Bitcoin: Censorship-Resistant Digital P2P Currency

Moliere · Post by **Moliere** » Tue Jul 04, 2017 3:57 pm

Ripple!! (i.e., dude, blockchain!)

Ripple's website describes the opensource protocol as "basic infrastructure technology for interbank transactions – a neutral utility for financial institutions and systems." The protocol allows banks and non-bank financial services companies to incorporate the Ripple protocol into their own systems, and therefore allow their customers to use the service.[82] Currently, Ripple requires two parties for a transaction to occur: first, a regulated financial institution "holds funds and issues balances on behalf of customers." Second, "market makers" such as hedge funds or currency trading desks provide liquidity in the currency they want to trade in.[83] At its core, Ripple is based around a shared, public database or ledger that has its contents decided on by consensus.[6] In addition to balances, the ledger holds information about offers to buy or sell currencies and assets, creating the first distributed exchange.[82] The consensus process allows for payments, exchanges and remittance in a distributed process.[7] According to the CGAP in 2015, "Ripple does for payments what SMTP did for email, which is enable the systems of different financial institutions to communicate directly."[81]

In Ripple, users make payments between each other by using cryptographically signed transactions denominated in either fiat currencies or Ripple's internal currency (XRP). For XRP-denominated transactions Ripple can make use of its internal ledger, while for payments denominated in other assets, the Ripple ledger only records the amounts owed, with assets represented as debt obligations.[18] As originally Ripple only kept records in its ledger and has no real-world enforcement power, trust was required.[18][clarification needed] However, Ripple is now integrated with various user verification protocols and bank services.[84] Users have to specify which other users they trust and to what amount.[18] When a non-XRP payment is made between two users that trust each other, the balance of the mutual credit line is adjusted, subject to limits set by each user. In order to send assets between users that have not directly established a trust relationship, the system tries to find a path between the two users such that each link of the path is between two users that do have a trust relationship. All balances along the path are then adjusted simultaneously and atomically.[18] This mechanism of making payments through a network of trusted associates is named 'rippling'. It has similarities to the age-old hawala system.

RunningMn9 · Post by **RunningMn9** » Tue Jul 04, 2017 5:05 pm

Moliere wrote:At its core, Ripple is based around a shared, public database or ledger that has its contents decided on by consensus.

This is almost the exact same sentence I've seen over and over again. Some people react to that sentence with "ZOMG TEH WORLDS ARE CHANGING!!". My reaction is "so what?".

I mean, if we abstract it, and simply say that one use case is the ability to create a distributed, cryptographically secure network between international financial institutions that reduces transaction latency, increases security and reduces cost - I can "get" that. I understand the practical value of that.

But that just moves my response to "ok, that sounds useful". When it's said that the database is "public" and "transparent", what does that mean in this example?

Isgrimnur · Post by **Isgrimnur** » Tue Jul 04, 2017 5:07 pm

Reduced opportunity for fraud, probably. Non-repudiation.

RunningMn9 · Post by **RunningMn9** » Tue Jul 04, 2017 5:32 pm

That's not what I meant. I mean, if the information is public, does that mean anyone can view it? Is that something people engaging in international financial transactions want? Is it public, but encrypted?

Isgrimnur · Post by **Isgrimnur** » Tue Jul 04, 2017 6:03 pm

World Finance

On February 27, the Bank for International Settlements released a report illustrating the new risks posed by distributed ledger technology (DLT) – the technology behind bitcoin. DLT has hit headlines with its potential to revolutionise the financial landscape by creating huge efficiencies in payment, clearing and settlement activities.
...
According to the report: “Having many nodes in an arrangement creates additional points of entry for malicious actors to compromise the confidentiality, integrity and availability of the ledger.”

As it stands, cryptographic tools underpin the security of current financial architecture and are broadly considered effective. Such tools, like public key cryptography, are widely used today and would be vital in a future involving DLT arrangements. However, according to the report, technological advancements could dent the security of existing cryptographic tools.

Matrix · Post by **Matrix** » Wed Jul 05, 2017 12:32 am

RunningMn9 wrote:That's not what I meant. I mean, if the information is public, does that mean anyone can view it? Is that something people engaging in international financial transactions want? Is it public, but encrypted?

