Why China Wants to Ban Cryptocurrency Mining

China is looking to ban cryptocurrency mining and regulators in the country are seeking public opinion on the matter. The nation is home to the world’s biggest mining-pools and hardware manufacturers.

Its leadership is, however, distrustful of cryptocurrencies and is currently considering a ban due to a melange of factors. According to the National Development and Reform Commission (NDRC), crypto mining is unsafe. The agency also says that it has the potential to cause substantial damage to the environment.  

Authorities in the country are cracking down on illegal mining operations which have been on the rise since the recent cryptocurrency market boom. 

Over a dozen suspects were recently arrested in China’s Jiangsu province. The electricity-theft syndicate was found to be running an extensive crypto mining operation with 4,000 miners. The local power company is said to have incurred losses running into tens of millions of Yuan due to the shady setup.

Authorities in China are also grappling with the construction of illegal crypto mining farms in Sichuan Province. Electricity tariffs in the region are usually among the lowest in the country during the rainy season. The area has over 25 operational hydroelectric dams which generate cheap power during this time.

Although illegal mining schemes are becoming a major headache for the authorities, the Chinese government also wants to ban cryptocurrency to stem large-scale capital flight.

The Sino–U.S. Trade War and the Attempt to Mitigate Capital Flight

The Chinese and U.S. governments are embroiled in a trade war which is threatening to undermine China’s economy and its national currency.

With major industries in recession and the economy at its most vulnerable, there are fears that an increase in cryptocurrency mining and trading could, at this juncture, trigger massive capital flight.

The saber-rattling has led to an economic slowdown in China. According to the International Monetary Fund (IMF), the country’s economic growth outlook for 2019 has cascaded to 6.2 percent from 6.6 percent last year. It is expected to contract to 6.0 percent in 2020.

The bleak economic situation is believed to be driving the adoption of popular decentralized digital currencies such as bitcoin which are perceived have better value-retention in the long term as compared to fiat currency.

More Chinese investors are also reportedly selling the Yuan for stablecoins.  According to a recent revelation by XBTO CEO, Philippe Bekhazi, the digital currencies are slowly becoming a new fad among the country’s entrepreneurs.

The Chinese government is already attempting to curb capital flight through monetary transfer policies and ramping up operations against black-market forex trading. Stablecoins are, as a result, emerging as a new way to shield funds from trade-war instigated economic turbulence.

(Featured Image Credit: Pixabay)

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NOIA Network’s Domantas Jaskunas on Building the New Internet

When thinking of the Internet, few people dive deep enough to understand how it works. The “Information Superhighway” has created trillions of dollar in value, facilitated the spread of globalization, opened the doors to education for billions, and changed entire generations. However, the Internet, according to the NOIA team, is still extremely inefficient – and they want to change that. 

From a bird’s eye view, NOIA has designed a distributed peer-to-peer content delivery network (CDN) administered by a blockchain. The team believes this to be a much more effective solution than the current protocol that runs the Internet. 

The problem, as explained by NOIA, is that the Internet as is wasn’t designed to be this way – it just happened. The natural lack of structure led to a fragmentation that is responsible for upwards of $700B a year in outage costs for enterprises according to an IHS study.  

We connected with Domantas Jaskunas, a Co-Founder at NOIA Network, to elaborate on how he sees NOIA changing the infrastructure of the Internet as we know it. 

Let’s talk about the Internet as of today. Most people are online almost 16 hours a day but have little to no idea how it functions. Could you run us through the current Internet architecture and its routing protocols? 

It is important to understand that the internet is a network of networks. It is just cables that run across the world, provided by your ISP who then connects to other ISPs and so on. It’s a large tangle of networks using physical cables running across the world. It is operated by thousands of different institutions in order to be functional. 

These institutions should have a common protocol. Commercialization of the Internet began with universities then to private ISPs, as a network of networks. 

Boarder Gateway Protocol was introduced in 1994. This allows a path from one computer to another including websites to television to social media and essentially anything and everything on the internet. The routing protocol and data currently functions in a series of “hubs.” Currently, users do not have a choice of which hub is used and ultimately, ends up at the main server where the data is hosted. 

The problems?

The BGP protocol only works on a very “local view” on the network, sending traffic to those hubs. Using the information from each other, autonomously governed, data is stored across the internet. This doesn’t include packet laws, latest measurements, security features, and is a simple protocol showing a direction towards a destination. No one is responsible for delivering traffic, performance, and non-intelligent routing, specifically. 

90% of all internet traffic is routed using BGP. This also results in huge financial losses for major companies and is inefficient. 

It costs Technology companies, Enterprises, and Internet Service Providers upwards of $700B. Where does this money go? 

An IHS Study is very broad and includes a very broad picture of why internet creates complexity for a lot of companies. Includes direct network and internet outages, for example. It affects productivity, texting, software, slow experiences, services, etc. This is an annual number which becomes exponential. 

Companies and enterprises will install and will use private service providers which adds another cost because the public internet can be too risky. These solutions are still not enough. Regardless, at some point, all enterprises are reliant on public internet where their private cannot be covered. So, access points MPLS Protocol which costs hundreds of times more are used but this is also outdated. 

Let’s talk about the future of the Internet. How is going online in 10 years going to be different than today? 

The programmable Internet is based on the idea of openness, resource sharing, and balancing. Regular Internet users can contribute and use the programmable Internet by sharing their Internet connection. Once NOIA application is installed, the user’s connection will become a part of the new Internet and user will get access to the best Internet connection possible given his Internet plan, location and other details.

This would let users make their internet fast, guarantee the best gaming and television experience and get rewarded for contributing and using the Programmable Internet.

Regular user contributions can bring traffic decentralization and make Internet balanced and effective. This brings more traffic to faster, better networks and fosters competition between Internet Service Providers which leads to innovation and evolution of Internet Infrastructure.

IPV6 expanded the size of data packets. This allows for custom data headers. This adds a place for editing data including routing information. Segment routing is increasing such as Cisco (among others) is doing today. The majority of the hardware will support segment routing over the next 5 to 10 years. There is no technical reason why this is not possible in order to support segment routing. Worldwide segment routing is the future environment and the IPV6 protocol. Currently, there is no such thing as a database internet using BGP protocol. 

Editor’s note: In the blog announcement, Bill Norton broke it down into simple terms: “Much like Waze routed cars to alternative routes to bypass congested highways, machine learning will dynamically adjust the topology of contributed network segments to optimize routing for its participants. The entire community benefits from better Internet connectivity, and blockchain handles the settlement between participants.”

We use distributor ledger technology allowing for all segment routing databases and running our nodes. The user experience is exponentially improved by seeing all available connections to use for transit. This is a solid base for programmable internet. 

After this is achieved, an economy needs to be created and enabled. By combining all of the aforementioned, our model is a decentralized internet transit exchange, i.e. DITEX. This offers a financial incentive which offers an “opening up” of the internet so segments are open and shared in order to perform “smart routing” with machine learning and algorithms. 

Could you tell us a bit about the founding team behind NOIA? Why is this the best team to solve this challenge?

We started a year and a half ago. Our testnet has been performing for about one year in order to release this technology now. Our team has recently added Bill Norton as a late-stage founder. We have a team of experts at the highest level in the U.S. and globally. 

How is NOIA going to impact the internet? 

We connect different independent networks by programming segment routing language. We are connecting the internet with smart routing and an alternative routing system. 

This provides maximum utilization for the internet including safety, security, performance, and solves critical problems associated with the current internet architecture associated with the BGP. 

How will Bill Norton impact the progress of the project? 

