Blockchain: A technical primer

Great info here on what blockchain is, how it works, and possible uses.

https://www2.deloitte.com/insights/us/en/topics/emerging-technologies/blockchain-technical-primer.html?id=us:2sm:3tw:4di_gl:5eng:6di&utm_content=bufferad8e2&utm_medium=social&utm_source=twitter.com&utm_campaign=buffer

Bitcoin is no democracy and that is a feature, not a bug

Bitcoin not only invented a digital means of payment, but also a new mechanism for social governance that manifests itself in the protocol: consensus. What is the difference between consensus and democracy? What are the effects on government and society?

Over the past 200 years, the ideal of democracy has become the core of society – democracy as the apotheosis of society. Accordingly, decisions must be taken democratically in order to claim legitimacy. Abstractly speaking, the majority subjugates the minority in a democratic decision. Democracy is a form of government.

Bitcoin turns the system upside down

At crypto conferences we hear again and again “democratization of X” as the goal of the digital revolution 2.0, but let’s remember: this revolution 2.0 was abandoned by Bitcoin – the decentralized peer-to-peer electronic cash system. The fundamental feature of Bitcoin is its leadership.

At this point, the difference between government and governance becomes clear: the government is the authority that determines the course; in return, leading is the process by which something is decided.

We already know that there is no central authority in Bitcoin, no government to make decisions. This is not a bug – it’s a feature. The absence of a ruling authority leads to a unique leadership mechanism: consensus.

While in a democracy the majority decides over the minority, in a consensus everyone decides over himself. Participants have exclusive decision-making power over themselves and their property. This means that in Bitcoin it is not the majority that decides – but everyone, everyone decides about themselves. Anyone participating in the network implicitly agrees to the rules. Everyone agrees on these rules. All interaction is based on a voluntary basis.

Decisions in the consensus model

The example of block scaling demonstrates the consensus principle:

In 2016 and 2017, one question dominated the Bitcoin world: How should Bitcoin scale to a global currency? The answers were as diverse as they were contradictory. Two camps pulling in opposite directions – “Larger blocks!” “No, SegWit!”. A dead end dilemma? After all, there is no instance that can tell you what to do. The status quo is maintained. But that was not the end of the story.

After several years of debate, the Bitcoin protocol showed its true strength. Instead of imposing something on one or the other camp, there is a third option in Bitcoin Land. In the words of Dora the Explorer: “Por que no los dos?” (engl. “Why not just both?”). In fact, this was the solution to the conflict. The Bitcoin Unlimited team forked the Bitcoin network. Bitcoin Cash implements the proposed, larger blocks. Bitcoin, on the other hand, activated SegWit and implemented a different approach to solving the scaling question.

All users could and can decide for themselves. If you want larger blocks, you sell your Bitcoin for Bitcoin Cash; if you want SegWit, you sell your Bitcoin Cash for Bitcoin; indecisive people don’t have to do anything. Whether you want to use Bitcoin or Bitcoin Cash (or neither) is up to you. Essential: All decisions are voluntary.

Hard Forks instead of majority decision

In a democracy, the majority must agree to make a legitimate decision. In consensus, this condition is drastically tightened: everyone must agree on this. If there are differences of opinion, the paths fork. It’s called a hard fork. There are then two incompatible networks. However, there is still consensus within the systems.

This is where the power of consensus comes into its own. It tolerates a plurality of opinions and everyone can express them. Where in a democracy only one variant can win and is implemented (Trump or Clinton? Deutsche Mark or Euro?), the consensus model allows everyone their ideal world. Whether larger blocks or Lightning are the right way to scale or not, time will show us. We will see, as both approaches exist.

This article originally appeared at: https://captainaltcoin.com/bitcoin-is-no-democracy-and-that-is-a-feature-not-a-bug/.

UHive ICO (HVE Token): Blockchain Social Network Crypto Coin?

UHive describes itself as the world’s first social network “with physical dimensions and blockchain technology.” Find out what that means today in our review.
What Is UHive?

UHive is a blockchain-based social network that combines human psychology with blockchain technology to deliver a new user experience unlike any other social network.

The UHive ecosystem revolves around UHIVE tokens.

Obviously, we already have hundreds of major social networks on the internet today. What makes UHive different? How does UHive plan to separate itself from the crowd? The unique selling feature of the UHive social network is the idea of a “physical dimension”. By adding a physical dimension to the social network, UHive aims to bring digital social interactions to the real world.

How UHive Blockchain Social Network Crypto Coin Works

UHive is a social network available through a mobile app or web browser. The social network combines a physical dimension with blockchain technology. It also uses AI and virtual reality.

What exactly is this UHive “physical dimension”? Well, the company’s platform allows users to create and display their profile or walls with a digital physical location address in a world of infinite space. Your social profile occupies a real space inside a virtual environment.

