Why Governments Are Afraid of Bitcoin - Investopedia
Why Governments Are Afraid of Bitcoin - Investopedia
The biggest problems of Bitcoin that people are not ...
What Is Bitcoin - History, How It Works, Pros & Cons
Banning bitcoin - ScienceDirect
What Exactly Does the US Government Really Think of Bitcoin?
Blockchain in the Public Sector – Webcast Q&A
Link to our website:https://block.co/blockchain-in-the-public-sector-webcast-qa/ Block.co fourth webcast titled "Digital Transformation of the Public Sector & The Upcoming Legislation of Blockchain Technology in Cyprus” was an immense success. We gathered some of the best experts in the field, Deputy Minister Kyriacos Kokkinos, Jeff Bandman, Steve Tendon, and Christiana Aristidou to share their experience and discuss with us the latest updates regarding Blockchain in the Public Sector. In its fourth series of webcasts, Block.co gathered 281 people watching the event from 41 different countries, for a two-hour webcast where guests answered participants’ questions. Following the impressive outcome and response we received from the audience, Block.co’s team has done its best to address all the questions for which public information is available. Below is a list of the questions that were made and were not answered due to time constraints during the webcast. For the remaining questions from our audience, the team will reach out to our distinguished guests to receive their comments and feedback. Please note, that the below information is only for informational purposes! Question 1: How can asset tracing be accomplished with bitcoins and cryptocurrency? And how can this be regulated? Block.co Team Answer: Digital Asset tracing may be accomplished with cryptocurrency intelligence solutions such as Cipher Trace and the ICE cryptocurrency intelligence program. FATF (Financial Action Task Force) embarked on a program of work from summer 2018 to June 2019 to strengthen and update the provisions dealing with virtual assets and virtual asset service providers. FATF updated Recommendations in October 2018 and Guidance in June 2019 include several new obligations that apply to VASPs. The so-called “Travel Rule” FATF announced in October 2019 agreed on the assessment criteria for how it will assess countries’ compliance with the new global standards. Under the Travel Rule, the transmitter’s financial institutions must include and send information in the transmittal order such as Information about the identity, name, address, and account number of the sender and its financial institution Information about the identity, name, address and account number of the recipient. The ”Travel Rule” is effectively being applied to cryptoasset transfers when there is a virtual asset service provider (VASP) involved. The scope of focus has broadened from “convertible” virtual assets to any virtual asset. Countries should make sure businesses can freeze crypto wallet or exchange accounts for sanctioned individuals. Question 2: Which kind of software or technical knowledge is required to develop cryptocurrency? Block.co Team Answer: It depends on the type of cryptocurrency you wish to create, as well as the preferred functionality and features, and characteristics of the token or coin (i.e. will it be pre-mined, what type of hashing or cryptographic algorithm will be used (i.e. proof of work (POW) or proof of stake (POS) or a hybrid of both), etc. Likewise, it is useful to utilize a programming language that is broadly used and supported by a vast and active development community; more data could be found here: more information could be found here: top programming languages in 2015/2016, published by IEEE here, and TIOBE. Hypothetically, you can utilize any programming language to make cryptocurrency digital money, however, the most widely recognized are C, C++, Java, Python, Perl. The beauty of cryptocurrencies is that you can literally have access to the entire Bitcoin and Ethereum open-source programming scripts, and create your alternate coin (altcoin). Question 3: Hello all, I want to know about the current status of the European Union Blockchain initiative in currency or public identity. Block.co Team Answer: Please refer to the European Services Blockchain Infrastructure (EBSI) website. Question 4: Mining is also the process of confirmation of transactions in the Bitcoin Blockchain. What is the process of confirmation of transactions in the Blockchain of an Organization? How do we call it? Block.co Team Answer: That would depend on the specific consensus algorithm used for the confirmation of transactions. The consensus algorithm is part of the blockchain protocol that defines the rules on how consensus is reached on that blockchain. In order to participate, entities on the blockchain must obey and follow the same consensus algorithm. Make sure to check our glossary for more information. Question 5: How does a small business implement blockchain into its current non-blockchain software systems? Who do they hire to install it? Block.co Team Answer: It is easy when there are APIs to connect the various software. For more information, you can check Block.co API. Question 6: What is your opinion on digitizing developing economies like India by using AI and blockchain? Block.co Team Answer: Watch a very interesting webinar on the matter by Mr. Prasanna: Question 7: Blockchain technologies have been around since 2008. What would you say has been the biggest obstacle in widespread adoption? Block.co Team Answer: In our opinion, the biggest obstacles are volatile cryptoasset prices, complicated UIs, undefined blockchain technology standards. Moreover, the legislation around the technologies is still now being developed and does not offer legal certainty for broader adoption. Question 8: Limitations to Blockchain Usability in the Public Sector? Block.co Team Answer: Blockchain in the Public Sector, like any other innovative concept with big potential, cannot be a solution to every problem. Users and developers are still figuring out technological and managerial challenges. From a technological perspective, some aspects such as platform scalability, validation methods, data standardization, and systems integration must still be addressed. From a managerial point of view, the questions include business model transformation, incentive structure, and transaction scale, and maturity. Read more here. Question 9: How can these blockchain initiatives be practical for the African context Block.co Team Answer: As long as the internet infrastructure is in place, these blockchain initiatives may have the same benefits for the African region. Question 10: What are some compelling use cases you’ve seen lately, and how do they serve to further legitimize blockchain as a solution? Block.co Team Answer: You can see the global trends from all around the world when it comes to further legitimization as a solution, with China leading the way. Read more here. Question 11: How does digital currency manage the issue of money laundering? Block.co Team Answer: Depends under which context you are looking at the term digital currency. A digital currency usually refers to a balance or a record stored in a distributed database, in an electronic computer database, within digital files or a stored-value card. Some examples of digital currencies are cryptocurrencies, virtual currencies, central bank digital currencies (CBDCs), and e-Cash. The Financial Action Task Force (FATF) is an intergovernmental body established in 1989 on the initiative of the G7 to develop policies to fight money laundering. Since 2001 FATF is also looking into terrorism financing. The objectives of FATF are to set standards and promote effective implementation of legal, regulatory and operational measures for combating money laundering, terrorist financing, and other related threats to the integrity of the international financial system. FATF is a “policy-making body” that works to generate the necessary political will to bring about national legislative and regulatory reforms in these areas. FATF monitors progress in implementing its Recommendations through “peer reviews” (“mutual evaluations”) of member countries. It is the global watchdog for anti-money laundering & counter-terrorist finance. In June 2019, it updated its guidance paper for Virtual Assets Service Providers (VASPs) regarding the transfer of digital assets. There was an insertion of a new interpretive note that sets out the application of the FATF Standards to virtual asset activities and service providers. To apply FATF Recommendations, countries should consider virtual assets as “property,” “proceeds,” “funds,” “funds or other assets,” or other “corresponding value.” Countries should apply the relevant measures under the FATF Recommendations to virtual assets and virtual asset service providers (VASPs). Read more about the FATF recommendations here). https://preview.redd.it/58tt7mt1pld51.png?width=1920&format=png&auto=webp&s=d24811c4864ebf02cb9aacc8d6b877a1fbc3756b Question 12: To what extent can blockchain be used to improve the privacy of healthcare? Block.co team Answer: Please refer to our previous webcast, blog, and articles for more information. Question 13: What is Blockchain technology in Shipping? Block.co team Answer: The shipping sector has been in the hold of phony maritime institutes charging exorbitant fees via agents, issuing certificates to candidates who do not have the imperative attendance, or those candidates who just pay the fees for the course and ask for the certificate. In view of these fake accreditations, the possibility exists that someone could be harmed or killed, and we could face any number of potential ecological disasters. Having the option to easily verify the genuine origin of a certificate by an approved maritime center is foremost for shipping companies to fast-track their operation and streamline their labor. Question 14: Different uses of blockchain other than cryptocurrency? Block.co team Answer: Please refer to our blog and glossary. Question 15: Upcoming trends in Blockchain concerning Advertising, Marketing, and Public Relations in the Public and Private sectors. Block.co Team Answer: Regarding the application of blockchain technology to media copyrights, please see Block.co use case proposal during the Bloomen Ideathon. https://preview.redd.it/48zc8j38pld51.png?width=3622&format=png&auto=webp&s=79987d1dc7eb8d0c8e32dbce8680b17801d0d244 Question 16: How to create a decentralized blockchain? Block.co Team Answer: An excessive number of individuals feel that blockchain is some supernatural innovation that makes up a decentralized system. In truth, this innovation only enables decentralization. Which means, it permits cryptocurrency to work in a decentralized way. Yet, it doesn’t give any guarantees that it will work that way. Along these lines, it’s really, some outer variables that decide genuine decentralization. Technology, itself never really guarantees it. That is the reason it’s a mistake to expect that if it’s a blockchain — it’s decentralized. From a technical perspective, both blockchains, centralized, and decentralized are comparative, as they take work on distributed peer to peer to network. This implies every node is individually responsible to verify and store the shared ledger. Both Blockchains utilize either a proof-of-work or proof-of-stake mechanisms to make a solitary record and they have to give upper and lower limits on the security and productivity of the system. For more information please refer to our infographic. Question 17: Dubai government Blockchain implementation progress? Block.co Team Answer: You can see more information here. Question 18: How Blockchain and IoT can be integrated to secure data being transmitted through IoT devices. Block.co Team Answer: You can read more about it here. Question 19: How can the Nigerian government use Blockchain to effectively implement its existing launched eGovernment master plan? Block.co Team Answer: Perhaps it can draw its attention to the initiatives of Dubai, Estonia, and Malta to prepare an implementation framework. Question 20: What impact is blockchain going to have in today world of business especially in the financial sector Block.co Team Answer: Please refer to our recent article titled Benefits of Blockchain Technology in the Banking Industry. Question 21: Is Blockchain Technology affect individuals? Block.co Team Answer: The social effect of blockchain innovation has just started to be acknowledged and this may simply be a hint of something larger. Cryptocurrencies have raised questions over financial services through digital wallets, and while considering that there are in excess of 3,5 billion individuals on the planet today without access to banking, such a move is surely impactful. Maybe the move for cryptocurrencies will be simpler for developing nations than the process of fiat cash and credit cards. It is like the transformation that developing nations had with mobile phones. It was simpler to acquire mass amounts of mobile phones than to supply another infrastructure for landlines telephones. In addition to giving the underprivileged access to banking services, greater transparency could also raise the profile and effectiveness of charities working in developing countries that fall under corrupt or manipulative governments. An expanded degree of trust in where the cash goes and whose advantages would without a doubt lead to expanded commitments and backing for the poor in parts of the world that are in urgent need of help. Blockchain technology is well placed to remove the possibility of vote-apparatus and the entirety of different negatives related to the current democratic procedure. Obviously, with new innovation, there are new obstacles and issues that will arise, yet the cycle goes on and those new issues will be comprehended with progressively modern arrangements. A decentralized record would give the entirety of the fundamental information to precisely record votes on an anonymous basis, and check the exactness and whether there had been any manipulation of the voting procedure. Question 22: As Andreas Antonopoulos often says in his MOOC: ”is a blockchain even needed?” Ie. Are there better methods? Block.co Team Answer: In combination with nascent technologies, IoT, distributed computing, and distributed ledger technologies, governments can provide inventive services and answers for the citizens and local municipalities. Blockchain can provide the component to create a safe framework to deal with these functions. In particular, it can provide a safe interoperable infrastructure that permits all smart city services and capacities to work past presently imagined levels. On the off chance that there were better techniques, they would be researched. Question 23: Would any of this be also applicable to the educational sector (as part of the general public sector), and if so in which way? Block.co Team Answer: Yes, please refer to our Webcast on Education and our blog post. Question 24: Will we be able to get a hold of this recording upon completion of the meeting? Block.co Team Answer: Yes, here is a link to the recording of our webcast Blockchain in the Public Sector. Question 25: Was wondering if there are any existing universal framework in governing the blockchain technology? Block.co Team Answer: The short answer is NO, as this framework is currently being prepared in collaboration with the various Member States. We would like to thank everyone for attending our webcast and hoping to interact with you in future webinars. If you would like to watch the webinar again, then click here! For more info, contactBlock.codirectly or email at [[email protected]](mailto:[email protected]). Tel +357 70007828 Get the latest from Block.co, like and follow us on social media: ✔️Facebook ✔️LinkedIn ✔️Twitter ✔️YouTube ✔️Medium ✔️Instagram ✔️Telegram ✔️Reddit ✔️GitHub