Bill has pushed our project to the major league of Silicon Valley projects. To have him on board means we are doing something significant in the industry. 

What is NOIA Cache? 

A peer-to-peer content delivery network (CDN). This was released over 6 months ago. CDN is the first application running on the testnet, open-source, etc. 

How will NOIA compete with Amazon, Microsoft, and CloudFlare? 

These companies privatize their internet. Their internet is private and they still lack solutions in certain regions and countries. 

NOIA uses the existing infrastructure. We are democratizing the public internet which spans the globe. In fact, we are offering our services to these companies.  

What role will blockchain play in internet decentralization? 

 A more accurate description is Distributed Ledger. This is the only way for the internet to be decentralized as a public database for this new routing system. This isn’t owned by our company, it is public. 

How will NOIA make money? 

To utilize Segment Routing, we are developing the software for data packet programming. It’s basically one of the first in the world (or the first) such software available as a service for individuals and Enterprises. This software works in combination with router softwares which supports Segment Routing protocol and this forms a basis for traffic routing in Programmable Internet. 

In order to grow the number of users and contributors, NOIA will be focused on providing a good UX/UI in terms of Programmable Internet usage and integration into the existing IT infrastructures. 

To do that, we’ll be releasing an application for individual users and businesses. Both applications will give access to Programmable Internet and serve as “gateways”.

We have two categories of customers:

  • Individuals: We’re developing an app for every Internet user to speed up their Internet and share their connections to get rewarded.
  • Businesses: It essentially will be a SaaS platform which will provide all tools needed to connect all wanted end-points in companies infrastructure and setup, manage, analyze network connectivity. That part we’re planning to monetize. 

It’s a good way to differentiate the private business from open-source distributed ledger project. The core of the project is the ledger and the exchange. Those will be decentralized and NOIA company will only get value being a token holder. But in terms of the product, the software itself, the UX/UI part, it will be monetized for Enterprises as a service. 

Anything else you’d like our readers to know? 

Everyone should understand that NOIA is creating a sustainable token economy revolving around the sharing-and-using internet connection, a next-generation internet. This model is tied to the NOIA token. 

Thank you!

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Amrit Kumar on Smart Contract Security, Blockchain Sentiment, and the Future of Zilliqa

Amrit Kumar, Zilliqa President and Chief Scientific Officer

Amrit Kumar Zilliqa

Amrit Kumar

Decentralized app (dApp) platforms seem to be running into issue after issue lately. Many have trouble scaling while others have seen some nasty bugs due to smart contract vulnerabilities. The Zilliqa team is aiming to turn that around. Zilliqa implements sharding, alongside its own programming language, Scilla, to bring forward a more secure, scalable blockchain.

This week, CoinCentral’s Steven Buchko had the pleasure of speaking with Amrit Kumar, the President and Chief Scientific Officer of Zilliqa. They discussed blockchain privacy, advice for the industry, and the issues in the smart contract landscape today, among other topics. Read on below:

In a ​recent interview, you mentioned that you started out as a postdoc researching privacy-enhancing technologies for blockchains. What are your thoughts on the current landscape for those technologies and the privacy coins implementing them?

Privacy-preserving and privacy-friendly technologies have definitely made their way into blockchains. 

Several projects such as Monero, ZCash, and MimbleWimble are good examples which have implemented privacy technologies in different forms. They can help anonymize the sender of a transaction, hide the amount transacted among, etc. 

In parallel, we are also witnessing a lot of tooling being developed specifically around zkSNARKs – a privacy-preserving technology to prove the knowledge of certain secret data. With zkSNARKs and similar cryptographic primitives, the reach of privacy is being pushed beyond simple payments to running smart contract transactions. It is interesting to see that many of these privacy technologies can actually be used for other purposes such as scaling. 

zkSNARKs are being adopted by several projects to be used for scaling and not necessarily for privacy. This clearly shows that many of the underlying primitives in privacy coins have much broader applications than just privacy.

Regarding smart contract development, what issues do you see in traditional programming languages like Javascript, and why do you feel that even Ethereum’s Solidity still falls short?

It’s important to recognize that ten years on, the blockchain industry is still largely in the process of determining and establishing the best practices – be it the best infrastructure to use for a particular use case, or in this case, the best programming language to design smart contracts. That being said, in this nascent stage, the current infrastructures we have at our disposal are but a work-in-progress.

Legacy programming languages, especially Javascript, have the benefit of being regarded as the “gateway” language for newcomers looking to acquire skills in coding. Widely known and applicable to different areas of computer science, Javascript significantly lowers the barriers to entry for an area of the field that’s regarded as highly complex. With its emphasis on usability, the use of Javascript as a native programming language on any platform will be highly beneficial as a project looks to build up their community as they onboard new developers. 

Similarly, a language like Ethereum’s Solidity was equally designed with usability in mind, making it the most popular programming language for smart contract design. 

However, history has shown that the language itself was not designed with safety in mind. With incidents such as the DAO and Parity hacks, where wrongfully-inputted code resulted in the loss of significant amounts of money, we can see that greater security is needed at the language level. 

With mainstream adoption as the long-term goal of every project in the space, a greater emphasis needs to be made on developing secure-by-design infrastructures. In order to enable far-reaching solutions enabled by smart contracts, be it in the financial services sector or healthcare, where significant volumes of currency or sensitive data are transacted, security ​must​ come first.

At Zilliqa, we’ve tried to address this problem by developing our own smart contract language, Scilla, which was designed with functional programming language principles in mind. In so doing, developers will be able to leverage mathematical proofs in order to ensure that their contracts are provably correct. 

This is only one approach, and I’m certain that there will be many others, as more projects look to develop far more security-oriented solutions. While we cannot downplay the value of languages such as Javascript and Solidity, and how they’ve largely shaped the trajectory of smart contract development, it’s clear that our path as an industry doesn’t end there. 

As we look to establish best practices going forward, language designers will be able to glean from past experiences and develop even something better – a language that provides better security while allowing for expressivity and tractability.

Sharding is at the crux of Zilliqa’s design. We know that higher throughput is a significant value-add, but what are some of the potential downsides?

zilliqa scaling

Zilliqa implements sharding to improve scaling. | Source: Zilliqa

If you compare a sharded architecture with a non-sharded architecture (such as Ethereum in its current form), there is a drop in decentralization for sure, as in a sharded network only a subset of nodes from the entire network processes a given transaction. However, if the size of that subset of nodes is sufficiently large, then the level of decentralization should be acceptable. Zilliqa, for instance, requires that number to be 600 nodes.

You released the Zilliqa mainnet this year. Which dApps excite you the most?

Unstoppable domains is a project running on the Zilliqa mainnet which I am really excited about, particularly from the user experience perspective. They are building a naming registration service to replace long hexadecimal account addresses with simple human-readable names. This project is important to make it easier for the non-blockchain crowd to own blockchain-backed assets and transfer them around.

unstoppable domains

Unstoppable Domains create human-readable Zilliqa wallet addresses. | Source: Unstoppable Domains

Other than Zilliqa, which blockchain projects interest you the most?

Within a rapidly developing space, it’s been exciting to witness the ongoing research and development across the industry. In the past few years, there’s been a lot of exciting developments being made in the respective Bitcoin and Ethereum ecosystems when it comes to areas such as governance, scalability, and consensus algorithms. More specifically, however, I’ve also been interested in some of the more recently-launched projects that are shifting towards more privacy-oriented offerings as well as layer-2 (off-chain) solutions.