Its public but encrypted on bitcoin. It varies on each blockchain technology, each one does it with its own flavor. Zcash is completely anonymous, Ethereum will have ability to do mostly private transaction with certain add on. On ethereum you can also build privet blockchains. It really depends on what flavor of blockchain is need, but it can be built.

Matrix · Post by **Matrix** » Wed Jul 05, 2017 12:38 am

Isgrimnur wrote:World Finance

On February 27, the Bank for International Settlements released a report illustrating the new risks posed by distributed ledger technology (DLT) – the technology behind bitcoin. DLT has hit headlines with its potential to revolutionise the financial landscape by creating huge efficiencies in payment, clearing and settlement activities.
...
According to the report: “Having many nodes in an arrangement creates additional points of entry for malicious actors to compromise the confidentiality, integrity and availability of the ledger.”

As it stands, cryptographic tools underpin the security of current financial architecture and are broadly considered effective. Such tools, like public key cryptography, are widely used today and would be vital in a future involving DLT arrangements. However, according to the report, technological advancements could dent the security of existing cryptographic tools.

They dont know what they talking about. This just shows how little they understand the tech behind blockchain. In theory this: “Having many nodes in an arrangement creates additional points of entry for malicious actors to compromise the confidentiality, integrity and availability of the ledger.”
Sounds as correct info, in reality, it would be extremely difficult to compromise the ledger, and unless they got majority (which couldn't happen unless done over long long long time) , during some stage it would be pretty obious that something was up. So long story short, there are 99 problems for block chain but “Having many nodes in an arrangement creates additional points of entry for malicious actors to compromise the confidentiality, integrity and availability of the ledger.” ain't 1. There is a reason why Bitcoin never been even close to compromised, sure people got hacked, but it wasnt the bitcoin tech , it was banks or other entities on top of it. Also analyzing bitcoin for this report, is meaningless since bitcoin will be never be accepted financial vehicle for institutions. Analyzing Ripple or Ethereum would have made much more sense. But Banks currently dont allocated enough resources to blockchain, nor know how to understand it on deeper level.

RunningMn9 · Post by **RunningMn9** » Wed Jul 05, 2017 5:29 am

I thought it was bitcoin that has been compromised multiple times. I only remember that because the comment made by the author was "but that was the result of malicious intent rather than a failure of the technology itself" which seemed like an odd way to defend that something was hacked.

In any case, my understanding was that each node phones home every 10 minutes. In order to compromise the integrity of the ledger, you would have to compromise a majority of the nodes within that 10 minute window. And that would take more computing power than is available (currently).

I wouldn't buy that any system is hacked-proof, but decentralization certainly seems to strengthen security rather than weaken it (if my understanding is correct).

RunningMn9 · Post by **RunningMn9** » Wed Jul 05, 2017 5:31 am

Also, "they just don't understand it" is a bit of a red flag defense.

At the moment, banks that do international business stand to gain the most from adoption of this technology. Alleging that they understand it less than the investors trying to make money on their adoption seems dangerous to me. Of course, you may also be correct.

Matrix · Post by **Matrix** » Wed Jul 05, 2017 9:10 am

RunningMn9 wrote:Also, "they just don't understand it" is a bit of a red flag defense.

At the moment, banks that do international business stand to gain the most from adoption of this technology. Alleging that they understand it less than the investors trying to make money on their adoption seems dangerous to me. Of course, you may also. E correct.

I been to number of conferences and spoke with number of banks over last 3 month, in fact we spoke with really big bank to potentially bring us in on board as consultants. "They dont understand" is a fact. There only handful banks that actually get the importance of blockchain, and they are spending like possessed. The problem for them and for the rest is, tech is too new, most use cases are in very early form or not existing. Hence, to understand for such legacy institution, with tech built on 70s and 80s tech, is to see it in use. Yet to put it in use, means to move faster then all of them find acceptable. Hence R3, and number of other alliances that supposed to ease in through transition. Your definition of understand will vary, for banks to understand means to know 100% it will work. International business? that is not even scratching surface, the compliance part is one that can save them a lot more, and the are a number of departments that will be outright eliminated. What is blokcchain? Blockchain is Trust, internet is communication. Currently banks are the role of that trust, blockchain quiet literally can take their huge parts of their function but at this point it just unclear how or on what platform. It is a game of chicken, and Bank of international Settlements is just trying to buy some time.