The anti-Japan sentiment in this sub is pretty toxic and stupid
Since there are gonna be some people saying things like "yOu aMeRiCaNs gO hOmE", I would first like to say I am ethnically and legally a Korean. And to add more on to my background, I have been flying in and out of Korea since I was 1 year old. I lived about 2/3 of my life in Korea and 1/3 in English speaking countries (NA and OCE). So I think I can look at the Korean society and culture from an outsider point of view, but with the knowledge of an insider and vice versa. Since this summer, I believe, the anti-Japan sentiment has grown for some reasons but mostly from the trade dispute between ROK and JP. I have made exchanges with some users on this sub through comments about this topic and more than often when a user sees that I hold a different worldview they attack me for some reason. I totally understand that people have different values and backgrounds thus agreeing on trivial topics like this is not easy but after seeing this post today, I felt that the anti-Japanese sentiment on this sub is so toxic and stupid. The comments on the post were mostly mockery towards Japan. No single reasoning or contemplation on the article itself, but only comments laughing at other's failure is the state of the anti-Japan sentiment in this sub. The comments on this other post talking about the anti-Korea sentiment in Japan was also pretty painful to read because they never mention the same default emotions Koreans have towards Japan. The reason why I think all this is toxic and stupid is because I know that 90% of the people in this sub are not even Korean. And almost 70% of the people on this sub have an intermediate or lower reading level in Korean. (/Korea Survey 2019). So inevitably the majority demographic (35 years old and younger) that come in this sub are mostly people from other countries who can't even read Korean properly, but hate Japan??? What has Japan done to you? I'm pretty sure nobody in this sub lived in Korea between 1910-1945. Funnily enough, my grandpa who is almost 90 now has lived through these years and he absolutely loves Japan. To me, it just seems like a bunch of foreigners learned some stuff about the ROK-JP rivalry from their friends and media or whatever, and pretend to be supportive to the country they are staying in. Which is pretty weird because I thought western philosophy has evolved out of the totalitarian/nationalistic trend that ended in 1945 with Nazi Germany. Why is it that when it comes to ROK vs. JP people lose all individual reasoning and instead choose to become a zealot of nationalistic values that has no benefit in the well-being of either the nation or individual? I would like to address some serious flaws of the anti-Japan movement.
How do you define boycott-Japan? If you're going to boycott Japanese products how far will you go? If you find that the cabus/train you are riding has Japanese parts in it, which is a very high possibility, will you not take it? I've seen a Korean owning a Japanese themed restaurant in Seoul that was going broke because people won't eat "Japanese". In the same sense, why people who own Japanese cars should be apologetic to everyone else? Why are people bullying these car owners? So, to some people the definition of Japanese is anything that was influenced by Japanese culture. But how can a country can not be influenced by its neighbor country? Especially when Korea was colonized by Japan for 35 years, how can anything cannot be influenced by Japan in Korea? Even the words people use in day to day life there are many Japanese nuances because modern Korean and Hangul were reinvented and became widely available during the colonization era. Before Japan reintroduced Hangul to the Koreans, the Joseon dynasty banned any use of Hangul. Will you abandon Hangul and the modern Korean language? A movement without a distinct definition or goal only creates chaos and worst case it will affect the ones who were supposed to be protected by it.
What has caused the whole boycott-Japan movement? Did Japan restricted exports to Korea for no reason? No. Japan had some good reasons to restrict exports. North Korea has developed a blockchain that happens to be used for freight ships. They also stole a bunch of Bitcoins to fund their nuclear program. And Cho-Guk had ties to both bitcoin and freight ships. And Cho-Guk himself is blatantly a Leninist while the US secretary of defense is openly quoting that president Moon's policy is benefiting China and North Korea. And Japan, which is also an ally of the US raised concerns that some of the strategical materials were smuggled into North Korea. The current administration basically said "F*** off" when they could simply show some paper work that the materials were used/shipped to somewhere else to prove their innocence. Why wouldn't Korea do this and embarrass Japan for their false allegations? The current administration had a very good chance at elevating their popularity without going through all the drama, which is still on effect, but chose to do nothing. What does that say to you?
The boycott-Japan movement is not an organic movement. 민주연구원, a think tank under the Minjoo party released a research paper suggesting that they should use the emotional response to Japan's export restrictions to win the upcoming general elections. In Korea, propaganda from this side of the political spectrum is becoming more and more obvious since the 2008 US Beef protest. Back in 2008, MBC aired a program showing the "danger" of US beef, causing hundreds of thousands of people to storm the streets of Seoul. Brainwashed by one TV program, people lost their minds. So many Koreans thought everyone will all die from the Mad Cow Disease. But what now? American beef is now the best selling meet in Korea. Later the TV program was ruled as fake news by the supreme court and MBC made a statement with their apologies. And when you look at the ones who lead these protests based on fake news and mass lunacy, they are always the same people!
What I have learned is that many people in this sub underestimate the military/geopolitical climate of Korea. But again, with a 90% chance, I think that is just another naive point of view coming from someone who clearly doesn't understand Korean culture and history. However, I cannot tolerate when people actually push their ill-informed narrative on this sub to other people- where literally anyone on Earth can come and read posts and comments in the most widely used language.
I've been engaged with the cryptosphere since almost the very beginning: immediately seeing bitcoin for what it was, a way to securely store wealth outside of the banking system, freed from relying on a middleman who, it became clear over time, was more interested in policing my (and everyone else) actions to make sure their ass was covered with the increasingly noisy regulators, and due to their financial irresponsibility, always coming up with new and progressively more ridiculous fees. I was fed up with the old system already, having explored the black magic of infinite inflationable monies, centralized, communist-style administration of entire economies, and all the suffering, surveillance, corruption, and centralization of power that such things necessarily entail. Some Rothschild or Rockefeller said it best, "give me control of a nations money supply and I care not who makes the laws" - or something to that extent. Anyway, the allure for the very early adopters was being able to sidestep the massive fiat scam, put personal financial destiny squarely in our own hands, and not rely on third parties as much as possible. In the beginning Bitcoin was almost completely ignored. Only some ubernerds and a few drug dealers and drug users (who would like nothing more than peacefully transact between each other and mutually benefit from the exchange by the way, but are forced into dark corners of the internet because of arcane, politically-motivated, outdated drug laws that FINALLY appear to be crumbling to pieces after DECADES of propaganda and lies organized by major world governments and their lackeys) knew about it. Unfortunately most people lack imagination and, the nerds being mostly quiet and the drug-related activity soon being used as a justification to slam bitcoin with the "only for crime" label, most people thought nothing else of it. They could not see, and to this day still don't see, the immense potential that cryptocurrency can bring the world. There are more of you out there now who can, this is self-evident. Although frankly too many of you are here for gains mostly/only, and fail to see what cryptocurrency is really all about. Much like how so many people think the Internet is facebook and instagram and twitter. Which is so shockingly ignorant it almost makes my blood boil. Look, gains are nice, and of course we all want to make some money. I won't even fault you for taking profits, to me this seems like a sensible hedge, even a full decade into the cryptocurrency experiment, nothing is guaranteed, nothing is certain. So it makes sense to diversify, even - gasp - into fiat money that we can - hopefully - put to good use, today, in the "real" world. But to get back to the story - quickly then, from a very underground thing that almost nobody knew about, Bitcoin was attacked as being "only for criminals", and there was a palpable sense of apprehension and fear from international organizations and governments. Here was this thing that entirely sidestepped the financial system that keeps their funny monies going, and people were using the technology to emancipate themselves from arbitrary limitations and appalling mass-surveillance. And once a state gets used to mass-surveillance, it is very hard to get it to stop. The power is simply immense. Can you imagine? A database with the social connections of every citizen, what they like reading, the sites they like visiting, their physical location logged nonstop, painting very detailed pictures of peoples' lives. All of their posts online, neatly tucked away in some searchable massive database. Almost no one protested. "Well, I have nothing to hide", they said. And thus the surveillance state grew and grew, almost entirely unchallenged. In the name of "fighting terrorism", "catching pedos" and "removing drugs from society" (I could write volumes on this last one alone but this is not the time or the place) we saw our liberties and privacy being steadily eroded, particularly after the perfect excuse happened on September 11 2001. Boy oh boy did we see a destruction of civil liberties since then. Another part of this mass-surveillance was, and is, the banking system. Put simply, every transaction you make is under surveillance, recorded indefinitely. The reasoning? It could be related to financing terrorism. That appears to be the great corrosive thought behind all of this. You could be making a transaction to fund terrorism. You could be spewing "hate speech" (who gets to define it? apparently these days it means expressing right-leaning opinions - tomorrow, who knows?) on social media, so better record everything you write. You could be visiting "extremist" sites online, and because clearly this means you must be an extremist-in-training and not just some curious human trying to understand why on earth someone would have such wicked ideas, your internet activity is logged and analyzed. You use Tor or a VPN? Oh dear, now it's really clear that you must be a potential criminal. Otherwise you would have nothing to hide. Right ? Do you see the pattern? To bring it back to cryptocurrency, Bitcoin users, it is known, were also targeted for increased attention by certain intelligence agencies. Same logic - you were not happy with using the mass-surveilled financial system of yesterdecade? Probably a criminal in the making. Eventually though, that air of fear and apprehension more or less vanished. Regulators actually begun to realize that bitcoin is entirely transparent! All you have to do is require KYC at strategic points. People thought you were crazy for saying KYC would come to crypto. But it was so obvious. And you know what else is obvious? Once exchanges are keeping KYC, global regulators will require that they exchange information with them. This, recent news tell us, is already set in motion and will soon be a reality. Given the transparent nature of most blockchain projects, the implications are so obvious that the fact that almost no one sees what's coming next is almost enough for me to lose hope in humanity. Once there is a centralized record of who owns which addresses, several things become possible. You can now put people under surveillance in real time while they do their transparent chain business (.. shocking, right). You can tell who they transact with, and how often. You can censor their transactions, if not at the network level, at the merchant and exchange levels. And you can do something else too, which is to automatically treat any and all bitcoin addresses not associated with a known real identity as potential money laundering (remember the pattern?). All of this information being available will inevitably create a reality where you will be asked questions about what you do with your money. And this time it isn't the bank, it comes straight from higher up. Because every transaction is fucking PUBLIC!. Who did you send 0.5 BTC to on day X ? This address is not known to us. Please explain (or else). Why did you attempt to mix your coins? Have you got something to hide? Do you enjoy swapping coins in accountless sites like morphtoken ? Well, enjoy while it lasts, because it is a certainty that they will soon be forced to force you to put your identity at risk of being stolen, or else - you guessed it - they are helping with laundering funds. You think tools like wasabi wallet will help? On a transparent chain? If by now you cannot tell that the only thing this will accomplish is an automated blacklist of your coins because you must be trying to hide something but not allowing the State to track your every financial transaction on the chain, there is not much hope left for you. That is simply a massive failure of the imagination, and I lack the words to make the consequences of your ignorance any more obvious. I'm one of those "privacy nuts" you sometimes hear about. 