On ​Twitter​, you’ve emphasized the importance of critical feedback. What pieces of critical feedback do you have for the blockchain industry?

As a researcher and an academic at heart, I find that critical, albeit constructive, feedback is necessary to facilitate growth. Ongoing, consistent improvement should be the goal. 

That being said, having entered this fast-paced industry where entrepreneurship, innovation, and technical excellence are so valued, it’s easy to forget that we’ve only just started.

While it’s difficult to separate the speculation of cryptocurrency prices from the meaningful technological developments being made in the space, people do need to remember that there’s more to cryptocurrencies than price and that there’s more to blockchain than just the value of a project’s token. 

Within an inherently volatile space, where cryptocurrencies are still treated as a speculative asset, it can be frustrating to many that a lot of the work being done behind the scenes isn’t always translated to the price movements of a token, and I understand that. However, it also bears consideration that there are larger macroeconomic factors at play, be it regulatory developments or even regulatory sentiments as a whole. 

The entrance of traditional players in the space can equally shift prices, as we saw with Facebook’s launch of Calibra and the launch of the Libra Association. Ultimately, it all boils down to sentiment. 

Beyond this, it’s important to remember that disruption is a two-way street. We might be changing the way things are done in certain industries, but by partnering with traditional leaders in these verticals, they add the legitimacy and contribute to the wider attitudinal shifts taking place on a grand scale. In partnering with legacy companies or publicly listed organizations, this means taking a more measured approach to how announcements are shared and news is disseminated throughout the space.

What’s next for Zilliqa?

Last month, we announced our first foray into the payments space by way of our partnership with Xfers, a FinTech payments solution provider. As one of the leading payments platforms for online businesses and end-users in Singapore and Indonesia, as well as the first non-government company in Singapore to become accredited by the Monetary Authority of Singapore as a Widely Accepted Stored Value Facility (WA SVF), we’re excited to be supporting them as they explore the potential of distributed ledger technology in this next phase of transaction growth.

Beyond this, we have some exciting announcements in the pipeline for this month, so watch this space! 

On the tech front, we have a tech-heavy roadmap for the next 8-12 months working on improving the infrastructure that we have already built by adding new features to it. We will also be working very extensively on toolchains and making dapp development on Zilliqa as easy as possible.

Thank you, Amrit, for your time and insight!

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This Week in Cryptocurrency: July 19th, 2019

Cryptocurrency Market Update

Ouch. But we’re used to it! 

This wasn’t the best week for cryptocurrency markets in recent weeks, but the volatility isn’t anything we haven’t seen before. If you’ve been following cryptocurrency markets for a while, a 10% change in either direction in a day isn’t much to blink over.

Anyway, let’s do a roll call of this week’s casualties:

However, a few projects managed to escape the slaughter. V Systems, a newcomer to the game, saw a 22.1% uptick. 

Price Table
# Coin Price Marketcap Volume (24h) Supply Change (24H) Price Graph (7D)
1 $ 10,465.00 $ 186.46 B $ 30.14 B 17.83 M -0.65%
2 $ 219.09 $ 23.45 B $ 9.82 B 106.97 M -2.28%
3 $ 0.318708 $ 13.66 B $ 1.71 B 42.83 B -1.16%
4 $ 96.78 $ 6.07 B $ 4.10 B 62.73 M -4.45%
5 $ 301.60 $ 5.40 B $ 1.79 B 17.90 M -4.54%
6 $ 29.03 $ 4.51 B $ 502.70 M 155.54 M 0.52%
7 $ 3.98 $ 4.05 B $ 2.95 B 1.02 B -3.06%
8 $ 1.00 $ 3.57 B $ 42.71 B 3.56 B 0.14%
9 $ 140.80 $ 2.52 B $ 544.00 M 17.90 M 4.53%
10 $ 0.057989 $ 1.81 B $ 119.99 M 31.11 B -1.41%

G7 Agrees: Libra and Crypto Have Significant Concerns: In comments to CNBC’s Squawk Box, US Treasury Secretary Steve Mnunchin said, “There was a clear agreement from all G7 finance ministers and central bank governors that Libra, in particular, raises some very significant concerns, and cryptocurrencies more broadly,” adding, “before any of us let these go through, we’re going to make sure those concerns are satisfied.” While the G7 finance ministers and central bank governors reached consensus (ha!), it’s still unclear whether there will be an international decision in regards to regulation of digital assets. Mnunchin also commented, “first of all let me be clear, we very much support financial innovation and anything that lowers payment processing costs, especially cross-border.”

BitMEX Under Investigation by the U.S. Commodity Futures Trading Commission (CFTC): The people planning to invade Area-51 aren’t the only ones about to be probed. The  U.S. Commodity Futures Trading Commission (CFTC) is currently probing Seychelles-based cryptocurrency exchange BitMEX. Earlier this week, cryptocurrency antagonist Nouriel Roubini denounced BitMEX claiming that it “may be openly involved in systematic illegality.” According to Bloomberg, the CFTC investigation is “ongoing” and won’t necessarily lead to misconduct allegations.  

Top Cryptos Pronounced Dead: A report by CoinTelegraph noted five tokens pronounced “dead” for a variety of reasons. The list includes Emercoin, NEM, Bitconnect, Bitcoin Diamond, and Universa, for reasons running the gamut from theft, Ponzi Schemes (you know which one this is), low liquidity, and lack of liquidity.  

Jeremy Allaire Added to Power Lunch Time with Warren Buffett: The upcoming lunch between Tron CEO Justin Sun and billionaire Oracle of Omaha Warren Buffett has grown to include the CEO of Circle, Jeremy Allaire. Sun seeks to help Buffett, a vocal Bitcoin skeptic, see the light for cryptocurrency’s ability to impact the world positively, as well as an asset class worth exploring. The $4.6 million lunch also includes Litecoin creator Charlie Lee and will take place at Quince, a three-Michelin-star restaurant in San Francisco. 

What’s New at Coincentral?

Facebook Libra Project Already Facing Resistance, Major Hurdles Ahead: There have been concerns that its Libra platform will be used to gather financial information about its users. Facebook has made an effort to mollify data privacy fears by publishing a communiqué which emphasizes that consumer data will not be shared with third parties.

What Is Blockstack (STX)? | The First SEC-Qualified Token Offering: Blockstack is a decentralized computing network and ecosystem for decentralized applications (dApps). The project recently made headlines as the first token sale in U.S. history to receive clearance from the Securities and Exchange Commission (SEC). The team has been together since 2013, however.

Iran is Looking to Allow Regulated Cryptocurrency Mining: Abdol Nasser Hemmati, the governor of the Central Bank of Iran has announced that the government is working on a framework that will allow regulated cryptocurrency mining.

3Commas Sees an Automated Trading Cryptocurrency Future: As the cryptocurrency market continues to entice new and old traders, teams are building projects to facilitate the process of buying and selling digital assets. One such company, called 3Commas, is one of the largest in the space to provide trading bots and trading automation tools.

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Source: Coin Central

Iran is Looking to Allow Regulated Cryptocurrency Mining

Abdol Nasser Hemmati, the governor of the Central Bank of Iran has announced that the government is working on a framework that will allow regulated cryptocurrency mining.

According to the official, lawmakers are drafting policies that will require miners to pay for electricity at export rates. He has also mentioned that it’s in the government’s interest to have mined digital currencies channeled back into the Iranian economy.

The move will pressure mining enterprises into making a positive contribution to the economy which has been battered by a wave of crippling sanctions imposed by the Trump administration.

