Mining Bitcoin: How to Mine Bitcoin • Coinsquare News

Ultimate glossary of crypto currency terms, acronyms and abbreviations

I thought it would be really cool to have an ultimate guide for those new to crypto currencies and the terms used. I made this mostly for beginner’s and veterans alike. I’m not sure how much use you will get out of this. Stuff gets lost on Reddit quite easily so I hope this finds its way to you. Included in this list, I have included most of the terms used in crypto-communities. I have compiled this list from a multitude of sources. The list is in alphabetical order and may include some words/terms not exclusive to the crypto world but may be helpful regardless.
2FA
Two factor authentication. I highly advise that you use it.
51% Attack:
A situation where a single malicious individual or group gains control of more than half of a cryptocurrency network’s computing power. Theoretically, it could allow perpetrators to manipulate the system and spend the same coin multiple times, stop other users from completing blocks and make conflicting transactions to a chain that could harm the network.
Address (or Addy):
A unique string of numbers and letters (both upper and lower case) used to send, receive or store cryptocurrency on the network. It is also the public key in a pair of keys needed to sign a digital transaction. Addresses can be shared publicly as a text or in the form of a scannable QR code. They differ between cryptocurrencies. You can’t send Bitcoin to an Ethereum address, for example.
Altcoin (alternative coin): Any digital currency other than Bitcoin. These other currencies are alternatives to Bitcoin regarding features and functionalities (e.g. faster confirmation time, lower price, improved mining algorithm, higher total coin supply). There are hundreds of altcoins, including Ether, Ripple, Litecoin and many many others.
AIRDROP:
An event where the investors/participants are able to receive free tokens or coins into their digital wallet.
AML: Defines Anti-Money Laundering laws**.**
ARBITRAGE:
Getting risk-free profits by trading (simultaneous buying and selling of the cryptocurrency) on two different exchanges which have different prices for the same asset.
Ashdraked:
Being Ashdraked is essentially a more detailed version of being Zhoutonged. It is when you lose all of your invested capital, but you do so specifically by shorting Bitcoin. The expression “Ashdraked” comes from a story of a Romanian cryptocurrency investor who insisted upon shorting BTC, as he had done so successfully in the past. When the price of BTC rose from USD 300 to USD 500, the Romanian investor lost all of his money.
ATH (All Time High):
The highest price ever achieved by a cryptocurrency in its entire history. Alternatively, ATL is all time low
Bearish:
A tendency of prices to fall; a pessimistic expectation that the value of a coin is going to drop.
Bear trap:
A manipulation of a stock or commodity by investors.
Bitcoin:
The very first, and the highest ever valued, mass-market open source and decentralized cryptocurrency and digital payment system that runs on a worldwide peer to peer network. It operates independently of any centralized authorities
Bitconnect:
One of the biggest scams in the crypto world. it was made popular in the meme world by screaming idiot Carlos Matos, who infamously proclaimed," hey hey heeeey” and “what's a what's a what's up wasssssssssuuuuuuuuuuuuup, BitConneeeeeeeeeeeeeeeeeeeeeeeect!”. He is now in the mentally ill meme hall of fame.
Block:
A package of permanently recorded data about transactions occurring every time period (typically about 10 minutes) on the blockchain network. Once a record has been completed and verified, it goes into a blockchain and gives way to the next block. Each block also contains a complex mathematical puzzle with a unique answer, without which new blocks can’t be added to the chain.
Blockchain:
An unchangeable digital record of all transactions ever made in a particular cryptocurrency and shared across thousands of computers worldwide. It has no central authority governing it. Records, or blocks, are chained to each other using a cryptographic signature. They are stored publicly and chronologically, from the genesis block to the latest block, hence the term blockchain. Anyone can have access to the database and yet it remains incredibly difficult to hack.
Bullish:
A tendency of prices to rise; an optimistic expectation that a specific cryptocurrency will do well and its value is going to increase.
BTFD:
Buy the fucking dip. This advise was bestowed upon us by the gods themselves. It is the iron code to crypto enthusiasts.
Bull market:
A market that Cryptos are going up.
Consensus:
An agreement among blockchain participants on the validity of data. Consensus is reached when the majority of nodes on the network verify that the transaction is 100% valid.
Crypto bubble:
The instability of cryptocurrencies in terms of price value
Cryptocurrency:
A type of digital currency, secured by strong computer code (cryptography), that operates independently of any middlemen or central authoritie
Cryptography:
The art of converting sensitive data into a format unreadable for unauthorized users, which when decoded would result in a meaningful statement.
Cryptojacking:
The use of someone else’s device and profiting from its computational power to mine cryptocurrency without their knowledge and consent.
Crypto-Valhalla:
When HODLers(holders) eventually cash out they go to a place called crypto-Valhalla. The strong will be separated from the weak and the strong will then be given lambos.
DAO:
Decentralized Autonomous Organizations. It defines A blockchain technology inspired organization or corporation that exists and operates without human intervention.
Dapp (decentralized application):
An open-source application that runs and stores its data on a blockchain network (instead of a central server) to prevent a single failure point. This software is not controlled by the single body – information comes from people providing other people with data or computing power.
Decentralized:
A system with no fundamental control authority that governs the network. Instead, it is jointly managed by all users to the system.
Desktop wallet:
A wallet that stores the private keys on your computer, which allow the spending and management of your bitcoins.
DILDO:
Long red or green candles. This is a crypto signal that tells you that it is not favorable to trade at the moment. Found on candlestick charts.
Digital Signature:
An encrypted digital code attached to an electronic document to prove that the sender is who they say they are and confirm that a transaction is valid and should be accepted by the network.
Double Spending:
An attack on the blockchain where a malicious user manipulates the network by sending digital money to two different recipients at exactly the same time.
DYOR:
Means do your own research.
Encryption:
Converting data into code to protect it from unauthorized access, so that only the intended recipient(s) can decode it.
Eskrow:
the practice of having a third party act as an intermediary in a transaction. This third party holds the funds on and sends them off when the transaction is completed.
Ethereum:
Ethereum is an open source, public, blockchain-based platform that runs smart contracts and allows you to build dapps on it. Ethereum is fueled by the cryptocurrency Ether.
Exchange:
A platform (centralized or decentralized) for exchanging (trading) different forms of cryptocurrencies. These exchanges allow you to exchange cryptos for local currency. Some popular exchanges are Coinbase, Bittrex, Kraken and more.
Faucet:
A website which gives away free cryptocurrencies.
Fiat money:
Fiat currency is legal tender whose value is backed by the government that issued it, such as the US dollar or UK pound.
Fork:
A split in the blockchain, resulting in two separate branches, an original and a new alternate version of the cryptocurrency. As a single blockchain forks into two, they will both run simultaneously on different parts of the network. For example, Bitcoin Cash is a Bitcoin fork.
FOMO:
Fear of missing out.
Frictionless:
A system is frictionless when there are zero transaction costs or trading retraints.
FUD:
Fear, Uncertainty and Doubt regarding the crypto market.
Gas:
A fee paid to run transactions, dapps and smart contracts on Ethereum.
Halving:
A 50% decrease in block reward after the mining of a pre-specified number of blocks. Every 4 years, the “reward” for successfully mining a block of bitcoin is reduced by half. This is referred to as “Halving”.
Hardware wallet:
Physical wallet devices that can securely store cryptocurrency maximally. Some examples are Ledger Nano S**,** Digital Bitbox and more**.**
Hash:
The process that takes input data of varying sizes, performs an operation on it and converts it into a fixed size output. It cannot be reversed.
Hashing:
The process by which you mine bitcoin or similar cryptocurrency, by trying to solve the mathematical problem within it, using cryptographic hash functions.
HODL:
A Bitcoin enthusiast once accidentally misspelled the word HOLD and it is now part of the bitcoin legend. It can also mean hold on for dear life.
ICO (Initial Coin Offering):
A blockchain-based fundraising mechanism, or a public crowd sale of a new digital coin, used to raise capital from supporters for an early stage crypto venture. Beware of these as there have been quite a few scams in the past.
John mcAfee:
A man who will one day eat his balls on live television for falsely predicting bitcoin going to 100k. He has also become a small meme within the crypto community for his outlandish claims.
JOMO:
Joy of missing out. For those who are so depressed about missing out their sadness becomes joy.
KYC:
Know your customer(alternatively consumer).
Lambo:
This stands for Lamborghini. A small meme within the investing community where the moment someone gets rich they spend their earnings on a lambo. One day we will all have lambos in crypto-valhalla.
Ledger:
Away from Blockchain, it is a book of financial transactions and balances. In the world of crypto, the blockchain functions as a ledger. A digital currency’s ledger records all transactions which took place on a certain block chain network.
Leverage:
Trading with borrowed capital (margin) in order to increase the potential return of an investment.
Liquidity:
The availability of an asset to be bought and sold easily, without affecting its market price.
of the coins.
Margin trading:
The trading of assets or securities bought with borrowed money.
Market cap/MCAP:
A short-term for Market Capitalization. Market Capitalization refers to the market value of a particular cryptocurrency. It is computed by multiplying the Price of an individual unit of coins by the total circulating supply.
Miner:
A computer participating in any cryptocurrency network performing proof of work. This is usually done to receive block rewards.
Mining:
The act of solving a complex math equation to validate a blockchain transaction using computer processing power and specialized hardware.
Mining contract:
A method of investing in bitcoin mining hardware, allowing anyone to rent out a pre-specified amount of hashing power, for an agreed amount of time. The mining service takes care of hardware maintenance, hosting and electricity costs, making it simpler for investors.
Mining rig:
A computer specially designed for mining cryptocurrencies.
Mooning:
A situation the price of a coin rapidly increases in value. Can also be used as: “I hope bitcoin goes to the moon”
Node:
Any computing device that connects to the blockchain network.
Open source:
The practice of sharing the source code for a piece of computer software, allowing it to be distributed and altered by anyone.
OTC:
Over the counter. Trading is done directly between parties.
P2P (Peer to Peer):
A type of network connection where participants interact directly with each other rather than through a centralized third party. The system allows the exchange of resources from A to B, without having to go through a separate server.
Paper wallet:
A form of “cold storage” where the private keys are printed onto a piece of paper and stored offline. Considered as one of the safest crypto wallets, the truth is that it majors in sweeping coins from your wallets.
Pre mining:
The mining of a cryptocurrency by its developers before it is released to the public.
Proof of stake (POS):
A consensus distribution algorithm which essentially rewards you based upon the amount of the coin that you own. In other words, more investment in the coin will leads to more gain when you mine with this protocol In Proof of Stake, the resource held by the “miner” is their stake in the currency.
PROOF OF WORK (POW) :
The competition of computers competing to solve a tough crypto math problem. The first computer that does this is allowed to create new blocks and record information.” The miner is then usually rewarded via transaction fees.
Protocol:
A standardized set of rules for formatting and processing data.
Public key / private key:
A cryptographic code that allows a user to receive cryptocurrencies into an account. The public key is made available to everyone via a publicly accessible directory, and the private key remains confidential to its respective owner. Because the key pair is mathematically related, whatever is encrypted with a public key may only be decrypted by its corresponding private key.
Pump and dump:
Massive buying and selling activity of cryptocurrencies (sometimes organized and to one’s benefit) which essentially result in a phenomenon where the significant surge in the value of coin followed by a huge crash take place in a short time frame.
Recovery phrase:
A set of phrases you are given whereby you can regain or access your wallet should you lose the private key to your wallets — paper, mobile, desktop, and hardware wallet. These phrases are some random 12–24 words. A recovery Phrase can also be called as Recovery seed, Seed Key, Recovery Key, or Seed Phrase.
REKT:
Referring to the word “wrecked”. It defines a situation whereby an investor or trader who has been ruined utterly following the massive losses suffered in crypto industry.
Ripple:
An alternative payment network to Bitcoin based on similar cryptography. The ripple network uses XRP as currency and is capable of sending any asset type.
ROI:
Return on investment.
Safu:
A crypto term for safe popularized by the Bizonnaci YouTube channel after the CEO of Binance tweeted
“Funds are safe."
“the exchage I use got hacked!”“Oh no, are your funds safu?”
“My coins better be safu!”


Sats/Satoshi:
The smallest fraction of a bitcoin is called a “satoshi” or “sat”. It represents one hundred-millionth of a bitcoin and is named after Satoshi Nakamoto.
Satoshi Nakamoto:
This was the pseudonym for the mysterious creator of Bitcoin.
Scalability:
The ability of a cryptocurrency to contain the massive use of its Blockchain.
Sharding:
A scaling solution for the Blockchain. It is generally a method that allows nodes to have partial copies of the complete blockchain in order to increase overall network performance and consensus speeds.
Shitcoin:
Coin with little potential or future prospects.
Shill:
Spreading buzz by heavily promoting a particular coin in the community to create awareness.
Short position:
Selling of a specific cryptocurrency with an expectation that it will drop in value.
Silk road:
The online marketplace where drugs and other illicit items were traded for Bitcoin. This marketplace is using accessed through “TOR”, and VPNs. In October 2013, a Silk Road was shut down in by the FBI.
Smart Contract:
Certain computational benchmarks or barriers that have to be met in turn for money or data to be deposited or even be used to verify things such as land rights.
Software Wallet:
A crypto wallet that exists purely as software files on a computer. Usually, software wallets can be generated for free from a variety of sources.
Solidity:
A contract-oriented coding language for implementing smart contracts on Ethereum. Its syntax is similar to that of JavaScript.
Stable coin:
A cryptocoin with an extremely low volatility that can be used to trade against the overall market.
Staking:
Staking is the process of actively participating in transaction validation (similar to mining) on a proof-of-stake (PoS) blockchain. On these blockchains, anyone with a minimum-required balance of a specific cryptocurrency can validate transactions and earn Staking rewards.
Surge:
When a crypto currency appreciates or goes up in price.
Tank:
The opposite of mooning. When a coin tanks it can also be described as crashing.
Tendies
For traders , the chief prize is “tendies” (chicken tenders, the treat an overgrown man-child receives for being a “Good Boy”) .
Token:
A unit of value that represents a digital asset built on a blockchain system. A token is usually considered as a “coin” of a cryptocurrency, but it really has a wider functionality.
TOR: “The Onion Router” is a free web browser designed to protect users’ anonymity and resist censorship. Tor is usually used surfing the web anonymously and access sites on the “Darkweb”.
Transaction fee:
An amount of money users are charged from their transaction when sending cryptocurrencies.
Volatility:
A measure of fluctuations in the price of a financial instrument over time. High volatility in bitcoin is seen as risky since its shifting value discourages people from spending or accepting it.
Wallet:
A file that stores all your private keys and communicates with the blockchain to perform transactions. It allows you to send and receive bitcoins securely as well as view your balance and transaction history.
Whale:
An investor that holds a tremendous amount of cryptocurrency. Their extraordinary large holdings allow them to control prices and manipulate the market.
Whitepaper:

A comprehensive report or guide made to understand an issue or help decision making. It is also seen as a technical write up that most cryptocurrencies provide to take a deep look into the structure and plan of the cryptocurrency/Blockchain project. Satoshi Nakamoto was the first to release a whitepaper on Bitcoin, titled “Bitcoin: A Peer-to-Peer Electronic Cash System” in late 2008.
And with that I finally complete my odyssey. I sincerely hope that this helped you and if you are new, I welcome you to crypto. If you read all of that I hope it increased, you in knowledge.
my final definition:
Crypto-Family:
A collection of all the HODLers and crypto fanatics. A place where all people alike unite over a love for crypto.
We are all in this together as we pioneer the new world that is crypto currency. I wish you a great day and Happy HODLing.
-u/flacciduck
feel free to comment words or terms that you feel should be included or about any errors I made.
Edit1:some fixes were made and added words.
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PoW or PoS: The Difference Between Mined and Non-Mined Crypto

PoW or PoS: The Difference Between Mined and Non-Mined Crypto
The whole crypto world discusses how Ethereum will switch from Proof of Work to Proof of Stake now. This change can significantly affect the cryptocurrency market. What are the positive and negative sides of PoW and PoS?
Cryptocurrencies can be divided into two types: those that can be mined (Bitcoin, Litecoin, Monero) and pre-mined ones (Ripple, Stellar, Cardano, EOS, NEO).

