From the Front Page - General

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    We Talk, Share, Create, Exchange, and Resolve: Decentralized Autonomous Society

    August 19th, 2014 by lainfinity
    New Editor: Crystal Editor: Cheryl Decentralized autonomous society empowers individuals by rewarding innovation through sharing, distributed ownership and abundance. By sharing innovative ideas we can build a much better, fair, transparent and innovative society which is based on group consensus rather than a society enforced by rules and regulations. Therefore for any society to operate on complete autonomy, it should have these 5 major components or in other words the 5 pillars as its foundation. I would like to explore these components and provide a bird's eye view of how decentralized autonomous society can thrive. * **Decentralized Communication to talk** * **Decentralized Collaboration to share ideas and designs** * **Decentralized Creation to manifest goods and services** * **Decentralized Exchange to barter goods, services and resources** * **Decentralized Arbitration to resolve conflicts** ###Decentralized Communication and Privacy Establishing privacy in our communication channels is the first and foremost priority in order to be self-autonomous and free. Without private correspondence we cannot strive to build a free autonomous society. Privacy enables an individual to be free as a self autonomous entity and thus empowering the society as a whole to be self autonomous. ####Why mass surveillance is a violation of Article 12 of Universal Declaration of Human Rights of United Nations? >No one shall be subjected to arbitrary interference with his privacy, family, home or correspondence, nor to attacks upon his honour and reputation. Everyone has the right to the protection of the law against such interference or attacks.[Source](http://www.ichrp.org/en/article_12_udhr) Mass digital surveillance in any form is an arbitrary interference of privacy and correspondence. Therefore it is a gross violation of human rights. On December 19 2013 the United Nations passed a resolution backing the right to digital privacy. >Deeply concerned that electronic surveillance, interception of digital communications and collection of personal data may negatively impact human rights, the United Nations General Assembly has adopted a consensus resolution strongly backing the right to privacy, calling on all countries take measures to end activities that violate this fundamental tenet of a democratic society.[Source](http://www.un.org/apps/news/story.asp?NewsID=46780#.U-vXmaJX-uY) we can hardly trust any third party to keep our information safe and secure because of conflicts of interest such as maximizing profits and legal obligations to local jurisdiction. The E-mail privacy can only be achieved through decentralized peer to peer communication. ####How does Bitmesssage enable E-mail privacy? >Bitmessage is a P2P communications protocol used to send encrypted messages to another person or to many subscribers. It is decentralized and trustless, meaning that you need-not inherently trust any entities like root certificate authorities.[Source](https://bitmessage.org/wiki/Main_Page) Bitmessage protocol implements two major features which are storing the information in peer nodes for a limited period of time and encrypting the message end to end. Thus it is extremely difficult for anybody to intercept the information. Bitmessage is not the only open source tool that enables digital privacy as there are many other tools which serve similar purpose. One such tool is known as Tox which fascilitates instant messaging and video calls. >Tox is a free and open-source, peer-to-peer, encrypted instant messaging and video calling software. The stated goal of the project is to provide secure yet easily accessible communication for everyone. ###Decentralized Collaborative Sharing vs Centralized Hiding Let us imagine a cave man discovered how to make fire to keep him warm and cook food. If he did not share his discovery and decentralized the concept of light and warmth but instead claimed intellectual property right on how to make light and heat, I do not think I would be able to type this article in a markdown format and share my vision with all of you today. The moral of the story is to let your light shine. It would be nothing but an absurdity for anyone to claim a patent right on how to make light and heat because inventions and discoveries are nothing but an innovative improvisation of a priori. There is nothing wrong in awarding compensation for inventions and discoveries. But it should rather be awarded to the collective for decentralized collaborative sharing than compensating global monopolies such as corporates for centralized hiding. >In 1742 Benjamin Franklin invented a new type of stove for which he was offered a patent. Franklin refused it arguing in his autobiography >we enjoy{ed} great advantages from the inventions of others, we should be glad of an opportunity to serve others by any invention of ours. [source](http://www.economist.com/blogs/freeexchange/2014/08/innovation) In similar veins Linus Torvalds could not afford to buy propriatiary Unix so he created Linux kernel and released the source code under GPL Licence so that it can be used for similar purpose and to empower others. ####Why is Linux kernel a success story even though it defied the conventional knowledge of the academic paradigm? Decentralized collaborative sharing enabled the success of Linux kernel.Thousands of ordinary people shared small pieces of code known as patches. Linus Torvalds designed and developed a tool known as git. This open source tool enabled the decentralized collaborative sharing by managing a distributed revision control archive and Linus along with his team merged the patches with the kernel. But the irony is that thousands of ordinary people who contributed to the Linux kernel walked away without a penny and the monopoly corporates such as Redhat and Google reap billions of dollars today in profits thanks to Linux kernel. It is neither fair nor ethical but it bootstrapped the open source movement because they don't want to kill the goose that lays the golden eggs. ####Open source tools that enables decentralize collective sharing Even though there are many tools that enable decentralize collective sharing I would like to highlight only two tools. One is git which enables to develop open source software by means of decentralize collective sharing and contribution of source code which I have discussed before. And the other one is Twister which is a hybrid of two peer to peer technologies such as Blockchain from Bitcoin and DHT from Torrents. Twister is a social microblogging peer to peer network such as twitter but is based on decentralized peer to peer network. It enables decentralized sharing of ideas and concepts without being tracked or compromising your digital privacy. It creates and authenticates users using Blockchain and stores the data using Distributed Hash Table (DHT) ####What is the issue with Centralized Hiding? By enforcing centralized hiding such as intellectual property rights on the masses, it leads to a situation where the benefits are funneled to the 1% at the cost of 99%. It also impedes innovation resulting in stagnation and scarcity thus empowering the few to control the many. For example if there are 7 different brands of cars and there is a billion of each brand, controlling and manipulating one of each 7 brands will be easier than controlling each of the 7 billion different cars. Control, manipulation and corruption are applicable to finite sets of numbers. They are of no relevance to infinite set of numbers. An example of a centralized hidden archive is the vault below the Vatican which runs for more than 52 miles and hoards vast collection of knowledge dating back 10000 years from various libraries from around the world such as Alexandria. **Knowledge is power when applied, but is wisdom when shared. Power corrupts but wisdom redeems.** ###Decentralize Creation and Abundance Let me clarify the key difference between creation and cloning. Creation is the process of manifesting our shared ideas and design into a physical or readable form. Cloning on the other hand is a process of producing photocopies of someone's design using it as a template. Creation can also be compared to writing your own book or novel but production is photocopying a book written by someone else. In a decentralized creation the value is based on network effect and abundance. Let us consider LTBcoin for example, the value of the coin will increase provided more people use the LTB network and the network creates higher quality content. Thus the value is not based on scarcity but is based on abundance. The decentralized creation operates on the principle of abundance, the more the better as we do not produce but we create. On the other hand, centralized production operates on the principle of scarcity of innovation, the lesser the better. This is because we do not create but we clone someone's design which resides in a centralized hidden archive. We are forced to pay a patent fee for the clone even though someone has the knowledge to design and create their own car. For example if we consider a centralized car manufacturing industry, the value of the car is directly proportional to the quantity that has been produced.Ford is a cloned mass produced car based on a single template.Even though there are million clones they have less value because they are not original, creative or innovative. Let me give you another example even though someone has the knowledge to use one of the open source software distributions like Ubuntu, every time he buys a new laptop or computer he is forced to pay the license fee for Windows which has its source code residing in the centralized hidden archive which the buyer has no access to. ###Decentralized exchange of goods, services and resources Any exchange involves two major transactions. We sell what we create and we buy what we need.Peer to peer payment system enables individuals to pay directly to the producers bypassing the middlemen. This enables the producers to have a better profit margin and the consumers to have better value for their money. One such example is OpenBazaar. >OpenBazaar is an open source project to create a decentralized network for peer to peer commerce onlineusing Bitcointhat has no fees and cannot be censored.[Source](https://blog.openbazaar.org/what-is-openbazaar/) Lets say that you would like to sell vegetables from your garden. Using the OpenBazaar, you create a new listing on your computer with details of the vegetables and quote for the price in Bitcoin. When you publish that listing, it is sent out to the distributed p2p network of other people who use OpenBazaar. Anyone who searches for the keywords such as local vegetables will find your listing. They can either accept your price, or offer up a new price. If you both agree to a price, OpenBazaar creates a contract with your digital signature and sends it to an entity called a notary. In the case of a dispute an arbiter can be brought into the transaction. There is no third parties involved. The notaries and arbiters are also part of the distributed p2p network who the buyer and seller trust in case something goes wrong. The notaries and arbiters witness the contract and create a multisignature Bitcoin account that requires two of three people to agree before the Bitcoin can be released. Decentralized distributed exchange can also empower individual innovation at a personal level through crowdfunding. Crowdfunding in turn enables decentralized distributed ownership. >Crowdfunding is the practice of funding a project or venture by raising monetary contributions from a large number of people, typically via the Internet. One early-stage equity expert described it as the practice of raising funds from two or more people over the internet towards a common Service, Project, Product, Investment, Cause, and Experience[Source](https://en.wikipedia.org/wiki/Crowdfunding) ####How decentralized distributed ownership is different from stocks and bonds? Decentralized distributed ownership enables individuals to directly own a company but not through third parties like stock brokers or banks. The dividends are paid directly to the individual owners of the company. Distributed ownership can enable all the 7 billion people of this planet to own one single company directly without any major issues or downsides. The funds raised through bonds are invested in public infrastructure projects such as roads, rails, bridges etc. The decentralized distributed ownership enables individuals to directly participate in the public infrastructure projects without the need for bonds. ###Decentralized Arbitration We as individuals each one of us is a sovereign. We are not a person but a sovereign, which is a basic right granted by the Creator. We exist simultaneously in a parallel multiverse which has many domains or dimensions that exist in parallel but we are aware of only one domain. These are some of the practical implications of the Multiverse hypothesis. We can only be tried in any jurisdiction as a person. We consent to be represented as a legal person to be tried in a court of law in a temporal domain. A person is a legal entity such as a limited liable company which can be tried by any jurisdiction. The purpose of a legal entity such as a person is to limit the liability to this temporal domain. We can create our own rules without involving any third parties to arbitrate and abide by them as a sovereign as long as the rules are consented by the counter party and are not violating the common law or natural law. This is made possible by the application of smart contracts. >Smart contracts are computer protocols that facilitate, verify, or enforce the negotiation or performance of a contract, or that obviate the need for a contractual clause. Smart contracts usually also have a user interface and often emulate the logic of contractual clauses.[Source](https://en.wikipedia.org/wiki/Smart_contract) ####What is Temporal Jurisdiction? As a sovereign, if anyone prefers litigation rather than decentralized arbitration, then they should be at liberty to exercise their freedom to choose their temporal jurisdiction in order to resolve their conflicts. When Ethereum started the first round of crowd funding the funds are managed by a company incorporated in Switzerland. The developers of Ethereum had the freedom to choose their legal jurisdiction of sale and thus are accountable to the laws of Switzerland but not accountable to the temporal jurisdiction of Canada or USA. This is a classic example of exercising their freedom to choose their temporal jurisdiction in order to resolve their conflicts in future. ####Disclosure This article is meant for informational purposes and is not an endorsement. Articles published on the LTB network are the authors personal opinion and do not necessarily represent the opinions of the LTB network. ####Further Reading https://en.wikipedia.org/wiki/Email_privacy https://bitmessage.org/bitmessage.pdf https://en.wikipedia.org/wiki/Tox_(software) https://en.wikipedia.org/wiki/Git_(software) http://twister.net.co/ http://www.youtube.com/watch?v=9vZpNQUIqIg https://en.wikipedia.org/wiki/Multiverse https://www.ethereum.org/ Read More
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    Categories: General

    An Overview of Applications that Could Be Empowered by Bitcoin

    August 18th, 2014 by CrimsonRoze
    edited by denise 8/8/2014
    Please note that author wants to submit recording to release simultaneously with blog.

    "After editing, before publication, I would like to have the article recorded so it an be released with an audio recording attached. Please do not publish it before I have had a chance to get it recorded. (but you're more than welcome to do all edits so I get a final version to record.)"
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  • 58 Comments
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    Categories: General

    Counterparty, Dogeparty, and Why the Term 'Burning' Gives the Wrong Impression

    August 18th, 2014 by Rob
    Rob's Note: I changed the references to "simply" Cheryl and I discussed via DM. That's all I changed. Thanks!

    Original (editor: dhimmel; proofreader: cheryl):

    The world of cryptocurrency has progressed to a state where practically anyone can create their own cryptocurrency. With only basic experience using Bitcoin or Dogecoin, it is easy to create blockchain-based tradable digital-tokens, thanks to the Counterparty protocol, and its brand new implementation called Dogeparty.

