Satoshi Nakamoto’s Identity and Other Bitcoin Mysteries
Who Traded Over $1B Worth of Bitcoin in September of 2019?
Key to Bitcoin’s success, and intrigue, is the anonymity it provides. In early September, 2019, a wallet was involved in a series of transactions, receiving a total of over one billion dollars worth of Bitcoin. Anyone can see the transactions on the blockchain ledger, but what they won’t be able to determine is the real-world identity of the parties involved. Who would trade that kind of money, and why?
It has been reportedly determined that 30% of the currency came from Huobi Global, a cryptocurrency exchange based in Singapore, but they remain mum on the details surrounding the exchange.
Regardless, the massive deal bumped Bitcoin’s price from $10,569 to $10,790.
Since its introduction in 2008 Bitcoin has captured the public imagination. There are the obvious questions: What is it? How does it work? Above and beyond this, Bitcoin, by its very nature, lends itself to folklore, speculation and mystery. Here are four such cases.
Any discussion of Bitcoin’s mysteries must start with the granddaddy of them all: just who, or what, is Satoshi Nakamoto?
Who is Satoshi Nakamoto?
In 2008 Satoshi Nakamoto was the supposed publisher of a nine-page white paper which introduced the concept of Bitcoin to the world. Several months later Nakamoto released Bitcoin’s first software, and began interacting with developers, coders and interested parties. He remained visible online until 2011, when he vanished from view, taking his one million bitcoins with him.
The years since have seen exponential growth in Bitcoin’s value, as well as its public profile. Not surprisingly, interest in Nakamoto’s identity has skyrocketed as well.
In 2014 Newsweek claimed to have discovered the answer, pointing the finger at Dorian Nakamoto, a Japanese American graduate of California Polytechnic. Dorian was known to share some of the libertarian leanings featured in the white paper, and had apparently made some incriminating statements to the journalist covering the story. Dorian Nakamoto denies being the famous founder.
Others point to Nick Szabo, a computer engineer who had worked on Bit Gold, a precursor to Bitcoin, although this has never been proven.
Many believe Australian scientist Craig Wright to be Nakamoto. In contrast to other prominent suspects, Wright seems to revel in the attention, and has gone so far as to provide screenshots as evidence of his early involvement. Skeptics dismiss these as forgery, and, suffice to say, nothing is settled.
The whole thing has become a bit of a circus for interested parties and internet sleuths. It’s no trivial matter, as Nakamoto is in possession of one million Bitcoins, approximately 5% of the amount that will ever exist. A sudden dumping of his stash could send shockwaves through the marketplace. If he re-emerged, his opinions could be influential amongst those who debate the coin’s future.
Given the inactivity of Nakamoto, and his funds, there is speculation that the individual has died. Some contend that he’s not a he at all, but a she. Others believe ‘he’ is actually a group of people, perhaps even a state-actor. With all that’s at stake, don’t expect this debate to die down anytime soon.
When Gerald Cotten, chief executive of Canada’s once-largest cryptocurrency exchange Quadriga, apparently died in January of 2019, a lot of cryptocurrency went with him. Five of the six wallets he was known to use were found to be empty. His widow, Jennifer Robertson, claimed that Cotten had transferred the funds to a holding wallet. Apparently Cotten had taken the passkey for that wallet to the grave, leaving customers in astonishment.
Not surprisingly legal action followed, and a court ordered investigation conducted by accountancy firm Ernst & Young uncovered a complex web of deception, embezzlement and fraud conducted by Cotten; a mystery partially solved.
Why did Google Searches for BTC Suddenly Surge?
A sudden uptick in a particular Google search term can identify increasing interest, and, in the case of currencies, can foreshadow a rise in demand.
With this in mind, when searches for ‘BTC’, Bitcoin’s trading name, shot suddenly upward, traders scrambled for an explanation. What was behind the sudden interest? Why did ‘BTC’ rise drastically with no corresponding increase in searches for ‘Bitcoin’?
The answer was hiding in plain sight: BTC not only stood for Bitcoin, but also for Bahamas Telecommunications Company. When the island was battered by deadly hurricane Dorian, mobile customers were affected. It was this, and not a sudden increase in interest for Bitcoin, that was behind the surge.
The interest and speculation surrounding Bitcoin is justified. It, and other cryptocurrencies, are here to stay. Capitalize on the opportunity to acquire Bitcoin with our convenient and affordable mining equipment. Visit https://jvdriver.com/crypto/ today and start profiting from cryptocurrency mining.
Sharma, Rakesh. “Three People Who Were Supposedly Bitcoin Founder Satoshi Nakamoto.” Investopedia. Investopedia, July 10, 2019. https://www.investopedia.com/tech/three-people-who-were-supposedly-bitcoin-founder-satoshi-nakamoto/.