15 years ago I was telling people that it was a really bad idea to be donating so much personal information to some company, but nobody would listen. Already too hooked on getting attention and feeling validated. What's sacrificing a little privacy to feel good - who cares if the tech company is making millions selling your every weakness, your private thoughts, your tastes and opinions, to third parties who somehow, for some reason, are very very keen in acquiring this data. Baffling how people could not see how valuable this data would become. Today it seems they are beginning to wake up. Meanwhile, the entire Internet has been boobytrapped, and in the unending fight to get rid of pedos, drugs and terrorists, we all live under mass-surveillance and almost everyone pretty much accepts it without questioning things too much. After all, there don't seem to be many consequences. But that's just a failure of the imagination. By accepting, uncritically, that transparent chains are a good foundation with which to build the new financial system, you are all voting for more surveillance, the automatic criminalization of privacy, suspicion by default, and subjecting yourselves to 24/7, algorithmic mass-surveillance. Physical cash is already on the way out in some parts of the world, and this is no accident. It is much harder to trace cash, and at this point the fourth excuse to do away with that pesky stuff - civil liberties - comes into play. The digitization of everything financial, the accompanying mass-surveillance and mass-ingestion of the data is necessary, you see, to catch tax evaders. After all (and you will remember the pattern for sure), if you desire some financial privacy, if you would prefer to keep your economic activity to yourself, you are a potential tax evader. It should go without saying, and even including this paragraph I suspect there will be many comments by people with short attention spans who will accuse me of encouraging tax evasion. Ah, how deep the brainwash goes. To that I would say, just think about the fact that up to until only a few decades ago (in thousands of years of history) it was not even possible to do financial mass-surveillance. And somehow roads were built, civilizations thrived, and there's a direct ancestry right to us. And yet we are told that only by stripping everyone of privacy could the state ever hope to collect tax. Bullshit. Look, you have to ask yourself, is this really what you want ? A world of mass-surveillance where all aspects of our life are neatly categorized and searchable in some state-controlled database (that will never be hacked, right ? hint: shadowbrokers) Can't you see it? Have you been anesthetized? Are you too numb to see? This is totalitarianism. Pure and simple. It's happened so gradually that somehow it seems the world has failed to notice. It is not right for things to be this way. If you would stop distracting yourself with social media, tv series and porn (and whatever else young people distract themselves with these days) you would come to develop this notion. Cryptocurrency was all about personal freedom. I am sorry to say that the technology has been almost entirely successfully adapted to do the exact opposite. Rather than offer us freedom, it serves as perfect, immutable evidence of all of our economic activity, whatever little privacy it offered crushed by off-chain measures like KYC and guilty-until-proven-innocent techniques that would have made the STASI proud. But not all is lost, yet. Fortunately we already have the technology to make on-chain privacy a reality. It's called Monero and it works today. I'm not going to babysit you through this and I'm not going to tell you to just trust my word for it, but I am going to tell you that if you care about a future where financial privacy is a reality, a future where the state and powerful corporations don't keep tabs on every transaction you make, every cent you receive, from whom and how often, with perfect accuracy, where automatically they know where you spend your money.. if you care about a future where you are not a slave to some financial master who insists on its right to observe to the most minute detail every aspect of your financial life (and as we have seen, many other aspects of life too - financial mass-surveillance is after all a subset of mass-surveillance itself).. Then you owe it to yourself to read about Monero. Transactions cost less than a cent, and on-chain privacy is a reality. Today. Will it be the ultimate financial privacy project? This I cannot know. I can tell you that it is the best chance we got today. Ultimately it does not matter to me which project makes financial privacy a staple. All I care about is that we, the peoples of the world, are able to transact with each other freely, without the assumption of wrongdoing, without being asked questions about or dealings and who we decide to do business with, before there is any evidence of foul play. That is what is happening today, and it is a very palpable thing that outside of certain niches like VPN providers, Monero adoption is very lackluster. They are afraid. People hear "privacy-preserving money" and think "headaches from the state". This is a shame. This cowardice will, unless reversed, soon enough plunge us into a world where our masters know everything about us, and can with the press of a button blacklist, deplatform, defund, and otherwise shut us up. Applied knowledge is power, and so is information. If you know everything about everyone, you have tremendous power over everyone. This reality must be stopped at all costs, if we want freedom and individual liberty to survive. Surveillance coins (99.999% of them) are not the answer to this most concerning of trends. Stand up for your rights. Use Tor, use VPNs, encrypt your email, encrypt your communications, and use privacy preserving cryptocurrency such as Monero. Don't be afraid. There's strength in numbers. Never forget who ultimately gives legitimacy to laws. If enough people come to think that weed ought to be legal, then in countries where the government is still somewhat under the control of the people, it will be so. You are probably sitting at home reading this. In the privacy of your home. That should be sacred. And yet, if you decide to visit certain sites like torproject.org or getmonero.org after you read this, automated actions behind your back will be taken. Increased scrutiny will be placed on you - "who is this person, that wants to protect their privacy? It is hard to convey in words just how evil, misguided and stifling this is. You may say I'm exaggerating, in which case only one word for you: SNOWDEN. And by the way, it was pretty damn obvious before his revelations that something of the sort was happening. Like it is obvious now with surveillance coins (transparent blockchains). Today it's KYC, tomorrow is automated chain analysis, the day after it's endless questions about who you're transacting with (updating the central registry based on the answers), and when your debt-ridden, socialist-leaning state finally pulls a Venezuela on you, it's open season. Let's try to put a stop to this while we can, shall we? The beast will not grow tamer if we keep ceding ground. The beast sometimes needs to be reminded of who's really in control. Privacy is not a crime. It is our birthright. We have the right and the basic dignity to transact with one another, without the Eye of Staton gazing upon us.
No one shall be subjected to arbitrary interference with his privacy, family, home or correspondence, nor to attacks upon his honour and reputation. Everyone has the right to the protection of the law against such interference or attacks. https://www.un.org/en/universal-declaration-human-rights/
It is on us, and future generations will hold us accountable, if privacy falls worldwide and the state controls every aspect of our life, and comes uninvited to ask questions under threat of force if we refuse on principle to comply. Stop getting distracted. Educate yourself, never stop learning, and do what you can to make this world a better place. More state control ain't the way.
3 It explains our intuition that human beings, but not lower animals, have free will. Lower animals lack free will because they lack the second-order volitions which are constitutive of free will. (This item is unnecessary and probably not true; how do we know animals have no "second-order volitions"? Having no other language than "body", we can only surmise (guess) what their volitions are. Volitions come before actions, we cannot see them or interpret them in any way. Brain conditions might be interpreted with MRI scanning, but to put a subject in a scanning device is to prevent any other actions. Such measuring ruins the connection between mental state and volition being measured, except we can safely assume that every measurement of animals must default to the volition to escape the measuring device.)
That's the first-order, highlighted deviation from compatibility theory. Clarification of "second-order volition": a path from choice to action has an intermediate "middle-way" tunneling mode, contracting (taking on) a desire to make a choice, prior to making the choice. In order to prove freedom, one must establish the mental preference for an imagined outcome in order to prove that preference did come from within the person and was not forced by other external deciding factors (genetic factors are pre-determined). incompatibilism Note: the approach is wrong by the universal assumption, IOW that the intersection of determined and free is zero. It's a supremacy position, or superposition principle (LoL), the error is in over-simplification. The Logic Argument (p.5) is not representative of reality, which is more nuanced. Therefore, Frankfurt's thesis is good (denial of incompatibilism), but not due to the case presented (superposition). Take Frankfurt's case (p.4) of Black vs Jones4 to be analogy for State vs Individual. Silent Weapons for Quiet Wars (other sources exist, search for yourself) The (myusername) determinism/free-will duality hypothesis (denial of incompatibilism due to non-zero intersection):
Most choices, including the choice of desires, are determined by contingencies of which one is the natural desire of the actor to optimize his/her outcomes ("best wishes"). Is a person always compelled to have best wishes? What is best depends on a person's mental state, which is usually determined by external factors, but those can vary in cogency (impact on behavior). Consider the choice to commit suicide, certainly not a trivial choice. (The Chosen means of execution (puns intended) is somewhat more trivial, but again, partly determined by external conditions.)
Some choices, nearly all trivial, are free because no interfering contingencies are apparent during the choosing interlude. It may happen in hindsight, that a past choice is observed to be a mistake, usually because some contingency was overlooked or unknown during the choosing. This observation should be remembered so as to avoid repeating a future choice like that mistake. Choices always have risks, including the choice to do nothing. Different day, slightly different approach... parsing choice. 1 important choices that have many deep effects later, for instances a marriage partner, a new job, a new residence; 2 trivial choices which have minor effects, risks or physical involvement, for instances a choice of toothpaste at the market, to like or not a web-link or museum exhibit. According to (myusername)'s determined/free paradigm, type 1 choices are nearly all determined by pre-existing conditions (not free). Type 2 choice is the arena of freedom. I suppose a person's low risk-aversion parameter could expand the envelope of freedom, but that's a characteristic that develops during maturation, one's history of choices and ensuing responses. Successful responses lead to more freedom, failures to less. So even when freedom exists, it accumulates a history (habits) which become a determinant. Contracting the Social Construct Disorder (it's contagious) Take 1: How does an actor (person in question who comes to an internal state, or inner-construct) interact with a community or society? Must it be IRL, or can virtual interaction suffice to construct internal states? And more to my point, must the interaction be two-way (containing feedback), or simply via broadcast medium? (broadcast includes published books, articles, records, radio, TV or Internet A/V shows, etc.) Interaction with broadcast media can be summarized by: a choice, a degree of attention and focus (time spent on and attention given to item), a like/dislike or more complex reaction to item, having future behavior influenced by item, to continue a stream of behaviors (especially sequential item choices) as consequence of influence of item, to develop a complex of attitudes built upon stream of items (eg. just mentioned 'risk aversion parameter and habit). Before going on, I notice that broadcast media is like Sunshine, Rain, and Grace. It is made available by participation in a community, and falls without curse or blessing, it's all there for the choosing (or ignoring), depending on the contingencies. Mind control theory? (because mind is the inner source of volition... behavior, control the mind (easy), hence control the behaviors (difficult otherwise)) Mind control courtesy Tavistock Inst. Construction of Favor (or any knowledge) upon Familiarity What is Social Construction? (cntrlZ)
"For instance, trees are only differentiated from other plants by virtue of the fact that we have all learned to see them as "trees."