Matrix · Post by **Matrix** » Wed Jul 05, 2017 9:19 am

RunningMn9 wrote:I thought it was bitcoin that has been compromised multiple times. I only remember that because the comment made by the author was "but that was the result of malicious intent rather than a failure of the technology itself" which seemed like an odd way to defend that something was hacked.

In any case, my understanding was that each node phones home every 10 minutes. In order to compromise the integrity of the ledger, you would have to compromise a majority of the nodes within that 10 minute window. And that would take more computing power than is available (currently).

I wouldn't buy that any system is hacked-proof, but decentralization certainly seems to strengthen security rather than weaken it (if my understanding is correct).

The original poster was wrong, bitcoin never been hacked. As i mentioned, only crypton banks (mt.gox) and other been hacked, always because of their own security weakness.

Correct, each transaction continues to be coated by each encryption (on bitcoing its 10min), so the longer that transaction on blockchain the more encrypted it becomes as it becomes part of the chain. This is for bitcoin, on ethereum it is every 13 seconds. Runningman, you just got why that paper is bs in much faster time, then they needed to write that paper. Answer to that in my previous post, they are scared and they dont understand it. For banks to "undertsand" it has to be 100% concrete.

Isgrimnur · Post by **Isgrimnur** » Wed Jul 05, 2017 9:23 am

Coindesk

A new report by the Deloitte Center for Financial Services predicts that permissioned blockchain payment systems will see "significant transaction volume" by 2020.

Such systems, the report said, could reach the scale of the ACH network, which processes 23 billion transactions annually, by 2025. Elsewhere, it projects that bitcoin and digital currencies will go mainstream, but that many alternative cryptocurrencies would likely vanish or be replaced by "state-sponsored" digital currencies.
...
The report suggested that incumbent financial providers are perhaps the most likely to commercialize the opportunity, but that the success of such initiatives would be based on how well blockchain technologies can interoperate.

Deloitte wrote:

"We believe that corporate payments may have a head start in adopting blockchain technology, given the limited set of entities involved and the strong payment-transaction relationships corporates already have with banks."

Such a transition, Deloitte said, was likely to "erode" product margins at financial institutions, forcing market participants to change how they approach relationships with merchants, consumers, businesses and counterparties. Notably, the professional services firm expects "all aspects" of the securities trade cycle to be dominated by digital technologies.
...
The report concluded:

"In our view, while the promise is real, the path to actualizing the potential will not be easy. There is simply too much legacy overhang in making this transition. It will take enormous effort on a collective basis to migrate to a blockchain-based trading and settlement infrastructure."

It's never likely to replace banking as a method of personal financial transactions, but it's poised to have an impact to lower overhead for the first to implement in the banking world.

If it it can increase transfer speed over ACH and lower overhead, it's probably going to be a competitive advantage to those that are first to market, offering better service and lower fees to consumers.

RunningMn9 · Post by **RunningMn9** » Thu Jul 06, 2017 7:57 pm

I assume the original author was referencing stuff like this.

Which may not be the blockchain itself, to be fair (didn't read all of the examples).

RunningMn9 · Post by **RunningMn9** » Thu Jul 06, 2017 9:45 pm

Or this.

If I'm understanding them right (I've read through them all now), none of these hacks were of the blockchain itself (not sure about this one above), but rather on the "wallet" side. I would imagine that this distinction may not be relevant when it comes to trust of cryptocurrencies.

And it's not just bitcoin. Other digital currencies like Etherium have suffered similar breaches that have tanked currency value.

Matrix · Post by **Matrix** » Thu Jul 06, 2017 10:54 pm

RunningMn9 wrote:Or this.

If I'm understanding them right (I've read through them all now), none of these hacks were of the blockchain itself (not sure about this one above), but rather on the "wallet" side. I would imagine that this distinction may not be relevant when it comes to trust of cryptocurrencies.

And it's not just bitcoin. Other digital currencies like Etherium have suffered similar breaches that have tanked currency value.