Huff, Steve. “Someone Made a Single $1 Billion Bitcoin Transaction and No One Knows Why.” Maxim, September 12, 2019. https://www.maxim.com/news/1-billion-bitcoin-transaction-mystery-2019-9.
Huillet, Marie. “Mystery Behind Sudden Spike in ‘BTC’ Searches Tied to Hurricane Dorian.” Cointelegraph. Cointelegraph, September 7, 2019. https://cointelegraph.com/news/mystery-behind-sudden-spike-in-btc-searches-tied-to-hurricane-dorian.
Cuthbertson, Anthony. “Cryptocurrency Mystery Deepens as $143m from Dead Owner’s Bitcoin Wallet Goes Missing.” The Independent. Independent Digital News and Media, March 4, 2019. https://www.independent.co.uk/life-style/gadgets-and-tech/news/cryptocurrency-exchange-quadriga-bitcoin-wallet-missing-a8806816.html.
Hochstein, Marc, and Nikhilesh De. “QuadrigaCX CEO Set Up Fake Crypto Exchange Accounts With Customer Funds.” CoinDesk. CoinDesk, June 20, 2019. https://www.coindesk.com/quadrigacx-ceo-set-up-fake-crypto-exchange-accounts-with-customer-funds.
In June of 2019 the development of a new cryptocurrency, Libra, was announced. Although it’s often referred to as ‘The Facebook cryptocurrency’, is Facebook really in control? Will lawmakers or other stakeholders prevent it from reaching the marketplace? Is it even accurate to call it a cryptocurrency? Let’s take a look at what we know at this point.
Much like other cryptocurrencies, Libra will be accounted for via the blockchain. Unlike Bitcoin and many other prominent cryptos, it will not be decentralized, at least not initially. As opposed to a permissionless blockchain, trust will be placed upon the ‘Libra Association’, a group of partnering companies that have bought in, or will, prior to the currency’s launch.
In addition to monetary investment, these players, mostly from the fields of payment, tech, telecommunications, blockchain and venture capital, will have to meet certain criteria outlined in the association’s guidelines. Calibra, a subsidiary of Facebook, will be the primary wallet, and the association’s mechanizations mean that Facebook will only get one vote at the currency’s governing table.
Libra will not be mined, but will instead be issued according to demand. A stablecoin, the currency will be backed by deposits and securities. Consumers will buy in using local government issued ‘fiat’ currency, which will remain in trust. This will serve as backing for the Libra. Those cashing out will receive fiat currency, and the corresponding Libra will cease to exist.
As a result of these measures, the actual amount of Libra in existence will rise and fall with demand, and 100 per cent of the current level will be in circulation at any given time. All of this is designed to increase stability of value, in hopes that the Libra will be utilized for widespread transactions.
What’s In It for Facebook and Partners?
The prominence of Facebook and its partners means that the Libra could potentially be widely adopted. It is intended to be easy to use, with very minimal transaction fees. The investing companies largely rely on digital transactions, and many stand to gain by eliminating transaction fees. If consumers buy in, Facebook could collect a lot of ad revenue from companies wishing to capitalize on these easy transactions.
Facebook could also prevent rival companies from beating them to the punch with cryptocurrencies of their own. These currencies could provide other companies with an avenue for horning in on digital identity and other aspects of Facebook’s business model.
The partners will also benefit by collecting interest on the stored reserves.
Legal Libra Backlash
Not among the ranks of Libra’s fans: US President Donald Trump.
Back in July the 45th president used his famous Twitter account to offer the following, “If Facebook and other companies want to become a bank, they must seek a new Banking Charter and become subject to all Banking Regulations.”
While it may be tempting to dismiss this as another one of President Trump’s short-term feuds, the POTUS is not alone in his concerns. Congress has drafted a law titled ‘Keep Big Tech Out of Finance’, which aims to prevent the Libra’s launch. Libra’s broad network and centralized structure have raised concerns about its potential influence over monetary markets.
Across the pond, European Central Bank board member Yves Mersch recently warned attendees of the ECB’s legal conference about the Libra Association’s potential power.
“To begin with, Libra coins will be issued by the Libra Association – a group of global players in the fields of payments, technology, ecommerce, and telecommunications,” said Mersch. “The Libra Association will control the Libra blockchain and collect the digital money equivalent of seigniorage income on Libra.”
Also of issue is Facebook’s less than stellar reputation on issues related to privacy. Although Facebook has promised to prevent crossover between Calibra’s and Facebook’s data, some remain skeptical.