What is the big difference?

Although they differ in the method of generation, the basis of both types of crypto is the same: verification. Every transaction processed by the network must be verified by someone to ensure that virtual money has not been spent twice. Here we are talking about the difference in the verification process. Transaction groups are combined into a block; after verification, the block joins other previously confirmed blocks, and create a chain of transactions, or blockchain.

PoW: Mined Crypto

Mining is a process in which individuals, groups, or companies solve complex mathematical equations to verify transaction blocks using powerful computers. These math problems are part of the encryption process that protects transactions from cybercriminals and third party access.
The first who solves the problem and signs a block of transactions receives a reward. The miner, who confirmed the block of transactions e.g. in the Bitcoin network, receives a reward in BTC.

Disadvantages of Mined Crypto

  • Mining can be very expensive due to the large amounts of electricity consumed. In mined crypto with less capitalization, competition is usually lower than in BTC.
  • BTC mining requires special ASIC chips, that are combined into huge farms. Electricity is one of the main expenses for these projects. That is why China, where electricity is relatively cheap, has become a home to four of the five largest Bitcoin mining companies in the world.
  • Mining farms have to spend significant money funds on new equipment, which becomes out of date very fast.
  • Large projects need additional cooling, as servers and graphics cards heat up to high temperatures during operations.
  • The Proof-of-Work model is potentially vulnerable to a 51% attack (when a group of people with 51% of the computing power gains control of the network and its participants). For popular cryptocurrencies such as Bitcoin (BTC), Litecoin (LTC), and Monero (XMR) this is not a problem due to their large capitalization. However, minor cryptocurrencies with long block processing times and low daily volumes are risking a lot.

PoS: Non-Mined Crypto

At the other end of the spectrum are pre-mined cryptocurrencies such as Ripple (XRP), Stellar, Cardano, EOS, and NEO.
In the PoS model, super-powered computers are not needed, and participants do not compete for the right to sign the next block. Thus, the costs of this approach are significantly lower. Transaction verification is carried out by cryptocurrency owners. The more cryptocurrencies you have, the longer you own it, the higher the probability that you will be selected to check the transaction block.
Certain mechanisms are built into the system that prevents the dominance of large cryptocurrency holders over the verification process. There are many random ways to select owners who get the right to sign a transaction block. This ensures that small holders have a chance to participate in the process.

Disadvantages of Non-Mined Crypto

Despite the fact that the costs of the Proof-of-Stake method are lower, PoS has its drawbacks.
  • Such cryptocurrencies are not threatened by an attack of 51%, however, another trouble replaces it — a person who posses 51% of all tokens in circulation can gain control of the network and its participants. Of course, in the case of cryptocurrencies with high capitalization, the possibility of this scenario is low, but small partners may suffer from this vulnerability.
  • The Proof-of-Stake model also gives major owners additional votes in determining the future development of the network. Most NEO tokens) belong to several founders, for instance. This helps increase transaction speed and reduces consensus-building time, but also makes cryptocurrency too centralized. In other words, in the PoS model, large players gain significant power, which is theoretically impossible with the PoW model.

Which method is better?

Both methods have their pros and cons. Nevertheless, sooner or later, some of the largest mined currencies (e.g. BTC) will reach their token limit. At this point, they will have to switch to Proof-of-Stake. Since it significantly reduces power consumption and doesn't require powerful computers, gradually all crypto including BTC will switch to a non-mined model just like Ether did.

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The Intellectual Foundation of Bitcoin比特幣的智識基礎. By Chapman Chen, HKBNews

The Intellectual Foundation of Bitcoin比特幣的智識基礎. By Chapman Chen, HKBNews

https://preview.redd.it/w6v3l8n3zxu41.jpg?width=2551&format=pjpg&auto=webp&s=fb0338a36a1a321d3781f43ff5eb6929d8b92edc
Summary: Bitcoin was invented by the anonymous Satoshi Nakamoto as recently as 2008, but it is backed up by a rich intellectual foundation. For instance, The 1776 First Amendment separates church and state, and contemporary American liberation psychologist Nozomi Hayase (2020) argues that money and state should similarly be separated. Just as Isaac Newton’s study of alchemy gave rise to the international gold standard, so has the anonymous creator Satoshi Nakamoto's desire for a “modernized gold standard” given rise to Bitcoin. Indeed, Bloomberg's 2020 report confirms Bitcoin to be gold 2.0. Montesquieu (1774) asserted that laws that secure inalienable rights can only be found in Nature, and the natural laws employed in Bitcoin include its consensus algorithm and the three natural laws of economics (self-interest, competition, and supply and demand). J.S. Mill (1859) preferred free markets to those controlled by governments. Ludwig von Mises (1951) argued against the hazards of fiat currency, urging for a return to the gold standard. Friedrich Hayek (1984) suggested people to invent a sly way to take money back from the hands of the government. Milton Friedman (1994) called for FED to be replaced by an automatic system and predicted the coming of a reliable e-cash. James Buchanan (1988) advocated a monetary constitution to constrain the governmental power of money creation. Tim May (1997) the cypherpunk proclaimed that restricting digital cash impinges on free speech, and envisioned a stateless digital form of money that is uncensorable. The Tofflers (2006) pictured a non-monetary economy. In 2016, UCLA Professor of Finance Bhagwan Chowdhry even nominated Satoshi for a Nobel Prize.
Full Text:
Separation between money and state
The 1791 First Amendment to the U.S. Constitution enshrines free speech and separates church and state, but not money and state. "Under the First Amendment, individuals’ right to create, choose their own money and transact freely was not recognized as a part of freedom of expression that needs to be protected," Japanese-American liberation psychologist Nozomi Hayase (2020) points out (1).
The government, banks and corporations collude together to encroach upon people's liberties by metamorphosing their inalienable rights into a permissioned from of legal rights. Fiat currencies function as a medium of manipulation, indulging big business to generate market monopolies. "Freedom of expression has become further stifled through economic censorship and financial blockage enacted by payment processing companies like Visa and MasterCard," to borrow Hayase's (2020) words.
Satoshi is a Modern Newton
Although most famous for discovering the law of gravity, Isaac Newton was also a practising alchemist. He never managed to turn lead into gold, but he did find a way to transmute silver into gold. In 1717, Newton announced in a report that, based on his studies, one gold guinea coin weighed 21 shillings. Just as Isaac Newton’s study of alchemy gave rise to the international gold standard, so has the desire for a “modernized gold standard” given rise to Bitcoin. "In a way, Satoshi is a modern Newton. They both believed trust is best placed in the unchangeable facets of our economy. Beneath this belief is the assumption that each individual is their own best master," as put by Jon Creasy (2019) (2).
J.S. Mill: free markets preferable to those controlled by governments
John Stuart Mill (1806-1873) the great English philosopher would be a Bitcoiner were he still around today. In On Liberty (1859), Mill concludes that free markets are preferable to those controlled by governments. He argues that economies function best when left to their own devices. Therefore, government intervention, though theoretically permissible, would be counterproductive. Bitcoin is precisely decentralized or uncontrolled by the government, unconfiscatable, permissonless, and disinflationary. Bitcoin regulates itself spontaneously via the ordinary operations of the system. "Rules are enforced without applying any external pressure," in Hayase's (2020) words.
Ludwig von Mises (1958): Liberty is always Freedom from the Government
In The Free Market and its Enemies, theoretical Austrian School economist Ludwig von Mises (1951) argues against the hazards of fiat currency, urging for a return to the gold standard. “A fiat money system cannot go on forever and must one day come to an end,” Von Mises states. The solution is a return to the gold standard, "the only standard which makes the determination of the purchasing power of money independent of the changing ideas of political parties, governments, and pressure groups" under present conditions. Interestingly, this is also one of the key structural attributes of Bitcoin, the world’s first, global, peer-to-peer, decentralized value transfer network.
Actually, Bloomberg's 2020 report on Bitcoin confirms that it is gold 2.0. (3)
Von Mises prefers the price of gold to be determined according to the contemporaneous market conditions. The bitcoin price is, of course, determined across the various global online exchanges, in real-time. There is no central authority setting a spot price for gold after the which the market value is settled on among the traders during the day.
Hayek: Monopoly on Currency should End
Austrian-British Nobel laureate Friedrich Hayek’s theory in his 1976 work, Denationalization of Money, was that not only would the currency monopoly be taken away from the government, but that the monopoly on currency itself should end with multiple alternative currencies competing for acceptance by consumers, in order "to prevent the bouts of acute inflation and deflation which have played the world for the past 60 years." He forcefully argues that if there is no free competition between different currencies within any nation, then there will be no free market. Bitcoin is, again, decentralized, and many other cryptocurrencies have tried to compete with it, though in vain.
In a recently rediscovered video clip from 1984, Hayek actually suggested people to invent a cunning way to take money out of the hands of the government:- “I don’t believe we shall ever have a good money again before we take the thing out of the hands of government, that is, we can’t take them violently out of the hands of government, all we can do is by some sly roundabout way introduce something they can’t stop” (4). Reviewing those words 36 years hence and it is difficult not to interpret them in the light of Bitcoin.
Milton Friedman Called for FED to be Replaced by an Automatic System
Nobel laureate economist Milton Friedman (1994) was critical of the Federal Reserve due to its poor performance and felt it should be abolished (5). Friedman (1999) believed that the Federal Reserve System should ultimately be replaced with a computer program, which makes us think of the computer code governing Bitcoin (6).[\](https://en.wikipedia.org/wiki/Criticism_of_the_Federal_Reserve#cite_note-:2-12) He (1970) favored a system that would automatically buy and sell securities in response to changes in the money supply. This, he argued, would put a lid on inflation, setting spending and investment decisions on a surer footing (7). Bitcoin is exactly disflationary as its maximum possible supply is 21 million and its block reward or production rate is halved every four years.
Friedman passed away before the coming of bitcoin, but he lived long enough to see the Internet’s spectacular rise throughout the 1990s. “I think that the Internet is going to be one of the major forces for reducing the role of government," said Friedman in a 1999 interview with NTU/F. On the same occasion, he sort of predicted the emergence of Bitcoin, "The one thing that’s missing, but that will soon be developed, is a reliable e-cash, a method whereby on the Internet you can transfer funds from A to B, without A knowing B or B knowing A." (8)
Of course, Friedman didnt predict the block chain, summed up American libertarian economist Jeffery Tucker (2014). “But he was hoping for a trustless system. He saw the need. (9).
Bitcoin Computer Code as Constitution in the Buchananian Sense
American economist cum Nobel laureate James Buchanan (1988) advocates constitutional constraints on the governmental power to create money (10). Buchanan distinguishes a managed monetary system—a system “that embodies the instrumental use of price-level predictability as a norm of policy”—from an automatic monetary system, “which does not, at any stage, involve the absolute price level” (Buchanan 1962, 164–65). Leaning toward the latter, Buchanan argues that automatic systems are characterized by an organization “of the institutions of private decision-making in such a way that the desired monetary predictability will emerge spontaneously from the ordinary operations of the system” (Buchanan 1962, 164). Again, "Bitcoin regulates itself through the spontaneous force of nature, flourishing healthy price discovery and competition in the best interest of everyone" (Hayase 2020).
Shruti Rajagopalan (2018) argues that the computer code governing how the sundry nodes/computers within the Bitcoin network interact with one another is a kind of monetary constitution in the Buchananian sense. One of Buchanan's greatest inputs is to differentiate the choice of rules from the choice within rule (Buchanan 1990). One may regard the Bitcoin code as a sort of constitution and "the Bitcoin network engaging in both the choice of rules and choice within rules" (Rajagopalan 2018) (11).
Tim May: Restricting Digital Cash may Impinge on Free Speech
Cypherpunks are activists who since the 1980s have advocated global use of strong cryptography and privacy-enhancing technologies as a route to social and political liberation. Tim May (Timothy C. May [1951-2018]), one of the influential cypherpunks published The Crypto Anarchist Manifesto in September 1992, which foretold the coming of Bitcoin (12). Cypherpunks began envisioning a stateless digital form of money that cannot be censored and their collaborative pursuit created a movement akin to the 18th Enlightenment.
At The 7th Conference on Computers, Freedom, and Privacy, Burlingame, CA. in 1997, Tim May equated money with speech, and argued that restricting digital cash may impinge on free speech, for spending money is often a matter of communicating orders to others, to transfer funds, to release funds, etc. In fact, most financial instruments are contracts or orders, instead of physical specie or banknotes (13).
Montesquieu: Laws that secure inalienable rights can only be found in Nature
In his influential work The Spirit of Laws (1748), Montesquieu wrote, “Laws ... are derived from the nature of things … Law, like mathematics, has its objective structure, which no arbitrary whim can alter". Similarly, once a block is added to the end of the Bitcoin blockchain, it is almost impossible to go back and alter the contents of the block, unless every single block after it on the blockchain is altered, too.
Cypherpunks knew that whereas alienable rights that are bestowed by law can be deprived by legislation, inalienable rights are not to be created but can be discovered by reason. Thus, laws that secure inalienable rights cannot be created by humankind but can be found in nature.
The natural laws employed in Bitcoin to enshrine the inalienable monetary right of every human being include its consensus algorithm, and the three natural laws of economics (self-interest, competition, and supply and demand) as identified by Adam Smith, father of modern economics.
Regarding mathematics, bitcoin mining is performed by high-powered computers that solve complex computational math problems. When computers solve these complex math problems on the Bitcoin network, they produce new bitcoin. And by solving computational math problems, bitcoin miners make the Bitcoin payment network trustworthy and secure, by verifying its transaction information.
Regarding economic laws, in accordance with the principle of game theory to generate fairness, miners take part in an open competition. Lining up self-interests of all in a network, with a vigilant balance of risk and rewards, rules are put in force sans the application of any exterior pressure. "Bitcoin regulates itself through the spontaneous force of nature, flourishing healthy price discovery and competition in the best interest of everyone," to borrow the words of Hayase (2020).
A Non-monetary Economy as Visualized by the Tofflers
In their book, Revolutionary Wealth (2006), futurists Alvin Toffler and his wife Heidi Toffler toy with the concept of a world sans money, raising a third kind of economic transaction that is neither one-on-one barter nor monetary exchange. In the end, they settle on the idea that the newer non-monetary economy will exist shoulder-to-shoulder with the monetary sector in the short term, although the latter may eventually be eclipsed by the former in the long run. What both the Tofflers' The Third Wave (1980) and Revolutionary Wealth bring into question is the very premise of monetary exchange. The vacuum left over by cash in such a non-monetary economy may be filled up by Bitcoin as a cryptocurrency.
Satoshi Nakamoto Nominated for Nobel Prize by UCLA Finance Prof.
UCLA Anderson School Professor of Finance Bhagwan Chowdhry nominated Satoshi Nakamoto for the 2016 Nobel Prize in Economics on the following grounds:-
It is secure, relying on almost unbreakable cryptographic code, can be divided into millions of smaller sub-units, and can be transferred securely and nearly instantaneously from one person to any other person in the world with access to internet bypassing governments, central banks and financial intermediaries such as Visa, Mastercard, Paypal or commercial banks eliminating time delays and transactions costs.... Satoshi Nakamoto’s Bitcoin Protocol has spawned exciting innovations in the FinTech space by showing how many financial contracts — not just currencies — can be digitized, securely verified and stored, and transferred instantaneously from one party to another (14).
Fb link: https://www.facebook.com/hongkongbilingualnews/posts/947121432392288?__tn__=-R
Web link: https://www.hkbnews.net/post/the-intellectual-foundation-of-bitcoin%E6%AF%94%E7%89%B9%E5%B9%A3%E7%9A%84%E6%99%BA%E8%AD%98%E5%9F%BA%E7%A4%8E-by-chapman-chen-hkbnews
Disclaimer: This article is neither an advertisement nor professional financial advice.
End-notes
  1. https://bitcoinmagazine.com/articles/bitcoin-is-the-technology-of-dissent-that-secures-individual-liberties
  2. https://medium.com/hackernoon/why-sir-isaac-newton-was-the-first-bitcoin-maximalist-195a17cb6c34
  3. https://data.bloomberglp.com/professional/sites/10/Bloomberg-Crypto-Outlook-April-2020.pdf
  4. https://www.youtube.com/watch?v=EYhEDxFwFRU&t=1161s
  5. https://www.youtube.com/watch?v=m6fkdagNrjI
  6. http://youtu.be/mlwxdyLnMXM
  7. https://miltonfriedman.hoover.org/friedman_images/Collections/2016c21/IEA_1970.pdf
  8. https://www.youtube.com/watch?v=6MnQJFEVY7s
  9. https://www.coindesk.com/economist-milton-friedman-predicted-bitcoin
  10. https://www.aier.org/research/prospects-for-a-monetary-constitution/
  11. https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3238472
  12. https://www.activism.net/cypherpunk/crypto-anarchy.html
  13. http://osaka.law.miami.edu/~froomkin/articles/tcmay.htm
  14. https://www.huffpost.com/entry/i-shall-happily-accept-th_b_8462028
Pic credit: Framingbitcoin
#bitcoin #bitcoinhalving #jamesBuchanan #MiltonFriedman #AlvinToffler #FirstAmendment #LudwigVonMises #TimMay #freeMarket # SatoshiNakamoto #FriedrichHayek #Cypherpunk #Cryptocurrency #GoldStandard #IsaacNewton
submitted by HKBNews to Bitcoin [link] [comments]

