Blockchain: Everything You Need to Know

Blockchain: Everything You Need to Know

Blockchain: Everything You Need to Know

By Kun Hu

Blockchain, the underlying technology of bitcoin, was once just a buzzword but is now an irreversible trend that has the potential to reshape human society.

 

What is blockchain?

There is no consensus on the definition of blockchain. Technically speaking, blockchain is an ever-growing append-only chain of blocks, where blocks are chained together by cryptographically guaranteed hashes. Within each block on the chain are the transaction items and other extra information contained in that network.

Blockchain began as a concept from the bitcoin whitepaper by bitcoin founder Satoshi Nakamoto. The bitcoin paper uses the phrase "chain of blocks" and "block chain" instead of 'blockchain'. 

The idea of blockchain first appeared in a research paper "How to Time-Stamp a Digital Document" by Stuart Haber and W. Scott Stornetta. The paper introduced the notion of "chain of time-stamps" similar to our current definition of blockchain. In general, blockchain is a combination of three technologies – cryptography, distributed ledger technology (DLT), and Consensus.

Some key features are created from this combination, making the blockchain unique, the core being immutability, which could have a profound influence on social structure, monetary and financial system, government governing philosophy, value definition, and the list goes on. Blockchain technology is the backbone of transforming our trust from trusted third parties to trust in machines. Blockchain technology is the backbone for the value network that solves the problem of double-spending without the need for a trusted central authority.

 

Key features of blockchain 

Immutability. With blockchain, it is the first time in history that humanity has the ability to keep records permanently. this feature gives us the feeling of "eternality". On the blockchain, the record is undeniable and tamper-proof. Immutability is blockchain’s most important feature. With immutability, blockchain makes trustless applications a reality.

Decentralization. A blockchain's infrastructure is supported by a network of nodes that can be anywhere in the world. Nodes on the network are usually computers and servers distributed globally. The nodes constantly update each other with the latest blockchain data. Unlike a centralized system, there is no single point of failure for the network to be attacked.

Consensus. It is the economic incentive to make miners do the right thing. It is, in essence, a reward mechanism to reward those who contribute to the security of blockchain, thus making the blockchain network more robust with time. In the bitcoin blockchain network, the incentive is newly created bitcoins in the Coinbase transaction plus transaction fees. Token (coin) is not necessarily an element of a blockchain. But most popular blockchains have tokens and most are hard forks or codebase reuse of bitcoin like Ethereum, Litecoin, Bitcoin Cash, BSV, etc. For the bitcoin network, it uses proof-of-work (PoW) consensus to solve probabilistically long-last Byzantine Generals' Problem in distributed systems. As Satoshi said, “The proof-of-work chain is a solution to the Byzantine Generals' Problem…The proof-of-work chain is how all the synchronization, distributed database, and global view problems you've asked about are solved.” 

Permissionless. The blockchain network is open to everybody. Everybody can join or leave the blockchain network as a node without any permission. This is really a powerful feature as it decoupled from node numbers and the nodes communication complexity doesn’t necessarily rely on node number.

 

Block and transaction

Block is a collection of transactions. Typically, a block has some metadata like transactions, a hash as a reference to the block, Height, Block reward, timestamp, Nonce, etc. Now in the extended version, it has Miner name, Fee Reward, confirmation, Transaction Volume, etc.

The transaction has a hash, received time, inputs (address and other info), output (address and other inf), etc.

All the block and transaction info are publicly available, but typically you don't know who is behind the address. There are some blockchain explorers you can use to inspect block and transaction details of bitcoin and other crypto blockchains, like blockchain.com, btc.com and blockchair.com

 

How does blockchain work?

The blockchain working process is simply adding a new block to the existing blockchain recursively. We use the bitcoin blockchain as an example.

(1) When people make transactions, the transactions are broadcast to all miners (full nodes). Then miners collect new transactions into a block.

(2) At the same time, miners will do a proof-of-work puzzle game (proof-of-work) for the right of adding the block. When a miner solved the puzzle game, it broadcasts the block to all nodes

(3) If miners confirmed all transactions in the block are valid and unspent, miners will accept the block. Then miners will use the accepted block's hash as the previous hash and work on the creating next block.

(4) The process above is repeated endlessly.

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Types of blockchain

A blockchain can be public or private. A blockchain can be permissioned and permissionless. 

Typical public permissionless blockchains are bitcoin blockchain and Ethereum blockchain.

Typical public permissioned blockchain is R3.

We can categorize blockchain by consensus algorithms as well. Typical consensus algorithms are Proof of Work (PoW), Proof of Stake (PoS), and Delegated Proof-of-Stake (DPoS). PoW is the original consensus in bitcoin. Ethereum is a PoW consensus as well, but in Ethereum 2.0, it will migrate to a PoS consensus. Algorand is a pure PoS based blockchain. EOS claims to be DPoS consensus.