Reaction in the Cryptocurrency Community
It’s not just lawmakers who are raising their eyebrows over the Libra. Many in the cryptocurrency community are quick to note that the centralized nature of the coin’s management falls short of the core ideals of cryptocurrency.
Others fear that knee jerk reactions from regulators may punish other currencies for the sins of the Libra. Still others see the glass half full, believing that the involvement of a tech giant will make the public more comfortable with the concept of cryptocurrency.
Due to the aforementioned factors, as well as cold feet on the part of several partners, the Libra may or may not come into existence. Regardless, cryptocurrency is here to stay. The time to earn by mining cryptocurrency is now, so visit jvdriver.com/crypto/ today and start profiting.
Like many aspects of our modern society, cryptocurrency is a work in progress. Several short years ago most people had never even heard the term. Today Bitcoin and other cryptocurrencies are widely known, but many people still have trouble understanding the technology.
The future of cryptocurrency is even more difficult to pin down. In recent years experts have had difficulty predicting more immediate issues, such as economic trajectories and election results.
Cryptocurrency is the intersection of technology, finance, government, commerce, practicality and evolution. No wonder it’s so hard to forecast.
What follows are some thoughts about the future of cryptocurrency. While there may be more questions than answers, we can at least offer some expectations.
Cryptocurrency as a means of transaction will continue to evolve. In a relatively short period of human history, our economic system has already progressed from trade and bartering to cash, credit and banking. One day cryptocurrency may well seem as ubiquitous and obvious as credit cards or bank loans do today.
The number of merchants that accept cryptocurrencies will continue to grow. Smart cities will emerge where cryptocurrency and associated technologies will be used to accomplish everyday things, such as making purchases, banking or accessing government services.
Greater numbers of cryptocurrencies will continue to emerge. Many will find small niches, and some will be used to conduct trade in specific industries or geographical areas. One segment that will remain at the forefront will be the gaming industry. Gamers are early adopters, and comfortable with the technology. Expect crypto-based finance and lending to grow as well, including in the business-to-business sector.
The widespread use of cryptocurrencies on a day-to-day basis will take time to arrive, but is considered by many to be an inevitability. Like most major technological or societal disruptions, it will move forward, inch by inch, until one day reaching a critical mass. Then, much like the internet itself, we will one day wake up and realize that it is everywhere.
The early history of cryptocurrency could be likened to a roller coaster. Certainly not everybody has the stomach for that. Although the current global valuation has gone down since the high of January 2018, it has shown signs of stabilization. To paraphrase Mark Twain, reports of its death have been greatly exaggerated.
In truth, individual cryptocurrencies are a highly speculative investment. In this way they are similar to individual websites during the initial rise of the internet. But just as the internet itself was too useful to go away, the idea of cryptocurrency may also be unstoppable.
Several questions remain about how exactly this will look, but it will likely bring added legitimacy to the idea of cryptocurrency.
Part of the reason for cryptocurrency’s existence is to provide an alternative to centralized monetary structures. As the phenomenon becomes more widespread, however, it attracts an increasing level of government scrutiny. Adam Barone of Investopedia summarizes the paradox:
“The more popular they become, the more regulation and government scrutiny they are likely to attract, which erodes the fundamental premise for their existence.”
Regulation will always lag behind technological advancement, and the simple truth is that many lawmakers just don’t understand all of the implications of cryptocurrency and blockchain technology.
As cryptocurrency becomes more widespread, expect governments to become increasingly interested in managing it, and harvesting tax dollars. Which countries will react most swiftly, and become most involved will depend on political and economic realities, as well as other factors. Therefore, predicting this with accuracy is next to impossible. What is certain, however, is that crypto’s expected continued rise will not go unnoticed by lawmakers.
As you can see, the future of cryptocurrency is not yet written. Whatever the details, it seems very likely that cryptocurrency itself is here to stay. One great way to get involved, and capitalize on cryptocurrency is through mining it for profit. Everything you need to get started is available from JV Driver, so visit jvdriver.com/crypto and learn more about our customizable and easy to use crypto mining units today!
A good GPU is essential for mining Bitcoin and other cryptocurrency. We look at the best options for speed, power consumption and budget.
Despite its ups and downs, cryptocurrency remains a viable investment, and a stride into the future of transaction. One of the best ways to capitalize is through crypto mining, which requires the proper equipment to be done effectively.
One aspect of a good setup is a GPU (graphics processing unit) that can get the job done.
But why a GPU? What does it have to do with Bitcoin mining?
Bitcoin and other cryptocurrencies operate through their own blockchain. This is used to verify transactions and prevent the fraudulent creation of additional coins, as well as many other wide ranging applications.
Verifying the previous block requires that machines guess a long string of characters—this is the process of mining. Correctly ‘guessing the characters’ results in a reward, in the form of the currency in question.