Mining and Dogecoin - Some FAQs

Hey shibes,
I see a lot of posts about mining lately and questions about the core wallet and how to mine with it, so here are some facts!
Feel free to add information to that thread or correct me if I did any mistake.

You downloaded the core wallet

Great! After a decade it probably synced and now you are wondering how to get coins? Bad news: You don't get coins by running your wallet, even running it as a full node. Check what a full node is here.
Maybe you thought so, because you saw a very old screenshot of a wallet, like this (Version 1.2). This version had a "Dig" tab where you can enter your mining configuration. The current version doesn't have this anymore, probably because it doesn't make sense anymore.

You downloaded a GPU/CPU miner

Nice! You did it, even your antivirus system probably went postal and you started covering all your webcams... But here is the bad news again: Since people are using ASIC miners, you just can't compete with your CPU hardware anymore. Even with your more advanced GPU you will have a hard time. The hashrate is too high for a desktop PC to compete with them. The blocks should be mined every 1 minute (or so) and that's causing the difficulty to go up - and we are out... So definitly check what is your hashrate while you are mining, you would need about 1.5 MH/s to make 1 Doge in 24 hours!

Mining Doge

Let us start with a quote:
"Dogecoin Core 1.8 introduces AuxPoW from block 371,337. AuxPoW is a technology which enables miners to submit work done while mining other coins, as work on the Dogecoin block chain."
- langerhans
What does this mean? You could waste your hashrate only on the Dogecoin chain, probably find never a block, but when, you only receive about 10.000 Dogecoins, currently worth about $25. Or you could apply your hashrate to LTC and Doge (and probably even more) at the same time. Your change of solving the block (finding the nonce) is your hashrate divided by the hashrat in sum - and this is about the same for Doge and LTC. This means you will always want to submit your work to all chains available!

Mining solo versus pool

So let's face it - mining solo won't get you anywhere, so let's mine on a pool! If you have a really bad Hashrate, please consider that: Often you need about $1 or $2 worth of crypto to receive a payout (without fees). This means, you have to get there. With 100 MH/s on prohashing, it takes about 6 days, running 24/7 to get to that threshold. Now you can do the math... 1 MH/s = 1000 KH/s, if you are below 1 MH/s, you probably won't have fun.

Buying an ASIC

You found an old BTC USB-miner with 24 GH/s (1 GH/s = 1000 MH/s) for $80 bucks - next stop lambo!? Sorry, bad news again, this hashrate is for SHA-256! If you want to mine LTC/Doge you will need a miner using scrypt with quite lower numbers on the hashrate per second, so don't fall for that. Often when you have a big miner (= also loud), you get more Hashrate per $ spent on the miner, but most will still run on a operational loss, because the electricity is too expensive and the miners will be outdated soon again. Leading me to my next point...

Making profit

You won't make money running your miner. Just do the math: What if you would have bougth a miner 1 year ago? Substract costs for electricity and then compare to: What if you just have bought coins. In most cases you would have a greater profit by just buying coins, maybe even with a "stable" coin like Doges.

Cloud Mining

Okay, this was a lot of text and you are still on the hook? Maybe you are desperated enough to invest in some cloud mining contract... But this isn't a good idea either, because most of such contracts are scams based on a ponzi scheme. You often can spot them easy, because they guarantee way to high profits, or they fake payouts that never happened, etc.
Just a thought: If someone in a subway says to you: Give me $1 and lets meet in one year, right here and I give you $54,211,841, you wouldn't trust him and if some mining contract says they will give you 5% a day it is basically the same.
Also rember the merged mining part. Nobody would offer you to mine Doges, they would offer you to buy a hashrate for scrypt that will apply on multiple chains.

Alternative coins

Maybe try to mine a coin where you don't have ASICs yet, like Monero and exchange them to Doge. If somebody already tried this - feel free to add your thoughts!

Folding at Home (Doge)

Some people say folding at home (FAH - https://www.dogecoinfah.com/) still the best. I just installed the tool and it says I would make 69.852 points a day, running on medium power what equates to 8 Doges. It is easy, it was fun, but it isn't much.
Thanks for reading
_nformant
submitted by _nformant to dogecoin [link] [comments]

Could bitcoin mining pollution mean the end of bitcoin? What if bitcoin was banned due to wasting resources? Secondly, what might happen to the world if bitcoin were suddenly banned and rates plummeted?

Something which I feel is being overlooked or unseen by the governments is the amount of pollution needlessly caused by bitcoin, what if one day, let's say that the World Health Organisation claims that bitcoin is a waste of resources and is needlessly causing pollution worsening the impact of climate change...
I personally would be afraid to have a large number of bitcoins due to this possibility.
This has made me wonder about what might happen to the world if we woke up and bitcoin was banned... mass-suicides? Economic collapse? What might pursue?
EDIT: Let me phrase it this way, would it be legal for me to buy a factory and produce as much pollution as I like, just for the sake of it, the factory serves no purpose just to produce pollution, would this be allowed? If no, then something should be done about that. If yes, then let me rephrase that, would it be legal for me to buy a factory and fill it with computers, which then click a cookie needlessly to earn points, thereby creating pollution by wasting resources, would this be allowed?
EDIT 2: I've just read something extremely alarming, bitcoin mining will cease in over 100 years time, and rate of miners is increasing.
" Currently it is expected that the next halving will occur in May 2020 - dropping the reward to 6.25 BTC. If the Bitcoin protocol remains the same and halving is consistent, Bitcoin is expected to reach the total supply cap in 2140 – still more than 100 years to go. "
https://blog.liquid.com/how-many-bitcoins-are-there-and-when-will-they-all-be-mined
If bitcoin were to continue at the rate of using 0.06% of the worlds energy consumption, then that would mean that by the time it is 2140 and all bitcoin is mined, we would have spent 7.2 years using all of our worlds energy resources on solving mathematical equations to generate a virtual number,
7.2 years of pollution.
If you consider that they are cracking down harder on pollution, do you not think that this will be eradicated before 2140, 120 years from now? Personally, I would avoid bitcoin. It is too risky, I think everyone is jumping the gun reassured by bitcoin supporters.
submitted by acosta1997 to Bitcoin [link] [comments]

There never was a "scaling problem." The only problem is "people that don't want Bitcoin to scale."

This is a necessarily long post that seeks to undo a major misunderstanding and help people to understand what happened to Bitcoin and why we have Bitcoin Cash.
I frequently get asked, "how will Bitcoin Cash solve Bitcoin's fundamental scaling problem?"
The idea that Bitcoin has some fundamental scaling problem is a misunderstanding as old as Bitcoin itself.
Check out this email exchange in 2008 between Satoshi and Mike Hearn > James Donald. Mike James has already spotted the "scaling problem" and points it out to Satoshi:
To detect and reject a double spending event in a timely manner, one must have most past transactions of the coins in the transaction, which, naively implemented, requires each peer to have most past transactions, or most past transactions that occurred recently. If hundreds of millions of people are doing transactions, that is a lot of bandwidth
There it is. "Naively implemented" Bitcoin would require everyone to keep a record of all transactions - ie "everyone must run a full node."
Satoshi corrects him:
Long before the network gets anywhere near as large as that, it would be safe for users to use Simplified Payment Verification (section 8) to check for double spending, which only requires having the chain of block headers, or about 12KB per day.
Aha! There is no real need for individuals to keep a copy of all transactions. Which makes sense - who wants to keep a copy of everyone else's transactions just to buy a coffee?
But who can be trusted to keep our transactions? Satoshi answers on the next line:
Only people trying to create new coins would need to run network nodes.
There it is folks.
Miners - y'know, the ones currently getting paid $150K every ten minutes - have both the incentives and the means to maintain the blockchain, without which the goose that lays their digital-gold eggs will die.
Businesses also need to maintain copies of the blockchain for audit and systems integration purposes among others.
So what's the scaling "problem?" Once we take end-users mostly out of the equation, it's clear that the technology is easily capable of scaling this design up to extremely high throughput. Understanding this was key to my getting involved in Bitcoin in the first place! With modest hardware current versions of Bitcoin Cash are already capable of "Paypal levels" of scaling, already 20-30X more than Bitcoin Segwit, and by next year I think we'll see another 10X on top of that. That vastly exceeds even our rosiest 2-3 year capacity requirements.
There isn't a "scaling problem." It just doesn't exist. The "scaling problem" is really an "adoption opportunity" since there's abundant cheap capacity just lying around asking for businesses to build stuff on it.
No. There's no scaling problem at all. The only problem that exists is "people that don't want Bitcoin to scale."
There are several classes of these people.
  1. is a group who believes that larger blocks will cause fatal mining centralization. The problem with this belief is that the cost to store and transmit blockchain data is a tiny fraction of the cost to mine. Most of the costs to mining are electricity consumption, plant, property, mining equipment, and personnel. Storage for a year's worth of totally-full 32MB "paypal level" blocks is roughly $100 in today's prices and coming down all the time. But the cost to actually reliably mine a Bitcoin block is (edit: tens-to-) hundreds of thousands of dollars per day. Storage and data transmission don't even enter into the equation. Others point to the orphaning problem inherent in relaying large blocks but this is essentially erased by xthin blocks and miners being on an ultrafast network. In short the idea that bigger blocks will cause mining centralization is total speculation and could in fact be dead wrong.
  2. another group believes that larger blocks will centralize "nonmining full nodes." First off, as long as mining is reasonably decentralized, it is unclear that there is any network requirement for there to be "non mining full nodes" - people would only run these when they had some need for all the world's transaction data. Past that, it is true that the costs to transmit and store the blockchain go up as blocks get larger, all other things held equal. However, the costs remain minimal to a business - $100 to store a year's worth of always-full 32MB blocks is simply not a barrier to entry for any business. And as Satoshi pointed out, individuals really have no need to keep a copy of all the world's transactions just to use the system. Without going into great detail it's my opinion that many people who worry about "full node centralization" are simply victims of censorship and community manipulation. Here's a great article on how "full nodes" that don't mine are a tiny piece of the decentralization puzzle.
  3. a third group of people who don't want Bitcoin to scale are essentially here to harm Bitcoin or move its value elsewhere. If Bitcoin can't work as intended as P2P cash, then that's terrific news for legacy banking. It's also great news for Ethereum, Monero, Dash, and everyone else who has a coin that does work as P2P cash - all forms of "off chain scaling" (the demand moves off the Bitcoin chain). Lightning Network is also a form of "off chain scaling" that ultimately could harm onchain security by moving transaction value off of the blockchain. In short, anything that aims to "scale" by moving value off the blockchain onto another chain or layer benefits from ensuring that onchain Bitcoin cannot scale.
A word needs to be added about so-called "offchain" or "L2" scaling.
"Offchain scaling" is like "scaling" an underground metro by never adding new lines, trains, or cars so that when demand increases, people walk or ride in surface taxis instead (edit: then going into the cab business!). The only way to scale the subway is to put more people on more subway trains.
So to repeat, it is clear to many people that there exists no "scaling problem." The only problem that exists are people who don't want to add more capacity.
submitted by jessquit to btc [link] [comments]

Why do 51% attacks happen and what are they?

