Wednesday, December 26, 2018

Cryptocurrencies in the United States will no longer be securities?

The US lawmakers recently introduced a bill that allows digital currencies to be removed from a security definition approved 72 years ago.

https://i.redd.it/57jyzx9iwr621.jpg

The news seems boring, but it’s the one that causes heated discussion - the crypto industry members, for example, assert that the existing legislation is behind the times.

"At the dawn of the Internet, Congress passed a law that provided clarity and opposed the desire to overregulate the market. We want to achieve a similar effect in the American economy to ensure the leadership of our state in this innovative space," say the supporters of the new bill.

Now for the classification of investment proposal as security, a Howey test from 1946 is used. According to it, any transaction that has the characteristics of an investment contract automatically becomes a security.

But experts are sure: some nuances should be considered.

"Decentralized networks do not really fit into the current regulatory structure. Today we are taking a step towards finding the right way to regulate them," said Kristin Smith, the head of the US Blockchain Association, who lobbies for the interests of the industry in Washington.

Earlier, SEC head Jay Clayton made it clear that he was not going to change the current standards and adapt them to digital assets. The Commission continues to classify the initial coin offerings as securities offering, excluding from the general pattern only Bitcoin and Ethereum regulated by the Commodity Futures Trading Commission (CFTC).

The supporters of crypto industry are proposing to amend the Securities Act of 1933 and the Securities Exchange Act of 1934, adding to them the definition of a digital token. This does not mean that cryptocurrencies will not be regulated at all. It means that the industry will come under the control of the Federal Trade Commission and the CFTC.

In addition, the authors of the bill encourage SEC to change the principles of virtual currencies taxation by making the exchange of one cryptocurrency to another a non-taxable event and setting a minimum limit that will allow the transactions below a certain limit to be exempted from tax.

The development of the bill was carried out for several months. More than 50 industry participants, including representatives from Fidelity, Nasdaq, State Street, Andreessen Horowitz, and the US Chamber of Commerce took part in the discussion of regulatory issues held in September.

The last meeting of the Congress is likely to take place this Friday. After that, the proposal will have to be drawn up again when the control goes to the Democrats.


[Daily Discussion] Thursday, December 27, 2018

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Bytom Sets to Create Diverse Assets and A Programmable Economy

We have grown accustomed to a world dominated by a single asset class: most people have deposits of just one fiat currency for life. In the blockchain era, however, thousands of cryptocurrencies like BTC, ETH, BTM pop up, and the way of tradings has changed from people-to-people to people-to-AI or AI-to-AI payments.

Therefore how can we stimulate the efficient and free circulation of multiple digital assets to inject fresh vitality into the cryptocurrency market?

Duan Xinxing, CEO of Bytom delivered a speech at 2018 Bytom global dev conference which was held in Hangzhou on Nov. 11 and proposed solutions in terms of programming languages, side chain and cross-chain technologies and three-layer architecture. In his speech, he also detailed the progress of Bytom and the project ’s future development.

https://i.redd.it/n5zdlbz1yr621.png

Here is a full transcript of Duan’s speech:

Blockchain and Digital Assets

For some, blockchain is seen as a software that has certain codes to crack some specific problems and needs periodic upgrades. Others think blockchain is a protocol which defines how participants on the blockchain interact with each other, just like TCP/IP.

Of course, blockchain is indeed a platform, especially true in public blockchains which allow developers to build various applications upon it as a network operating system does. To put it simply, “blockchain is an open source campaign powered by economic incentives”.

As some people are curious about the differences between Bytom and Ethereum or Bitcoin, the answer is quite simple: the vision of Bytom is to creating diverse assets and a programmable economy. During the development process of Bytom, we have made two expansions:

First, expand cash into diverse assets. Divers assets include native digital assets, the types of assets generated by the blockchainization of physical assets, and more complex interactive assets;

Second, expand the Bytom-based payment into various activities in a well-functioned economy such as registration, issuance, settlement, and transaction. Hence a simple payment system has turned into a programming economy with diverse assets.

https://i.redd.it/igqohix0yr621.png

Two Reasons Behind Using Diverse Assets

Duan points out two critical reasons: one is post-90s or even post-95s generation’s views on the world have radically changed. The renminbi and the banknote themselves are a kind of virtual asset. The paper money’s value is created based on the users’ consensus and public’s understanding of its role to play in various occasions.

It is natural that new generations fully embrace diversified digital assets just as we embraced paper money decades ago. Therefore, I think the arrival of Gen Z will promote the prosperity of diverse assets, a fact widely accepted by the public.

The second reason touches on the development of artificial intelligence(AI), the Internet of Things(IoT), and the Machine Economy. You can’t imagine a legal gateway sitting between two IoT devices, like the bank to clear and settle transactions.

In the future, the machine-to-machine interactions require different types of assets in a more efficient operating environment and intelligent environment. In fact, we’ve found that the automatic data purchase based on Bytom enables the encryption of both sides’ public keys to generate two types of assets so that the latter public key holder can interact with the original owner. The intermediate platform is unable to decrypt data in the process, thus ensuring the data safety.

Bytom to Support Diverse Assets and Technical Development

As of today, 1714 product statuses of Bytom has been submitted and 27 versions have been iterated since the first test Network beta version released. Bytom has 28 core developers and attracted the attention of roughly 1000 developers globally. Bytom full-node wallet latest version is 1.0.7 at the press time.

In terms of Bytom’s product design and architecture, we adopt a classic model —UTXO or an unspent transaction output— rather than the popular model endorsed by other public chains which require users to set up an account first, and then to create a contract in the account to control asset flows. Bytom itself is a native asset public chain that is born for assets.

We continue to extend UTXO structure and give different tags to UTXO so that different types of assets will be generated. Assets on Bytom blockchain can be divided into small amounts, as well as UTXO. If the asset needs to be programmable, we can develop a programmable language on it, and use UTXO to do complex operations. Assets can also be destroyed. We still adopt a safer and more efficient model to build our asset system.

Bytom’s technology boasts two features:

Firstly, BUTXO supports more types of assets;

Secondly, different from Bitcoin’s temporary script of a transaction, Bytom develops our own high-level programming language, defines a certain type of asset and corresponding parameters and conduct intelligent operations with multi-signature. To this end, Bytom has put forward its own Equity language, which is a Turing complete and interpretive high-level language.

Many participants in the latest Bytom Dev Conference used the langue, which is beyond expectation. We have never thought about the anti-counterfeiting, traceability and registration solutions powered by Bytom blockchain for copyrighted work. But developers have implemented these features by calling the function.

Bytom’s tech stack adopts three-layer architecture due to the existence of a ‘Blockchain Trilemma’. The key issue for a blockchain is how to balance security and efficiency. In real life, the problem can be solved with a product and engineering perspective. The underlying protocol is focused on security, while layer 2 and layer 3 for concurrency, scalability, and efficiency and programmability.

Currently, Bytom provides developers around the world with a development template and tools, as well as 8 contract templates, including single-signature contracts, multi-signature contracts,  crypto-to-crypto trading contracts, trusted third party custodian contract, loan contracts, call option contract, and betting contracts. Many developers have made a lot of interesting things, for example, Greek developers have designed three types of assets for government environmental agencies and chemical companies with the use of the multi-signature contract and other features. Each type of asset can identify the amount of emissions and waste.

Moreover, scientific data extracted from the process can add indicators for Ethereum. Hence it is possible to program more and more social relations and production relations.

Besides, our own core developers are also conducting active explorations. Two sentences— ‘Information is Power. Computing is power.’— is written in the Genesis block of Bytom. But what is ‘Computing is power’? Does it mean we should blindly worship ‘power’?