To maximize your ability to ‘mine’, it’s important to have a unit that is capable of making the maximum amount of guesses per second—this is the ‘hash rate’.
In the early days of cryptocurrency mining, a CPU would do the trick just fine. Now that competition has increased, a quality GPU provides an edge.
Alt Text: Blockchain technology is central to cryptocurrency mining, and one of the keys to success is having a capable GPU.
The Nvidia GeForce GTX 1070 offers great hashing abilities, without using a lot of power to run (150W, incredible for such a powerful machine). This helps to ensure that your earnings are for you, and not your electricity provider.
Nvidia is a trusted name in the GPU market, and this card in particular is well known and considered to be among the best.
Of course, there’s always a downside, and that is the relatively high price tag associated with this GPU. Coming in between $600-$1,000, there is a sting upfront. Those that intend to use the card extensively, however, will see the purchase price offset by the lower power consumption.
Nvidia GTX 1070Ti
As you may have guessed, this is the updated version of the aforementioned GeoForce GTX 1070. As with most updates you take the good with the bad. The computing power of this GPU is even higher than its predecessor’s already considerable capabilities, but it comes at a price. Both the upfront cost, and the power consumption rate have increased. At 180W, however, it’s consumption is not unreasonable.
Nvidia GeForce GTX 1060
This model is excellent for beginners, and comes at a lower price than the 1070 models. The power consumption is a miniscule 120W and is also good for gaming, if you intend to utilize the card for more than one purpose.
Not surprisingly it moves a bit slower than the 1070 model, so the serious miner is likely to eventually move on from this GPU.
AMD Radeon RX Vega 56
This GPU has been impressing people with its great hash rate, outdoing even the Nvidia GTX10170 models. It can often be found at a lower price than its rival as well, although it still won’t be cheap.
The downside (you knew it was coming) is that this GPU has a consumption rate of 201W, making it most suitable for miners with access to an affordable source of power.
AMD Radeon RX580
Coming in at a lower price ($350), the AMD Radeon RX580 offers good value for the dollar, with reasonable speed. The consumption rate is a middle-of-the-road 185W, but it is not as compact as some of its competition.
These are just some of the excellent GPU options available today for those mining cryptocurrency. Of course, the right GPU is just one component of an effective mining system.
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Mining Maximization: Which Countries Thrive on Bitcoin Mining?
Central to the foundation of Bitcoin and other cryptocurrencies is the practice of mining. Mining for Bitcoin is the mechanism that secures the network, enables rewards, and is key to the decentralized ethos of cryptocurrency. Mining adds transactions to the blockchain leger and unlocks new Bitcoin. In short, it makes the whole thing tick.
But mining is not equally optimized in all areas. The efficiency of mining is maximized in the presence of several key factors. Since mining involves computers solving complex mathematical problems, it is best done in areas where electricity is abundant and affordable, where technology is available and where internet connectivity is not a problem. Furthermore, the regulatory environment around Bitcoin mining differs from country to country, and indeed from year to year. Revolutions of this nature seldom unfold according to a precise roadmap.
With that being said, which countries are capitalizing on the Bitcoin bonanza? What are the greatest environments for miners? Let’s take a look.
When it comes to mining Bitcoin and other cryptocurrencies, China truly is the beast from the Far East. Cheap electricity is readily available, with some power companies rumoured to be pointing their excess energy towards Bitcoin mining facilities in order to avoid waste. China is home to many of the world’s biggest mining pools, which consist of large groups of miners who pool resources and share processing power. The abundance of cheap labour and tech savvy individuals only adds to China’s suitability.
On the cautionary side, however, are lingering questions related to the government’s plans related to the sector long-term. Some fear that sweeping regulations could arrive, shaking up the industry in unpredictable ways. As Jehan Chu, managing partner at blockchain investment firm Kenetic says, “I believe China simply wants to reboot the crypto industry into one that they have oversight on, the same approach they took with the internet.” The extent of these regulations, and their eventual effects, will be a tale told by time.
Far away from China, both geographically and politically, sits the small island nation of Iceland. The country’s hydroelectricity and geothermal energy plants create an abundance of affordable energy, prompting an influx of miners, including Genesis Mining. Crypto mining equipment not only requires large amounts of energy, but creates a great deal of heat. Cooling the equipment is necessary, and this, intuitively, can be most easily accomplished in a cooler environment, such as Iceland’s. A strong tech scene, the presence of venture capital, and a friendly regulatory environment make Iceland a favoured location for mining.