 

Importance of blockchain

Blockchain’s immutability makes it possible to facilitate direct p2p transactions without trust third parties involved. To understand the importance of blockchain, we need to first understand “trust”.

 

Credit, Trust and Reliance

Trust and credit are everywhere in our society. Common institutions like banks are built around trust. They are trusted third parties. When you buy a house, many third parties are involved like governments, banks, real estate agencies. When it comes to the monetary and financial industry, almost everything is based on trust. If you save money in banks, your wealth is simply a digital number in bank IT systems and you have to trust them. Almost all financial services are based on trust. Even your money is issued with trust in the central bank. All fiat money is issued based on national credit.

 

Reducing trust and reliance

Where there is a reliance there is the risk of being enslaved. Government and other institutions tend to abuse and extend its scope in nature. When we delegate more to authorities, there are more risks of abuse. Although we have laws and regulations, these checks and balances are far from perfect when the rules are getting ever more complex. The best way is to reduce the roles of trusted third parties.

Milton Friedman, an American economist and Nobel prize winner, best known for his strong beliefs in free-market capitalism discussed a similar concept when talking about reducing the roles of government in 1999. He said:

"I think that the Internet is going to be one of the major forces for reducing the role of government. The one thing that’s missing, but that will soon be developed, is a reliable e-cash, a method whereby on the Internet you can transfer funds from A to B without A knowing B or B knowing A."

Conducive to Friedman's missing e-cash concept is blockchain-based bitcoin and other cryptos, capable of creating true free markets. 

Actually, the core idea behind the bitcoin network is to make possible p2p transactions without having to rely on trusted third parties, thus removing the need for third party agencies.

"[Bitcoin is] a purely peer-to-peer version of electronic cash would allow online payments to be sent directly from one party to another without going through a financial institution…Commerce on the Internet has come to rely almost exclusively on financial institutions serving as trusted third parties to process electronic payments".

The bitcoin whitepaper, mentions “trust” 14 times. Satoshi Nakamoto also expressed his frustration with having to trust the monolithic central banking system. He wrote:

"The root problem with conventional currency is all the trust that's required to make it work. The central bank must be trusted not to debase the currency, but the history of fiat currencies is full of breaches of that trust. Banks must be trusted to hold our money and transfer it electronically, but they lend it out in waves of credit bubbles with barely a fraction in reserve. We have to trust them with our privacy, trust them not to let identity thieves drain our accounts. Their massive overhead costs make micropayments impossible."

While blockchain removes the trust in monetary and financial systems, it also introduces a new money issuance consensus. Bitcoin creation relies on computing power. When the ways of creating and earning money changes, the value system built around it will change accordingly.

The blockchain’s ability to reduce “trust” is beyond the monetary and financial industry, and government. There are many more blockchain applications. Typically, blockchain's application utilizes blockchain's two features: transparency and privacy.

 

Blockchain applications

Blockchain is widely adopted in different industries, including supply chain, insurance, Identity Management, voting system, and IoT.

Real estate. The process of buying a house is quite complex. Many certificates and materials are verified and assessed repeatedly by many parties involved. The process can be reduced and simplified by adopting blockchain-based property ownership certificates and history records. It can avoid paper certificates fraud for renting as well. In addition, blockchain can factor one whole house and sell to different investors by tokenizing the house. But it may have some legal issues. Blockchain can be used in mortgage of the property as well. For example, the Bank of China has adopted blockchain technology in property and the valuation report can be shared among alliance banks without sensitive information disclosure.

Supply chain. Supply chain companies can utilize blockchain's traceability to accelerate the process and provide (a) transparent and full controlled transactions. This can avoid some common problems like smuggling. (2) Auditability and reliability. Since the data on the blockchain can not be altered, all parties involved can trust the data and audit the data immediately and easily. 

Insurance. Insurance companies can use blockchain technology to solve the double claim problem without customer data shared and disclosed. AIA International Limited has called for proposals that looked for a blockchain solution to deal with that issue. The solution shares customer information by a fingerprint of data (a.k.a. hash value). Therefore no actual information had been disclosed.

Identity Management. Blockchain-based identity management provides tamper-proof evidence for identity verification while guaranteeing enough privacy. Some universities have adopted blockchain-based certificates which can reduce fake paper ones and simplify the verification process.

Voting system. Voting is important for democracy and the voting result reflects public opinion and interest.  Real voters and convenience are key factors for voting. Blockchain guarantees voting without manipulation in the voting process and reduce the risk of a hack.