Before we dive into this topic, one should understand the basics of Blockchain technology. A well-distributed blockchain consists of thousands of different nodes that individually support the network’s decentralization and security. These nodes are by itself supported by miners, basically computers who use their processing power to solve mathematical equations. All these nodes and mining computers are connected and together make up for a distributed datacenter we know as a blockchain. The way of reaching consensus about the given rules within the protocol varies per blockchain. The oldest and most commonly used version is the Proof-Of-Work blockchain, invented by Satoshi Nakamoto. Given the fact thousands of people and institutions around the world support these networks, it’s hard to breach the security. In theory, it is possible, however.
What is a 51% attack? A blockchain is hard to hack into, it’s not as simple to crack as a regular database that usually hides behind admin access gained with a couple passwords. In order to breach a blockchain, you’d have to perform a 51% attack. This simply means that you would have to gain access over more than 50% hashrate of the network, thus 51% attack. Hashrate is another word for mining power. The moment one sole entity is in charge of more than half of the network, this party can now change its consensus protocol. By doing so, you could reverse the blockchain years back in time causing many transactions to never have occurred, allow more Bitcoin to be created or destroy parts of the entire supply. This means you could cause chaos. The chances of a 51% attack are not that high, but in history, it has happened before.
Ethereum Classic One of the most famous 51% attacks was on the original Ethereum protocol, Ethereum Classic. After a major hack in the early days of the Ethereum network, the team we now know responsible for Ethereum took control of the network and reversed the attack. To frustration of the core team of Ethereum, that went on to build further on Ethereum Classic, the version that was never forked or whatsoever. Having a smaller market cap would make it less expensive for a single entity to take control of the network and that is what happened. $1.1 million in ETC was double spent during the attack, causing many major exchanges to halt the trading of the coin. Prices went down but eventually recovered and the hackers eventually got away with it.
Verge This project has suffered multiple attacks over the years. After claiming to be the number one privacy coin, the project called for many haters to come to their front doors. Back in 2018 however, Verge suffered from more than one attack. It started with a hacker found a way of integrating malicious software into the mining protocol. With their new version of the protocol, they could mine multiple blocks per minute on the verge blockchain, gaining them control over network hashrates and move XVG to their wallets. At the peak of the second attack, the hackers were mining 25 blocks per minute, or roughly 8250 XVG or $950 every single minute. Reports say over $1.7 million in XVG was stolen in the three attacks. The team behind Verge called it nothing but a DDoS attack. Afterward, a hard fork occurred and now a multi-algorithm style of mining is utilized to minimize the probability of another 51% attack.
How can it happen? You might be wondering, how is this possible? You plug in thousands of mining rigs and there you have it, you just gained control of the network. This, however, is a very expensive operation. Doing this for the Bitcoin blockchain would cost you around 1 Billion dollars, that amount much lower for smaller coins though. Ever heard of Monero? That’d cost you roughly $25,000 according to calculations by Exaking. These are theoretical examples, in practice, many of these projects have built-in warning signs and detectors to go against these kinds of attacks. It is, however, important to be aware of this possibility. You can not just blindly trust any blockchain out there to be a hundred percent safe.
SwapSpace team is always ready for discussion. You can drop an email about your suggestions and questions to [[email protected]](mailto:[email protected]) Join our social networks: Twitter, Medium, Facebook The best rates on https://swapspace.co/ Why is SwapSpace https://blog.swapspace.co/2019/09/17/why-is-swapspace/
submitted by SwapSpace_co to btc [link] [comments]

Why do 51% attacks happen and what are they?

Before we dive into this topic, one should understand the basics of Blockchain technology. A well-distributed blockchain consists of thousands of different nodes that individually support the network’s decentralization and security. These nodes are by itself supported by miners, basically computers who use their processing power to solve mathematical equations. All these nodes and mining computers are connected and together make up for a distributed datacenter we know as a blockchain. The way of reaching consensus about the given rules within the protocol varies per blockchain. The oldest and most commonly used version is the Proof-Of-Work blockchain, invented by Satoshi Nakamoto. Given the fact thousands of people and institutions around the world support these networks, it’s hard to breach the security. In theory, it is possible, however.
What is a 51% attack? A blockchain is hard to hack into, it’s not as simple to crack as a regular database that usually hides behind admin access gained with a couple passwords. In order to breach a blockchain, you’d have to perform a 51% attack. This simply means that you would have to gain access over more than 50% hashrate of the network, thus 51% attack. Hashrate is another word for mining power. The moment one sole entity is in charge of more than half of the network, this party can now change its consensus protocol. By doing so, you could reverse the blockchain years back in time causing many transactions to never have occurred, allow more Bitcoin to be created or destroy parts of the entire supply. This means you could cause chaos. The chances of a 51% attack are not that high, but in history, it has happened before.
Ethereum Classic One of the most famous 51% attacks was on the original Ethereum protocol, Ethereum Classic. After a major hack in the early days of the Ethereum network, the team we now know responsible for Ethereum took control of the network and reversed the attack. To frustration of the core team of Ethereum, that went on to build further on Ethereum Classic, the version that was never forked or whatsoever. Having a smaller market cap would make it less expensive for a single entity to take control of the network and that is what happened. $1.1 million in ETC was double spent during the attack, causing many major exchanges to halt the trading of the coin. Prices went down but eventually recovered and the hackers eventually got away with it.
Verge This project has suffered multiple attacks over the years. After claiming to be the number one privacy coin, the project called for many haters to come to their front doors. Back in 2018 however, Verge suffered from more than one attack. It started with a hacker found a way of integrating malicious software into the mining protocol. With their new version of the protocol, they could mine multiple blocks per minute on the verge blockchain, gaining them control over network hashrates and move XVG to their wallets. At the peak of the second attack, the hackers were mining 25 blocks per minute, or roughly 8250 XVG or $950 every single minute. Reports say over $1.7 million in XVG was stolen in the three attacks. The team behind Verge called it nothing but a DDoS attack. Afterward, a hard fork occurred and now a multi-algorithm style of mining is utilized to minimize the probability of another 51% attack.
How can it happen? You might be wondering, how is this possible? You plug in thousands of mining rigs and there you have it, you just gained control of the network. This, however, is a very expensive operation. Doing this for the Bitcoin blockchain would cost you around 1 Billion dollars, that amount much lower for smaller coins though. Ever heard of Monero? That’d cost you roughly $25,000 according to calculations by Exaking. These are theoretical examples, in practice, many of these projects have built-in warning signs and detectors to go against these kinds of attacks. It is, however, important to be aware of this possibility. You can not just blindly trust any blockchain out there to be a hundred percent safe.
SwapSpace team is always ready for discussion. You can drop an email about your suggestions and questions to [[email protected]](mailto:[email protected]) Join our social networks: Twitter, Medium, Facebook The best rates on https://swapspace.co/ Why is SwapSpace https://blog.swapspace.co/2019/09/17/why-is-swapspace/
submitted by SwapSpace_co to bitcoin_uncensored [link] [comments]

Bitcoin Halving: a Harbinger of a Bull Market or Coincidence?

Bitcoin Halving: a Harbinger of a Bull Market or Coincidence?
In this article, we will talk in detail about the Bitcoin halving, find out what it is, analyze how this event affected the market previously, study the theories of top traders and try to understand what to expect in the future. So, first things first.
https://preview.redd.it/58uagqpscqq31.jpg?width=640&format=pjpg&auto=webp&s=ae0b5759cf7916fb3492685a78ca1d19d0a66a17

Inflation?

The mysterious Bitcoin creator Satoshi Nakamoto was a real genius, as he came up with a rather smart solution to maybe the most important problem of any currency - inflation. The current Bitcoin rate inflation is 4% per year, while the US dollar 1,91%, the Indian rupee 5,24%, the Russian ruble 4,33%, etc. However, Bitcoin inflation will continue to decrease until it reaches 0% in 2140.
To begin with, the Bitcoins issue is limited, in total, 21 million coins will be issued. As you know, Bitcoins are not issued by any single centralized authority - they are mined. And by analogy with precious metals, the mining complexity will constantly increase, while the reward for the work done will decrease. The whole thing is the correct implementation of source code, as well as the so-called halving, which means that the miners get half as many coins every four years. Thus, by rough estimates, the last Bitcoin will be mined in May 2140.

What is halving and how does it work?

To explain what halving is, let's first understand how Bitcoin works. So, this digital coin is based on blockchain technology, which is a decentralized data accounting book, exact copies of which are located on miner computers around the world.
As you know, each book consists of pages, in our case these are blocks. Each block has its own unique serial number. Miners solve complex mathematical equations to form a new block and receive a reward in the form of coins for the work done. The size of this reward is halved every 210 thousand blocks. Considering that about 144 blocks are mined per day, this event occurs approximately once every four years. This is what is called halving. The short Bitcoin history includes two halvings:
  1. 11/28/2012 the reward for the found block was reduced from 50 to 25 BTC.
  2. 07/09/2016 the award halved again from 25 to 12.5 coins.
The next halving should happen on May 23, 2020, then the reward will again decrease by half and amount to 6.25 BTC.

A brief analysis of the first halving

On the day when the first decrease in the reward for the found block happened, the BTC rate showed a slight movement - the price increased by only 1.7%. But if you look at the big picture, you can see that the asset began to grow several months before this event, and just continued to move up after halving. Thus, the BTC rate increased from 13 to 260 US dollars in just four months.
https://preview.redd.it/89x4xdmvcqq31.png?width=934&format=png&auto=webp&s=af38bb2957a876c9f447b411db7a7e09d5ea21bc
This was followed by a rollback in price up to $80, but later a real bull race started and lasted until December 2013. At that time, the asset grew to unimaginable values, its rate reached the level of 1150 US dollars. Well, and of course, after such an increase, a tight correction of the price and a protracted bear market followed.
Pay attention to the complexity of the Bitcoin network during this event. The chart below shows, that the hash rate began to increase rapidly a few months before the halving, and the growth did not stop after it.
https://preview.redd.it/ljb35j7xcqq31.png?width=1335&format=png&auto=webp&s=f61f7a35294d500163e495370c8ece9fd27d68f5

A brief analysis of the second halving

The second halving occurred in less than four years - on July 9, 2016. This time, the reward for miners fell to 12.5 BTC. It is important to note that the time between the first and second halvings was 1316 days or 3.6 years. Moreover, if to analyze the data, you can see that the market started an upward movement about 9 months before the event. During this period, the BTC rate rose by 112%, and after the Bitcoin halving, it continued to grow till December 2017 and stopped at around $20,000 per coin.
We can also see how the hash rate increased against the background of the second halving. The chart below shows that the complexity of the Bitcoin network throughout the bear market in 2014-2015 was about the same value, but this figure began to grow rapidly about six months before the halving.
https://preview.redd.it/wylqu1wycqq31.png?width=1366&format=png&auto=webp&s=a84acd976f6ae945c390615797234e20473fecaf
Therefore, the miners' interest in Bitcoin has grown significantly a few months before the event. And just like the previous time, the hash rate of the network continued to grow after halving.

In the run-up to of the third halving

As we all remember, a rather encouraging 2018 followed the euphoria of 2017, and the rates of all coins fell down to 90% of their peak values. According to technical indicators and the general mood in the market, we can say that the bear flag lasted until April 2, 2019. On this day, the Bitcoin exchange rate rose from $4,100 to almost $5,000, then an upward movement began. Note that this happened 13 months before the upcoming halving.
Further, the BTC rate continued to grow rapidly and reached the level of $14,000 at the end of June, followed by a rollback and the price held at around $10,000 for a long time. But on September 24, 2019, there was a fairly powerful price drop, the rate fell by $1,500 in less than a day, and at the time of this writing, the market price of one BTC coin is $8,200.
Note that the resumption of BTC growth this year was again accompanied by a significant increase in the hash rate. The complexity of the network from April to September has more than doubled, and it continues to increase.
https://preview.redd.it/dnivyfm0dqq31.png?width=1366&format=png&auto=webp&s=29c3ecbce63bfed760c0c98af0e2db5948a456d3

How will halving 2020 affect the price?