But we don't all know about trees to an equal degree. I know rather much about trees from my interaction with them: living among them, planting them, sawing them, moving them, burning them, etc., not from reading or talking about them. No doubt, there are many persons all over the world who have very little experience of trees, and cannot 'construct' treeness as well as me. Direct experience is more realistic and developed than social constructs. Favor and Familiarity are interwoven by choice I chose to live alone with trees and not alone with sea, or desert (for examples), because it was easier to go with trees. Was the choice free? I could have chosen city or suburb with even more ease than forest, so ease of choice was not the deciding factor, it was my preference of lonely forest over crowded urb that decided me. So maybe it wasn't really about trees, it was about independence or something else like that. When we choose, we may not understand the contingencies, but our decision (choice) may be due to habits or patterns that have developed in the maturity process. Habits are strong determinants, and they develop, according to Ian Plowman, 4 ways. The cntrlZ article makes the case for 'Strong Social Construction' based on that 'knowing' which is all about language, certainly a social construct.
Within the social construction of language is the game. Outside the social construction is reality, the real world. (a list of social constructs follows)
That makes it clear. Experiences (direct ones) without resort to language are NOT social constructs. That observation makes another distinction clear: gender may be a social construct, as it's a language issue, but sex is not a social construct, it is a direct experience issue that develops in the maturation process: birth, infant, child, puberty, sexy adolescent, sexy adult, old (unsexy) adult, death. Prior to puberty, sex is incipient in its development, but comes to life, (like a flower blooms) after a decade or so. Knowing about sex as a child is by observation from outside (thru the looking glass), after puberty, it's direct experience, and much later, it's a fading memory. Regarding Looking-glass self theory the notion of socially constructed identity (defining the self by differences/ affinities to others),
... the outcome of "taking the role of the other", the premise for which the self is actualized. Through interaction with others, we begin to develop an identity of our own as well as developing a capacity to empathize with others... Therefore, the concept of self-identity may be considered an example of a social construction.
... makes a spurious expansion of identity formation to include everyone (a unity), or nearly so. According to Reisman's Lonely Crowd, there is a triality of social nature, expounded by parsing people into tradition, inner, and other directed personalities. This theme was a scholar's response to the US trend toward consumerism and conformity to "norms", (local traditions, eg. "keeping up with the Joneses") mid-20th century. The social construct crowd would be Reisman's Other directed personality, which may truly be the majority, in USA certainly. However, the tradition-following and inner-directed personalities are a significant minority. Let's not ignore them (I'm in there.) What is “Mob Mentality?” Herd mentality | wkpd Are All Personality Descriptions Social Constructions? Sep.2019 | psytdy
... that objective reality does not directly reveal itself to us, is true beyond a doubt.
The preceding statement author, JA Johnson, is way off (and his article is full of falseness). Objective reality IS direct experience, no more revealing modality exists. Denial of this obvious fact (just lied about above) is a redefinition of the term (a social construct). Experience is beyond language, thus beyond 'description'. However the following is a true reveal about (((Yews))) (the like of whom Dr. Johnson seems):
It is true that when we describe someone with socially undesirable traits... we are constructing for them a social reputation that might decrease their chance of success in life. This is precisely one of the concerns of (((social constructivists, like Dr. Johnson))), that certain categorizations (eg. a separate race) reduce power and status.
Favor-Goodness-Beauty paradigm Favor is not favored in prior art, Truth takes Favor's place in the Transcendental Spectrum: Transcendentals 5pg.pdf We have already seen the idea in part 1 that Truth is a disputed transcendental in the social-constructionism academic universe. Academics use the "universal fallacy" that their favored item is part of an incompatible pair, which by logic excludes everything not in their favor. They want to ignore the nuances in order to push an ideology toward a supremacy of thinking, just like in a totalitarian state. Whereas the (myusername) principle of Truth, it has a dual nature, 1 relative to a society (democratic consensus); and 2 absolute to reality (math/science/technology). So 'Favor' is a better term because objective proof (no contest) is not required (except the meaning of objective that says 'objection!', meaning 'contest'). 'Favor' implies bias which is the subjective reaction that matches Goodness and Beauty better than 'Truth'. Apply Truth-Goodness-Beauty paradigm to social construction
because the aim of constructionists is to justify a collective "truth" of their own construction. A social construct is not absolute, it's anything a society wants it to be ("social proof"). That's a good description of tyranny... The Empowered Female Parasite 2014 (that's a surprising result, here is one not-surprising.) Social Proof: established by culture media (mind control, a monopoly 2012 (scroll down long graphic), of the Juice 2015), go back to part 1, macrosocial constructs. Does Appreciation of Beauty have any innate sources? (otherwise it's all a social construct) Neuroscience of Beauty; How does the brain appreciate art? 2011 | sciam (in brain) Onward (Dis)-Favor Readers... Investigation of (Dis-)Favor 3\3, House of Not-Friends Contracting the Social Construct Disorder Take 2 Living outside the 'Normitory" (away from Dreamland (everybody's asleep), to where Nessun Dorma (nobody sleeps)) It so happens that an ethnic group which originated in eastern Mediterranean Middle-East evolved to specialize in intelligence, commerce, morally corrupt enterprises, and crime. Essential to their success was eugenic traditions that applied artificial selection to just those same specialties, which makes this ethnic group a formidable enemy. They have developed a very strong sense of in-groupness, and a vested interest in social construct studies. A unified collective is a more effective competitor than an inchoate population of diverse individuals. This group has as ethnic traits: global dispersion (aka Diaspora), preference for urban environments (aka Cosmopolitan, or Globalist), covert inter-group rivalry (aka InfoWar), and deception (aka MOSSAD). This cosmopolitan group must operate covertly and deceptively, because those are effective tactics, and they are a small minority (2% of USA), therefore weak in the democratic sense. Immoral Social Constructs enforced by 5th column subversives
There is no universal morality. Morality is much like Beauty, in the mind of beholder (actor who holds to a specific moral code). Morality is a social construct, and varies between societies. (I think a fair definition of morality is a code of ethics which is community-specific.) For a society to sustain, it needs to be isolate from conflicting societies. If different societies, with different moralities must coexist, the natural tendency for actors in the same niche toward dominance will destroy or remake the subordinate societies, which reduces the conflicts. Status Hierarchies: Do We Need Them? blog 2012 | psytd
a need for 'virtue signaling'? It's natural, and likely unavoidable, evidence pride displays.
Apple ($900bil) is x4.5 larger than Cryptococurrency ($200bil); Apple gets away with tax evasion/poor labour market practice... yet govts target Crypto
Apple has a market cap of around $900 billion United States dollars. Cryptocurrencies have a market cap of around $200 billion United States dollars. Governments need to go after the big fish before the little fish. They should be more concerned about Apple's tax avoidance; price gouging; and labour practices. [Edit (Evasion): The post should say tax avoidance, not tax evasion, as kindly pointed out by a Redditor] [Edit (Apple): Apple was only chosen because it has the largest market cap. The main point here is about proportionality, not Apple per se. Large companies 'misbehave' and govts turn a blind eye. The entire cryptocurrency market - fraction of the size of a major corporation - faces near continual harassment and disproportionate govt reactions]. [Edit (EU Case): Apple is indeed being targeted by the EU. Apple is not being banned. Apple is not being restricted. Apple is not being subjected to excessive bureaucratic requirements. Laws are not being instantly changed to stop Apple in future. We cannot say the same for cryptocurrency. The EU's case with Apple is nothing more than political grandstanding. There is little chance that $15billion will ever be paid or demanded in full. The case will likely continue for years so that the EU can make their point. Nothing consequential is likely to come of it]. [Edit (Tax): Indeed, many investors in the cryptocurrency industry do not pay tax. Many (not all) governments and regulators have yet to clarify their positions on the legal status of coins and tokens. They have yet to clarify if they are currencies, assets, commodities, or some hybrid. They have yet to construct accounting standards. If a tax accountant cannot explain/define the tax implications of cryptocurrency investment, they cannot expect individual investors to read their minds and abide by a framework which does not yet exist]. [Edit (Populism): Someone made a comment about this sub-Reddit becoming like soap opera. This made me laugh. I did not expect this post to reach the top of the Bitcoin sub-Reddit otherwise I would have chosen a better analogy. To those of you who think this is populist, I apologise and sympathise lol].