IoT. IoT devices responsible for the data collection, and blockchain for the data storage. Blockchain guarantees the data in IoT networks are not modified like climate data. Blockchain also enhances IoT network robustness as well.

 

Blockchain market size

According to Gartner, the business added value by blockchain will be more than 3.1 Trillion USD by 2030. The growth of the Business Value of Blockchain is divided into 3 phrases: Irrational exuberance, Larger focused investment to large-scale economic value-add. According to PWC's report, blockchain technologies could boost the global economy US$1.76 trillion by 2030.

 

Blockchain companies

There are many blockchain companies and startups. Typical emerging blockchain companies are ESO's parent company Block.one, Blockchain.com, BlockStream, Coinbase, Gemini and ConsenSys. Some traditional companies have taken part in the blockchain industry like IBM, PWC and Microsoft. 

There are some listed companies with major business being blockchain and crypto-related. 

DigitalX (ASX: DCC), provides service for ICO advising.

HIVE Blockchain (TSXV: HIVE), connects blockchain and cryptos to the traditional asset markets.

Northern Data (FWB: NB2), collaborated with Canna to work with AI and blockchain development.

Overstock.com (NASDAQ: OSTK), invests in blockchain ventures spanning from finance to agriculture.

RESAAS Services (TSXV: RSS), brings the real estate industry to a cloud-based and blockchain-powered system. 

Grayscale Bitcoin Trust (OTCMKTS: GBTC), established in 2013 by Digital Currency Group, focuses on digital currency investing, primarily bitcoin. 

Okg Technology Holdings Ltd (HKG: 1499), Mingxing Xu is the controlling shareholder of both Okg Technology and OKEx.

Huobi Technology (HKG: 1611), is a cryptocurrency exchange and blockchain-related service provider.

Article produced by Kun Hu. Johnny Chiu and Lucas Cacioli contributed to the post.

https://blockchain.news/wiki/Blockchain-everything-you-need-to-know

 

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Heiko Closhen, Entrepreneur

How Public Blockchains Could Supplement ERP Systems

From DeFi to DeOps: How Public Blockchains Could Supplement ERP Systems

From DeFi to DeOps: How Public Blockchains Could Supplement ERP Systems

By Paul Brody

Enterprise Resource Planning (ERP) is simultaneously one of the most transformational technologies for modern business and also one of the most boring. Quite simply, ERP is the glue that holds modern enterprises together, connecting business processes across large enterprises in a standardized way. 

That said, there is also nothing magical about ERP. It simply combines two things: transactional data (purchases, sales and inventory levels) with business rules and process. The results are simple, but the technology itself has immensely powerful capabilities, for instance, automatically re-ordering supplies when an inventory runs low, without human intervention.

With blockchain technology, we are entering the era of decentralized, ERP-like apps that can span multiple enterprises but also share data and logic, in turn automating and digitizing commerce.

In an always-on digital environment, this doesn’t seem very new or unusual. That’s because when it comes to truly digital supply chains, most companies are faking it, not making it. 

The secret truth about digital commerce is that it usually comes to a screeching halt at the enterprise door. It’s not uncommon for a digital system to create a purchase order using PDF software (which is emailed to a supplier), only for it to be scanned into their systems using a process called optical character recognition (OCR). 

This digital-analogue-digital scanning process is only one step above printing and faxing. Within the digital supply chain, electronic data interchange (EDI) is one step above OCR, but it only allows for static communication (and only between two parties). Furthermore, it doesn’t support any kind of shared business logic or process.  

To understand what a big deal this is – and to get a sense of how much is at stake – it is useful to step back and define how big the impact of ERP has been. When I joined McKinsey & Co, in 1995, process change was something you put on paper and into manuals. With the widespread deployment of ERP, the reality is that business processes – if they exist – really only exist in software.   

If you want to put a product on sale at 500 stores across the country (or around the world), it can likely only be achieved with end-to-end software. Whether forecasting the sale events or planning increased inventory and making sure price reductions happen at the cash register if it doesn’t happen with enterprise software it probably won’t happen at all.

Thanks to ERP, the efficiencies driven by a single retailer alone are thought to have cut the cost of living in the U.S. for the average person by $895 a year

ERP systems have such a huge impact because they allow companies to make good on their operating scale. Companies that are integrated from end to end can also negotiate significantly lower prices with suppliers. Their promise to buy only from a preferred supplier is much more credible because ERP systems will simply block purchases from unauthorized suppliers – something that used to happen routinely before digital systems were introduced. ERPs can also carry less inventory and have lower shipping costs as they track inventory levels and plan replenishment operations each day. 