Many market participants are wondering how will the third halving affect the market situation? Unfortunately, we can’t know the future, we can only analyze the current situation, compare it with historical data and draw certain conclusions.
In this article, we take the theories of two famous traders - Bob Lucas and Sunny Decree. They both analyzed in detail previous halving and made their forecasts regarding the market reaction to the next halving.

Sunny Decree Theory

He believes that the expectation of a halving will lead to Bitcoin price rise, as it was in previous times. He uses the BLX index to confirm this theory - this is the most complete history of the BTC price on the Internet, this is data actually from its very foundation.
The first cycle until November 2012 (before the first halving) is not so important for us since at that time Bitcoin was still a fairly new concept. Almost no one knew about its existence, and there were not many exchanges where it could be traded. However, we can use the second cycle as a projection for the third, in which we are now. The key role in the formation of new cycles is not in the reduction of inflation itself (that is, the Bitcoin halving), but trading activity in anticipation of it.
https://preview.redd.it/4kczz6a2dqq31.png?width=1306&format=png&auto=webp&s=f0734155c3af4755935bcb052572585a124128f6
Each of these cycles can be divided into several phases:
  • The first phase, which is not highlighted in color, is the bull market when the price forms a parabolic upward movement and market participants are in euphoria
  • The second phase is highlighted in red - it is a bear market that afflicts traders and most investors.
  • The third phase is highlighted in orange - it is an accumulation that begins after reaching the bottom.
  • The fourth phase is marked in yellow - this is a parabolic movement after accumulation, which occurred throughout all three cycles.
  • The fifth phase is highlighted in gray - this is the continuation of accumulation until halving and a new bull rally.
It to look attentively at the current cycle (that is, the third) we can see:
  • the first phase is a bullish trend up to $20,000.
  • the second phase is a drop to $3200.
  • the third phase is flat, which did not differ in increased volatility, at that moment the whales accumulated coins.
  • the fourth phase - a sharp increase, up to $14,000.
  • the fifth phase - a new correction to $8,200 and the continued accumulation of assets.
This theory tells us about the continuation of accumulation until the next halving in May 2020, which should be followed by a new bullish trend.
Now let's move on to the price forecast. The difference between the high of the first and second cycle is about 3600%, between the second and third - 1600-1700%. That is, each time the profit as a percentage goes down, so the third cycle was approximately half weaker than the second. As a result, according to Sunny Decree's theory, projecting the estimated percentage of growth proportionally, we can expect that the next BTC high will be at around $185,000. Using the structure of the third cycle, we can suggest that the peak of the bull market will happen in the summer of 2021.

Bob Lucas theory

Next, let's look at the theory of professional trader Bob Lucas. He analyzes the so-called cycles. In his opinion, the last four-year cycle (which contained 52 weeks in the drop and 153 weeks in growth) came to its end, it took 205 weeks in total.
Bob Lucas believes that the price we saw on December 10, 2018, was the end of this cycle. It is important to understand that the video in which he tells this theory in detail appeared on his channel on April 2, 2019 - on the very day when the market began to grow, so six months later we can notice that he was right in many ways, but not in everything.
So, Bob Lucas says in his video that at the beginning of a new cycle we will see the incredible power that will rapidly push the price to new levels. Lucas noted that at the time of recording the video, a lot of people are beginning to actively buy BTC in hope on rapid growth.
He believed that in April the market was not yet at the stage of the final bull race. He said that there will be growing up to plus or minus $6,000 in the near future, followed by a tough correction that will unsettle many weak investors. In his opinion, during this correction, the price may even update the December bottom, and only after that, a new cycle will begin, which will last about 150 weeks in growth. As for the final price, he does not have a specific figure, but he believes that the rate of the first cryptocurrency will be more than 100 thousand US dollars.
He stated that a hard correction should happen around August 2019, but in fact, it did not happen. Even though he made a mistake with the time frame and the estimated rate of BTC, he predicted the vector of the development of the situation quite correctly. Recent events are an excellent confirmation of this when on September 24, 2019, the BTC rate fell by $1,500 in less than a day. It was the correction Bob Lucas spoke about, but it happened a month later than he expected. Yes, it`s not likely that the rate falls to $3,000, but in current conditions, it is quite realistic to imagine a BTC rate of $6,000. Indeed, many analysts and experts agree that the “bloody Tuesday”, September 24th was not the final fall, it caused the next phase of accumulation of assets, which will take some time.

Neironix research department opinion

Let's drop someone else’s opinion and do what professional investors usually do - just take the facts we have and analyze them with a cold head.
  1. If to take a look at the BTC chart for its entire history, you can see certain patterns that have been repeated in a cyclic form several times.
  2. These cycles are conditionally divided by halvings, according to the principle of one halving - one parabolic growth.
  3. Even after shocking price kickbacks, the BTC rate never again fell to the values ​​that were before the start of the parabolic growth.
  4. Each subsequent halving increases the cost of mining BTC, which plays an important role in increasing the value of the coin.
  5. Bitcoin Halving 2020 is a very hype event, so in any case, this will affect the price.
Can we predict the future based on this? Of course, we cannot know for sure what surprises the cryptocurrency market is preparing for us. But no doubt that the cryptocurrency market, moreover Bitcoin, has great prospects. Bitcoin should be considered only as a long-term asset, which has always shown huge returns for a long period of time.
But it is important to understand that this article is not a guide to action since the digital coin market is quite unpredictable and it is a rather difficult task to foretell any outcome in advance. Do not invest in cryptocurrencies more than you can afford to lose. If you spend more money than you can effort, then you will not be able to think rationally and survive often storms in this young market. Treat your investments with a cold mind, and then you will succeed.

Conclusion

Bitcoin has already survived two halvings during its short history, and in less than nine months, we will see another decrease in the reward for miners. If you carefully study the charts, you can see that the BTC rate always grows before the halving. And after it, the market goes into a phase of parabolic growth, it lasts about a year, and then comes the correction and a protracted bear market.
A similar scenario has already been repeated twice and many traders believe that we will see a similar picture in the future, since the next halving should take place in May 2020. We observed a significant increase in the hash rate, the number of wallets, transactions and an increase in the rate of the main cryptocurrency 13 months before this event.
Earlier that we carried a detailed analysis of the current state of the Litecoin cryptocurrency, and also analyzed its behavior against the background of the recent halving that took place on August 5, 2019. If you are interested in this topic, here is a link to our study.
submitted by neironixio to u/neironixio [link] [comments]

Why do 51% attacks happen and what are they?

Before we dive into this topic, one should understand the basics of Blockchain technology. A well-distributed blockchain consists of thousands of different nodes that individually support the network’s decentralization and security. These nodes are by itself supported by miners, basically computers who use their processing power to solve mathematical equations. All these nodes and mining computers are connected and together make up for a distributed datacenter we know as a blockchain. The way of reaching consensus about the given rules within the protocol varies per blockchain. The oldest and most commonly used version is the Proof-Of-Work blockchain, invented by Satoshi Nakamoto. Given the fact thousands of people and institutions around the world support these networks, it’s hard to breach the security. In theory, it is possible, however.
What is a 51% attack? A blockchain is hard to hack into, it’s not as simple to crack as a regular database that usually hides behind admin access gained with a couple passwords. In order to breach a blockchain, you’d have to perform a 51% attack. This simply means that you would have to gain access over more than 50% hashrate of the network, thus 51% attack. Hashrate is another word for mining power. The moment one sole entity is in charge of more than half of the network, this party can now change its consensus protocol. By doing so, you could reverse the blockchain years back in time causing many transactions to never have occurred, allow more Bitcoin to be created or destroy parts of the entire supply. This means you could cause chaos. The chances of a 51% attack are not that high, but in history, it has happened before.
Ethereum Classic One of the most famous 51% attacks was on the original Ethereum protocol, Ethereum Classic. After a major hack in the early days of the Ethereum network, the team we now know responsible for Ethereum took control of the network and reversed the attack. To frustration of the core team of Ethereum, that went on to build further on Ethereum Classic, the version that was never forked or whatsoever. Having a smaller market cap would make it less expensive for a single entity to take control of the network and that is what happened. $1.1 million in ETC was double spent during the attack, causing many major exchanges to halt the trading of the coin. Prices went down but eventually recovered and the hackers eventually got away with it.
Verge This project has suffered multiple attacks over the years. After claiming to be the number one privacy coin, the project called for many haters to come to their front doors. Back in 2018 however, Verge suffered from more than one attack. It started with a hacker found a way of integrating malicious software into the mining protocol. With their new version of the protocol, they could mine multiple blocks per minute on the verge blockchain, gaining them control over network hashrates and move XVG to their wallets. At the peak of the second attack, the hackers were mining 25 blocks per minute, or roughly 8250 XVG or $950 every single minute. Reports say over $1.7 million in XVG was stolen in the three attacks. The team behind Verge called it nothing but a DDoS attack. Afterward, a hard fork occurred and now a multi-algorithm style of mining is utilized to minimize the probability of another 51% attack.
How can it happen? You might be wondering, how is this possible? You plug in thousands of mining rigs and there you have it, you just gained control of the network. This, however, is a very expensive operation. Doing this for the Bitcoin blockchain would cost you around 1 Billion dollars, that amount much lower for smaller coins though. Ever heard of Monero? That’d cost you roughly $25,000 according to calculations by Exaking. These are theoretical examples, in practice, many of these projects have built-in warning signs and detectors to go against these kinds of attacks. It is, however, important to be aware of this possibility. You can not just blindly trust any blockchain out there to be a hundred percent safe.
SwapSpace team is always ready for discussion. You can drop an email about your suggestions and questions to [[email protected]](mailto:[email protected]) Join our social networks: Twitter, Medium, Facebook The best rates on https://swapspace.co/ Why is SwapSpace https://blog.swapspace.co/2019/09/17/why-is-swapspace/
submitted by SwapSpace_co to CryptoCurrencies [link] [comments]