Yep, wallet hacks are not fun, but far from blockchain hacked itself. Unfortunately even less people make the distinction between those 2, hence prevalent belief that blockchain is getting hacked left and right. While one of the core values of blockchain is its trust factor, as Internet is communication, blockchain is trust. I am working on very big project at the moment, under very heavy nda now, but hopefully can share it one day

.

RunningMn9 · Post by **RunningMn9** » Thu Jul 06, 2017 11:00 pm

What happens when a trusted node is compromised, but still trusted?

Matrix · Post by **Matrix** » Thu Jul 06, 2017 11:51 pm

RunningMn9 wrote:What happens when a trusted node is compromised, but still trusted?

this will vary from blockchain to blockchain, of the 100s of tokens (coins) out there, solutions will vary greatly, and if you not building blockchain, don't worry about it.

RunningMn9 · Post by **RunningMn9** » Fri Jul 07, 2017 5:44 am

Out of curiosity, what is your technical background? I only ask because working where I do, I work with a number of experts in network security. They seem somewhat less confident than you, to put it mildly.

Their concern isn't about hacking the data of the blockchains, their concern is about compromising one or more trusted nodes.

Presumably a trusted node can make changes to the blockchain, it must be able to do that to execute and record valid transactions, no? How does the blockchain differentiate between real and fraudulent transactions if the node doing both is still trusted?

malchior · Post by **malchior** » Fri Jul 07, 2017 8:06 am

Isgrimnur wrote:It's never likely to replace banking as a method of personal financial transactions, but it's poised to have an impact to lower overhead for the first to implement in the banking world.

If it it can increase transfer speed over ACH and lower overhead, it's probably going to be a competitive advantage to those that are first to market, offering better service and lower fees to consumers.

Yup - and the banks in general have been very aggressive in adopting new tech that give them an advantage. It has lead to issues though. For example, the big relevant one was the CME Clearpoint hack. That itself has put all the big exchanges under regulatory scrutiny to protect the integrity of electronic markets. That is one hurdle they'll have to overcome with blockchain. Another hurdle is legal. The lawyers are wary of having to potentially defend a brand new tech in court. Judges are notoriously tech ignorant and defending transactions have complex relationships with trading controls. It isn't that blockchain is too complicated for the banks or that the banks wouldn't be able to spin up products. The Exchanges in particular are basically software houses now and the banks aren't far behind. The 'delay' is that there are lots of complicated ancillary problems on top and network security concerns. A set of problems that the banks are definitely working on as fast as they can muster.

Matrix · Post by **Matrix** » Fri Jul 07, 2017 9:13 am

RunningMn9 wrote:Out of curiosity, what is your technical background? I only ask because working where I do, I work with a number of experts in network security. They seem somewhat less confident than you, to put it mildly.

Their concern isn't about hacking the data of the blockchains, their concern is about compromising one or more trusted nodes.

Presumably a trusted node can make changes to the blockchain, it must be able to do that to execute and record valid transactions, no? How does the blockchain differentiate between real and fraudulent transactions if the node doing both is still trusted?

I am between the tech and analysts, so i dont dive in tech too deep, but we do discuss the more theoretical parts of it. Hence in pure tech talk, i am out of my depth, for that we have our technical team. But question you are asking are only partial about tech, a lot of it is about integrity, which is more of blockchain architecture element. Hence, i might be able to answer this one. The nodes are authnticators, majority of nodes must come to agreement, if one node that is trusted is not in agreement with other nodes, that node gets ignored and majority of nodes must come to consensus bypassing the node that not in agreement. Hence to answer your questions, trusted node alone can never execute or record a valid transaction, since it can not be valid unless it is authenticated by other nodes and they all come to consesus on what the most valid version of ledger here. That most valid version, becomes the ledger to which future blocks get added. Everyone has a piece of the ledger, and only version that all nodes agrees on moves forward.
Ethereum is currently working on POC, which is different from POF. In that case, you as a node have some down deposit, and if you try to misbehave , your collateral gets burned.
So technically a few compromise notes wouldnt make a difference, but if you can compromise majority, thats when technically it is a problem, but the idea of blockchain is decentralization of nodes and authority, so the more nodes there are the harder in theory it should be to compromise the entire network.
This vary greatly on each blockchain, as as amount of nodes. Hence bitcoin is probably easiest to talk about, but Ethereum is one that currently innovating the most in the POC.