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INSTEAD OF SUPPLIERS HAVING TO INTEGRATE WITH CUSTOMIZED SYSTEMS IN LARGE ENTERPRISES, THEY CAN INSTEAD INTERACT WITH STANDARDIZED APPS AND TOKENS ON THE PUBLIC BLOCKCHAIN NETWORK.

Exciting? No. High impact? Yes.

The benefits associated with these systems have traditionally been limited to the largest companies because each large enterprise has its own digital hub for collaboration. If you’re a supplier and you want to sell to a big retailer, be prepared to join the supplier’s network (which is not free). Each integration brings with it both efficiency and long-term cost commitments. For instance, smaller companies are often overwhelmed by these types of demands – but ERP can remove that hurdle.

Blockchain technology has the potential to change the dynamics of system integrations. Instead of suppliers having to integrate with customized systems in large enterprises, they can instead interact with standardized apps and tokens on the public blockchain network. 

DeOps (Decentralized Operations) applications could take hold. Want to have automated replenishment of your inventory? There’s a DeOps app for that. Insuring a shipment between two locations? There’s a DeOps app for that. Managing warehouse space that you rent from a third party? Same again.

DeOps applications will take the two main components of ERP – shared facts and shared business logic – and enable them to operate between enterprises and across enterprise boundaries. This will allow for truly digital end-to-end supply chains without having to worry about centralized entities spying on and monetizing the data flowing between companies.  

How much might the shift to truly digital supply chains be worth? Trillions of dollars. Given that nearly everything we buy today passes through multiple hands before it arrives in your home, there is a good chance that increased efficiency is possible at every step of the process. 

Entire industries have been built – and companies transformed – on their implementation of ERP. The impact of decentralized operations is likely to be just as large. And while nearly every large company currently has some form of an ERP system, almost none of them use DeOps applications – so we are just at the beginning of this transformation. 

Article produced by Paul Brody

https://www.coindesk.com/how-blockchains-replace-erp-systems

 

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Heiko Closhen, Entrepreneur

Avanti Becomes Second Crypto Bank in US

Avanti Becomes Second Crypto Bank in US

Avanti Becomes Second Crypto Bank in US

By Jeff Benson

Avanti, which will compete with Kraken Financial, plans to provide digital asset custody services—and create its own digital asset.

In brief

  • Avanti was granted a bank charter in Wyoming.
  • Kraken received a bank charter from the state in September.
  • In 2019, Wyoming passed new blockchain laws to attract digital asset firms.

Avanti has received a bank charter from the Wyoming State Banking Board, one month after exchange Kraken became the first crypto company to receive a bank charter in Wyoming—or the US for that matter.

Avanti Financial Group, founded by former Morgan Stanley managing director Caitlin Long, applied for a bank charter to become a special-purpose depository institution this summer.

AVANTI IS OFFICIALLY A BANK! Our charter & business plan were approved 8-0 today, incl. #Avit (a tokenized US dollar, which we announced we'll issue initially on #Liquid (#Bitcoin sidechain) & #Ethereum. Open for commercial customers early Q1. More here:https://t.co/CgNazN08zV

— Avanti Bank & Trust (@AvantiBT) October 28, 2020

The charter allows it to provide specified banking services, including digital asset custody, and it plans to start opening commercial accounts next year.

“We will provide products and services that do not exist in the market today,” said Long in a press release. “Currently the only type of U.S. financial institution that can provide final and simultaneous settlement of trades between digital assets and the U.S. dollar—because it is the only type currently approved to handle both within the same legal entity—is a Wyoming special-purpose depository institution like Avanti.”

One product it’s looking at in particular is its own tokenized dollar, the Avit, which it plans to issue on Bitcoin sidechain Liquid as well as Ethereum.

Long has been working toward this moment for some time. Early in 2019, the Wyoming legislature passed a slate of blockchain-friendly bills designed to make the western state a haven for crypto asset companies. As a member of the Wyoming Blockchain Task Force, Long played a major role in drafting and lobbying for the legislation.

Avanti is nominally in competition with Kraken Financial, which received its charter in September—with Long's endorsement. Both banks plan to begin operating in early 2021.

Article produced by Jeff Benson

https://decrypt.co/46561/avanti-becomes-second-crypto-bank-us

 

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Heiko Closhen, Entrepreneur

22 Indian Bank Branches to Begin Offering Crypto Banking Services

22 Indian Bank Branches to Begin Offering Crypto Banking Services

22 Indian Bank Branches to Begin Offering Crypto Banking Services

By Kevin Helms

An Indian bank is preparing to start providing crypto banking services at its physical bank branches. Customers can buy bitcoin and several other cryptocurrencies at these branches with Indian rupees, open savings accounts with crypto wallets, make loans against their cryptocurrencies, and more.