INT - Comparison with Other IoT Projects

What defines a good IoT project? Defining this will help us understand what some of the problems they might struggle with and which projects excel in those areas. IoT will be a huge industry in the coming years. The true Internet 3.0 will be one of seamless data and value transfer. There will be a tremendous amount of devices connected to this network, from your light bulbs to your refrigerator to your car, all autonomously transacting together in an ever growing network in concert, creating an intelligent, seamless world of satisfying wants and needs.
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Let’s use the vastness of what the future state of this network is to be as our basis of what makes a good project.
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Scalability
In that future we will need very high scalability to accommodate the exponential growth in transaction volume that will occur. The network doesn’t need to have the ability to do high transactions per second in the beginning, just a robust plan to grow that ability as the network develops. We’ve seen this issue already with Bitcoin on an admittedly small market penetration. If scaling isn’t a one of the more prominent parts of your framework, that is a glaring hole.
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Applicability
Second to scalability is applicability. One size does not fit all in this space. Some uses will need real-time streaming of data where fast and cheap transactions are key and others will need heavier transactions full of data to be analyzed by the network for predictive uses. Some uses will need smart contracts so that devices can execute actions autonomously and others will need the ability to encrypt data and to transact anonymously to protect the privacy of the users in this future of hyper-connectivity. We cannot possibly predict the all of the future needs of this network so the ease of adaptability in a network of high applicability is a must.
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Interoperability
In order for this network to have the high level of applicability mentioned, it would need to have access to real world data outside of it’s network to work off of or even to transact with. This interoperability can come in several forms. I am not a maximalist, thinking that there will be one clear winner in any space. So it is easy, therefore, to imagine that we would want to be able to interact with some other networks for payment/settlement or data gathering. Maybe autonomously paying for bills with Bitcoin or Monero, maybe smart contracts that will need to be fed additional data from the Internet or maybe even sending an auto invite for a wine tasting for the wine shipment that’s been RFID’d and tracked through WTC. In either case, in order to afford the highest applicability, the network will need the ability to interact with outside networks.
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Consensus
How the network gains consensus is often something that is overlooked in the discussion of network suitability. If the network is to support a myriad of application and transaction types, the consensus mechanism must be able to handle it without choking the network or restricting transaction type. PoW can become a bottleneck as the competition for block reward requires an increase in difficulty for block generation, you therefore have to allow time for this computation in between blocks, often leading to less than optimal block times for fast transactions. This can create a transaction backlog as we have seen before. PoS can solve some of these issues but is not immune to this either. A novel approach to gaining consensus will have to be made if it is going to handle the variety and volume to be seen.
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Developability
All of this can be combined to create a network that is best equipped to take on the IoT ecosystem. But the penetration into the market will be solely held back by the difficulty in connecting and interacting with the network from the perspective of manufacturers and their devices. Having to learn a new code language in order to write a smart contract or create a node or if there are strict requirements on the hardware capability of the devices, these are all barriers that make it harder and more expensive for companies to work with the network. Ultimately, despite how perfect or feature packed your network is, a manufacturer will more likely develop devices for those that are easy to work with.
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In short, what the network needs to focus on is:
-Scalability – How does it globally scale?
-Applicability – Does it have data transfer ability, fast, cheap transactions, smart contracts, privacy?
-Interoperability – Can it communicate with the outside world, other blockchains?
-Consensus – Will it gain consensus in a way that supports scalability and applicability?
-Developability – Will it be easy for manufactures to develop devices and interact with the network?
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The idea of using blockchain technology to be the basis of the IoT ecosystem is not a new idea. There are several projects out there now that are aiming at tackling the problem. Below you will see a high level breakdown of those projects with some pros and cons from how I interpret the best solution to be. You will also see some supply chain projects listed below. Supply chain solutions are just small niches in the larger IoT ecosystem. Item birth record, manufacturing history, package tracking can all be “Things” which the Internet of Things track. In fact, INT already has leaked some information hinting that they are cooperating with pharmaceutical companies to track the manufacture and packaging of the drugs they produce. INT may someday include WTC or VEN as one of its subchains feeding in information into the ecosystem.
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IOTA
IOTA is a feeless and blockchain-less network called a directed acyclic graph. In my opinion, this creates more issues than it fixes.
The key to keeping IOTA feeless is that there are no miners to pay because the work associated with verifying a transaction is distributed to among all users, with each user verifying two separate transactions for their one. This creates some problems both in the enabling of smart contracts and the ability to create user privacy. Most privacy methods (zk-SNARKs in specific) require the one doing the verifying to use computationally intensive cryptography which are outside the capability of most devices on the IoT network (a weather sensor isn’t going to be able to build the ZK proof of a transaction every second or two). In a network where the device does the verifying of a transaction, cryptographic privacy becomes impractical. And even if there were a few systems capable of processing those transactions, there is no reward for doing the extra work. Fees keep the network safe by incentivizing honesty in the nodes, by paying those who have to work harder to verify a certain transaction, and by making it expensive to attack the network or disrupt privacy (Sybil Attacks).
IOTA also doesn’t have and may never have the ability to enable smart contracts. By the very nature of the Tangle (a chain of transactions with only partial structure unlike a linear and organized blockchain), establishing the correct time order of transactions is difficult, and in some situations, impossible. Even if the transactions have been time stamped, there is no way to verify them and are therefore open to spoofing. Knowing transaction order is absolutely vital to executing step based smart contracts.
There does exist a subset of smart contracts that do not require a strong time order of transactions in order to operate properly. But accepting this just limits the use cases of the network. In any case, smart contracts will not be able to operate directly on chain in IOTA. There will need to be a trusted off chain Oracle that watches transactions, establishes timelines, and runs the smart contract network
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-Scalability – High
-Applicability – Low, no smart contracts, no privacy, not able to run on lightweight devices
-Interoperability – Maybe, Oracle possibility
-Consensus – Low, DAG won’t support simple IoT devices and I don’t see all devices confirming other transactions as a reality
-Developability – To be seen, currently working with many manufacturers
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Ethereum
Ethereum is the granddaddy of smart contract blockchain. It is, arguably, in the best position to be the center point of the IoT ecosystem. Adoption is wide ranging, it is fast, cheap to transact with and well known; it is a Turing complete decentralized virtual computer that can do anything if you have enough gas and memory. But some of the things that make it the most advanced, will hold it back from being the best choice.
Turing completeness means that the programming language is complete (can describe any problem) and can solve any problem given that there is enough gas to pay for it and enough memory to run the code. You could therefore, create an infinite variety of different smart contracts. This infinite variability makes it impossible to create zk-SNARK verifiers efficiently enough to not cost more gas than is currently available in the block. Implementing zk-SNARKs in Ethereum would therefore require significant changes to the smart contract structure to only allow a small subset of contracts to permit zk-SNARK transactions. That would mean a wholesale change to the Ethereum Virtual Machine. Even in Zcash, where zk-SNARK is successfully implemented for a single, simple transaction type, they had to encode some of the network’s consensus rules into zk-SNARKs to limit the possible outcomes of the proof (Like changing the question of where are you in the US to where are you in the US along these given highways) to limit the computation time required to construct the proof.
Previously I wrote about how INT is using the Double Chain Consensus algorithm to allow easy scaling, segregation of network traffic and blockchain size by breaking the network down into separate cells, each with their own nodes and blockchains. This is building on lessons learned from single chain blockchains like Bitcoin. Ethereum, which is also a single chain blockchain, also suffers from these congestion issues as we have seen from the latest Cryptokitties craze. Although far less of an impact than that which has been seen with Bitcoin, transaction times grew as did the fees associated. Ethereum has proposed a new, second layer solution to solve the scaling issue: Sharding. Sharding draws from the traditional scaling technique called database sharding, which splits up pieces of a database and stores them on separate servers where each server points to the other. The goal of this is to have distinct nodes that store and verify a small set of transactions then tie them up to a larger chain, where all the other nodes communicate. If a node needs to know about a transaction on another chain, it finds another node with that information. What does this sound like? This is as close to an explanation of the Double Chain architecture as to what INT themselves provided in their whitepaper.
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-Scalability – Neutral, has current struggles but there are some proposals to fix this
-Applicability – Medium, has endless smart contract possibilities, no privacy currently with some proposals to fix this
-Interoperability – Maybe, Oracle possibility
-Consensus – Medium, PoW currently with proposals to change to better scaling and future proofing.
-Developability – To be seen
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IoTeX
A young project, made up of several accredited academics in cryptography, machine learning and data security. This is one of the most technically supported whitepapers I have read.They set out to solve scalability in the relay/subchain architecture proposed by Polkadot and used by INT. This architecture lends well to scaling and adaptability, as there is no end to the amount of subchains you can add to the network, given node and consensus bandwidth.
The way they look to address privacy is interesting. On the main parent (or relay) chain, they plan on implementing some of the technology from Monero, namely, ring signatures, bulletproofs and stealth addresses. While these are proven and respected technologies, this presents some worries as these techniques are known to not be lightweight and it takes away from the inherent generality of the core of the network. I believe the core should be as general and lightweight as possible to allow for scaling, ease of update, and adaptability. With adding this functionality, all data and transactions are made private and untraceable and therefore put through heavier computation. There are some applications where this is not optimal. A data stream may need to be read from many devices where encrypting it requires decryption for every use. A plain, public and traceable network would allow this simple use. This specificity should be made at the subchain level.
Subchains will have the ability to define their needs in terms of block times, smart contracting needs, etc. This lends to high applicability.
They address interoperability directly by laying out the framework for pegging (transaction on one chain causing a transaction on another), and cross-chain communication.
They do not address anywhere in the whitepaper the storage of data in the network. IoT devices will not be transaction only devices, they will need to maintain data, transmit data and query data. Without the ability to do so, the network will be crippled in its application.
IoTeX will use a variation of DPoS as the consensus mechanism. They are not specific on how this mechanism will work with no talk of data flow and node communication diagram. This will be their biggest hurdle and why I believe it was left out of the white paper. Cryptography and theory is easy to elaborate on within each specific subject but tying it all together, subchains with smart contracts, transacting with other side chains, with ring signatures, bulletproofs and stealth addresses on the main chain, will be a challenge that I am not sure can be done efficiently.
They may be well positioned to make this work but you are talking about having some of the core concepts of your network being based on problems that haven’t been solved and computationally heavy technologies, namely private transactions within smart contracts. So while all the theory and technical explanations make my pants tight, the realist in me will believe it when he sees it.
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-Scalability – Neutral to medium, has the framework to address it with some issues that will hold it back.
-Applicability – Medium, has smart contract possibilities, privacy baked into network, no data framework
-Interoperability – Medium, inherent in the network design
-Consensus – Low, inherent private transactions may choke network. Consensus mechanism not at all laid out.
-Developability – To be seen, not mentioned.
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CPChain
CPC puts a lot of their focus on data storage. They recognize that one of the core needs of an IoT network will be the ability to quickly store and reference large amounts of data and that this has to be separate from the transactional basis of the network as to not slow it down. They propose solving this using distributed hash tables (DHT) in the same fashion as INT, which stores data in a decentralized fashion so no one source owns the complete record. This system is much the same as the one used by BitTorrent, which allows data to be available regardless of which nodes will be online at a given time. The data privacy issue is solved by using client side encryption with one-to-many public key cryptography allowing many devices to decrypt a singly encrypted file while no two devices share the same key.
This data layer will be run on a separate, parallel chain as to not clog the network and to enable scalability. In spite of this, they don’t discuss how they will scale on the main chain. In order to partially solve this, it will use a two layer consensus structure centered on PoS to increase consensus efficiency. This two layer system will still require the main layer to do the entirety of the verification and block generation. This will be a scaling issue where the network will have no division of labor to segregate congestion to not affect the whole network.
They do recognize that the main chain would not be robust or reliable enough to handle high frequency or real-time devices and therefore propose side chains for those device types. Despite this, they are adding a significant amount of functionality (smart contracts, data interpretation) to the main chain instead of a more general and light weight main chain, which constrains the possible applications for the network and also makes it more difficult to upgrade the network.
So while this project, on the surface level (not very technical whitepaper), seems to be a robust and well thought out framework, it doesn’t lend itself to an all-encompassing IoT network but more for a narrower, data centric, IoT application.
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-Scalability – Neutral to medium, has the framework to address it somewhat, too much responsibility and functionality on the main chain may slow it down.
-Applicability – Medium, has smart contract possibilities, elaborate data storage solution with privacy in mind as well has high frequency applications thought out
-Interoperability – Low, not discussed
-Consensus – Low to medium, discussed solution has high reliance on single chain
-Developability – To be seen, not mentioned.
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ITC
The whitepaper reads like someone just grabbed some of the big hitters in crypto buzzword bingo and threw them in there and explained what they were using Wikipedia. It says nothing about how they will tie it all together, economically incentivize the security of the network or maintain the data structures. I have a feeling none of them actually have any idea how to do any of this. For Christ sake they explain blockchain as the core of the “Solutions” portion of their whitepaper. This project is not worth any more analysis.
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RuffChain
Centralization and trust. Not very well thought out at this stage. DPoS consensus on a single chain. Not much more than that.
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WaltonChain
Waltonchain focuses on tracking and validating the manufacture and shipping of items using RFID technology. The structure will have a main chain/subchain framework, which will allow the network to segregate traffic and infinitely scale by the addition of subchains given available nodes and main chain bandwidth.
DPoST (Stake & Trust) will be the core of their consensus mechanism, which adds trust to the traditional staking structure. This trust is based on the age of the coins in the staker’s node. The longer that node has held the coins, combined with the amount of coins held, the more likely that node will be elected to create the block. I am not sure how I feel about this but generally dislike trust.
Waltonchain's framework will also allow smart contracts on the main chain. Again, this level of main chain specificity worries me at scale and difficulty in upgrading. This smart contract core also does not lend itself to private transactions. In this small subset of IoT ecosystem, that does not matter as the whole basis of tracking is open and public records.
The whitepaper is not very technical so I cannot comment to their technical completeness or exact implementation strategy.
This implementation of the relay/subchain framework is a very narrow and under-utilized application. As I said before, WTC may someday just be one part of a larger IoT ecosystem while interacting with another IoT network. This will not be an all-encompassing network.
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-Scalability – High, main/subchain framework infinitely scales
-Applicability – Low to medium, their application is narrow
-Interoperability – Medium, the framework will allow it seamlessly
-Consensus – Neutral, should not choke the network but adds trust to the equation
-Developability – N/A, this is a more centralized project and development will likely be with the WTC
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VeChain
\*Let me preface this by saying I realize there is a place for centralized, corporatized, non-open source projects in this space.* Although I know this project is focused mainly on wider, more general business uses for blockchain, I was requested to include it in this analysis. I have edited my original comment as it was more opinionated and therefore determined not to be productive to the conversation. If you would like to get a feel for my opinion, the original text is in the comments below.\**
This project doesn't have much data to go off as the white paper does not contain much technical detail. It is focused on how they are positioning themselves to enable wider adoption of blockchain technology in the corporate ecosystem.
They also spend a fair amount of time covering their node structure and planned governance. What this reveals is a PoS and PoA combined system with levels of nodes and related reward. Several of the node types require KYC (Know Your Customer) to establish trust in order to be part of the block creating pool.
Again there is not much technically that we can glean from this whitepaper. What is known is that this is not directed at a IoT market and will be a PoS and PoA Ethereum-like network with trusted node setup.
I will leave out the grading points as there is not enough information to properly determine where they are at.
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INT
So under this same lens, how does INT stack up? INT borrows their framework from Polkadot, which is a relay/subchain architecture. This framework allows for infinite scaling by the addition of subchains given available nodes and relay chain bandwidth. Custom functionality in subchains allows the one setting up the subchain to define the requirements, be it private transactions, state transaction free data chain, smart contracts, etc. This also lends to endless applicability. The main chain is inherently simple in it’s functionality as to not restrict any uses or future updates in technology or advances.
The consensus structure also takes a novel two-tiered approach in separating validating from block generation in an effort to further enable scaling by removing the block generation choke point from the side chains to the central relay chain. This leaves the subchain nodes to only validate transactions with a light DPoS allowing a free flowing transaction highway.
INT also recognizes the strong need for an IoT network to have robust and efficient data handling and storage. They are utilizing a decentralize storage system using DHT much like the BitTorrent system. This combined with the network implementation of all of the communication protocols (TCP/IP, UDP/IP, MANET) build the framework of a network that will effortlessly integrate any device type for any application.
The multi-chain framework easily accommodates interoperability between established networks like the Internet and enables pegging with other blockchains with a few simple transaction type inclusions. With this cross chain communication, manufactures wouldn’t have to negotiate their needs to fit an established blockchain, they could create their own subchain to fit their needs and interact with the greater network through the relay.
The team also understands the development hurdles facing the environment. They plan to solve this by standardizing requirements for communication and data exchange. They have heavy ties with several manufacturers and are currently developing a IoT router to be the gateway to the network.
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-Scalability – High, relay/subchain framework enables infinite scalability
-Applicability – High, highest I could find for IoT. Subchains can be created for every possible application.
-Interoperability – High, able to add established networks for data support and cross chain transactions
-Consensus – High, the only structure that separates the two responsibilities of verifying and block generation to further enable scaling and not choke applicability.
-Developability – Medium, network is set up for ease of development with well-known language and subchain capability. Already working with device manufacturers. To be seen.
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So with all that said, INT may be in the best place to tackle this space with their chosen framework and philosophy. They set out to accomplish more than WTC or VEN in a network that is better equipped than IOTA or Ethereum. If they can excecute on what they have laid out, there is no reason that they won’t become the market leader, easily overtaking the market cap of VeChain ($2.5Bn, $10 INT) in the short term and IOTA ($7Bn, $28 INT) in the medium term.
submitted by Graytrain to INT_Chain [link] [comments]

Why do 51% attacks happen and what are they?