Information can be considered as power and play a role in the social development because everyone can obtain information from the Internet and it brings benefit to the public. Yet traditional monopoly of computing power cannot benefit everyone.

https://i.redd.it/2q9id3hzxr621.png

Numerous entrepreneurs and research institutions flock in the artificial intelligence(AI) space, and a large number of NGOs are working on bioinformatics processing, speech recognition, image recognition and data processing, but they do not control computing power. What does computing mean to them? Can they use Bytom blockchain to do improvement? Our exploration has proved that it is a possible development direction.

The left image shows Bytom’s mining pool. This calculation method that supports inference learning has been included in Bytom’s consensus algorithm. When there is a certain task, we can identify the redundant and idle computational power as an asset in Bytom, and then leverage the  computational power to facilitate tradings so that AI companies which have data but lack of computational power or those that have creative and visionary ideas can get access to computing assets via Bytom, advancing the development of the AI industry.

Dapp is not the Only Direction

Bytom is a fledgling blockchain. The white paper was published in June 2017; the mainnet was released on April 24, 2018; the virtual machine and programming language were unveiled in July 2018. In August, Bytom announced the launch of its Global Dev Competition, an event committed to promoting the application of blockchain technology and strengthening the exchange and collision of technical peers in both China and abroad.

Dapp is not necessarily the only development direction in the future for Bytom, because the amount of daily activity and the usability of DApps on other public chains are very low. We currently focus on supporting the developer community and Dapps. Bytom is not only a Dapp, but also serves as an accessory and a plug-in in the system.

Blockchain itself cannot solve all problems, but as a technology, it can work together with other technologies to generate a set of solutions to more problems.

Bytom faces two challenges in the future. For a start, it needs to achieve scalability based on the  Proof-of-Work (PoW) consensus; the second challenge is how to develop more scalable applications with high usability on a higher level.

Bytom now is dedicated to building side chains on the network. For one thing, BUTXO offers better concurrency; for another, side chains and subchain models with the application layer can solve such problems. For example, we are able to develop subchains for national secret test scenarios, deploy nodes, and perform various debugging and configuration upon the blockchain to meet specific requirements.

Meanwhile, Bytom partners with many top universities and research institutions to develop Zero-Knowledge Proof technology. The next step for Bytom is to enhance school-enterprise and international cooperation. We plan to work with Shanghai Jiao Tong University, Tongji University, and Tsinghua University to improve our research teams of engineering, underlying protocols and patents.

It can be seen that developers from all over the world contribute to the launch of this Dev conference and the creation of Bytom ecosystem. At present, Bytom is among only a few public blockchains in China that enjoy a relatively complete community of blockchain developers. We have a community of about 600 active developers from China, the US, Japan, and South Korea. Further, we will expand cooperation with enterprises and institutions to develop more meaningful service products for the real economy and the virtual economy in the future.

https://i.redd.it/z89icd9yxr621.png

In the end, what does Bytom mean? It connects the byte world and the atom world. Some say Bytom refers to a type of asset and value, while others think it represents liquidity and consistency, as well as information and substance. Here we want to emphasize that Bytom is a technology platform, a kind of technical means or a technology open source campaign. Further, Bytom also means technology and prosperity. We hope Bytom and blockchain technology can drive great social progress and the economic prosperity.


[Daily Discussion] Thursday, December 27, 2018

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[Daily Discussion] Thursday, December 27, 2018

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[Daily Discussion] Thursday, December 27, 2018

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[Altcoin Discussion] Thursday, December 27, 2018

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  • This is for high quality discussion of altcoins. All shilling or obvious pumping/dumping behavior will result in an immediate one day ban. This is your only warning.
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[Daily Discussion] Thursday, December 27, 2018

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[Daily Discussion] Thursday, December 27, 2018

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New Years Eve 2019 - The Genesis Block: Bitcoin's 10 Year Anniversary

Satoshi Nakamoto began mining the Genesis Block on January 3rd, 2009. Ten years later, Bitcoin has become the first proven application on the blockchain. Institutions worldwide are recognizing Bitcoin as a new asset class and blockchain to be the future of technology.

The Genesis Block is the first block of any blockchain technology and hardcoded into the software for anyone utilizing its network. Also, the Genesis Block is referred to as block 0 or block 1. This New Year's Eve, come join us in celebrating the 10-year anniversary of Bitcoin’s Genesis Block, while having the opportunity to network with blockchain pioneers and other crypto enthusiasts.

The celebration will be in a festive atmosphere as we wave goodbye to 2018’s bear market and say hello to 2019’s big possibilities as adoption increases!

https://i.redd.it/2ghvixw5kq621.jpg

This event is held by Ulord and HOMEBLOC, warmly welcome!

More details about the address and the ticket, click the link https://www.digital.nyc/events/new-years-eve-2019-genesis-block-bitcoins-10-year-anniversary


New Years Eve 2019 - The Genesis Block: Bitcoin's 10 Year Anniversary

Satoshi Nakamoto began mining the Genesis Block on January 3rd, 2009. Ten years later, Bitcoin has become the first proven application on the blockchain. Institutions worldwide are recognizing Bitcoin as a new asset class and blockchain to be the future of technology.

The Genesis Block is the first block of any blockchain technology and hardcoded into the software for anyone utilizing its network. Also, the Genesis Block is referred to as block 0 or block 1.

This New Year's Eve, come join us in celebrating the 10-year anniversary of Bitcoin’s Genesis Block, while having the opportunity to network with blockchain pioneers and other crypto enthusiasts.

The celebration will be in a festive atmosphere as we wave goodbye to 2018’s bear market and say hello to 2019’s big possibilities as adoption increases!

https://i.redd.it/kglrg5nblq621.jpg

The event is hold by Ulord and Homebloc. More details, please clink the link:

https://www.digital.nyc/events/new-years-eve-2019-genesis-block-bitcoins-10-year-anniversary

Warmly welcome!


[Daily Discussion] Thursday, December 27, 2018

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[Daily Discussion] Thursday, December 27, 2018

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[Daily Discussion] Thursday, December 27, 2018

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Hong Kong: BitMEX and Wine Retailer May Purchase Stake in Japanese Cryptocurrency Exchange - Inside Bitcoins - News, Price, Events

https://insidebitcoins.com/news/hong-kong-bitmex-and-wine-retailer-may-purchase-stake-in-japanese-cryptocurrency-exchange/204755

[Daily Discussion] Wednesday, December 26, 2018

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Mining One Bitcoin a Month Would Require Harvesting Body Heat from 44,000 People - Inside Bitcoins - News, Price, Events

https://insidebitcoins.com/news/mining-one-bitcoin-a-month-would-require-harvesting-body-heat-from-44000-people/204717

Bitcoin Plays Pokemon: The first onchain video game where every move guides Satoshi to victory

https://bitcoinplayspokemon.com

"Introducing "Bitcoin Plays Pokemon" developed by our good friend @dymurray5. Visit https://bitcoinplayspokemon.com to play the first (?) onchain video game ever. Can the Bitcoin community cooperate and guide Satoshi to victory? Powered by Money Button and Bitsocket!"

https://twitter.com/Bitcoin_Beyond/status/1078041279630581760

[Daily Discussion] Wednesday, December 26, 2018

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Extremely Bearish: Crypto VC Says Bitmain Layoffs Could Spell Doom for Bitcoin Cash and Litecoin (current BTC/USD price is $3848.56204763)

Latest Bitcoin News:

Extremely Bearish: Crypto VC Says Bitmain Layoffs Could Spell Doom for Bitcoin Cash and Litecoin

Other Related Bitcoin Topics:

Bitcoin Price | Blockchain | ICOs


The latest Bitcoin news has been sourced from the CoinSalad.com Bitcoin Price and News Events page. CoinSalad is a web service that provides real-time Bitcoin market info, charts, data and tools. Follow us on Twitter @CoinSalad.