https://preview.redd.it/b4d7bm72lcx31.png?width=1903&format=png&auto=webp&s=feaf5a4e74b071cd4d418bce41972f79c96b2b0f When people think of digital currencies, most might think of cryptocurrencies like Bitcoin. However, Bitcoin was not the first attempt at creating a digital currency. In fact, many different people have tried to create digital currencies in various forms for nearly 40 years. The earliest efforts to create a digital currency go all the way back to the early 1980s. Many of the ideas and concepts that led to the creation of Bitcoin came directly in response to the many failed attempts at creating digital currencies in the past, and by finding solutions to the problems that caused many early digital currencies to fail. In this blog, we look at the history of digital currencies that came before (and would later inspire) the creation of Bitcoin. Computer scientist David Chaum is regarded as the first person to release a white paper on digital currency in 1982. The paper titled Blind Signatures for Untraceable Payments proposed a new digital currency in response to a sharp increase in electronic transactions at the time. The article was also the first to conceptualize an anonymous digital currency. In 1990, Chaum launched DigiCash. DigiCash made its first electronic transaction in 1994 using a new digital currency called eCash. DigiCash was the first to use protocols such as public-key cryptography and blind signatures to ensure a user’s anonymity. By using these protocols, third parties did not have access to personal information contained in online transactions. Advancements in both public and private key cryptography allowed the electronic payment system to become untraceable by a bank, government, or third party. However, the system of blind signatures that allowed users to remain anonymous required a central authority such as a bank to ensure that the funds were not spent twice. Although DigiCash was the first to introduce many of the ideas that would later serve as the framework for future cryptocurrencies, the company did not have much commercial success. Only one US bank implemented the currency. DigiCash filed for bankruptcy in 1998 and was eventually sold off for assets. Other electronic cash systems such as First Virtual Holdings and Cybercash were created around the same time and suffered a similar fate. One of the most significant problems with the early electronic cash systems is that they relied on centralized organizations like financial institutions to partner in the process. Relying on banks also created a single point of failure for early digital currencies, meaning that if a bank was to go out of business then the digital currency that the bank partnered with would go down with it. Early digital currencies also suffered from the problem of governments shutting them down overnight, rendering many early e-cash solutions useless. Government intervention ceased operations for several digital currencies such as E-Gold and GoldMoney over concerns that the criminal underworld was using the currencies to launder money and facilitate illegal transactions. The problem of government regulation intensified following 9/11 as governments tried new ways to stop the transfer of funds to terrorist organizations. The perception that central authorities could suspend digital currencies simply by enacting new legislation gave the public a good reason to be reluctant in adopting them. Nick Szabo, a cryptographer and computer scientist, was the next to introduce ideas around creating a decentralized digital currency with Bit Gold. Bit Gold never came to fruition, but it is essential in the history of digital currency as many of Szabo’s ideas would go on to become critical in the creation of cryptocurrencies. Bit Gold aimed to create a trustless transaction model tied to gold. The US Federal Reserve’s central bank broke the standard of having the money supply of US dollars tied to gold in 1971. Bit Gold was the first digital currency to implement a proof-of-work (PoW) consensus algorithm. Using proof-of-work, cryptographic puzzles are solved using computational power. Each puzzle solution is broadcast on a peer-to-peer network. A cryptographic hash is created to link the solution of each puzzle to the next puzzle. In this model, all the users on the network need to agree on the previous puzzle’s answer before a new puzzle is generated. This method of consensus would be used to secure groups of transactions that would all be linked together using cryptographically hashed solutions. Unlike Bitcoin, Szabo was unable to solve what is known as the double-spending problem. An example of the double-spending problem is spending $100 on goods and services and then using the exact same $100 to make additional purchases at another point in the future. Szabo wanted to mimic the characteristics of gold (which has intrinsic economic value) and to prevent fraud or mismanagement by centralized third parties. Up until the creation of blockchain and cryptocurrencies, centralized organizations were solely responsible for maintaining and updating the account balances used in financial transactions. British cryptographer Adam Back created the digital currency Hashcash in 1997. Back wanted to introduce a system that could prevent spammed emails by restricting the amount of internet resources each user can spend per email. Back’s solution to spam email required that users spend a small amount of computing power to solve a puzzle before they would be able to send emails. For regular emails, the amount of computational power to solve each puzzle would be tiny, and it would only delay an email by a few seconds. However, someone trying to send spam email would be prevented from doing so by making it almost impossible for them to have the computational resources to send out thousands of emails all at once. It would also prevent spammed email by requiring that the senders pay for the electricity costs necessary to use a vast amount of computing power. Hashcash was referenced in Satoshi Nakamoto’s Bitcoin white paper. According to Nakamoto, a proof-of-work system similar to Hashcash would be needed in the blockchain that would be used to create Bitcoin. Computer engineer Wei Dai proposed another digital currency with the paper, "B-money, an anonymous, distributed electronic cash system" in 1998. The first protocol outlined in the article proposed using Hashcash’s proof-of-work consensus algorithm to create money. In the proposed system, transactions would be broadcast to everyone on the network to keep a balance of all the money in each account. In the second protocol, only a small subset of the network’s participants would be used to keep the balance in each account. He set out to create a punishment and reward system by having each server deposit a certain amount of funds in an account to be used as fines or rewards for proof of misconduct. To fully understand the development of digital currency, one must understand the story of the Cypherpunks. Cypherpunk is the name given to an activist that advocates for social and political change by using privacy-enhancing technologies such as cryptography. A small group of cryptographers met in the San Francisco Bay area and adopted the name Cypherpunks in 1992. The Cypherpunks mailing list was created later that year, acting as a forum for discussing computer science, cryptography, math, politics, and philosophy. The core Cypherpunk philosophy is that individuals should have the power to reveal their identity only when they choose to reveal it, and that neither governments or corporations can be entirely responsible for protecting that right. Satoshi Nakamoto cited several Cypherpunks in his original article. He first announced his white paper and the genesis block creation for Bitcoin through the Cypherpunk mailing list. Many of the early Cypherpunks went on to become developers for Bitcoin. With the creation of Bitcoin in 2009, Nakamoto was able to solve many of the problems that plagued his predecessors. By using a decentralized peer-to-peer network of computers that continually updates and maintains a public ledger (known as the blockchain) the problem of double spending is eliminated. Nakamoto explained this process in his 2008 white paper by stating, “Digital signatures provide part of the solution, but the main benefits are lost if a trusted party is still required to prevent double-spending. We propose a solution to the double-spending problem using a peer-to-peer network. The network timestamps transactions by hashing them into an ongoing chain of hash-based proof-of-work, forming a record that cannot be changed without redoing the proof-of-work”. Said more simply, for someone to double-spend funds they would have to deceive the entire network into thinking that it was a legitimate transaction. New coins cannot be faked or copied and every transaction in the history of a cryptocurrency can be found on the blockchain. Making it nearly impossible to spend the same money twice. Nakamoto referenced the ideas first proposed by Szabo, Back and Dai in his white paper. The proof-of-work consensus algorithm outlined by the previous three authors defined the process over the creation of new Bitcoins. Bitcoins are issued to users on the system who help process transactions on the network. This is known as Bitcoin mining. Releasing a known and fixed number of coins over a given period of time creates an environment of scarcity for the currency, leading to the coins having value. This removes the need for Bitcoin to be tied to some other asset that has an intrinsic economic value such as gold. Nakamoto also found a solution to the problem DigiCash experienced of needing to rely on financial institutions in the transaction process by having a decentralized network that holds all of the transaction information in a public blockchain. With Bitcoin, there is no central authority or financial intermediary to regulate or attack. Solving the problem of other early digital currencies such as E-Gold and Gold Money that were essentially shut down overnight by new government regulations. No government or third-party can censor or shutdown a cryptocurrency like Bitcoin. Bitcoin does not have a single point of failure. To summarize, Bitcoin is not the world’s first digital currency. Attempts to create a digital currency goes back to the 1980s with key players such as David Chaum, Nick Szabo, Adam Back, Wei Dai and the original Cypherpunks all playing significant roles. However, many of the earlier attempts at creating digital currencies informed and inspired Satoshi Nakamoto in the creation of blockchain and Bitcoin. Are you new to the Canadian crypto space? At NDAX, we’re not. Create an account on our new website and start trading cryptocurrencies in Canada today. THIS BLOG AND WEBSITE ARE NOT INTENDED TO PROVIDE INVESTMENT, LEGAL, ACCOUNTING, TAX, OR ANY OTHER ADVICE AND SHOULD NOT BE RELIED ON IN THAT OR ANY OTHER REGARD. THE INFORMATION CONTAINED HEREIN IS FOR INFORMATION PURPOSES ONLY AND IS NOT TO BE CONSTRUED AS AN OFFER OR SOLICITATION FOR THE SALE OR PURCHASE OF CRYPTOCURRENCIES OR OTHERWISE.
Hello! My name is Daria Volkova and I am the Head of Platinum Legal Department. Our team believes that these are exciting times for the crypto market. We supported more than 100 clients, created and promoted their STO and ICO campaigns, got from an idea to funding in a matter of 2.5 months! See the full list of our services: Platinum.fund We are more than proud to present our education project. The UBAI can help you to learn specifics about cryptocurrencies and blockchain technologies. Learn all about ICO avenues and opportunities, plug into the world of trading cryptocurrency markets, become an expert in scam projects, promoting ICOs and STOs, launching your own campaigns and many more! What are the different cryptocurrency regulations in major countries? Find the answer after reading this article. Cryptocurrency Regulations across Major Countries Cryptocurrency and the blockchain industry may seem sufficiently exciting and attractive to you now. After all, you are taking the time and effort to study this course. You may be planning to work in cryptocurrency and the blockchain industry. Of course, we want to encourage you and help you proceed toward your goal. But it is also important you understand the regulations guiding the blockchain industry to help keep yourself out of trouble. This year, in particular, seems to be the year in which a lot of countries are looking to finally coalesce the regulations relating to the blockchain industry into a workable legal framework. Some countries are more accommodating to cryptocurrency and blockchain technological innovations while others are still more cautious. We will examine how each major country is forming their own regulatory framework for the blockchain industry. Canada Cryptocurrencies are not considered legal tender in Canada. This was clearly expressed by the country’s Financial Consumer Agency (FCA). Canada, like the US, has yet to clearly define or legislate a framework surrounding cryptocurrencies. But Canada still appears to be among the most transparent of countries for the nation’s interpretation and enforcement of the law surrounding cryptocurrencies (aside from Switzerland). For the time being, Canada has clearly stated its reluctance to adopt cryptocurrency as a legal tender, due to its high volatility. “ “The United States of America (USA) There are certain laws regarding transactions in virtual currency in the US today but there is still no comprehensive legal framework. The Commodity Futures Trading Commission currently regulates virtual currencies as commodities. The CFTC is the first US regulator to allow for public cryptocurrency trading. The Securities and Exchange Commission requires registration of any virtual currency traded in the US if it is classified as a security (e.g. by the Howey test). The regulatory authorities have not yet formulated or offered a coherent framework for regulations regarding cryptocurrencies. Typical of most legislators and regulatory agencies in the US, the Securities and Exchange Commission (SEC) has intensified its focus on the pressing need for comprehensive regulation. And it seems everyone is waiting for the right catalyst to coalesce into a usable set of legal guidelines that can protect the investing public and also allow for blockchain and cryptocurrency innovation as well. If cryptocurrency becomes a form of legal tender in the US, there will likely be stringent laws on its use. However, if cryptocurrency is treated like a security, cryptocurrencies would be regulated under securities law as interpreted by the SEC. Present securities laws place a large number of limitations on who is able to buy securities, how