Before we dive into this topic, one should understand the basics of Blockchain technology. A well-distributed blockchain consists of thousands of different nodes that individually support the network’s decentralization and security. These nodes are by itself supported by miners, basically computers who use their processing power to solve mathematical equations. All these nodes and mining computers are connected and together make up for a distributed datacenter we know as a blockchain. The way of reaching consensus about the given rules within the protocol varies per blockchain. The oldest and most commonly used version is the Proof-Of-Work blockchain, invented by Satoshi Nakamoto. Given the fact thousands of people and institutions around the world support these networks, it’s hard to breach the security. In theory, it is possible, however.
What is a 51% attack? A blockchain is hard to hack into, it’s not as simple to crack as a regular database that usually hides behind admin access gained with a couple passwords. In order to breach a blockchain, you’d have to perform a 51% attack. This simply means that you would have to gain access over more than 50% hashrate of the network, thus 51% attack. Hashrate is another word for mining power. The moment one sole entity is in charge of more than half of the network, this party can now change its consensus protocol. By doing so, you could reverse the blockchain years back in time causing many transactions to never have occurred, allow more Bitcoin to be created or destroy parts of the entire supply. This means you could cause chaos. The chances of a 51% attack are not that high, but in history, it has happened before.
Ethereum Classic One of the most famous 51% attacks was on the original Ethereum protocol, Ethereum Classic. After a major hack in the early days of the Ethereum network, the team we now know responsible for Ethereum took control of the network and reversed the attack. To frustration of the core team of Ethereum, that went on to build further on Ethereum Classic, the version that was never forked or whatsoever. Having a smaller market cap would make it less expensive for a single entity to take control of the network and that is what happened. $1.1 million in ETC was double spent during the attack, causing many major exchanges to halt the trading of the coin. Prices went down but eventually recovered and the hackers eventually got away with it.
Verge This project has suffered multiple attacks over the years. After claiming to be the number one privacy coin, the project called for many haters to come to their front doors. Back in 2018 however, Verge suffered from more than one attack. It started with a hacker found a way of integrating malicious software into the mining protocol. With their new version of the protocol, they could mine multiple blocks per minute on the verge blockchain, gaining them control over network hashrates and move XVG to their wallets. At the peak of the second attack, the hackers were mining 25 blocks per minute, or roughly 8250 XVG or $950 every single minute. Reports say over $1.7 million in XVG was stolen in the three attacks. The team behind Verge called it nothing but a DDoS attack. Afterward, a hard fork occurred and now a multi-algorithm style of mining is utilized to minimize the probability of another 51% attack.
How can it happen? You might be wondering, how is this possible? You plug in thousands of mining rigs and there you have it, you just gained control of the network. This, however, is a very expensive operation. Doing this for the Bitcoin blockchain would cost you around 1 Billion dollars, that amount much lower for smaller coins though. Ever heard of Monero? That’d cost you roughly $25,000 according to calculations by Exaking. These are theoretical examples, in practice, many of these projects have built-in warning signs and detectors to go against these kinds of attacks. It is, however, important to be aware of this possibility. You can not just blindly trust any blockchain out there to be a hundred percent safe.
SwapSpace team is always ready for discussion. You can drop an email about your suggestions and questions to [[email protected]](mailto:[email protected]) Join our social networks: Twitter, Medium, Facebook The best rates on https://swapspace.co/ Why is SwapSpace https://blog.swapspace.co/2019/09/17/why-is-swapspace/
submitted by SwapSpace_co to CryptoCurrencyTrading [link] [comments]

How do I mine Dogecoin?

How do I mine Dogecoin?
Let’s take a lucky guess that you’re here today because you’ve heard a lot about cryptocurrencies and you want to get involved, right? If you’re a community person, Dogecoin mining might be the perfect start for you!
Bitcoin was the first in 2009, and now there are hundreds of cryptocurrencies. These new coins (that operate on their own native blockchain) are called altcoins or alternative coins. One popular altcoin is Dogecoin. It can be bought, sold and traded, just like Bitcoin. It can also be mined!
So, what is Dogecoin mining?
You’ll know what hardware and what software you need to get started. You’ll also know whether or not Dogecoin mining is for you!
So, where would you like to start? The beginning? Great choice. Let’s have a quick look at how Dogecoin got started.
A (Very) Short History of Dogecoin
In 2013, an Australian named Jackson Palmer and an American named Billy Markus became friends. They became friends because they both liked cryptocurrencies. However, they also thought the whole thing was getting too serious so they decided to create their own.
Palmer and Markus wanted their coin to be more fun and more friendly than other crypto coins. They wanted people who wouldn’t normally care about crypto to get involved.
They decided to use a popular meme as their mascot — a Shiba Inu dog.

https://preview.redd.it/rymnyyz1iil31.png?width=303&format=png&auto=webp&s=f138e3fe56eef9c6b0e7f49b84fefc41fb83e5aa
Dogecoin was launched on December 6th, 2013. Since then it has become popular because it’s playful and good-natured. Just like its mascot!
Dogecoin has become well-known for its use in charitable acts and online tipping. In 2014, $50,000 worth of Dogecoin was donated to the Jamaican Bobsled Team so they could go to the Olympics. Dogecoin has also been used to build wells in Kenya. Isn’t that awesome!
Users of social platforms – like Reddit – can use Dogecoin to tip or reward each other for posting good content.
Dogecoin has the 27th largest market cap of any cryptocurrency.
Note: A market cap (or market capitalization) is the total value of all coins on the market.
So, Dogecoin is a popular altcoin, known for being fun, friendly and kind. It’s a coin with a dog on it! You love it already, don’t you?
Next, I want to talk about how mining works…
What is Mining?
To understand mining, you first need to understand how cryptocurrencies work. Cryptocurrencies are peer-to-peer digital currencies. This means that they allow money to be transferred from one person to another without using a bank.
Every cryptocurrency transaction is recorded on a huge digital database called a blockchain. The database is stored across thousands of computers called nodes. Nodes put together groups of new transactions and add them to the blockchain. These groups are called blocks.
Each block of transactions has to be checked by all the nodes on the network before being added to the blockchain. If nodes didn’t check transactions, people could pretend that they have more money than they really do (I know I would!).
Confirming transactions (mining) requires a lot of computer power and electricity so it’s quite expensive.
Blockchains don’t have paid employees like banks, so they offer a reward to users who confirm transactions. The reward for confirming new transactions is new cryptocurrency. The process of being rewarded with new currency for confirming transactions is what we call “mining”!

https://preview.redd.it/rcut2jx3iil31.png?width=598&format=png&auto=webp&s=8d78d41c764f4fe4e6386da4f40a66556a873b87
It is called mining because it’s a bit like digging for gold or diamonds. Instead of digging with a shovel for gold, you’re digging with your computer for crypto coins!
Each cryptocurrency has its own blockchain. Different ways of mining new currency are used by different coins where different rewards are offered.
So, how do you mine Dogecoin? What’s special about Dogecoin mining? Let’s see…
What is Dogecoin Mining?
Dogecoin mining is the process of being rewarded with new Dogecoin for checking transactions on the Dogecoin blockchain. Simple, right? Well no, it’s not quite that simple, nothing ever is!
Mining Dogecoin is like a lottery. To play the lottery you have to do some work. Well, actually your computer (or node) has to do some work! This work involves the confirming and checking of transactions which I talked about in the last section.
Lots of computers work on the same block of transactions at the same time but the only one can win the reward of new coins. The one that earns the new coins is the node that adds the new block of transactions to the old block of transactions. This is completed using complex mathematical equations.
The node that solves the mathematical problem first wins! It can then attach the newly confirmed block of transactions to the rest of the blockchain.
Most cryptocurrency mining happens this way. However, Dogecoin mining differs from other coins in several important areas. These areas are;
  • Algorithm: Each cryptocurrency has a set of rules for mining new currency. These rules are called a mining or hashing algorithm.
  • Block Time: This is the average length of time it takes for a new block of transactions to be checked and added to the blockchain.
  • Difficulty: This is a number that represents how hard it is to mine each new block of currency. You can use the difficulty number to work out how likely you are to win the mining lottery. Mining difficulty can go up or down depending on how many miners there are. The difficulty is also adjusted by the coin’s protocol to make sure that the block time stays the same.
  • Reward: This is the amount of new currency that is awarded to the miner of each new block.
Now, let’s compare how DogeCoin mining works compared to Litecoin and Bitcoin…
Mining Comparison
Bitcoin uses SHA-256 to guide the mining of new currency and the other two use Scrypt. This is an important difference because Scrypt mining needs a lot less power and is a lot quicker than SHA-256. This makes mining easier for miners with less powerful computers. Fans of Litecoin and Dogecoin think that they are fairer than Bitcoin because more people can mine them.
Note: In 2014, Litecoin and Dogecoin merged mining. This means they made it possible to mine both coins in the same process. Dogecoin mining is now linked with Litecoin mining. It’s like two different football teams playing home games in the same stadium!
Mining Dogecoin is a lot faster than mining Litecoin or Bitcoin. The block reward is much higher too!
Don’t get too excited though (sorry!). Dogecoin is still worth a lot less than Bitcoin and Litecoin. A reward of ten thousand Dogecoin is worth less than thirty US Dollars. A reward of 12.5 Bitcoin is currently worth 86,391.63 US Dollars!
However, it’s not as bad as it sounds. Dogecoin mining difficulty is more than one million times less than Bitcoin mining difficulty. This means you are much more likely to win the block reward when you mine Dogecoin.
Now I’ve told you about what Dogecoin mining is and how it works, would you like to give it a try?
Let’s see what you need to do to become a Dogecoin miner…
How to Mine Dogecoin
There are two ways to mine Dogecoin, solo (by yourself) or in a Dogecoin mining pool.
Note: A Dogecoin pool is a group of users who share their computing power to increase the odds of winning the race to confirm transactions. When one of the nodes in a pool confirms a transaction, it divides the reward between the users of the pool equally.
Dogecoin Mining: Solo vs Pool
When you mine as a part of a Dogecoin pool, you have to pay fees. Also, when the pool mines a block you will only receive a small portion of the total reward. However, pools mine blocks much more often than solo miners. So, your chance of earning a reward (even though it is shared) is increased. This can provide you with a steady new supply of Dogecoin.
If you choose to mine solo then you risk waiting a long time to confirm a transaction because there is a lot of competition. It could be weeks or even months before you mine your first block! However, when you do win, the whole reward will be yours. You won’t have to share it or pay any fees.
As a beginner, I would recommend joining a Dogecoin pool. This way you won’t have to wait as long to mine your first block of new currency. You’ll also feel like you’re part of the community and that’s what Dogecoin is all about!
What You Need To Start Mining Dogecoin
Before you start Dogecoin mining, you’ll need a few basics. They are;
  • A PC with either Windows, OS X or Linux operating system.
  • An internet connection
  • A Shiba Inu puppy (just kidding!)
You’ll also need somewhere to keep the Dogecoin you mine. Go to Dogecoin’s homepage and download a wallet.
Note: A wallet is like an email account. It has a public address for sending/receiving Dogecoin and a private key to access them. Your private keys are like your email’s password. Private keys are very important and need to be kept completely secure.
There are two different types; a light wallet and a full wallet. To mine Dogecoin, you’ll need the full wallet. It’s called Dogecoin Core.
Now that you’ve got a wallet, you need some software and hardware.
Dogecoin Mining Hardware
You can mine Dogecoin with;
  • Your PC’s CPU: The CPU in your PC is probably powerful enough to mine Dogecoin. However, it is not recommended. Mining can cause less powerful computers to overheat which causes damage.
  • A GPU: GPUs (or graphics cards) are used to improve computer graphics but they can also be used to mine Dogecoin. There are plenty of GPUs to choose from but here are a few to get you started;SAPPHIRE Pulse Radeon RX 580 ($426.98)Nvidia GeForce GTX ($579.99)ASUS RX Vega 64 ($944.90)
  • A Scrypt ASIC Miner: This is a piece of hardware designed to do one job only. Scrypt ASIC miners are programmed to mine scrypt based currencies like Litecoin and Dogecoin. ASIC miners are very powerful. They are also very expensive, very loud and can get very hot! Here’s a few for you to check out;Innosilicon A2 Terminator ($760)Bitmain Antminer L3 ($1,649)BW L21 Scrypt Miner ($7,700)
Dogecoin Mining Software
Whether you’re mining with an ASIC, a GPU or a CPU, you’ll need some software to go with it. You should try to use the software that works best with the hardware you’re using. Here’s a short list of the best free software for each choice of mining hardware;
  • CPU: If you just want to give mining a quick try, using your computer’s CPU will work fine. The only software I would recommend for mining using a CPU only is CPU miner which you can download for free here.
  • GPU: If you mine with a GPU there are more software options. Here are a few to check out;CudaMiner– Works best with Nvidia products.CGminer– Works with most GPU hardware.EasyMiner– User-friendly, so it’s good for beginners.
  • Scrypt ASIC miner:MultiMiner– Great for mining scrypt based currencies like Litecoin and Dogecoin. It can also be used to mine SHA-256 currencies like Bitcoin.CGminer and EasyMiner can also be used with ASIC miners.
Recommendations
You’re a beginner, so keep it simple! When you first start mining Dogecoin I would recommend using a GPU like the Radeon RX 580 with EasyMiner software. Then I would recommend joining a Dogecoin mining pool. The best pools to join are multi-currency pools like Multipool or AikaPool.
If you want to mine Dogecoin but don’t want to invest in all the tech, there is one other option…
Dogecoin Cloud Mining
Cloud mining is mining without mining! Put simply, you rent computer power from a huge data center for a monthly or yearly fee. The Dogecoin is mined at the center and then your share is sent to you.
All you need to cloud mine Dogecoin is a Dogecoin wallet. Then choose a cloud mining pool to join. Eobot, Nice Hash and Genesis Mining all offer Scrypt-based cloud mining for a monthly fee.
There are pros and cons to Dogecoin cloud mining;
The Pros
  • It’s cheaper than setting up your own mining operation. There’s also no hot, noisy hardware lying around the house!
  • As a beginner, there isn’t a lot of technical stuff to think about.
  • You get a steady supply of new currency every month.
The Cons
  • Cloud mining pools don’t share much information about themselves and how they work. It can be hard to work out if a cloud mining contract is a good value for money.
  • You are only renting computer power. If the price of Dogecoin goes down, you will still have to pay the same amount for something that is worthless.
  • Dogecoin pools have fixed contracts. The world of crypto can change very quickly. You could be stuck with an unprofitable contract for two years!
  • It’s no fun letting someone else do the mining for you!
Now you know about all the different ways to mine Dogecoin we can ask the big question, can you make tons of money mining Dogecoin?
So, Is Dogecoin Mining Profitable?
The short answer is, not really. Dogecoin mining is not going to make you a crypto billionaire overnight. One Dogecoin is worth 0.002777 US Dollars. If you choose to mine Dogecoin solo, it will be difficult to make a profit. You will probably spend more money on electricity and hardware than you will make from Dogecoin mining. Even if you choose a Dogecoin pool or a cloud pool your profits will be small.
However, if you think I am telling you to not mine Dogecoin, then you’re WRONG! Of course, I think you should mine Dogecoin!
But why? Seriously…
Well, you should mine Dogecoin because it’s fun and you want to be a part of the Dogecoin family. Cryptocurrency is going to change the world and you want to be part of that change, right? Mining Dogecoin is a great way to get involved.
Dogecoin is the coin that puts a smile on people’s faces. By mining Dogecoin you’ll be supporting all the good work its community does. You’ll learn about mining from the friendliest gang in crypto. And who knows? In a few years, the Dogecoin you mine now could be worth thousands or even millions! In 2010, Bitcoin was worthless. Think about that!
Only you can choose whether to mine Dogecoin or not. You now know everything you need to know to make your choice. The future is here. So, what are you going to do?
submitted by alifkhalil469 to BtcNewz [link] [comments]

I decided to post this here as I saw some questions on the QRL discord.

