Bitcoin Trading Volume Slumps; Will TikTok Revive Dogecoin?
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Bitcoin enjoyed a modest breakout Monday, gaining close to 5%, though it soon retreated back near where it began the week. After rising more than 150% in a two-month period from mid-March to May, bitcoin has sputtered since its halving and it’s volatility by the end of June was its lowest since February. A report this week showed that bitcoin trading volumes sank by 36% in June, a decline reminiscent of the lead-up to the “crypto winter” in early 2019.
One small cryptocurrency did double in value this week with a push from young TikTok users. Dogecoin, which trades for less than half a penny, soared after a viral video with a million views encouraged users to invest.
Brock Pierce, a controversial cryptocurrency investor who cofounded the stablecoin tether, is running for president. While his vanity third-party run isn’t getting as much hype as that of rapper Kanye West, Pierce promises that he would have used “21st century technology” to get stimulus checks and unemployment to Americans much faster. In a wide-ranging interview, Pierce revealed more details on his policy positions and denied disturbing allegations that he provided drugs to minors and pressured them to have sex in 2000.
The first week of his campaign didn’t go so well. A New York appeals court approved an investigation into a number of businesses behind tether, which is pegged to the U.S. dollar and has a market value of $10 billion. Questions about whether or not tether is actually backed dollar-for-dollar have circulated since 2018. The Bitfinex exchange is also a separate respondent in the New York attorney general’s investigation.
Sigal Mandelker, a Donald Trump appointee for under secretary of the Treasury for terrorism and financial intelligence who stepped down last year to work in the private sector, has reemerged as an investor and board member for Chainalysis. Her venture firm, Ribbit Capital, joined the crypto investigation startup’s expanded $49 million Series B funding round, and she expects to put her government experience tracing illicit activities to good use.
Bitcoin’s lightning network was built to speed up low-value bitcoin transactions by moving them off the bitcoin blockchain, but researchers at the Hebrew University of Jerusalem warned that the network is vulnerable against cyberattacks if users aren’t careful. Computer scientists Jona Harris and Aviv Zohar wrote in a Medium post that since the network is susceptible to “blockchain congestion,” around $9 million worth of bitcoin could be “looted” by attackers.
The PlusToken Ponzi scheme masterminds disappeared in 2019 with a $3 billion profit after six people allegedly involved in the scheme were arrested, but after a long quiet period, the XRP holdings of PlusToken wallets are moving again, signaling that some Ponzi schemers may still be at large.
About 285 million XRP tokens were transferred to a pool of accounts on June 19 shuffling the money and making it difficult to trace, though the scammers don’t necessarily control this shuffle-pool and it may be law enforcement simply selling seized assets.
Digital asset investment manager Arca launched the Arca U.S. Treasury Fund on Wednesday, making it the first SEC-registered product regulated under the Investment Company Act of 1940 to offer digital securities. The fund will use the Ethereum blockchain to offer shares of ArCoins, which will pay out quarterly interest to investors, and ArCoins’ value is expected to remain stable since the fund will invest primarily in low-risk Treasury securities.
The Federal Reserve’s Declining Balance Sheet Is Bearish for Bitcoin. Or Is It? [CoinDesk]
Crypto Stablecoins Face Increasing Regulatory Scrutiny [Bloomberg]
Could We Fight Misinformation With Blockchain Technology? [New York Times]
Author: Crypto Confidential
- Russian Courts Can't Agree on Whether Crypto is Property
- Stephan Nilsson compares Bitcoin SV benefits between logistics and gambling
- Japanese Residents Have Cash to Spare, But is it Going into Crypto?
- Listen: What a Bitcoin Researcher Says About Lightning
- CoinSwap and the Ongoing Effort to Make Bitcoin Privacy ‘Invisible’
Russian Courts Can't Agree on Whether Crypto is Property
Stephan Nilsson compares Bitcoin SV benefits between logistics and gambling
There are lessons everywhere to be learned from COVID-19, and the supply chain world is no different. “So supply chains, just like we have seen now with this situation here with the COVID is that our society at the moment is very vulnerable for any kind of disruption, and especially if you get things like this when people have to stay home or they are not allowed to work,” Nilsson said. “And a lot of supply chains today, even if we are living in a very digitalized world, supply chains today are still a lot of manual work. It’s moving physical things, it’s moving even paper between each other, exchanging papers still today, I don’t understand how that can still be possible, but they do. So, when you have things like it, when people cannot work, you have to stay home, or even get sick, even if not many have actually got sick, but then we see that supply chains are stopping.”