[Daily Discussion] Wednesday, December 26, 2018

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Why Is A ‘Cooling’ Crypto Market Positive For Clearing Out The Clutter And Confusion For Real Change To Happen - Bitcoin Exchange Guide

https://bitcoinexchangeguide.com/why-is-a-cooling-crypto-market-positive-for-clearing-out-the-clutter-and-confusion-for-real-change-to-happen/

I tested KeepKey + Mycelium + SegWit so you don't have to.

TLDR: you can send and receive Bitcoin to and from native SegWit (Bech32) addresses using KeepKey + Mycelium, but not using KeepKey + KeepKey client (yet?).

Mycelium can import the extended public key (xpub) from your KeepKey, this allows you to get a watch-only wallet on your phone, that can spend only if you connect your KeepKey to the phone.
The xpub is not the private key, the private key never leaves KeepKey, you can not spend from just the xpub, cold storage is not compromised.
It's a nice combination of the accessibility of an app, and the security of a hardware wallet.
My favorite feature is being able to watch the value of my Bitcoin moon plummet from the comfort of my phone.
The Mycelium Android wallet finally got it's SegWit update this month, and I used about a buck in Bitcoin to test the new address format.

Importing a KeepKey xpub into Mycelium

The first thing to note is that if you already had a KeepKey account in Mycelium before Mycelium's SegWit update you'll have to remove that account from Mycelium and reimport it to enable SegWit support.

To import your KeepKey’s xpub into Mycelium you need to connect the KeepKey to your phone using a USB OTG adapter, you can get one for about 10 bucks if one did not already come with your phone.
When connected, open Mycelium, go to the “accounts” tab, tap the icon of a key with a “+”, tap “advanced”, tap “KeepKey”, and enter your pin.

(If you have enabled passphrase protection on your KeepKey then at this point Mycelium will also ask you to enter the passphrase now.
You can read this page for instructions on how to enable/disable passphrase protection:
https://help.keepkey.com/how-to-guides/how-to-disable-a-passphrase
If you want to enable it change the command from “(false)” to “(true)”.
This is an advanced feature so only use this if you know what you are doing, enabling and disabling it has been very flaky in my experience, but once enabled the passphrase feature itself works without error)

Accounts

Mycelium will now scan KeepKey for accounts, if you have multiple accounts on the KeepKey and want to add all of them to Mycelium you will have to go through these steps multiple times to add them one at a time.
An account with zero Bitcoin will not be detected by Mycelium.

You can give the account you are adding to Mycelium a label.
Mycelium will display a KeepKey logo next to the account name in the accounts tab to indicate this is a watch-only account from a KeepKey.

What can I do with an imported account in Mycelium?

Without having your KeepKey connected you can:
-View your Bitcoin balance and it’s fiat value.
-View all transactions including those done through the KeepKey Client app.
-Generate receiving addresses in all three formats, legacy P2PKH (starting with 1), SegWit wrapped P2SH (starting with 3), SegWit native Bech32 (starting with bc1).
-Receive Bitcoin on said addresses and view the incoming transactions before during and after they are confirmed. Note that Mycelium will default to generating SegWit wrapped P2SH receiving addresses, you can change the default to SegWit Native Bech32, but you can not change the default to legacy P3PKH addresses, this is important.

How do I receive Bitcoin with Mycelium?

Choose the KeepKey account from the accounts screen, tap the “receive” button and it will display a SegWit Wrapped P2SH address by default.
You can switch to a Legacy or Bech32 address from this screen, and switch the default from P2SH to Bech32, but not to Legacy.
This means that by default you will always be receiving Bitcoin on a SegWit address.

How do I send Bitcoin from Mycelium?

In order to send Bitcoin from Mycelium you can tap “send”, enter a receiving address, choose an amount and a fee setting.
Next you will have to connect your KeepKey to the phone with the OTG adapter, enter the pin, and enter the passphrase if your KeepKey has one.
The transaction will be displayed on the KeepKey’s own display, you should verify the address, amount and fee.
Confirm the transaction through the physical button on the KeepKey, twice.
Your transaction will be broadcast, you can now disconnect the KeepKey.

How secure is this?

The private key never leaves the KeepKey, cold storage is never compromised.
The only way to sign a transaction and send Bitcoin is by connecting the KeepKey, entering the pin to unlock it, and entering the passphrase to further unlock it if you have one enabled, and then using the physical button on the KeepKey to confirm the transaction.

What does not work?

And now finally, the reason I’m making this post, what does not work.
At the time of writing the KeepKey client app for Chrome is capable of sending to SegWit P2SH and Bech32 addresses.
The KeepKey Client app is however not capable of generating SegWit receiving addresses, nor can it view the balance of SegWit P2SH or SegWit Bech32 addresses.
It also can not send Bitcoin that was received on these addresses.

This means that if you use Mycelium to receive Bitcoin on a SegWit address, the KeepKey Client app does not understand this transaction.
The KeepKey Client app will not add the balance of this address to your total balance, if this was the only transaction in the wallet it will show a zero balance.
The KeepKey Client app will not be able to send Bitcoin that was received on these addresses, you can only do that using Mycelium.
This can lead to confusing situations where Mycelium and the KeepKey Client app show two different total balances for the same wallet, because Mycelium sees the real balance, and the KeepKey Client app only sees the non-SegWit addresses balance.

I fully expect a future update to the KeepKey Client Chrome app to enable full SegWit support so the above will no longer be an issue, but right now receiving Bitcoin on SegWit addresses through Mycelium means you can no longer effectively use the KeepKey Client app until it is updated.



Bitcoin Welcomes The Dow Jones Who Could Soon Enter A Bear Market Along Side Cryptocurrencies - Bitcoin Exchange Guide

https://bitcoinexchangeguide.com/bitcoin-welcomes-the-dow-jones-who-could-soon-enter-a-bear-market-along-side-cryptocurrencies/

Proof of Keys Movement: What “Not Your Keys, Not Your Bitcoin” Means? - Bitcoin Exchange Guide

https://bitcoinexchangeguide.com/proof-of-keys-movement-what-not-your-keys-not-your-bitcoin-means/

[Daily Discussion] Wednesday, December 26, 2018

Thread topics include, but are not limited to:

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[Daily Discussion] Wednesday, December 26, 2018

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[Daily Discussion] Wednesday, December 26, 2018

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[uncensored-r/Bitcoin] Don’t be complacent and quadruple check everything before making upgrades that could affect your ...

The following post by yzder is being replicated because some comments within the post(but not the post itself) have been silently removed.

The original post can be found(in censored form) at this link:

np.reddit.com/r/ Bitcoin/comments/a9qbrt

The original post's content was as follows:


So my xmas present from myself was: loosing access to a Exodus wallet that had a decent amount of BTC in it

I did a “fresh start” on my laptop with windows defender. So some apps needed to be downloaded again (you guess it, Exodus was one of em) when I downloaded the app again I had to restore my wallet. I entered what I thought was my 12 words recovery phrase. Then boom wrong phrase. Started to slightly stress about it. Looking through some other stuff stored somewhere else and found a couple of 12 words recovery phrase that was Identified for completely different wallet . Entered both of those and it said recovery successful but balance was still at 0. I entered both phrase and they both said successful recovery.

Now at this point I have accepted the fact that my BTC are lost forever but I am very confused on why 2 completely different 12 words recovery phrase would both tell me “recovery successful” and then nothing shows up.

Im taking a break from trying to find a solution coz im going crazy. Im thinking restoring my computer to an earlier date could work but I have never set it prior to that event so I am not to hopeful about the outcome.

So to any newbie out there. I thought I had it all figured out but I have been proven otherwise yesterday. Make sure you have everything clearly marked/identified on paper and quadruple check it before doing anything else. For some reason I kept those out of cold storage and that decision came back to hunt me (thank god I didn’t lose everything)

Merry Christmas


AMA with Wanchain VP Lini

Original article here: https://medium.com/wanchain-foundation/ama-with-wanchain-vp-lini-58ada078b4fe

“What is unique about us is that we have actually put theory into practice.”