In other words, you have a “physical” location within the UHive social network. You can discover and explore the network to find new businesses and spaces. You can zoom in and out or left and right to explore adjacent spaces.

UHive has filed patents for two technologies, including their “physical social network” concept and their “Grey World” concept. Both are listed as patent pending.

With UHive, users can have multiple profiles. You can have a profile on the Civilized World and another on the Grey World. You can embrace freedom and imagination on the Grey World while enjoying a regulated environment on the Civilized World. UHive uses a hybrid blockchain technology to keep user data, identity, and activities secured and anonymous.

Let’s go back to talking about UHive’s physical space idea: over time, your physical space in the Civilized World and Grey World can become more unique. As users engage with the platform more frequently, their space will be more visible and attractive to other users.

Users can also choose a specific space location today and then capitalize on the increased value of that space over time. You might situate your profile next to a famous space with lots of traffic, for example, which means people visiting the space will see your profile, increasing the value of your space location.

UHive also mentions virtual reality technology. The social network will be built from the ground up to support virtual reality, although this feature will be optional for users. You can explore the physical spaces inside UHive from a virtual reality device. The social network will also allow you to view movies and photos using VR and perform other social interactions with VR.

UHive Features And Benefits

Why do we need a social network like UHive? What’s the point of creating a “physical” social network? UHive seeks to provide a number of unique benefits to today’s social media infrastructure, including all of the following:

  • A unique discovery experience compared to traditional social networks
  • Enhanced visibility for brands, businesses, and communities to all users by visual representations, with trending topics easy to identify
  • New marketing trends based on the utilization of high traffic from surrounding spaces and increasing numbers of organic visitors
  • Hybrid blockchain technology that secures all data on the platform, allowing for increased anonymity and data security
  • A new digital token (UHIVE) that can be used to support a thriving digital economy
  • Socially active users will receive free UHIVE tokens on a weekly basis
  • A new, unique, and entertaining experience designed to distinguish UHive from other social networks

To learn more about UHive or to participate in the ongoing ICO,  

This article originally appeared at: https://bitcoinexchangeguide.com/uhive-ico-hve-token/.

Everything You Need To Know About Staking Coins

“Cryptocurrency currencies take the concept of money, and they take it native into computers, where everything is settled with computers and doesn’t require external institutions or trusted third parties to validate things.” – Naval Ravikant

Blockchain based cryptocurrencies provide an alternative way for people to make money. Digital currencies remove the need for relying on the stock exchange or traditional brokers. Millions of people around the world are making money through crypto trading, mining operations or staking coins.

What is Proof of Staking Coins?

Proof of staking (PoS) is a relatively new consensus algorithm for some digital currencies. It creates new blocks that are added to the blockchain. These blocks are staked by a person who is already holding some coins and helps in validating a new transaction on the platform.

An individual is only able to mine or validate new transactions for coins equal to the number of coins they have staked. The more coins a person stakes, the higher their power to validate transactions.

How Does the Process Work?

In a regular crypto network like Bitcoin, transactions are randomly processed by the mining node that is the first to solve a complex algorithm at the end of a timeframe. Investors holding Bitcoins have no say in which network operator validates the transaction.

In Proof of Staking protocol, miners are chosen randomly from a pool by holders of the digital coin. A miner can be added to the pool by staking a certain amount of coins in a bound wallet.

The chosen node stakes the coins in the bound wallet and creates a new block that is proportional to the percentage of coins staked. For example, if the number of coins staked is 5% of the total coins on the network, the node can mine 5% of transactions for new blocks.

Benefits of Staking Coins

Staking coins offers a number of benefits to mining operators.

The consensus mechanism removes the need for purchasing high-end computer hardware. When a mining node stakes bound coins from an e-wallet, it is guaranteed a fixed percentage of transactions on the network irrespective of its processing power. Investors with enough holdings in the coin can validate transactions on the network.

The value of assets staked through PoS does not depreciate with time unlike ASIC and other mining hardware. The value of the stake can only be affected by fluctuations in the currency prices.

Proof of stake is environmentally friendly and more energy efficient than proof of work mining used in Bitcoin. The threat of 51% attacks is reduced in a staking coins system.

The major benefit of staking coins is that it removes the need for purchasing expensive hardware. The system offers a guaranteed return and predictable source of income for miners unlike proof of work system where coins are randomly rewarded to the most high-level computing systems.

The Risks of Staking Coins Staking coins in a bound wallet has one drawback. The coins are locked up for a period of time and cannot be sold.

This may not be a problem while the value of the currency is rising, it can lead to losses when the price is falling. The amount earned through staking might not be enough to cover the price depreciation during a bearish run.

