#Blockchain In-Wallet BCH Purchases and BCH Merchant App in the Weekly Update From Bitcoin.com

In-Wallet BCH Purchases and BCH Merchant App in the Weekly Update From Bitcoin.com

An integration with Moonpay allows users of the Bitcoin.com wallet in the U.K. and Europe to buy bitcoin cash with credit cards and merchants can accept BCH payments with a new POS app which is now online. This and more in the weekly video news update shared on Bitcoin.com’s Youtube channel.

Also read: Crypto Rocket Lets You Track Over 2,000 Cryptocurrencies

Buy Bitcoin Cash in the Bitcoin.com Wallet

Residents of the United Kingdom and other countries in Europe will be able to purchase bitcoin cash directly through their Bitcoin.com wallet using a credit card. That’s possible thanks to the integration of the Moonpay service with the latest release of the client.

The option to buy BCH with Visa and Mastercard is already available for those living in the U.S. You can join close to 4 million users around the world by visiting free.bitcoin.com to get set up with a wallet and receive some free BCH.

A point of sale app called BCH Merchant is now available for Android devices with an iOS version coming soon. The simple and free software allows merchants to accept bitcoin cash at any retail location. BCH Merchant does not require an account or registration. To start receiving BCH payments, all you have to do is provide a public key or an extended public key linked to your cryptocurrency wallet.

Meanwhile, the largest cryptocurrency exchange by volume, Binance, announced it’s planning to delist BSV. Other digital asset trading platforms such as Kraken and Shapeshift have taken steps in the same direction. Following Binance’s announcement, the price of BSV fell and the coin is trading for around $56 at the time of writing. Learn more about these stories and more in the Bitcoin.com weekly video update embedded above.

Make sure to subscribe to the Bitcoin.com Youtube channel and leave a comment on the latest video.


Image: Bitcoin.com


Verify and track bitcoin cash transactions on our BCH Block Explorer, the best of its kind anywhere in the world. Also, keep up with your holdings, BCH and other coins, on our market charts at Satoshi’s Pulse, another original and free service from Bitcoin.com.

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#Blockchain The Number of Crypto Exchanges Offering Margin Has Multiplied

Until recently, Bitmex, Deribit and a handful of established exchanges were the only places where traders could get their leverage fix. This has now changed with the emergence of dozens of exchanges offering leverage and plenty more on their way. Binance and Kucoin – two platforms famed for driving this year’s other exchange trend, the IEO – are believed to be mulling the introduction of margin trading. In 2019, it seems, everything’s being served with leverage.

Also read: Darknet Users Allege Wall Street Market Exit Scammed, Possibly Snatching $30M

Margin Trading Is so Hot Right Now

Margin trading and initial exchange offerings (IEOs) have proven to be the dominant trends among cryptocurrency exchanges this year. Bibox is the perfect case in point: the exchange, which offers up to 3x leverage on BTC, recently entered the IEO game, announcing the launch of no less than four projects on Bibox Orbit simultaneously to commence on April 22: The Force Protocol (FOR), Ludos (LUD), Staking (SKR), and X-Block (IX).

The Number of Crypto Exchanges Offering Margin Has Multiplied

FTX is another platform that encapsulates one of 2019’s defining crypto exchange trends, in this case for leverage. The derivatives exchange, backed by trading firm Alameda Research, offers futures, leveraged tokens at up to 3x, and OTC trading. With leverage of anywhere from 2-100x, these exchanges multiply the thrill – and the risk – of going long or short on bitcoin and other digital assets. Where once traders had a handful of options, now there are dozens, as the number of platforms offering margin and derivatives products has proliferated.

The Number of Exchanges Offering Leverage Has Increased 10x

The Perils of Offering Leverage

On market data sites such as Coincodex, Coinlore, and Coinpaprika, the number of exchanges offering leverage now runs to more than 50. Some provide margin trading on leading coins such as BTC, ETH, and BCH, while others have gotten more adventurous, offering products such as leveraged futures on Telegram’s still unreleased gram token. For traders lured by the prospect of tripling their money through little more than cranking up a slider and letting the multiplier effect take care of the rest, there are a few perils to be aware of – aside from the obvious risk of being liquidated.