— Lini

https://i.redd.it/n6lo2xcmtn621.png

https://i.redd.it/10aj3ointn621.png

Wanchain’s Vice President of Business Development, Lini, sat down with blockchain media organization Neutrino for an AMA covering a wide range of topics concerning Wanchain’s development.

The following is an English translation of the original Chinese AMA which was held on December 13th, 2018:

Neutrino: Could you please first share with us a little basic background, what are the basic concepts behind cross chain technology? What are the core problems which are solved with cross-chain? In your opinion, what is the biggest challenge of implementing cross chain to achieve value transfer between different chains?

Lini: Actually, this question is quite big. Let me break it down into three smaller parts:

  1. First, what is the meaning of “cross-chain”?

https://i.redd.it/cpui6t7qtn621.png

In China, we like to use the word “cross-chain”, the term “interoperability” is used more frequently in foreign countries. Interoperability is also one of the important technologies identified by Vitalik for the development of a future blockchain ecosystem mentioned in the Ethereum white paper. So cross-chain is basically the concept of interoperability between chains.

  1. The core problem solved by cross chain is that of “multi-ledger” synchronous accounting

https://i.redd.it/603dl86stn621.png

In essence, blockchain is a distributed bookkeeping technique, also known as distributed ledger technology. Tokens are the core units of account on each chain, there currently exist many different chains, each with their own token. Of especial importance is the way in which each ledger uses tokens to interact with each other for the purpose of clearing settlements.

  1. The core purpose of the cross-chain technology is as one of the key infrastructures of the future economy based on digital currencies.

https://i.redd.it/3d61f26utn621.png

Cross chain technology is one of the foundational technological infrastructures that is necessary for the large scale application of blockchain technology.

Neutrino: As we all know, there are many different kinds of cross-chain technologies. Please give us a brief introduction to several popular cross-chain technologies on the market, and the characteristics of each of these technologies。

Lini: Before answering this question, it is very important to share two important concepts with our friends: heterogeneity and homogeneity, and centralization and decentralization.

https://i.redd.it/n6wbs77wtn621.png

These two points are especially important for understanding various cross-chain technologies, because there are many different technologies and terminologies, and these are some of the foundational concepts needed for understanding them.

There are also two core challenges which must be overcome to implement cross-chain:

https://i.redd.it/84wqd28ytn621.png

Combining the above two points, we look at the exploration of some solutions in the industry and the design concepts of other cross-chain projects.

First I’d like to discuss the Relay solution.

https://i.redd.it/qgcqiwlztn621.png

However the Relay solution must consume a relatively large amount of gas to read the BTC header. Another downside is that, as we all know, Bitcoin’s blocks are relatively slow, so the time to wait for verification will be long, it usually takes about 10 minutes to wait for one block to confirm, and the best practice is to wait for 6 blocks.

The next concept is the idea of Sidechains.

https://i.redd.it/9cg79bl1un621.png

This solution is good, but not all chains contain SPV, a simple verification method. Therefore, there are certain drawbacks. Of course, this two way peg way solves challenge beta very well, that is, the atomicity of the transaction.

These two technical concepts have already been incorporated into a number of existing cross chain projects. Let’s take a look at two of the most influential of these.

The first is Polkadot.

https://i.redd.it/1o3xwz93un621.png

This is just a summary based on Polkadot’s whitepaper and most recent developments. The theoretical design is very good and can solve challenges alpha and beta. Last week, Neutrino organized a meetup with Polkadot, which we attended. In his talk, Gavin’s focus was on governance, he didn’t get into too much technical detail, but Gavin shared some very interesting ideas about chain governance mechanisms! The specific technical details of Polkadot may have to wait until after their main net is online before it can be analyzed.

Next is Cosmos.

https://i.redd.it/5gtjf6x4un621.png

Cosmos is a star project who’s basic concept is similar to Polkadot. Cosmos’s approach is based on using a central hub. Both projects both take into account the issue of heterogeneous cross-chain transactions, and both have also taken into account how to solve challenges alpha and beta.

To sum up, each research and project team has done a lot of exploration on the best methods for implementing cross-chain technology, but many are still in the theoretical design stage. Unfortunately, since the main net has not launched yet, it is not possible to have a more detailed understanding of each project’s implementation. A blockchain’s development can be divided into two parts: theoretical design, and engineering implementation. Therefore, we can only wait until after the launch of each project’s main network, and then analyze it in more detail.

Neutrino: As mentioned in the white paper, Wanchain is a general ledger based on Ethereum, with the goal of building a distributed digital asset financial infrastructure. There are a few questions related to this. How do you solve Ethereum’s scaling problem? How does it compare with Ripple, which is aiming to be the standard trading protocol that is common to all major banks around the world? As a basic potential fundamental financial infrastructure, what makes Wanchain stand out?

Lini: This question is actually composed of two small questions. Let me answer the first one first.

  1. Considerations about TPS.

First of all, Wanchain is not developed on Ethereum. Instead, it draws on some of Ethereum’s code and excellent smart contracts and virtual machine EVM and other mature technical solutions to build the mainnet of Wanchain.

The TPS of Ethereum is not high at this stage, which is limited by various factors such as the POW consensus mechanism. However, this point also in part is due to the characteristics of Ethereum’s very distributed and decentralized features. Therefore, in order to improve TPS, Wanchain stated in its whitepaper that it will launch its own POS consensus, thus partially solving the performance issues related to TPS. Wanchain’s POS is completely different from the POS mechanism of Ethereum 2.0 Casper.

Of course, at the same time, we are also paying close attention to many good proposals from the Ethereum community, such as sharding, state channels, side chains, and the Raiden network. Since blockchain exists in the world of open source, we can of course learn from other technological breakthroughs and use our own POS to further improve TPS. If we have some time at the end, I’d love to share some points about Wanchain’s POS mechanism.

  1. Concerning, Ripple, it is completely different from what Wanchain hopes to do.

Ripple is focused on exchanges between different fiat pairs, the sharing of data between banks and financial institutions, as a clearing and settlement system, and also for the application of DLT, for example the Notary agent mechanism.

Wanchain is focused on different use cases, it is to act as a bridge between different tokens and tokens, and between assets and tokens. For various cross-chain applications it is necessary to consume WAN as a gas fee to pay out to nodes.

So it seems that the purpose Ripple and Wanchain serve are quite different. Of course, there are notary witnesses in the cross-chain mechanism, that is, everyone must trust the middleman. Ripple mainly serves financial clients, banks, so essentially everyone’s trust is already there.

Neutrino: We see that Wanchain uses a multi-party computing and threshold key sharing scheme for joint anchoring, and achieves “minimum cost” for integration through cross-chain communication protocols without changing the original chain mechanism. What are the technical characteristics of multi-party computing and threshold key sharing? How do other chains access Wanchain, what is the cross-chain communication protocol here? What is the cost of “minimum cost?

Lini: The answer to this question is more technical, involving a lot of cryptography, I will try to explain it in a simple way.

  1. About sMPC -

It stands for secure multi-party computation. I will explain it using an example proposed by the scholar Andrew Yao, the only Turing Award winner in China. The scenario called Yao’s Millionaire Problem. How can two millionaires know who is wealthier without revealing the details of their wealth to each other or a trusted third party? I’m not going to explain the answer in detail here, but those who are interested can do a web search to learn more.

In sMPC multiple parties each holding their own piece of private data jointly perform a calculation (for example, calculating a maximum value) and obtain a calculation result. However, in the process, each party involved does not leak any of their respective data. Essentially sMPC calculation can allow for designing a protocol without relying on any trusted third parties, since no individual ever has access to the complete private information.