 

Crypto Banking at Physical Bank Branches in India

Cryptocurrency users in India will soon be able to visit physical bank branches for crypto banking services as well as learn about cryptocurrency investing. This is due to a partnership, announced Monday, between crypto banking platform Cashaa and The United Multistate Credit Co. Operative Society (United), as part of Cashaa’s expansion plan in India. The United is a member of the National Federation of Urban Co-operative Banks and Credit Societies Ltd.

Dinesh Kukreja, Managing Director of United Multistate Credit Co. Operative Society, will be the CEO of the joint venture between the two companies. The announcement details:

The joint venture, Unicas, will build the world’s first crypto-friendly financial institution with physical branches and operations.

“Unicas will enable people to access traditional banking services along with crypto banking services both online and through its 22 physical branches across north India,” the announcement adds. Customers will be able to buy cryptocurrencies with cash at these physical branches, “Open saving accounts with crypto wallets … Loan against cryptocurrencies, gold, and real estate … [and] Invest in cryptocurrencies, bonds, and fixed deposits.”

A spokesperson for Cashaa confirmed to news.Bitcoin.com that “Currently, there are 22 active branches and the Unicas operations will start in December … we will be ready with 22 branches.” The companies had planned to launch crypto banking services at 34 branches. However, he explained that “Due to the covid situation opening up the remaining is a bit challenging … We are seeing a slow opening from the lockdown.”

Cashaa detailed: “Initially account holders will be able to buy and sell bitcoin (BTC), cashaa (CAS), ethereum (ETH), binance (BNB), bitcoin cash (BCH), EOS, litecoin (LTC) and ripple (XRP) in cash or with the account balance in Indian rupees.”

 

Crypto Lounges at Indian Bank Branches

“The United’s existing branches will be transformed and modernized as Crypto Lounges,” Cashaa described, noting that “Members can walk into any of these branches and get educated about cryptocurrencies along with other banking services.”

The spokesperson further shared with news.Bitcoin.com: “We will educate them on investment opportunities, utilities of bitcoin and other cryptos, how to use and store crypto, etc.” He clarified that non-bank customers “will have access to general material, but the usage of lounges are for bank customers.” Cashaa emphasized:

The immediate plan is to open these Crypto Lounges in Delhi, Gujarat, and Rajasthan covering a population of 150 million Indians living in these states.

Kukreja commented: “By increasing our exposure to emerging technologies, we are aiming to rapidly expand to over 100 physical branches by 2021, employing thousands of skilled professionals in India,” noting:

Our savings bank account holders will also be able to use their cryptocurrencies as collaterals to take loans, like any other traditional loan given by banks.

Article produced by Kevin Helms

https://news.bitcoin.com/indian-bank-crypto-banking-services-buy-bitcoin/

 

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Heiko Closhen, Entrepreneur

JPMorgan’s stablecoin finally sees commercial light of day

JPMorgan's stablecoin finally sees commercial light of day

JPMorgan's stablecoin finally sees commercial light of day

By MARIE HUILLET

JPMorgan Chase now recognizes blockchain's profitability and has created a new business dedicated to digital currency and blockchain work.

A year and a half after it was first announced, JPM Coin — JPMorgan Chase's in-house stablecoin — is now live and in use by a major transnational tech firm for around-the-clock cross-border payments.

According to a report on Tuesday, this real-world proof that the technology is increasing efficiency and reducing costs has bolstered the megabank's confidence in the technology's promise and profitability. With the expectation that further commercial clients will sign up to use the stablecoin, JPMorgan Chase has created a dedicated business devoted to digital currency and blockchain work.

The new business unit, dubbed "Onyx," has over 100 staffers and is being led by Umar Farooq as CEO. Takis Georgakopoulos, JPMorgan Chase's global head of wholesale payments, told reporters:

"We are shifting to a period of commercialization […] moving from research and development to something that can become a real business."

On the heels of PayPal's recent embrace of crypto, incumbents' confidence that blockchain can actually make them money appears to be on the rise. JPMorgan Chase's experimentation and development with the technology thus far can be broken up into several key areas.

First, the megabank has been piloting a blockchain-based Interbank Information Network since 2017, involving over 400 participant banks and corporations. JPMorgan Chase believes that the network, now being rebranded as Liink, can bring significant efficiency savings for the complex interactions of corresponding banks in cross-border wholesale payments. JPMorgan Chase itself accounts for cross-border wholesale payment flows of over $6 trillion per day across over 100 different countries.

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The bank has also identified blockchain's usefulness to innovate the existing outdated system for processing "hundreds of millions" of paper checks. Blockchain and digitization can, securely, banish the physical aspects of this exchange altogether. Georgakopoulos said that a new blockchain system is months from commercial launch:

“Using a version of blockchain with the participants being the main issuers of checks and the main operators of lockboxes, it’s possible we can save 75% of the total cost for the industry today, and make checks available in a matter of minutes as opposed to days.”