    How does Counterparty work?

    The Counterparty protocol allows users to create and trade their own cryptocurrency tokens. Users do this with a wallet dedicated to sending and receiving Counterparty messages on the Bitcoin blockchain. The messages are broadcast by sending very small amounts of Bitcoin, coupled with Counterparty data. Only the owner of the private key for a Bitcoin address can send a Counterparty asset, and the complete history of counterparty transactions is as secure as the blockchain it runs atop (the Bitcoin blockchain, in the case of Counterparty, or the Dogecoin blockchain, in the case of Dogeparty).

    Burning isn't wasting

    The coin that acts as the fuel for the Counterparty system is XCP. The developers decided the most fair way to distribute XCP to those who saw the value in the Counterparty protocol was to allow people to acquire it for Bitcoin. People who wanted to own XCP sent Bitcoin to an address that has no private key, so all Bitcoin sent to that address was gone forever. But it was not wasted. It was effectively transformed, at a given rate of exchange, into XCP, which was distributed to each address that contributed Bitcoin. This process is referred to as burning, and it is often panned as a wasteful destruction of a coin and its value. However, the destruction of value in one coin sprouts new value in another coin, so the net effect is transformation, not destruction. Proponents see this method of coin-creation as the least corruptible way to launch a new platform; it removes major greed motive, and thus also removes the potential skepticism inherent to new platforms that provide huge fundraising windfalls to the development team.

    Why Dogeparty?

    Many people have jumped on the Counterparty platform, as it is the first easily-accessible way to create tokens that leverages the inherent security of the Bitcoin blockchain. For example, the Let's Talk Bitcoin ecosystem is currently run on a Counterparty asset called LTBCOIN. While the Counterparty protocol is relatively cheap to use, the costs add up when there's a lot going on. That's because each transaction requires sending Bitcoin and enough in miner's fees to make sure the transaction is recorded to the blockchain. Thus, any time you send a Counterparty token, you need to send a base-level of Bitcoin. Recently, the Counterparty developers decided to create a version of their protocol that would live on the Dogecoin blockchain. That not only reduces the transaction fees to less than 1% of the those running on the Bitcoin blockchain, it also allows for much faster transactions. Now, anyone who wants to experiment with asset creation on the Counterparty protocol can do so for pennies! 

    The Dogeparty protocol uses XDP as the native unit for the system, instead of XCP used for Counterparty. If you want to create your own assets, you need XDP, plus some Doge (as you must send Dogecoin to carry the date for the Dogeparty transaction). Because the Dogecoin protocol just launched, the "burn" period is still in effect, so you can acquire XDP by using the Dogeparty Wallet to send Doge to a specific non-recoverable address. I've seen this process interpreted as a non-sensical wasting of Dogecoin, as an artificial attempt to prop up the overall Doge platform. But that overlooks the fact that people are converting their Doge into XDP, because they believe in the potential of the Dogeparty platform. After seeing how well Counterparty has worked on the Bitcoin blockchain, it is not surprising there's excitement about Dogeparty, even for people who have never been involved with Dogecoin.

    Counterwallet & Dogeparty Wallet

    One thing you'll immediately notice is how easy the developers made it to get started with their web wallets. Simple go to counterwallet.co or wallet.dogeparty.io, click the button to create a wallet, and save the pass phrase you are given. That's it. People can send you asset tokens on the platform, or you can create your own assets, provided you have the native coin (XCP or XDP) and some Bitcoin or Dogecoin to send in tiny amounts, to carry your token transactions. Once you have both the native token and the blockchain currency in your new wallet, you simply go to Address Actions, and click "Create a Token (asset)," and fill in a handful of details about the asset. Note that the asset name land-grab has already begun on both platforms.

    When you have a wallet running in your browser, it is not simply a connection to a Counteryparty server. Once the wallet is launched, your browser is actively a javascript wallet. Thus, trying to log into your wallet from a second computer, when the wallet is already open on another computer, can cause problems (fortunately, the wallet warns you if you try to do this).

    Risks

    This is all experimental (for that matter, even Bitcoin is technically still in Beta). It is certainly possible there are bugs or exploitable flaws in both implimentations of the Counterparty protocol. Of course, the hashing power securing the Dogecoin blockchain is but a tiny fraction of the hashing power securing the Bitcoin blockchain. And, unlike Bitcoin's trend of ever-increasing hashrates, Dogecoin's hashrate is well off of highs reached in February of this year. So there's a lot more risk of a 51% attack on Doge. Such an attack could render recent transactions (of Doge or Dogeparty assets) invalid, but Dogecoin and Dogeparty assets still couldn't be spent without having the private key for a particular address. Counterparty's original flavor, running on the Bitcion blockchain, appears to be much more secure from 51% attack, as its hashrate eclipses all others.

    Perhaps a greater risk is that most users are using the online Counterwallet or Dogeparty Wallet. All that's required to access either wallet is a passphrase, because two-factor-authentication has not been implemented yet. Many people would not feel comfortable with their tokens being so accessible if their computer (or password itself) was compromised, so I hope 2FA will be added to the online wallet soon. There are also offline wallets offered that can be complied by users, but it is unclear how many people will utilize these much more technical wallets. If you're about to put any serious value into a Counterwallet or Dogeparty Wallet, or base an important project on these protocols, an offline wallet is the safe way to go. 

    Bottom line

    These are very exciting technologies that bring nontechnical cryptocurrency enthusiasts the ability to create their own asset tokens, at a very low cost. And that doesn't scratch the surface of these protocol's more complex abilities, or explore interesting uses that may develop on top of these platforms. If you have any desire to experiment with these platforms, now is your chance to dive in as an early adopter.

    Disclosure: I own small amounts of XCP and XDP. Note that implications of trading in these new tokens may be a tax headaches for those who attempt to be 100% compliant with outdated tax regulations. Read More
  • 49 Comments
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    Categories: General, Legal Activity

    Death and Bitcoin

    August 15th, 2014 by wildjo

    Editor: Edward
    Proofreader: Cheryl

    For too many people, the answer to the question "What happens to your bitcoins when you die?" will include some variant of "lost." Of course, that does not have to be the case if we use the legacy estate law of our home jurisdictions. These legacy systems, however, have the same disadvantages of the financial system we are trying to make obsolete with cryptocurrencies: trusted third parties and gatekeepers.

    There are alternatives within and on top of the Bitcoin protocol that can overcome these legacy estate law disadvantages. This article identifies two and suggests a mechanism in which they may be employed to provide simple estate-like planning in a decentralized, autonomous way without the time cost and monetary expense of traditional strategies.

    [The above was written by the original author. I assume it was meant to be used as an excerpt/preview for the article. I made some minor edits.]

    ----------------------------------------------------------------------------------------------------------------------------

    What happens to your Bitcoin when you die?

    For some of us outliers in the U.S. cryptocurrency communitythat is, those of us who didnt grow up with a computer in the home and are old enough to have learned how to type on an actual typewriterthe twin certainties of death and taxes are on our minds more than others. In this regard, crypto presents unique challenges. How do we pass on our Bitcoin wealth and legally avoid unnecessary estate expenses, while also protecting our private keys while we are still alive?

    The world of estate law (the law governing the management of a persons assets, with an eye to how they will transfer after he or she dies) has some ideas, but, not being crypto devotees, those ideas center around how to wrangle crypto into their non-crypto world.

    For example, the proposed Fiduciary Access to Digital Assets Act (FADAA) would simply give trusted-third parties enhanced rights (and liability protection) to force a software or hardware company to provide anothers private information. That may be necessary in some situations, but Im sure the crypto community can come up with a better and more generally applicable decentralized and autonomous solution that minimizes the need for trusted third-parties and gatekeepers (and their associated privacy risks and fees).

    Why is the status quo unsatisfactory? The main problem with legacy estate law is that it requires the disclosure of private keys to trusted third-partiesexecutors, trustees, agents operating under a power of attorney, conservators, and personal representativesso that they may access the decedents wallet and distribute the decedents digital assets. Thus, we reintroduce the trust factor back into an area of the cryptocurrency arena that was doing just fine without it. Not only must we trust that these third-parties wont access our wallets while we are living, but we must also trust that they will keep the private keys secure and provide continuity of care in the event they predecease us. Continuity of care requires the introduction of even more third-parties, but is necessary, if not required under some state professional responsibility codes, when attorneys and other professional fiduciaries are involved.

    Another deficit of the legacy estate system is that it necessitates the inclusion of gatekeepersprobate courts/judges, magistrates, executors, attorneys, and state agencies (e.g. vital statistics departments). In even the simplest of situation where all the necessary information is known and all the heirs are getting along, these gatekeepers impose costs in terms of both time and money. Where information is absent and heirs disagree, those costs can be extraordinarily high. Sadly, the latter scenario is far too common.

    Estate law is a required course in law school. I suffered through it and swore I would never practice it when I became an attorney because it can capture the human species at its very worst. The cases usually have the same last name on each side of the v., as in Jones v. Jones and Smith v. Smith, because some relative feels they got the short end of the inheritance stick and decides the only way to be vindicated is to blow up the family. These fights rage on because both sides are empowered by a legal system and legal profession that stands to profit from the dispute. Family relationships are devastated and family assets dwindle in the process. Insert the technological difficulties and relative unfamiliarity of crytpocurrency and you are simply adding heavy fuel to those fires; fires that can only be snuffed out with the loss of additional time and money.

    No. Satoshi was right. We need to continue to keep trusted third-parties and gatekeepers out of our digital financial lives as much as possible, both during our lives and after our deaths. The problem is, however, that there is no clear way to accomplish this within the Bitcoin protocol. Or is there?

    Im no coder, and my computer competency is just deep enough to make me dangerous. Still, we need to start considering this question, so allow me to kick it off and allow other, more sophisticated, members of the community to take it further.

    In my view, what we are looking for is a mechanism that allows a wallet holder to send a percentage of their wallet balance, whatever that balance may be at some indeterminate time, to another wallet(s) upon the death of the first wallet holder. There are a couple elements here that we need to parse out.

    First, the transaction needs to take place in the future. As I understand it, this function (or something very similar to it) already exists within the protocol. It is called LockTime and is a major feature of distributed blockchain contracts that allows a payment to be made from one address to another after the specified period (n) has passed. Without more, such a function could be used as a crude estate planning tool by selecting a date beyond which is the reasonable life expectancy of the initiating party. However, that means that the initiating party could never change their mind and that the beneficiary might have to wait years before they receive the asset. A lot could happen in that intervening period to make such a transaction unpalatable.

    To make this function better for autonomous estate planning purposes, we would need to modify the LockTime functionor build on top of itto allow us to modify the transaction date repeatedly. If this were possible, we could set up transactions to our heirs on New Year's Day of each year to be distributed, for example, on January 1st of the following year. If we pass away within that period, then transaction propagates. If we dont, then we modify the transaction on New Years Eve to take place in another year, repeating the process until we are no longer around to do so and the transaction kicks in. In the meantime, this flexibility allows us to adjust who our beneficiaries are, the amount they would receive, or to suspend the transaction altogether at any time. In other words, it gives us the flexibility of the existing estate law system (e.g. rewriting a will) with the autonomy of the Bitcoin protocol.

    The second element to address is the amount transferred. With the current LockTime function, the amount of the coin transferred must be specified and it is removed from the wallet. However, in the new estate planning space we are creating for ourselves, while we want our heirs to inherit what is left over, we might want to spend some of our Bitcoin in the meantime. Having to deplete our wallet balance, even if temporary, in order to make a contingent LockTime transaction, could be inconvenient. But, what if we could modify the function to allow for a percentage of the then existing wallet balance to be transferred? For example, I set a transaction to my daughter to be completed a year from today and the amount is set at twenty-five percent of the balance existing in my wallet at that specific time. I could then accommodate multiple heirs with set percentages and not have to worry about changing the transaction each time my wallet balance changed.

    In this scenario, I could set up empty wallets for each of my beneficiaries, teach them how to use the technology, make sure the private keys were preserved (e.g. in a safe), and instruct them to get their own wallets and move their distribution out of that interim wallet and into their own, secure wallet upon my death. This prevents the private keys to my account from being compromised, while minimizing the period of time that the interim account is vulnerable (it will not be used except on the moment the contingent LockTime transaction is ultimately made and then transferred out to the beneficiaries' own wallet) while also ensuring that the LockTime transaction can be recovered (private keys kept in safe place known to me and relevant beneficiary). All of this accomplished autonomously, with only me and my beneficiaries playing an active role.