Secure multiparty computing can be abstractly understood as two parties who each have their own private data, and can calculate the results of a public function without leaking their private data. When the entire calculation is completed, only the calculation results are revealed to both parties, and neither of them knows the data of the other party and the intermediate data of the calculation process. The protocol used for secure multiparty computing is homomorphic encryption + secret sharing + OT (+ commitment scheme + zero knowledge proofs, etc.)

Wanchain’s 21 cross chain Storeman nodes use sMPC to participate in the verification of a transaction without obtaining of a user’s complete private key. Simply put, the user’s private key will have 21 pieces given to 21 anonymous people who each can only get 1/21 part, and can’t complete the whole key.

  1. Shamir’s secret sharing

There are often plots in a movie where a top secret document needs to be handed over to, let’s say five secret agents. In order to protect against the chance of an agent from being arrested or betraying the rest, the five agents each hold only part of a secret key which will reveal the contents of the documents. But there is also a hidden danger: if one the agents are really caught, how can the rest of the agents access the information in the documents? At this point, you may wonder if there is any way for the agents to still recover the original text with only a portion of the keys? In other words, is there any method that allows a majority of the five people to be present to unlock the top secret documents? In this case, the enemy must be able to manipulate more than half of the agents to know the information in the secret documents.

Wanchain uses the threshold M<=N; N=21; M=16. That is to say, at least 16 Storeman nodes must participate in multi-party calculation to confirm a transaction. Not all 21 Storeman nodes are required to participate. This is a solution to the security problem of managing private keys.

Cross-chain communication protocols refers to the different communication methods used by different chains. This is because heterogeneous cross-chain methods can’t change the mechanism of the original chains. Nakamoto and Vitalik will not modify their main chains because they need BTC and ETH interoperability. Therefore, project teams that can only do cross-chain agreements to create different protocols for each chain to “talk”, or communicate. So the essence of a cross-chain protocol is not a single standard, but a multiple sets of standards. But there is still a shared sMPC and threshold design with the Storeman nodes.

The minimum cost is quite low, as can be shown with Wanchain 3.0’s cross chain implementation. In fact it requires just two smart contracts, one each on Ethereum and Wanchain to connect the two chains. To connect with Bitcoin all that is needed is to write a Bitcoin script. Our implementation guarantees both security and decentralization, while at the same time remaining simple and consuming less computation. The specific Ethereum contract and Bitcoin scripts online can be checked out by anyone interested in learning more.

Neutrino: What kind of consensus mechanism is currently used by Wanchain? In addition, what is the consensus and incentive mechanism for cross-chain transactions, and what is the purpose of doing so? And Wanchain will support cross-chain transactions (such as BTC, ETH) on mainstream public chains, asset cross-chain transactions between the alliance chains, and cross-chain transactions between the public and alliance chains, how can you achieve asset cross-chain security and privacy?

Lini: It is now PPOW (Permissioned Proof of Work), in order to ensure the reliability of the nodes before the cross-chain protocol design is completed, and to prepare to switch to POS (as according to the Whitepaper roadmap). The cross-chain consensus has been mentioned above, with the participation of a small consensus (at least 16 nodes) in a set of 21 Storeman nodes through sMPC and threshold secret sharing.

In addition, the incentive is achieved through two aspects: 1) 100% of the cross chain transaction fee is used to reward the Storeman node; 2) Wanchain has set aside a portion of their total token reserve as an incentive mechanism for encouraging Storeman nodes in case of small cross-chain transaction volume in the beginning.

It can be revealed that Storeman participation is opening gradually and will become completely distributed and decentralized in batches. The first phase of the Storeman node participation and rewards program is to be launched at the end of 2018. It is expected that the selection of participants will be completed within one quarter. Please pay attention to our official announcements this month.

In addition, for public chains, consortium chains, and private chains, asset transfer will also follow the cross-chain mechanism mentioned above, and generally follow the sMPC and threshold integration technology to ensure cross-chain security.

When it comes to privacy, this topic will be bigger. Going back to the Wanchain Whitepaper, we have provided privacy protection on Wanchain mainnet. Simply put, the principle is using ring signatures. The basic idea is that it mixes the original address with many other addresses to ensure privacy. We also use one-time address. In this mechanism a stamp system is used that generates a one-time address from a common address. This has been implemented since our 2.0 release.

But now only the privacy protection of native WAN transactions can be provided. The protection of cross-chain privacy and user experience will also be one of the important tasks for us in 2019.

Neutrino: At present, Wanchain uses Storeman as a cross-chain trading node. Can you introduce the Storeman mechanism and how to protect these nodes?

Lini: Let me one problem from two aspects.

  1. As I introduced before in my explanation of sMPC, the Storeman node never holds the user’s private key, but only calculates the transaction in an anonymous and secure state, and the technology prevents the Storeman nodes from colluding.
  2. Even after technical guarantees, we also designed a “double protection” against the risk from an economic point of view, that is, each node participating as a Storeman needs to pledge WAN in the contract as a “stake”. The pledge of WAN will be greater than the amount of any single transaction as a guarantee against loss of funds.

If the node is malicious (even if it is a probability of one in a billion), the community will be compensated for the loss caused by the malicious node by confiscation of the staked WAN. This is like the POS mechanism used by ETH, using staking to prevent bad behavior is a common principle.

Neutrino: On December 12th, the mainnet of Wanchain 3.0 was launched. Wanchain 3.0 opened cross-chain transactions between Bitcoin, Ethereum and ERC20 (such as MakerDao’s stable currency DAI and MKR). What does this version mean for you and the industry? This upgrade of cross-chain with Bitcoin is the biggest bright spot. So, if now you are able to use Wanchain to make transactions between what is the difference between tokens, then what is the difference between a cross chain platform like Wanchain and cryptocurrency exchanges?

Lini: The release of 3.0 is the industry’s first major network which has crossed ETH and BTC, and it has been very stable so far. As mentioned above, many cross-chain, password-protected theoretical designs are very distinctive, but for engineering implementation, the whether or not it can can be achieved is a big question mark. Therefore, this time Wanchain is the first network launched in the world to achieve this. Users are welcome to test and attack. This also means that Wanchain has connected the two most difficult and most challenging public networks. We are confident we will soon be connecting other well-known public chains.

At the same time of the release of 3.0, we also introduced cross chain integration with other ERC20 tokens in the 2.X version, such as MakerDao’s DAI, MKR, LRC, etc., which also means that more tokens of excellent projects on Ethereum will also gradually be integrated with Wanchain.

Some people will be curious, since Wanchain has crossed so many well-known public chains/projects; how is it different with crypto exchanges? In fact, it is very simple, one centralized; one distributed. Back to the white paper of Nakamoto, is not decentralization the original intention of blockchain? So what Wanchain has to do is essentially to solve the bottom layer of the blockchain, one of the core technical difficulties.

Anyone trying to create a DEX (decentralized exchange); digital lending and other application scenarios can base their application on Wanchain. There is a Wanchain based DEX prototype made by our community members Jeremiah and Harry, which quite amazing. Take a look at this video below.

https://www.youtube.com/watch?v=codcqb66G6Q

Neutrino: What are the specific application use cases after the launch of Wanchain 3.0? Most are still exploring small-scale projects. According to your experience, what are the killer blockchain applications of the future? What problems need to be solved during this period? How many years does it take?