The Eastern European nation of Georgia is home to BitFury and other mining farms, punching above its weight on the international scene. Low electricity costs, favourable tax laws and a strong tech scene add incentive for miners. On the flip side, the nation’s proximity to Russia casts some level of doubt over their political stability.
The True North Strong and Free has also become a capital for Bitcoin mining. Hydroelectric plants in Quebec have been particularly attractive sources of energy for miners, although the industry is not exclusive to that region. Many Chinese miners have begun shifting operations to Canada in order to escape their home nation’s regulations and uncertainty. Canada also offers a cool climate and favourable regulatory framework.
The United States offers electricity that is quite affordable relative to some other countries, but the numbers vary state to state, with Louisiana, Idaho, Washington, Tennessee and Arkansas being the most affordable. Mining has been more or less unregulated, although there has been some level of confusion regarding legal framework and future expectations. Regardless, it remains a great place to profit from cryptocurrency mining.
Russia has positioned themselves as a friendly place for Bitcoin mining in an effort to benefit from the boom. Subsidized energy and a cool climate offer further benefits to miners.
Venezuela has been a favourite location for Bitcoin miners, thanks largely to dirt cheap energy prices. Recently, political instability and social upheaval have affected nearly almost all aspects of life in the South American nation, and mining is no different. Hyperinflation has prompted many to place their faith in Bitcoin, and the government has even launched its own cryptocurrency, the Petro, although critics remain skeptical of that currency’s usage and future.
Whether you’re in one of the aforementioned countries, or elsewhere in the world, Bitcoin mining remains a viable source of earning, and a real opportunity. Talk to us today to learn more about our fully customizable and easy to set up crypto mining facilities and begin capitalizing today!
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Cryptojacking is a troubling new form of cybercrime that is quickly becoming more and more common. You’ve got questions: What is it? How does it work? Why are cyber-criminals engaging in it, and what can be done to detect and prevent it? We’ve got answers.
What is Cryptojacking?
Cryptojacking is the unauthorized use of someone else’s computer to mine cryptocurrency. Essentially, crypto mining requires two ingredients: energy and hardware. With so much of both out there for the taking, it’s not surprising that enterprising cyber-criminals have utilized great energy to gain access. In this sense, cryptojacking is essentially a theft of resources.
Why Has Cryptojacking Become So Popular with Cybercriminals?
Cryptojacking is on the rise, as it offers several advantages over other forms of hacking, such as ransomware. Whereas ransomware involves interacting with the infected party, and relies upon their co-operation for monetization, cryptojacking malware works best when it is not detected. To this point, cryptojacking is a numbers game. Cryptojacking malware can be programmed to use as little, or as much of a host’s power as is deemed optimal. The effects of the stolen power will be a slower, less responsive unit. Utilize too much energy and the malware will be detected, and removed.
With this in mind, some malware has been designed to detect mouse movement, and temporarily suspend activity. An additional benefit of cryptojacking to cybercriminals is the anonymous nature of cryptocurrency. Unlike the spoils of ransomware, considerably less energy need be invested in laundering or hiding the monetary gains. For this reason, cryptocurrencies like Monero and Zxash are often preferred targets over more visible and scrutinized options like Bitcoin.
Effects of Cryptojacking
For victims of cryptojacking, the effects can range from mild annoyance to serious monetary loss. When home computers and smart devices are infected, the results will typically be a slower machine, or one that does not perform to usual standards. For larger systems, being infected may result in costly strains on the company system, not to mention the IT department.
Detecting and Removing Cryptojacking Malware
It is always good advice to monitor your machine’s behaviour, and if suspicious activity is detected Windows Task Manager or Mac OS Activity Monitor can often identify the culprit. It is worth noting that in some instances the file in question may hide behind a name that is shared with a legitimate windows file. In these cases, Process Explorer allows you to see the parent process and the location of the file.
While cryptojacking is a growing concern, in many cases, due diligence will allow one to detect and remove the responsible malware. Unlike ransomware, which relies upon the creation of an immediate and pressing problem, and requires the victim’s cooperation to make money, cryptojackers prefer to remain undetected, monetizing your system for as long as possible. For this reason, education and vigilance are key.
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Make money mining cryptocurrency with fully customizable and affordable crypto mining facilities from the leader in design and engineering.
Much has been made about the ups and downs of the cryptocurrency market, with the explosive boom and bust now giving way to slow, but steady, recovery. Of course, the early history has been driven by a mix of innovators, speculators and enthusiasts of the underlying technology. With the market beginning to mature, however, the arrival of institutional capital promises to be a game changer. Although Wall Street has been increasingly flirting with cryptocurrency, it has been a relationship defined by false starts and baby steps. As cryptocurrency continues to become more and more difficult to ignore, its relationship with the world of major finance seems destined to be a matter of when, not if.