Hemmati has, however, warned that mining of cryptocurrencies whose value is tethered to that of the national currency, the rial, or assets such as gold will be barred. Iran is currently experiencing an incursion of miners looking to take advantage of its cut-rate electricity fees.

The low cost of power in the country is as a result of extensive government subsidies and expansive oil reserves. The Iranian administration spends over $40 billion a year on energy subsidies alone and has vast oil reservoirs second only to Venezuela.

These two factors have pushed down energy consumption costs considerably. As a result, the average rate per kilowatt hour in Iran is about $0.03, but it exports electricity to neighboring countries at a cost of about $0.8 kWh.

The Incursion of Miners Is Forcing the Government to Change Policies

Reports of miners flocking in from China, Spain, Ukraine, France, and Armenia have been circulating since December last year when the crypto winter was setting in. Energy consumption has reportedly surged by over 6 percent as a result of mining activities.

As such, the government is taking the rise of mining-farms seriously and has apparently identified over 100 cryptocurrency mining-zones. It has threatened to cut off power supply and seek legal action against infringing entities.

The Iranian leadership has traditionally allowed some religious establishments such as mosques to use electricity for free but the mining mania has prompted the government to rethink this policy due to abuse.

Viral images of mining rigs installed in mosques and government buildings have triggered a re-examination of the free electricity policy.

Cryptocurrency Trading is Still Banned in Iran

There has been some policy incertitude in regard to the legality of crypto mining and trading in Iran. This is largely due to a flurry of contradictory remarks made by Iranian politicians.

Nasser Hakimi, the deputy governor for new technologies at the Central Bank has offered some clarification on this and emphasized that The Supreme Council on Countering Money Laundering clearly prohibits trading in digital currencies. He has underscored that crypto mining is still allowed.

(Featured Image via Pixabay)

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What Is Blockstack (STX)? | The First SEC-Qualified Token Offering

What Is Blockstack?

Blockstack is a decentralized computing network and ecosystem for decentralized applications (dApps). The project recently made headlines as the first token sale in U.S. history to receive clearance from the Securities and Exchange Commission (SEC). The team has been together since 2013, however.

The Blockstack team’s overarching goal is to give users control of their data and identity. They’re accomplishing that goal by providing a suite of developer tools and protocols intended to lower the start-up barriers of dApp development.

In this Blockstack guide, we take a look at:

How Does Blockstack Work?

Blockstack is a comprehensive ecosystem containing numerous components that enable you to go from “Zero-to-DApp” in less than an hour. Let’s examine a few of the necessary parts.

Stacks Blockchain

As you could probably guess, the Stacks blockchain is the foundation of Blockstack. It implements a leader election process with Tunable Proofs to maintain consensus. The Tunable Proofs enables Blockstack to combine native Proof-of-Work (PoW) consensus with the hash power of a more established blockchain.

Currently, the Stacks blockchain includes a combination of its own Proof-of-Work and a Bitcoin Proof-of-Burn consensus. To become a leader (miner), you burn the underlying cryptocurrency (bitcoin) and commit a set of transactions. You receive a mining reward if your transactions match the ‘winning’ chain.

Once the network is large enough, the Blockstack team plans to switch the Stacks blockchain over entirely to a native PoW consensus.

Blockstack Authentication

One of the project’s first features, Blockstack Authentication, connects your identity to all of the dApps in the Blockstack ecosystem. It utilizes single sign-on with your universal username, and in place of passwords, public key cryptography that runs on your local device’s software.

Authentication is entirely on-chain, maintained by the Blockstack blockchain and Blockstack Naming System.

Gaia Data Storage

According to the Blockstack whitepaper

“[Gaia is] a user-controlled storage system that enables applications to interact with private data lockers.”

Individuals, rather than the Stacks blockchain, host these data lockers. Instead, the blockchain records pointers to a piece of data’s Gaia location. As with other forms of blockchain storage, Gaia removes the need to trust third-party cloud storage providers like Amazon and Google.

Gaia architecture

Gaia provides a decentralized mechanism for data storage. | Source: Blockstack whitepaper

Clarity Smart Contracts

Similar to Ethereum’s Solidity, Blockstack implements its own smart contract programming language, Clarity. Unlike Solidity, Clarity is non-Turing complete over a single transaction. However, it is Turing complete over the history of transactions.

Blockstack keeps the majority of a dApp’s business logic off-chain and prevents the virtual machine (VM) from compiling smart contracts. In fact, most dApps using Blockstack aren’t actually smart contracts.

Libraries and SDKs

The Blockstack developer community has a substantial (and growing) list of tools to help developers build Blockstack applications. The list includes, but isn’t limited to libraries for:

  • Android
  • iOS
  • Javascript
  • React Native

If you’re a novice developer, the team also provides a tutorial on creating a dApp in under an hour.

App Mining

Every month, Blockstack rewards the best apps in the ecosystem with a $100,000 prize pool. The top app receives 20 percent of the total prize ($20,000). The next best app receives 20 percent of the remaining pool ($16,000). And so on until the pool is dry.

Blockstack App mining decay schecule

The app mining reward decreases by 20 percent with each drop in ranking. | Source: Project website

Blockstack has partnered with four independent companies (Product Hunt, Awario, TryMyUI, Internet Labs), which rate the apps using their distinct proprietary data. Your app’s ranking depends on which Blockstack features you’ve integrated, how you’ve improved since the previous month, and how many standard deviations you are away from the average score in your category, among many other aspects.

The Stacks Token (STX)

The Stacks token is the native token of the Blockstack ecosystem. You spend STX to register digital assets, execute smart contracts, perform transactions, and anchor app chains, among other activities.

Blockstack Team & Progress

Blockstack, created by Muneeb Ali and Ryan Shea, initially launched in 2014 as a decentralized identity system. Throughout 2015 and 2016, the team created the Blockchain Naming Service and brought on two additional team members.

In the second quarter of 2017, they launched the Blockstack Authenticator and published the project’s whitepaper. At the end of that year, the team held a token sale in which they raised about $50 million.

Throughout 2018, the Blockstack team released several development libraries, launched a universal store for dApps, and created the Stacks wallet among several other accolades.

Already this year, Blockstack created a prototype for their VM and released a new consensus algorithm. On deck for the rest of 2019 and 2020:

  • Clarity smart contract SDK
  • Hardfork to a new consensus
  • Fully-featured smart contract support
  • Improvements to Gaia

The project has received investments from some of the top venture capital firms in the world, including YCombinator, Union Square Ventures, and Winklevoss Capital.

Where to Buy STX

The Stacks token sale is fully regulated by the SEC under Regulation A+, so expect to provide personal information for Know-Your-Customer (KYC) and Anti-Money Laundering (AML) laws.

The token sale began on July 11 and will continue until the project raises $28 million. To register, head over to the Stacks token sale registration page.

Where to Store STX

You should store your STX in the official Stacks wallet. It’s available on Mac and Windows operating systems.

Stacks wallet

The Stacks wallet requires fuel for transactions. | Source: Project website

For additional security, consider using a hardware wallet like Ledger or Trezor as well. The Trezor One, Trezor Model T, Ledger Nano S, and Ledger Blue all support STX storage.

Note: To perform transactions in the Stacks wallet, you need to supply a small amount of bitcoin as fuel.

Final Thoughts

The Blockstack team envisions an entirely decentralized Internet on the horizon and their ecosystem at the base of it.  The project is an ambitious undertaking, but the team has shown that they get results through continuous development milestone achievements. It also helps that they have the support of some of the biggest names in blockchain, cryptocurrency, and venture capital.

Although the current token sale requires some KYC input, it’s worth a look.