Lini:

  1. Wanchain is just a technology platform rather than positioning itself as an application provider; that is, Wanchain will continue to support the community, and the projects which use cross-chain technology to promote a wide range of use cases for Wanchain.
  2. Cross-chain applications that we anticipate include things like: decentralized exchanges, digital lending, cross chain games, social networking dAPPs, gambling, etc. We also expect to see applications using non fungible tokens, for example exchange of real assets, STOs, etc.
  3. We recently proposed the WanDAPP solution. Simply speaking, a game developer for example has been developing on Ethereum, and ERC20 tokens have been issued, but they hope to expand the player base of their games to attract more people. To participate and make full use of their DAPP, you can consider using the WanDAPP solution to deploy the game DAPP on other common platforms, such as EOS, TRON, etc., but you don’t have to issue new tokens on these chains or use the previous ERC20 tokens. In this way the potential user population of the game can be increased greatly without issuing more tokens on a new chain, improving the real value of the original token. This is accomplished completely using the cross-chain mechanism of Wanchain.
  4. For large-scale applications, the infrastructure of the blockchain is not yet complete, there are issues which must first be dealt with such as TPS, sharding, sidechains, state channels, etc. These all must be solved for the large-scale application of blockchain applications. I don’t dare to guess when it will be completed, it depends on the progress of various different technical projects. In short, industry practitioners and enthusiasts need a little faith and patience.

Neutrino community member Block Venture Capital Spring: Will Wanchain be developing any more cross chain products aimed at general users? For example will the wallet be developed to make automatic cross chain transfers with other public chains? Another issue the community is concerned about is the currency issuance. Currently there are more than 100 million WAN circulating, what about the rest, when will it be released?

Lini: As a cross-chain public chain, we are not biased towards professional developers or ordinary developers, and they are all the same. As mentioned above, we provide a platform as infrastructure, and everyone is free to develop applications on us.

For example, if it is a decentralized exchange, it must be for ordinary users to trade on; if it is some kind of financial derivatives product, it is more likely to be used by finance professionals. As for cross-chain wallets which automatically exchange, I’m not sure if you are talking about distributed exchanges, the wallet will not be “automatic” at first, but you can “automatically” redeem other tokens.

Finally, the remaining WAN tokens are strictly in accordance with the plan laid out in the whitepaper. For example, the POS node reward mentioned above will give 10% of the total amount for reward. At the same time, for the community, there are also rewards for the bounty program. The prototype of the DEX that I just saw is a masterpiece of the overseas community developers, and also received tokens from our incentive program.

Neutrino community member’s question: There are many projects in the market to solve cross-chain problems, such as: Cosmos, Polkadot, what are Wanchain’s advantages and innovations relative to these projects?

Lini: As I mentioned earlier, Cosmos and pPolkadot all proposed very good solutions in theory. Compared with Wanchain, I don’t think that we have created anything particularly unique in our theory. The theoretical basis for our work is cryptography, which is derived from the academic foundation of scholars such as Yao Zhizhi and Silvio Micali. Our main strong point is that we have taken theory and put it into practice..

Actually, the reason why people often question whether a blockchain project can be realized or not is because the whitepapers are often too ambitious. Then when they actually start developing there are constant delays and setbacks. So for us, we focus on completing our very solid and realizable engineering goals. As for other projects, we hope to continue to learn from each other in this space.

Neutrino community member Amos from Huobi Research Institute question: How did you come to decide on 21 storeman nodes?

Lini: As for the nodes we won’t make choices based on quantity alone. The S in the POS actually also includes the time the tokens are staked, so that even if a user is staking less tokens, the amount of time they stake them for will also be used to calculate the award, so that is more fair. We designed the ULS (Unique Leader Selection) algorithm in order to reduce the reliance on the assumption of corruption delay (Cardano’s POS theory). which is used for ensuring fairness to ensure that all participants in the system can have a share of the reward, not only few large token holders.

Wu Di, a member of the Neutrino community: Many big exchanges have already begun to deploy decentralized exchanges. For example, Binance, and it seems that the progress is very fast. Will we be working with these influential exchanges in the future? We we have the opportunity to cooperate with them and broaden our own influence?

Lini: I also have seen some other exchange’s DEX. Going back the original point, distributed cross-chain nodes and centralized ones are completely different. I’m guessing that most exchanges use a centralized cross-chain solution, so it may not be the same as the 21 member Storeman group of Wanchain, but I think that most exchanges will likely be using their own token and exchange system. This is my personal understanding. But then, if you are developing cross chain technology, you will cooperate with many exchanges that want to do a DEX. Not only Binance, but also Huobi, Bithumb, Coinbase… And if there is anyone else who would like to cooperate we welcome them!

Neutrino community member AnneJiang from Maker: Dai as the first stable chain of Wanchain will open a direct trading channel between Dai and BTC. In relation to the Dai integration, has any new progress has been made on Wanchain so far?

Lini: DAI’s stable currency has already been integrated on Wanchain. I just saw it yesterday, let me give you a picture. It’s on the current 3.0 browser, https://www.wanscan.org/, you can take a look at it yourself.

This means that users with DAI are now free to trade for BTC, or ETH or some erc20 tokens. There is also a link to the Chainlink, and LRC is Loopring, so basically there are quite a few excellent project tokens. You may use the Wanchain to trade yourself, but since the DEX is not currently open, currently you can only trade with friends you know.

https://i.redd.it/jme5s99bun621.png

About Neutrino

Neutrino is a distributed, innovative collaborative community of blockchains. At present, we have established physical collaboration spaces in Tokyo, Singapore, Beijing, Shanghai and other places, and have plans to expand into important blockchain innovation cities such as Seoul, Thailand, New York and London. Through global community resources and partnerships, Neutrino organizes a wide range of online an offline events, seminars, etc. around the world to help developers in different regions better communicate and share their experiences and knowledge.

About Wanchain

Wanchain is a blockchain platform that enables decentralized transfer of value between blockchains. The Wanchain infrastructure enables the creation of distributed financial applications for individuals and organizations. Wanchain currently enables cross-chain transactions with Ethereum, and today’s product launch will enable the same functionalities with Bitcoin. Going forward, we will continue to bridge blockchains and bring cross-chain finance functionality to companies in the industry. Wanchain has employees globally with offices in Beijing (China), Austin (USA), and London (UK).

You can find more information about Wanchain on our website. Additionally, you can reach us through Telegram, Discord, Medium, Twitter, and Reddit. You can also sign up for our monthly email newsletter here.

https://i.redd.it/w7ezx27dun621.png


The clock is about to strike midnight on a hedge funds $1 million bet on bitcoin soaring above ... (current BTC/USD price is $3808.32146199)

Latest Bitcoin News:

The clock is about to strike midnight on a hedge funds $1 million bet on bitcoin soaring above ...

Other Related Bitcoin Topics:

Bitcoin Price | Blockchain | ICOs


The latest Bitcoin news has been sourced from the CoinSalad.com Bitcoin Price and News Events page. CoinSalad is a web service that provides real-time Bitcoin market info, charts, data and tools. Follow us on Twitter @CoinSalad.


[Daily Discussion] Wednesday, December 26, 2018

Thread topics include, but are not limited to:

  • General discussion related to the day's events
  • Technical analysis, trading ideas & strategies
  • Quick questions that do not warrant a separate post

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Now I am part of the solution too.

Hey guys,

I have been following bitcoin for more than a year now but hadn't done anything for the network. I joined this reddit sub a month ago and VOILA I have my own full and lightening node. I am so happy and want to thank you all for the motivation. I wouldn't have realized/done it otherwise, seriously. This is awesome. Let's keep it up y'all.

Also, want to thank Stadicus for the awesome guide.



Bitcoin Exchange Guide’s Most Important Negative Moments of Cryptocurrencies During 2018

https://bitcoinexchangeguide.com/bitcoin-exchange-guides-most-important-negative-moments-of-cryptocurrencies-during-2018/

Bitcoin is a non-correlated asset, crypto expert says (current BTC/USD price is $3804.94941817)

Latest Bitcoin News:

Bitcoin is a non-correlated asset, crypto expert says

Other Related Bitcoin Topics:

Bitcoin Price | Blockchain | ICOs


The latest Bitcoin news has been sourced from the CoinSalad.com Bitcoin Price and News Events page. CoinSalad is a web service that provides real-time Bitcoin market info, charts, data and tools. Follow us on Twitter @CoinSalad.


Where is the real bottom of bitcoin?