The Number of Crypto Exchanges Offering Margin Has Multiplied

Bitmex takes pride in the size of its insurance fund, which currently stands at close to 24,000 BTC, but the majority of leveraged exchanges aren’t nearly so well equipped. With smaller exchanges, a large trader’s account going bankrupt can lead to clawbacks from other accounts to cover the loss. Poorly designed risk management systems exacerbate this risk. The complexities of offering leverage are significant, necessitating collateral to be posted for separate margin wallets for each digital asset. Newly launched futures exchanges also typically suffer from low volume and poor liquidity due to a small customer base, which in turn makes it more difficult to attract customer flow and market makers.

The Number of Crypto Exchanges Offering Margin Has Multiplied
Okex rolled back its futures contracts following a massive liquidation in July 2018

It’s not just new exchanges that can get things from when it comes to managing margin, either: last year Okex suffered a $9M clawback after a trader placed a large BTC order and was then liquidated after the asset crashed. As FTX notes, “If a user has a leveraged futures position on and markets move against their account enough that their net asset value is negative, then someone has to pay for that loss.” It continues:

In crypto you can’t repossess assets from the bankrupt account’s owner from outside the system, so you’re stuck with other users — the users who aren’t getting liquidated — footing the bill.

With the public’s appetite for leveraged everything and IEOs for everything showing no signs of being sated, expect to see plenty more of both in 2019. In an increasingly competitive marketplace, with hundreds of platforms jostling to gain a foothold, margin, despite its hazards, is seen as a key way to attract traders and stay relevant.

What are your thoughts on the proliferation of exchanges offering margin trading? What’s your favorite platform for leveraged trading? Let us know in the comments section below.


Images courtesy of Shutterstock.


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#Blockchain Crypto Rocket Lets You Track Over 2,000 Cryptocurrencies

Crypto Rocket Lets You Track Over 2,000 Cryptocurrencies

Having access to detailed and real-time market data is a precondition for becoming a successful cryptocurrency trader. Crypto Rocket is a mobile app that aggregates useful information about digital coins including price movements and the latest developments in the space.

Also read: BCH Merchant App Allows Businesses to Accept Crypto Payments in Store

Prices, Charts, News and Analysis in One App

Crypto Rocket is a free application developed for Android devices that tracks the prices of over 2,000 cryptocurrencies. It pulls market data from multiple digital asset exchanges including major platforms such as Kraken, Coinbase, and Bitfinex, as well as Localbitcoins, which is the leading peer-to-peer exchange.

The software can notify users when the price of a particular coin crosses a certain threshold thanks to customizable price alerts. Traders can create a watchlist to filter followed currencies. Interactive historical price charts allow them to examine market trends over different timeframes.

Crypto Rocket Lets You Track Over 2,000 Cryptocurrencies

The app also offers homescreen widgets that will help you stay informed about market developments concerning the coins you are interested in as well as a Breaking News page. There’s also a Details section that facilitates deeper analysis based on highs, lows and total volume.

Crypto Rocket comes with a currency converter that can be used to compare the market prices of cryptocurrencies in fiat equivalent. The feature supports dozens of traditional currencies including Indian rupee, Russian ruble, Turkish lira, South African rand, Brazilian real, and Vietnamese dong.

If you need to keep track of the current prices and market valuations of cryptocurrencies you can also use the Satoshi Pulse market cap aggregator developed by Bitcoin.com. The platform allows you to pick your favorite digital coins and calculate their price in a number of crypto and fiat currencies. It’s available in English, Russian, Chinese, and Korean.

What cryptocurrency tracker are you using? Tell us in the comments section below.

Disclaimer: Readers should do their own due diligence before taking any actions related to third party companies or any of their affiliates or services. Bitcoin.com is not responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any third party content, goods or services mentioned in this article.


Images courtesy of Shutterstock.


At Bitcoin.com there’s a bunch of free helpful services. For instance, have you seen our Tools page? You can lookup the exchange rate for a transaction in the past. Or calculate the value of your current holdings. Or create a paper wallet. And much more.

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#Blockchain Darknet Users Allege Wall Street Market Exit Scammed, Possibly Snatching $30M

Darknet Users Allege Wall Street Market Exit Scammed, Possibly Snatching $30M

During the first week of April, news.Bitcoin.com reported on a large swarm of darknet market (DNM) users flocking from Dream to the Wall Street marketplace. However, the migration hasn’t been as successful as it may have first seemed, with some vendors alleging that Wall Street has pulled an exit scam and ran off with $30 million in crypto held in escrow.