The partnership of Wall Street and the blockchain has not been full speed ahead, but rather two steps forward, and one step back, an equation that still ultimately results in forward progress. Wall Street giant Goldman Sachs announced plans to open a Bitcoin trading operation, but scaled back the campaign due to lukewarm response and regulatory delays. Similarly, the International Exchange, parent company of the New York Stock Exchange, have delayed the opening of their cryptocurrency exchange, with lack of regulatory approvals proving to be a hurdle. Chicago Board Options Exchange have also stalled with their Bitcoin trading contract.
At the root of the hesitation are concerns over regulation, security, price manipulation and a ‘wait and see approach’ that has many wondering what the ultimate function of cryptocurrency will be within their portfolios. While some have taken on a venture capitalist mindset, seeing early adoption as a gateway to large upside as values increase, others see opportunity on the service-provider side.
Still, there can be little doubt that the interest is there, which will ultimately provide an infusion of capital into crypto markets. Cryptocurrency’s underlying blockchain technology continues to gain widespread acceptance, with more and more applications being adapted all the time, making it impossible to ignore. Meanwhile, markets have grown increasingly stable, having survived several rounds of bubble and burst. Bitcoin value, although down from its heady highs, remains significantly more valuable than it was prior to the first bust, in 2013, showing an overall positive trajectory.
One aspect of cryptocurrency speculation that has seen approval and uptick is the futures market. In this form of trade, investors are able to essentially bet on the price movement of Bitcoin without actually holding the currency. The CME (Chicago Mercantile Exchange) has introduced a Bitcoin futures contract, which has seen moderate success, and Goldman Sachs are considering following suit.
Meanwhile J.P. Morgan have introduced their own coin, JPMCoin. The bank’s leader, Jamie Dimon, has long been critical of cryptocurrency, yet has decided to proceed with the coin. Critics have cried foul, however, as the critical function of JPMCoin will be internal, with it being used to facilitate a fraction of cross-border payments with clients, putting it at odds with cryptocurrency’s ‘permissionless’ ethos.
Regardless, the cumulative effect of these developments is a demonstrable interest in cryptocurrency, which could prove to be a gateway to increased involvement in the near future.
One substantial advocate of Bitcoin is Jack Dorsey. The chief executive of Twitter, who is also the founder and CEO of online payments company Square, has been vocal in his support for the currency, stating that it is ‘native to internet ideals’ and even going so far as to predict that it may become the world’s predominant currency within 10 years. He has compared cryptocurrency’s ups and downs to the early days of the internet itself.
Dorsey’s comparison of the internet and cryptocurrency is apt: the internet went through growing pains as various interests struggled to define its nature, but ultimately the technology’s unlimited potential could not be stifled, it was always destined for ubiquity. As blockchain technology becomes increasingly mainstream, and cryptocurrency’s widespread capacity becomes undeniable, it is poised to continue its ascension, with early adopters being joined by the mechanisms of mainstream capitalism.
The takeaway, of course, is that now is a great time to get on board with Bitcoin and other cryptocurrencies. JV Driver are a leader in crypto facilities, offering fully customizable mobile cryptocurrency mining equipment at an affordable price. All you need is a suitable location, a source of power and an internet connection, so visit jvdriver.com/cryptoand get started today.
Applications of Blockchain Technology: Not Just Bitcoin
The blockchain is something you’ve likely been hearing more and more about. Many people are vaguely familiar with the concept of the blockchain as a means of recording and distributing digital information, but may not be familiar with its inner workings, or the advantages it brings.
Although blockchain technology is perhaps most closely associated with cryptocurrencies, it in fact has applications that can be applied to many practices and industries, making it a beneficial, and potentially disruptive technology. Before we explore some of the specific ways the blockchain is transforming traditional processes, let’s take a brief overview of its inherent properties.
According to Don & Alex Tapscott, authors of ‘Blockchain Revolution’, the blockchain is “an incorruptible digital ledger of economic transactions that can be programmed to record not just financial transactions, but virtually everything of value.”
What makes the blockchain unique is that it is a decentralized system that relies not upon one governing body, but upon thousands, or even millions, of computers around the internet. Each new record is a block that becomes stored in the records of each of these computers, making it nearly impossible to refute or corrupt the data. The time stamped data is not owned by any one entity, and has even been referred to as a ‘new type of internet’.
While a simple Google search will net you many more detailed explanations of the mechanics of the blockchain, the main takeaway is that the blockchain offers three unique and game-changing features:
It is decentralized, which means it is in the hands of the population at large, and not a centralized body, which could exploit data or record-keeping for profit.
It is transparent, eliminating secrecy that surrounds transactions.