We have good and bad news for you. The good one is that the growth of Bitcoin is inevitable. And the bad news is that it will start much later than most analysts predict because Bitcoin is still not at the bottom where it can accumulate enough strength for the next growth.

It's time to get rid of illusions and decide on where the real bottom of Bitcoin and how long to wait for the market reversal.

Fair bitcoin price

For #1 cryptocurrency to gain enough power for the new indigent and the bubble began to inflate again, long-term investors must accumulate an abundant supply of crypto-assets. But the big players will not do this until bitcoin reaches the so-called 'fair price', the level at which the accumulation of value occurs, or the bottom.

Now many analysts claim that this is $3,000, but they also said the same when Bitcoin cost $6,000 and said that there was nowhere to fall below. It turned out that there is.

If we turn to technical analysis, support levels of $3000 and even $ 2000 are not a bottom or a fair price. Because they were set during a bullish rally when the bubble began to inflate, meaning all those who entered the market at that time had already managed to sell bitcoins at the peak and are now unlikely to rebuy them. They will wait for the maximum drawdown, and this level is about $1500. BTC traded around this cost for a long time, and it was a springboard for the explosive growth of 2017.

How will the market act?

It is essential to understand it is impossible to predict the market because it is not regulated. At any time, an event that violates all forecasts can occur. All we can do is monitoring the situation and drawing conclusions based on previously collected statistics.

We draw your attention that the right trader or investor always thinks only with his head and further is not a financial recommendation, it’s just our take on the current situation and nothing more.

So, now the market has two scenarios. The first is a further rapid decline, which will indicate a continuation of the surrender phase.

But if we consider Bitcoin's record oversold, then the second scenario is the transition to the stage of despair accompanied by high volatility and a soon return to a bitcoin price of $4,000, $5,000, or even higher. But then the course will turn around again and fall below current levels. Such swings will continue, gradually fading away, until we reach the real bottom.


[Daily Discussion] Wednesday, December 26, 2018

Thread topics include, but are not limited to:

  • General discussion related to the day's events
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Making a recap video of 2018. What was YOUR most memorable event of 2018? Death of ICOs? Bitcoin Cash War ? Bitgrai… https://t.co/OoF7etW9hH - Crypto Insider Info - Whales's

Posted at: December 26, 2018 at 08:48PM

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Making a recap video of 2018. What was YOUR most memorable event of 2018? Death of ICOs? Bitcoin Cash War ? Bitgrai… https://t.co/OoF7etW9hH

Automate your Trading via Crypto Bot : http://bit.ly/2GynF9t

Join Telegram Channel for FREE Crypto Bot: Crypto Signal


[Daily Discussion] Wednesday, December 26, 2018

Thread topics include, but are not limited to:

  • General discussion related to the day's events
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  • Quick questions that do not warrant a separate post

Thread guidelines:

  • Be excellent to each other.
  • Do not make posts outside of the daily thread for the topics mentioned above.

Other ways to interact:


[Daily Discussion] Wednesday, December 26, 2018

Thread topics include, but are not limited to:

  • General discussion related to the day's events
  • Technical analysis, trading ideas & strategies
  • Quick questions that do not warrant a separate post

Thread guidelines:

  • Be excellent to each other.
  • Do not make posts outside of the daily thread for the topics mentioned above.

Other ways to interact:


Bitcoin as the Ultimate Haven from Hyperinflation: A Country By Country Analysis Of Worldwide Fiat Currency Inflation

https://cryptoiq.co/bitcoin-as-the-ultimate-haven-from-hyperinflation-a-country-by-country-analysis-of-worldwide-fiat-currency-inflation/

Bitcoin was created during the Great Recession that started in 2008, when the governments of the world printed trillions of dollars to bail out banks and corporations. Satoshi Nakamoto intended Bitcoin to be a decentralized form of money that could not be printed by governments at will. In the the Genesis Block Satoshi included the message “The Times 03/Jan/2009 Chancellor on brink of the second bailout for banks.”

Fiat currencies continue to be the dominant form of global currency, but it seems logical that, if fiat currencies were to hyperinflate and collapse, Bitcoin would become the dominant global currency.

This is because Bitcoin can be sent instantly anywhere in the world and is cryptographically secure. It is easy enough to integrate Bitcoin into any e-commerce store or physical store, and the customers of the future will be able to send Bitcoin from their smartphones via QR codes. Therefore, if fiat currency becomes obsolete, Bitcoin could seamlessly take its place and keep the global economy running.

There has been plenty of hype that fiat currencies are collapsing, but this article will explore the current state of major fiat currencies in the world to ascertain the true situation. This is important information since the rate of fiat currency inflation by country is an important factor that will determine Bitcoin adoption rates and ultimately Bitcoin’s price.  

United States’ Inflation Rate

The United States is perhaps the best place to start an analysis of global fiat inflation, since the USD is the world’s dominant fiat currency and perhaps the most stable long term. That being said, there is 2-3 percent annual inflation in the United States.

If we split the difference at a 2.5 percent annual inflation rate, it means $100,000 stored in a bank will lose a whopping $22,400 of value over the course of 10 years, corresponding to 22.4 percent inflation per 10 years. Therefore, even in the United States, saving money long term seems impractical, and this essentially forces people to risk their savings by investing in the hopes that the money earned from investing will outpace inflation.

It appears inflation will only worsen in the United States since the national debt is approaching $22 trillion, with a budget deficit of $1 trillion per year and growing. This situation will likely lead to increased money printing, which would increase the inflation rate. Therefore, saving money in USD long term does not make financial sense. Bitcoin is an alternative way to store money long term, although Bitcoin has yet to mature and can be extremely volatile from year to year.

Euro (EUR) Inflation Rate Is 37.5 percent Relative To USD During The Last 10 Years

One of the primary global currencies besides the USD is the Euro (EUR). For the rest of this global analysis, fiat currencies will be compared to the USD exchange rate to determine inflation, but it must be kept in mind that the USD itself is inflating at the rate of 2 to 3 percent per year.

When the EUR launched in 1999, the exchange rate was one USD per 0.85 EUR. By 2002 the EUR weakened to 1.16 EUR per USD. The EUR then entered a period of vigorous strengthening, and the exchange rate fell to 0.64 EUR per USD by 2008. The Great Recession caused the EUR to begin weakening versus the USD long term, and currently each USD is worth 0.88 EUR. This represents 37.5 percent inflation relative to the USD in roughly 10 years.

Back to the storing money in a bank analogy, $100,000 of EUR stored over the past 10 years would have lost the EUR inflation rate + the USD inflation rate. With this sort of inflation rate it seems dangerous to store money in EUR long term.

It gets worse. The EUR is one of the top global fiat currencies, and there are many currencies doing worse than the EUR.

United Kingdom’s Pound Has 65 Percent Inflation Relative to USD in 11 Years

The United Kingdom (UK) is one of nine European Union (EU) countries that does not use the EUR, and eventually, the UK will leave the EU via the Brexit. However, the native Great Britain Pound (GBP) has done far worse than the Euro, with the exchange rate going from 0.48 GBP per USD in 2007 to 0.79 GBP per USD currently. This is 65 percent inflation relative to the USD during the past 11 years.

Canada’s Inflation Rate Is 45.2 Percent Relative to USD During the Last 7 Years

The United States’ neighbor to the north is similar to the United States in many respects. It is a fully developed and industrialized first world country. However the native fiat currency, the Canadian Dollar (CAD), has been experiencing severe inflation since the Great Recession. In 2011 1 USD was worth 0.95 CAD, and now the exchange rate is 1.36 CAD per USD. This represents 43.2 percent inflation relative to the USD since 2011, and of course, the USD has an underlying inflation rate as well of 16.2 percent during the last 7 years.

Even in the first world country of Canada, it is becoming impossible to save cash for retirement or even for short-term goals like buying a house, forcing people to invest in the risky stock market.