Lastly, JPMorgan Chase has confidence in blockchain for the creation of new payment rails for global central banks and their evolving central bank digital currencies. Pointing to China and Singapore, Georgakopoulos expressed his confidence that the probability of CBDC adoption is "very high." 

Farooq, the new CEO of Onyx, gave his insights as to why developments have appeared "slow," or at least equivocal, on the blockchain front at JPMorgan Chase until now:

“If you think about blockchain, we are either somewhere in the trough of disillusionment or just beyond that on the hype curve. That’s why at JPMorgan we’ve been relatively quiet about it until we were ready to scale it and commercialize it.”

Article produced by MARIE HUILLET

https://cointelegraph.com/news/jpmorgan-s-stablecoin-finally-sees-commercial-light-of-day

 

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Heiko Closhen, Entrepreneur

Researchers question what trustless’ actually means for blockchain

Researchers question what ‘trustless’ actually means for blockchain

Researchers question what ‘trustless' actually means for blockchain

By MARIE HUILLET

Blockchain allegedly eliminates the need for trust — but how far is this notion actually true or helpful?

Crypto community members will likely be familiar with mantras such as “Don’t trust, verify!” or the “law of code.” Both refer to the promises of greater transparency and audibility via a technology that offers to replace fallible, corruptible powerful actors with a functional rules-based order secured through deterministic computation.

The desire to dispense with the need to trust third-party actors is a mainstay with many cryptocurrency creators and users. Bitcoin (BTC), after all, was invented in the immediate aftermath of the 2008 financial crisis, and the abuse of authority by powerful actors and institutions continued to make itself felt throughout the Great Recession. Crypto has continued to draw in more and more enthusiasts against the backdrop of social, political and economic crises. 

However, a paper published by a group of researchers this August that circulated through the University of Oxford Faculty of Law’s blog on Oct. 27 argues against conceptualizing blockchain as a question of trust — or the absence of such.

Instead, the paper proposes to understand blockchain as a “confidence-machine”: A technology designed to maximize the degree of confidence in the system as a means to, only indirectly, reduce the need for interpersonal trust. The paper’s argument rests on carefully parsing the distinction between trust and confidence, each of which is a complex cluster of ideas in its own right. Yet for all their internal complexity, trust and confidence, each implies a fundamentally different interpretation of the nature of the social environment. 

Trust, across its various definitions, presupposes an acknowledgement of risk and uncertainty: One can choose to consciously trust another agent by way of a leap of faith or commitment, or as the outcome of a rational choice, based on the calculation that it is in the interests of a third party to act in a particular way. One can also trust more tacitly, by way of routinized actions, where the backdrop of risk is less explicitly recognized. 

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Confidence, by contrast, presupposes the predictability of systems or institutions. These predictable systems, in the case of blockchain, refer to the technological design of a protocol (i.e., one that is designed to mint a certain degree of new coins at a given interval), a repository of open-source code, and the mathematical properties of hash functions and public-private key cryptography. 

Blockchain systems also attempt to maximize the predictability of a network of actors’ decisions by means of game-theoretical mechanisms and economic incentives, and by the provision of a collectively auditable record of the sequence of actions in a given ecosystem.

In the course of their argument, however, the authors of the paper complicate this view of confidence, which, they claim, rests on a denial that blockchain systems are irreducibly hybrid, involving both social and technical components. They make their case by exploring the real asymmetries in resources and knowledge — and therefore power — among the various actors in blockchain networks, uncovering the mixture of confidence, trust and even faith that is involved in their everyday operations. 

“The governance of most blockchain-based systems is highly centralized: on-chain governance is inherently plutocratic, dominated by a few large operators or individuals who control most of the mining resources and/or token holdings, whereas off-chain governance most often operates as a technocracy, with a few influential players dominating both the front-stage and the backstage.”

Rather than evoking an alternative, ideal scenario wherein relationships of dependency and domination could be magically eliminated, the paper concludes with an exploration of what blockchain governance, accurately understood, actually involves, and what it could evolve into if we fully acknowledge the clusters of power that inescapably shape its infrastructure.

Article produced by MARIE HUILLET

https://cointelegraph.com/news/researchers-question-what-trustless-actually-means-for-blockchain

 

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Heiko Closhen, Entrepreneur

Beware: Latest Ledger Email Phishing Scam Making The Rounds

Beware: Latest Ledger Email Phishing Scam Making The Rounds

Beware: Latest Ledger Email Phishing Scam Making The Rounds

By Martin Young – Last Updated Oct 27, 2020

The crypto industry is flooded with scammers preying on the vulnerable, and their latest attempt is to dupe hardware wallet Ledger consumers into revealing their credentials or downloading malware.