    Another use of a system of this nature would be to safeguard wallets in the event of lost private keys. For example, on my birthday each year, I could create a TimeLock transaction that would transfer my balance (0-100%) to another address on my following birthday, unless I rescinded it at any time before that magical date arrives. In the interim, if I lost my private key, there is a contingency in place that would allow me to recover my balance in the new wallet and all I would need is a little patience.

    Getting back to our estate planning use, an autonomous system of this nature is similar to the legacy estate planning systems pay on death (POD) or transfer on death (TOD) account. There, an account holder designates a beneficiary and informs the institution holding the account of their identity. During the principals life, the beneficiary has no right to the account, but title and right vests immediately with the beneficiary at the moment of the principals death. This allows the account to be distributed to an heir(s) (the designated beneficiary) outside of probate. The drawback, of course, is that the beneficiary has to obtain and present a certified copy of the death certificate to the bank in order to take possession. This can waste time and money.

    A contingent TimeLock % balance transaction is clearly superior as it accomplishes everything a POD/TOD account does, while keeping the gatekeepers (in this case, the institution issuing the death certificate and the institution holding the account) out.

    There are a lot of nuances to any given jurisdictions estate law and a lot of complexities that go into a persons estate plan. This discussion is, by no means, an attempt to cover any of that ground or to provide legal advice to the reader. Rather, the goal here is to kick off a discussion of a basic wallet/protocol function that could be one strategy in an overall estate plan, and, most importantly, one that minimizes the drawbacks of the legacy estate planning system and its trusted third-parties and gatekeepers.

     

    In other words, Im hoping we can answer the question, What happens to your Bitcoin when you die? with, No worries. Its in the blockchain.

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  • 34 Comments
    2,026 views
    Categories: General, Guest Blog, Fiction

    Grandpa, Tell Me 'Bout the Good Ol' Days

    August 14th, 2014 by Tron

    Editor: Cheryl

    “Hey Jimmy what do you have there?  Oh goodness, I haven’t seen that shoebox since I was teenager.  Were you in the back of my closet?   Bring it here.  Open it up and let's take a look.  It’s my box of old paper dollar bills.  I thought they might be worth something someday.  Boy!  Was I wrong!”

    "When I was kid, back in 2014, people used to trade this paper for housing, food, gas, and cell phone service. Yes, believe it or not -- paper.  I know, it’s bizarre and still makes me chuckle. And they had these big machines called ATMs back then that were bolted to the sides of buildings we used to call 'banks'. These ATMs would spit out these green paper slips with pictures of dead presidents on them.  And then, for whatever reason, other people would trade these slips of mostly green paper for things they wanted. Surprisingly it worked. Sure, it seems archaic now, but people didn't think so at the time.”


    “What?  Oh, banks? Yeah, they would store and track your money like your Samsung S27 bitcoin wallet does now, only they were entire buildings staffed with real people. In fact that social center down on Main Street where they have that little room with the ice cream machine and the big steel doors -- that was a bank.  If memory serves, Bitcoin existed back then, but I guess it just took some time to adjust to the new way of storing and sending value.“


    “What happened to paper money?  Oh, that’s a long story.  It started a long, long time ago in the early 1970s when President Nixon decided that the paper money was accepted well enough that it didn’t need to be backed by anything, so he just stopped allowing convertibility to gold.  Looking back with 20/20 hindsight, it was a really stupid thing to do, but it worked for a while.  Nobody thought much of it at the time.”


    “What happened next?  Oh, not much at first, but in 2008 the first problems started.  It wasn’t so much because of Nixon’s bone-headed decision, but because those ‘banks’ I was telling you about were allowed to loan out more than they held in deposits.   They created more money by making loans, and they could create as much as they wanted as long as they could find people to borrow.  They started loaning to everybody, and I mean everybody.  ‘No job, no problem, here’s your loan.’  Sure, looking back, it seems insane, but I don’t think people in that era really understood money.”


    “Then, the banks had this brilliant idea to insure against loan defaults and sell the loans as investment grade.  The banks used some clever, but ultimately self-destructive methods to hide the bad loans and pretend they were investment worthy.  Well, as you’ll soon learn in your history class, and what should’ve been obvious at time, those with no jobs couldn’t pay their loans, so they didn’t.  There were so many of these bad loans that the insurance companies couldn’t make good, so the whole system was at-risk.”


    “Well, as you can imagine, this was a pretty scary time for those that benefitted from creating money out of nothing.   What were they to do?  What could they do?  They figured they could make more money out of nothing and use it to try to save the system, so that’s what they did.  They just started creating money like crazy to buy Treasury bonds.  This helped the political class back then because they could spend this new money to create programs and buy votes.  There were dozens of different programs to get the money out into the economy.  It didn’t matter how crazy the idea.  We were even sending money to other countries to buy their cooperation.”


    “It worked for a while.  They just kept pumping more ‘free’ money into the system, and people didn’t seem to care.  If you were poor, you got free stuff. Why complain?  No job? -- free money.  If you were rich, you got even richer since borrowing costs were super low so you could borrow cheap and invest in the stock market.  If you were a CEO, you couldn’t lose because you could just borrow cheap, buy back your own stock and get rich.   But, if you were a saver back then, you got crushed.”


    “Jimmy, would you hand grandpa that drink of water? Thanks.”


    “It wasn’t until 2017, when things turned bad for almost everyone.  There weren’t enough people working to keep the system going.  The defaults started again, and surprisingly they hadn’t learned anything the first time.  They ramped up the printing presses again to buy even more Treasury bonds.  Only now, there was so much interest owed it was like running on an accelerating treadmill.  We could loan ourselves more money out of thin air and be the only buyers with an infinite imaginary bank account, or we could offer more interest to get other interested buyers, but only at our own peril because increasing interest rates on our massive debt was crippling.  We were trapped.”


    “Even the Wall Street guys could see the writing on the wall and started looking for safe havens.  What’s Wall Street you ask?  Ah, funny story, there was this guy from New York named Ben Lawsky.  He started Wall Street’s woes, but that’s a story for another time.  I’ll take you to the Wall Street museum sometime.”


    “Anyway, they were desperate to get dollars into the economy, so dollars were easy to come by.  If you had something that had real value, you could get lots and lots of dollars, but saving dollars was futile.  Savers were again getting crushed.  People wanted anything that couldn’t be conjured out of thin air.   It wasn’t only bitcoin that people wanted, it was also food, gold, real estate, and farm land.  Bitcoin was the easiest to store, and transmit, so it worked best when trading for food and other daily needs.”


    “Once the ball was rolling, it picked up speed.  Some say it made the Weimar Republic look tame by comparison.  Since nobody wanted the green slips of paper, but wanted bitcoin instead, the transition happened very quickly.  Thankfully, your grandma and I did fine because we already had some bitcoin before the rush started.  I kept that shoebox full of dollars, partly as a reminder, and partly because I really thought they might be worth something someday.”


    “Well, off to bed."




    The events depicted in this story are obviously fictitious -- there’s no way paper money can last ‘til 2017.  Any similarity to any person living or dead is merely coincidental - except for Ben Lawsky - he’s real and couldn’t be reached for comment because he’s too busy shooting NY in the foot.

     
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    Bitcoin and Intrinsic Value

    August 6th, 2014 by Tron

    Warren Buffett, generally a shrewd investor, surely knows the financial definition of intrinsic value, but inexplicably he does not understand Bitcoin. How do I know he does not understand Bitcoin? Because he called it a "mirage," said it had “no intrinsic value,” called it “a joke,” and compared it to a check. A check? Bitcoin, the network, can be compared to the entire banking system that processes a check, which includes the clearing system, the image scanning system, the ATM network, the credit and debit system of the Automated Clearing House, the SWIFT financial messaging system, and ultimately the institutions that we trust to safely track our balances and return our deposited funds upon request.


    Warren’s uninformed and off-the-cuff remark sparked a conversation about the intrinsic value of Bitcoin. We need to begin by defining "intrinsic value," because it has a different definition for a financial investor than it does for most noninvestors. Investors look at the book value and add the discounted cash flow to arrive at the intrinsic value, which is often different from the market value. Most noninvestors think of intrinsic value as the value of a thing itself. Noninvestors often cite the example of gold, or of a knife that can cut, splice, and dice. Gold can be used for industrial purposes. It is extremely malleable, shiny, and contains other unique physical properties. I posit, however, that gold’s real value lies in its scarcity and in its worldwide acceptance as a store of value. Knives, on the other hand, are great tools of utility value.


    Mr. Buffet’s ability to calculate the difference between intrinsic (or fundamental) value and market value gives him a real investing edge. I respect his investing acumen and I mean no disrespect for him when I declare he is wrong about Bitcoin.


    Perhaps if Warren thought about Bitcoin differently, he might come to a better conclusion. He regularly purchases stocks, so he understands that market. A stock, based upon the investor's definition of intrinsic value, represents partial ownership in an ongoing business that holds assets (book value) and makes money, which can be included in its value when discounted for time. Once Mr. Buffet learns a bit more about Bitcoin, I hope he will realize that upper-case Bitcoin, the network, holds tremendous value because it can be compared to a banking system, or a worldwide collection of banks and all of their systems. While lower-case bitcoin, the currency, can be compared to an index fund or an exchange-traded fund, which would indlude all the bitcoin companies in the Bitcoin ecosystem.


    Value is subjective and contextual. It is subjective because it depends on the feelings and opinions of the person doing the valuing. It is contextual because it depends on the circumstances and setting of that person.


    Let’s explore this with a simple example. Imagine you are stranded alone on a desert island with no internet connection. You are hungry, thirsty, and you cannot get off the island. Three things wash ashore -- a laminated-paper bitcoin wallet that gives the private key for an address that holds 100 BTC, a shoebox full of freshly printed US $100 bills, and a crate containing a knife, some flint, nine hens, a rooster, and several large sealed bottles of crystal-clear purified water. Which has the most value -- to you?  


    Now change the context, and imagine you just polished off a meal at a five-star restaurant and you ate too much dessert. You’re faced with the choice between the same items, but now you might want to count the $100 bills and check the public bitcoin address to decide whether you would rather take the bitcoin or the shoebox full of cash.  


    OK, one last example. This time you have eaten a nice meal while reading about China and Russia striking a deal to use their native domestic currencies to settle trade and purchase energy in the form of gas, oil, and coal. You are faced with the same choice of food, bitcoin, or dollars. But now you’re rattled. You think, “What if the dollar is losing its status as the global-reserve currency? What if dollars come flooding back to the United States as other countries choose not to hold them? What if government numbers for inflation are being blatantly manipulated?” You give it more thought, and you reason that you could take the dollars and buy stock in global companies in order to protect yourself. Then it hits you: “This is why the stock market is doing so well. It is not in recovery at all. People are shifting to stock assets in the face of a manipulated and devalued currency.” Your choice now comes down to buying global stocks, or taking the bitcoin. You look at the history of Bitcoin over the last few years, compare it to the S&P 500, and you make your choice without even needing to count the dollars in the shoebox.
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    Intro to Decentralized DNS

    August 4th, 2014 by mdw

    The Domain Name System (DNS) is the Internet's version of a phone book, allowing computers to lookup an IP address like 66.175.222.204 from a given domain name like letstalkbitcoin.com. Today's Domain Name System is sagging under the heavy weight of political and technical problems. It has held fast for years, but worsening technical issues and growing concern over governance seem implacable in a system designed with centralized control.

    In this series of articles we intend to examine the key issues more closely, and look at specific initiatives in the crypto-currency space designed to alleviate the pain points or create new opportunities. We will be outlining some of the next generation DNS alternatives being built, and talk with some of the visionaries making it happen.

    But first, it is important to identify what the most serious problems really are. Which ones are intrinsic problems that any distributed naming system will exhibit? Which ones are shortcomings of centralized systems, such as we currently have?


    Freedom of Speech

    In most parts of the world speaking out against government censorship, corruption, or government policies is a risky proposition. By speaking out, we refer to publicly voicing dissenting opinions, published on a website for the whole world to read.

    In a world where thought leaders can keep a low physical profile, electronic censorship has become the de facto weapon of choice in the suppression of ideas and ideology. Mass access to these voices, and the censorship thereof both rely on using domain names.

    Today domain names are routinely seized for various reasons. Sometimes people are indifferent, or even supportive of this - in the case of child pornography websites for example. Sites filled with hate speech, promoting violence against ethnic, religious, racial, or other minorities are routinely taken down via domain seizures. Registrars are only too happy to comply with governments to minimize citizens' exposure to the ugliness that is hatred and bigotry.