RunningMn9 · Post by **RunningMn9** » Fri Jul 07, 2017 11:56 am

Matrix wrote:The nodes are authnticators, majority of nodes must come to agreement, if one node that is trusted is not in agreement with other nodes, that node gets ignored and majority of nodes must come to consensus bypassing the node that not in agreement. Hence to answer your questions, trusted node alone can never execute or record a valid transaction, since it can not be valid unless it is authenticated by other nodes and they all come to consesus on what the most valid version of ledger here.

Maybe I'm missing something still. Presumably nodes process transactions in some form - and that transaction has to propagate to other nodes somehow? You said that each node has a piece of the ledger. I thought the important part of blockchain is that every node has a copy of the ledger (thus the all data is public and transparent). Regardless - there still has to be a way for new transactions to get written to the ledger - how does the technology differentiate between new transactions to the ledger that are real and ones that are fraudulent if they are both coming from a trusted source?

They treated my question similar to you (not in a bad way, just in that each side is working with more knowledge than I have), chuckled about transitive trust networks, and went about their business.

Matrix · Post by **Matrix** » Mon Jul 10, 2017 10:18 pm

RunningMn9 wrote:
Matrix wrote:The nodes are authnticators, majority of nodes must come to agreement, if one node that is trusted is not in agreement with other nodes, that node gets ignored and majority of nodes must come to consensus bypassing the node that not in agreement. Hence to answer your questions, trusted node alone can never execute or record a valid transaction, since it can not be valid unless it is authenticated by other nodes and they all come to consesus on what the most valid version of ledger here.
Maybe I'm missing something still. Presumably nodes process transactions in some form - and that transaction has to propagate to other nodes somehow? You said that each node has a piece of the ledger. I thought the important part of blockchain is that every node has a copy of the ledger (thus the all data is public and transparent). Regardless - there still has to be a way for new transactions to get written to the ledger - how does the technology differentiate between new transactions to the ledger that are real and ones that are fraudulent if they are both coming from a trusted source?

They treated my question similar to you (not in a bad way, just in that each side is working with more knowledge than I have), chuckled about transitive trust networks, and went about their business.

Yep, each node has entire ledger, i was talking about Ethereum POC which would be partial ledger, but at the moment it is entire ledger that held by each node on both bitcoin and ethereum. Can you give me example of how is fraudulent transaction on blockchain would look like?

RunningMn9 · Post by **RunningMn9** » Mon Jul 10, 2017 10:25 pm

It would look a lot like what happened to Etherium where they had to diverge so that one path could offer a way to roll back "bad" transactions. It seemed to me that clearly fraudulent transactions found their way into the ledger. Maybe I didn't understand that correctly?

Matrix · Post by **Matrix** » Mon Jul 10, 2017 10:51 pm

RunningMn9 wrote:It would look a lot like what happened to Etherium where they had to diverge so that one path could offer a way to roll back "bad" transactions. It seemed to me that clearly fraudulent transactions found their way into the ledger. Maybe I didn't understand that correctly?

No, that was the case of the DAO, smart contract that had bad contract in it that was exploited. But the blockchain itself behaved exactly as it should, the issue was error in the smart contract, which is a layer on top of ethereum. Hence it is same/similar story as bitcoin wallets, the hack was on the weakness of the smart contract, not the blockchain itself.
They didnt roll back pre say (though technically they did), what they did is called hard fork. Which basically meant, they pooled majority of ethereum holders and with 86% voting for hard fork (roll back), that still haunts them as there is Etehreum Classic that continued with original chain that allowed for DAO. As far as i know, blockchains at them moment is unhackable, but the smart contract and other infrastructures on top of it are. That is more of growing pains, the level of smart contracts and agreements has to grow and will require time.
I was at hackathon as attendee, and one of the project was blockchain filter that caught discrepancies in smart contracts. It demonstrated how if it was present it would have caught error in DAO smart contract within seconds of it appearing.

RunningMn9 · Post by **RunningMn9** » Mon Jul 10, 2017 10:54 pm

Matrix wrote:As far as i know, blockchains at them moment is unhackable

I don't think that I could ever accept that as true.

Matrix · Post by **Matrix** » Mon Jul 10, 2017 10:59 pm

RunningMn9 wrote:
Matrix wrote:As far as i know, blockchains at them moment is unhackable
I don't think that I could ever accept that as true.