Additional Blockstack Resources







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Source: Coin Central

What is PIVX Cryptocurrency? | Beginner’s Guide

PIVX: The New Privacy Coin on the Block(chain)

PIVX (or Private Instant Verified Transaction) is a privacy-centric Proof-of-Stake cryptocurrency forked from DASH. The PIVX Manifesto focuses on community governance and a decentralized project from the technology itself to how project proposals are voted on and implemented.

As the name implies, PIVX is attempting to build a usable digital means of exchange that is easy to spend privately and securely in everyday life. To this end, the main focuses of development are minimizing transaction times and fees while maintaining privacy and security.

The PIVX community is vibrant and global, with active populations on all of the major chat platforms (Discord, Reddit, BitcoinTalk, etc.) as well as a public roadmap and lots of resources for interested investors and community members to learn about the technology and get involved.

The core team welcomes participation from anyone willing to put in the time and effort, and all community proposals are entertained, discussed, and voted on by invested community members.


PIVX Manifesto

In this PIVX guide, we’ll go over some basic history about the project, the PIVX mobile wallets, how staking and Masternodes work, and technical features of the network and token.

About PIVX

PIVX is was launched on January 31, 2016, by two DASH community members.

The founders admired the DASH technology but wanted to see some changes. They moved to a completely Proof-of-Stake system as opposed to DASH’s Proof-of-Work system and implemented what they saw as a fairer reward system that used a see-saw mechanism to auto-balance reward payouts (this is gone into more detail in the staking section below).

They saw privacy as a critical component of a daily means of exchange and set out to combine the “digital cash” ethos of DASH that prioritizes fast, cheap payments with more advanced privacy and anonymity. Their hope is to become the go-to payment method for peer-to-peer transactions and in-store exchanges.

Point of Sale and Wallet

As a coin focused on being digital cash, a lot of attention is being paid to the mobile wallets that will enable users to spend their PIVX in stores and with other users. The idea is to create a simple app that lets you buy anything right from your phone like you would with Venmo or Apple Pay. The wallet promises to be flexible, secure, and convenient. The Android wallet was released on August 1, 2017, and the iOS wallet is set to be released by the end of 2017.

The wallet comes equipped with security measures like 2-factor authentication (which is pretty expected from most secure apps these days) and also Universal 2-Factor, which makes use of a hardware dongle to provide an extra layer of security when accessing your funds. The PIVX team wants their wallet to be your bank so they can assist you in managing your funds to make buying and sending a breeze while maintaining complete security. They’re pulling out all the stops when it comes to the latest security measures and want to see the PIVX wallet become the cornerstone of digital asset storage.

The wallet roadmap includes the ability to create escrow agreements with other users, enabling users to make use of the wallet to transact directly with peers for goods and services in a safe and efficient manner. This makes the wallet not only a storage for your assets but also a peer-to-peer marketplace and payment processor, like Paypal. Encrypted messaging built into the wallet is aimed at making the PIVX wallet the easiest way to arrange sales, send funds, receive payments, and power commerce in all contexts.

Coin Supply and Sustainability

The PIVX network allows for 2.6 million PIVX tokens to be minted per year forever, with 90% of the minted coins going to staking wallets and Masternodes (staking is covered in the next section), and 10% going to fund budget proposals voted on by the Masternodes and stakers.

This lack of a maximum coin supply makes PIVX function similar to a traditional currency, as inflation is introduced to the system to encourage daily usage and avoid hoarding. The inflation is around 4% per year, but instead of simply devaluing your currency like the Fed does when it prints Dollars, all those minted coins are going directly to holders of PIVX, offsetting the effect of inflation by spreading the profits.

While the coin supply will grow indefinitely, there is a “soft cap” that throttles the rate of inflation imposed by burning transaction fees based on the traffic level of the network. Once the number of transactions reaches a certain threshold, transaction fees are “burned,” meaning that a number of coins equal to the transaction fees are permanently removed from circulation.

Community Governance and Staking

There are two ways to earn rewards for contributing to the PIVX network: Masternodes and staking.

A network of Masternodes, users holding coins as collateral, are used to verify and anonymize transactions, store the blockchain, and vote on community proposals, and in return pay out dividends in the form of PIVX rewards.

Masternodes require a holding of 10,000 PIVX in the PIVX-Qt wallet available from the pivx.org website. The budget, development roadmap, and any major community decisions are decided by this voting mechanism, decentralizing the governance of the project and putting the decision-making power in the hands of those invested in the success of the technology.

Staking coins are used to secure the network and to release new blocks (think “mining” in regard to other coins like Bitcoin). Any amount of PIVX can be staked in the wallet, and recently a proposal was passed to give some voting rights to all stakers. This means that you don’t need to hold a full 10,000 PIVX to earn rewards and vote. Each block (every 60 seconds) a reward is released at random in chances proportional to the amount of coins being staked.

The more coins you’re holding, the higher your chance, but every staking wallet will eventually receive some rewards. The network uses a see-saw mechanism to balance the rewards between Masternodes and traditional staking, auto-balancing the reward frequency and size as the number of nodes changes. Your expected returns from staking or running a Masternode can be calculated using the Returns Calculator a community member put together. To learn more about running your own Masternode check out the official Masternode website. To learn more about staking coins in the PIVX wallet or other opportunities to earn PIVX, take a look at the reward page.


Private and Instant

PIVX employs a custom version of the popular Zerocoin protocol to anonymize transactions by obfuscating the addresses associated with coins. It’s based on the libzerocoin technology that many other privacy coins employ, but the much of the PIVX code is custom-built. As opposed to Dash and Zcash, PIVX can be completely anonymous, preventing blockchain analysis from revealing recipients and senders.

This in-house version of Zerocoin produces smaller and faster transactions than the original libzerocoin library employed by other coins, which allows them to provide privacy (which usually comes with added transaction fees and speed reductions) while also working to live up to the goals of super fast transactions and negligible fees. They also added a mechanism for auto-minting anonymous coins, which ensures that there are always enough anonymous coins in circulation to secure the network and keep things private.


To spend coins anonymously, users need to convert their standard PIVX tokens into ‘zPIV’ tokens and then send them to any PIVX address. On the other end, a user receives PIVX tokens just like any normal transaction, but thanks to Zerocoin, the transaction is both verifiable on the blockchain and anonymous as to who sent and received those coins. Moving forward, the community is aiming to decrease the added costs of anonymity, moving more and more of the total coin supply over to private zPIVs.

Using what the PIVX community calls SwiftX, transactions are nearly instant and coins are spendable within seconds of being sent. With a block time of 60 seconds and a global network of Masternodes constantly verifying transactions, PIVX aims to make instant spending and receiving a reality. This is further enabled by very small transaction fees, usually around the order of fractions of cents per transaction. This is vital to the mission of owning your day-to-day purchases and payments and goes a long way toward paving the way for PIVX to take a big role in the space moving forward.


PIVX is a promising privacy coin aiming to be an easy-to-use digital cash replacement. There have been a few hiccups surrounding the implementation of the privacy technology, but the community and development team are active, engaged, and optimistic. It’s performing well on the market, with high volume and support from major exchanges (most notably Bittrex) and looks like it’ll be around for a while.

Complete privacy from the Zerocoin implementation, instant, and dirt-cheap transactions thanks to SwiftX, and a return on your investment via staking all add up to a very solid coin worth keeping an eye on.

There are projects with similar missions, but PIVX brings some unique value to the table with its advanced Proof-of-Stake algorithm and decentralized, Community Guided Governance model.