    But this is a slippery slope. It is not clear that the system benefits us all when the censorship occurs because content is alleged to be in violation of copyright law or politically threatening. Is seizure of domain names justified when sites are being used to spread malware? Is revolutionary speech too destabilizing, and when can it safely be tolerated? The answer of course, is highly subjective.


    Privacy

    Over the years, the Internet Corporation for Assigned Names and Numbers (ICANN) has developed processes for making decisions which are highly inclusive of a range of stakeholders. Unfortunately the loudest voices get a disproportionate share of influence, and this has contributed to an erosion of privacy for domain registrants.

    Information about who is the registrant of record for a given domain name are currently accessible via a mechanism called WHOIS. ICANN requires this information, and the penalty for non-compliance or falsifying the info can be domain seizure. This is very convenient for corporate holders of intellectual property rights, in order to identify and go after those who are perceived to be infringing on those rights.

    There is a strong case to be made against requiring such disclosure from registrants. However, ICANN's Expert Working Group on WHOIS and Privacy recently published their report recommending the expansion of WHOIS in a way which further weakens privacy for individual registrants by requiring and exposing street address and phone number data.


    Internet Security

    Identity is at the heart of many online security challenges. "Who is that, and should I trust them?" is the most basic concern in many interchanges on today's Internet. Indeed, identity and reputation management are considered by some to be the holy grail of social interactions on the Internet.

    As users interact with websites which offer services and information, each side tries to determine the likelihood that the other is sufficiently identified, and that the interaction will be conducted safely. A potpourri of technologies is employed to accomplish this today, which is another way to say that we struggle mightily.

    Trust on the web today is primarily established using digital server certificates. The entity at the other end, with whom users interact, establishes a basis for trust by providing one of these. It will be signed by an even more trustworthy certificate authority. In case it is not yet evident, this system if fraught with peril and requires a lot of trust. The current system has proven over time to be untrustworthy.

    Another area of concern is the control structures. Registry operators are the authorities for top level domains like .COM. Root servers are those lynchpins which contain the authoritative DNS data for resolving domain names. They are both prime targets for attack, as well as central points of failure. There are other central targets in the system as well, including ICANN itself, which guards a private key used to sign certificates for these root servers.


    Domain Thefts

    Aside from the domain seizures that routinely occur, the risk of theft is always present in the current domain name system. The classic scenario is the compromising of a victim's registrar account along with an email account. The specifics could involve keystroke loggers, social engineering to access registrar accounts, registrar employee collusion, or plain old inadequate password management on the part of registrants or registrars.

    However it happens, when registrar accounts are compromised, the domain names are typically transferred to countries with less mature judicial systems, or less cooperative political leadership leaving the victims with little or no recourse.

    Assets secured on a blockchain work differently. Transferring control of assets involves presenting private keys. That is all. No password management, hacking servers, etc. The security of such an asset is completely up to the person controlling the private key.


    More Problems?

    There are other shortcomings to the current domain name system. But we have outlined enough here to give our readers a sense of where we expect to see blockchain-based solutions making inroads.

    Big changes are coming to the domain name system as we know it today. Our current system has been in place since the 1980's, and is ripe for change. In fact people have been working on blockchain based remedies and replacements for this thirty year old system that we have come to depend on.

    What will our global namespaces look like a few years from now? How similar will these systems be to our current one? Stay tuned as we bring you the ideas of some key visionaries who seek to rework this aging system.

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    Solution to Sybil attacks and 51% attacks in Decentralized Networks

    August 3rd, 2014 by lainfinity
    Original (dhimmels):

    In the early days Internet started as a symmetric peer to peer decentralized network of computers. As time passed by, the Internet became more asymmetric and concentrated in a few centralized data centers with billions of PCs and laptops on the edges. The reason Internet started as peer-to-peer decentralized networks are scalability, high fault tolerance and resilience to censorship. However security is a major drawback in these types of networks as it is almost a certainty that malicious nodes will be joining the network from time to time. These malicious nodes can flood the network with invalid packets, thus preventing the packets from being delivered causing a simple flood attack.

    Another common attack is Man in the Middle (MitM) attack in which an attacker places himself between two peer nodes in the network. Such an attack can remain undetected, as long as the attacker remains passive. This also enables the attacker to listen to the communications between the two nodes. As a result, the attacker can assume the identity of both the peer nodes, compromise one or both nodes and try to infiltrate the network. 

    What are Sybil Attacks and Sockpuppets?

    Sybil attack is another security vulnerability specific to peer to peer decentralized networks as it is open and anonymous in nature. The attack is named after the subject of the book Sybil which deals with the case study of a woman diagnosed with Dissociative Identity Disorder. The main component of the Sybil attack comprise of creating a large number of pseudonymous identities. Once the identities are accepted as peers they try to gain control of the network and subvert the whole network from within. The network’s resilience depends on the main criteria which is how easy it is to create an identity and be accepted as a peer. As there is no 100 percent fail-proof firewall against these types of attacks, the best defense against sybil attacks is to make it as impractical as possible.

    Sockpuppet is a term that implies many online identities for the sole objective of deception in the online communities.

    A sockpuppet is an online identity used for purposes of deception. The term, a reference to the manipulation of a simple hand puppet made from a sock, originally referred to a false identity assumed by a member of an Internet community who spoke to, or about, themselves while pretending to be another person. A significant difference between the use of a pseudonym and the creation of a sockpuppet is that the sockpuppet poses as an independent third-party unaffiliated with the puppeteer.

    What is 51% attack?

    A “51% attack” means a bad guy getting as much computing power as the entire rest of the Bitcoin network combined, plus a little bit more.

    In his white paper Satoshi proposed the Proof of Work. The main purpose of this algorithm is to minimize 51% attacks. However proof of work does not completely eliminate 51% attack. If a bad guy tries to launch an attack, the algorithm makes it harder as it requires a lot of resources to take down the hashing power of 51 percent of the nodes that constitutes the Bitcoin network. I would therefore like to discuss the possibilities of mitigating these risks by proof of reputation.

    Why centralized proof of work increases the risk of 51% attack?

    Let us imagine a case scenario where the proof of work is centralized in a few data centers. As a result whoever controls the data centers can intentionally manipulate the proof of work algorithm of the decentralized network to his own ends. It is also feasible for the hackers to have a total control of the network. It will play out exactly the same way the centralized Bitcoin exchanges are getting hacked nowadays. Thus we can conclude that if we centralize the proof of work it only magnifies the risk of the attack rather than mitigating it.

    Why delegated Proof of Stake is equivalent to centralized Proof of Work?

    Delegated proof of stake magnifies the risk of 51% attack same as centralized proof of work. It is relatively easy to corrupt, say 100 delegates than to corrupt the 51 percent of the stake holders.

    A bank is an example of a hybrid of delegated Proof of Stake and fractional reserve system. When a user deposits 100 pieces of silver coins into a bank, the user delegates his stake of silver to the bank. Then the bank releases a token of 10000 notes based on the user’s 100 pieces of silver coins.

    The issue with banks is that it involves trusting the third parties as it is based on delegated Proof of Stake. If the trust is violated it magnifies the risk out of proportion because of fractional reserve system. Thus Delegated Proof of Stake cannot be classified as a decentralized system because one has to trust a third party to delegate his stake. In the long run more users tend to delegate their stakes because of brand loyalty, user friendliness etc. This leads to more centralization, violation of the trust, dilution and corruption of the whole stake. 

    Proof of Reputation

    The motive behind proof of work is based on the control of processing power while proof of stake is based on the percentage of wealth. It is very easy to corrupt both. On the other hand the motive behind proof of reputation is based on ethics and morality which is very resilient to corruption.

    Let us examine the Proof of Reputation in depth and its implications. Assuming there are 10 anonymous generals who don’t trust each other but are willing to undertake an invasion by providing 1000 soldiers each. In return they are willing to settle with one tenth of the spoils. It is highly probable for a general to either have 2 to 3 sockpuppets, to conspire with another 5 generals or the combination of the two.

    Let us now bring in the proof of reputation in the equation. Say for example each general has a score for Proof of Reputation which is based on how many of the 1000 soldiers like them. It is very difficult to gain good reputation for all the 3 sock puppets even if they tend to have similar reputation as it negates the purpose of the sock puppets. If a general tries to conspire with another 5 generals, it will be very difficult to conspire with all the 5 generals with good reputation. This is because each one will have to risk his reputation.

    In a decentralized peer to peer network it is next to impossible to corrupt 51% Proof of Work, 51% Proof of Stake and 51% Proof of Reputation of the whole network. 

    Implementation of Proof of Reputation

    Proof of Reputation can be implemented as an assurance contract which is explained as follows:

    In a binding way, members of a group pledge to contribute to action A if a total contribution level is reached. If the threshold level is met, the action is taken, and the public good is provided; otherwise, the parties are not bound to carry through the action and any monetary contributions are refunded.

    The problem with assurance contract is that it enables free riders. Free riders are those who do not contribute to the public good but reap the benefits of the public good at the cost of other contributers. In order to eliminate the problem of free riders, Alex Tabarrok proposed Dominant Assurance Contract by publishing a white paper. Dominant Assurance Contract not only defines the monetary incentive, expiry date as in Assurance contract but also adds another parameter known as minimum number of contributers required for the contract to come into effect.

    Therefore Proof of Reputation has to be implemented as a dominant assurance contract to discourage free riders. One method of implementation is based on semi-trusted oracles. Gavin Andresen explains the implementation as follows.

    So I’ll start there, and imagine that there are semi-trusted ‘oracles’ that compete to be the most reliable and trustworthy verifiers of contracts. People involved in contracts choose N of them, and then require that contract conditions be validated by one or more of them before the contract pays out. Pick more than one so no single oracle can steal the contract’s funds, but less than N in case some of them go out of business or just aren’t around to validate contracts when it is time for the contract to pay out.

    These oracles need an agreed-upon, machine-readable contract language, but that shouldn’t be hard. There are lots of interesting design decisions on what information contract scripts have access to (and lots of not-so-interesting-to-me design decisions on the language itself; is it stack-based, register-based, high-level, low-level bytecode, etc etc etc).

    Another method of implementation is by awarding tokens to miners based on honesty and integrity. Tokens are basically an implementation of the assurance contract to make sure that the motives of the miners and end users are aligned for the common good. For example, if the mining pool operators will tweak their mining rigs between 10-20 percent for a period of time then the operators will have an incentive to be honest and earn reputation as tokens in addition to mining incentives. If a miner is using a mining pool, he can pledge may be 5% of his total Bitcoin mining towards the dominant assurance contract so that the mining pool will receive a reputation token which can be pegged to the market value of Bitcoin.

    Tokens can also be crowd funded as a pledge by the stake holders in the decentralized network to ensure the miners and pool operators have an incentive to be honest, hence earn reputation. The tokens can be earned or burned depending on the nature of the coin which is either inflationary or deflationary. If it has to be burnt it can be released as a token and claimed by charities.

    The tokens can be issued either as 1 to n, n to n or n to 1, depending on individual requirements based on Counterparty protocol, Colored coin protocol for Bitcoins or Dogeparty protocol for Dogecoins.

    Another method of implementation is using the Lighthouse platform. Lighthouse has a lightweight encrypted HD wallet. It uses payment verification by directly synchronizing with the block chain. It also enables dominant assurance contracts for people to pledge for the projects directly using Bitcoins. If they want their money back before the contract reaches its target amount, they can revoke the pledges they have already made. As the contract is entirely based on the block chain, pledges cannot be claimed individually. They can only be claimed when the combined pledges together reaches the targeted amount.

    LTBcoin

    In LTB network, Proof of Reputation is being implemented to defend against sockpuppets which is based on token controlled access. Each piece of content is mapped to certain tokens and quantities. If the quantity is zero, the content is accessible to users. If the quantity required is more than zero, the content is then blocked.

    Token-Controlled Access (TCA) is a simple idea. In a given system, different levels of access to that system are granted according to the combination of tokens in a particular user’s wallet. 
    Token Controlled Viewpoint (TCV) is an application of TCA to information content (forums, posts, comments, bonus content, bloopers, walkthroughs, tips, tweets, supplemental blogs, RSS feeds or other data) on basic web pages. 

    Disclosure

    This article is meant for informational purposes and is not an endorsement. Articles published on the LTB network are the author’s personal opinion and do not necessarily represent the opinions of the LTB network.

