological Differences Between Fiat Money and Cryptocurrency

The aforesaid features are what ultimately allow cryptocurrencies to start rewriting the firmware of human psychology. Since fiat currencies are controlled by banking cartels and central governments, people’s psychology — their behavior, emotions, and thought processes — become intertwined with the currency.

This creates a master-slave dynamic in regards to fiat currency. It creates a psychological scenario where people who have it, consciously or unconsciously, associate it with power and control. In other words, fiat currency overrides our neural networks and makes people mean. It disintegrates people’s innate proclivity to empathize, as demonstrated by the money-empathy gap experiment.

Money Psychology: How Cryptocurrency Makes Us More Compassionate (Part 2)

Cryptocurrency, on the other hand, represents a different dynamic. It is a network dynamic that is based on the underlying principle of connection and sharing and cooperation.

Friend-Friend dynamic

This new friend-friend dynamic crops up as a result of cryptographic features. These are the characteristics of decentralization, peer-2-peer transacting, and borderless and permissionless trading. When these emergent properties of computational monetary systems arise, it changes the way people feel about each other in relation to money. People now view each other as partners or ‘friends’ in a forward-moving, cooperative financial economy.

To wit, people have reason to be more compassionate. They are no longer being bombarded by money that is associated with greed and power. They are interacting with a paradigm that is based on algorithmic fairness. We can already see this manifesting in society. In a previous article on the topic, I mentioned my colleague Jamie Redman and his perception of the wealthy in society:

For example, Bitcoin enthusiast and Journalist Jamie Redman of news.Bitcoin.com is known as the family man of Bitcoin. He chats with his children about money and the promise of cryptocurrency, and does not despise either the rich or poor. His mentality may be unique, but it seems to foreshadow the idea that Bitcoin is altering our psychology. Vice even wrote an article about his family-oriented ideals called “Meet the Bitcoin Family.” This means things are changing for the better.

Nature Via Nurture in Economic Systems; Holarchy Versus Aggressive Hierarchy

Some people, however, argue all money leads people to become evil and greedy, hence the phrase “money is the root of all evil.” It is not money that leads people toward evil and greed, though. It is more likely the structure and function of institutions exacerbate phenomena like the money-empathy gap.

When the game is rigged so there are few winners and many losers, people turn hostile and aggressive. They lose their ability to connect and empathize with others.

Money Psychology: How Cryptocurrency Makes Us More Compassionate (Part 2)

This results from the interaction of the environment with a person’s genetics. It is not that people are genetically geared to fight each other or be inhumane. It is just human behavior transforms to match the style of environment they populate. In other words, nature via nurture oftentimes determines our behavior, especially in the realm of economics and money psychology.

In this sense, if the structure of society and its monetary system is refashioned to represent a holarchy rather than aggressive hierarchy, it is likely people’s economic and psychological behavior will change with it. This would lead to more compassionate, empathetic, and care-giving lifestyles. This is what cryptocurrencies are in the process of doing.

The Rise of Cryptopsychology

Even though bitcoin and cryptocurrency herald a new paradigm of compassion, the true nature of their ability to shift human psychology has yet to be seen. There has not been much research on whether cryptocurrency interactions change psychology; but because of how human psychology functions environmentally, cryptocurrencies are already reshaping humanity — making people more compassionate and loving.

I call this new realm of inquiry crypto-psychology. It is a field that would explore how blockchain technology, cryptocurrency, and other innovative technology changes how we think and perceive. My guess is that it will open a Pandora’s Box of new insights, and that we will see how flexible human nature is when trustless protocols unfetter everyone from the dominator culture in which we dwell.

Do you think have more wealth causes the money-empathy gap? Share your thoughts in the comments section below!

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Source: Science of Crypto
Money Psychology: How Cryptocurrency Makes Us More Compassionate (Part 2)

Apartments in Turkey Available for Purchase Using Bitcoin

Apartments in Turkey Available for Purchase Using Bitcoin

Click here to view original web page at news.bitcoin.com

Apartments in Turkey Available for Purchase Using Bitcoin

The owner of the MiaVita Beytepe project in Ankara, Turkey, has announced that its luxury apartments are available for purchase using bitcoin. The apartments are expected to comprise the first real estate transactions to be made using cryptocurrency in Turkey.

Also Read: Luxury Dubai High Rise Apartments Will Be Sold for Bitcoin

Luxury Apartments in Turkey Are Available for Purchase Using Bitcoin in an Attempt to Capitalize Upon a Growing Interest in Cryptocurrency From Turkish Investors

Apartments in Turkey Available for Purchase Using Bitcoin

The luxury apartments have been realized by the Turkish company Anadolu Akaryakıt ve Ticaret Ltd. Sti, who has named the 114 apartment development the ‘MiaVita Beytepe’ project.

Erdal Daldaban, the “Project Management Firm owner”, has enthusiastically described the foray of MiaVita Beytepe’s into digital currency, emphasizing the growing interest in bitcoin being generated among Turkish investors. “We decided to make sales via Bitcoin, which has recently attracted the attention of Turkish investors with its recent value route, considering that we could also attract the attention of our customers who appreciate their investments like this”, adding that “digital money has become an element that can no longer be ignored for the global economy. The most remarkable progress in these digital currencies was the fact that BitCoin provided technical infrastructure stability and awareness, and the Turkish investor was rightly interested.”

Daldaban has sought to assure potential investors, stating that “bitcoin is independent of monetary policies that control conventional currencies and acts on its own channel as it is not tied to any Central Bank.”

Turkey’s Banking Regulation and Supervision Agency Issued a Statement in 2013 Which Is Seen to Have Confirmed the Legality of Bitcoin

The 2013 release concludes that bitcoin is not considered to be electronic money according to Turkish legislation, “and thus its surveillance and supervision are not possible within the frame of the law.”

Apartments in Turkey Available for Purchase Using Bitcoin

Although Turkey has not updated its official position regarding bitcoin since 2013, Turkey’s Banking Regulation and Supervision Agency announced that it would seek to “prevent the use of alternative spending methods, such as bitcoin, ethereum, and ripple, for illegal gambling activities” as part of an initiative designed to crackdown on black market gambling. During August of last year, Turkey’s sole bitcoin exchange, BTCturk, announced that it would cease operations due to its inability to find a banking partner – suggesting that despite bitcoin’s legal status within Turkey, domestic financial institutions are hesitant to partner with cryptocurrency businesses.

The MiaVita Beytepe project joins a number of up-market properties that have been listed for sale in exchange for bitcoins in recent months. During last week, a home in Austin, Texas was sold in exchange for bitcoin. A London home was also listed for sale with a minimum asking price of 500 bitcoins last week. At the start of the month, Michelle Mone and Douglas Barrowman announced plans to sell 1,133 Dubai apartments in exchange for bitcoin, in partnership with Bitpay and Knox Group, with the 40-storey tower apartments set to become the first properties in Dubai’s Science part to be priced and sold in exchange for a cryptocurrency settlement. This year has also seen two properties situated in the Canadian city of Coquitlam listed on Hong Kong’s Craigslist in exchange for sums of bitcoin, despite cryptocurrency existing outside of Canadian finance and property regulations.

Would you consider purchasing or selling property in exchange for bitcoin or other cryptocurrencies? Share your thoughts in the comments section below!

Images courtesy of Shutterstock

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Source: Science of Crypto
Apartments in Turkey Available for Purchase Using Bitcoin