Also read: The Darknet’s Largest Marketplace Is Closing – But a Replacement Is on Its Way

Wall Street Market Users and Vendors Complain of Payment Issues and Possible Exit Scam

Not long ago, the largest DNM on the invisible web, Dream market, decided to shut down operations and transition to a new marketplace. At the time, many users flocked to other markets like Wall Street, Cannazon, and the Majestic Garden. According to user and vendor reports, since the Dream closure a huge number of users have migrated to Wall Street (WS). The WS marketplace has since reportedly amassed millions of dollars in BTC in escrow before people started noticing issues on April 17. One spectator commenting on Deepdotweb.com on April 20 claimed WS stopped paying vendors for finalized orders and all the funds collected were then transferred into a single BTC wallet.

Darknet Users Allege Wall Street Market Exit Scammed, Possibly Snatching $30M

“If you do your research you can find this wallet and see that afterward the BTC got split over several other BTC wallets,” the comment notes. “They claim to have some “technical issues” with their BTC servers. They have been saying that they are working on the issue for the last couple of days and that the missing BTC will be returned to the website.” The comment stemming from someone who calls himself a “DNM veteran” further states:

In the meantime they are making it look like nothing is going on and they are still running the website and having customers transfer BTC to the website.

Deepdotweb.com does show that the marketplace has 97.9% uptime at the moment, but the publication does display a caution notice that says “Warning: Market is exit scamming, do not deposit any funds into Wall Street market.” Further, the website’s comment section for direct links to WS is littered with commentary concerning the possibility that WS admins have exit scammed.

Darknet Users Allege Wall Street Market Exit Scammed, Possibly Snatching $30M

Essentially, an ‘exit scam’ is a confidence scheme used by a well-established darknet operation that stops shipping orders but continues to amass funds in escrow. After a good chunk of money has been collected, the DNM admins steal the funds and the site shuts down all of a sudden. On the Reddit forum r/darknet there’s a ton of posts stemming from users and vendors complaining about not being able to obtain funds from Wall Street. The top post on the forum says that “WSM has exit scammed” and some WS admins may be extorting users for more money.

Darknet Users Allege Wall Street Market Exit Scammed, Possibly Snatching $30M

Running Away With a Possible $30 Million in Crypto

According to the extortion post, WS support allegedly messaged users who did not encrypt their support messages and asked for help in plain text. The post says that users who made this mistake need to pay 0.05 BTC to a specific address or the list of people they caught making the mistake will be sent to Europol and the FBI. Another post on the forum called “WS Exit Scam Confirmed” also details a similar situation where vendors were not getting paid this past week, according to a meeting between “27 well-established DNM vendors.” There are definitely a number of deniers on these posts who declare “post proof or stop with this bullshit” but a good majority of comments uphold the story and warn that people should not place orders on the market.

Darknet Users Allege Wall Street Market Exit Scammed, Possibly Snatching $30M

There are others who have spoken with insiders from WS and individuals who work for support who say that the market system was having “technical issues.” One post claims a WS support email details that “services will resume shortly” and they expected to resolve the issue by “Saturday morning on 4/20,” the unofficial cannabis holiday.

Conversations on the DNM discussion forum Dread explain that WS market may have scammed people out of a whopping $30 million worth of cryptocurrencies. The issue with WS strikes fears into the hearts of the many DNM users who have experienced exit scams in the past and demonstrates the fundamental problems with centralized DNMs. Since the creation of the Silk Road and its eventual takedown, there’s been a variety of DNM exit scams which have included Evolution, Oasis, East India Company, Olympus, and Sheep marketplace. The current news concerning the WS market issues has DNM users wondering once again if another popular darknet market has bit the dust.

Do you think Wall Street market exit scammed? Let us know what you think about this subject in the comments section below.


Image credits: Shutterstock, Reddit, r/darknet, Deepdotweb.com, Pixabay, and WS Market logos.


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#Blockchain These Next-Generation Mining Rigs Pack a Ton of Hashpower

A Great Deal of Hashpower Is Coming With 2019's Next-Generation Mining Rigs

Last week, mining manufacturer Bitmain launched its latest Antminer 17 series. Now Canaan Creative has published its own device specifications and pricing for the new Avalonminer 10 series that process between 31-33 trillion hashes per second (TH/s). In addition to Canaan’s latest miners, two more China-based companies are releasing next-generation miners this summer that mine at maximum hashrates between 46-70TH/s.