they are traded, and how to ensure transparency in the flow of information relevant to investors. Also note that non-US investors may experience their own difficulties getting a license to trade cryptocurrencies in the country. “ “Japan Japan has always been one of the most positive and forward-thinking nations regarding cryptocurrencies and the blockchain. Of course, they were cautious at first, and they knew no more than anyone else in government, which means they literally knew nothing. But they took time to research, learn, and develop an approach to regulate the industry without killing it. The official policy is clear: Protect the public interest, but also encourage the growth of the industry with a legal framework that allows for innovation in blockchain and cryptocurrencies. China The situation in China is a sad one. The country has been taking increasingly strict actions to discourage and outlaw any activity related to the blockchain industry. China has banned ICOs, frozen all accounts associated with cryptocurrency, stopped bitcoin miners and even ordered a nationwide ban on all forms of cryptocurrency trading. China has the strictest laws against cryptocurrency. Yet, despite that fact, as of 2017, 50% of the world’s mining population was from China! If you are involved with the cryptocurrency industry it is strongly advised to stay away from China, and avoid transactions with Chinese business because of the unpredictable and negative legal framework. “ “The United Kingdom & European Union Brexit is scheduled to take place in March 2019, yet the UK and the EU still remain united in their regulatory attitude toward cryptocurrencies. There are also reports that the UK and EU are planning to end anonymity for cryptocurrency traders. The UK and EU are both trying to control all the scams and frauds. They are working with cryptocurrency platforms to stop or at least report all suspicious transactions. This adds a degree of regulatory burden on the exchanges as well as increasing the associated compliance costs. Cryptocurrencies are extremely volatile. They are a high-risk investment. Governments across Europe are greatly concerned about the possibility of both retail and sophisticated investors losing a lot of money. This has led to a situation similar to that in the US. The regulatory authorities have not yet formulated or offered a coherent framework for regulations regarding cryptocurrencies. There is an intense focus on the pressing need for comprehensive regulation. And everyone is waiting for the right catalyst to coalesce into a usable set of legal guidelines that can protect the investing public and allow for blockchain and cryptocurrency innovation as well. We certainly hope for intelligent and effective legislation from all the major countries. “ “Accommodating & Unaccommodating Countries Below is a list of countries we have not specifically covered, but they have each taken an active position on a regulatory framework for cryptocurrencies. The following countries are either supportive or at least neutral toward cryptocurrencies: -Switzerland. -Australia. -Nigeria. -Ghana. -South Africa. -Singapore. Countries with the most stringent and negative cryptocurrency regulation: -Venezuela. -South Korea. -India. -Russia. Did you know? It is not uncommon to see Bitcoin and other cryptocurrency ATMs throughout Japan. Exchange robberies and hacks like MtGox, and the recent loss of $530 million NEM coins have led to serious debate in the Japanese government. The industry needs to provide a secure and manageable solution to these problems. Voluntary self-regulation and close cooperation with regulatory authorities is the most favored solution. It seems the regulators are working hard behind the scenes right now leading the industry in the desired direction in typical Japanese fashion. “ “Blockchain Industry Regulations in the USA Based on the information received from the Columbia Science and Technology Law Review, there was a variety of responses from different government bodies about blockchain regulations. The regulators responses ranged from indifference to suspicion, and to positive expectation and excitement. The US government has tremendous constitutional power to regulate business and industry, including of course the blockchain industry if it so desires. But basically, the federal government has been relatively indifferent and has even refused to speak on blockchain regulations despite the interest of various federal agencies. As of 2017, eight states in the US were working on bills promoting the use of cryptocurrency and blockchain technologies. It is even reported that a few states have actually begun the final steps before voting and passing legislation into law. On April 3, 2018 Arizona introduced a law allowing corporations to hold and share data on the blockchain. The governor, Doug Ducey, put forward the legislation after the state began accepting signatures and smart contracts recorded on the blockchain as legally valid documentation. In 2017, Delaware was the first state to pass legislation allowing for shares of stocks to be legally traded on the blockchain. Other notable developments have occurred in the US at the state or local level. Vermont makes use of blockchain as evidence in trials. Chicago uses blockchain to maintain real estate records. New York is currently evaluating four bills for the application of data storage on the blockchain. “ ” Blockchain Regulations in Europe The entire European Union has approached blockchain with a positive and welcoming attitude. The EU has taken the position that they want to actively encourage innovation. This philosophy could support the development of cryptocurrencies in two ways: -Encouraging the exploration of uses testing the impact and effect of the laws in a way that allows for a more finely-tuned and sophisticated understanding for all parties involved. -Giving entrepreneurs the confidence that their target markets will be more trusting of their solution since they are operating with the explicit legal support of the state. This approach, along with the EU’s scope as the regulator of 28 different countries, will encourage growth across the entire crypto ecosystem, and may end up transforming Europe into one of the most desirable destinations for blockchain development. Entrepreneurs are likely to move to the EU bloc to access the rich vein of available talent, as well as the positive and supportive laws. The EU has actually disclosed through its executive arm that it is working on the use of blockchain for distributed ledger based projects. EU officials have constantly stated they are looking for ways to support more innovation with distributed ledger technology. The European Commission said it was “”actively monitoring Blockchain and DLT developments”” and has work in progress to explore “”DLT benefits and challenges as well as fields for application in financial services””. The official press release stated that the commission clearly wants to “”pilot projects to foster decentralized innovation ecosystems and help reshape interactions between consumers, producers, creators and among citizens, businesses and administrations to the end benefit of society””. “ “Blockchain Regulations in Europe §2 Switzerland has gradually become the favored hub for cryptocurrency and blockchain development in Europe. This position has been enhanced through a Swiss non-profit blockchain and cryptographic technology ecosystem known as the Crypto Valley Association. The Crypto Valley Association has begun working on the development of an ICO Code of Conduct to take advantage of the ban imposed by China on token crowd sales. They are hoping to capture the Chinese and Asian entrepreneurs searching for a new home. Other countries are not as accepting of this new DLT technology and have even gone as far as classifying it as illegal and immoral behavior. There have been hyperbolic concerns most notably from China that cryptocurrencies will destabilize world financial markets. There are various pilot projects and efforts to prove the benefits of cryptocurrencies and the blockchain industry currently being tested all across Europe. Yet even now they are barely scratching the surface of the full potential of the blockchain. Country-by-Country Cryptocurrency Adoption Citizens of countries all over the world have varying attitudes about cryptocurrency. These attitudes and sentiments can be very significant to the future adoption of cryptocurrencies because politicians and regulators tend to act in consideration of the collective opinion of the public. Some countries were more accommodating at first but then became stricter, despite positive public interest, basically saying they are still not sure about the possible consequences and benefits of the technology. “ “Country-by-Country Cryptocurrency Adoption Estonia Surprisingly enough this small Baltic nation has gained a reputation for being quick to accept technological innovation. Estonia has a tech-friendly government eager to accommodate the innovative use of cryptocurrency in fields ranging from blockchain technology for healthcare and banking services; and even granting citizens the right to become what is known as “e-Residents”. As e-Residents, Estonian citizens and businesses are provided with digital business authentication. It is also one of the first countries to employ the use of a blockchain-based e-voting service that enabled people to become shareholders of NASDAQ’s Tallinn Stock Exchange. This fascinating and highly innovative country is now host to a number of Bitcoin ATMs and startups, like Paxful. They are cryptocurrency friendly, and cryptocurrency user friendly as well. Estonia also has highest internet penetration rates in the world. Estonia may be a fine place to consider basing your ICO due to the friendly legal and regulatory environment. This and a lot more you can learn on our website: www.ubai.co! “ “Country-by-Country Cryptocurrency Adoption The United States of America The USA is the world’s dominant superpower, and it should come as no surprise that it has the highest number of cryptocurrency users in the world. It also has the highest bitcoin trading volume and the highest number of bitcoin ATMs. Powered by Silicon Valley, which is home to a lot of cryptocurrency and blockchain startups, the US stands at the forefront of all things relating to cryptocurrency worldwide. Many other nations are planning to follow the US lead concerning cryptocurrency regulations. This means the USA will serve as the testing ground for cryptocurrency and crypto-regulation in the years to come. This is likely where the future regulatory framework will take shape. Bitcoin in particular has shown massive growth in the US. This can only be interpreted as a strong tailwind for a positive regulatory environment because the population at large supports blockchain technology. For the moment, due to regulatory paralysis and the resultant legal vacuum, ICOs are strongly advised against raising funds or basing operations in the US. The SEC has been particularly strict in its enforcement of securities and investment law which require an ICO to do an oppressive amount of compliance work. “ “Country-by-Country Cryptocurrency Adoption Denmark When it comes to technological advancements and the standard of living of its citizens, Denmark is among the world leaders. It is considered one of the most developed countries in the world. It is also at the forefront of countries looking to reduce the use of cash money and advance to the use of 100% digital currency. As such, sentiment among the general public and political sphere actively supports the adoption of cryptocurrencies as a means of payment. The only question left is which particular cryptocurrency system to adopt. It is still unclear whether bitcoin is the one, or BTC will mainly just be accepted as a means of exchange. There are also discussions in Denmark about when to redesign its national financial system; this would be a “world first”, and a radical leap forward for cryptocurrencies. Another fascinating thing is that the Danish Central Bank has declared BTC as a non-currency; meaning its use is not subject to the country’s currency regulations. Some of the top bitcoin startups and exchanges such as CCDEK have their foundations in Denmark. With its open market and encouraging regulatory framework, Denmark might very well rival Switzerland in Western Europe for the position of the continent’s preeminent ICO and blockchain industry hub. “ “Country-by-Country Cryptocurrency Adoption Sweden Sweden is quite similar to Denmark, for its social and demographic climate, and also for the government’s desire to eliminate cash. The Swedish Riksbank recently introduced negative interest rates. This can cause a spike in the demand for coins in the near future as citizens look for the best way to preserve their wealth. Negative interest rates like we have seen in Europe and Japan also, actively corrode savers’ wealth because people are actually paying a percentage of their savings to the central bank to hold their cash, in addition to losing out to inflation at the same time. Sweden has taken the boldest step yet in all of continental Europe to legalize cryptocurrency. The country legalized the use of BTC and other cryptocurrencies as a means of payment by official public declaration. It is however expected that exchanges should file for a license in accordance with AML/CTF and KYC regulations. Sweden is also home to a number of cryptocurrency startups such as the Safello Bitcoin exchange, and Stockholm-based KnCMiner. The gradually increasing trading volume of cryptocurrency has been a good indicator of the country’s appreciating demand for cryptocurrencies. “ “Country-by-Country Cryptocurrency Adoption The Netherlands The Netherlands is quite fascinating in its own right. How can a country not be referred to as Bitcoin-friendly when it can boast about having its own “Bitcoin City”? There are over 100 merchants that sell goods that can be purchased with cryptocurrency in Bitcoin City. There are no regulations restricting the use of BTC in the Netherlands under the Act on Financial Supervision of the Netherlands. This explains why a lot of startups, BTC ATMs, and even a Bitcoin Embassy can be found in the heart of Amsterdam (the capital of Netherlands). The friendly climate for cryptocurrency has led to a lot of very active bitcoin communities across the nation hosting regular meetups and other events. The country’s banking sector has been looking to incorporate BTC and blockchain to reduce costs and improve banking technology. The Netherlands is also a popular location for many important bitcoin conferences and bitcoin companies such as BitPay. The Netherlands is increasingly becoming