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The Top Five Things Bitcoin Opponents Just Don’t Get

5 hours 20 min ago

Bitcoin & Co.’s prices are still on a roller coaster ride. Bitcoin, the flagship of all cryptocurrencies, recently fell below $6,000.

Now it’s over $7,000 again. Recent causes of turbulence were a possible crypto ban in India and the ordered phase-out of crypto mining in China. Then came some regulatory actions in the US and EU that were rather neutral but had a negative impact on the price.

The critics felt immediately confirmed. The price is falling, the bubble is bursting. But are the sceptics correct?

In the following, we will debunk the top five things Bitcoin opponents just don’t understand.

1. Bitcoin is a new technology, not an investment

Behind the hype around bitcoin and cryptocurrencies is a technology, the so-called blockchain. Blockchain is a relatively simple use of existing cryptographic algorithms. Since January 2009 Bitcoin has proven that Blockchain works and is safe.

The biggest mistake of the Bitcoin opponents is to consider Bitcoin as an investment. The claim that Bitcoin is a pyramid scheme or Ponzi scheme comes precisely from this point of view. What the opponents forget is that behind Bitcoin is neither an organization nor an individual who could dictate the course. Last year’s performance was the result of the free market.

The following price collapse was the result of legal uncertainty. This after various states, including China, South Korea and India, made unclear statements about the legality of cryptocurrencies. This legal uncertainty will continue to affect the crypto courses in the coming months.

Bitcoin and Blockchain, however, continue to develop and enter the already digitized society. Even if cryptocurrencies would be banned globally, the blockchain technology is not leaving. As a disruptive technology, Blockchain will replace existing business models, with or without the cryptocurrency Bitcoin.

2. Cryptocurrencies have global potential
Image via Fotolia

Bitcoin opponents argue that Bitcoins have no value and are therefore not good means of payment. The fact that banknotes also have no real value only moderately disturbs opponents. All you have to do is put a central bank behind the paper money. It implies security.

Central banks control the money supply and set inflation targets. This is for the common good or at least for the good of one’s own economy. Since the value of money is directly linked to the competitiveness of a country, currencies are generally depressed rather than raised. This leads to international tensions and trade conflicts. The damage to savers caused by real negative interest rates tends to be marginal.

Because Bitcoin and many other cryptocurrencies are not subject to a central control body, they have the potential to be accepted internationally as a means of payment. By contrast, the creation of a global single currency through an international central bank would be a mere utopia.

3. Money is a Tool

Money was invented because bartering in kind is a tedious and inefficient means of exchange. A good monetary asset has the following properties: it can be stored for a long time, it is easy to transport, it can be easily exchanged, it can be divided into smaller units, the monetary units are limited, equivalent and difficult to counterfeit.

All these requirements are met by cryptocurrencies better than real currencies and even better than coins and precious metals in the past.

Cryptocurrencies are digital money and a further step in digitalization. With a cryptocurrency, amounts of any size can be stored securely without banks, and values can be transferred quickly and easily globally.

All you need to use cryptocurrencies is a computer or a mobile phone and an Internet connection. Ok, a hardware wallet is also good thing to have, so you can sleep at ease. Things, in other words, that everyone owns and carries around with them today.

4. Early Growing Pains are being eradicated

Since November, countless bitcoin transactions have been stuck. Only recently the Bitcoin network was able to process the outstanding transactions. The cause of the blockage lies on the one hand in the fixed block size of one megabyte and on the other hand in the block interval of about 10 minutes. Thus, the transaction maximum of Bitcoin is optimistically estimated at about seven transactions per second.

For this reason, many Bitcoin opponents believe Bitcoin is not a good international currency. That’s true, of course, seven transactions per second is far too few. As a global currency, several thousand transactions per second would be a minimum.

Bitcoin is the very first cryptocurrency there is, and it still struggles with a few teething troubles. But one does not judge today’s Internet by the download speed of 1992.

Numerous cryptocurrencies have already massively increased the transaction limit. To think that Bitcoin’s transaction limit is a physical limit that cannot be technically moved is naive.

Even Bitcoin itself has been innovating with improvements that have drastically reduced transaction times as well as uncomfirmed transactions. In the below image we have the Bitcoin memepool.

The Bitcoin Memepool over time

As you can see, the size of the Bitcoin memepool (uncomfirmed transactions) has been decreasing steadily since November of last year. This could be down to a number of factors including further SegWit adoption as well as new innovations such as the lightning network.

5. Regulation could be a new beginning and not the end

The regulation of cryptocurrencies and especially of ICOs is urgently needed. Cryptocurrencies can be misused as illegal money, for money laundering and for tax evasion. Up to now, the existing money has been used for this purpose.

Bitcoin is new and therefore even more difficult for the authorities to assess. In principle, however, the problem remains exactly the same, and it can be expected that authorities, above all tax offices and the police, will be able to deal with cryptocurrencies in the future.

Many Bitcoin opponents believe that the regulation of Bitcoin can only have negative consequences on the price. It is more likely that regulation and the resulting legal certainty will lead to a renewed boom and to a permanent spread and use of cryptocurrencies.


It is unlikely that Bitcoin will ultimately become the global currency. The Bitcoin developers and the Bitcoin network are too divided for Bitcoin to position itself as a global currency. However, it is to be expected that a cryptocurrency will prevail in the long term.

The only alternative would be to ban or over-regulate cryptocurrencies on a global level. However, this is unlikely with such a promising technology and would be in clear contradiction to the technological development of the last 20 years.

Featured Image via Fotolia

The post The Top Five Things Bitcoin Opponents Just Don’t Get appeared first on Coin Bureau.

Proof of Burn Explained – A Sustainable Consensus Algorithm

Sat, 03/17/2018 - 21:52

When it comes to thinking about blockchain technology, one essential element to consider are consensus algorithms, of which a brief explanation can be found here.

These algorithms play an important role in blockchain architecture, by ensuring that network participants are able to reach consensus as to the shared state of the blockchain.

There are numerous consensus protocols that exist, such as proof-of-work (PoW) and proof-of-stake (PoS), with each protocol representing a different approach as to how blockchain consensus should be achieved in a distributed and trustless environment.

In advancing this discussion, one novel approach that has been proposed is a consensus algorithm known as: proof-of-burn (PoB).

What is Proof-of-Burn?

The idea behind PoB is that, in order for a user to mine in a PoB consensus algorithm, they must burn their cryptocurrency. Users do this by sending their coins to a verifiably unspendable address. Once coins are sent to this address, they can no longer be accessed or spent.

Because PoB transactions are recorded on the blockchain, it can be demonstrated that the coins can no longer be used, which means that the user can then be rewarded.

The concept behind PoB can properly be understood when it is compared to the already popular and existing consensus algorithm, PoW. With PoW, miners are required to invest in equipment and electricity in order to mine blocks.

Effectively, the right to mine blocks in a PoW system is directly linked to the monetary cost that the miner is required to take on. And it is very important that a miner, in any consensus algorithm, take on some potential cost, so that it can be made expensive for any potential bad actors to carry out attacks on the network, for example a 51% attack.

In the case of PoW, that cost is monetary, as miners must pay for hardware and electricity. However, the disadvantage of PoW systems is that they can consume a significant amount of energy. For example, it is predicted that Bitcoin PoW mining could consume as much electricity as Denmark by 2020.

From an environmental standpoint, the damage that PoW mining could cause to the earth is not a scenario that we want materialising.

Miner Cost Reshaped

The innovative element of PoB is that it reshapes the type of cost that miners must take on in order to mine blocks. Instead of taking on costs associated with electricity and hardware as in PoW mining, miners in PoB burn their coins in order to mine a block.

Thus, PoB miners are still taking on a cost, however, no resources are consumed other than the burned underlying asset. This means that the problem of energy consumption and environmental impact, that is inherent in PoW systems, is not apparent in the PoB consensus model.


PoB is an interesting algorithm that adopts a novel approach to distributed, trustless consensus. As of now, there are a few cryptocurrency projects that have adopted the PoB consensus algorithm, such as Slimcoin and Counterparty.

It is likely that we will continue to see the introduction of multiple consensus algorithms, as projects strive to design an algorithm that effectively balances the interests of competing stakeholders within their localised ecosystems.

Featured Image via Fotolia

The post Proof of Burn Explained – A Sustainable Consensus Algorithm appeared first on Coin Bureau.

Belacoin Review: Earning Crypto by Sharing Pictures on Belacam

Sat, 03/17/2018 - 13:14

The world of social media is on the verge of being disrupted by a new wave of blockchain based projects.

The current giants of the industry rely on centralized platforms that offer their users and content creators very little for their efforts; despite this, apps such as Instagram and Snapchat retain a loyal following that will take some persuading in order to switch over to another platform.

Belacam which is based on the Bela (BELA) blockchain aims to provide a decentralized alternative that directly rewards its users for their efforts.

What is Belacoin?

Belacoin (BELA) was originally created in 2014 as a charity coin for organizations that specialized in helping children. A percentage of the circulating supply was donated to different organizations and used in a Bela faucet in order to try and widen the distribution of the coin.

This idea never really took off and the project switched focus in 2016 after the Ambia Fund took over development of Belacoin. A rebranding followed along with updates to the Bela wallets. The team also focused on attracting both dedicated and independent miners to help secure the blockchain.

Originally based on Litecoin, Belacoin utilized the Dark Gravity Well difficulty adjustment algorithm and boasted a swift block time and was able to adopt technological advances such as SegWit and the Lightening Network.

As a result, Bela was able to facilitate fast peer to peer transactions and this helped attract the Belacam team who were looking for a suitable network that could support their social media platform.

In order to help facilitate the growth of the Belacam platform, BELA is being transformed into an ERC-20 token in order to help it seamlessly integrate into an already existing infrastructure.

What is Belacam?

Belacam is a platform that allows its users to share both pictures and gifs, and to be rewarded in BELA for uploading content. In addition, content creators can also receive BELA for each like their images get and users can withdraw their funds or use them to like other users’ photos.

The platform is scheduled to work in a manner similar to Steemit and users will be able to both interact with and reward their friends and favourite personalities, as well as organizations and other content creators.

The team behind Belacam are working in unison with the Ambia Fund team and the two parties are aiming to create a unique social platform that taps into a substantial market of photo sharing app users.

How Viable is the Project?

Social media plays a huge role in today’s society with Snapchat moving close to around 200 million users while Instagram has close to 800 million. The picture sharing sector may prove to extremely lucrative for Belacam and Steemit has shown that decentralized social media projects can definitely be successful.

While the mainstream platforms have amassed huge numbers of users, they do not directly reward content creators and they either go unpaid or enlist the help of third party sites in order to find sponsors or advertising partners. By enabling content creators to be directly rewarded by other users of the platform, Belacam has the potential to disrupt the current market and attract a significant number of young, crypto friendly users.

Belacam is also being closely monitored by the Ambia Fund which specializes in developing cryptocurrency start-ups and the Ambia team have been behind sourcing programmers and designers, in addition to managing the project’s media and public relations campaigns.

Bela is also supported by Live Bela LLC, the company behind the cryptocurrency with the team headquartered in Charlottesville, USA. They remain fully compliant and Live Bela LLC is registered with the US Government and retains the Delaware LLC File Number: #6507095.

Live Bela maintains and develops Bela’s source code, software projects, and plug-ins as well being involved in building its community.

The interaction between Bela and Belacam will prove vital as people will need Bela to pay for special features in Belacam and as the platform grows in popularity the demand for Bela will increase. Content creators are also set to receive Bela from both followers and advertisers and when they choose to exchange their earnings for other currencies, this will help create substantial trading volume for Bela, and in turn, help it to gain further traction.

In addition to the Belacam platform, Bela also supports Bella chess, an android app that allows users to play chess against a number of opponents and to receive BELA as a reward for winning.

Is BELA Worth Investing In?

The BELA token has struggled recently as the market downturn has seen it lose the vast majority of its value. After peaking at a price of around $0.52 in January, BELA is currently trading at a price of $0.09 and retains a market cap of approximately $4m. At its peak it was worth over $20m and the team have some work to do in order to attract investment back into the project.

There are a number of developments in the pipeline and the Bela team has decided to switch BELA over to an ERC-20 token and to incorporate a Proof-of-Stake consensus algorithm. The main objectives are to incentivize true everyday users and to also move away from more centralized mining pools. These shifts are also aimed at improving interoperability with ERC-20 tokens being well integrated with exchanges and hardware wallets.

The swap is scheduled to take place over the coming weeks and each old BELA will be exchanged for an ERC20 BELA on a 1:1 ratio.

The Belacam platform is also in development with the Gamma version close to being launched. Testing applications were taken between January 29 and February 20, and the individuals selected have since been testing out Belacam Gamma with the release scheduled for Q2 of this year.

As with any blockchain based project a lot depends on how the team manage to stay on top of developments and to also move ahead of their competitors. The decentralized social media sector can prove difficult to navigate, and while Steemit has proved to be a success, Indahash has performed badly while the team behind Props project has been forced to delay launching their video sharing platform.

Building a strong social media platform takes time, even though these projects are able to grow their user base at an almost exponential rate.

There also exists the possibility that Belacam is not well received by the general public as platforms such as Instagram and Snapchat maintain a strong hold over their users. The success of Belacam very much depends on the token revenue sharing model becoming more visible and everyday users getting more accustomed to exchanging value via tokens. The project can market itself heavily to the cryptocurrency community and build itself up from there, similar to the way Steemit has operated.

So far the project looks set to incorporate a number of positive features and Belacam includes a clean and intuitive interface and as well as interactive features such as a leader board highlighting the users who have given the most likes within a 24 hour period.

By giving away a large amount of likes on the site and making it onto the leader board users will have their profiles featured in front of thousands of other users. Features such as these can help incentivize users to interact on the platform.

The Belacam application could prove to be potentially profitable for holders of BELA as applications such as Instagram and Snapchat attract huge numbers of users, whilst Facebook and Twitter also incorporate a heavy amount of image sharing and are immensely popular.