Also read: Statistics Show Bitcoin Cash Is a Strong Contender After Crypto Winter

Avalonminer 10 Series: 31-33 Trillion Hashes per Second

Bitcoin mining machines that process the SHA256 consensus algorithm are growing ever more efficient. Last year, a number of newly improved mining rigs were released by various manufacturers and this year there’s a bunch more on the horizon. News.Bitcoin.com recently reported on Bitmain and Canaan’s new miners but Canaan hadn’t published the latest Avalonminer 10 specifications or prices. The new Avalonminer 10 series documentation is now available on the company’s website and interested buyers can sign up for the waiting list.

These Next-Generation Mining Rigs Pack a Ton of Hashpower

There are two models available on Canaan’s store – the Avalonminer 1041 and the 1041F. Interestingly, even though one unit is a bit more effective than the other, they are both listed for the same price at $1,057 per mining rig. The 1041 unit processes the SHA256 algorithm at 31TH/s and power efficiency of 56 joules per terahash (J/TH). Another thing to note is that the 10 series models both use 16nm chipsets rather than the next-generation 10nm or 7nm chips used by competitors.

These Next-Generation Mining Rigs Pack a Ton of Hashpower

In addition to the chips used, the 1041 machine puts out 70 decibels (dB) of sound and weighs around 8kg. The more effective Avalonminer model, the 1041F, processes 33.5TH/s according to the 1041F specifications page. Canaan says the 1041F comes with top tier power efficiency by giving owners 63J/TH. The machine is a touch lighter at 6kg and also puts out 70db sound which Canaan calls a “traditional” output. Each machine has a 180-day warranty from when the mining rigs are received.

Strongu’s U8 Model: 46 Trillion Hashes per Second

In addition to the latest mining rigs being sold in 2019, the top three mining giants Ebang, Bitmain and Canaan have smaller competitors trying to make strides in the industry. Two models being sold this summer aim to give miners higher hashrate for their money. The first mining rig expected to go on sale this July is Strongu Mining’s STU-8 (also known as the U8) which claims to pack a maximum hashrate of 46TH/s. The model’s power consumption takes about 2100W off the wall according to specifications. A few vendors online expect the U8 model to sell between $1,520-1,883 per unit. The U8 is a bit louder too as the unit’s fan has a noise level of around 76dB. The U8 model will be sold in pre-sale batches as well (25 units per order) according to the Strongu website. However, the China-based firm does not disclose what type of chipset is used for the latest U8 model.

These Next-Generation Mining Rigs Pack a Ton of Hashpower

Microbt Whatsminer M20S: 70 Trillion Hashes per Second

Another mining rig expected this summer stems from another company headquartered in China. The manufacturer Microbt claims the new Whatsminer M20S will process a maximum hashrate of around 70TH/s. The machine has a power consumption of around 3360W and has a noise level of around 75dB. Microbt plans to sell the mining rig in August and the rig’s official distributor Pangolin is selling each unit for $2,349. The Pangolin website does disclose the type of chip used in the new M20S models, revealing it to be a 12nm TSMC made semiconductor.

These Next-Generation Mining Rigs Pack a Ton of Hashpower

Despite the crypto winter, bitcoin mining manufacturers have continued to develop faster models with next-generation chips. Both BTC and BCH hashrates have risen significantly in 2019 and global data shows the mining economy is still booming. It’s likely that next-generation machines will relentlessly push the envelope within this industry. With the Microbt Whatsminer M20S, Strongu’s U8, and the new Antminer 17s from Bitmain producing hashrates of over 50 trillion hashes per second, mining competitiveness is guaranteed to increase. Soon enough, mining participants and facilities will find that low hashrate-producing mining rigs will be far less efficient to the point of not being worthwhile to run, unless they’re combined in great numbers.

What do you think about 2019’s next-generation miners from Canaan, Microbt, and Strongu? Let us know what you think about this subject in the comments section below.

Disclaimer: Readers should do their own due diligence before taking any actions related to the mentioned companies, software or any of the affiliates or services. Bitcoin.com or the author is not responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article. This editorial review is for informational purposes only.


Image credits: Shutterstock, Canaan Creative, Microbt, Asicminervalue.com, and Strongu.


At news.Bitcoin.com all comments containing links are automatically held up for moderation in the Disqus system. That means an editor has to take a look at the comment to approve it. This is due to the many, repetitive, spam and scam links people post under our articles. We do not censor any comment content based on politics or personal opinions. So, please be patient. Your comment will be published.