a prominent place for ICOs and blockchain related businesses to base their operations. “ “Country-by-Country Cryptocurrency Adoption Finland Well-known as the home of Nokia, Finland has constantly been at the forefront of technological innovation, just like its other Scandinavian neighbors. The Finnish Central Board of Taxes (CBT) has even gone as far as classifying bitcoin as a financial service, exempting it and cryptocurrency purchases from the VAT. What more could be better for Bitcoin? Finland also boasts a significant number of BTC ATMs despite its small population. The capital of Helsinki alone is reported to have 10 ATMs for BTC. The country is also home to top exchanges such as FinCCX and Bittiraha.fi. As of January 2016, the most expensive bitcoin sale took place in Finland. It involved the sale of a Tesla Model S worth over €140,000 at Auto-Outlet Helsinki Oy. Canada Canada is home to a variety of bitcoin startups and ATMs. It is considered to be more favorable toward cryptocurrencies than the USA. The country has two cities on its eastern and western coasts, Toronto and Vancouver, that are recognized as “Bitcoin hubs”. Canada has a vibrant cryptocurrency community and is home to startups such as Decentral, the Vanbex Group and a large number of merchants who accept cryptocurrencies as payment. Vancouver is known to have over 20 ATMs while Toronto is well-known for holding large cryptocurrency conferences. There has been constant growth in cryptocurrency trading volume in the country. Canada might be the best location in North America to base an ICO or operate a blockchain business due to its supportive regulatory environment and a rich ecosystem for cryptocurrency, with human talent, ATMs and other tools, etc. “ “Country-by-Country Cryptocurrency Adoption United Kingdom The UK is one of the absolute top financial hubs in the world. It is also a center of innovation. There are a large number of bitcoin and blockchain related startups, BTMs and active communities. All of the previously listed crypto-friendly features make the UK a very desirable environment for bitcoin. The UK has identified the inevitable need for a new payment solution and is gradually bracing itself for a widespread adoption of cryptocurrency in the future. There are even a few local pubs that accept BTC as a means of payment. It is also interesting to note that the Bank of England has been closely monitoring bitcoin technology and has requested ideas from citizens on the improvement of its monetary system. Bitcoin is presently seen as “private money” where VAT is imposed from suppliers of goods and services that accept cryptocurrency as payment. Profits and losses incurred from cryptocurrency trading are also subject to capital gains tax, just as in the US. In the UK, it has become increasingly clear that BTC can be part of a bigger story, and the trading volume indicates steady growth. There are not clear laws against cryptocurrencies at the present time. But the lack of regulatory momentum suggests we may see more positive developments soon. One thing to keep in mind, while the Brexit is still in progress, the British government may be more likely to legislate on non-core issues. “ “Country-by-Country Cryptocurrency Adoption Australia The major banks in Australia have been quite hostile toward bitcoin, but at least the country has removed the burden of “double taxation” on cryptocurrency. This was good news to the local business community because blockchain startups had begun to leave the country as a direct result of unfavorable taxation and closure of bank accounts. The use of BTC still remains unregulated, there is no law or regulation restricting the use of cryptocurrencies by Australian citizens. Cryptocurrencies are regarded as a form of property in Australia, and purchases with BTC, for example, are referred to as “barter”. The Australian Securities Exchange (ASX), you will remember, is transitioning its CHESS verification system to a blockchain solution that should go live at the beginning of 2019. Cryptocurrencies in Australia are seen a lot like they are in the US. Topics like the imposition of capital gains tax, concern about securities law, the legal debate about using cryptocurrency as payment for goods and services, etc., are all problematic for regulators. While the general population is quite comfortable and supportive of cryptocurrencies and blockchain solutions, at the present it is not a high priority for the government to legislate or regulate. “ “Taxation and Cryptocurrency Tax is of course one of the most important factors in financial matters on both a personal and corporate level. Taxes greatly influence investment decisions and returns, regardless of industry or size. It is one of the first things every individual or group considers before investing. Notably, in Australia and the USA, cryptocurrency gains are treated as capital gains and taxed at up to 50% of the return. Some countries have low cryptocurrency taxes specifically to encourage the blockchain industry. By offering a more competitive tax rate, countries are implicitly supporting cryptocurrency and actively trying to offer a better return profile than other countries. We will discuss the different taxation regimes in a wide range of countries so you can ascertain the financial advantages and disadvantages of a variety of locations. Belarus Belarus charges 0% in taxation until 2023. That exemption is specifically for cryptocurrency exchanges and transactions. This has been done to help Belarus build a special economic zone, referred to as ‘HTP Belarus’. Their goal is to have an economic zone strong enough to compete with the likes of Silicon Valley. The government of Belarus has also declared smart contracts as legal documents. Anyone looking to set up a blockchain company or a cryptocurrency startup should seriously consider Belarus. It has a supportive regulatory and legal environment which actively encourages the blockchain industry and does not impose punitive taxes upon those inside the industry. “ “Taxation and Cryptocurrency Portugal Any and all personal income received from cryptocurrency transactions is tax-free in Portugal at the present moment. Income from cryptocurrency trading is categorized as something legally different from traditional income or capital gains. The Portuguese government stated clearly that any kind of sale of cryptocurrency does not fall under capital income or capital gain. If an individual is however found to be carrying out professional activity, or any business activity related to cryptocurrencies, that is a different matter and such income will be subject to taxation. From a personal perspective, Portugal is one of the leading countries where an individual can carry out their cryptocurrency transactions and enjoy a decent standard of living in the same country too. However, for ICO and Blockchain businesses it is not recommended to base your operations in Portugal. China China is famous the world over for being home to some of the largest cryptocurrency mines and many active cryptocurrency investors; yet at the same time China makes it illegal to conduct any cryptocurrency related business or investment. But China still has an especially attractive environment for investors. Hong Kong runs on a policy of zero VAT or capital gains tax so it is easy to recommend you base your business there. Hong Kong also stands out as a major financial hub in the heart of Asia. “ “Taxation and Cryptocurrency Netherlands Actually, Netherlands was the first country to make use of a non-zero tax rate policy for cryptocurrencies. So, it may seem reasonable to expect a discouraging tax situation. But the fact is, Netherland’s tax policy is rather advantageous for cryptocurrency. They have a very simple, low-tax regime. Cryptocurrency assets need to be declared with the total assets owned by an individual at the beginning of the year to assess their value. Cryptocurrency gains will be taxed at the highest tax bracket for capital income of just around 5%. The Netherlands is strongly recommended as a good country to work and live in, from both a personal and corporate perspective. Germany Germany is the economic center of the EU. This makes it a great place to start a cryptocurrency or blockchain company. Financial technology has been thriving there for more than ten years, and Germany has favorable cryptocurrency laws too. Bitcoin and cryptocurrency assets have a 0% tax when used in making payments due to no VAT levied for making payments with BTC, because there is no “value added” through cryptocurrency as a fiscal product. Germany offers a moderately compelling case for both blockchain business and individuals. While the tax rate on income at the company level is not competitive, the ability to pay for services in crypto as well as hold cryptocurrency assets and sell them at zero percent taxation rate is compelling. “ “Where to Base Your ICO Let’s talk about the countries that are most accommodating with regard ICOs. Start-up ICO companies, like any company, essentially require three key principles for operation. The first is a sound legal and regulatory framework wherein the rule of law is preserved and business encouraged. The second is the ability to hire or acquire talented individuals to work at the firm. The third and final is the tax system and access to associated financial systems in order to allow the enterprise to succeed. Estonia This country is, perhaps surprisingly, widely referred to as the most digital society in the world. Estonians are known to be pathfinders deeply involved in setting up an efficient, secure, and transparent internet ecosystem. The country ranks first when it comes to the number of ICOs per inhabitant. It has an incredibly supportive tax regime, actually among the most competitive in the world, as well as a deep pool of talent across all areas of the digital spectrum. Estonia offers possibly the most supportive and friendly regulatory and legal framework in the world for an ICO. This, in combination with a zero percent tax rate at both a personal and corporate level, combine to make Estonia one of the single most appealing locations from which you can launch and operate your ICO. “ “Where to Base Your ICO Singapore Singapore is another important regional hub in Asia for its strong rule of law as well as low taxation. The country offers one of the highest standards of living in the world. It is centrally located in the heart of Asia, so it easy to travel and recruit talent from surrounding countries. At the present there are not any specific regulations targeting the blockchain industry, but it is one of the world’s largest countries by funds raised for ICOs. It has a competitive tax regime in combination with strict AML and KYC. All of these factors make Singapore Asia’s leading location to launch and base an ICO. The regulatory situation around the world may seem rather complicated. That is because it is. Laws and regulations are changing rapidly all over the world. And the regulatory framework is the most significant point of concern for a startup ICO. You should carefully study not only the current regulations surrounding your particular venture and how its tokenomics affects its classification, but you also need a reasonable sense of where the country is likely to be six months or a year later. Ideally you would base your ICO in a country that is supportive now, and all timeframes into the future with a competitive and legally sound tax system. Where to Base Your ICO Slovenia Slovenia has recently transformed itself into the leading destination for blockchain technology in Europe. The government of Slovenia has placed a strong emphasis on the study of blockchain technology in public administration, and there has been an amazing success rate for ICOs in Slovenia. While the Slovenian government is a leader in terms of adopting cryptocurrencies, its rate of taxation is still considered quite high at 19%, even though that is still lower than other European countries. ICOs are considered to be normal business activities where you are taxed based on the funds received from an ICO less the expenses of doing business. Switzerland Switzerland is trying to remain relevant for the blockchain industry and for ICOs. The Swiss finance ministry is actively trying to attract investors to the country. Switzerland is considered a very important crypto location due to fact it was home to four of the largest ICOs in the world. The country is also very attractive to investors because of its friendly regulations and digital expertise. The taxation and regulatory environment is extremely secure and positive towards the cryptocurrency and blockchain industry in general. Are there successful ICOs that have originated from the specific countries considered? Read the full article to get the answer! UBAI.co Learn more about our STO and ICO marketing services right now! Contact me via LinkedIn: LinkedIn