Popular Cryptocurrencies for Staking Coins Coin staking gives currency holders some power on the network. It gives them the ability to earn a regular income for their investments. This is quite similar to how someone would receive interest for holding money in a bank account.

The ability to stake coins to get mining preference has been seen received favorably by crypto investors. Many new currencies have built this model into their platform. Some of the popular currencies for coin staking are listed here.

DASH

DASH stands for Digital Cash. It was one of the first currencies to introduce the coin staking mechanism. The currency was built upon the core of Bitcoin. It made further improvements by implementing PrivateSend and InstantSend features.

The currency allows its investors to stake coins through a masternode. The minimum requirement to run a masternode is 1000 DASH units. DASH is currently priced at $320 which makes the cost of running a masternode somewhere close to $320,000.

NEO

The purpose behind NEO is to create a smart economy using the blockchain technology. NEO’s proof of stake algorithm uses the dBFT algorithm. Participants on the platform can stake their coins by binding coins in a NEON wallet. Stakeholders can expect to earn new coins at 5.5% annually for all the coins that they stake.

NEO is quite popular and the number one currency at Bitfinex, a Chinese virtual currency exchange based at Hong Kong. The coin is expected to rival Ethereum which has held the number two position in cryptocurrency markets for quite some time.

OkCash

This currency was launched in 2014. It is designed to be suitable for micro-transactions. It has a pretty good ROI on staking. The coins can earn an annual return of 10% the value of the stake. It is currently trading at $0.121 in the markets.

Source: Krohn Media

Mining Coins – What Does It Mean?

“[Bitcoin] is a remarkable cryptographic achievement… The ability to create something which is not duplicable in the digital world has enormous value…Lot’s of people will build businesses on top of that.” – Eric Schmidt, Executive Chairman of Google.

By now, almost everyone has heard of cryptocurrency like Bitcoin and Ethereum. Most people, however, may not know how the Blockchain protocol generates new coins nor how the network operates relative to mining coins.

Mining coins and running the platform is the job of miners, aka the node operators.

Cryptocurrency Transactions
Currencies like Bitcoin run on a Blockchain operated by independent mining operators from around the world. When a person with Bitcoins in their wallet wants to make a transaction, they send a query to the miners to authenticate the transfer.

Miners check the amount of coins on the IP address, as noted in the ledger. If enough coins are available, the system tries to resolve the query. The most efficient method is calculating the hash rate.

The same calculation simultaneously takes place over hundreds of other connected nodes.

Cryptocurrency protocols are designed so that it takes a specific amount of time for the query to be successfully resolved. For example, the time it takes for a Bitcoin query to be resolved is set at ten minutes.

The first mining computer that finds the correct solution adds it to the blockchain. The updated ledger is then sent to other miners on the network for authentication.

When the transaction is verified by a majority of nodes, it is updated to the ledger. The mining system that found the correct solution, or hash rate, earns a fraction of the coins from the transaction.

Mining Coins
Mining operations are responsible for two main functions, generating new coins and authenticating transactions for existing coins.

New coins are generated for most cryptocurrencies by solving a complex mathematical problem similar to authenticating transfers. The objective is to find the most efficient way to add a new block to the ledger. Additionally, the goal is to find the method that gives the least possible incremental value.

The first mining computer that finds the correct code is awarded with a small amount of newly generated coins. Those coins are then added to the total amount in circulation.

Difficulty in Mining Coins
Cryptocurrency developers add a degree of difficulty, and cost, into running a mining operation as more miners get into the business. The model is designed based on real world business situations.

Industries that are highly competitive have more barriers to entry and lower profit margins for each business. Those with few sellers tend to give a very high return on investment.

Mining requires advanced level computational resources such as high-end processors and graphics cards. Buying and operating these resources have a cost that the miner must bear.

Take the Bitcoin design for instance. When the value of Bitcoin rises, mining becomes a great way to generate an income based on the fractional reward system.

When investors see a greater profit in mining coins compared to their day job, they tend to purchase the equipment necessary to become miners. That will increase the operational capacity of the system.

But as more people join the business, the hash rate calculation becomes more difficult. This requires a more advanced level of machinery. Profits are balanced when the cost for each competing miner increases due to scalability issues.

Miners will be forced to stop mining coins when it becomes impossible for them to meet costs.

This self correcting system lies at the heart of all cryptocurrencies, which keeps the market from over saturating with mining operations.

Mining Coins – What Does It Mean?

Blockchain transactions just got a whole lot safer

Banking giant ING’s blockchain team has announced a major breakthrough that will help overcome one of the biggest obstacles to using blockchain in financial services: protecting data privacy. The new code, known as a “zero-knowledge range proof” (ZKRP) is 10 times more efficient than existing technologies designed to keep information on a ledger private.“Our solution is 10 times more efficient than other technologies” - Mariana Gomez de la Villa

“Our solution is 10 times more efficient than other technologies” – Mariana Gomez de la Villa

How does it work?