 

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#Blockchain BCH Merchant App Allows Businesses to Accept Crypto Payments in Store

BCH Merchant App Allows Businesses to Accept Crypto Payments

Cryptocurrency gives companies another payment option to offer their customers that yields a host of benefits. In the case of bitcoin cash, crypto payments are an easy, fast and cheap option, thanks to ultra-low onchain fees. BCH Merchant is a Point of Sale app that allows businesses to accept bitcoin cash.

Also read: Crypto-Friendly Banking Platform Cashaa Offers Personal and Business Accounts

Free App Helps Expand Payment Options

BCH Merchant is a free mobile application developed by Bitcoin.com which is available in the Google Play store. With the simple to use POS software, merchants can accept bitcoin cash payments at any retail location.

The app is very easy to set up as no account or registration is needed. To start receiving BCH payments, all you have to provide is a public key or an extended public key linked to your cryptocurrency wallet.

Permissions are limited to the camera, used to scan QR codes, network connections, and the Near Field Communication (NFC) functionality. BCH Merchant is QR code payment compatible with all bitcoin cash wallets.

BCH Merchant App Allows Businesses to Accept Crypto Payments in Store

Amounts can be displayed in local currency and the application supports over 150 fiat currencies. Thanks to the design of the Bitcoin Cash network, the fee paid by customers is very low – less than $0.01 – and is charged independently of the amount due.

BCH Merchant offers instant and safe payments. The app is also employee-friendly, with all settings accessible only through a PIN code.

If you or your business need a simple and secure way to send and receive cryptocurrency, you can also download and install the Bitcoin.com Wallet – over 3.9 million have been created already. The wallet is available for mobile and desktop devices and all major operating systems including iOS, Android, Windows, and Linux.

Are you offering your customers a crypto payment option and what services are you using? Let us know in the comments section bellow.


Images courtesy of Shutterstock.


At Bitcoin.com there’s a bunch of free helpful services. For instance, have you seen our Tools page? You can lookup the exchange rate for a transaction in the past. Or calculate the value of your current holdings. Or create a paper wallet. And much more.

The post BCH Merchant App Allows Businesses to Accept Crypto Payments in Store appeared first on Bitcoin News.

from Bitcoin News http://bit.ly/2IKUNu6 BCH Merchant App Allows Businesses to Accept Crypto Payments in Store

#Blockchain Russia Adopts Law to Isolate Runet From the Internet

Russia Adopts Law to Isolate Runet From the Internet

Runet, the Russian segment of the internet, is about to be isolated from the rest of the web. A new law adopted by the State Duma aims to do so in order to supposedly protect it from external threats and turn it into a “sovereign” space. Russian taxpayers and end users will pay the bill for the extra security that is likely to affect internet businesses including crypto platforms.

Also read: Lithuania to Adopt Crypto Regulations Even Stricter Than the EU’s

Is Moscow Building Russia’s Great Firewall?

This week, the lower house of the Russian parliament adopted on third and final reading a draft known as the “Digital Economy National Program.” The legislation still needs the approval of the Federation Council – the upper house – before it’s signed by President Putin but the decisive support in the Duma, where over two thirds of the deputies voted in favor, is a strong indication of the political will to pass and implement the law.

Some of its key provisions include the introduction of a system that will channel Russian internet traffic through government-controlled routing points as well as granting unlimited powers to Roskomnadzor, which will be able to cut off non-complying internet providers. The country’s telecom watchdog will set up a monitoring center that will detect threats and issue instructions. Roskomnadzor will also create and maintain a national domain name system (DNS).

Russia Adopts Law to Isolate Runet From the Internet

The new legislation is designed to ensure that online data transfers between Russian citizens, businesses and organizations are executed within the country instead of being routed internationally. Russia, which has been threatened by the West with sanctions over alleged cyber attacks, wants to build its own DNS system which will remain operational even if links to the servers based abroad are interrupted.

The Runet law is scheduled to enter into force in November this year, with the rules governing Russian domains and cryptographic protection of information expected to be introduced on January 1, 2021. The bill has already attracted criticism from different corners of Russian society, not least because its implementation has been estimated to cost the state budget at least 30 billion rubles (almost $500 million). There’s also a strong suspicion that Moscow intends to use the system for censorship purposes. Some have already likened it to China’s Great Firewall and protests have been held against it.

All Depends on the Opposition to the Law

Roskomsvoboda is one of the organizations that have voiced serious concerns regarding the adoption of the Runet law. It is fighting internet censorship while promoting freedom of information and self-regulation in the online space. Roskomsvoboda was established in 2012 when Russian authorities created a banned websites register. It is constantly monitoring the government’s legislative activities regarding internet regulation including restrictions imposed on web-based sources. News.Bitcoin.com contacted the project’s leader Artem Kozlyuk for his opinion on the upcoming changes.