By using blockchain technology to facilitate swift payment and rewards for liking and sharing content, Belacam has every possibility of carving out a portion of the market for itself. With a current market valuation of around $4m, BELA also plenty of room to grow and provides investors with the possibility of significantly healthy returns.

Images via

The post Belacoin Review: Earning Crypto by Sharing Pictures on Belacam appeared first on Coin Bureau.

Everything You Need to Know About CryptoCurrency Airdrops

Fri, 03/16/2018 - 22:37

Free stuff is great right? But whenever you get something for free you always wonder “What’s the catch?” That’s because we know that you rarely get something for nothing, and that anything which seems too good to be true usually is.

Well in the cryptocurrency world the traditional rules rarely apply, and the creators of new tokens and coins have found a way to challenge the idea that free stuff always comes with a catch with a little trick of their own and it’s called an “Airdrop”.

What is an Airdrop?

In the most simple terms an airdrop is nothing more than free coins that are given away by the development team. There are many ways that this is done. In some cases the coins simply show up without warning in your wallet.

In other cases there are requirements that need to be met to get the airdropped coins. Perhaps it requires signing up for the development team’s Telegram channel and following or interacting with them there. It could require you to promote the coin on Twitter in some way, or on another social media site.

You may have to hold a certain amount of another coin in your wallet to receive the airdropped coins. There are any number of requirements and they differ from one airdrop to another, because in the wild west of cryptocurrencies there are no rules.

The development teams make up their own rules as they go along, deciding what requirements best suit their needs before distributing free coins.

Where do the Airdropped Coins come From?

The usual method is to simply do a hardfork of the existing blockchain, creating coins and then distributing them for free. One very well known airdrop happened recently when bitcoin forked to create bitcoin cash.

In that case every bitcoin holder received an equal amount of bitcoin cash when the fork occurred. With bitcoin cash currently trading right around $1,000 that’s a pretty nice “freebie”!

In some cases the airdrop is done instead of an ICO, with the bulk of the coins being given away, while the development team holds 5% or 10% of the total coins in order to fund future development.

Why is it done?

You probably think it sounds crazy for development teams to give away up to 95% of the equity in their projects for free, but it actually makes very good sense.

The other way to distribute coins is through an initial coin offering. If you’ve been following cryptocurrencies for any length of time you know that some ICOs have been wildly successful, raising hundreds of millions of dollars. But those are the exception rather than the rule. Most ICOs are nowhere near that successful.

So, a new idea was formed. What if new projects simply gave away their coins?

The result is that they are able to spread the news about their project much further – ICOs typically don’t see more than 30 or 40,000 buyers. And they get people interested in learning more about the project, and in some cases they become so excited they begin to spread the word to their friends, turning the airdrop and the project into a viral phenomenon.

That’s really the reason airdrops are done. To spread the word about a project to the largest number of users, in hopes that they will spread the word further, generating massive interest in the project, and eventually causing the price of the airdropped token to rise dramatically.

One successful example is eBitcoin (eBTC) which was airdropped on September 28, 2017 at a value around $0.03 and is currently trading up at $0.80 per coin. Another example is OmiseGo (OMG), which was airdropped in July 2017 at a value of roughly $0.20 per coin and traded as high as $25 and is currently at $11.86 a coin.

Of course not all airdropped coins perform so well, but they’re free so even if only 5% of them grow like this you’ve made a nice profit.

How to claim your airdrop?

Many of the airdropped coins are based on the ERC20 protocol and require an ERC20 compliant, non-exchange wallet to claim. The most popular wallet used for this purpose is MyEtherWallet. In some cases the coins are simply added to your wallet, there’s nothing else you need to do. In other cases you need to perform some action to claim the coins, or you need to already own some amount of a coin.

Truth be told each project has its own requirements to receive an airdrop. One good place to find out about airdrops in by joining Telegram and following the projects you like. Another good source for airdrop information is AirDropAlert.

You can also check CoinAirdrops for current and upcoming airdrops. Finally, you can find out about airdrops on the BitcoinTalk forum or through numerous Facebook and Twitter groups and newsletters.

Examples of Airdrops

One ongoing airdrop of an existing coin is the DeepOnion Project. This is a 100% anonymous and untraceable coin transmitted over the Tor network, and it is now on its 35th airdrop. Currently the ONION coin is worth $1.79 each.

One upcoming airdrop that looks interesting is for Orbis (OBT), a project that will run on the NEO blockchain and looks to provide secure, decentralized, and open networks for Bluetooth communities. Making it even more interesting is that the white paper also states that, in order to avoid devaluation of OBT, additional coins will be minted to counteract inflation. The additional coins will then be airdropped to holders of Orbis.

Keep Yourself Safe

Not surprisingly, there are bad actors out there who try to take advantage of the airdrop phenomenon, so you also need to have some awareness and common sense, and keep yourself safe out there. Here are a few tips to avoid scams and phishing schemes:

  1. Never send your private keys to anyone for any reason. This doesn’t just apply to airdrops, but to anything crypto related.
  2. Never send any money or cryptocurrency to an address to participate in an airdrop. Remember, airdrops are free coins. There’s never a need or reason to send anyone cash or cryptocurrency to participate in an airdrop.
  3. If you hear about an airdrop check the official sources. This might be the development teams Telegram channel, or Twitter account, or GitHub or even the official website. Gather as much information as you can before clicking on any shared links. There have been several instances of scammers spoofing a projects web address by changing one letter, or using a the same name with a different tld. Always be wary and expect a scam.
  4. Be especially careful with airdropped coins that have proprietary wallets. If one of the requirements for collecting airdropped coins is downloading and installing a wallet it isn’t necessarily a scam, but it is suspicious. It is very easy for a hacker to include malware in the wallet download, and chances are you’d never know.
Final Words on Airdrops

It isn’t likely you’ll get rich with airdrops, but it can be a quick and easy way to add some new token to your portfolio and make some small profits.

They’re free after all. And if you’re getting in on as many as possible maybe, just maybe, you get lucky and pick up some coins that will perform well in the long run.

Featured Image via Fotolia

The post Everything You Need to Know About CryptoCurrency Airdrops appeared first on Coin Bureau.

Substratum Review: The Cryptocurrency for a Decentralized Internet

Fri, 03/16/2018 - 20:23

Centralisation is not just a factor in the financial system. It also plays out quite regularly in the World Wide Web.

This is the case when it comes to both the access of information as well as website hosting. These centralizing factors can impact on the long term health of the internet and make it less impartial and accessible.

That is where Substratum comes in. The company wants to make the web decentralized by being large open source network where anyone can rent out their computers as hosting providers. The company wants to shake up the “client-server” model that has become the backbone of the web.

Instead of a number of people connecting to large centralised web hosts, they can connect to a network that is run on millions of individual nodes (computers). Instead of using proprietary software for the server machines, they will make use of open source code on a blockchain.

Quite simply, Substratum is trying make the internet freer for everyone. Let’s take a closer look into the project.

Overview of Substratum

What Substratum is trying to achieve is to give all of those who are connected to the network the opportunity to become their very own web hosts. They are the “nodes” that form part of the broader decentralised network.

If you wanted to become a host on the Substratum network, all you would have to do is download the latest Substratum software. This is open source meaning that anyone can download the code and work on it themselves.

Once you have downloaded the software, you can launch it and you start syncing with the broader network. What it is allowing you to do is to essentially run your own server which will connect with the other computers on the network. Other users can then access the internet and the content that you are collectively hosting.

In return for offering up your PC as a decentralised host, you will be rewarded with the Substratum tokens (Substrate). These payouts are determined based on how much you have devoted to the network. This includes things such as bandwidth and the CPU power.

Perhaps one of the most interesting things about the Substratum network is that it allows the user to tailor their hosting. They can determine how much they want to contribute in terms of resources as well as when they would like their hosts to be active.

Screenshot of Substratum Software. Image via

Apart from traditional hosting services, Substratum also wants to give websites the opportunity to use their CryptoPay function. This will allow these sites to process payments for goods and services using a range of different cryptocurrencies.

This creates a number of synergies between the two ecosystems of decentralised Peer-to-Peer cryptocurrency and a P2P website hosting network.

How users Connect

On the other side of the coin, there may be those users who want to “surf the web” on the decentralised substratum network. It will work much in the same was as the internet does now currently.

You will connect to the substratum network and you will enter your desired domain. The Substratum protocol will do a Domain Name System (DNS) and will use advanced technology to direct you to the host machine that is closest to you geographically.

This also makes the Substratum network that much easier to use mainly because it can easily interact with your traditional web browsing software such as Chrome and Firefox.

The Benefits of Substratum

There are a number of risks that one runs when connecting to a centralized server. The most relevant of these risks is that there is a central point of failure. There is one web host that can become an easy target for authorities and hackers.

There is one central server that can easily track your movements and record exactly what you are doing on the network. This throws up important considerations for user privacy and security.

Substratum is firstly decentralized and secondly encrypted. This means that users can freely browse the network without having to make use of privacy enhancing software such as VPNs and proxy servers. It also means that bad actors cannot infiltrate it even if they wanted to.

Apart from the security enhancing benefits of the network, there are also numerous cost advantages to using the Substratum network for hosting. This is because of the way in which webmasters are charged for the hosting of their sites.

Traditional hosting services will make use of a monthly billing model. You will get charged a flat rate based on a particular hosting plan. Irrespective of the amount that you use, you will pay this monthly subscription.

On the other hand, with the Substratum network, you will be charged based on the amount of data that has been transferred for your particular site. This is a similar model to that of some cloud CDN services that will charge based on the amount of GET requests that are sent to the server.

Internet Freedoms Entrenched

While privacy online is a very important consideration for many people, there are others who have to fear the consequences of repressive regimes. It is well known that in countries such as China and Iran, Internet activity is heavily monitored.

The governments try to restrict what content their citizens are able to access and what discussions they are able to have. For example, in China there is something called the “Great firewall”. This is essentially a large network firewall that surrounds the whole country and controls what can be accessed.

Using the Substratum network, however, can circumvent this. The entire network is encrypted and the only thing that the government controllers will be able to see is a connection to a decentralised network. There is no way of them monitoring what you do or where you visit.

Internet freedom is not only something that people in authoritarian countries have to worry about. For example, the move last year by the SEC to end Net Neutrality could have numerous implications for those citizens who are based in the USA.

Essentially, the ruling implies that the internet service providers can charge different rates for those who wish to access different content and websites. Hence, the ISPs can selectively throttle your access based on the sites that you choose to access.

Connecting to a decentralised network that splits access points and encrypts traffic means that your ISP will have no idea what sites you are accessing. You will be free to browse the internet as if Net Neutrality was still in place.

Strong Team Members

Taking a look at those who are in charge of Substratum should provide users with an added sense of confidence. The Substratum team members have diverse backgrounds in fields of tech and business.

Co-Founders of Substratum. Image via

As can be seen in the above image, the three co-founders have over 50 years of industry experience working with companies such as Apple, HP, Facebook and a number of other Fortune 500 clients. Having a strong team is no doubt a great asset that is often helpful in separating a crowded startup market.

Potential Challenges for Substratum

Although the idea of Substratum is no doubt intriguing, there are a number of other blockchain based projects that offer a similar concept and have been in circulation for a longer period of time.

For example, you have Golem (GNT) which is making use of the Ethereum network to build a large decentralised virtual super computer. You also have cloud storage based projects such as Filecoin that are also about to come online with extensive ICO funds backing them.

It is also less clear that there will be a great incentive for participants to host on the Substratum network. For example, hosting will require the resources of the PC in the form of CPU power and storage. Mining cryptocurrency is similar and uses GPUs for Proof-of-Work algorithms or the hard drive for Proof-of-Capacity protocols.

Hence, the host will have to decide which is more lucrative. Either they can offer up their PC for hosting to earn Substrate or they can turn their computing power onto mining crytpocurrencies. If hosting Substratum is not much less resource intensive or much more lucrative, it is unlikely to get many hosts on board.

The Substrate Tokens (SUB)

Substrate is an ERC20 token that people could have purchase initially through an ICO. This was held between August and September last year where the project was able to raise about $13.8m.

Although this was below their target of $45m, it is still a substantial sum which the developers are no doubt going to be putting to good use. The SUB tokens are currently trading at $0.454. This can be seen in the graph below

Substratum Price Performance. Image via

The price of the tokens has fallen considerably over the past few weeks which is in line with the general cryptocurrency markets. The SUB tokens are still up considerably from the ICO token price of about $0.08.

You can purchase SUB tokens on exchanges such as KuCoin, EtherDelta and Binance. Once you have got your coins, you can store them on any ERC20 compatible hardware wallet or web based wallet such as My Ether Wallet (MEW).

Future Prospects for Substratum

The idea behind Substratum does indeed have the potential to change the way that we think about access to information in a digital age. There has been too much power placed into the hands of centralised web hosts at the expense of users.

Substratum is helping to achieve those ends by creating a truly decentralized internet where users are able to benefit from spare computing power of their neighbors next door. It empowers those nodes that want to become their own hosts. It also allows them a chance to earn extra income.

There are of course challenges that Substratum has to overcome. There are strong competitors and the cryptocurrency market is currently going through some choppy conditions. They will also have to think of a way to properly incentivize hosts to use Substratum over regular cryptocurrency mining.

Nevertheless, Substratum is a project that deserves your attention. We will keep a close eye on the project to see how it develops over the coming months.

Featured Image via Fotolia

The post Substratum Review: The Cryptocurrency for a Decentralized Internet appeared first on Coin Bureau.

Here is Why The Google CryptoCurrency & ICO Ban is Good

Thu, 03/15/2018 - 20:48

There has been a great deal that has been made by the news that Google will be banning cryptocurrency related advertisements.

The most common theme has been those emanating from the mainstream press that it is likely to slow adoption and lead to a lack of awareness of cryptocurrencies. This is actually quite far from the truth.