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    Hashing, Football, and Bitcoin

    August 2nd, 2014 by therealtwig
    ## Original text below (dhimmels): Say you are presented with a list of names of every player that plays in the National Football League (NFL) with the names of their teams hidden. I then ask you to name anyone that plays for the Indianapolis Colts professional football team based solely upon the names on this list. You can guess as many times as you want until you are successful. However, the catch is you are one of many people playing the game and only the first person to guess correctly wins a prize. Of course this would be easy if you had some familiarity with the NFL or you if you had your smartphone nearby. However, assuming you knew nothing about football and you didnt have any access to information otherwise, you may have to run through quite the amount of possibilities hoping for success. In the NFL, there are 32 teams with 53 players on the active roster for each team, or 1696 possible players that could play for the Colts. So, this would be very time consuming, but still doable eventually. # What exactly is a Hash? What I have just described for you is a very basic idea of a **hashing function**. A hashing function takes a bunch of items and converts them into a precious few. The term hash comes from an analogy of chopping and mixing. For instance, if you have ever had a breakfast hash, then you know there are elements like onions, peppers, potatoes, and corned beef that get combined in a customized way to make delicious dish. In the example of the NFL, the ingredients being hashed are all of the athletes, and the delicious dishes are all of the teams that make up the league. Hashing functions are as arbitrary as the aforementioned NFL example. All that is required is that many elements are split into a fewer amount of outputs, or containers. So, anytime your mom asked you to sort your room when you were younger, technically she was asking you to create your very own hashing function to sort your junk. Our convention as a society of using a calendar to describe cycles of time is actually a very clever hashing function as well. All of us are hashed into 365 containers (366 if you are a leap year baby) based on the day we are born. Ever heard of a "**hash**tag" on twitter? Many comments about a topic sorted into a few categories that describe it. Mathematical hashing formulas are just as arbitrary. Say I have an input space of {0,1,2,3,4,5,6,7,8,9} and my hashing function is just to add each number by ten and round up or down to the nearest ten depending on the number. The set of outputs would then be {10,10,10,10,10,20,20,20,20,20}, or by eliminating repeats, {10,20}. All that is required to hash in general is to arbitrarily convert many elements to a few categories. An added security convenience of such a function is how hard it is to guess the original input based solely on the output. # Why is Hashing Important? Hashing functions have a wide range of uses. Typically, they increase efficiencies in quickly locating an item. For instance, knowing in which drawer I store my socks helps me get dressed considerably faster in the morning than if my socks are on the floor mixed in with all my other clothes. However, if I am looking for a specific pair of socks, it still may take some time to sort through the drawer. But, at least its still considerably less time than if all my clothes are mixed together randomly on the floor. For something like Bitcoin, we would never want have a hashing function like a sock drawer or an NFL team. Or, even worse, a sock drawer of an NFL team! This is because the many-to-few sorting that takes place within Bitcoin are the many private keys to the few public addresses that contain funds. If there were only 1696 private keys and 32 public addresses with Bitcoin as in the NFL example, then there would be some MAJOR issues. First and foremost, imagine how mad you would be if you were the 33rd person in line at a bank where only 32 accounts could be created! So, any system looking to have many people using it should at least have enough space for each person to create at least one account. Furthermore, say we alter the rules of the Guess the NFL team game to be instead a scenario where naming any member of the Denver Broncos unlocks a vault representing the entire net worth of the team. Suddenly, your incentive to spend time making as many guesses out of all of the 1696 possibilities as fast as possible grows quite considerably. So, the sample space of private keys should be considerably larger than 1696. It should also not be as low as 32, because guessing any of the keys randomly would open up any of the vaults. # So How Does Bitcoin Use Hashing? One of many clever ways the bitcoin protocol makes use of hashing algorithms is in [the process of generating bitcoin addresses](https://en.bitcoin.it/wiki/Technical_background_of_version_1_Bitcoin_addresses). Every bitcoin address has a private key and a corresponding public key. You can think of the public key as a storage locker and the private key as what enables someone to spend funds that are located in their locker. The choice of the protocol is to generate the storage locker from the private key, but how? A private key is a 256 digit random number made up of a series of 0s or 1s. When you generate a new bitcoin address, you are taking one of the ![](http://i.imgur.com/lMJCIxN.gif) possible private keys and running it through a series of hashing algorithms to produce an output that makes it very difficult to guess its input. In fact, as we are about to see, it is so difficult that it is virtually impossible. Before any hashing takes place, first the private key is put through something known as [elliptic curve multiplication](http://en.wikipedia.org/wiki/Elliptic_Curve_DSA) to generate a private/public key combination that are linked to one another. This result is then put through a gauntlet of several complicated hashing algorithms with really cool and intimidating names like SHA256 and RIPE-MD160. The result at the very end is one of ![](http://i.imgur.com/ufNMasb.gif) possible public addresses. When you see a bitcoin address such as my tipping address below, it is just essentially a vanity plate that represents one of these ![](http://i.imgur.com/ufNMasb.gif) possible bitcoin storage locker possibilities. While it is true that hashing takes many items to just a few, the few in this example is actually quite large. Checking with my good friends over at [Wolfram Alpha](http://www.wolframalpha.com/input/?i=2%5E160), the ![](http://i.imgur.com/ufNMasb.gif) few is actually the number listed below. ![](http://i.imgur.com/3ubKYa3.jpg) I dont think we have any more problems with 33 people in line trying to get an account! Each of these ![](http://i.imgur.com/ufNMasb.gif) containers are all that will ever exist to store a total sum of 21,000,000 possible bitcoins ever to be in existence. Every time you spend a bitcoin, you just move a coin (or part of a coin) from one container to the next. # So, What's the Big Deal? Now, you might be thinking, "Hey...there are more private keys available than public containers&couldnt someone rob from my container!!!" And the answer is yes, it is of course *possible*. In the same way that it is *possible* to find out you won the lottery while vactationing on Mars. Any hashing function where the set of inputs is larger than the field of outputs will produce, by nature, collisions by the [pigeonhole principle](http://zimmer.csufresno.edu/~larryc/proofs/proofs.pigeonhole.html). Sometimes math doesnt have to be scary. Its just obvious. If you have more pigeons than containers, one container has to have more than one pigeon! Even with this possibility being out there, somewhat simple algebra can explain just how unlikely it would be for someone to find another key that works for your locker. If you take the number of private keys divided by the number of public containers, you get: ![](http://i.imgur.com/WSPtXpQ.gif), or ![](http://i.imgur.com/5s4Pgwx.gif) private keys that correspond to the same bitcoin address. Sure, you could brute force your way through these. Although, by comparison, it has been estimated that there are ![](http://i.imgur.com/kwpJ3mj.gif) [grains of sand on the entire earth](http://www.hawaii.edu/suremath/jsand.html). Trying to find another key at random that opens up someone elses locker is like searching through every grain of sand on the planet. Sounds like way too much effort for me. Id much rather be spending my free time eating some great [corned beef hash](http://www.hashhouseagogo.com/) and watching my Indianapolis Colts play some football! -*Adam Terwilliger* Read More
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    Categories: General, Breaking News, Columns

    SecretBitcoinProject.com goes Stellar! But... why?

    August 1st, 2014 by Mike
    No I’m not referring to the Incubus song, although I like where your head is. 

    Rather, Jed McCaleb’s new project (formerly secretbitcoinproject.com) has finally come to fruition. Today users who signed up to be alpha testers received an email which introduced the new project: “Stellar”.

    Before we begin, I would like to caution you that this article is not intended to give a full technical breakdown of any of the protocols described within. Any information presented is intended to convey a very basic level of understanding. Many aspects of the programs have been left out. There is also quite a bit of conjecture on my part. Though I have tried to be relatively unbiased and present the facts where there are facts and my interpretation of events where interpretation is needed, you may see things differently. I encourage you to post those differences in the comments so that we can talk about them further! I have a financial stake in both the Ripple network and the Stellar network. 

    For anyone who is familiar with Ripple, Stellar will sound quite familiar to you. This is because Stellar is essentially a carbon copy of the Ripple project of which Jed was a founding member. Ripple was Jed’s biggest pet project after selling Mt. Gox. Though it has received seemingly infinite amounts of scrutiny, it has also arguably seen quite a bit of success in its resiliency.

    The question is: Why would Jed ditch Ripple and create basically an exact copy of it?  For that, we have to speculate a bit.

    Before we go there however, the following is a quick-and-dirty rundown of what Ripple is and what it provides for those who are not already aware. I will not get very technical here; for that you can go to their website.

    Ripple was created to provide a network that could seamlessly convert any one currency to any other in the middle of a transaction. Let’s say that we only hold U.S. dollars because that is the only currency we trust. We see that Alice is selling key chains online and they are really cool, so we decide that we are going to buy one. There’s one problem though… She only accepts Euros.

    Since we only have dollars,  this would normally necessitate the conversion of USD to EUR and then somehow conveying that to Alice in Europe. All of this can be quite costly and time consuming. In many cases the international wire fees would cost more than the trinket to begin with. Usually, we would just forget about the key chain and move on.

    This is where Ripple came in. Ripple created a cryptographically based network where users could hold any currency they wanted, and send any amount of that currency to another user. The transaction would be confirmed in seconds, and in those seconds between remittance/receipt, the initial currency would be converted automatically to whichever currency the receiver preferred. Ripple does this by providing a third “currency” known as ripples (XRP). Ripple the token is used as the third party to any currency exchange on the network. Thus, USD would be converted to XRP at the best possible rate and then converted to EUR at the best possible rate. This exchange can actually be done through any number of currency combinations, resulting in the best possible exchange rate on the market every single time. The best rate is determined through a built-in process known as “pathfinding”.

    This is essentially what Stellar is as well. So why the fork? Again, much of this is speculation, but I will attempt to come up with an explanation here.

    It is well known to the Ripple community that Jed had a falling out with the company that currently runs the core development of the Ripple Protocol – Ripple Labs. The first thing to understand is that Ripple Labs is a for-profit entity. All ripples were pre-mined just like stellars were on Stellar. These ripples were allocated to founders, early stage investors, and Ripple Labs. Like Stellar, the majority of the internal tokens were set aside by the core development entity for free giveaways. These giveaways would be used to promote the adoption and subsequent health of the network. In Ripple’s case however, these giveaways and the exact nature of ripple distribution have been a bit foggy since the very beginning. This has brought enormous amounts of scrutiny from bitcoin enthusiasts and is still one of the main arguments against the platform itself.

    It appears as though the decision to basically fork Ripple stems from a philosophical issue. Ripple Labs seems to have changed directions from Jed’s initial vision of Ripple. According to Jed, the initial vision was to provide a way for regular people like us to send payments in any currency, anywhere in the world, at little-to-no cost.

    It appears as though Ripple Labs has decided to pursue other outlets for their platform by way of acting as a sort of back-end clearing house for financial institutions. This change in the tide appears to have been at the cost of basically ignoring the common user.

    Because of this difference in vision, Jed stepped down from all of his responsibilities at Ripple Labs. He then announced to the community that he would begin selling what was left of his enormous founder's allocation of XRP on the open market. As one can imagine, this caused a crash in the value of XRP, since his one founder allocation would be enough to wipe out the entire order book of offers across all currencies on the network. Afterwards he would have still had an obscene amount of XRP left. In case you were wondering, he never dumped the entire amount all at once.

    In comes Stellar. Mechanically it appears to be almost, if not the exact, same platform as Ripple. However, I can spot two key philosophical and one key mechanical difference right off the bat, and there may be more.

    The first mechanical difference that I see is the total amount of Stellar that will ever exist. Instead of being a fixed amount like bitcoin or ripple, 100 billion stellar was created in the genesis block and more will be generated at a fixed rate of 1% per year. This introduces some degree of inflation which can arguably be good or bad depending on your perspective. The two main arguments in favor of the mechanism, according to the foundation, are to account for both lost stellars as well as economic growth. This 1% is allocated weekly to the top fifty accounts voted to receive such a distribution by the community. The foundation’s hope for these inflationary funds is that “holders will use the inflation-generated stellars to enable novel business models or to fund causes they support".

    In the first philosophical case, the Stellar Development Foundation is a 100% not-for-profit entity. Its only goals are to provide support/development for the Stellar network as well as “expand financial access and literacy worldwide”. All of this can be found in their mandate. It will not take any profits and only allocated 5% of the genesis stellar toward financing future operations. For the rest of the genesis stellar the breakdown is as follows: 50% dispursed to the “direct signup educational program”, which involves giving users who create new wallets some stellar. Then 25%, the  “increased access program”,  will be given away to nonprofits that aim to support the underserved/under-banked populations across the globe. Finally, 20% of the genesis stellar will be given away in the “bitcoin program”,  which aims to give back to both the users of Bitcoin and Ripple. Without these two protocols, Stellar would likely not exist. It could also be argued that Ripple is included due to the crash that followed Jed’s intent to sell announcement. This ended up costing many users quite a bit of money.