It is immutable, and therefore no credible challenge can be made to its accuracy.
Applications of the Blockchain
These characteristics make the blockchain ideally suited to be the transactional engine of cryptocurrencies, but the usage doesn’t end there. In a world where data is central to nearly everything we do the applications are endless. The results are capable of fostering not just efficiency and accuracy, but ethical benefits as well.
Because of the decentralized nature of the blockchain, it takes power away from governing bodies like banks and other money transferring services, putting it in the hands of the many. This is perhaps the central tenant that drove its creation, and the benefits are real.
For those who regularly transfer money to relatives in impoverished nations, transaction fees have historically been a fact of life. With blockchain technology, the middleman is eliminated, meaning the full sum of money goes to the recipient. In fact, some recent large scale refugee relief efforts have been conducted through the blockchain, bypassing potentially corrupt bodies that stood between senders and receivers. For these same reasons, the blockchain has been an economic boon to remote areas where geographical and political challenges have historically been a hurdle for business development.
Similarly, blockchain technology can be utilized in the sharing economy, allowing for the sharing of rides or beds without the need for centralized brokers like Uber or AirBnB, effectively disrupting the disrupters.
The transparency of the blockchain makes it a valuable source of record keeping. Conducting elections through the blockchain makes it virtually impossible to hide or embellish votes. Compliance with tax and accounting laws, as well as workers’ rights legislation can be assured through visible blockchain records, and it can prove an invaluable source of data collection in the medical field as well.
There are applications in supply management too, eliminating the need for excessive paperwork and allowing shippers and receivers to track the whereabouts of cargo in real-time. For consumers who wish to verify the country of origin of artisan coffee, confirm the vintage of a bottle of wine or track the path of ‘authentic’ memorabilia, blockchain records allow them access to a complete ledger of data surrounding the product path.
The applications are vast, and will continue to touch almost all aspects of the economy, and society as a whole. Blockchain can be used to facilitate stock trades, shine light upon the sale of weapons, help artists track the usage of their intellectual property, monitor quality control, administer loyalty reward programs, and record title transfers of real estate and other assets, including wills and inheritances.
As blockchain technology continues to be better understood, and more widely utilized, expect to hear more about the transformative effects it is having on a wide range of industries and practices.
Recently, if you’ll pardon the bad pun, a growing number of cryptocurrency enthusiasts have been getting charged up about the Lightning Network. The network, which is growing steadily in capacity, has been hailed as a solution to the scalability concerns that constantly plague Bitcoin and other cryptocurrencies. How does the lightning network function? And what does it do to solve the scalability issue? Read on.
Off the Chains!
Cryptocurrency transactions, of course, are accounted for on the blockchain. Using proof of work, or other standards, each transaction’s data is recorded, providing the currency with its electronic ledger. As a cryptocurrency continues to increase in popularity, the volume of transactions places a strain on the capacity of the blockchain to keep up. In order to decrease this strain on the blockchain, the Lightning Network takes place on top of, or outside of it.
Two parties that anticipate transacting frequently set up a multi-signature wallet on the Lightning Network, and contribute to it financially. As transactions flow back and forth, both parties sign off on them, using their private key, effectively updating the balance sheet inside the channel, without bothering the blockchain itself. Only when the wallet is closed will the information be obtained by the blockchain, with the most recent version of the mutually agreed upon balance sheet providing the blockchain with its accounting instructions.
A Trip to the Ballpark: A Lightning Network Analogy
Consider the following non-crypto analogy, for its illustrative purposes.
Suppose two friends, John and Andy, attend a sporting event together, and agree to split the costs of the outing. John buys two tickets for $100, so Andy presents him with $50, the cost of one ticket. The two take a cab to the stadium, and Andy pays the fare of $20, and John, in turn pays Andy $10. Upon entering the stadium, Andy buys concessions for $30, and collects $15 from John. Eventually, the interactions between John and Andy become cumbersome. They’ll spend more time reaching for their wallets than watching the game!
A more efficient system would be for John and Andy to record all expenses as they occur, and tabulate them at the conclusion of the outing. Perhaps John contributed $200 in total, and Andy $150. Andy, therefore, would owe John $25 (half of the difference). This one interaction would replace the constant exchange of money between the two friends.
The joint wallet on the Lightning Network follows the same general principle. As transactions occur between the participants, both parties would sign off, and they would be recorded within the Lightning Network. Eventually the participants would end the arrangement, and only at that point would the most recent accounting be sent to the blockchain, saving the blockchain from tabulating each transaction individually.