In fact, these bans by Google are likely to make the ecosystem that much more healthy as only the most reputable and trustworthy content will be presented to users who decide to visit search for particular topics.

Before we delve into the underlying benefits, lets dig into the background to the ban.

Following Facebook

Google was not the first company to implement on a ban on cryptocurrency advertisements. That title falls to Facebook. In late January, Facebook was letting its advertisers know that they would be restricting any adds related to crypto.

They didn’t only ban cryptocurrency ads but they also took on the highly suspect Binary Options industry. They would be banning ads that related to these instruments as well and followed on with their other platforms such as Instagram.

There was a great deal of speculation whether Google would follow suit. In fact, there were reports that the Canadian and US regulators were trying to pressure the search giant to limit these ads on their platform as well.

According to Jason Roy of the Manitoba Securities Commission:

we’re very pleased with Facebook’s decision. My hope is that Google will enact a similar policy, where they specifically name products like binary options, ICOs and cryptocurrencies.

This is something Google was initially dismissive of as they had already made a number of changes that improved the quality of the advertisers. For example, they were already banning any ads that were intentionally misleading.

Google’s Change of Heart

After a few weeks of intense lobbying from the regulators, Google decided that they would indeed implement a ban on ads that promoted questionable financial products from their ad networks.

In an update to their advertising terms of service, Google stated that they advertisers would no longer be allow to serve binary options, cryptocurrencies and related products.

There were a few exceptions for those advertisers who were legitimate brokers that wanted to promote CFDs, spread betting or spot forex. They would have to apply for an exemption from Google in order to promote it.

No More Scams, No More Spam

What most people tend to forget is that using Google Adwords has a really low barrier to entry. Any odd bucket-shop broker or ICO can promote their site on the first page of Google simply by buying PPC ads.

Similarly, click bait marketers have actively used these ad networks to promote junk stories of untold riches and secret systems. Is is also known that ICO scams and fraudulent phishing schemes have used the ads to generate traffic.

For those users who know enough about how these ads are served, they will often just skip over the paid ads and will go directly to the organic results. It is known that these ads are often just used to jump past the most relevant results.

At this time, when someone is searching for “Bitcoin”, they will be taken to the page on the original white paper or the main Bitcoin website. They won’t be presented with an add to some obscure ICO offering “limitless gains”.

When someone searches for “cryptocurrrency exchange”, they will not be presented with a fake domain attempting a homograph attack which will harvest their credentials. They will be presented with a well thought out list of legitimate cryptocurrency brokers by reputable industry influencers.

Why this is Good for The Ecosystem

Quite simply, by Google eliminating ads for these keywords, they are effectively making sure that those that are the most susceptible to fall for scams, won’t. They are taking away a stream of revenue from questionable actors.

It also means that these new investors in the cryptocurrency ecosystem won’t be mislead by false claims of quick riches. They will be presented with responsible content that gives them the most accurate information on the market.

If there are far less victims in the cryptocurrency markets, there are far less people who can complain about fortunes lost through bad investments. We will read far less headlines about ICOs exit scams that naturally tarnish the reputation of legitimate projects.

In the end, this could be a great move for long term adoption. The less ridiculous ads that people see in their search results and news feeds, the less likely they are to look down on cryptocurrencies.

By only being presented with the best content with the most information, these readers will be forced to learn about the underlying fundamentals of cryptocurrencies and why blockchain technology is so revolutionary.

This create a positive feedback loop for adoption and online information. Serious investors making investment decisions on serious technology.

Keep Calm and HODL On

If the cryptocurrency markets are likely to lose any investors on the basis of fewer cryptocurrency and ICO ads, then that is for the better. Any “investor” that bought into an ICO merely because of a Google ad, should not have been investing.

As the click bait chasing buyers start to subside, the serious adoption of cryptocurrency by the likes of institutional investors can continue. Cryptocurrreny innovation is still moving at a fever pitch and these investors are fully aware of it.

In the long run, just HODL your coins and avoid the FUD that is being perpetuated by the news outlets. They are, after all, also in the quest for clicks with their bait.

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The post Here is Why The Google CryptoCurrency & ICO Ban is Good appeared first on Coin Bureau.

The Current State of GPU Mining and What to Expect

Wed, 03/14/2018 - 20:14

As cryptocurrency prices have been exploding over the past few months, so have the amount of people looking to mine them.

This surge in demand for mining equipment has led to a gold rush as people attempt to get their hands on the latest equipment. One of the most popular pieces of hardware that is used for this is the Graphics Processing Unit (GPU).

These have been the staple of the cryptocurrency miner for a number of years as their raw processing power is beneficial to Proof-of-Work mining algorithms. There are a number of coins that GPUs can turn their hash power on.

However, there are also a number of challenges for the GPU miner that they should be concerned about. One of them is the reaction by the chip makers themselves and the other is the the threat posed by ASICs.

Let’s take a deeper look into the current landscape.

GPU Madness Angers Some

There are many people who are not too happy about the impact that cryptocurrency mining is having on the GPU market and prices. For one, many gamers are complaining about the shortage and how it hits their pocket.

There are also those who use the GPUs for scientific computational experiments. These researchers can often not afford to buy the highly inflated prices of GPUs to complete an experiment that often does not produce a monetary return.

These concerns are also shared by the chip manufacturers themselves. They are concerned that their sales are too highly correlated with that of the cryptocurrency market. Right now they are cresting on a demand wave and worry about downturns.

There are rumors that companies such as Nvidia that are trying to slow supply of their GPUs by placing restrictions on its downstream graphic card partners. They hope that this will have the effect of driving demand back to the original gamers and scientists.

It is also less than certain that these rumors are true. Although Nvidia may not like the irregular earnings that volatile demand could have, they are unlikely to cut off a sizeable chunk of their current demand.

In quite a contradictory stance, they have also decided to increase the prices in order to limit demand from the miners themselves. They hope that this could have the impact of keeping revenue constant in a downturn.

Threat Posed by ASICs
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Application Specific Integrated Circuits (ASICs) have been viewed as one of the biggest threats to traditional mining hardware and smaller miners globally. These are developed for the express purpose of mining particular coins and do so with lethal efficiency.

More technically, these ASIC miners are able to provide their buyers with more computational power per watt of electricity and per dollar of capital. This makes them an attractive option for the miner.

These were initially produced initially for the Bitcoin PoW mining algorithm by a large Chinese company called Bitmain. Taking advantage of some loopholes in the protocol, Bitmain was able to produce these specialized chips.

They have also had the affect of making Bitcoin mining much less decentralized as only the largest mining operations can really afford to buy these ASICs. Now, seeing the effectiveness that these have had with Bitcoin, the manufacturers are developing ASICs for other coins.

For example, a manufacturer called Baikal has announced that they are looking to build an ASIC that will be used to mine the cryptonite algorithm. This is currently in use by coins such as Electroneum and Monero.

The Monero community has viewed this with a great deal of suspicion. This is because given that Monero is a privacy conscious coin, centralization is a threat to that privacy. They have hence decided to hard fork their chain in order to avoid the threat posed by Baikal and their ASICs.

Bitmain is not likely to let the ASIC boom get away from them either. They have actively been developing alternate ASICs. For example, they recently undercut the Siacoin developers when they released an early version of their Antminer A3.

They also have the Ethereum mining industry in their sites. They have been rumoured to be working on an ASIC that can mine using the ETASH algorithm. This is something that the Ethereum developers are adamant should not occur.

They have always claimed that their coins were ASIC resistant and they are likely to implement changes that could prevent this. Moreover, Ethereum is actively looking to move to Proof-of-Stake minion in their upcoming Metropolis upgrade.

Potential for Other Algorithms

Although PoW is viewed as an essential part of the consensus algorithm, there are many who are experimenting with other mining algorithms that are less energy intensive and less dependent on brute force computing.

Currently, the second most popular mining algorithm is Proof-of-Stake. This essentially allows for consensus to be built by those who hold “stakes” in the coins. These nodes are the validating nodes on the network and the coins staked are the collateral that keeps the network honest.

There are also other interesting mining proposals that are gaining steam in the community. One of those is Proof-of-Capacity. This is currently in use with the Burst coin algorithm and allows for coins to be mined directly on the hard drives of the miners.

Price of Gold, Price of Shovels

There is also another much larger factor that is at play with GPU mining prices currently. This is how the expected returns to the miner are likely to be impacted by falling cryptocurrency prices.

So far 2018 has seen a precipitous fall in the price of all cryptocurrencies and this is likely to have a marked impact on the potential return on investment of GPU mining rigs. This will mean that less people will be buying the latest GPUs off the shelf.

There is also the chance that they could attempt to sell the cards that they currently hold. This could have the impact of flooding the second hand market with used GPUs.

However, the computer gamers and scientists should not be celebrating just yet. Cryptocurrency markets go through corrections regularly and this could also be another example of that.

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The post The Current State of GPU Mining and What to Expect appeared first on Coin Bureau.

Tezos Infighting Moves from Board Room to Internet Forums

Wed, 03/14/2018 - 10:44

The cryptocurrency project, Tezos, has fallen on hard times recently.

Not only did they have to recently replaced two of their board members, but the company is also a class action lawsuit. To make things even worse, despite the fact that the company completed its now one billion-dollar ICO back in the summer of 2017, they have still not been able to launch their live main net deployment.

With all this going on, what is the general sentiment towards Tezos? Are people starting to lose faith, or are they still holding strong?

A quick review – What is Tezos?

Let’s take a moment to review what Tezos is. If you’re already familiar, feel free to skip this section.

Tezos is a smart contract and cryptocurrency platform that has several self-governance features. Similar to Decred, Tezos has a system designed to prevent the need for contentious hard forks. It also mitigates too much debate and disagreement locking their blockchain in place and without upgrades.

The company raised a few hundred million dollars last year, and those funds today would now be worth well over 1 billion.

“Timely launch”

According to a press release that came out in February, the Tezos foundation had two of its board members voluntarily step down. This was done in order to “serve the best interests of the Tezos project”.

This ties into earlier troubles that the cryptocurrency project faced in regards to the creators of the project and another board member. They had a disagreement over who owns the Tezos intellectual property rights. And also, over who controlled the money that was raised through the ICO. These issues caused a sequence of delays and even lawsuits against the company, from within the company.

In the February press release, the foundation states that they aim to achieve a timely launch of their project. This phrasing, however, is apparently vague on purpose.

Another lawsuit, which is a class action lawsuit against Tezos is aimed at investors who want their money back. This is presumably because all of the delays and internal strife are causing investors to get nervous. The lawsuit appears to be ongoing at this point.

Tezos community in turmoil

A quick perusal of the official sub-Reddit for Tezos reveals a much higher than usual amount of shouting matches and debates. They are about not only what the community thinks Tezos should do, but also just shouting matches about “apologists” and “complainers.”

Amongst the upset community is calls for the company to return all invested funds and disband. Still others say that they will never sell, and still fully believe in the project and its future.

Does Tezos have a future?

Tezos finds itself in a very difficult spot now. The legal troubles alone are very significant, and have undoubtedly caused at least many months of delays. In the cryptocurrency world, months are and incredibly long period of time.

To make things worse, the community is falling to pieces and lacks a sense of unity or purpose.

Finally, if Tezos does launch, it will find itself rubbing shoulder to shoulder with an ever increasing number of smart contract platforms. Even long-standing projects that previously didn’t support smart contracts are beginning to enter the space, such as DigiByte and Bytecoin, just to name a few.

Not only that, but many other smart contract competitors have been active for quite some time, and as such have already grown supportive and solid communities.

While the situation for Tezos may seem grim, it does appear that enough of the community is willing to back it, if and when it launches. Further, the company has such a large cache of wealth that it’s entirely possible they could use this to pick themselves up and get a running start.

Featured Image via Business Insider

The post Tezos Infighting Moves from Board Room to Internet Forums appeared first on Coin Bureau.

Everything You Need to Know About Zero Knowledge Proofs & zkSNARKs

Tue, 03/13/2018 - 17:02

Zero-knowledge proofs are cryptographic alchemy whose value lies in their seemingly paradoxical property of proving a statement without revealing anything about it. In a manner of speaking, a verifier given a zero-knowledge proof is supposed to be told by God that this is so.

However, God’s function in the context at hand is one of the underlying protocol, or setting, in which the scenario takes place. And importantly for the purpose of blockchain agencies as institutional bodies, it enables the forcing of  malicious participants in a protocol whereby they execute in accordance with predetermined steps to ensure global security within otherwise cloaked privacy.

If I had but the time and you had but the brain.

― Lewis Carroll, The Hunting of the Snark

The P and NP Complexity Zoo

A few fundamental notions are important to understand in acquiring a good intuition about zero-knowledge proofs as they relate to blockchain technology. In computer science, the P class problems refer to problems which can be solved by a reasonably fast program on a computer of some sort (Turing machine or other model), or in other words for which there is an implementable solution which can be refined in what is called polynomial time (in effect, synonymous with fast time).

Most importantly, polynomial expressions (from Greek, “many names”) are not exponential functions (i.e., to the power of), but map to arithmetic circuit problems of linear, quadratic, cubic and similar types, where the number of steps required are acceptable compared to the size of the problem. That is to say, problems involving things like mazes, multiplication, etc. or which can be reduced to such problems.

The polygraph, a double-entry machine

In the fabric of blockchain, where enactment of transactions is massively replicated in the singular ledger among many distributed nodes reproducing the same outputs (similar to polygraph lie detectors, in basic principle), it is important that the number of computational steps in a set of instructions is kept at a minimum.

This is why zero-knowledge proofs in such environment need to be “succinct” and not require reproducing the execution in order to demonstrate validity of that execution.

The NP (for non-deterministic polynomial time) complexity class on the other hand describes problems where the soundness of their solutions have proofs which can be efficiently verified by deterministic computations in said polynomial, or let’s say linear-sequential blockchain time.