Thanks to the blockchain technology made capable by Bitcoin SV, its possible to mitigate these disruptions in the future. “If you look at the supply chain, it’s a network, it’s a distributed network of company, independent companies, and we have heard this before, distributed network, that is exactly what the blockchain is,” he said. “So, there is a very good fit between this distributive supply chain network with our distributed blockchain network. It does not mean that every company should mine, be their own miner stuff like that, that’s totally out of the way. But it means that we have a lot of different actors that are working together but maybe not really trust each other totally, and this is where we can start using blockchain.”
While gambling isn’t as dependent on paperwork as the supply industry has been, the benefits are still obvious. “And the blockchain functionality, one of the things just like in gaming I can imagine, is its payment functionality,” Nilsson noted. “Of course, we can do payments, but we can do micro payments, and that’s something completely new. I think most people listening to this already know about micro payments and blockchain, so in gaming that’s what I imagine they do in in gaming with blockchain. But we also of course have the whole thing with smart contracts, and being able to optimize the business processes between businesses.”
He explained how these processes can be improved using supply chain examples he’s familiar with “Today all companies have their own ERP system, their own eat IT systems where they’re having their business processes, so business processes are like, I’m sending an order to you, you send a delivery note to me, and then you send an invoice to me, and so that’s business processes,” he said. “But today, that’s mostly between two parties, but what we can do with blockchain is that we can now connect many partners together in a long chain, a business process, so your supplier, supplier, supplier, and my customers, customers, customers, we can now all put them into one big beautiful chain of work or business process, thanks to the blockchain functionality, and thanks to micro payments and thanks to smart contracts.”
Now you may be wondering why Bitcoin SV is the only viable solution to this. Nilsson has put in the work for you. “I know what the industry needs: we need scalability, we need security, and it has to be cost efficient,” he said. “I’ve been looking into all different blockchain solutions. Ethereum of course, like a lot of come are working with the Ethereum, Hyperledger, EOS, WeChain, all of the chains out there, but I realized that the only blockchain that is actually really scalable, really secure and really having a very good cost efficiency, is actually BSV, Bitcoin SV, because it’s proven for eleven years that it actually is secure, there is no other more secure system in the world. What we see now, when we went back to the original protocol from Satoshi that the block size is removed, which means that the block can be as big as they are needed by the market, no central instance and no group of developers decide how big the block size is, it’s all decide by the market. If there is a need for more transactions, bigger blocks, then the miners will have an incentive to invest more money to make bigger blocks. So with that, that limit is gone and that’s very very important. And what we get with that as well is that now we get economy of scale, so instead of like Ethereum, the more transactions you do the more gas you have to pay. No, in Bitcoin SV, its other way around: the more transactions you do, the cheaper it gets, so it’s economy of scale in the real way.”
UNISOT is applying these new possibilities in Norway’s seafood industry, which Nilsson originally thought might make a nice bitesize example, but quickly found out that it really puts BSV’s scaling capabilities to the test. “We built an industry solution called SeafoodChain to help Norwegian or any seafood company to get global traceability, and get proof of origin of products and so on, and also be doing payments, so like doing micro payments for a temperature, or for weight, or locations,” he said. “So, you can actually track the fish all the way from the sea to the to the retailer and everything, and you can actually sell information doing that way on the supply chain. And then we see from consumers that they want more and more information about the actual content they are buying.”
If you’re still wary about BSV due to the public narrative around the digital currency space, Nilsson had some pretty simple suggestions to follow. “You need to store and read a lot of information securely, and then you need a technology that you’re secure and distributed and cost efficient, and that is exactly what you get with Bitcoin SV, so please just go and do very basic reading about technology,” he said. “Don’t listen to all this mess in social media about Craig Wright and all of that. If you can look beyond that, you can you can you can get so much information and verify that it actually works, instead of listening to hot air from all over all over the place.”
Nilsson concluded that BSV offers everything a gambling operation should want, and they need to focus on the solution that provides it all. “You have a lot of suppliers who are selling blockchain but you really have to look into scalability, security, and costs,” he said. “I mean just three are gold, if you get these three right, the rest is easy.”