The post What is PIVX Cryptocurrency? | Beginner’s Guide appeared first on CoinCentral.

Source: Coin Central

My Experience Using a Bitcoin ATM

In my previous research for Coinbase alternatives, I discovered a fairly novel way to purchase Bitcoin and other altcoins – Bitcoin ATMs. Like normal ATMs, you deposit cash into the machine, but instead of receiving your funds in a bank account, you receive an equivalent amount of Bitcoin in a wallet that you provide.

There are currently over 1700 Bitcoin ATMs across 58 countries. These machines aren’t the only way to purchase cryptocurrency with cash, though. Beyond the thousands of ATMs, there are almost 40,000 service providers that can help you exchange Bitcoin for cash and vice versa.

Bitcoin ATMs have been popping up recently in online articles promoting the ever-growing adoption of Bitcoin, but I (wrongly) assumed that they were limited to large cities. For fun, I entered my address on Coin ATM Radar to see how far I’d have to travel to try out one of these bad boys.

I was shocked to find that, lo and behold, there’s a Bitcoin ATM just blocks from my apartment in the back of a Chevron gas station. Who would’ve thought that a city of just 140,000 would be on the forefront of cryptocurrency advancements?

My first impression

The ATM was a little tough to find hidden behind a stack of water bottle cases and a couple of mini-kegs. After shifting some inventory,  I had plenty of room to work and can begin my crypto purchase.

I’m greeted with a simple screen showing the exchange rates for each of the three currencies offered – Bitcoin, Dash, and Ethereum.

Bitcoin ATM


I can see at first glance that this isn’t going to be a cheap experiment. Bitcoin is listed at almost $1000 more than the market rate for a price of $6818.36 USD. For those who don’t want to do the math, that’s about a 17% markup – a not so small cost for convenience.

Alright, let’s get started exchanging.

After choosing to “buy Bitcoin”, I’m told that I need to be registered to use the ATM. It seems strange that I’d need to register to purchase a currency that became popular, in part, due to its privacy aspects, but I decide to continue anyway. I’ve got nothing to hide.

Bitcoin ATM Registration


I’m first prompted to enter my phone number to receive a one-time password. Easy enough. I get the text with my password almost immediately.

Once I enter my password, I’m then required to scan both sides of my driver’s license. This seems a bit invasive, but once again, I push forward.

Bitcoin ATM Driver's License Input

So much for privacy

For the last step of the registration, I need to take a selfie. This is usually where I’d draw the line on privacy; however, I’m curious to see how the rest of the process plays out, so I snap a picture. The sacrifices I make to produce an interesting article.

Bitcoin ATM selfie


My first selfie attempt is rejected because I’m not smiling. This is a strange requirement, but okay. I try again, showing off my pearly whites this time, and that does the trick. Finally, time to buy some Bitcoin.

Well, not exactly.

The next screen informs me that my registration has been submitted but not approved yet. This process could take up to 5 minutes – an estimate that I’m sure is on the optimistic side. I could either stand in the gas station awkwardly waiting for my approval, or I could call it a day and visit again tomorrow. I choose the latter.

Let’s buy some Bitcoin

I show up the next day and head straight for the ATM – an action that the gas station attendant was clearly not accustomed to seeing. Through some casual chit-chat, I learned that they had gotten the ATM a couple of months ago, but it hadn’t been getting very much action. I refrained from telling him that the 5-foot high beverage pile in front of the machine probably wasn’t helping. Other than that, he didn’t know too much about the ATM or cryptocurrency in general.

Back at the machine, I once again have to enter my phone number to get my password.

Success! Now, I’m finally able to enter the recipient wallet address for my Bitcoin. I log into my wallet account on my phone and pull up the QR code. While doing this, I time-out of the ATM and have to enter my phone number again. Thank God I’m not in a hurry.

Bitcoin ATM Wallet Information


Entering my wallet information is much easier than I anticipated it would be. The scanner on the ATM has no problems reading the image from my phone as I hold it up to the camera. After my issues taking a selfie the previous day, I thought this would be an issue.

On the next screen, I’m able to confirm my address and begin inserting some cash. 

Bitcoin ATM Insert Cash

I slip in a crisp $10 bill (baller!) and approve my transaction. I then receive a confirmation message and head home knowing that these exchanges usually take a few minutes. Once at home, I check my Bitcoin wallet, and sure enough, the funds are there!

My thoughts

Purchasing Bitcoin through an ATM was by no means a pleasant task. The registration process is unnecessarily intrusive, and the poor exchange rates outweigh the positives of any convenience that you may gain by using the machine. I doubt I’ll be using one again in the immediate future.

That being said, I think these ATMs are ideal for people without access to a bank account or those attempting to cut ties with the current financial system. As Bitcoin becomes a more prevalent payment method around the world, I could also see ATMs like this being popular among travelers looking to avoid the poor rates found at the currency exchanges of each country.

The growing popularity of Bitcoin ATMs is a good reflection of the steps the world is taking toward the adoption of crypto. As the technology improves and the exchange rates become more manageable, I’ve got no doubt that machines like these will be widely used in cities, both big and small, around the world.

The post My Experience Using a Bitcoin ATM appeared first on CoinCentral.

Source: Coin Central

Litecoin vs Bitcoin: Which one is better?

Litecoin vs Bitcoin

Litecoin vs Bitcoin. Which one is better? Everyone from qualified economists to Redditors have been comparing the two since Litecoin came into existence in 2011.

The conversation not only discusses these coins individually and against each other, but also pertains to a more complex debate over what it takes to become a successful cryptocurrency.

Bitcoin is the clear poster-child for the crypto-community. However, Litecoin has developed a user base from those who are skeptical of some aspects of Bitcoin but still strongly believe in the future of cryptos.

While Bitcoin and Litecoin have some slight technical differences, they both set out to accomplish the same thing: transfer value using cryptographic principles. Yet once the two coins face off, it’s clear why Bitcoin has come out the winner.

Litecoin vs Bitcoin: At a Glance

Note: On mobile devices, swipe and scroll table.


Launch Date October 7th, 2011 January 3rd, 2009
Creator Charles Lee Satoshi Nakamoto
Protocol Proof-of-Work Proof-of-Work
Algorithm Scrypt SHA-256
Average Block Time 2.5 Minutes 10 Minutes
Block Halving Every 840,000 Blocks Every 210,000 Blocks
Max Total Coins 84,000,000 21,000,000

We can compare cryptocurrencies from many angles, but the most popular method is looking at their market capitalization. Market cap is essentially the amount of currency on the market (usually in U.S. dollars). Bitcoin is currently ranked number one with a market cap of over $56 billion, and Litecoin is ranked fifth with a market cap of $2.56 billion. Bitcoin is the standard cryptocurrency that most users and platforms prefer. You might be thinking, So why are we talking about Litecoin? Its market cap may be a tiny sliver of cake compared to Bitcoin’s $45 billion, but it’s one of the few altcoins with an active user base and legitimate credentials.

(You can view current market caps in the table above to see how they’ve changed since this article was published.)

Bitcoin Price Chart

Litecoin functions like Bitcoin: It is an online payment system that uses cryptocurrency instead of a national currency like U.S, dollars, Bitcoin and Litecoin carry out transactions using bitcoin and Litecoin respectively. As cryptocurrencies, they both garner a similar community and image, as well as rely on similar cryptographic principles.

Bitcoin was released in 2009 as the first cryptocurrency. Litecoin launched only two years later in 2011 but has been sprinting to catch up to Bitcoin ever since.