That is, the mental work necessary for solving a particular problem can be reduced or converted to a simpler problem which is capable of mechanizing the process of thinking that unfolds a particular binary decision tree.

And since blockchains as such require strict determinism to maintain integrity of global consensus (the same input must always produce the same output with little to no deviation), they scale much better if engaged to only verify/read instead of executing/write.

zk-SNARKs in this scenario optimize a way of using the blockchain as a verifier of general computational integrity off-chain, with verification times on-chain magnitudes faster than execution times, in the logarithm (that is, the inverse of exponentiation) of the steps or cycles involved (measured in gas expenditure on the Ethereum blockchain).

This has many potential applications, from using the blockchain agency as a mediator of institutional transactions to cloaking large sum balances and transactions away from the attention of maliciously prying eyes, preventing bandwagon and bot-activated “whales” effects to complementary scaling solutions and possibly engaging the blockchain as a kind of malware detector.

And possibly even more broadly to how the most precious societal resource of trust as such is re-articulated and behaviourally translated back in facilitating human cooperation in game theoretical scenarios previously not in equilibrium.

Zero Knowledge Proofs

Zero-knowledge proofs are, in essence, cryptographic constructions which investigate how far can formal logic be taken in solving tricky problems. In a ZKP a prover, Peggy and a verifier Victor (in place of the proverbial Alice and Bob) interact in a series of steps in such a way that Peggy is able to prove to Victor the validity of some statement without revealing anything about that statement, given that both follow the constraints of the same protocol.

The basic idea is illustrated in common cryptography folklore with the well-known example of Ali Baba’s cave. Imagine a ring-shaped cave with an entrance and a magic door on the other end blocking the sides.

Peggy wants to prove to Victor her knowledge of the secret phrase that opens the door without revealing that phrase. So, Victor waits outside a bit, then goes in and shouts which side he wants Peggy to show up from. This is repeated until the probability of Peggy simply having turned out lucky approaches zero.

Ali Baba’s Cave. Courtesy of Scott Twombly

The concept of interactive zero-knowledge proof systems was first introduced by Shafi Goldwasser and Silvio Micali in the late 1980’s, and the general assumption of how the proof of a given statement as such contains more knowledge than the sole true/false validity of that statement (making use of auxilary inputs, “trapdoors”, etc.) underpins much of modern cryptography since.

A zero-knowledge proof must by definition satisfy the following three properties:

  • Completeness: If a statement is true and both parties follow the same protocol correctly, then the verifier naturally becomes convinced.
  • Soundness: If statement is false, the verifier will almost certainly not be convinced (Probabilistically Checkable Proof constructions rely on repetition until probability of falsehood or plain coin flip luck approaches zero).
  • Zero-knowledge: The verifier learns no further information.

Taking up upon that, Micali and Manuel Blum soon followed further investigating the possibilities of saving up on precious resource by eliminating the communication rounds of interaction (which tend to be the most computationally expensive) and instead relying on a common reference string derived from a shared or public random beacon (for instance, the same Geiger counter).

In the past 20 years, research on zero-knowledge proof systems has been gradually improving with focus on optimizing their efficiency for specific applications and improvements in different parameter scenarios, yielding dramatic reductions in both the length of the common reference string and the size of the proof.

zk-SNARKS: Zero-Knowledge Succinct Non-Interactive ARgument of Knowledge

A zk-SNARK construction involves three interplaying algorithms:

  • A key generator: Setting up the parameters for generating a key pair. For example, a trusted set of people generates a private/public key pair, destroys the private part and then from the public part another key pair is generated, producing a proving and a verification key for some given program.
  • A prover: The prover takes the provided proving key, a given public input and a private witness such that it satisfies the intended context of the program, and generates a proof.
  • A verifier: Verification is computed from the verification key, the public input and the provided proof and evaluates to either true or false depending on whether the proof is correct or not (in the context of what is being verified to satisfy what).

To depict this more vividly, two polynomial strings are produced which are expected to not deviate much from agreeing most of the time given legitimacy, and then a number of quick random checks are performed at arbitrary spots to ensure they do agree.

ZCash Implementation
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Since bitcoin transactions can be de-anonymized by tracking and analyzing cash flow patterns (even regardless of laundry mixers), ZCash constructs a decentralized anonymous payment scheme on top of the Bitcoin code base via implementing the above general mechanisms (in specific implementations, such as the Pinocchio protocol, originally developed as a practical method for verifying outsourced computations).

It provides two regimes of blockchain broadcasted transactions: transparent and shielded. The first are similar to regular bitcoin transactions, but users are provided with the optional privacy feature of concealing sender, recipient and amounts transacted and thus having their transactions go in the latter, shielded pool. Discretional “selective disclosure” allows for proving legitimacy to auditors, while avoiding what other radars may trigger.

The trusted setup phase in ZCash involves an intricate ceremony following a Multi-Party computation protocol in which a set of participants spread in different geolocations cooperatively assemble the public key and destroy their corresponding private shards. In the given protocol it suffices that just one participant successfully erases their private key to make it impossible to reconstruct the whole private key from which the public one is subsequently derived.

A quantum-resistant alternative to circumventing this kind of trusted setup comes with the active research into zk-STARK constructions (Scalable Transparent Argument for Knowledge) by Prof. Eli Ben Sasson and others in Technion, Israel’s Institute of Technology.

ZoKrates: Proof-of-Concept Toolbox Implementation on Ethereum

ZoKrates is a prototyping toolbox (as of yet not too powerful) for creating and verifying zero-knowledge proofs in Solidity Ethereum Smart Contracts. It provides a high-level language (although still in early experimental stage) for writing programs and verifying their execution on-chain with support for a setup phase, witness computation and proof generation.

The python-like syntax is composed of primitive uint types (positive numbers), imperative algebraic statements, for loops, conditional if statements and function definitions. The compiler transforms the conditions to a constraint system of an arithmetic circuit (think sudoku) from which a zk-SNARK is generated. The verification key can then be exported to a smart contract allowing for verification of proofs on the blockchain.

The building blocks for the on-chain verification algorithm reside on the blockchain as pre-complied contracts and the outcome of the verification algorithm on a provided proof can be used to further trigger other on-chain activity (i.e., if true then).

This allows, for example, for creating a token contract with confidential balances, while additionally allowing (via the ERC-621 extension) for increasing and decreasing the supply of the meta-currency or token.

Users, however, must keep track of their balances client-side (since they do not show on Etherscan) and above all, it must always be remembered that the Ethereum platform provides the ultimate testing playground for economic theories and ideas within the resource constraints of reality chaining gas expenditure, the component of which is what tends to force economic thinking about problems.

Integration on Quorum Blockchain

On May 22nd, 2017 ZCash announced Proof-of-Concept of their privacy layer technology on JP Morgan’s enterprise Ethereum-based Quorum blockchain, which was followed by a price jump in ZCash (as they also shortly after joined the Ethereum Enterprise Alliance).

Quorum is a minimal Ethereum fork featuring its own smart contracts language (Constellation) designed specifically for the institutional financial markets, and since zero-knowledge proofs walk the thin line between personal privacy and institutional integrity it makes them ideal for ensuring private settlements of digital assets on the Quorum ledger.

Noteworthy, in developing their own enterprise blockchain framework, JP Morgan have in the past substantially contributed to the development and hardening of the public chain in the process.

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The post Everything You Need to Know About Zero Knowledge Proofs & zkSNARKs appeared first on Coin Bureau.

Proof of Capacity Explained: The Eco-Friendly Mining Algorithm

Tue, 03/13/2018 - 09:29

When it comes to mining cryptocurrencies, there are currently two well established protocols and they are Proof-of-Work (PoW) and Proof-of-Stake (PoS).

However, there is a third mining algorithm that many people may not have heard of: Proof-of-Capacity.

Indeed, it is not entirely unreasonable to assume this. Proof-of-Capacity is a really new mining algorithm that is currently only being used by one Cryptocurrency called Burstcoin.

Despite this though, there are many who think that proof of capacity is a viable alternative to the currently established methods of mining. So what is Proof-of-Capacity and why is it viewed as such a great mining solution?

Before we go over the technicalities of PoC, it helps to take a look at how the popular mining algorithms currently work.

Established Mining Protocols
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PoW is currently one of the most well established mining protocols. This basically requires a miner to use computer resources to solve complicated mathematical hash functions (the “Work”). In the case of Bitcoin, a well-known hashing function called the SHA 256 function is used.

These hashing functions are one way functions that can only have one solution. They require this raw computing power in order to find the exact function input to get the right function output. One of the input variables in the hashing function is the “nonce”.

The nonce is the variable that the miner will continually iterate through until they are able to produce the right hash. This is brute force computing that requires a great deal of energy and resources to solve. As Bitcoin difficulty has increased, so too has the amount of power required to find the right nonce.

Proof of Stake mining (PoS) is quite a different concept from PoW mining. In this, miners have to hold a particular “stake” in the cryptocurrency in question in order to take part in the transaction verifications.

These stakers or “validators” will be a node and will create the new blocks based on the amount of coins that they currently hold in their wallets.

The Need for Alternatives

While the PoW algorithm used to work well when Bitcoin was a relatively nascent technology, the growth of the network has been exponential. The Bitcoin protocol is designed in order to increase mining difficulty in order to keep block times constant.

The result of this is that the mining difficulty has become so complicated that only the most advanced machines called Application Specific Integrated Circuits (ASICs) can mine the coins. They also require an immense amount of power in order to solve the hash functions.

For all the miners that are not able to solve the hash functions in time, the energy that they have expended will be wasted. The result of this is runaway energy costs that many see as bad for the environment.

While PoS mining can be less energy intensive, there are other externalalities that many cryptocurrency advocates have problems with. This is the notion of centralisation in the mining process. Staking coins means that those with the most coins can have more say in the mining process.

This means that the smaller mining operations will have much less of an impact on important decisions that are made by the larger nodes.

Hence, there is a great need for an alternative mining algorithm that is less energy intensive than PoW and allows for proper decentralisation of the network. This is where Proof-of-Capacity comes in.

What is Proof of Capacity?

Proof-of-Capacity is a consensus algorithm where miners will “plot” their hard drives in order to take part in transaction verification. In other words, the miners will compute and store the solutions to the mining problems before the mining has even begun.

There will be some solutions that will be achieved faster than others and these will be the ones that are chosen in the consensus round. These miners will be awarded the block and hence the coins applicable to that.

These solutions have to be calculated prior as they are too complicated to solve in real time. Moreover, the block times are really short at an average of 1 block every 4 minutes (compared to Bitcoin’s 10 minutes). This is why the solutions to the hashing algorithm must be saved prior.

The way that a miner is able to increase his / her chances of winning the block reward is by making sure that they have the most solutions (plots) saved on their hard drives before hand. This will increase the chances that your solution is the fastest.

How Does Proof of Capacity Work?

There are two components that make up the Proof-of-Capacity, these are Plotting and the mining on the hard drive. Plotting is the first stage and this involves you creating your unique plot files.

Plotting makes use of a hashing function called Shabal. This hashing algorithm is much harder to compute than the SHA 256 variant used in the Bitcoin protocol. Hence, the miners will compute the solutions to the Shabal algorithm in advance and store them on the hard drive.

Plotting the Hard Drive

When you plot your hard drive or create the plot files, you are producing nonces. This is slightly different to the Bitcoin nonce in that it is generated from the plot file. You will continually hash your data including your particular ID until you have solved the nonce.

Each of the nonces will contain 8,192 hashes and these are bundled together into a number of pairs that are termed “scoops”. In total there will be 4,095 scoops that will each be assigned that unique number. Below is a graphical example of the scoops.

Example of Nonce and Scoops. Image Source: Mining on the Hard Drive

One of the results of the calculation will be the scoop number. This scoop number will be between 0 and 4,095. The resulting scoop number and the corresponding nonce will be used to calculate a unit of time called the “deadline”.

This will be completed for all of the nonces that are on your hard drive and you will then select the shortest deadline. This minimum deadline is the amount of time that will pass since the last block was created until you can produce a new one.

If the deadline that you are able to produce is shorter than those of the other miners then you are allowed to create the new block and you will be entitled to the block reward.

Benefits of Proof of Capacity Mining

Given the many challenges that are faced by more traditional mining algorithms such as PoW and PoS, Proof of Capacity consensus algorithms have a number of advantages.

  • Mining with a hard drive is markedly more energy efficient than using specialised equipment such as an ASIC or regular GPUs. This will assuage the concerns of numerous environmentalists.
  • Miners who had invested in highly specialised mining rigs and ASIC chips would not have an advantage in mining the coins. This is often viewed as one of the drawbacks of the Bitcoin protocol.
  • There is a greater degree of diversification with Proof of Capacity. This is because of the low barriers to entry of obtaining a hard drive. They are usually quite cheap and allow more miners to jump into the fray.
  • The hard drive can be reused as normal pieces of equipment once you are done mining. Given that they are not so specialised, you can merely delete the data once you are finished and they are good as new. This cannot be said for ASICs.
  • There is very little optimisation benefits of newer hard drives (apart from size). Hence, the latest equipment is not a prerequisite for getting an edge on the mining of the coins.

Perhaps this is the reason that many in the cryptocurrency community are looking to the mining algorithm as a new panacea for an eco-friendly decentralised alternative. However, there are a number of cons that exist with Proof of Capacity mining. These include the following:

  • The data that is plotted on the hard drive is of no use beyond the mining of the coins. This means that there is a great deal of space that is left redundant.
  • Although there are lower barriers to entry with Proof of Capacity mining, people could also buy larger hard drives. There is nothing stopping an individual from purchasing much larger hard drives and using them to mine most of the coins. This could impact on the network decentralisation.
  • If the mining becomes popular then there is a possibility that it could be exploited by hackers. Currently, mining malware has proliferated exponentially to numerous computers around the world. These can sometimes be identified as PoW mining slows down the PC. However, with Proof of Capacity it is much harder to tell whether your spare hardware space is being used for illicit purposes.
“Proof” is in the Pudding

Proof of Capacity is no doubt one of the more interesting mining algorithms. Not only does it rethink the way mining has been approached over the past few years, it is also a solution that many see as ecologically sustainable.