    The second philosophical case is a big one. I mentioned previously that Ripple Labs appears to have switched gears from being user-focused to business/institution-focused. From all angles that I can see, Stellar looks to be targeted towards the regular person. Stellar wants to be what Jed wanted Ripple to be originally; a wallet for the everyday person to side-step the big, bad legacy financial system and support payments from person-to-person across the globe at little-to-no cost. One can see the individual focus all over their website, and especially throughout their mandate. Stellar is very focused on financial literacy and accessibility which absolutely starts at the individual level.

    There you have it. In my opinion, this is what caused Jed to essentially fork Ripple and pursue his original vision for the technology. In the interest of full disclosure, I have had a significant stake in Ripple for quite some time now. I also plan on pursuing a significant stake in Stellar.

    In any case, it will be interesting to see how both networks play out in the long run. Due to the difference in objectives, it may be that Ripple and Stellar can coexist and both be wildly successful. Only time will tell.

    If you are interested in seeing what Stellar is all about, I encourage you to sign up at http://www.stellar.org. For creating an account and linking your Facebook profile to it, you are credited with 5,000 stellar. If you confirm your email address, you receive another 1,000 stellar. Finally, for testing the network and sending 1,000 stellar to someone else you are credited with another 1,000 stellar.

    As an added bonus, if you send your 1,000 stellar to me, I will return 500 of it back to you as a win-win for the both of us. You get 1,500 stellar instead of 1,000 and I get some extra stellar as a tip. Full disclosure: there are better offers on the Stellar forums, but if you enjoyed my article and are feeling generous I would love to work with you!

    My Stellar username is: mjroncone and if that doesn’t work the address is: gPcDRFkyksJh5o53Lr8dbEfH7KSYfaPvMv

    If you are reading this article and are not a member of LetsTalkBitcoin.com, I encourage you to go here and sign up! (Caution: referral links) That way you can send me a private message or ping me in a thread by using @Mike if you have any questions or if I have failed to return your 500 stellar. 

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    Categories: General, Columns

    A History of Zombie Events

    August 1st, 2014 by jratcliff63367

    About a month ago I posted an article on 'Let's Talk Bitcoin' entitled 'Rise of the Zombie Bitcoins'.  In this previous article I presented a great deal of data and analysis about the state of the bitcoin blockchain in relation to long unused addresses.  In that article I argued that the bulk of the bitcoins mined for the first two years have never been moved and, most likely, never will be.  I also argued that bitcoins which have sat in addresses for an extremely long time with absolutely no spend activity are arguably lost forever.  In total these 'zombie' bitcoins represent roughly 25% of the number of bitcoins which have ever been produced.  This is such a huge quantity that knowing whether or not they should be considered part of the active economy is an important mystery to investigate.   And investigate is what I have been doing. I have discovered in the data presented in this article strong evidence that this view may be wrong. It turns out that someone who mined the earliest bitcoin blocks has been spending them at semi-regular intervals in relatively recent history.


    Today I will not be presenting a great deal of analysis.  There are only two simple graphs and no burndown charts.  Instead I am going to be providing absolute raw data that you, the reader, can use to become a blockchain researcher yourself.  You can use this data to produce your own findings, graphs, and conclusions.  I encourage readers to download this dataset and explore interesting ways to chart it and then leave links to those results in the comments section of this blog post.


    This dataset can be extremely fascinating to dig through because, while most of those old 50 bitcoin mining reward blocks have never been spent, there are still some being shaken loose today.  It might be pretty interesting to track down when and where this happens and follow where they lead to.


    For example, here is the address of a bitcoin public key which contained nothing but a miners reward block of 50 bitcoins created on July 13, 2010.   Then, on May 1, 2014, BOOM, the owner came along almost 4 years later and transferred these coins to two other addresses; one receiving 45 bitcoins which remains untouched, and another that has a lot of transaction history.  So, while it is true that the vast majority of those ancient 50 bitcoin miners reward blocks have been untouched, occasionally they do, in fact, rise from the dead.  This dataset provides you with a window directly into every single time this has ever occurred.  So let the chase begin!


    I would like to explain what this dataset represents and how it was created.  I wrote a piece of software which analyzes the entire bitcoin blockchain at one day intervals since its inception.  For each day I gather all of the bitcoin public key addresses which are in active use and look for any which have had spend transactions performed that day relative to keys which were untouched for over two years.  This dataset is current as of today, July 26, 2014.  


    I start with the assumption that these 'zombie events' are infrequent and becoming more rare all of the time.  I believe the data set attached shows this to be true.


    For each zombie event I provide the following detailed information as a single line in a comma-separated-value file which can be imported into any standard spreadsheet program.

    Here is a link to a spreadsheet which shows a list of the top 148 days since April 2013 that have had significant amounts of very old bitcoins transferred. You can cross reference any of these days against the full datset to drill down into every single individual public key address and transaction that was involved. You will note that most of these 'zombie events' refer to bitcoins which were last moved in 2011 and 2012. It is much more rare to see bitcions which were mined during the first year of the blockchain being moved.


    Date: This is the date at which the zombie event occurred.

    LastDate: This is the last date that his address was used prior to this event.


    PublicKey: This is the bitcoin public key address associated with this event.  You can copy/paste this key into the blockchain.info website to get the entire transaction history to match.


    Type: The type field classifies whether this public key is associated with a 50 bitcoin miners reward, a 25 bitcoin miners reward, or is simply a normal bitcoin address not previously associated with a miners output.


    BalanceBefore : This is the balance held at this key before the zombie event occurred.


    BalanceAfter : This is the balance held at this key after the zombie event occurred.


    ValueChange: This is the amount of bitcoin value which was transacted during this zombie event; not necessarily all bitcoins may have been spent.


    Age: This is how old this key was in days since its last send transaction prior to this event.  Minimum age is two years for this dataset.


    ZombieScore : This is a computed value equal to the number of bitcoins previously associated with this address times the number of days since it was last used squared.


    In the provided data set immediately following each day that new zombie events have occurred (and zombie events do not happen every single day), a subtotal is included.  The subtotals per day include the following.


    TotalZombieCount : The total number of zombie events which occurred on this day.


    TotalZombieValue : The total value in bitcoin addresses associated with the zombie events for this date.


    TotalZombieValueChange :  The total value change which occurred, which is not necessarily the same as TotalZombieValue since not all of the bitcoins associated with each key may have been spent.


    TotalZombieScore : The total zombie score for all events on this day.



    Now let's take a look at some of the most significant zombie events in history.  There have been around 24,000 'zombie events' throughout the lifetime of the bitcoin blockchain.  Considering the fact that there have been millions and millions of transactions, this points out just how rare an event it is when bitcoins older than two years get moved to a new address.


    Take a look at these four public keys.  These are public keys associated with block miner rewards of 50btc each that were mined over a couple of days starting January 30, 2009.  This is quite literally just a few weeks after bitcoin was started, and highly likely belonging to either Satoshi or one of his close friends.  These were all spent on the same day over five years later on February 7, 2014.  Maybe Satoshi (or Hal Finney) had some bills to pay?  Realize that this first address is a coinbase-reward from block #2400!


    The oldest ever was this address which mined a block on January 30, 2009 (just a few weeks after bitcoin was started) but was spent on February 6, 2014.  Was this Satoshi?


    Here are the four addresses:


    15coobWGLz5rTPPLwMqDrC848g5rSqgXX1

    1CgrbzKje66Pcz1egaAnhr7qEGfdk9atS2

    1KiCeqdXxzTYeq1dDUi6B1265cqFwsihzm

    14pDPbeBCCn4CoNKc7YZJnJSWnqfoxf1XF


    Then we find that on November 15th and November 18th of 2013 someone (Satoshi??) cashed in 1,850 bitcoins over those two days from public keys that date back to January 29, 2009!  On November 18th, 2013, bitcoins were at their near all time high of over $1,100 each.  So on those two days someone who mined blocks on January 29, 2009 of the history of the blockchain cashed out over a million dollars worth of the earliest bitcoins!  


    On October 9, 2013, probably the same person, cashed out 200 bitcoins from the earliest blocks.  Here is one of the public keys of the four he cashed in.  Again, this person is cashing in bitcoins mined right around January 30, 2009.  Probably the same person.


    I must admit that I was surprised to find these transactions.  Apparently someone who mined bitcoin in the earliest days has, in fact, been cashing out some of them in relatively small batches (if you can call a million dollars worth of bitcoin 'small').  This person is either Satoshi himself or, more likely, one of the first handful of people who downloaded and were running the bitcoin client which could mine bitcoins easily on a CPU back then.  This demonstrates that at least one person who mined bitcoins in the earliest days actively controls the keys and is making withdrawals over time but probably not anywhere near their entire stash.  This is indeed very interesting data to inspect!

    Here is a spreadsheet which highlights the several phases that bitcoins which were mined during just the first few weeks of the blockchain were moved over the course of the last year.



    So who are the people likely to have been mining bitcoins in the first few weeks? Likely they were individuals participating on the cyberphunk mailing list and responding to Satoshi's announcement of the availability of the software. Some likely candidates include:

    Satoshi Nakamoto
    Hal Finney
    Ray Dilinger
    Dustin D. Trammell


    The bitcoin zombie event with the highest zombie score in history is this transaction on March 10, 2014 of over 111,114 bitcoins when this public key got emptied.  Considering the timing, this could have been related to the MtGox fiasco.  It could also belong to the Winklevoss twins or could have had something to do with Silk Road; I’m really not sure but maybe someone knows and can post it in the comments section.


    On March 7, 2014, the following four public keys, three containing 40,000 bitcoins and one containing 30,000 bitcoins, for a total of 150,000, were all transferred out of addresses which had not been touched in 842 days from November 16, 2011.  Considering the timing the movement of these coins was probably associated with MtGox's claim that they 'found' a bunch of old bitcoins they had lost.


    Here are those four addresses:


    16Ls6azc76ixc9Ny7AB5ZPPq6oiEL9XwXy

    12HddUDLhRP2F8JjpKYeKaDxxt5wUvx5nq

    1cXNTyXj4xPGopfYZNY5xfSM1EPJJvBZV

    1MyGwFAJjVtB5rGJa32M6Yh46cGirUta1K





    Finally, I will include two quick charts.  The first shows the number of zombie events that occur daily over time.  As you can see, during periods of time when the bitcoin price was running up, the number of zombie events (indicating people cashing in and moving a lot of old bitcoin public keys) goes up substantially.  Note that this is just a total count of 'events', it does not graph value.


    NumberOfZombieEventsPerDayOverTime.png


    Here is a graph of the absolute total value in bitcoins rising from the dead on a daily basis.  Note that the Y axis has been clamped at 18,000 bitcoins since on just a few days hundreds of thousands of bitcoins were moved and throw the graph out of scale.


    ZombieValueByDay.png



    References:

    Here is a link to a graph showing the distribution of bitcoin balances by age.

    Here is a link to a spreadsheet showing every day that a sigificant quantity of bitcoins rose from the dead, meaning value older than two years old was transferred.

    Here is a link to the raw data as a straight ASCII comma separated value file showing every single 'zombie event' over the lifetime of the bitcoin blockchain and up until July 27, 2014.

    Here is a link to a spreadsheet which shows the top 1,534 bitcoin public key addresses with a balance of greater than or equal to 1,000 bitcoins.

    Finally, here are some overall blockchain statistics as of July 27, 2014.

    * Total Blocks: 312,869
    * Total Transactions: 43,386,218
    * Total Inputs: 102,938,959
    * Total Outputs: 115,051,298
    * Found 42,288,981 addresses which have ever been used.
    * Found 39,120,232 addresses with a zero balance.
    * Found 1,509,310 'dust' addresses (less than 1mbtc) with a total balance of 206.78281 BTC
    * Found 1,335,814 addresses with a balance greater than 1mbtc but less than 1btc, total balance 116,862
    * Found 208,989 addresses with a balance greater than 1btc but less than 10btc, total btc: 528,389
    * Found 99,695 addresses with a balance greater than 10btc but less than 100btc, total: 3,532,151
    * Found 13,407 addresses with a balance greater than 100btc but less than 1,000btc, total: 3,044,956
    * Found 1,435 addresses with a balance greater than 1,000btc but less than 10,000btc, total: 3,210,357
    * Found 97 addresses with a balance greater than 10,000btc but less than 100,000btc, total: 2,206,252
    * Found 2 addresses with a balance greater than 100,000btc, total: 295,838

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    Categories: General, Guest Blog

    The Evolution of BitShares (Formally ProtoShares)

    July 30th, 2014 by pairmike
    How ProtoShares evolved to become BitShares X and other future DACs.