But that is a whole point of block chain. if it is not true, then it has almost no value... One of the core points of blockchain is trust. If there is not trust, it is worthless. Hence, if it is hackable, it is worthless. The entire trust that is currently given to blockahin technology will evaporate over night. Hence, as it stands right now, it is unhckable. If it changes, and it proves to be otherwise, it means it is flop and new tech trend will likely will take its place.

RunningMn9 · Post by **RunningMn9** » Mon Jul 10, 2017 11:02 pm

Now you see my problem. I don't believe something can be designed that is hacker-proof. Trusting that it is, or could be seems very dangerous.

However, I don't think it has to be hacker-proof to have some value. It simply has to be more secure than what it hopes to replace.

Moliere · Post by **Moliere** » Mon Jul 10, 2017 11:09 pm

I thought Ripple was doing bad, but apparently the whole market is taking a dive. Time to invest when everyone is running, RunningMn9. What could go wrong?

LordMortis · Post by **LordMortis** » Tue Jul 11, 2017 9:11 am

As someone who just doesn't understand and has been to conferences where tech guys with Zaxxon like stars in their eyes on the future being now rave about how blockchain and bitcoin are going to disrupt all of money, this thread is now getting interesting. The conferences were never interested in schooling me so like RM9 to me it feels like another don't get caught holding the bag when the music stops game. Of course all money is fiat and the dollar could do the same damned thing, so...

Maybe something will come from it where I will understand.

But right now alternative electronic currency seems like like a primary mover for things that occur in (usually internationally) illegal channels.

Rick and Morty Season 3 Spoiler

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

Matrix · Post by **Matrix** » Thu Jul 13, 2017 11:09 pm

LordMortis wrote:As someone who just doesn't understand and has been to conferences where tech guys with Zaxxon like stars in their eyes on the future being now rave about how blockchain and bitcoin are going to disrupt all of money, this thread is now getting interesting. The conferences were never interested in schooling me so like RM9 to me it feels like another don't get caught holding the bag when the music stops game. Of course all money is fiat and the dollar could do the same damned thing, so...

Maybe something will come from it where I will understand. But right now alternative electronic currency seems like like a primary mover for things that occur in (usually internationally) illegal channels.

Rick and Morty Season 3 Spoiler

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

Actually, i was just at the talk today with head guy from a blockchain (who used to be in auditing and money laundering area) from Earnest & Young, and he basically debanked the myth of illegal channels, according to him that vast vast majority of transactions are legal. It just media like to play up that element of something nefarious (his words). I can certainly see it, as when i was in the dating field and it was same crap, media loved to play up extreme situations, almost never interested in what was actually happening.

RunningMn9 · Post by **RunningMn9** » Fri Jul 14, 2017 8:03 am

LordMortis wrote:But right now alternative electronic currency seems like like a primary mover for things that occur in (usually internationally) illegal channels.

To me it seems like someone is trying to get me to accept that their Candy Crush tokens should be worth real money, and I should treat it as actual currency. No thanks.

That said, I don't think that the expectation is that I'm going to be buying groceries with Ether or BitCoins anytime soon (even if I can actually do that now, which I probably can). Getting individual people to believe in the worth of made up electronic tokens can't really be the end game. Providing some sort of efficient mechanism for financial institutions to transfer money across international boundaries? Maybe. I can understand the appeal of that.

But expecting me to have any kind of faith at all in e-tokens for my daily life? I don't see that happening. Maybe this is my first SmooveB-moment.

Matrix · Post by **Matrix** » Fri Jul 14, 2017 9:52 am

RunningMn9 wrote:
LordMortis wrote:But right now alternative electronic currency seems like like a primary mover for things that occur in (usually internationally) illegal channels.
To me it seems like someone is trying to get me to accept that their Candy Crush tokens should be worth real money, and I should treat it as actual currency. No thanks.

That said, I don't think that the expectation is that I'm going to be buying groceries with Ether or BitCoins anytime soon (even if I can actually do that now, which I probably can). Getting individual people to believe in the worth of made up electronic tokens can't really be the end game. Providing some sort of efficient mechanism for financial institutions to transfer money across international boundaries? Maybe. I can understand the appeal of that.