If the new technology of BSV seems daunting to you still, Nilsson also speaks about his approach to educating an industry as old as the seafood world on its benefits, and his approach to providing zero barrier to entry. Also, don’t forget to subscribe to the CalvinAyre.com YouTube channel to see The Long Con each and every Monday.
Japanese Residents Have Cash to Spare, But is it Going into Crypto?
Investors in Japan increased their crypto holdings during the early stages of the pandemic before the government issued economic relief payments.
According to a July 13 report from Japanese news outlet Nikkei, the Bank of Japan revealed that the supply of M3 in the country — a measure of various money stock in circulation — increased 5.9% in June to $13.5 trillion.
The amount of liquid assets available to residents of Japan has increased following the government issuing 100,000 yen — roughly $936 — stimulus payments to individuals, 300,000 yen to some households, and other payments to companies in response to the coronavirus outbreak.
The Nikkei reported that such payments have made the cash flow in Japan “abundant” with fewer increasing their spending habits. If this money were to go towards any number of asset markets, it could form a bubble as quantitative easing continues while inflation is limited.
Cointelegraph reported in April that the number of purchases for $1,200 on crypto exchange Coinbase increased fourfold in March. The data suggests that Americans may have been using the government-issued checks intended for economic relief to invest in cryptocurrency in the midst of major nationwide shutdowns.
In March, investors in Japan increased their holdings of major cryptocurrencies, by 11% for Bitcoin (BTC), 5.7% for Ethereum (ETH), and 6.4% for Ripple (XRP), as well as moderate gains for other altcoins.
The issuance of $936 stimulus checks in Japan began in April. This means Japanese residents were investing more heavily in crypto following “Black Thursday” and during early measures in the country to prevent the spread of the coronavirus — many schools in Japan closed in March.
Author: by admin
Listen: What a Bitcoin Researcher Says About Lightning
CoinSwap and the Ongoing Effort to Make Bitcoin Privacy ‘Invisible’
A developer known for working on enhancing Bitcoin privacy has set his sights on a new project he hopes will “massively improve” how we keep our transactions private.
Belcher recently received not just one, but two grants for his efforts, showing just how excited Bitcoiners are about the potential of the project.
Related: Listen: What a Bitcoin Researcher Says About Lightning
Though the Bitcoin network arose from a privacy-minded movement, its privacy is actually pretty thin. Just take a look at any block explorer for a glimpse of how easy it is to pull up any transaction that’s ever happened in Bitcoin’s history – as well as the transaction’s associated history.
Belcher argues that this is, in some ways, worse than the financial privacy we have in legacy systems today. “The banking system, they know your transactions, but the general public doesn’t. With Bitcoin it is the general public — it is everyone that can see exactly what the user does,” Belcher added.
Related: Bitcoin App Bottlepay Is Back From the Dead With a New Lightning App
He added it’s important to most people that this type of information isn’t exposed to the whole world.
“Financial privacy is good for human dignity, [for example], if you don’t want your neighbors to see what charities you donate to or that type of thing, or if you’re paid in bitcoin you don’t want your employers to know what charities you donate to or what other activities you’re involved in,” Belcher added.
“CoinJoins” (distinctive from “CoinSwaps,” which Belcher is putting to the test) are the privacy transactions that are most popular on Bitcoin today. CoinJoins give users good privacy and are becoming more popular. Thus far, they have been adopted in the Wasabi wallet, Samourai Wallet and JoinMarket.
A CoinJoin takes all inputs from several transactions by different users and mixes them into one big, collaborative transaction. This one big transaction then sends the bitcoins mixed from different addresses out to different addresses. Because no one can tell where the spent bitcoins originally came from, the scent of the trail is obfuscated and the participants in the CoinJoin gain better privacy.
But it’s not perfect. There are still ways for people analyzing the Bitcoin blockchain (namely blockchain analysis companies) to detect when and where bitcoins are being mixed.
For one thing, the transaction sizes of mixed coins are much bigger than normal transactions because they contain so many different inputs.
Also telling is the fact they have outputs that are all the same size. “Equal output CoinJoins are very obvious. If someone sees them on the blockchain they can see that this kind of privacy protocol is happening,” Belcher said.
Why are outputs the same size? If Bob sends 0.8 BTC into the CoinJoin transaction and Alice sends 0.187 BTC and Mary sends 1.2222 BTC, and the resulting outputs are exactly 0.8 BTC, 0.187 BTC and 1.2222 BTC respectively, that coincidence is pretty obvious to anyone who is looking.