Types of Cryptocurrency Transactions: Fits and Misfits of the Lightning Network
Because of the reduced amount of computations involved, the Lightning Network offers significantly lower transaction fees than those attached to blockchain transfers, providing it with a significant advantage. In the future, as cryptocurrencies continue to become more widely used for day-to-day transactions, bypassing the blockchain for minor exchanges creates a feasible solution to the scalability issues incumbent upon the blockchain.
On the other hand, because the Lightning Network takes place outside the blockchain, there have been concerns about marginal sacrifices in security. For this reason, the Lightning Network is not currently considered the best option for major transactions between long-term investors.
The Lightning Network is also able to facilitate transfers of tokens between different blockchains. These ‘atomic swaps’ help to eliminate pricy and potentially risky centralized cryptocurrency exchanges from the equation.
Where Did the Lightning Network Come From, and Who’s Carrying the Ball?
The genesis of the Lightning Network was a white paper authored by Joseph Poon and Thaddeus Dryja in 2015. Currently, the Lightning Network is being developed mainly by Blockstream, Lightning Labs and ACINQ. Although the technology was initially designed to facilitate Bitcoin transactions, it has since been modified for a host of other cryptocurrencies, including Ripple, Stellar, Zcash, Litecoin, and Ether.
As modifications continue, buy-in is steadily growing. Recently the capacity of the Lightning Network has exceeded 500 BTC ($2M). As Bitcoin, and other cryptocurrencies, continue to crawl back from the roller coaster ride that was 2018, the increased capacity and adaptation of the Lightning Network is seen as a strong fundamental sign that cryptocurrencies are poised to keep rising to dominance as both a strong investment, and functional means of conducting financial transactions. By facilitating efficient trading, the Lightning Network will allow Bitcoin and others to compete with financial juggernauts like Visa, causing many to anticipate future bull-runs on leading cryptocurrencies.
As 2019 gets underway, cryptocurrency investors look ahead with cautious optimism. Although 2018 saw a slowdown from the frantic pace of the year before, the pieces are in place for a solid bounce back in the next 12 months.
With more institutional money set to come on board, and a host of currencies poised for success, investors anticipate a bull market. But where does the smart investor place his focus? We break down the currencies we believe are worthy of attention, and investment, in the coming year.
Second only to Bitcoin in size and name-recognition, Ethereum has a massive community, and should prove to be a stable option for investors. Ethereum’s platform for launching decentralized applications and ICOs has had great success, and the highly-respected leadership skills of Vital Buterin makes it one of the most trusted cryptocurrencies on the market.
In 2019, Ethereum is set to take measures to deal with scalability concerns, which should make it an even more prominent currency moving forward. Although it will face lots of competition in the decentralized app platform space, Ethereum is here for the long term, and therefore represents a good investment.
BNB is the token launched by the hugely influential Binance platform. As one of the world’s most prominent cryptocurrency exchanges, Binance is often the first stop for those dipping their toes in the trading market, meaning it should see lots of activity as crypto markets continue to make gains in the mainstream. Binance’s referral scheme and discounted BNB exchange fee give this token a built-in advantage over many of its rivals, which should result in a bright future.
Cryptocurrency exchanges are, of course, vulnerable to security concerns and the prospect of increased government oversight, but with a great team in place, look for BNB to be a good bet in the year ahead.
Another of Ethereum’s challengers in the launch-platform battleground, EOS is faster and more scalable than its rival. EOS had a successful token sale, and enjoys good community support. With capital in place, there is reason to believe EOS has a solid upside.
Geared towards large financial institutions, Ripple boasts the third largest market capitalization, trailing only Bitcoin and Ethereum. As a venture-backed start-up, Ripple will enjoy freedom from SEC regulation. With huge sums of institutional capital set to enter the crypto-market, the time is now to invest in Ripple.
With an algorithm that emphasizes the anonymity of its users, Monero has aligned itself with the values of privacy and decentralization that were core to the initial cryptocurrency movement. For these reasons, expect Monero to maintain its place in the market.
Although its position as undisputed king of crypto has been challenged, Bitcoin is still the currency most likely to impress your relatives during holiday dinners. As Bitcoin’s main function is as a store of value, used as a trading partner for other coins, its rise will be tied to that of the market as a whole. The result of this ubiquity is likely to be a slow and steady rise in value, as opposed to the stratospheric roller coaster ride Bitcoin has experienced in the past. Bitcoin has the highest market cap and the largest community, and is a safe bet to be found in crypto wallets, and on the tongues of the public at large, for the foreseeable future.
Crypto markets are by nature speculative, and nobody can predict with certainty the future of any particular currency. What’s essential for clarity is to carefully monitor the situation, paying close attention to managerial competency, technological developments, and community enthusiasm. With many analysts expecting steady gains in 2019, the astute observer will be wise to consider the currencies highlighted above.