It also lends itself well to the panacea of most crytpocurrency advocates: a perfectly decentralised ecosystem.

It is still a new concept and has not been used on the same scale that other algorithms have. It remains to be proven whether Proof of Capacity can overcome a number of the scaling obstacles that more established blockhains such as Bitcoin and Ethereum are facing.

Nevertheless, all innovative technology starts out as a simple use case and is further improved as obstacles are presented. It will be interesting to see how much Proof of Capacity can impact the cryptocurrency ecosystem.

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Shaping up ShapeShift – Our Review of the Instant Crypto Exchange

Mon, 03/12/2018 - 10:13

Cryptocurrency exchanges can be daunting, confusing, and even risky. The standard exchange format requires that you first make an account, pass an identity verification (in many cases), deposit cryptocurrency, make your trades, and then ideally withdraw.

When you deposit and withdraw, you pay fees each time. The exchange itself also incurs a fee. Even worse, exchanges are famous for getting hacked, so your assets could potentially be at risk. In response to this, a cryptocurrency exchange called ShapeShift appeared a few years back and offers a paradigm that we now call instant exchanges.

Today, we’re going to look into ShapeShift, see what it’s all about, and how it compares to its modern-day competitors.

How ShapeShift works

ShapeShift takes a different business model than other exchanges. It uses and account-free model where anyone can anonymously create a transaction to exchange from one cryptocurrency to another. The process is entirely automated.

A completed ShapeShift exchange

Let’s say, for example, that you want to exchange some Litecoin for some Ethereum. You open the ShapeShift website, choose your desired cryptocurrencies, and choose if you want to exchange a specific amount or a non-specific amount.

The difference here depends on how picky you are. If you want to know exactly how much Ethereum you will receive in exchange for your Litecoin, you’ll want to do a “precise” exchange as ShapeShift calls it.

Once you enter the amount that you will deposit, ShapeShift will tell you immediately how much you will receive. If you use the “quick” method, then you will instead simply be presented with a deposit address, and ShapeShift will send you whatever the equivalent Ethereum is, minus their own fees.

The advantage of using the quick method is that you can create a reusable deposit address. Let’s say for example that you have an employer that pays you in Litecoin but you want Ethereum. Instead of needing to exchange it every time, you could create a reusable Litecoin deposit address.

Each time your employer pays to that address, what’s really happening is they are paying ShapeShift. ShapeShift will then send you the current up-to-date exchange rate for Ethereum.

ShapeShift’s “built-in” program

A few cryptocurrency wallets now support ShapeShift exchanges from within the program. This is because ShapeShift offers an API that allows for wallet developers to include ShapeShift service directly within their wallets. Two examples of this include Exodus and Jaxx. It should be noted, however, that Exodus takes a small cut of every exchange that is done within their wallet. This is how Exodus funds its development.

Wallets that offer ShapeShift services may not necessarily offer all the trading pairs that ShapeShift has. This is because not all wallets will support all assets. Today, ShapeShift supports a fairly wide number of assets, but certainly not all assets that are available in the markets today. For example, ShapeShift does not support PIVX or FunFair (anymore), to name a few.

How does ShapeShift compare to the competition?

There are now several alternatives to ShapeShift that offer similar instant exchange services. Each one supports different cryptocurrency assets, and they typically have different exchange rates.

We wanted to do a simple test to demonstrate how ShapeShift exchange rate differs from its competitors. We did an example of 1 ETH to LTC.

ShapeShift – 3.81126679 LTC Flyp.Me – 3.82058803 LTC – 3.7977472764 LTC – 3.781 LTC

As you can see, ShapeShift is largely in line with its competition, with Flyp.Me offering just slightly more for this particular pairing, and at this particular time. It should be noted as well that we took these screenshots within a five-minute window.

You can buy bitcoin with a credit card, but you probably shouldn’t

Recently, ShapeShift started offering a service where users can purchase bitcoin with a credit card. This puts them in direct competition with other major blockchain players such as Coinbase.

However, once you enter your details, you are faced with a screen that shows that the transaction includes a crushingly large fee of 12.5% (if buying $100 worth of crypto). If buying a similar amount of bitcoin on Coinbase, one would expect to pay almost half of that fee.

However, Coinbase requires that you create an account and upload identification documents. ShapeShift does not have that requirement. To some people, this could be an important distinction. If, however, like most people, you want to pay the lowest possible fees, then ShapeShift with a credit card is probably not for you.

Is ShapeShift a good exchange?

ShapeShift is not perfect for everyone. This is because exchange fees on an instant exchange are going to be higher than on a traditional one. This is especially true if you’re a high-volume trader. Most traditional exchanges offer lower fees for those that meet certain minimum activity requirements.

On the other hand, if you are a casual trader or one that makes no more than one or two exchanges a week, then an instant exchange services like ShapeShift could be perfect.

Just make sure to shop around at other sites to see if you can get a better rate, as rates could be different each day depending on market conditions.

Featured Image via

The post Shaping up ShapeShift – Our Review of the Instant Crypto Exchange appeared first on Coin Bureau.

Comprehensive Guide to PoS Mining: What you need to know

Sun, 03/11/2018 - 19:00

Mining in cryptocurrency is the process of securing and verifying transactions (called blocks) along the blockchain. Cryptocurrency mining (also called crypto-mining); helps to maintain network security by ensuring that, only valid blocks are recorded on the digital ledger.

Participants in a mining process get rewarded for dedicating their resources and time to solving computational algorithms.

Cryptocurrency mining can be done in either Proof of Work (PoW) or Proof of Stake (PoS) consensus, depending on the coin.

In this article, we examine what Proof of Stake is, how it works and which coins currently use this method.

What’s Proof-of-Stake?

Proof of Stake is a consensus algorithm whereby new blocks are secured by validators before being added to the blockchain. In proof of stake mining algorithm, a person (node) can participate in the mining process by “staking” a given amount of their coins to be allowed to validate a new transaction.

The PoS is a deterministic concept that simply states that an individual is only able to mine or validate new blocks equivalent to the number of coins they possess in their staking account.

It implies that the more coins you have, the higher your mining power, i.e., the more coin you have in your wallet, the more transactions you can validate to earn block rewards.

How does Proof-of-Stake work?
Image via Fotolia

In Proof of stake consensus algorithm, miners (called validators, delegates or forgers) are chosen or voted for randomly by holders of the native coin on the network.

When you hold a given amount of coins in your wallet for staking, your computer qualifies to be a node. For a node to be chosen as one of the stakers, they need to have deposited a certain amount of coins in a bound wallet.

The chosen validators then stake the required amount of coins using the special staking wallets. The node will forge or create new blocks proportional to the number of coins in their wallets. For instance, if you have 1% of all the coins, then you can “mine” 1% of the new blocks.

Different coins use a variety of PoS systems, but they all work the same by helping verify transactions and to secure the network. Validators get rewarded with block rewards as well as a share of the transaction fees collected per block.

What about Proof of Stake Pooling?

It is possible to pool funds to participate in staking and earn profits from coins that have very high staking amounts. There are two ways to do this. You can give your coins to another user who will stake and then share profits with you.

This of course should be with a reliable person known to you. The other method is to join a staking pool. Here you get to join some of the biggest holders.

Benefits of a PoS consensus system
  • Proof of Stake consensus mechanism doesn’t require specialized and expensive hardware to run. You only need an internet connection and a functional computer setup.
  • Anyone with enough coins to stake can validate transactions on the network.
  • Investments in a PoS system do not depreciate with time like what happens to ASICs and other mining hardware. A validators’ initial stake can only be affected by price fluctuations and trading rates.
  • Proof of Stake is more energy efficient and environmentally friendly than Proof of Work regarding power consumption.
  • Reduced threat of 51% attack.

Although the PoS consensus algorithm indeed does sound great, there is one disadvantage and that is that decentralisation is not fully possible.

This is because staking can still be monopolized be a few of the nodes on the network. Those that have the most coins can effectively control most of the mining.

Most Profitable POS Coins to Consider

When you invest in a Proof-of-Stake coin you have the added benefit of not only of the possible appreciation in the value of the coin but also of the returns on possible staking.

But which are the best PoS coins to invest in currently. Below are a few you may want to consider.


NEO is a decentralized blockchain platform that seeks to develop a smart economy using cryptocurrency and blockchain technology. NEO’s proof of stake algorithm uses the delegated Byzantine Fault Tolerance (dBFT).

Participants on the NEO platform can stake their coins to earn a reward in the form of “GAS”. When staking with the NEO gas, all you need is to have the NEO coins in your NEON wallet.

You get an annual reward worth 5.5% on all the coins you stake. The best thing about NEO staking is that you do not have to be online all the time.


Lisk (LSK) uses a form of staking called delegated Proof of Stake consensus algorithm. To participate in securing and verifying transactions on the Lisk platform requires you to have enough LSK and be one of the top 101 delegates.

A delegate is an account that has been voted for by other LSK holders to complete transaction blocks. Delegates are chosen through voting on a rolling basis. You get rewarded with LSK for generating new blocks and securing the blockchain.


Stratis (STRAT) is a blockchain-based cryptocurrency platform built in the C# code. Its token coin STRAT is used when generating new transaction blocks using Proof of Stake consensus mechanism.

Staking is done using the Stratis Desktop Wallet. When you stake your STRAT coins, you earn an annual interest of 5.1%. This is in addition to the block rewards and transaction fees shared among stakers. Read more about it here.


PIVX stands for Private Instant Verified Transaction. PIVX is a privacy-oriented blockchain based cryptocurrency. It forked off DASH in 2016 and fully implemented the proof of stake consensus algorithm.

The crypto doesn’t have a minimum or maximum staking amount, which means even those with the least amount of PIVX, can still participate and earn rewards.
Staking is enabled using the PIVX Desktop Wallet.

To run a master node and therefore earn more in rewards, you need to have 10,000 PIVX. From these, you get an annual approximation of 5% return on investment (ROI).


OkCash was launched in 2014. It is a cryptocurrency suitable for micro-transactions and uses the proof of stake consensus mechanism to secure and verify transactions on its network.

OkCash provides the one of the best ROI on staking. To participate, a user transfers OK coins into a special staking wallet. The bonded coins will be used to verify transactions while they earn rewards in form of OkCash.

Staking on the OkCash network will earn you an annual return of 10% on the value of your stake. OkCash is a low-barrier coin because it doesn’t have any caps on the amount you can stake.

NAV Coin

NAV Coin is a cryptocurrency built on Bitcoin’s code. It is a Proof of Stake coin that has distinguished itself as a dual blockchain suitable for private transactions.

You can earn up to 5% returns on top of your stake. Staking with NAV, the native coin, is done on the NAV Coin Desktop wallet. As with OkCash, NAV Coin has no caps placed on you can stake.


Cryptocurrency mining is one way of getting crypto coins into circulation. Proof-of-stake is similar to POW in this respect. However, as decentralization and cheaper transactions become more important, the use of PoS could help by cutting on hardware costs and electricity needs.

That’s why we have Ethereum implementing its Casper protocol that will see it move from a Proof of Work system to a proof of stake mechanism. When it does, it will be one of the best due to its popularity and market cap.

Other Cryptocurrencies that you can stake to earn rewards are NXT, PeerCoin, Stellar and Bitshares.

Featured Image via Fotolia

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Red Number Day: The Shadow of Mt Gox Strikes, Bitcoin Price Tanks

Fri, 03/09/2018 - 15:07

In what seems to be an almost never ending chain of FUD, today turned out to be another serious “red number day” for cryptocurrency.

A few culprits have been accused of causing most of the dips, the biggest of which is actions made by the Mt Gox trustee in Japan. In this article, we’re going to review some of the FUD going on in crypto today, as we try to figure out which ones are causing the slide.

The Binance “hack”
Image via Fotolia

A number of users on the Binance exchange were very surprised to see that their accounts had suddenly sold all of their non-bitcoin cryptocurrencies for bitcoin, and then promptly place overpriced orders for a little-known altcoin called VIA.

It was quickly revealed that the attack was a highly coordinated one that took several months to arrange. The hackers made use of a “homograph” technique in order to lure unsuspecting users into entering their credentials into the fake site.

For those who don’t know, a homograph technique is one where look-alike characters are used. In this case, letters that, at first glance, appeared to spell the correct address were in fact ones that had very slight accents on them. And so to a computer, it was an entirely different address.

Unfortunately for the culprits, it appears that they not only failed to get any earnings out of the attempt, but they may in fact have lost money. The Binance exchange employs automatic threat detection software. That software spotted the bad accounts and locked them down immediately.

So not only can the hackers not get any funds out, but any funds they spent purchasing VIA in an attempt to sell it off at a massively inflated price is also permanently locked.

Regardless of the somewhat happy outcome, the FUD spread quickly, and news of the hack may have been partly responsible for prices dipping.

Japanese government goes after exchanges

According to a Tokyo-based Bloomberg tech reporter, the Japanese FSA is starting something of a crackdown on cryptocurrency.

In a tweet posted on March 7, reporter Yuji Nakamura noted that two exchanges will be shut down temporarily, four will be penalized, and two will have their license applications withdrawn. Further, exchange Coincheck cannot return any funds until they have undergone more audits.

This crackdown appears to be a response to both recent hacks that have occurred on Japanese exchanges, as well as for two of the platforms failing to meet AML and KY see rules.

Any FUD that hits Japan will inevitably hit the world at large. This is because the Japanese yen represents as much as 50% of all global cryptocurrency trading.

The never ending saga of Mt Gox
Image via Wikipedia

This particular saga is one that is long and frustrating. If you like more information about where this all started, we suggest you read our take on the Mt. Gox hack.

Following what has become the single biggest cryptocurrency hack in history, the Mt Gox fortune is now held by a trustee (lawyer) in Japan where the exchange was registered. The trustee has been overseeing a incredible horde of hundreds of thousands of bitcoin, and now an equal number of Bitcoin Cash.