Consumers who have purchased Ledger hardware wallets have been waking up to nasty emails claiming that their crypto assets are in danger of being stolen. It is the latest in a long list of phishing attacks designed to lure the uninitiated into divulging their secret phrases or downloading malware.

The first round of spurious emails was asking for the 24-word recovery phrase and Ledger responded with a warning emailed to customers confirming that it would never ask for this.

The second round of emails is a little more insidious as they claim that a data breach on Ledger servers has affected the wallet associated with the target email account. It asks users to download the latest version of Ledger Live, via an email embedded link, and reset their PIN numbers.

It was reported that Ledger did suffer a data breach in July resulting in 9,500 users having their personal information compromised.

 

Sneaky Social Engineering

On initial glance, the email looks genuine but there are a number of key giveaways that are easy to spot for the trained eye. Firstly, the domain name is not from ledger.com but legder.com

Secondly, hovering over the link in the box (but being careful not to click it) reveals a dodgy URL; https://url9594.legder.com which is likely to result in the downloading of malware which may be able to log keystrokes, steal credentials, or mine cryptocurrency.

Crypto investors and traders have already taken to Twitter to share this phishing scam and warn others about it;

*** SCAM ALERT***
I just received this in my inbox. A new phishing scam has been send out claiming there are problems with @Ledger live and a call to action to download “the newest version of Ledger live”.

Please share this in order for as many people as possible to see this… pic.twitter.com/xOKUBoKI63

— Young And Investing (@QuintenFrancois) October 25, 2020

Additionally, Ledger itself has published a list confirming knowledge of these phishing attempts and reinforcing the premise that funds are safe providing the recovery phrase is;

Remember, your assets are safe if your 24-word recovery phrase is. We’ve come up with a short list of tips and tricks to help — we know it’s quite Phishy out there. (1/5)

— Ledger (@Ledger) October 26, 2020

The company stated that nobody, including Ledger, should ever ask for the PIN number of recovery phrase, but this latest email was a call to action prompting the clicking of a malicious link.

 

Risk Mitigation

Hardware wallets, such as those produced by Ledger or Trezor, take an extra step to mitigate these risks. Ledger stated that crypto-assets cannot be sent from a Ledger device unless the user physically connects it to the computer and verifies the transaction on both the computer and the device.

If malware is controlling the PC or smartphone, it cannot control the Ledger wallet, even when it is plugged into the computer.

Article produced by Martin Young

https://cryptopotato.com/beware-latest-ledger-email-phishing-scam-making-the-rounds/

 

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Heiko Closhen, Entrepreneur

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How Asia Is Unbeatable In Blockchain Tech

How Asia Is Unbeatable In Blockchain Tech

How Asia Is Unbeatable In Blockchain Tech

By Giorgi Mikhelidze

Far away from the western eyes, the blockchain system in Asia is growing. Every project, start-up, and new idea is based on blockchain. Asia is seeing the future in blockchain and they are not mistaken. Every time something is trending in the world, in Asia it was popular five years ago. Meaning that they are always looking forward and their innovative ideas are always changing things for the future of the whole world.

A vibrant ecosystem of the public and allowed system has boomed in Asia. The blockchain is protected and embraced by the governments in Asia. It’s not only China that is welcoming the blockchain system in the country but other countries too. Everyone across southeast Asia is officially hooked with the idea of blockchain. The blockchain system is already used in different industries. For example aviation – China and India use blockchain for deploying the visitors from each other. It is speeding up immigration for millions of people.

Asia loves blockchain because the new technology and creative ideas are important for them. They know that in the future everything will work based on technology. Solving any kind of problem with blockchain is not a hard task, so they are adopting this system as much as it is possible. Singapore is also using a blockchain system. In fact, it is one of the greatest examples of using blockchain. The biggest fintech festival in the world celebrates fintech that is using blockchain every year.

The important part of using blockchain in China is the fact that most people are trading. They know that the future of the financial world is in trading and because of that regulations and proper protection is needed. Some of the largest crypto exchanges, as well as the largest crypto miners, are located in China. China is also the first country that will have a CBDC (central bank digital currency).

Japan has pretty much fully integrated itself with Bitcoin as almost everything can be bought with BTC there. Singapore is an unstoppable fintech machine where the most number of fintech startups are going. Blockchain is a fintech so it's pretty obvious why this is an important location.

The situation in Singapore is so advantageous in the fact that the list of 10 best Asian forex brokers contains nearly 8 companies located in this particular city. FX trading is also considered as some kind of fintech so it's not too surprising. It is almost becoming a cultural thing. Singapore is looking at bitcoin and foreign exchanges as a business and where the economic value can be driven.