Currently, information on a public ledger is not private given that changes must be verified by each participant in the network. The ZKRP code adds a layer of cryptography to blockchain technology that resolves this challenge.

The ZKRP solution demonstrates the truth of a specific statement without revealing any additional information beyond what it’s trying to prove. For example, a mortgage applicant could prove that their salary sits within a certain range, without revealing the exact figure. Similarly, the ZKRP could prove that a payment amount is within a limit, without showing the exact amount.

What’s so clever about that?

“Until recently, one of the primary challenges for applying blockchain in the banking sector was ensuring that data privacy was protected and at the same time meeting regulatory reporting requirements,” explained Mariana Gomez de la Villa, global head of ING’s blockchain programme.

“While existing zero-knowledge technology has provided us with a way of overcoming that, the main limiting factor is the resource, and therefore cost, that each verification would generate.”

ING’s specific solution has been benchmarked against similar technologies in Ethereum, the world’s largest blockchain alliance, which the bank is part of. The operating costs of ZKRP are much lower than other technologies.

“ING’s ZKRP solution has been proven to be 10 times more efficient than others in the Ethereum test network, while upholding the same three principles: completeness, soundness and zero-knowledge,” said Mariana.

ING’s blockchain team have launched ZKRP as an open source solution, which means that other interested parties in the development community are able to download, access and even contribute to the solution.

 

This article originally appeared at: https://www.ing.com/Newsroom/All-news/Blockchain-transactions-just-got-a-whole-lot-safer.htm.

Bitcoin briefly jumps more than 11% after news Square is testing the digital currency

Square is testing support for Bitcoin 

The digital currency briefly surged more than 11 percent Wednesday to a high of $7,336.80 , according to Coin Desk. That’s within 10 percent of its record high of $7,879.06 hit last Wednesday. Bitcoin had fallen 30 percent below that record over the weekend amid controversy over the digital currency’s future.

In the established stock market, a decline of at least 10 percent from a recent high sends a stock into “correction” territory, and a drop of at least 20 percent marks “bear market” territory.

Wednesday’s gains in bitcoin came after news that Jack Dorsey’s company Square is testing support for bitcoin through its payments app Cash. Early on Wednesday, Credit Suisse analysts published a report on the Square news describing how the “bitcoin buying option could help stock.”

Square shares spiked more than 5 percent in the open before closing about 2 percent higher. The company’s test of bitcoin is still small and focused on letting customers buy and sell the digital currency within the app. The test does not allow individuals or businesses to send or accept bitcoin, Square said.

Bitcoin performance over the last six months

1510755803_bitcoincoindesk6mo171115.jpg

Source: CoinDesk

Digital currency trading firm Genesis Global Trading found bitcoin tends to recover dramatically from large drops. The last four times bitcoin has fallen more than 20 percent this year, it has gained an average 28 percent in the two weeks following, and an average 61.5 percent in the four weeks following, the analysis showed.

Trading in Japanese yen accounted for about nearly 56 percent of bitcoin trading volume Wednesday, according to CryptoCompare. U.S. dollar-bitcoin trading volume accounted for about 25 percent.

Another digital currency, ethereum, traded about 1.5 percent lower near $331, according to CoinDesk.

“A lot of the recent volatility has been caused by the recent narrative and events surrounding bitcoin and bitcoin cash and the record setting exchange trading volume between the two amongst large investors, miners, and retail investors in Asia,” Alex Sunnarborg, founding partner, Tetras Capital, said in an email. “The price of BTC and BCH have moved inversely between each either, driving the price of bitcoin down as it flows to bitcoin cash and vice versa.”

The controversy over the best way to improve bitcoin’s transaction speeds and costs remains unresolved.

One upgrade proposal called SegWit2x was called off last Wednesday, causing bitcoin to surge temporarily to its record high before crashing.

An upgrade which took effect in August split bitcoin into bitcoin and bitcoin cash. The offshoot bitcoin cash traded slightly lower Wednesday near $1,222, about 50 percent below its record high of $2,477.65 hit Sunday, according to CoinMarketCap.

Another version of bitcoin that launched Sunday, bitcoin gold, has tumbled more than 20 percent in the last 24 hours to around $162, according to CoinMarketCap. Bitcoin gold is an attempt to make “mining,” or creating, the digital currency less dependent on specialized hardware.

This article originally appeared at: https://www.cnbc.com/2017/11/15/bitcoin-jumps-more-than-9-percent-after-news-square-is-testing-the-digital-currency.html.