“Of course we, like many other public organizations and internet companies, oppose the adoption of this absurd legal act,” he said noting that lawmakers assess “external threats” inadequately without defining them and prescribing counteractions. Kozlyuk believes Russian internet infrastructure will become more centralized under the new regulations, which will actually increase cyber risks. “Any decentralized system is always more robust against external influences, but the initiators of the bill are unwilling to realize that,” he added.

Russia Adopts Law to Isolate Runet From the Internet

The activist emphasized that the legal texts are quite unclear and the sponsors of the draft want to put everything under government control, from domain names and cryptography to traffic filtering and routing. All this will create multiple threats – economic, technical and legal. On top of that, the government’s working group on IT and communications has estimated that the annual costs of maintaining the sovereign Runet will reach 134 billion rubles (over $2 billion).

“If these expenses fall on the shoulders of telecom operators, that will lead to increased internet costs for Russians. Internet connection can also be slower and constantly failing due to the filtering equipment through which all traffic will be passing,” Kozlyuk elaborated. There’s also a risk of monopolizing the internet services market and regional shutdowns and disconnections will likely be much more common.

At the same time, Roskomsvoboda’s founder thinks that it would be very hard to completely disable the rest of the internet in Russia. According to Artem Kozlyuk, the effectiveness of the blockade will depend on the position of internet providers and their readiness to resist censorship. “If they do that, then I am sure that internet resources like Telegram will continue to be accessible to Russians. Many VPN services have already refused to redirect traffic to Roskomnadzor and this is encouraging,” he commented.

Russian Crypto Industry to Be Affected

The Runet law is likely to negatively affect crypto businesses in Russia, some of which have already started looking for better regulatory climates for this and many other reasons. Russian lawmakers have been postponing the adoption of a package of bills meant to regulate digital financial assets and related matters since last year. The Duma is now expected to adopt them on third reading this spring.

Russia Adopts Law to Isolate Runet From the Internet

“Currently, cryptocurrencies in our country are in the gray zone and crypto portals are often being prosecuted. But we have cases when our lawyers successfully challenged their illegal blocking,” remarked Artem Kozlyuk. Nevertheless, prosecutors continue to refer to Russian courts requesting the prohibition of one platform or another.

“Of course, in such conditions it’s difficult to provide these services and Russian developers have been looking towards other markets, where there are fewer risks of this kind and authorities demonstrate a more positive interest in this space,” said Kozlyuk.

What consequences do you expect from the new law isolating the Russian internet from the global web? Share your thoughts on the subject in the comments section below.


Images courtesy of Shutterstock.


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#Blockchain Without a True Two-Way Peg No ‘Real’ Sidechain Exists, Says Drivechain Creator

On April 17, the founder of the Drivechain project, Paul Sztorc, published a new blog post concerning the validity of today’s so-called ‘production sidechains.’ Sztorc has declared on multiple occasions that true sidechain technology hasn’t been invented yet and even Blockstream’s Liquid protocol, dubbed “the first production sidechain,” in a critical sense is not a ‘real’ sidechain.

Also read: Statistics Show Bitcoin Cash Is a Strong Contender After Crypto Winter

Paul Sztorc Questions the Validity of the Supposed ‘First Production Sidechain’

Over the last year, there’s been a lot of discussion concerning sidechain technology and the conversation intensified when Blockstream released its Liquid protocol. The project is considered to be a sidechain that’s interoperable with the BTC network, but since the day it was launched has been criticized for its method of consensus called ‘federated distribution.’ Critics believe the federated distribution model is not really ‘peer to peer’ as it relies on a large group of exchanges and fancy multi-signature technology in order to provide trust.

Without a True Two-Way Peg No 'Real' Sidechain Exists, Says Drivechain Creator
There have been many criticisms aimed at Blockstream’s Liquid project.

Because of the injected orthogonal trust Blockstream created, Liquid critics believe there’s nothing new or exciting to a consortium of exchanges acting as the custodians for an entire sidechain system. Paul Sztorc is a critic of Liquid and he’s also the creator of an alternative sidechain project called Drivechain. On Wednesday, Sztorc wrote a blog post that questions the validity of Liquid being a ‘real’ sidechain, adding that a recent quote from Blockstream developer Greg Maxwell solidifies his argument.