    Original (dhimmels):

    On October 5, 2013, at the Cryptocurrency Conference, Daniel Larimer, the founder of Invictus Innovations gave a presentation on Decentralized Autonomous Companies (DAC). One idea that he presented was the creation of ProtoShares (PTS). PTS is a mineable cryptocurrency used to raise funds for the development of a suite of DACs sponsored by Invictus Innovations.


    ProtoShares was initially mineable only with CPUs and then eventually with GPUs. They were not pre-mined and quickly rose in value to over $9.00 USD with a market capitalization that exceeded $30 Million Dollars within 45 days of launching. Quite impressive.  


    However, there was one huge problem.  In order to mine PTS, miners spent an enormous amount of money on hardware, software, and cloud services.  This realization caused Invictus Innovations to devise a new means of raising capital for DACs that did not divert funds away from the DACs ecosystem. Mastercoin, a Bitcoin 2.0 protocol, raised funds via a donation crowd sale in August 2013.  This eliminated the need for mining while maximizing the fund raising efficiency.  I believe this served as a pivotal example and encouraged the company to adopt this concept.  

     

    Invictus Innovations introduced some new features to this crowd sale donation concept.  One feature was to create a second asset called AngelShares (AGS) that allowed individuals to fund future DACs and receive a stake in them.  This idea is now commonly referred to as crypto equity. The second feature was to attract individuals in the crypto currency community who have a long term view of DACs concepts and its ecosystem.  A third benefit was for new DAC developers to gain initial community support if they would honor a social consensus contract. This contract stated that a new DAC developer would set aside a minimum 20% stake in their DAC. This stake which would be split equally between AGS and PTS holders in exchange for community support, testing, and promotion of the new DAC.  Also, the developer would gain access to the technology toolkit and support from Invictus Innovations.

     

    The AGS donation period starting Jan 1, 2014 and ended July 19, 2014.  During this time, one could donate Bitcoin (BTC) or PTS and receive a percentage of 5000 AGS distributed daily.  This was a very successful donation campaign.

     

    On Feb 28, 2014, Invictus Innovations conducted a snapshot for BitShares X which grants all holders of PTS and AGS a new allotment in BitShares X when released.  AGS donations after Feb 28, 2014 did not earn any stake in BitShares X or its derivative DACs.  However, the post snapshot donations earned a stake in the following and future DACs (non BitShares X):

     

    Domain Names

    The secure alternative to todays domain name system that eliminates domain name squatting while providing security against government seizures, man-in-the-middle attacks.

     

    Voting

    Transparent-yet-anonymous elections and polling

     

    Charity

    Finding ways to help others with the technology of decentralized autonomous charities.

     

    Gaming

    Honest and transparent gaming of all kinds is now possible.

     

    Insurance

    Get 'insurance' through a Mutual Aid Society with minimal overhead using decentralized autonomous insurance policies.

     

    Lending

    Lending is one of the more difficult systems to decentralize because it generally involves matters of trust and credit worthiness. These things typically require individual judgment and ultimately accountability.

     

    Music

    With the latest technologies that enable transparent decentralized ledgers, it is now possible for artists to sell shares of their songs rather than copies of their songs.

     

    Invictus Innovations renamed ProtoShares to BitShares PTS and AngelShares to BitShares AGS. On July 19, 2014, BitShares X (BTSX), a decentralized bank and exchange was release. AngelShares  holders can claim their shares in this asset.

     

    I hope this was helpful to clarify how ProtoShares has evolved from the beginning. For more information about BitShares click here.

     



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    Categories: General, Columns

    Our Fractious Bitcoin Community

    July 29th, 2014 by mdw
    There are growing divides among the ever increasing numbers of supporters of Bitcoin. These schisms have existed since the very early days of this technology. Yet people were compelled historically by a common vision to band together and push forward as a united movement.
     
    Bitcoiners hold a wide range of views about why Bitcoin specifically, and cryptocurrencies generally, are exciting. Initially these divergent opinions were suppressed in favor of universally supported goals, but as the Bitcoin ecosystem continues to mature that bond grows weaker.

    In the Beginning There Were Techies

    First there were the technophiles. Satoshi and his contemporaries having lofty discussions about how to make digital currency technology work. How specifically to create a system like hashcash or bit-gold without the double-spend problem? It’s not clear that even they realized the import of what resulted from those discussions.
     
    The techies continue to be fascinated by new algorithms for securing the network, experimentation with sidechains or tree chains, meta protocols using Bitcoin’s blockchain as substrate, new approaches to anonymity, next-generation 2.0 metachains, and all the new and shiny advances that come along.
     
    So the techies came first. Who else could understand why this Bitcoin would work where previous iterations had not? Who else would setup machines to "mine" these worthless digital things? Technologists create; if it has value, others may follow.
     
    Geeks soon began to realize this weird idea of a blockchain as a mechanism to achieve consensus across a distributed network had merit. It wasn’t simply an inefficient, sloppy way to do data storage. It was, in fact, a solution to a classic problem in computer science involving ensuring data integrity on a network without requiring the trusting of any specific node. They quickly began to think of other applications, like de-centralized domain name systems and more.
     
    Many of them began mining what would eventually turn into fortunes. This led to the inevitable first exchange of value involving Bitcoin, the famous 10,000 BTC pizzas, which would become a cherished part of Bitcoin history.
     

    And Then Came Progressives

    After living through the financial mess of the previous decade, many young idealists soon began to wonder if this weird digital money could provide some degree of freedom from the encumbrance of the traditional world of finance. An influx of counter-culture advocates flocked to Bitcoin, but were more diverse in their worldview than the original money hackers.
     
    These early adopters included a fair number of Libertarians, who found appeal in the idea of usurping government control over existing, corrupt financial systems. They pointed to the big banks, repeatedly sanctioned for market tamperingmoney launderingrigging ratesfraud and more. They were disgusted that these same institutions could receive billions in public bailouts when their dubious investments went belly up. Worse still, these huge banks and financial firms continued to engage in the same behaviors, merely paying fines every time they got caught.
     
    This group of early adopters also included self-proclaimed agorists, who rallied behind the notion that they could avoid letting governments know anything about their money, and avoid supporting it with their participation, and avoid paying taxes. This contingent included everything from living-off-the-grid isolationists to fiercely independent separatists. 


    Success Has a Downside

     
    Of course as Bitcoin the currency started to be valued in the nascent marketplace, it attracted the attention of criminals. Criminal enterprise is an indicator of success in the case of currencies. The US dollar is going to remain the preferred currency of criminal organizations for now, but new opportunities emerged for the unsavory elements in our midst to conduct business across distances using Bitcoin.
     
    The dark web became filled with Bitcoin scammers. Governments realized they could gain credibility in the eyes of those anxious about technological change by attacking underground Bitcoin enterprises like Silk Road
     
    Fraudsters began to emerge as well, as it became obvious that profits could be made. Some untrustworthy exchanges would repeatedly have trouble and freeze withdrawals, some would simply take deposits and disappear. 
     
    New altcoins would pop up with no hint of utility, engage in marketing campaigns and then dump everything as soon as the coin gained value. Some had no programmers, some had hidden pre-minesDaFuqcoin even deployed a trojan.
     
    And so there came to pass an uneasy alliance between many technologists, believing that algorithms can solve problems better than laws, and criminals looking for anonymity, and privacy advocates bemoaning the increasingly intrusive nature of online surveillance. This ushered in new tech like ZerocashDarkcoincoin mixing services, and Darkwallet.


    Enter the Entrepreneurs

     
    We then started to see a new class of technologists flocking to Bitcoin. Not the early pioneers, but more practical entrepreneurs. Some blended in perfectly, understanding the tech well at a sufficient level to bring it to main street. The result was friendlier wallets, exchanges, and tutorials.
     
    But the entrepreneurs working in the financial services space quickly realized they needed what others in the growing community were stridently opposed to. To build real exchanges in the post-Gox era, for example, required quantifying legal and regulatory risk. Business opportunities depend on predictability.
     
    Uncertainty is the worst environment for financial services; clearly spelled out governmental policies, even problematic ones, would bring opportunities. So how to make others in the community understand? Broad, sweeping regulation appeals to nobody. But the intersection of fiat and crypto is the domain of those governments who control the old currencies.


    The View From Main Street

     
    Bitcoin has survived MT Gox, Silk Road busts, repeated faux-banning in China and much more without sustaining any lasting damage, and that has vindicated those who truly believed. This has ushered in still more folks from main street, who have started to call for regulation, and to ask about those safeguards to which they’ve become accustomed in life. 
     
    Now they ask about services to insure deposits. They worry about the complexity, they worry about making mistakes. They wonder if the free-for-all altcoin markets would ever get some oversight. They talk about all those things that so many early adopters are so adamantly opposed to.
     
    Beyond the need for simplicity of design and function, the newly intrigued would like to participate more broadly. For that to happen requires fewer scammers and fraudsters, a wider variety of wallets and online account options, and the ability to scrutinize and audit services like online exchanges.


    The Inevitable Fragmentation

     
    The ever broadening base of Bitcoin supporters is highly democratic, and growing more diverse with each passing day. Entrepreneurs versus Agorists? Libertarians vs. Venture Capitalists? The plurality that is the Bitcoin community grows further apart with each new on boarding of users. Perhaps that’s not a bad thing.
     
    Isn’t this really what most of us wanted? Bitcoin’s becoming mainstream. So many different voices are speaking up. Did we expect dogma from a self-appointed group of thought leaders to be promulgated throughout the user base like an ancient religion? No, it only makes sense to expect a messy competition of ideas and aspirations. 
     
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  • 39 Comments
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    Categories: General, Guest Blog

    Bitcoin vs. Ponzi

    July 28th, 2014 by Tron

    “I can’t believe you fell for that Ponzi Scheme!” or “Sounds like a pyramid scheme to me.”  Have you ever heard this when telling someone about Bitcoin?  Don’t worry, it happens all the time.  Let’s take a closer look at why.

     

    We have Charles Ponzi, a 1920s notorious scam artist, to thank for the lending his name “Ponzi” to the practice of ripping people off by promoting a fake investment with huge returns, then not really investing the money, but rather siphoning funds while paying the original investors with new investor’s money.

     

    Why would anyone even compare bitcoin to a Ponzi scheme?  There are two reasons.

     

    First reason -- the huge returns.  In a Ponzi scheme the high returns are paid to the original investors so the original investors put in more money, and also to get testimonials to entice new investors (suckers).  With bitcoin, the high returns are simply the increase in market value of a new digital asset class that can’t be counterfeited.  Bitcoin benefits from the network effect in the same way that the telephone, the Internet, and Facebook have benefited. Since the returns for bitcoin, so far, have been massive, those that don’t recognize the sea change, compare it to other “investments” with massive returns -- the dreaded Ponzi scheme.  

     

    The second reason for the comparison is the similarity of the passion of those talking about bitcoin with the fervency of those promoting a Ponzi scheme.  This passion is sometimes described as being cult-like.  For the Ponzi scheme promoter the fervency is a matter of survival.  If new money doesn’t come in, the Ponzi scheme collapses, and there will never be enough to make everyone whole because it has been paid out to early investors or siphoned off.  With Bitcoin, I believe the cult-like passion comes from understanding what this new currency means for the future, and desire to share it with others.  I’m guilty of this.

     

    In the typical Ponzi scheme, the investment opportunity doesn’t really exist, it’s a fictional story used to explain the huge returns promised by the Ponzi scheme promoter.  A Ponzi scheme must promise huge returns because that’s how the promoter gets new money to keep the scheme going.  The new money is paid out to early investors to keep the fiction going, while some of the funds are being siphoned by the Ponzi operator.  For a Ponzi scheme to work, it’s critical that only the Ponzi promoter and co-conspirators know how much has been ‘invested’, because any type of audit or transparency of a Ponzi scheme will collapse it instantly.  

     

    Bitcoin can’t be a Ponzi scheme as it is the ultimate in transparency.  It’s so transparent its like a glass door that you don’t see until it’s too late and you smash your face.  It’s so transparent, that there’s dozens of websites that list every transaction anyone has ever made.  It’s so transparent that every fraction of every bitcoin in existence can be traced from its origination to its ultimate destination address.   The only thing we don’t know is who owns the keys to these addresses, and we should keep it that way.

     

    But beware, bitcoin can be used in Ponzi schemes, in the same way scammers might use Dollars, Yen, Euros, or gold.  The tell-tale signs of a Ponzi scheme will be large percentage returns, and you’ll have to send your bitcoin to someone else to get these spectacular returns.  Thankfully, if you remain the sole holder of the private keys for your bitcoin you will be safe from any Ponzi scheme.