In order to preserve privacy, a CoinJoin transaction usually splits the amount of bitcoin dispensed into even pieces, say 0.1 bitcoin. So, if Alice put in 0.3 bitcoin, she will receive three 0.1 pieces sent to three separate addresses that she controls.
Most transactions don’t have a bunch of equal outputs like this. That’s why CoinJoins are easy to detect.
Indeed, there have been a few instances of cryptocurrency exchanges banning users who have evidently sent their bitcoin through such privacy services.
“They’ll be suspicious. If there’s someone analyzing the blockchain, they’ll see this is a CoinJoin, so they know this person did that. And if they see another transaction, [by comparison] they can see that it’s not a CoinJoin,” Belcher said.
“CoinJoin” and “CoinSwap” have similar names and they both help to preserve privacy, so it’s easy to confuse them. But they’re different, and Belcher argues CoinSwaps “fixes many of the problems of some kinds of CoinJoins” and “is the next step for on-chain bitcoin privacy.”
CoinSwaps can be made to look invisible, Belcher said. If done correctly, a CoinSwap transaction can look just like a vanilla bitcoin transaction.
In a CoinSwap, it looks like two separate people are sending completely separate transactions. But under the hood, something else completely is happening.
Two parties, say Alice and Bob, execute such a swap. In short, Alice sends some bitcoin to a CoinSwap address. Bob sends the same amount of bitcoin to a separate CoinSwap address.
If both send the right amount of money over, the coins are “swapped.” The coins Alice sent to the CoinSwap address are sent to a new address owned by Bob, and the coins Bob sent to his own CoinSwap address are sent to a new address owned by Alice.
Under the hood, the CoinSwap address, which is responsible for this swapping, is much fancier than a normal bitcoin transaction. It’s a multi-signature transaction, meaning it requires more than one person to sign off on it in order to send the transaction. Usually, these types of transactions stand out on the blockchain since they look different from normal bitcoin transactions. But by including ECDSA-2P cryptography, these multi-signature transactions can be made to look just like normal bitcoin transactions. This is very much Belcher’s plan.
With ECDSA-2P in place, “Alice sends a CoinSwap to Bob and it just looks like just a normal transaction. But actually the coins have ended up somewhere else completely,” Belcher said.
This component is important. If all of these transactions look the same, people who aren’t even using CoinSwaps are getting more privacy too. There’s no way to tell if any transaction is a CoinSwap transaction or a normal one, turning bitcoin chain analysis on its head.
Similar technology will expand to the Lightning Network as well, so blockchain watchers can’t tell if any single transaction is a CoinSwap, a Lightning Network transaction or just a normal bitcoin transaction.
“CoinSwap could be said to allow bitcoins to teleport undetectably to anywhere else on the blockchain,” as a description of the technology on the Bitcoin Wiki puts it. For a deeper explanation, check out this post from JoinMarket developer Adam Gibson.
That’s not to say that CoinSwap is perfect, though. The problem with CoinSwap is that it is a much more complicated process to implement than CoinJoin.
In his mountain of a post, Belcher describes how to turn the idea of CoinSwap into reality.
A key reason CoinSwaps haven’t taken off since Maxwell described them seven years ago is that they’re not as straightforward as CoinJoins. So, Belcher has his work cut out for him in implementing the complexity for the first time.
His first step was just thinking about the best way to do it, outlining a number of different design considerations in the article making up his plan of attack. For one, he plans to use the Rust programming language, since it’s potentially more secure than other languages.
“I want to make it as decentralized as possible, so there’s no central point of failure that can be switched off or censored,” Belcher said. To meet this goal, he wants the “whole thing” to run over the privacy network Tor, which helps to shield IP addresses, which are kind of like a mailing address for a computer exposing where it is located.
“I think that’s quite necessary for privacy,” he said.
Belcher outlines this and various other considerations in his proposal, such as routing and using PayJoin, yet another bitcoin privacy technology, alongside it. Now that his ideas are out in the public, people can comment and make suggestions.
Image: “BallesStrob-4” by MathGoulet is licensed under CC BY-ND 2.0.
- CoinSwap and the Ongoing Effort to Make Bitcoin Privacy ‘Invisible’
- CoinSwap and the Ongoing Effort to Make Bitcoin Privacy ‘Invisible’
Author: Alyssa Hertig