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Interest In Technologies

One of the main things, why people in Asia are so interested in blockchain technology and financial technology is that they are extremely interested in new tech. For the blockchain adaptation, solid IT support is required. Korea possesses one of the fastest internet speeds in the world, which means blockchain and other new IT tech can be flawlessly completed.

Asians are using blockchain in this pandemic too. To secure data hackers and cyber thieves, many Asian countries decided to use blockchain as the protector during the coronavirus pandemic.

Blockchain technology has become more widely embraced in various areas of different fields. One of the most important is of course the financial services industry. During the coronavirus pandemic, people were stuck in their homes.

They needed online payment methods that will not cost too much of their money because everyone is saving money in these uncertain times. That is why the use of fintech and online payments rose during the pandemic. Everyone was buying stuff online because they could not go out to do something they wanted.

The recent digital currency electronic payment (DCEP) enterprise by the People’s Bank of China has put blockchain and crypto back on the radar screen. Home to the largest FinTech community in Hong Kong with well over 300 FinTech start-ups and companies in the community. Cyberport is pleased to be powering Hong Kong Blockchain Week to examine the latest improvements of blockchain and showcase Hong Kong’s abilities in this area.

Asia is always drawing blockchain talents together to exchange ideas, to co-create business occasions as well as to lead the region in embracing blockchain and they are doing a great job in it because they are best in adopting the blockchain system.

Article produced by Giorgi Mikhelidze

https://cryptodaily.co.uk/2020/10/how-asia-is-unbeatable-in-blockchain-tech

 

ecosystem for entrepreneurs

 

Heiko Closhen, Entrepreneur

XRP-friendly London Could Be Ripple’s New Home

XRP-friendly London Could Be Ripple’s New Home

XRP-friendly London Could Be Ripple's New Home

By Adriana Hamacher

Ripple is weighing moving its headquarters from San Francisco to London, as it seeks regulatory clarification for its cryptocurrency XRP. Japan and Singapore are also in the running. 

In brief

  • Ripple is considering a move to London, amid regulatory uncertainty in the US.
  • The status of its cryptocurrency is in dispute on its home turf.
  • The UK has offered Ripple assurance that XRP would not be considered a security.

In an interview with CNBC today, CEO Brad Garlinghouse said that the UK regulator, the Financial Conduct Authority, has provided Ripple with assurances that it doesn’t consider XRP to be a security—a key source of contention in its home market. Instead, the FCA deems XRP to be a currency, he said, and ”with that clarity, it would be advantageous for Ripple to operate in the UK.”

The $10 billion fintech company has been considering several potential new jurisdictions, and Garlinghouse revealed that the legal status of the XRP cryptocurrency is key in any decision. Japan, Singapore and Switzerland are also under consideration.

 

In search of a clear taxonomy

Ripple has long chafed at the US Securities and Exchange Commission stance on cryptocurrencies. The SEC has indicated that Bitcoin and Ethereum are not securities, while the status of XRP remains less clear.

The firm is fighting a legal battle with investors who claim that XRP is an unregistered, and illegally issued security and that Ripple is making misleading statements—allegations which Ripple denies.

Being labelled a security would also place XRP under stringent rules, with big repercussions for Ripple. While claiming to be independent of the cryptocurrency, Ripple owns more than half the XRP tokens in existence. 

Ripple says it holds the bulk of these funds in escrow, and mainly uses the digital asset for its financial services clients to transfer funds quickly and cheaply, but it also sells holdings regularly

“Regulation shouldn’t be a guessing game,” Garlinghouse said, in a separate interview with Bloomberg on Wednesday. In the US, he explained, the regulatory environment meant that cryptocurrencies could be classified as currencies, commodities, property, or securities. “You have different pockets of regulation from different parts of the government.”

But he stressed that the company would prefer to stay in the US. 

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He praised Japan for regulations that were in “contrast'' to the situation in the US and pointed out Japan was one of Ripple’s fastest-growing markets, thanks to ties with Japan’s SBI Holdings

Part of the SBI Group, the financial conglomerate runs dozens of companies involved in financial services, asset management, and biotech, as well as SBI Ripple Asia.

Asked whether Ripple was disappointed that XRP was not selected by PayPal, which recently announced it would offer support for four cryptocurrencies, Garlinghouse again blamed regulatory uncertainty. 

He made his latest remarks, two weeks after Ripple’s Executive Chairman Chris Larsen first suggested that the firm could abandon the US

Article produced by Adriana Hamacher

https://decrypt.co/46136/xrp-friendly-london-could-be-ripples-new-home

 

ecosystem for entrepreneurs

 

Heiko Closhen, Entrepreneur