Based on what can be seen on the bitcoin blockchain, and also according to a report released by the trustee themselves, a selloff has occurred and a large amount of bitcoin and Bitcoin Cash have been sold, some of which at comparatively low prices. In the report, the trustee notes:

Between the 9th creditors’ meeting and this creditors’ meeting, with the permission of the court, I sold a certain amount of BTC and bitcoin cash (“BCC”) that belonged to the bankruptcy estate.

Whenever a massive selloff occurs, prices usually dip in response because there’s so much supply on the market looking for buyers. In this case, the amount being sold all at once is sort of unprecedented. As many altcoin prices are tied to bitcoin, prices for most crypto assets dropped across the board today.

Typically by 10% or more. Ethereum in particular has been hit quite hard. It went from an all-time high of around $1400 to just over $600 today, meaning it dropped by more than half in value since January.

Never-ending FUD

One significant weakness that the cryptocurrency world has is its dependence on bitcoin as an underlying asset. Whenever bitcoin drops, everything drops in response. At least, when it comes to the comparative fiat values of the altcoins.

It is inevitable that more dips of this sort will continue to occur for at least the next few years. This is because many people still do not understand the true nature of bitcoin and cryptocurrency. And so, they will likely continue to overreact to these sorts of announcements by panic selling.

It is only when cryptocurrencies at large have had more than enough time to mature that these sorts of spikes will be lessened.

Featured Image via Business Insider

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Introduction to 0x: A Decentralized Exchange Platform for ERC20 Tokens

Fri, 03/09/2018 - 03:41

Exchanges may be a necessary evil in the world of cryptocurrency. If they are famous for one thing though, it’s for getting hacked. If they are famous for a second thing, it’s probably terrible customer service.

The concept of a decentralized exchange has been floating around for a while now. A few exist already, and so far the results are fairly promising. Although, they are not without their faults. 0x project wants to create a decentralized exchange network just for ERC-20 tokens.

The team behind it claim that its system will significantly reduce gas fees for sending tokens. The network will also allow for some participants to earn transaction fees for participating.

What is a decentralized exchange?

Let’s start out with a quick review of what a decentralized exchange is. If you’re already familiar, you can safely skip to the next section.

Most cryptocurrency exchanges today are centralized. This means that all trades occur through a single service. Further, all assets stored in the exchange are typically held together. It is this centralization that both makes them convenient, and dangerous.

A decentralized exchange, on the other hand, addresses the problem in a different way. Instead of having a central website, server, and set of wallets, all of these network components are spread out amongst different participants.

This leads to there being no single point of failure. In terms of security, decentralized exchanges never hold any assets, and only facilitate trade typically through smart contracts. This means that hackers do not have a single high-value target in which to go after.

There are currently quite a few decentralised exchanges on the market such as the Waves platform and EtherDelta.

What is 0x all about?
Comparison of Exchanges – Image via

0x project is not about making a company or website, but a system to facilitate decentralized trading on. 0x has created an API upon which anyone with enough skill can create interfaces to the network. These interfaces could potentially be apps, websites, and so on.

Aside from being decentralized, the other main goal of the project is to offer significantly lower transaction fees. Today, sending ERC-20 tokens requires transaction fees that are paid in Ether. The general rule of thumb is that sending ERC-20 tokens has a higher cost than just sending Ether directly.

Based on what we can find in the white paper, it appears that 0x is attempting to make something that, at least on the surface, looks like what the Lightning Network is doing for bitcoin. Specifically, it’s offering a way to perform most of the heavy lifting off the blockchain.

In addition to being able to process lower-cost trades, the 0x network has another feature. Some users can choose to become what’s called a relayer. These users participate by hosting a shared order book with other nodes, and propagating other important information on the network.

In exchange for participating in this way, they can earn 0x tokens from transaction fees. The amount of fees earned, or charged, is entirely up to the individual.

The team states that they think this type of economic model will lead to healthy competition and fair prices. The official website says that anyone can become a relayer. So it’s possible that the requirements are low.

0x has a test version running now, but the full version is not available yet.

Who is behind 0x?

The group that is running the project is based in San Francisco, California. It is run by the two cofounders, Will Warran and Amir Bandeali. The two cofounders are supported by a large team of skilled people, such as previous employees of Apple, Twitter, Instagram, Facebook, and Qantas to name a few.

The project also has several advisors, including several high-ranking members of former members of Coinbase, and the founder of Augur, a prediction market that is also based on Ethereum.

0x Tokens
Image via

Today, 0x tokens are trading for about $.70 each. The tokens have quite a large supply, with 500 million already in circulation, and a total 1 billion available eventually.

At their highest point, the tokens were going for $2.37. But prices have followed the general downward trend since January to reach where they are today. At its lowest point in early December of last year, the tokens were just $.23 each.

The majority of trade volume each day is occurring on Binance, followed by Poloniex with less than half the volume. In total the tokens are listed on 46 trading pairs among a number of different markets.

Final thoughts

As the usage of ERC-20 tokens continues to grow, the demand for low-cost ways of moving them around and trading them will be inevitable.

While there has been word of Plasma-based solutions such as OmiseGO, a market that is entirely focused on ERC-20 tokens will likely offer several advantages over other decentralized markets that are not specializing in that field.

The team seems to be full of high-powered expertise, and they undoubtedly know what they’re doing.

Token prices have seen a lot of volatility since they launched, but this is understandable as their main net launch still has not occurred yet. Quite likely, prices will begin to stabilize or at least follow a more linear trend once this happens.

Featured Image via

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Worldwide Asset Exchange: Comprehensive Review of WAX

Thu, 03/08/2018 - 06:15

In addition to logistics, charity, and medicine, the gaming industry is also well poised to utilise the benefits of blockchain technology.

The world of online gaming is set to be disrupted as industry pioneers use the blockchain in order to solve current problems.

WAX is offering a decentralized peer to peer trading protocol for online video game assets, and the WAX team are hoping to serve over 400 million online players who buy, sell, and collect unique in-game items.

What is WAX?

WAX (Worldwide Asset Exchange) is a decentralized platform that enables anyone to create and operate their own virtual marketplace. Without needing to invest in security or payment processing protocols, users can run a fully functioning virtual marketplace for digital assets.

WAX has been developed by the founders of OPSkins, the leading marketplace for online video game assets, and the platform also allows both current and future marketplaces to interact via the use of the native WAX token.

The project currently has offices in both Canada and the USA and the WAX team is fronted by the top brass at OPSkins.

WAX Team Members

CEO William Quigley is also the CEO at OPSkins, while lead designer John Brechisci Jr is both an OPSkins founder and CTO. Jonathan Yantis holds the COO position at both companies, whilst OPSkins CIO Malcom CasSelle also acts as the President of WAX.

What Problem Does WAX Solve?

The practice of trading virtual goods or “skins” that can customize in game appearances is well established in the online gaming community.

However, up until recently, there was no single marketplace that provided easy access to sellers of various skins, and exchanging the virtual goods often involved visiting online forums with poor reputations, or hoping for chance encounters.

Trades also required a high degree of trust as exchanges often took place on different platforms and fees could vary wildly depending on the seller.

WAX President Malcom CasSelle recently elaborated:

The vast majority of gamers who buy and sell virtual assets today are likely to have their items stolen or pay exorbitant fees through cross-border transactions, unless they go to a centralized trading platform. The ideal solution to this problem is a global virtual asset repository, accessible to anyone, which provides a complete catalog of all items available for sale in real time

Traditionally, in order to trade in game assets it was necessary to carry out an exchange where one party sent over a payment in the hope of receiving their item.

There remains a brief gap in time where either party could get scammed for their money or item. WAX streamlines the procedure by providing a secure platform that guarantees the delivery via a decentralized, trustless system.

Overview of WAX

Steam provide an alternative to this system in 2012 and the Steam marketplace has proved to be popular with gamers, however, Steam operates a centralized platform that isn’t integrated with alternative systems and any funds earned on the platform are only valid on the Steam market.

How Viable is the Project?

WAX is run by the founders of OPSkins, which is the leading marketplace in the world of online video game assets and despite starting less than three years ago, the company already boasts transactions of around two million per week and 100 million per year.

OPSkins also has millions of current users while the highest transacted item on the platform was worth $35,000. As a result, WAX is legitimately targeting a market of over 400 million gamers that is worth approximately $50 billion in virtual items worldwide.

The potential for WAX is huge and the marketplace can also handle more than just virtual items. Users can tokenize physical items and can form a guild to accept rare collectibles such as clothes and watches, and then issue tokens that can be redeemed by their owner. The owner can then trade the tokens for other items on the WAX platform.

The platform also makes use of transfer agents that are entrusted to facilitate the transfer of virtual goods between the buyer and seller and help administer the entire process. These agents take care of verifying and settling transactions in addition to collecting and holding the asset, before delivering it to the seller.

The entire process allows for marketplace that does away with the need for items to be transported, or physically sold at conventions and exhibitions. The platform is available around the globe and guilds can be created by anyone, which allows all kinds of assets traded on WAX.

As a result, WAX tokens are utility tokens that are used for all types of virtual goods and also help facilitate low cost, secure, and trustless trades on the WAX platform.

President Malcom CasSelle views the project as being similar to the current giants of ecommerce stating

WAX will enable a new generation of virtual asset traders, in a similar way that modern marketplaces enabled entrepreneurs to become power sellers online, ride share drivers or hosts for travelers (Alibaba, Amazon, Uber, and Airbnb)

Is WAX Worth Investing In?

Despite the many positives surrounding WAX, there are still some inherent risks associated with the project. For example, the utility of the project is limited its current user base, and anyone outside of the gaming community will not be drawn to use the token.

WAX also faces competition from the likes of Dmarket and Enjin and while Dmarket also aims to facilitate the trading of virtual goods, Enjin acts as a platform that helps users to create and manage virtual goods and focuses on game publishers.

However, WAX does not help publishers to create items and focuses on the secondary marketplace that allows goods to be traded online.

There is also competition in the form of centralized projects such as Steam or IGXE in China. The Steam marketplace has proved to be popular with gamers and funds earned in the Steam market are restricted to that platform.

IGXE has millions of gamers involved in the trading of in game virtual assets and Chinese gamers often want to use Alipay for their transactions. In addition, China operates a strict foreign currency control policy and OPSkins currently doesn’t have the necessary licenses to accept payments in China which closes off the Chinese market.

However, there is the possibility that local Chinese marketplaces like IGXE can set up their own markets using WAX’s system of transfer agents and payment processors

Prior to the ICO, the WAX token attracted a large amount of demand, with Pantera Capital, HyperChain Capital, and Fenbushi Capital all expressing interest in the project. WAX is also supported by Ethereum co-founder Anthony Di Iorio and respected game developers Dave Anthony and Brian Fargo, in addition to industry bigwig Mike Novogratz.

On top of this support, the WAX team has also announced a partnership with payment company Xsolla. The payment giant is a global distributor and publisher of video games, and retains companies such as Steam, Twitch, and Ubisoft as clients. Xsolla has confirmed that it will accept the WAX token as a form of payment.

WAX Project Roadmap

As a result of the level of optimism surrounding the project the WAX token performed extremely well once the ICO was completed at the end of last year.

Each WAX token was priced at $0.32 during the ICO and this rocked to a high of over $4.80 at the end of December. After swiftly falling back, the token has dwindled and has been trading at around its ICO price for the last month or so.

WAX has been unable to escape the downturn that has hit the entire market and the roadmap outlined in their whitepaper shows that the functional use of the WAX tokens will not occur until Q4 of 2018.

The team won’t actually be launching their product until Q4 of 2018, and this long wait has helped to kill much of the hype and momentum that the project previously gained.

The WAX token is currently trading below ICO price at around $0.21 and retains a market cap of around $104m; this represents a good opportunity for anyone looking for a longer hold.

Despite the poor performance, it’s worth remembering that WAX will leverage the existing OPSkins user base and once the launch has taken place we should see the rapid onboarding of users.

The overall future for WAX looks promising, though it may take until the end of the year for the token to appreciate significantly in value.

Images via

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Ethos Review: Project to Launch New Mobile Wallet – Is it Worth a Look?

Tue, 03/06/2018 - 12:41

An interesting new cryptocurrency project has appeared and is aiming itself at creating a mobile wallet and a currency. It will hypothetically aid mass adoption of cryptocurrency if successful.

That project is called Ethos. Not to be confused with the “EthOs” operating system with a similar name. Ethos will create a multi-asset mobile wallet with a unique smart key security design.

As well, it will allow its users to keep track of assets on other platforms much like how works. The wallet will also allow for quick and easy asset diversification without the need for advanced trading knowledge.

The company will be releasing its own cryptocurrency, the Ethos Token. The token may have different uses in the future once the platform is more popular.

The Ethos wallet
Image via

The company behind Ethos describes itself as “a people-powered cryptocurrency services company”. The main attraction to the Ethos platform seems to be the multi-asset mobile wallet they are developing.

According to the official website, the wallet will support bitcoin, “altcoins” and ERC-20 tokens. No further details are given on what other altcoins will be supported.

The wallet will supposedly allow for quick and category based automated diversification. For instance, it appears that if you deposit only bitcoin, you could use the wallet to diversify that bitcoin into multiple other crypto assets quickly. The wallet will apparently allow you to choose what types of assets you want to diversify into, such as platform tokens, utility tokens, privacy coins, and so on.

The site also claims that the wallet will be a hotbed for airdrop activity. Specifically, ethos claims that they will have many partnerships with other blockchain projects that will perform air drops onto ethos wallets.

Recently, air drops have been a somewhat popular way of some smaller blockchain projects to get there tokens in the hands of the public. However, air drops of also been a source of confusion as some users don’t understand what type of wallet is necessary in order to receive in airdrop. We wrote about this regarding the OmiseGO airdrop previously.