But expecting me to have any kind of faith at all in e-tokens for my daily life? I don't see that happening. Maybe this is my first SmooveB-moment.

The biggest promise of blockchain and big reason for it recent growth, is not it's use as currency. That is more of a side effect but because it was it's original use and so far biggest project(bitcoin) that's where the focus still is, but the promise is the ability to build ecosystem of applications on blockchain that can provide real solutions. That's why ethereum has grown so much, it is the promise of future potential. Will it happen? Who knows, but it does provides the tools. We can think of it as apps, on etehreum ther are even called dapps (decentralized apps). The more dapps are built our, the more people will adapt the use. On a lot of those dapps, the coin is used to the internal transactions and providing other value beyond monetary.
Everyone who thinks that crypto currency is not really equivalent to $ or pounds or Euro, is correct. It is not supposed to. At the moment we are very very early in the dapps stage. But if you look at some ofthe projects, like storj or brave or gnosis or swarm. They are dapps that trying to see how blockchain can fit into our daily life, where most people wont even know we are on blockchain.

Moliere · Post by **Moliere** » Sat Jul 15, 2017 12:37 am

What Exactly is Happening to Bitcoin on August 1st?

Bitcoin users all over the world are all too aware August 1st is approaching quickly. This day will be an important moment in the history of Bitcoin and potentially all of cryptocurrency. Multiple things can happen. No one knows for sure what the outcome of the 24 hours prior to August 1st, as well as the days after that date, will bring. Since it is just a few weeks before August 1st, let’s review the potential outcomes.
...
There is a distinct possibility SegWit2x may lead to a Bitcoin blockchain split down the line. SegWit2x is a solution enforced by miners, and it has the support of most major mining pools. However, the rest of the community just wants to see Segregated Witness activate without the increase to 2MB blocks. This is why August 1st is the “official” activation day for Segregated Witness through the user-activated soft fork, also known as BIP148.

SegWit2x and the UASF are not mutually exclusive since they follow similar paths. However, the chain split could still occur when the SegWit2x supporters aim to introduce their 2MB hard fork, which is a radical change to the current Bitcoin protocol. Additionally, the user-activated soft fork can cause a chain split, assuming the community can get enough support to keep their version of the blockchain alive while others jump on SegWit2x. If that were to happen, we will see two separate instances of Bitcoin. This can create a whole new set of problems.

Matrix · Post by **Matrix** » Sun Jul 16, 2017 4:32 pm

Moliere wrote:What Exactly is Happening to Bitcoin on August 1st?

Bitcoin users all over the world are all too aware August 1st is approaching quickly. This day will be an important moment in the history of Bitcoin and potentially all of cryptocurrency. Multiple things can happen. No one knows for sure what the outcome of the 24 hours prior to August 1st, as well as the days after that date, will bring. Since it is just a few weeks before August 1st, let’s review the potential outcomes.
...
There is a distinct possibility SegWit2x may lead to a Bitcoin blockchain split down the line. SegWit2x is a solution enforced by miners, and it has the support of most major mining pools. However, the rest of the community just wants to see Segregated Witness activate without the increase to 2MB blocks. This is why August 1st is the “official” activation day for Segregated Witness through the user-activated soft fork, also known as BIP148.

SegWit2x and the UASF are not mutually exclusive since they follow similar paths. However, the chain split could still occur when the SegWit2x supporters aim to introduce their 2MB hard fork, which is a radical change to the current Bitcoin protocol. Additionally, the user-activated soft fork can cause a chain split, assuming the community can get enough support to keep their version of the blockchain alive while others jump on SegWit2x. If that were to happen, we will see two separate instances of Bitcoin. This can create a whole new set of problems.

yep that the current elephant in the room.

Matrix · Post by **Matrix** » Sun Jul 16, 2017 11:29 pm

Here is good video for anyone who wants to understand crypto economics and it's roles. https://www.youtube.com/watch?v=ZH9nMKIHfAE
It gives solid overview and some indepth look into role. The slightly alien looking guy who is speaking, is Vitalik Buterin founder of ethereum.
Video is well worth the full view.