Mexico’s Inflation Rate Is 97.6 Percent Relative to the USD During Past 10 Years

Since the 2008 financial crisis, the exchange rate of the Mexican Peso (MXN) has gone from 10.12 MXN per USD to 20 MXN per USD. This represents 97.6 percent inflation relative to the USD, and USD inflation means the true Mexican inflation rate is well over 100 percent per 10 years. This sort of inflation rate ensures that people have to work their entire lives and can never retire, and overall, this sort of inflation can cause the entire economy of Mexico to struggle. Bitcoin seems like an obvious alternative to holding MXN long term.

It is quite shocking that a country bordering the United States has such high inflation, yet the mainstream media never mentions it.

Russia Has 194 Percent Inflation Relative to USD Since the 2008 Great Recession

Russia is a global superpower, with a gross domestic product (GDP) of $1.58 trillion versus the United States’ $19.39 trillion GDP. Despite being a superpower, the native currency of Russia, the Russian Ruble (RUB), has gone from 23.48 RUB per USD in 2008 to 69.08 RUB per USD currently. This yields a 194 percent 10 year inflation rate relative to the USD. Clearly, the Great Recession that started in 2008 is a common point when fiat inflation accelerated in many countries around the world.

Japan’s Inflation Rate Is 46 Percent Relative to USD Over the Past 7 Years

Japan is a first-world country and has one of the most important stock markets in the world. The GDP of Japan is ranked number three in the world at nearly $5 trillion. However, its inflation rate is far higher than the United States, at least since 2011. In 2011, the exchange rate was 76 JPY per USD, but it has now risen to 111 JPY per USD, a 46 percent inflation rate relative to the USD over the past 7 years. This is actually almost exactly the same as Canada’s inflation rate.

China’s Inflation Is Only 14.4 Percent Relative to USD Since 2013, but China Tightly Controls the CNY

China is the second ranking economy in the world with a $12 trillion GDP. Its position as the number one trading partner of the United States gives it power to manipulate the exchange rate of its native currency the Chinese Yuan (CNY). The CNY actually strengthened greatly versus the USD until 2013, when China relaxed its control over the CNY exchange rate to make it more competitive in the global import and export markets. Chinese control over the CNY and therefore, control over the profitability of Chinese imports, is a primary reason for the “trade war” between China and the United States.

Since allowing the CNY to lose value relative to the USD, the exchange rate has gone from 6.04 CNY per USD in 2013 to 6.91 CNY per USD currently, a 14.4 percent inflation relative to the USD in 5 years. China is an outlier and has one of the lowest inflation rates relative to the USD.

Switzerland Has One Of The Lowest Inflation Rates At Less Than 5 percent Relative To The USD In 7 Years

Switzerland has remained independent of the European Union and does not use the EUR. Instead, it uses the Swiss Franc (CHF). The CHF actually strengthened greatly relative to the USD during the Great Recession, but the trend reversed in 2011. There was a rapid devaluation of the CHF relative to the USD from 0.76 CHF per USD to 0.94 CHF per USD during 2011. In The 7 years since then, the CHF has roughly five percent inflation relative to the USD and sits at 0.99 CHF per USD currently.

That being said, it cannot be forgotten that the USD itself is experiencing 2.5 percent inflation per year, so even countries that have low inflation rates relative to the USD have a significant inflation rate overall.

India Has Seen 79 Percent Inflation Relative to USD Since the Great Recession Began

India has the sixth highest GDP in the world at $2.6 trillion, and the second highest population at 1.34 billion. Since the Great Recession began, the Indian Rupee (INR) has gone from 39.18 per USD to 70.14 INR per USD, a 79 percent inflation relative to the USD in 11 years. Unfortunately, India is slowly making Bitcoin more illegal and could fully outlaw it, so citizens may have to break the law in the future in the event that inflation accelerates and Bitcoin becomes a preferred way to store money.

Indonesia Has 76 Percent Inflation Relative to the USD in Seven Years

Indonesia has a population of 265 million, not far behind the United States, but its GDP is 20 times less than the United States at $1 trillion. Part of the reason Indonesia’s economy is weaker may be that the native fiat currency, the Indonesian Rupiah (IDR) has gone from 8,250 per USD in 2011 to 14,550 IDR per USD currently. This is 76 percent inflation relative to the USD in 7 years, around the same rate as India. However, Indonesia has banned Bitcoin as of 2018, which would make it difficult for citizens to use Bitcoin in the event inflation spirals out of control.

Brazil Has 152 percent Inflation Relative To USD In Past Seven Years, Despite Being the Strongest Economy In South America

Brazil has the most powerful economy in South America with a $2 trillion GDP. However, South America as a whole is experiencing out of control hyperinflation, and Brazil seems to be feeling the effects. The Brazilian Real (BRL) has gone from 1.55 per USD in 2011 to 3.91 BRL per USD currently. This is 152 percent inflation relative to the USD in 7 years. There does not appear to be any inflation safe haven in South America, and this could make South America a Bitcoin adoption hotspot.

Venezuela Has Ridiculous Inflation Around One million  percent Per Year; Bolivar Collapsing

The end game of fiat currency inflation, if left unchecked, is currency collapse. A classic example of currency collapse is the situation in Venezuela, where the Cafe Con Leche Index suggests 400,000 percent inflation per year, although if a shorter term average is used it is 1 million percent per year or more. It would be shocking if the native fiat currency of Venezuela, the Sovereign Bolivar (VES), is still usable one year from now. Bitcoin is legal in Venezuela, and there is plenty of news which indicates people are abandoning the VES for Bitcoin.

South Korea Has Zero Inflation Relative to the USD

South Korea is considered a powerful economy relative to most of the world, with a GDP of $1.5 trillion despite the country’s small size. The South Korean Won (SKW) has essentially zero inflation relative to the USD long term aside from an exchange rate shock during the 2008 Great Recession. That being said, inflation is still a reality in South Korea since the USD has average inflation of 2.5 percent per year.

Australia Has 53 Percent Inflation Relative to the USD in Seven Years

Australia essentially has a continent to itself, but it is not isolated from the global fiat inflation crisis. The AUD actually strengthened massively versus the USD from 2001 to 2011. However, the trend reversed, and the exchange rate has gone from 0.93 AUD per USD in 2011 to 1.42 AUD per USD currently. This is 53 percent inflation relative to the USD in seven years.

Israel Has Zero Inflation Relative To USD Long Term

Israel is in the Middle East but does not have strong connections to the economy of the rest of the Middle East and, apparently, a different monetary policy than most of the rest of the world. Israel is only comparable to the United States, South Korea, and perhaps Switzerland when it comes to fiat currency since the Israeli New Shekel (ILS) has practically zero inflation relative to the USD long term although there are shorter term oscillations. Like the other countries listed with zero USD relative inflation, inflation still exists because the USD itself is inflating.

In total, there are 180 fiat currencies in the world, and here, we’re covering just 16 of them. We could keep going, but the trend is already clear. Even in major countries with powerful economies, inflation has become a serious issue, with some major countries experiencing 50-200 percent inflation relative to the USD over the past decade, and those numbers don’t even take in the 2.5 percent per year USD inflation underlying them.

It is possible that worldwide fiat inflation will accelerate due to the growing global debt crisis. That’s especially true if an economic recession occurs since that would force a rapid increase in money printing.

So we’re in a global situation that needs to be actively monitored. Even if the status quo is maintained long term, most of the world’s population cannot realistically save money for the future because it’s going to lose value over time. This is a major shift from our parents’ generation when saving money was the smart thing to do.

The good news is Bitcoin is waiting on the sidelines. It’s ready to become the global currency if fiat currency collapses worldwide. Even if fiat does not totally collapse, perhaps once Bitcoin matures and becomes more stable, it will be a good option for saving money long term since its value is independent of fiat inflation.