Litecoin Price Chart

Litecoin’s developers have stated that their intention was to create a “silver” to Bitcoin’s “gold.” Although Litecoin tech is arguably better than Bitcoin’s, it was born inferior.

Litecoin vs Bitcoin: At Depth

The two cryptos may seem similar, but they are actually quite distinct in their market acceptance and technical mechanics.

In the following four points, we will discuss what makes each crypto distinct. You will come to understand how Litecoin’s arguably superior algorithm will likely forever be subordinate due to Bitcoin’s pervasive network.

1) Bitcoin is Much More Popular

With a market cap roughly 22.5x the size of Litecoin’s, Bitcoin’s overwhelming popularity makes it the obvious choice for the crypto investment community.

According to Google Trends, Litecoin hardly holds a candle to Bitcoin’s search popularity. For scale, 100 indicates the peak popularity a term. A value of 50 means the term is half as popular, and a value of 0 means the term was less than 1% as popular as the peak.

Since cryptos are viewed as inherently risky, Bitcoin seems relatively stable with its extremely high market cap. Sure, Bitcoin’s price can still be incredibly volatile. Yet while a mere $1 billion loss would decimate Litecoin’s market cap in half, Bitcoin would need a crash of $40 billion in market cap for effects to be just as catastrophic.

Despite all this, Litecoin is still fairly relevant in the crypto community.

2) Litecoin Accommodates More Total Coins

Many crypto traders account for the total number of coins each cryptocurrency is programmed to make. Bitcoin is capped at 21 million coins, but Litecoin can make up to 84 million coins.

Both coins technically still have a long ways to go until they hit their cap limits but it remains a concern because of the price volatility expected as the coins reach their maximums. Bitcoin currently has roughly 16.5 million coins in circulation, and Litecoin has about 52 million. This means Bitcoin is currently at 78% of its maximum, and Litecoin is about 61% of its maximum. If Bitcoin nears its maximum coin amount first, then Litecoin may pick up more traction with traders buying into Litecoin to avoid the Bitcoin volatility.

The above point in favor of Litecoin, however, is largely a misunderstanding: Since both Bitcoin and Litecoin can be divided into fractional amounts, the maximum coin shouldn’t impact the value storage of either coin. For example, Bitcoin users can transfer as little as 0.00000001 bitcoins. The ability to accommodate more coins is then kaput.

3) Litecoin Has a Faster Transaction Processing Speed

Bitcoin’s average transaction confirmation time is a little over 9 minutes per transaction, whereas Litecoin’s is roughly 2.5 minutes per transaction. This makes Litecoin’s transactions roughly four times faster than Bitcoin’s, offering an attractive advantage for users who frequently conduct transactions, such as merchants .

Keep in mind that transactions technically occur instantaneously on both Bitcoin and Litecoin networks, but the transaction confirmation by other network participants does take some time. Waiting the full 9 minutes for a Bitcoin transaction or 2.5 minutes for a Litecoin transaction ensures the transaction was valid. Merchants can accept the transactions instantaneously without waiting for a confirmation, but they run the risk of becoming victim to a “double spend” attack.

This seemingly large advantage Litecoin has over Bitcoin, however, is minimized by third-party solutions that make instantaneous transactions more secure.

4) Litecoin’s Cryptographic Algorithm Welcomes Newbies

Long-term cryptocurrency users consider the technical components of Bitcoin’s and Litecoins’ different cryptographic algorithms when comparing the two.

Bitcoin uses the SHA-256 algorithm and Litecoin uses an algorithm called Scrypt. These algorithms determine the “mining” process for new coins. “Miners” confirm the transactions of other users, and are rewarded units of that currency in exchange.

Many consider Bitcoin’s SHA-256 algorithm more complex than Litecoin’s Scrypt, which therefore allows for a higher degree of parallel processing. Bitcoin miners have built sophisticated methods to mine bitcoins at a highly efficient rate. The most dominant method uses ASICs–Application-Specific Integrated Circuits. ASICs are essentially hardware systems (similar to CPUs) created purely to mine bitcoins.

The Bitcoin competition for mining is fierce due to the sheer amount of miners, as well as technical innovations such as the ASICs. New miners struggle to establish themselves without adequate computing power, capital to handle expenses, and the know-how to outcompete experienced competition.

Litecoin was largely created to appeal to miners who could no longer mine Bitcoin because their CPUs couldn’t compete with ASICs. Scrypt is more accessible for new miners. It was designed to be less conducive to custom hardware solutions such as in ASIC-based mining. Scrypt, however, is not immune to the innovation and there is increasingly development that hinders the easy-access mining Scrypt was partially designed for.

Bitcoin Crowned King Thanks to Its Network

While Litecoin’s efforts to make mining more accessible to everyone is a notable gesture that speaks volumes about the Litecoin community, it also pigeonholes itself into a niche. Instead of appealing to a massive community of people to achieve a network to contend with Bitcoin’s, Litecoin focused on minor differentiating factors. Litecoin essentially functions the same as Bitcoin and doesn’t offer enough for users to convert from Bitcoin.

It’s safe to assume that most crypto-traders, those responsible for the large crypto market caps, aren’t valuing tech over substantial profit. Litecoin’s value proposition simply sounds like another altcoin pitch to them. Less tech-savvy adopters hardly know what the mining process is like, let alone the difference between SHA-256 and Scrypt. So while Litecoin’s price has increased significantly over the past few months, it simply isn’t as attractive as Bitcoin’s.

Litecoin additionally took a hard jab in the gut when Ethereum exploded onto the scene in early 2017 and knocked Litecoin down to the #4 market cap position. Ethereum has developed nearly 10x that of Litecoin’s market cap in a short amount of time.

Litecoin Do Something Meme

Final Thoughts

Since Litecoin’s purpose initially was to be “silver” to Bitcoin “gold”, it really begs the question of whether it will ever be anything more than Bitcoin’s minion.

Litecoin technically has a superior algorithm but this is largely irrelevant, as Bitcoin’s popularity has cemented it as the gold standard for old and new crypto traders.

When it comes to cryptocurrency adoption, Bitcoin and Litecoin are in the same boat. Think of it this way: Bitcoin and Litecoin are both good guys. But Bitcoin is the main protagonist and Litecoin is the inferior supporting actor. Bitcoin is the Goku, Aragon, and Batman. Litecoin is the Vegeta, Boromir, and Harvey Dent. In the end, Bitcoin will likely end up in every sequel, while Litecoin is killed off due to lack of popularity.

An extensive user network is essential in the crypto community. No matter how hard Harvey Dent altcoins may try, even their technical superiority can’t beat the popularity of the Batman Bitcoin .

Additionally, Bitcoin’s liquidity cannot be overlooked. The fact that cryptocurrencies tend to be very volatile plays a huge role in the minds of new users. Many new users start with Bitcoin because it offers stability and a large preexisting market.

The network effect ultimately determines which cryptos survive and as more users buy into Bitcoin, Litecoin will likely become increasingly obscure. Litecoin’s relevancy is debatable and its recent spikes in price are largely due to the current rise in cryptocurrency prices as a whole.

It’s interesting to theorize situations where Litecoin could overtake Bitcoin. Litecoin loyalists cling to the fact that Litecoin is one of the only high-value value-exchange alternatives. In the unlikely case that any of Bitcoin’s potentially problematic features like its 21 million coin limit remain unaddressed and start to create substantial problems, people could shift towards Litecoin. However, the downfall of Bitcoin–the flagship of the cryptocurrency world–could spell doomsday for the cryptocurrency market at large.