     

    Does Bitcoin need more people using it to continue its increase in value?  Sure, but Coca-Cola (NYSE:KO), Apple (NASDAQ:AAPL), and Amazon (NASDAQ:AMZN) also need more customers.  Increased demand or usage translating into increased value is shared with almost every company, stock, bond, commodity, and currency in existence.

     

    Some curmudgeons complain that the early adopters did really well.  Yes, similar to the way Venture Capital firms that recognized the early potential of Facebook (NASDAQ:FB), and Twitter (NYSE:TWTR) did really well.  

     

    Sadly though, most residents of the US are not allowed to invest in early stage companies because they’re not accredited investors.  Yep, even if you use your own money, early stage companies can’t let you be a part of their growth and success unless you’re quite literally a millionaire.  Bitcoin has no such restriction because unlike its earlier centralized predecessors like eCash, DigiCash, and Cybercash, Bitcoin can’t be intimidated, bribed, fined, or arrested.

     

    Bitcoin is a revolutionary global payment network that sprang into existence on January 3rd, 2009 with no promoter, and nobody robbing from Peter to pay Paul.  The verdict is in -- Bitcoin is no more a Ponzi scheme than politicians are honest.

     
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  • 0 Comments
    3,999 views
    Categories: General

    Darkcoin's Approach to Anonymity is Truly Trustless and Opens Endless Possibilities

    July 27th, 2014 by fernando
    Darkcoin is best known for being the first cryptocurrency focused exclusively on anonymity and privacy. What is less understood is how these features are implemented as well as how they open many exciting possibilities.
     
    In order to achieve anonymity, Darkcoin has successfully implemented master nodes. They are both innovative and necessary to achieve the privacy that Darkcoin promises.


    What are master nodes?

    Simply put, master nodes are servers connected to the network that perform certain tasks hand in hand with DarkSend (Darkcoin's anonymity feature) and they get paid for it. This concept is called proof-of-service.
     
    Anyone can run a master node. The objective is decentralization: to have enough running so no one controls an important fraction of masternodes. However, to avoid bloating the network and to discourage reckless operators, there is one condition that needs to be fulfilled: proof-of-ownership of 1000 Darkcoins. The coins don't need to be in the master node, but they do need to be held. If the owner moves or spends those coins, the master node stops working.
     
    Master nodes get paid by the network for the services they provide. Twenty percet of the each new block's reward goes to pay the master nodes. Each reward is paid to one maste rnode randomly selected, so in the long term all master nodes should receive a similar amount of rewards.
     
    In the current release of Darkcoin (RC3), two master nodes mix the coins of the transactions that users send choosing to be anonymous. However, in a couple of weeks, a new release of the software (RC4) will be launched and their role will change.
     
    In RC4, master nodes will anonymize the Darkcoins users have in their wallets at preset intervals. This way, when they want to send them to somebody, they will already be anonymous and the transaction won't be tracable by third parties. Additionally, transactions will be much faster than otherwise.  That is, if the coins had to be mixed/anonymized at the moment of the transaction.
     
    Up to eight master nodes will be involved in the process of anonymizing the coins of a given user.  It wil be a completly trustless system because the risk of someone controlling all involved master nodes is negligible. Hypotheically, with 700 master nodes (slightly less than the current existing number) there is a one in 1.3 trillion chance of someone with the needed twenty-five master nodes (costing $160,000 at today's prices) controling the eight involved nodes necesary to trace the transaction. Even more reassuring is the fact that the Darkcoins are never at risk, even if there are rogue master nodes.  Because, the Darkcoins never leave the user's wallet.
     

    What master nodes mean for the future

     
    Having so many servers with the full blockchain and working for the coin can be extremely useful. Thanks to the reward system, there is no risk of not having enough masternodes.  So, the developers can rely on them for any new decentralized feature they want to implement. This is huge. Because, the developer can depend confidently on a thousand distributed servers working 24/7.


    One doesn't need a big imagination to speculate, as others have, about other great ideas such as light wallets that still rely on master nodesblockchains, messaging services, as well as distributed storage. Only time will tell!
     
    Disclaimer: I own a significant number of Darkcoins and I am quite involved with the Darkcoin community. But, I view Darkcoin with a critical eye because my money is at stake. 
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    Categories: General, Columns

    In-depth Review: BitPesa

    July 27th, 2014 by William
    Last week I reported on two Bitcoin startups in Africa that are working to cash in on the remittance business: Kenya-based BitPesa and Ghana-based Kitiwa. These startups are working to leverage Bitcoin’s low transaction fees to reduce the cost of sending money across international borders.

    In this week’s column, I give a detailed review of BitPesa, based on four test transactions. My tests reveal that BitPesa is indeed a convenient, comparatively low-cost way of remitting money to Kenya.

    I found that the total fees for using BitPesa are slightly higher than the advertised 3%. However, BitPesa is still more economical than other options like Western Union. Moreover, BitPesa enables micro remittances, which are not currently practical through established money transfer services.


    What is BitPesa?

    BitPesa is a remittance service based in Kenya that allows users to exchange Bitcoin for Kenyan Shillings that are sent directly to a recipient’s mobile money account.

    Mobile money is a growing phenomena in Africa and around the world. People deposit money into an account associated with their cellphone number, then use their phones to buy things in shops, to send money to other mobile money accounts, or to cash out into paper currency.

    Kenya’s Safaricom owns the M-Pesa service, which is at the vanguard of the mobile money movement. Almost every adult in Kenya owns an M-Pesa account, and a third of the country’s GDP passes through the system. Users are assessed fees when transferring money between accounts and when exchanging mobile money for cash. These fees make mobile money a lucrative business, and Safaricom is now East Africa’s most profitable company.

    BitPesa, which works seamlessly with M-Pesa and competing mobile money platforms, allows people outside of Kenya to upload BitCoin and specify a Kenyan phone number to electronically receive Shillings in return. As stated, BitPesa advertises a 3% fee for this service.

    Not Available in All Markets

    I initially attempted to test BitPesa from my home in New York City. However, the system blocked me from creating an account, likely due to the United States' stringent money transfer laws.

    Currently I am traveling in England, where I successfully opened a BitPesa account and completed four test transactions.  

    Account Registration

    The registration process for BitPesa is trivial, requiring only a name, email address, mailing address and date of birth. Users must also check a box that permits BitPesa to confirm their identity information.

    Transactions

    After registering, users are asked to input the quantity of Pound Sterling (£) that they would like to remit to Kenya. This sum is immediately translated into the quantity of Kenyan Shillings (KSH) that will be received and the amount of Bitcoin (BTC) that is required to process the transaction.

    The user then specifies a person to receive the money by inputing their name, email address and mobile money phone number.

    A Bitcoin address is subsequently generated and a 10 minute countdown timer is initiated. The user must deposit the indicated amount of Bitcoin to the specified address in order to complete the transaction.

    In all of my test transactions, the recipients’ mobile money accounts were credited after one confirmation on the BitCoin network, which took between 2 and 15 minutes.

    Identification Required for Subsequent Transactions

    After the first transaction, BitPesa will not work until the user uploads a government-issued identity document.

    Fees and Exchange Rates

    I completed four test transactions in the amounts of £1, £2, £5 and £6. The table below details each of these transactions:

    Amount sent Amount received Bitcoin used
    £1 KSH 145 .00283
    £2 KSH 289 .00566
    £5 KSH 723 .01416
    £6 KSH 868 .01699

    At the time of testing, the market exchange rate for Bitcoin was 1 BTC = £353.73. The following table shows that this is roughly the same exchange rate that BitPesa used in calculating the Bitcoin required for each transaction:

    Amount sent (£)

    Bitcoin used (BTC)

    BitPesa's exchange rate (£/BTC)

    Market exchange rate at time of transaction (£/BTC)

    Difference

    1  0.00283  353.36  353.73  -0.37
    2  0.00565  353.98  353.73  0.25
    5  0.01412  354.11  353.73  0.38
    6  0.01695  353.98  353.73  0.25


    At the time of testing, the market exchange rate for Kenyan Shillings was £1 = KSH 149.23. The table below illustrates that BitPesa’s fees were indeed approximately 3%:

    Amount sent (£)

    Amount received (KSH)

    BitPesa's exchange rate (KSH/£)

    Market exchange rate (KSH/£)

    BitPesa's fee*

    1 144 144.00 149.14 3.45%
    2 289 144.50 149.14 3.11%
    5 723 144.60 149.14 3.04%
    6 868 144.67 149.14 3.00%
         

    *(Market Rate – BitPesa's Rate)/Market Rate, expressed as percentage



    It should be noted that the above calculations do not include the costs of purchasing BitCoin. I buy Bitcoin in the United States, on a low cost exchange, for a 1% fee plus $0.15. This increases the total transaction cost to about 4% from BitPesa’s advertised 3%.

    Not everyone desiring to send money to Kenya will be able to access low-cost exchanges. Immigrants who are undocumented or do not have bank accounts will likely have to purchase their Bitcoin with cash, at up to 10% above the market rate.

    Additionally, the above calculations do not include Bitcoin miners’ fees paid to transfer Bitcoin from a user’s wallet to BitPesa’s site. For each of the above test transactions, I paid a negligible .0001 BTC ($0.06) using my Mycelium smartphone wallet.

    Finally, receivers in Kenya must pay additional fees to Safaricom to withdraw cash from the M-Pesa network or to send money to another M-Pesa user. In the above £5 (KSH 723) transaction, the receiver would pay KSH 33 (4.5%) to send to another M-Pesa account or KSH 27 (3.7%) to withdraw cash.

    Not all M-Pesa transactions accrue fees, however. Buying airtime on the Safaricom network is free, as are transactions within Kenya’s mushrooming network of M-Pesa merchants. For instance, the recipient of my test transactions uses M-Pesa to buy gasoline and does not pay transaction fees to do so.

    Comparison with Existing Methods of Money Transfer

    Western Union is one of the world’s most well-established money transfer companies. In the United Kingdom, Western Union allows people to send money online, from their bank account to a Kenyan mobile money account like M-Pesa. The chart below uses Western Union’s fee calculator to determine the effective exchange rate for various remittance amounts:

    Amount sent (£)

    Western Union transfer fee (£)

    Total used (£)

    Amount received (KSH)

    Effective exchange rate (KSH/£)*

    2 2 4 295.24 73.81
    5 2 7 738.27 105.47
    10 2 12 1476.2 123.02
    50 4.9 54.9 7380.98 134.44
    100 4.9 104.9 14761.96 140.72
    500 19.9 519.9 73809.82 141.97
            *higher is better

     

    Compare this to BitPesa’s effective exchange rates in the table below:

    Amount sent (£)

    1% Bitcoin purchase fee (£)

    Total used (£)

    Amount received (KSH)

    Effective exchange rate (KSH/£)

    2 0.02 2.02 289 143.07
    5 0.05 5.05 723 143.17
    10 0.10 10.10 1447 143.27
    50 0.50 50.50 7235 143.27
    100 1.00 101.00 14470 143.27
    500 5.00 505.00 72349 143.27

    This comparison reveals that BitPesa yields a better exchange rate in all cases. Importantly, savings are particularly pronounced for small transactions. These “micro-remittances” in the range of £2 - £10 ($4 - $20) are impractical via established money transfer companies like Western Union.

    Conclusions

    BitPesa—one of Africa’s first Bitcoin startups—could make waves in the international remittance market. In addition to offering competitive exchange rates across the board, BitPesa also enables micro remittances. This may be the company’s strongest selling point for Kenyans living abroad, who often encounter situations where they wish to quickly send home small sums. BitPesa thus destabilizes the prevailing business model for money transfer services where smaller remittances accrue far higher fees than larger remittances, as illustrated in the Western Union table above. 

    BitPesa is also appealing in its convenience. Using the service is almost effortless once a person is comfortable with buying BitCoin and transferring it between wallets. BitPesa thus allows users to send money from their laptops or smartphones, eliminating the frustration of standing in long queues at brick-and-mortar money transfer outlets.

    There are drawbacks to using BitPesa, however. For instance, the service is not available in the United States, which will undoubtedly frustrate a number of potential users there.

    The extreme volatility of Bitcoin is a second potential drawback. Users who purchase Bitcoin and do not immediately send it might find that the value of their Bitcoin decreases (or increases) drastically in a matter of days or hours. Receivers are not directly affected by this volatility, however, because BitPesa converts Bitcoin into Shillings as soon as it enters the platform. In fact, receivers do not need to know anything at all about Bitcoin, or even that it was used in the transaction.

    In sum, BitPesa appears poised to disrupt the international remittance market by offering competitive fees, by enabling micro remittances, and by offering users a convenient way of sending money. It is an up-and-coming company to watch in Africa's fledgling Bitcoin ecosystem.

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