“Blockstream markets Liquid as ‘the first production sidechain,’” Sztorc details, sharing multiple links where this statement is highlighted on the web. But I think that something in that phrase has to be false. Either Liquid isn’t a sidechain; or else (if sidechain is redefined) then Liquid isn’t “the first” of that thing.”

RSK chief scientist Sergio Demian Lerner stated in 2015 that a federated peg with multi-sig is the best they have right now. This is still the case to this day.

The reason Sztorc feels Liquid is not really a sidechain is because a two-way peg is a fundamental feature of sidechain technology and since Liquid never invented a two-way peg technique, Sztorc has “never seen it as a real sidechain.” One key factor that shows Liquid’s lack of this feature is the fact that Liquid does not enable the ability for third parties to develop a permissionless sidechain.

Sztorc’s paper explains that an individual couldn’t create a sidechain token similar to Bitcoin Cash and Rootstock cannot use Liquid to create an Ethereum clone. Moreover, the Drivechain developer says that the technology used in Liquid is old tech that’s been on the go for years. For instance, multi-signature has been used for thousands of years, Sztorc’s blog post highlights, and not only that, but multi-sig has been applied to BTC since 2012. Additionally, the researcher notes that other features found in Liquid have also been used in the past by other projects. Sztorc’s post continues:

I struggle to understand the claim “first production sidechain” — On one hand, it suggests novelty and innovation. But the reality is that Liquid is not particularly novel (even if there is a lot of engineering behind it).

The issue people have with Drivechain is one of trust with miners, who are ironically the very actors who secure the network.

Liquid Does Not Use a ‘True’ Two-Way Peg so in a Critical Sense It’s Not a ‘Real’ Sidechain

In addition to Sztorc’s critique, his argument is bolstered by Greg Maxwell’s own words. Sztorc underlines a specific quote made by Maxwell during a presentation on the subject of sidechains. “We describe this mechanism called a federated peg, that is a sort of step-in alternative to the true two-way peg mechanism, that works without any changes at all in the hosting network,” Maxwell stated during the presentation. In Sztorc’s opinion, Maxwell’s words make it “crystal clear” that the federated peg is “undesirable.” It seems the federated model was the easiest way for Blockstream to produce the interoperable chain design but Liquid is still forced to add a second layer of trust that’s provided by a group of ‘trusted’ exchanges. The “not your keys, not your bitcoin” adage underscores the idea that Liquid’s model and others like it look no different than custodial solutions with some clever multi-signature technology.

“The only reason [a federated peg] is used, is because of a lack of “native support” for “true two-way peg” technology,” Sztorc’s paper concludes. “Since the Fed Peg is an alternative to a “true” two-way peg, then what is it? A non-true two-way peg — a false two-way peg — So, Liquid does not use a “true” two-way peg and in that critical sense is not a “real” sidechain.”

Drivechain Development

The Drivechain (DC) developer and a group of other blockchain engineers have been steadily developing the DC project and recently released the Drive Net 22. A key difference between DC and a federated method is the project uses the trust model that already resides within the bitcoin network — mining consensus. Sztorc and other DC proponents believe that blind merge miners acting as custodians would be the least problematic solution. One way to look at it is with every block mined, merge miners vote on the sound state of the secondary chain.

This contrasts sharply with a federated two-way peg model that some believe is no different than EOS or XRP. DC supporters think that Drivechain would alleviate threats to the main chain by lessening the need for hard forks and altcoins. Hashrate would essentially remain consistent and there would be less fear of miners leaving the main chain. Moreover, the main chain could essentially scale to handle the entire globe and be able to experiment with new features without affecting the main chain.

Critics think that Liquid, on the other hand, cannot offer these features of experimental sidechains and the business model seems to be more focused on speedy transfers between exchanges, wrapped assets, and purported confidential transactions. Even so, the company seems hellbent on providing this type of interoperable chain, even though engineers have told them the security model may encounter issues in the future. The fact is, federated pegged funds can most definitely be breached if any members of the federation are compromised. If, for instance, ‘X=7’ keys are attacked then funds can be stolen which makes a group of ‘trusted functionaries’ no different than the current banking system used today.

What do you think about Sztorc’s criticism of Liquid? Do you think Liquid is a real sidechain? Let us know what you think about this project in the comments section below.