The post Litecoin vs Bitcoin: Comparing Two of The Most Popular Cryptocurrencies appeared first on CoinCentral.

Source: Coin Central

Facebook Libra Project Already Facing Resistance, Major Hurdles Ahead

Facebook has released details of its highly secretive cryptocurrency project. The venture has stirred the crypto community and drawn interest from crypto industry stakeholders due to its market shifting potential.

There have been concerns that its Libra platform will be used to gather financial information about its users. Facebook has made an effort to mollify data privacy fears by publishing a communiqué which emphasizes that consumer data will not be shared with third parties.

It highlights a few instances where the company may do this and they include cases where there is a need to “comply with the law, secure customers’ accounts, mitigate risk and prevent criminal activity.”

The company has already created a subsidiary called Calibra whose task is to develop the Libra crypto wallet along with its information privacy features. Its technology will apparently prevent user-data on Facebook’s social networks from being combined with financial information on the blockchain.

The firm has announced that the cryptocurrency wallet will be embedded in its social media platforms. It will be available on both WhatsApp and FB as a standalone feature in 2020.

Facebook Faces Data Privacy Accusations

Facebook currently faces major trust issues, especially related to data privacy. Notable crypto industry stakeholders have already accused the company of camouflaging the true intentions behind its cryptocurrency project. Many skeptics believe that the company will use the Libra blockchain application to gather financial data on its users.

Among them is Open Privacy Executive Director, Sarah Jamie Lewis, who has publicly lambasted Facebook’s latest maneuver warning that the social media giant simply can’t be trusted with sensitive user information.

According to Senator Josh Hawley, Facebook is expanding its monopoly with its new project. He proclaims that the company has become too big and powerful and needs to be broken up.

The senator has called upon the Federal Trade Commission (FTC) to get serious when it comes to reining in the conglomerate adding that a fine of a few billion dollars is like a speeding ticket to the organization which raked in over $50 billion in revenue last year.

Of course, the fears are justified given Facebook’s past controversial data collection and sharing practices. In 2018, an investigative report by the Guardian revealed that the company had gotten into arrangements with third-party agencies, allowing them access to personally identifiable data, a move that deeply infringes upon consumer privacy.

Moreover, Facebook’s explanation of how it intends to tackle this problem when the new service is launched falls short of expectations.

The protocol will, however, allow users to make token transfers anonymously using numerous addresses. According to David Marcus, who heads the Libra venture, the firm will be committed to protecting user information. He disclosed this during an interview with CNBC, adding that consumers who find it hard to trust Facebook are free to look into alternative payment options offered by competitors.

According to David Marcus, who heads the Libra venture, the firm will be committed to protecting user information. (Image Credit: Yahoo)

The Senate Banking Committee has summoned Facebook to explain how it plans to safeguard user information on its new crypto platform.

The request was made in May after Facebook sent a letter to U.S. banks and related institutions asking them to provide financial data belonging to its users. How these details were going to be used was among the main questions posed by the senators.

A hearing has been scheduled for 16 July. Titled “Examining Facebook’s Proposed Digital Currency and Data Privacy Considerations”, it will give the company a platform to directly address concerns.

According to House Financial Services Committee chairwoman, Rep. Maxine Waters, there is an urgent need to tackle the issue.

As declared by ShapeShift CEO Erik Voorhees via Twitter, Libra is not a truly “pure cryptocurrency” and so no one should use the digital coin expecting privacy. He also added that the network would most likely be unavailable in certain countries such as Iran which currently faces U.S. sanctions.

Decred Project Lead and co-founder, Jake Yocom-Piatt says that the main benefit of Facebook’s cryptocurrency is not in its use-case, rather its potential as an on-ramp platform that will educate the general public about digital currencies. This is likely to lead to greater adoption of coins such as Bitcoin.

How Decentralized is the Libra Network?

The Libra network will apparently be decentralized and governed by a committee of founding institutions in which Facebook is a member with equal rights and powers to those of its peers.

The group consists of a host of payment-processing firms such as Visa, PayPal, MasterCard and Stripe, non-profits that include Mercy Corps and venture capital companies Andreessen Horowitz, Ribbit Capital, and Breakthrough Initiatives, among others.

The committee will apparently settle on suggested developments through a voting process.  The approval of policies or technical aspects will require a two-thirds majority vote.

Founding members will act as validator nodes and will be able to work with regulated resellers in various international markets while managing Libra reserves. The company says the following about assets backing its reserve.

“A basket of bank deposits and short-term government securities will be held in the Libra Reserve for every Libra that is created, building trust in its intrinsic value. The Libra Reserve will be administered with the objective of preserving the value of Libra over time.”

The Whitepaper indicates that the protocol will operate using a permissioned blockchain framework. This means that companies seeking to obtain a validator status will have to meet certain technical benchmarks.

Facebook explains that a permissionless system is not viable right now due to security concerns. It also claims that the decentralized Libra network is designed to withstand a system breakdown or attack affecting up to one-third of all the nodes.

Some industry pundits have underscored that a permissioned blockchain where some parties are allowed to process payments and others aren’t means that the network is not truly decentralized.

Serving the Unbanked, A Few Problems

Facebook states that the Libra project was developed to serve the unbanked adult population which the company estimates to be around 1.7 billion people. It highlights that about 1 billion individuals within this group have access to a mobile phone.

Facebook illustrates that many unbanked people lack access to this crucial service because some are undocumented, face exorbitant money transfer fees, or are located too far away from institutional facilities. This, it declares, is the main target-market for the Libra cryptocurrency.

Of course, the concept is theoretically sound but will be hard to propagate in some regions. Countries such as Venezuela, in particular, would be great candidates for the service.

About 9.5 million Venezuelans are unbanked and the nation is currently reeling from sanctions, political skirmishes, and growing economic uncertainty. As such, more citizens are embracing cryptocurrencies as a store of value.

Consequently, peer-to-peer crypto platforms such as LocalBitcoins are experiencing a spike in transactions carried out by Venezuelans. It is likely that the Libra token will appeal to the populace due to its ease of use, low transaction costs, and stability.

But considering that the Facebook coin will be pegged to a number of major fiat coins, including the U.S. dollar, there will undoubtedly be a few problems. The United States government has deliberately prevented Venezuela from accessing its dollar reserves and so it is unlikely that Facebook will be allowed to offer direct derivatives.

Converting Venezuelan Bolivars into Libra will be another main problem since the country’s national currency fluctuates more wildly than bitcoin due to hyperinflation. The skyrocketing inflation rate in Venezuela is projected to reach 10 million by the end of 2019. Right now, $1 is worth about 6.2 million Venezuelan Bolivars (VES).

Of course, it is possible that a slew of innovative FinTech companies will step in and provide solutions that allow the local population to gain access to the Libra network. It will be interesting to see how such an arrangement would work.

Visa and MasterCard are on the Libra Project’s founding committee, but the White House has already hinted at plans to bar the two payment-processing agencies from operating in Venezuela.

Furthermore, Libra utilizes a permissioned blockchain and this will further prevent third-party Venezuelan payment companies from freely processing transactions without explicit authorization from Facebook. Because of this, there is a real possibility that Venezuelans will not be able to reap the benefits of this new cryptocurrency.

But then again, the Libra Project is registered in Geneva, Switzerland, an E.U. jurisdiction. This means that the project is set to be in compliance with European statutes as opposed to U.S. laws which are a messy patchwork fraught with risks. But still, there are a lot of uncertainties when it comes to serving such regions.

(Featured Image Credit: Libra.org)

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Source: Coin Central