It seems likely that the air drops that would occur on the Ethos platform will not really be “air drops” as they are defined today, typically meaning ERC-20 tokens that are given to ETH holders. Instead, it could be a proprietary distribution method that is used only on their platform.

The company has not yet specified which partners they have made deals with, but they state that they already have several and there are many more that are excited to get involved.

The Ethos Token
Ethos Token. Image via Fotolia

The official website also describes a native currency that will exist for the wallet. However, the site seems a little unsure of itself as for what the Ethos Token is actually for.

First it states that Ethos Tokens can be sent anywhere with no transaction fees. However, it also states that Ethos Tokens can be used to pay for transaction fees (as well as other unspecified “services” on the platform).

If users can pay for, for example, bitcoin transaction fees using ethos tokens, then that may be a compelling use case if the result is lower transaction fees. This does not appear to be explained on the main site, however, and so it’s difficult to ascertain exactly what they mean here.

Digging a little deeper, we found the project’s white paper. The paper itself is hidden inside the FAQ under a specific question. An odd design choice, to say the least.

According to the white paper, the tokens will be used to do some fairly straight forward tasks like “reduce costs for consumers for crypto-related transactions”. Then there are few which are more difficult to decipher. Try your best at understanding this one: “create a scalable micropayment transfer mechanism for all platform services”. Your guess is probably as good as ours.

Even more vague descriptions exist on the main website, such as saying that Ethos Tokens “[enable] consumers to safely interface directly with blockchains”. So they are saying its implicitly “unsafe” to “interface directly with blockchains”?

The site is also quite cautious, using specific legalese. It specifies in no uncertain terms that Ethos Tokens are not shares in the company. They do not provide voting rights, and do not entitle anyone to dividends. This is likely done as a measure to dissuade the SEC from labeling their currency as a “security.”

On the same page, the site makes even more vague comments implying that Ethos tokens may be “used to send value, similar to PayPal”, but it says this would not likely to occur until sometime in the future.

What they mean by this is unclear, as we are not sure if they’re saying you can transact Ethos Tokens themselves as a means of moving value, or if they will be some sort of a representative token for fiat currency or something else. The white paper suggests this ties to fiat support, writing that “A core piece of the Ethos platform is a Fiat gateway and diversification platform”.

Final thoughts

An easy-to-use multi-asset wallet will likely find an audience in the cryptocurrency community. Especially among those that are new to cryptocurrency, and do not want to download many full node wallets on their computer with many hundreds of gigabytes of blockchain data. Likewise, it is unsafe to store assets on exchanges long-term, and so multi-asset wallets are attractive.

However, Ethos may be behind some of their competition already. Multi-asset wallets such as Exodus and Jaxx already exist and are quite popular. Further, new multi-asset wallets will be coming out this year that offer additional incentives. For instance, Celsius Network will be releasing its own multi-asset wallets that will allow users to earn interest on deposited cryptocurrency at a rate of around 9% per year.

If, however, the advantages afforded by the Ethos Token are compelling enough, it may attract users. Especially if they need to make many small transactions, and if the Ethos platform is able to lower their transaction fees somehow.

This again is unclear at this point, however. In any case, Ethos is a project to keep your eyes on. It could have some interesting features when the wallet goes live sometime in the near future.

Featured Image via Fotolia

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BTC Global: Another Cautionary Tale of a Typical Ponzi Scheme

Tue, 03/06/2018 - 10:50

When most people think of cryptocurrency Ponzi schemes, the Bitconnect saga usually comes to mind. They laugh at the ridiculous characters and scratch their heads at the numerous investors who lost despite countless warnings.

Yet, down in South Africa there was another Ponzi scheme in the works.

While there were many who doubted whether Bitconnect was a Ponzi scheme, there should have been no doubt when it came to BTC Global. If scams were rated out of 10 for their power to convince, BTC Global should have failed.

And yet, despite all of the obvious signs that were clear to see, the operators managed to run away with over $50 million in client funds.

Let us take a deeper look at the cautionary tale of BTC Global.

The BTC Global MO
Steven Twain – Image via

From the get-go, the way that the operators claimed that BTC Global made money, should have set alarm bells ringing. According to the website, they managed to find an illusive Binary Options trader by the name of “Steven Twain”. The original homepage was changed but here is how it appeared.

This trading Wunderkind is pictured right drinking a milkshake. Apparentely, he had over 6 years of experience trading these instruments for a whole host of high net worth individuals.

However, today the admin team has managed to secure a lucrative trading agreement with him! They stated:

Through our partnership with Steven, BTC Global have secured access to guaranteed 14% WEEKLY returns from as little as $1,000 invested. We have also secured extra returns to pay out as referral commissions should you decide to share this opportunity with others!

Now, let’s take a quick step back and analyse this…

Steven Twain, who looks like someone from MTV’s Jersey shore, is offering to trade his clients Binary options and make them fantastic returns? While Bitconnect claimed that they were a “lending” platform, Steven Twain actually makes money trading instruments that are known to be scams.

Then there is the promise of “14% WEEKLY” returns that the investors could get as well as “referral commissions”. These are the typical buzzwords that are associated with MLM type pyramid marketing schemes.

Not only were the operators relying on the suckers to believe the Ponzi, but they were encouraging them to refer their friends. They were creating this feeling of an “exclusive invite” club that could get access to Steven Twain’s trading services.

Such was the demand for access to this exclusive club that BTC Global’s website ranking and traffic increased exponentially. In the image below, you have the similar web rankings which shows the statistics on BTC Global. website rankings. Source:

The most important ingredient for a Ponzi scheme is for it to actually pay out. This is exactly what BTC Global did. Despite being initially suspect, many who invested got weekly returns and were hence duped into investing more.

How BTC Global Worked

What is interesting about the coverage of BTC Global is that it has been labelled a “cryptocurrency” Ponzi scheme. This is not entirely accurate. While their name has BTC in it and clients invested in Bitcoin, there was no native token or “scam coin” such as BCC that was used in Bitconnect.

As is shown in the promotional image below, the trader converted the Bitcoin into traditional fiat currency and then traded on the financial markets. He would then convert his Fiat winnings back into Bitcoin to pay the investors.

PowerPoint Presentation. Source:

There was no cryptocurrency trading and Bitcoin was most likely used as it was an immutable form of payment that was much harder to trace than other forms of funding. Investors were encouraged to buy the Bitcoin to fund Steven’s trading.

Once the user had registered with the username of their referral, they were taken to an admin panel where they could monitor their “investments” and refer their friends and family. They also had a tiered structure for the referrals that were brought (sound familiar?).

The promoters on the website referred to themselves as the “admin team”. They were a bunch of South Africans who were well known to have engaged in previous MLM type online marketing schemes.

One of these people was an individual by the name of Cheri Ward who ran the BTC Global facebook group and posted numerous videos. The rest of the local operators in this admin group were documented in this February Medium post.

Whether these individuals were the mastermind of the scam or mere cogs in the wheel of a larger criminal enterprise is uncertain. One would have to question the wisdom of knowingly promoting a Ponzi scheme with your real identity.

What Brought it Down

Just like Ponzi schemes before it, BTC Global worked until it did not work anymore. While the Bitcoin markets were rallying, they were able to constantly meet their weekly payments.

However, as the price of Bitcoin started to fall in early February, the payments started to slow. The clients started to wonder how safe their investment really was and why Steven was doing so poorly in the financial markets.

There were many contradictory stories that were given including that Steven had become a new dad and could not trade for a few weeks. Then, the story suddenly changed to Steven having suffered a house break in with the thieves taking off with all of his trading equipment.

These contradictory statements led many to believe that the admin team was in fact complicit and could have been much more than unwitting participants. Irrespective of the assumptions, the following has now been placed on the BTC Global site.

We are as shocked and angry as everyone. But we all knew the risks involved in placing funds with Steven. We all became complacent with Steven. And all of us funded him independently.

They then also claim that they are unable to locate Steven and they ask for anyone who has information as to his whereabouts to please get in touch.

What Was the Impact

It is sad to say that this Ponzi scheme has managed to ensnare thousands of people. The directorate of public prosecutions stated that they have received over 27,500 complaints from people all across the country. Investments had ranged from $1,000 up to $120,000.

As with many scams of this nature, those who lost the most tended to be the people who could not afford it. For example, a tree feller from Pretoria had taken a $10,000 from his home loan to invest in the platform.

In total, estimates say the Ponzi scheme was able to pull in about $50 million from the investors. While most of the victims appear to be South Africa, there are reports of victims in other countries including the USA and Australia.

Needless to say, many victims started to blame the local operators and “admin” team. Specifically, they targeted Cheri Ward and made numerous death threats. This prompted her to get a protection order. The website noted:

We call for the threats, harassment and violence on leaders and admin to stop. It is unfathomable that people can behave like this. If you feel you’ve had a crime committed against you, you need to follow the legal procedures to deal with the matter.

There are also investigations underway by both the local authorities and a private investigator. Unfortunately, it is unlikely the victims will get any of their money back. The Bitcoin that they sent to the operation has likely already been laundered and banked.

What Can be Learned

This is no doubt an upsetting example of investments that sound too good to be true. This was a well known scam in the South African cryptocurrency community. Those who invested in the scheme viewed sceptics with suspicion and ate up the tripe that was concocted by the admin team.

However, when it comes to online scams in the crypto world, the bar seems to get lowered every week. For example, we recently brought you news that people are being scammed by twitter bots offering free cryptocurrency as a promotion.

While no one wants to see innocent people getting scammed out of their money, personal responsibility must take precedent. From investing in ICOs to buying cryptocurrencies and taking part in airdrops, doing your own research is key.

Will justice take it’s course?

Much like the Bitconnect promoters, the admin team are likely to face civil claims. However, if it is proved they were complicit, they could serve a substantial sentence in a South African prison.

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The post BTC Global: Another Cautionary Tale of a Typical Ponzi Scheme appeared first on Coin Bureau.

NeoGas – What You need to Know to Earn Returns on NEO

Mon, 03/05/2018 - 11:45

Most cryptocurrencies and digital assets today operate one native token or coin, each. For instance, on the bitcoin network, the only asset of value is bitcoin (BTC) itself. This is also generally true on most smart contract platforms like Ethereum Classic and Lisk.

Some projects, however, have more than one digital asset that makes up their network. Such projects include Neo, with its sub-asset called GAS. Much like its name suggests, GAS works in many ways similar to how “gas” as a concept works on the Ethereum platform.

That being, it’s used to pay for a number of operations on the network. In this article, we’re going to talk about GAS. Including, what it is, what it’s for, and how to earn it.

A brief review of Neo
Image via

NEO is a smart contract platform that refers to itself as a “smart economy”. According to its official website, the company behind it was founded in 2014 and it first appeared on Github in June 2015.

Neo has faced a number of criticisms, such as that it is just a copycat of Ethereum, and that it is trying to cash in on the success of other blockchain projects. Others have supported the company by saying that its offerings are in fact quite unique and compelling, and offer several technical advantages and distinctions from Ethereum.

What’s important to remember about blockchain projects (which many people who don’t understand China very well may miss) is that one of the most important aspects of blockchain projects is their inability to be censored, and their protection from shutdown by any single government or government agency.

As Neo is based in mainland China, it is required to be compliant with domestic Chinese laws. This means that it will inevitably have some sort of backdoor or kill switch that the local government could employ at any time.

Political winds are constantly shifting in China, and so it’s impossible to say if at some point in the near or distant future that the reigning government could simply decide to shut things down, or even appropriate and nationalize it.

Likewise, Chinese law requires that all businesses in China be fully willing and able to turn over all records to the government at any time and for any reason.

Recently China has taken a relatively strong anti-cryptocurrency stance as they have been first pushing ICO’s and exchanges out of the country, and recently they appear to be targeting mining operations as well.

It is entirely conceivable that they could go after locally based cryptocurrency projects. It’s also possible that could offer tremendous support and encouragement for the sector. At this point, however, there is no solid information on this.

If you’d like a more complete overview of Neo, we suggest you take a look at our piece on why NEO is more than Chinese Ethereum.

With all that out of the way, let’s take a look at the secondary digital asset of the Neo platform, NeoGas or GAS for short.

Everything about GAS

GAS is a secondary cryptocurrency that can be bought and sold independently on many exchanges. The big attraction to GAS as a cryptocurrency is the ability for someone to earn it by staking NEO units on the Neo network.

GAS is used on the network to perform a number of functions. It can be thought of as a way to pay for transaction fees. One thing that is different about Neo than many other cryptocurrencies is that NEO units are not divisible.

For instance, it is not possible to send or hold 1.01 units of NEO, instead, one must only send or hold one or two units of NEO. Transaction fees on the Neo network can be paid for with GAS, and new smart contracts must be paid for in GAS as well.

Gas Prices. Source:

Today, GAS is trading for just about $35 each and has a market cap of just under $350 million independent of Neo. In the past, prices have ranged from between $2.50 to over $80.

How much GAS can you earn by staking NEO?

In order to figure out how much GAS one can earn by staking NEO, we took a look at the website The site provides a calculator that can help to estimate how much GAS one can earn per day.

At today’s rates, it would take about 83 units of NEO to earn one dollar per day. 83 NEO at press time will cost just under $10,000. This means that holding NEO in a staking eligible wallet (not an exchange) earns a return of about 0.3% per month.

While this is higher than most bank accounts in the US, 0.3% per month is still below what one would expect to earn by holding index funds on a traditional stock market that is performing normally.

Comparing this to another popular cryptocurrency that involves staking, PIVX, the rate also appears quite low. The same amount of money necessary to purchase 83 units of NEO would net you 1618 units of PIVX.

According to this PIVX rewards calculator, with that amount, you should expect to receive about $40 a month. This is about 25% more value than one would receive with NEO staking.

The difference being that staking PIVX does not pay out every single day. Instead, there is an element of chance involved. Therefore your earnings could be less or more.


For those who are already interested in holding NEO, staking it in exchange for GAS seems like a highly logical thing to do. In this way, you can earn an additional return each day without needing to do anything else.