Moliere · Post by **Moliere** » Mon Jul 17, 2017 11:37 pm

Hacker Allegedly Steals $7.4 Million in Ethereum with Incredibly Simple Trick

On Monday, Coindash, which offers a trading platform for ether, was slated to launch its Initial Coin Offering. These are essentially crowdfunding drives that allow investors to own a stake in the app by buying digital assets called tokens. Initial Coin Offerings are an incredibly popular method of funding an app on ethereum, and some ICOs have raked in millions of dollars within minutes of going live. Even the silliest apps have been able to raise thousands of dollars in token investments during recent ICOs.

Coindash's ICO, like many others, launched simply by posting a string of text representing an ethereum address for investors to send money to on the app's website. However, mere minutes into what was supposed to be another successful ICO, Coindash warned that its website had been hacked and asked people not to send ethereum to the posted address.

It's still unclear exactly what happened, but it seems like the hack was incredibly simple: The hacker allegedly took control of the Coindash official website and changed the text on the site, publishing their own ether wallet address instead of Coindash's. When people went to "invest" in Coindash, they actually sent their ether to the hacker, not the company.

Matrix · Post by **Matrix** » Thu Jul 20, 2017 12:42 am

Yep, big issue right now.
I am part of the project for big upcoming ICO, and the security issue has been a huge conversation for the developers of the ICO.
And problem is, there are tons of ICOs that want to happen, and a lot of them dont have security as top priority.

Moliere · Post by **Moliere** » Wed Jul 26, 2017 2:19 pm

Can Ethereum Overcome Its Immense Technical Problems? [Podcast]

Now that ethereum has a market cap of more than $18 billion, the network is facing immense technical challenges. Can it scale to serve millions of users? To discuss, we spoke with Michael Freedman, a professor of computer science at Princeton who, starting in the late '90s, worked on an earlier wave of peer-to-peer computing technologies. In 2011, Freedman co-authored a paper about a technique called "sharding" that ethereum developers are currently working to integrate into their network. Today, he's the co-founder and chief technology officer of the database company TimeScale. He's also serves an advisor to the decentralized computing platform Blockstack, which we discuss in the interview and was the subject of a recent Reason video.

Matrix · Post by **Matrix** » Thu Jul 27, 2017 1:01 am

Moliere wrote:Can Ethereum Overcome Its Immense Technical Problems? [Podcast]

Now that ethereum has a market cap of more than $18 billion, the network is facing immense technical challenges. Can it scale to serve millions of users? To discuss, we spoke with Michael Freedman, a professor of computer science at Princeton who, starting in the late '90s, worked on an earlier wave of peer-to-peer computing technologies. In 2011, Freedman co-authored a paper about a technique called "sharding" that ethereum developers are currently working to integrate into their network. Today, he's the co-founder and chief technology officer of the database company TimeScale. He's also serves an advisor to the decentralized computing platform Blockstack, which we discuss in the interview and was the subject of a recent Reason video.

The scaling is the both the question and the answer. According to etherum crew, it can be scaled to 100x in 18month. IF it can, then damn , all money in ethereum. But that is not the case, as there are no actual hard evidence that those scaling challenges can be overcome. I personally think/betting that it will get solved, but will it? No one knows, i think vitalik and his team is smart and they are hungry. So far ethereum team done wonders. whats next? Who knows!!! Will see it in couple of month.

LordMortis · Post by **LordMortis** » Thu Jul 27, 2017 8:08 am

RunningMn9 wrote:
LordMortis wrote:But right now alternative electronic currency seems like like a primary mover for things that occur in (usually internationally) illegal channels.
To me it seems like someone is trying to get me to accept that their Candy Crush tokens should be worth real money, and I should treat it as actual currency. No thanks.

That said, I don't think that the expectation is that I'm going to be buying groceries with Ether or BitCoins anytime soon (even if I can actually do that now, which I probably can). Getting individual people to believe in the worth of made up electronic tokens can't really be the end game. Providing some sort of efficient mechanism for financial institutions to transfer money across international boundaries? Maybe. I can understand the appeal of that.

But expecting me to have any kind of faith at all in e-tokens for my daily life? I don't see that happening. Maybe this is my first SmooveB-moment.

You and Howard Marks, apparently, who also compares cryptocurrency to Tulips. How are you not a billionaire?

http://www.cnbc.com/2017/07/26/billiona ... cheme.html