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#Blockchain Five Simple Ways to Increase Your Privacy When Using Cryptocurrency

Five Simple Ways to Increase Your Privacy When Using Cryptocurrency

Cryptocurrency without privacy is pointless. If your coins aren’t fungible, you lose much of the benefits of using cryptocurrency in the first place. Privacy isn’t just won and lost onchain though. In fact, much of the privacy gains to be made when it comes to sending, spending and trading crypto occur offchain, as you go about your business on the web.

Also read: Wasabi’s Privacy-Focused BTC Wallet Aims to Make Bitcoin Fungible Again

The Never-Ending Quest for Privacy

Privacy is like fitness: a way of life rather than a task that can be ticked off. Just as it takes time, perseverance and focus on different muscle groups to build a better body in the gym, strengthening your privacy calls for undertaking regular exercises to stem the flow of doxable information. Every time you perform an action online, you’re hemorrhaging a trove of data. This can be particularly damaging for cryptocurrency users, whose onchain actions will be recorded indefinitely.

When paired with offchain data points such as IP, email address, and cell number, it’s possible for an adversary to build a complete picture of their target. Given the ever-increasing capabilities of three-letter agencies, it’s safe to assume that in the near future, the state will be able to construct a highly detailed picture of the activities of today’s cryptocurrency users.

tl;dr: privacy matters. Here are five ways to up yours.

Use a VPN

There’s an assumption that using a VPN requires a degree of technical knowledge, and is for privacy zealots only. In fact, the majority of VPNs are foolproof and can be up and silently running in a couple of clicks – no manual port reconfiguration necessary. Opera even offers a VPN now in its desktop and Android browsers. “Enhanced online privacy is a right for everyone,” claim Opera. They’re right. A VPN will provide an added layer of privacy when logging into exchanges as well as masking the IP address associated with Bitcoin transaction relays.

Five Simple Ways to Increase Your Privacy When Using Cryptocurrency

Separate Your Regular Email From Your Crypto Email

Creating a separate email account for every cryptocurrency service you need to log into is impractical. You can, though, segment all of your crypto-related emails into a single account. This will yield twin benefits: if your main account is compromised, the hacker will have no information on or access to your crypto activities. Secondly, if you choose a fully encrypted email account such as Tutanota, prying eyes at border control and other government agencies will have no insight into your penchant for trading obscure shitcoins.

Stop Reusing Addresses

More than half of all bitcoin transactions involve addresses that have previously been used. Creating a new bitcoin address is free, instant, and provides an immediate privacy boost. If the wallet or platform you’re using doesn’t allow you to create a new address at will, stop using it. There’s a wealth of competing services out there, and switching to a more privacy-minded alternative can be done in a matter of minutes. Unless you’re transacting solely in privacy coins like monero, or are using an account-based, rather than UTXO-based, system like ethereum, you should aim for a fresh address every time.

Five Simple Ways to Increase Your Privacy When Using Cryptocurrency

Keep Your Keys and Codes Offline

Where do you store the backup 2FA codes for your trading accounts and the private keys to your crypto wallets? Are they written down, split into parts and stashed offline in a series of very safe places? Or are they hidden in plaintext in a folder on your laptop marked “anime”? You’d be surprised how many people go with the latter. Even if you’ve encrypted the folder containing your keys and codes, it’s dangerous to assume it can’t be cracked by a determined attacker since, statistically speaking, you almost certainly recycle passwords – you and 10 million others.

Keeping your private keys offline will protect you in the event of your computer being physically or digitally compromised. Even if you can’t afford a bank vault or strongbox, separating your key into parts and storing it in multiple locations – with duplicates, to ensure redundancy – will work just as well.

Always Be Shuffling

Coin mixers aren’t for the ultra-paranoid and the ultra-shady: they’re for everyone. If more people ran their coins through tumblers before withdrawing them to hardware wallets, bitcoin would become significantly more fungible, and blockchain forensics companies would suffer a major blow. Even if you can’t be motivated to mix your coins for the greater good, do it for your own. Services such as Cashshuffle for BCH make it easier than ever to obfuscate the origin of your coins, while Coinjoin, incorporated into pro-privacy wallets like Wasabi, do the same for BTC.

Five Simple Ways to Increase Your Privacy When Using Cryptocurrency

There’s something extremely comfortable about having a stash of cryptocurrency that can’t be linked to your identity safely stored in a hardware wallet that’s been backed up. It’s the digital equivalent of having a backyard bunker filled with canned goods and ammo in readiness for the apocalypse. Treat yourself to a privacy makeover and see how good it feels.

What other privacy tips do you recommend? Let us know in the comments section below.


Images courtesy of Shutterstock.


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