If, however, you do not already own NEO, or don’t already have an interest in the cryptocurrency, you may be better off putting your money in traditional index funds on the stock market. Or, in a higher-yielding cryptocurrency that offers staking rewards such as PIVX, among many other choices available on the market today.

Featured Image via Fotolia

The post NeoGas – What You need to Know to Earn Returns on NEO appeared first on Coin Bureau.

The Latest Crypto Ransom Threat, Coming to a Server Near You

Sun, 03/04/2018 - 12:58

There has been extensive attacks that make use of malware and file encryption to extract monetary ransoms. Hackers will lock up important files on the machines of the victims and demand a payment in cryptocurrency.

Now it seems as if hackers are restoring to another attack vector in order to extract their ransom payments. They are making use of Memcached DDoS (Dedicated Denial of Service) attacks on servers.

Unlike a standard DDos attack that would just inundate a server with random packets of data, these packets contained an interesting message. They instructed whoever was reading it to pay 50 Monero in order to stop the attack.

At current market prices, that is about $17,000 that a company would have to cough up in the hope that the attackers would let up.

But what exactly is a memchached DDos attack and are Ransom DDoS attacks common?

What is a Memcached DDoS Attack?

Memcached DDoS attacks have only recently started coming onto the scene and have enabled hackers to launch some of the largest DDoS attacks that have been seen. They are doing this by exploiting poorly configured memcached servers.

As explained in a blog post by Akamai, this poor configuration means that the server will respond to UDP traffic with packets that are much larger than those being sent. Sometimes these are many multiples bigger.

Moreover, given that it is the UDP protocol, the packet’s origin IP can easily be spoofed. Hence, the attackers will spoof the IP and make it look like another server is sending the request. The memcached servers will respond to that IP.

The packets being sent are sometimes so large that attacks can actually produce DDoS with a peak of 1.35 terabytes per second. In fact, it was this type of attack that just recently hit Github with some cyber security experts calling it the biggest attack ever.

This is called a reflective DDoS attack which has an “amplification factor”. In this case, the multiplied packet size was the amplification factor that brought the servers down.

It is not immediately clear who is behind the attack but there are many security researchers who believe that it could another hacking group from North Korea that is attempting to extort companies and websmasters around the world.

Pay Up, Or we Attack

Ransom DoS (RDoS) attacks are not entirely new. They have been practiced before with some organisations as victims. Initially, they would involve a group of attackers emailing numerous people in an organisation threatening an attack.

They would demand a Bitcoin payment in order to stave off a potential attack. They were also referred to as DDoS-for-Bitcoin (DD4BTC) and although they were intimidating, they were just threats.

Although they were threatening the DDoS, they most often did not have the firepower to actually bring down the servers. Hence, the people in the organisation were more than happy to ignore the majority of these requests.

With the vulnerabilities in the Memcached servers now known, they are being actively exploited. Attackers have the firepower they have been looking for and they are not afraid to use it.

In fact, they are not even threatening.

Pay Up, Or we Don’t Stop

In the case of this RDoS, the attackers did not threaten the company with their demands first. They immediately started launching the Memecache attack which must have brought many servers to their knees.

However, in the case of this attack, instead of sending random data, they sent a little message with the packets. Below is the screenshot of the ransom message that came from the attackers.

The Ransom Hidding in the Data. Source:

As you can see, the attackers are asking the victims to pay 50 XMR to a particular wallet address. They have no doubt chosen to receive their payment in Monero given that it is one of the most privacy conscious cryptocurrencies around.

This also does not appear to be targeted at only one victim. A French security researcher received the same attack with the samiliar ransom threat in the data packet.

related to this, Some Memcrashed server contains Ransom note which is server to the victim during the attack :O

— Ug_0 Security (@Ug_0Security) March 2, 2018

This shows that the attackers may be sending their deformed data packets to a number of different targets and hoping that someone is spooked enough to pay up. Given how secure Monero is, one has no way of knowing how much was being sent to that address.

Paying Won’t Help

Unfortunately for those under attack, paying the ransom is almost certainly unlikely to stop it. This is because it will be impossible for the attacker to identify who actually paid the 50 XMR as the payment address used is the same for all the attacks.

This is something that the attackers would most likely know with their goal being to scare the recipient enough to send over the Monero. This could have an adverse effect as the attacker would then see a return on their investment and they could ramp it up further.

What this attack demonstrates is the ability for cyber criminals to adapt faster than authorities and researchers are able to respond. It also shows that run of the mill cyber-attacks are now been re-engineered to include cryptocurrencies.

From malware that run on servers to website miners who hijack browsers to mine Monero, we are likely to see many more vectors open up over the next few months.

Featured Image via Fotolia

The post The Latest Crypto Ransom Threat, Coming to a Server Near You appeared first on Coin Bureau.

What is ByteBall? The Cryptocurrency With No Blockchain

Sat, 03/03/2018 - 13:02

Byteball is an interesting project that many in the Bitcoin community may have heard of recently. This is because the ByteBall coins were distributed to Bitcoin holders during 2017 in a proportion to how much they held.

Something else that is intriguing about ByteBall is that it does not use a blockchain. It makes use of a revolutionary new technology called a Directed Acylic Graph or “DAG”. Many people have considered this a great way to overcome blockchain growing pains.

There are also a number of unique features of the ByteBall project. For example, you can send conditional payments, hedge against uncertain events, take part in prediction markets and P2P betting. This is all based on the smart contract technology.

Let us dig deeper into the project and see why you may want to HODL your airdropped coins.

ByteBall Overview

The project began its journey in late 2014 when the Russian technologist, Anton Churyumov, was looking for ways to solve issues that he saw existed on the Bitcoin blockchain. Thus ByteBall was born and it was launched around the Christmas of 2016.

The main benefits of the ByteBall contract come from the fact that one is able to design specific smart contracts that will be validated among all of the nodes on the network. The rules that are coded into the contract are immutable which means that they cannot be changed.

When many people think of these contracts, they think of Ethereum. While they are relatively similar, Ethereum smart contracts are much more powerful and flexible as they make use of the proprietary language, Solidity.

Yet, what the ByteBall developers have given up in terms of functionality, they have made up for in simplicity. The goal of Anton was to allow non-developers to easily create these smart contracts. This smart contract simplicity also means that less coding mistakes such as the Parity wallet freeze are likely to occur.

So what sort of functionality is available for those users of ByteBall? Below are a list of the potential applications as well as some simple examples.

Risk Free Payments
Risk Free Payment Example. Source:

One of the disadvantages of a Bitcoin payment is that once it has been paid, there is no way to get it back. Hence, if you need to make a payment based on certain conditions having being met, then you will have to use some form of an escrow service.

However, with ByteBall, you have the opportunity to create simple conditional payments that will only verify the final transactions once these have gone through. In technical terms, you will be “binding” the payment to a specific condition.

If the condition has not been met by the other party then your bytes are sent back to your wallet. This is all done in a direct Peer-to-Peer fashion and there are no intermediaries. You can read the exact requirements on the Byteball application. These are the series of IF / AND / OR conditions.

You could therefore structure your very own escrow smart contract that will pay the recipient once someone else has verified that the condition has been met and only after a certain period has elapsed.

The ByteBall team is also looking to the possibility of including contracts that reference outside events into these payments. These external parties are termed oracles and they are already becoming an important part of other smart contract ecosystems.


We have all been in those situations when an unfortunate event has impacted cost us financially. Although many people may take out insurance on these events, claiming the money back is not quite as clear as one may think.

Would it not be ideal if there was a solution where a line of code would simply pay out in the event that said negative event were to occur? This is exactly what the ByteBall simple contract insurance can help you to develop.

You can structure an insurance agreement in the code of ByteBall where someone who took out insurance will get the funds transferred to them from the issuer if the condition is met. You could either buy this insurance from someone else or you could sell it to them.

These insurance smart contracts are the ones that are most likely to gain from the oracle technology. Given that insurance events are mostly external, these oracles can feed information on the event to the smart contract itself.

A simple example of this can be a cancelled flight. When someone is buying flight insurance, it can be structured as a contract that will pay them out in the event that the flight is cancelled for some reason. The oracle in this case can be an external flight information tracker.

This would automatically send the information to the smart contract so that it can be executed the moment that the flight has been cancelled. There are no doubt numerous other examples that one can think of.

Prediction & Betting
Example of a Sport Bet. Source:

When one places a bet or makes a prediction, the payoffs of these are generally conditional in nature. You will be paid out a certain amount that is based on the outcome of some external event.

In the case of the P2P betting, you can enter into a smart contract agreement with someone else on a particular sporting event. Based on the outcome of this event, the winner will then get the payment from the loser as defined by the contract rules.

You can also use the P2P smart contract to bet on the movement of a particular price. For example, in this example where you will be betting on the price of Bitcoin. This could be used to hedge a current position for example.

In the example given, the bet will be a binary one. There will be a winner and a loser that will be determined post event by the code in the smart contract. Similar to the flight example above, the oracle will give the information on the price to the contract.

Identity Management

While one of the primary motivations behind cryptocurrencies was for it to be anonymous, the ByteBall developers have given users the option of storing their ID in the wallet and determining exactly who to share this information with.

This could be an interesting proposal for those people who need to prove who they are in a largely anonymous ecosystem. One of the most prevalent examples of this is the KYC requirements that companies have to undertake when completing an ICO.

Earlier this year, ByteBall had partnered with Jumio in order to verify the identity of the person that was creating a particular ByteBall address. This will no doubt make the process that much more simple.

ByteBall Technology

As mentioned, ByteBall has done away with the notion of a blockchain and Proof-of-Work (POW) mining and instead opted for DAG data storage technology. This has a few advantages over traditional blockchain based cryptocurrencies.

These are all outlines in detail in ByteBall’s whitepaper. Below are some of the unique use cases for the ByteBall network.

DAG Data Storage

In the case of the Bitcoin blockchain, all of the blocks are linked in one long chain since the beginning of the genesis Bitcoin block. Miners will have do the PoW in order to add new blocks to this chain. This occurs about every 10 minutes due to the nature of the protocol.

Bitcoin Blockchain Example. Source:

This limitation that is placed on block creation is one of the reasons that transaction times and fees can spike in times of network congestion. ByteBall does away with this by using a completely different data structure. Below is an image of a DAG.

Directed Acylic Graph Example. Source:

As you can see, all of the transactions in the DAG are cryptographically linked to one another. Other transactions will be added on top of yours when they are entered. The advantage of this is that all the nodes on the network (users) will help verify the transactions.

Not only does this mean that payments can be verified more quickly, but it also means that the network is kept sufficiently decentralised. One of the other problems that many see with Bitcoin is the large centralised mining pools which can threaten the network.

The benefits of DAGs are quite clear and there are a number of other coins that use the technology including IOTA and Nano. In the case of IOTA, this is termed the “Tangle”.

In order to reduce transaction spam on the network, ByteBall makes use of transaction “Witnesses” who will charge a fee of 1 byte per byte of data that is stored on the DAG.

Untraceable Bytes

ByteBall also has another built-in cryptocurrency that is designed specifically for anonymity. These are called Blackbytes which have much more supply than the standard bytes tokens. They are used specifically for private transactions.

These Blackbytes can be sent between two different parties who are communicating via encrypted messaging. The DAG will register that the previous owner of the Blackbytes is no longer in possession of it, yet it won’t register the recipient of the new Blackbytes.

This has a number of benefits over Bitcoin as all transactions on the Bitcoin network are stored on the blockchain and can be traced. This is one of the reasons that so many users are moving to privacy concious coins.

Other Assets & Atomic Exchange

Another feature of the BlackBytes network is that users are able to define their own unique currencies. This can be done by mixing the various other properties of the ByteBall network. For example, a financial institution could use the ByteBall network to define its very own asset such as a loan for example.

They would require a host of KYC checks to be done through the application as part of the smart contract underlying the loan asset. This is one of the reasons why Anton decided to include the KYC functionality. It would allow ByteBall to easily be used as for these types of institutions.

The ByteBall network also has the ability to complete an atomic exchange. These essentially allow for a transaction to happen instantaneously at both ends. If they are not executed simultaneously then the transaction does not happen at all.

Where to Get Bytes?

The distribution of ByteBall Bytes (GBYTE) to Bitcoin holders occurred either in the initial launch on the 25 Dec 2016 or throughout a series of 10 further distributions in 2017. This means that about 65% of the total supply was distributed already.

However, you can still buy Bytes on a number of exchanges with your BTC. Currently, Bytes are available on exchanges including Bittrex, the Cryptopia Exchange, Changelly and a few others. The full list of exchanges is available on the ByteBall website.

Exchanges to buy Bytes (GBYTE). Source:

There is not that much volume on these exchanges currently with total daily volume on Bittrex at roughly $614k. Hence, you should take caution when you enter your buy order as you do not want to have an adverse impact on the price.

Once you have bought your Bytes, cryptocurrency best practices means that you will want to withdraw them from the exchange. This is where the ByteBall wallet enters the picture. You can download it from the official website and it is available on a number of operating systems for PCs and Macs. There are also mobile versions for Android and iOS.

ByteBall Prospects

While ByteBall is still a relatively new cryptocurrency compared to the likes of Bitcoin, it is quite established when compared with all the other coins and tokens that have hit the market over the past 2 years.

Hence, there has not been as much buzz around ByteBall as there have been for other newer and “hotter” tokens. This is possibly down to the nature of the project. The developers wanted to create a cryptocurrency that was technically superior with promotion being a secondary goal.

To that end, it seems as if they have indeed met that goal. While DAG technology is still to be fully tested at scale, it could theoretically be a much more scalable alternative to traditional blockchains.

Either way, ByteBall is an unique project with an enthusiastic community and a strong team behind it. It will be interesting to see how it progresses over the year.

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The post What is ByteBall? The Cryptocurrency With No Blockchain appeared first on Coin Bureau.