Is elliptic curve cryptography quantum resistant?
No. Using a quantum computer, Shor's algorithm can be used to break Elliptic Curve Digital Signature Algorithm (ECDSA). Meaning: they can derive the private key from the public key. So if they got your public key, they got your private key, and they can empty your funds. https://en.wikipedia.org/wiki/Elliptic-curve_cryptography#Quantum_computing_attacks https://eprint.iacr.org/2017/598.pdf
Why do people say that BTC is quantum resistant, while they use elliptic curve cryptography? (Here comes the idea from that never reusing a private key from elliptic curve cryptography (and public key since they form a pair) would be quantum resistant.)
Ok, just gonna start with the basics here. Your address, where you have your coins stalled, is locked by your public- private key pair. See it as your e-mail address (public key) and your password (Private key). Many people got your email address, but only you have your password. If you got your address and your password, then you can access your mail and send emails (Transactions). Now if there would be a quantum computer, people could use that to calculate your password/ private key, if they have your email address/ public key.
What is the case with BTC: they don't show your public key anywhere, untill you make a transaction. So your public key is private untill you make a transaction. How do they do that while your funds must be registered on the ledger? Wel, they only show the Hash of your public key (A hash is an outcome of an equation. Usually one-way hash functions are used, where you can not derive the original input from the output. But everytime you use the same hash function on the same original input (For example IFUHE8392ISHF), you will always get the same output (For example G). That way you can have your coins on public key IFUHE8392ISHF, while on the chain, they are on G.) So your funds are registered on the blockchain on the "Hash" of the public key. The Hash of the public key is also your "email address" in this case. So you give "G" as your address to send BTC to.
By the way, in the early days you could use your actual public key as your address. And miners would receive coins on their public key, not on the hashed public key. That is why all the Satoshi funds are vulnerable to quantum attacks even though these addresses have never been used to make transactions from. These public keys are already public instead of hashed. Also certain hard forks have exposed the public keys of unused addresses. So it's really a false sense of security that most people hang on to in the first place.
But it's actually a false sense of security over all.
Since it is impossible to derive a public key from the Hash of a public key, your coins are safe for quantum computers as long as you don't make any transaction. Now here follows the biggest misconseption: Pretty much everyone will think, great, so BTC is quantum secure! It's not that simple. Here it is important to understand two things:
1 How is a transaction sent? The owner has the private key and the public key and uses that to log into the secured environment, the wallet. This can be online or offline. Once he is in his wallet, he states how much he wants to send and to what address.
When he sends the transaction, it will be broadcasted to the blockchain network. But before the actual transaction that will be sent, it is formed into a package, created by the wallet. This happens out of sight of the sender.
That package ends up carrying roughly the following info: The public key to point to the address where the funds will be coming from, the amount that will be transferred, the public key of the address the funds will be transferred to.
Then this package caries the most important thing: a signature, created by the wallet, derived from the private- public key combination. This signature proves to the miners that you are the rightfull owner and you can send funds from that public key.
So this package is then sent out of the secure wallet environment to multiple nodes. The nodes don’t need to trust the sender or establish the sender’s "identity." And because the transaction is signed and contains no confidential information, private keys, or credentials, it can be publicly broadcast using any underlying network transport that is convenient. As long as the transaction can reach a node that will propagate it into the network, it doesn’t matter how it is transported to the first node.
2 How is a transaction confirmed/ fullfilled and registered on the blockchain?
After the transaction is sent to the network, it is ready to be processed. The nodes have a bundle of transactions to verify and register on the next block. This is done during a period called the block time. In the case of BTC that is 10 minutes.
If you comprehend the information written above, you can see that there are two moments where you can actually see the public key, while the transaction is not fullfilled and registered on the blockchain yet.
1: during the time the transaction is sent from the sender to the nodes
2: during the time the nodes verify the transaction.
This paper describes how you could hijack a transaction and make a new transaction of your own, using someone elses address to send his coins to an address you own during moment 2: the time the nodes verify the transaction:
https://arxiv.org/pdf/1710.10377.pdf
"(Unprocessed transactions) After a transaction has been broadcast to the network, but before it is placed on the blockchain it is at risk from a quantum attack. If the secret key can be derived from the broadcast public key before the transaction is placed on the blockchain, then an attacker could use this secret key to broadcast a new transaction from the same address to his own address. If the attacker then ensures that this new transaction is placed on the blockchain first, then he can effectively steal all the bitcoin behind the original address."
So this means that practically, you can't call BTC a quantum secure blockchain. Because as soon as you will touch your coins and use them for payment, or send them to another address, you will have to make a transaction and you risk a quantum attack.
Why would Nexus be any differtent?
If you ask the wrong person they will tell you "Nexus uses a combination of the Skein and Keccak algorithms which are the 2 recognized quantum resistant algorithms (keccal is used by the NSA) so instead of sha-256, Nexus has SK-1024 making it much harder to break." Which would be the same as saying BTC is quantum resistant because they use a Hashing function to hash the private key as long as no transaction is made.
No, this is their sollid try to be quantum resistant: Nexus states it's different because they have instant transactions (So there wouldn't be a period during which time the nodes verify the transaction. This period would be instant.) Also they use a particular order in which the miners verify transactions: First-In-First-Out (FIFO) (So even if instant is not instant after all, and you would be able to catch a public key and derive the private key, you would n't be able to have your transaction signed before the original one. The original one is first in line, and will therefore be confirmed first. Also for some reason Nexus has standardized fees which are burned after a transaction. So if FIFO wouldn't do the trick you would not be able to use a higher fee to get prioritized and get an earlyer confirmation.
So, during during the time the nodes verify the transaction, you would not be able to hijack a transaction. GREAT, you say? Yes, great-ish. Because there is still moment # 1: during the time the transaction is sent from the sender to the nodes. This is where network based attacks could do the trick:
There are network based attacks that can be used to delay or prevent transactions to reach nodes. In the mean time the transactions can be hijacked before they reach the nodes. And thus one could hijack the non quantum secure public keys (they are openly included in sent signed transactions) who then can be used to derive privatekeys before the original transaction is made. So this means that even if Nexus has instant transactions in FIFO order, it is totally useless, because the public key would be obtained by the attacker before they reach the nodes. Conclusion: Nexus is Nnot quantum resistant. You simply can't be without using a post quantum signature scheme.
Performing a DDoS attack or BGP routing attacks or NSA Quantum Insert attacks on a peer to peer newtork would be hard. But when provided with an opportunitiy to steal billions, hackers would find a way. For example:
https://bitcoinmagazine.com/articles/researchers-explore-eclipse-attacks-ethereum-blockchain/
For BTC:
https://eprint.iacr.org/2015/263.pdf
"An eclipse attack is a network-level attack on a blockchain, where an attacker essentially takes control of the peer-to-peer network, obscuring a node’s view of the blockchain."
That is exactly the receipe for what you would need to create extra time to find public keys and derive private keys from them. Then you could sign transactions of your own and confirm them before the originals do.
By the way, yes this seems to be fixed now, but it most definately shows it's possible. And there are other creative options. Either you stop tranasctions from the base to get out, while the sender thinks they're sent, or you blind the network and catch transactions there. There are always options, and they will be exploited when billions are at stake. The keys can also be hijacked when a transaction is sent from the users device to the blockchain network using a MITM attack. The result is the same as for network based attacks, only now you don't mess with the network itself. These attacks make it possible to 1) retrieve the original public key that is included in the transaction message. 2) Stop or delay the transaction message to arrive at the blockchain network. So, using a quantum computer, you could hijack transactions and create forged transactions, which you then send to the nodes to be confirmed before the nodes even receive the original transaction. There is nothing you could change to the Nexus network to prevent this. The only thing they can do is implement a quantum resistant signature scheme. They plan to do this in the future, like any other serious blockchain project. Yet Nexus is the only of these future quantum resistant projects to prematurely claim to be quantum resistant. There is only one way to get quantum resistancy: POST QUANTUM SIGNATURE SCHEMES. All the rest is just a shitty shortcut that won't work in the end.
(If you use this info on BTC, you will find that the 10 minutes blocktime that is used to estimate when BTC will be vulnerable for quantum attacks, can actually be more then 10 minutes if you catch the public key before the nodes receive them. This makes BTC vulnerable sooner thatn the 10 min blocktime would make you think.)
By the way, Nexus using FIFO and standadrized fees which are burned after the transaction comes with some huge downsides:
Why are WOTS+ signatures (and by extension XMSS) more quantum resistant?
First of all, this is where the top notch mathematicians work their magic. Cryptography is mostly maths. As Jackalyst puts it talking about post quantum signature schemes: "Having papers written and cryptographers review and discuss it to nauseating levels might not be important for butler, but it's really important with signature schemes and other cryptocraphic methods, as they're highly technical in nature."
If you don't believe in math, think about Einstein using math predicting things most coudldn't even emagine, let alone measure back then.
Then there is implementing it the right way into your blockchain without leaving any backdoors open.
So why is WOTS+ and by extension XMSS quantum resistant? Because math papers say so. With WOTS it would even take a quantum computer too much time to derive a private key from a public key. https://en.wikipedia.org/wiki/Hash-based_cryptography https://eprint.iacr.org/2011/484.pdf
What is WOTS+?
It's basiclally an optimized version of Lamport-signatures. WOTS+ (Winternitz one-time signature) is a hash-based, post-quantum signature scheme. So it's a post quantum signature scheme meant to be used once.
What are the risks of WOTS+?
Because each WOTS publishes some part of the private key, they rapidly become less secure as more signatures created by the same public/private key are published. The first signature won't have enough info to work with, but after two or three signatures you will be in trouble.
IOTA uses WOTS. Here's what the people over at the cryptography subreddit have to say about that:
https://www.reddit.com/crypto/comments/84c4ni/iota_signatures_private_keys_and_address_reuse/?utm_content=comments&utm_medium=user&utm_source=reddit&utm_name=u_QRCollector
With the article:
http://blog.lekkertech.net/blog/2018/03/07/iota-signatures/
Mochimo uses WOTS+. They kinda solved the problem: A transaction consists of a "Source Address", a "Destination Address" and a "Change Address". When you transact to a Destination Address, any remaining funds in your Source Address will move to the Change Address. To transact again, your Change Address then becomes your Source Address.
But what if someone already has your first address and is unaware of the fact you already send funds from that address? He might just send funds there. (I mean in a business environment this would make Mochimo highly impractical.) They need to solve that. Who knows, it's still a young project. But then again, for some reason they also use FIFO and fixed fees, so there I have the same objections as for Nexus.
How is XMSS different?
XMSS uses WOTS in a way that you can actually reuse your address. WOTS creates a quantum resistant one time signature and XMSS creates a tree of those signatures attached to one address so that the address can be reused for sending an asset.
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Probability in Bitcoin Mining: The Hashing Function What Are Bitcoin Miners Actually Solving? Bitcoin and cryptocurrency mining explained - YouTube What Is Bitcoin Mining? - YouTube What Bitcoin Miners Actually Do

If bitcoin is commercialized math, then mining is the process of solving all its equations. A common, yet accurate, joke explanation is, “imagine if you could solve puzzles, then use those solved puzzles as money”. Bitcoin is that, but on a much larger and astronomically more complex scale; bitcoin mining is both the process of solving puzzles, Modern Bitcoin miners can do this problem approximatly 1 billion times a second so it might not be worth while to use pen and paper. You can try it yourself at a web site . Put in a value in the top and you will see a string come up in the bottom. Then you have to keep changing the input by adding stuff untilthe answerstarts with a zero. Bitcoin is more complicated because certain information ... If you finally find a hash that has 13 leading zeroes… you're a winner! Other miners will now build upon your block, you've just got 25BTC. But you'll have to be fast! Back to step 1… If someone manages to build a block before you do, you'll have to start again from the beginning with the new block's hash (the one of the winner). Initially, miners used to solve the math problems using normal computers. Later, they realized that graphics cards are more suitable and appropriate for solving these problems, as this was the case that graphics cards were performing much faster than the normal computers but they were using too much electricity and were generating heat. Then they used commercial products for bitcoin mining ... Unlike mining for Gold, where miners dig up piles of the earth’s ground to seek precious nuggets, Bitcoin mining involves the use of specialized computers to solve mathematical equations instead. Additionally, in the early days of Gold mining, the first pioneers of the Gold Rush were able to mine with ease, as large deposits of gold-rich dirt were easily accessible with a pick and shovel.

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Probability in Bitcoin Mining: The Hashing Function

It took it upon myself to find out what Bitcoin miners were really mining/why they were mining. I don't know why it took me so long to find the answer, maybe I wasn't asking the right questions ... How does the hash function work in the world of Bitcoin mining? Peter Van Valkenburgh of the Coin Center explains how the hash function in Bitcoin uses entropy to select Bitcoin miners. Bitcoin and cryptocurrency mining explained with the Byzantine Generals Problem. We use it to explain the essence of cryptocurrency mining. https://www.udemy... Blockchain/Bitcoin for beginners 6: blocks and mining, content and creation of bitcoin blocks - Duration: 46:48. Matt Thomas 11,077 views How Bitcoin mining actually works - What is the "cryptographic puzzle"? - Duration: 14:13. Keifer Kif 78,184 views. 14:13. How to BitCoin mine using fast ASIC mining hardware - Duration: 27:15. ...

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