First of all, I want to thank the Bitcoin community for the kindness shown and expressed for my brother. My heart is touched. Thank you. I just talked to my brother with my dragon at my side for the first time in at least 2-3 weeks since this Newsweek episode turned our lives upside down, all lines of communications were cut. Majority of the world was not told that Leah was intruding upon people's privacy with zeal weeks before the launching of Newsweek hardcopies. It was agreed that none of "us" would talk. Make-Believe Journalism was never in our minds until the announcement by Newsweek. I wanted to share with those who are interested some of the human interest side. What is endearing about my brother are "things". Social concepts and personal thoughts that would be of a concern to a majority of the populace is not highlighted in my brother character. How would I word this? Dorian is a technically brilliant person who is more comfortable in an old crumpled T-shirt, cargo short pants, white crew socks and doesn't frequent mirrors at times to comb his hair. Leah McGraw Goodman got that right. The hair? Maybe a little more infrequent. These observations are not just mine. Over the decades, his friends who are and were executives in the aerospace firms and software engineering companies have told me the same things. I don't think I am going on the limb when I say that I wear 1/2 size white crew socks, wear Hawaiian shirts a lot and even collect vintage ones at that. That I can spend hours behind flat screens and not shave or comb my hair over the weekend. Since our Lexie, four footed member of the family passed on, I too am out less frequently due to no walks twice a day. If I am a geek, then so be it. I have seen my brother do exactly what he does before there was a culture of computer nerds or geeks, the terms weren't even concepts at the time. Besides, it is anti-fashion statement expressing freedom from fashion tyranny. We talked and at no time did he express or mentioned what the Huffington Post listed as the #1 thing that should be taken from the Newsweek's story written by Leah McGraw Goodman. The number one thing is that his younger brother called him to be an asshole. In usual form, I know that Dorian forgave me and moved on just before we reconnected. I wish that I can have that kind of character to do exactly that in my life. In my life, I tend to remember stuff and not forget even though I have learned over time that I have the ability to forgive people. It's part of my life I have to continuously work on. OK, here it is. Does anyone know or can ponder to guess why the AP reporter was given the exclusive? You guys all saw the video and I'm thinking some saw it over and over for details. Dorian opened the front door and he announced who would buy him lunch. The photographers of all nationalities swarmed in pushing each other flashing cameras and video cameras spearheading the way. No one spoke out but a guy way in back near the end of the low cinder block wall yelled out, "I'll buy lunch". Dorian said that the AP reporter was the only reporter to make an offer to buy lunch while all the others kept on taking pictures and taking videos. That is how the AP reporter was chosen as told by Dorian. Now you all know before any other media. Dorian had to take a short break. I am thinking things were hurting. I asked him what is a "hair ball". He said that he doesn't know exactly what a "hair ball" is and that it is probably what was called a spaghetti program long ago. Not well structured and has a lot of re-writing to do. In the short time he personally glanced at the write ups on the net regarding Bitcoin, he told me that the creator is "brilliant" but a poor code writer and that he could have done better with virtually no errors. With that, I am now convinced that my brother is not the "Satoshi Nakamoto". Can he do it? I think, Yes. I believe it and what's more important is that he is among a very select few of people of "extreme interest" as it was told to me by authority on Friday. I can see where Leah McGrath Goodman and the owner of Newsweek decided to throw Dorian Satoshi Nakamoto under the bus with a 20 to 30% probability that he is and dismiss the 70 to 80% that he isn't. Excuse me but Leah McGrath Goodman is such an 80's name. I am going to do her a favor and call her LMG. She is lucky that I don't call her LSMFT. My stuff. Calculations made for me by BCG from data publicly available sources that there are only 7 people in the world. The initial calculation went something like this. Overall demographics ie: people with computer programming knowledge, coding skills, distributed network knowledge including swarming techniques, Polish notation programming...right down to having lots of personal time to write code, disregard for family or pursuit of sex that would take time and energy, highly disciplined, focused beyond the normal, obsessive personality or just plain as BC put it "crazy" and highly anti-government. And the final kicker of the name Satoshi Nakamoto that is given weight. By the way, Satoshi is not an unusual name in Japan. The name Nakamoto is from what BCG reported, originates from the Hiroshima area as most "moto" or "source" translated phonetically is defined. I have to state that BCG is tied to the pharm medical world with statistical demographic mainframes with various programs with claims of accuracy audited by the FDA. I don't know specifically but I do know that I.Frank Nakamoto was born in Hiroshima before coming to America and then to later be thrown into an American concentration camps as a political prisoner in Perris, California for being a successful and outspoken businessman. I have been visiting his grave over many years at the Evergreen Cemetary in Boyle Heights. What calculations told me is that when it comes to human beings and their unique characters, profiling is a loose and irresponsible pseudo name for WTF, it doesn't work. All the professional behavioral analysts that Newsweek may have hired, their obviously under qualified and desperate legal advisers if they hired some, loosely expert statisticians and financial advisers didn't mean crap when the end result is that they are wrong. It's late and I have to get on with my reality. Once again, many thanks to the one and only forum that is a true community. Thanks for allowing me to vent. Thanks for the many posts of support. For those who a unsure, my sincerest apologies. My intention is to support my brother who supported me as a older brother is supposed to do. As the oldest brother, he, in Japanese and many other cultures including America, becomes the head of the family who takes care of the parent or parents. He is suffering right now and all I can do for this time being is figure out a ways to help from a distance due to irresponsible journalism operating at its finest. Instead of energies to minimize the 2nd Amendment we should spend time minimizing Freedom of the Press? I am not a Libertarian. I am a Conservative who thinks most of the Conservatives are Liberals. Andreas, my sincerest thanks. If we meet in the future, one minute, who is going to buy Dorian lunch? I will buy my brother's and you a lunch. Yalla, bye. As always, I authorize nakamotodragon to answer questions in my absence. Edit: proof for the non believers: http://imgur.com/wfFqpr1
Bitcoin, huh? WTF is going on? Should we scale you on-chain or off-chain? Will you stay decentralized, distributed, immutable?
0. Shit, this is long, TLWR please! Too long, won't read. EDIT: TLDR TLWR for clarity.
Bitcoin is a decentralized, distributed, immutable network. It has users, nodes, and miners, all of which participate in building a public and pseudonymous ledger of blocks called blockchain. The blockchain requires its own currency to function and this currency is called Bitcoin.
The bitcoin network is going through growing pains. Some believe that it should be scaled on-chain with high-volume-low-cost transaction fees, whereas others believe that it has to be scaled off-chain with low-volume-high-cost transaction fees and more affordable second layer solutions. Each have relative advantages and disadvantages. A compromise has not been reached yet.
The off-chain scaling solution via Bitcoin Core SegWit’s lightning network diminishes distributed and immutable network properties. It replaces bitcoin’s peer-to-peer network with a two-layer institution-to-institution network and peer-to-hub-to-peer second layer solution.
The on-chain scaling solution via Bitcoin Cash’s increased block size limit is feasible at the moment but inefficient in the long run. It could be merged with several good concepts from the lightning network proposal and new ideas outlined in this overview.
An appropriate scaling analogy is to recall email attachments early on. They too were limited to a few MB at first, then 10MB, 20MB, up until 25MB on Gmail. But even then, Gmail eventually started using Google Drive internally.
Similarly, any second layer solutions should be integrated within the existing bitcoin network secured by miners and nodes. The revenue from any second layer solutions should be redistributed internally to miners and nodes, not to additional third party hubs which the lightning network envisions.
The author of this overview recommends on-chain scaling for the time being, with the understanding that off-chain scaling should be implemented as soon as possible, as long as these second layer solutions keep the bitcoin peer-to-peer and decentralized, distributed, immutable. Unfortunately, the lightning network does not accomplish this.
The author remains impartial to Bitcoin Core and Bitcoin Cash proposals, with a preference for Bitcoin Cash’s way of handling immutability and overall progress thus far.
1. Bitcoin, huh? Brief introduction. There are 3 sections to this overview. The first section is a brief introduction to bitcoin. The second section looks at recent developments in the bitcoin world, through the analogy of email attachments, and the third section discusses what could be next, through the perspective of resilience and network security. This is just a continuation of a long, long, possibly never-ending debate that started with the release of the bitcoin whitepaper in 2008 (see https://bitcoin.org/bitcoin.pdf). The recent mess during the past few years boils down to the controversy with the block size limit and how to appropriately scale bitcoin, the keyword appropriately. Scaling bitcoin is a controversial debate with valid arguments from all sides (see https://en.bitcoin.it/wiki/Block_size_limit_controversy). I have researched, studied, and written this overview as objectively and as impartially as possible. By all means, this is still an opinion and everyone is advised to draw their own conclusions. My efforts are to make at least a few readers aware that ultimately there is only one team, and that team is the team bitcoin. Yes, currently though, there are factions within the team bitcoin. I hope that we can get beyond partisan fights and work together for the best bitcoin. I support all scaling proposals as long as they are the best for the given moment in time. Personally, I hate propaganda and love free speech as long as it is not derogatory and as long as it allows for constructive discussions. The goal of this overview is to explain to a novice how bitcoin network works, what has been keeping many bitcoin enthusiasts concerned, and if we can keep the bitcoin network with three main properties described as decentralized, distributed, immutable. Immutable means censorship resistant. For the distinction between decentralized and distributed, refer to Figure 1: Centralized, decentralized and distributed network models by Paul Baran (1964), which is a RAND Institute study to create a robust and nonlinear military communication network (see https://www.rand.org/content/dam/rand/pubs/research_memoranda/2006/RM3420.pdf). Note that for the overall network resilience and security, distributed is more desirable than decentralized, and the goal is to get as far away from central models as possible. Of course, nothing is strictly decentralized or strictly distributed and all network elements are at different levels of this spectrum. For those unaware how bitcoin works, I recommend the Bitcoin Wikipedia (see https://en.bitcoin.it/wiki/Main_Page). In short, the bitcoin network includes users which make bitcoin transactions and send them to the network memory pool called mempool, nodes which store the public and pseudonymous ledger called blockchain and which help with receiving pending transactions and updating processed transactions, thus securing the overall network, and miners which also secure the bitcoin network by mining. Mining is the process of confirming pending bitcoin transactions, clearing them from the mempool, and adding them to blocks which build up the consecutive chain of blocks on the blockchain. The blockchain is therefore a decentralized and distributed ledger built on top of bitcoin transactions, therefore impossible to exist without bitcoin. If someone claims to be working on their own blockchain without bitcoin, by the definition of the bitcoin network however, they are not talking about the actual blockchain. Instead, they intend to own a different kind of a private database made to look like the public and pseudonymous blockchain ledger. There are roughly a couple of dozen mining pools, each possibly with hundreds or thousands of miners participating in them, to several thousand nodes (see https://blockchain.info/pools and https://coin.dance/nodes). Therefore, the bitcoin network has at worst decentralized miners and at best distributed nodes. The miner and node design makes the blockchain resilient and immune to reversible changes, making it censorship resistant, thus immutable. The bitcoin blockchain avoids the previous need for a third party to trust. This is a very elegant solution to peer-to-peer financial exchange via a network that is all: decentralized, distributed, immutable. Extra features (escrow, reversibility via time-locks, and other features desirable in specific instances) can be integrated within the network or added on top of this network, however, they have not been implemented yet. Miners who participate receive mining reward consisting of newly mined bitcoins at a predetermined deflationary rate and also transaction fees from actual bitcoin transactions being processed. It is estimated that in 2022, miners will have mined more than 90% of all 21 million bitcoins ever to be mined (see https://en.bitcoin.it/wiki/Controlled_supply). As the mining reward from newly mined blocks diminishes to absolute zero in 2140, the network eventually needs the transaction fees to become the main component of the reward. This can happen either via high-volume-low-cost transaction fees or low-volume-high-cost transaction fees. Obviously, there is the need to address the question of fees when dealing with the dilemma how to scale bitcoin. Which type of fees would you prefer and under which circumstances? 2. WTF is going on? Recent developments. There are multiple sides to the scaling debate but to simplify it, first consider the 2 main poles. In particular, to scale bitcoin on blockchain or to scale it off it, that is the question! The first side likes the idea of bitcoin as it has been until now. It prefers on-chain scaling envisioned by the bitcoin creator or a group of creators who chose the pseudonym Satoshi Nakamoto. It is now called Bitcoin Cash and somewhat religiously follows Satoshi’s vision from the 2008 whitepaper and their later public forum discussions (see https://bitcointalk.org/index.php?topic=1347.msg15366#msg15366). Creators’ vision is good to follow but it should not be followed blindly and dogmatically when better advancements are possible, the keyword when. To alleviate concerning backlog of transactions and rising fees, Bitcoin Cash proponents implemented a simple one-line code update which increased the block size limit for blockhain blocks from 1MB block size limit to a new, larger 8MB limit. This was done through a fork on August 1, 2017, which created Bitcoin Cash, and which kept the bitcoin transaction history until then. Bitcoin Cash has observed significant increase in support, from 3% of all bitcoin miners at first to over 44% of all bitcoin miners after 3 weeks on August 22, 2017 (see http://fork.lol/pow/hashrate and http://fork.lol/pow/hashrateabs). An appropriate scaling analogy is to recall email attachments early on. They too were limited to a few MB at first, then 10MB, 20MB, up until 25MB on Gmail. But even then, Gmail eventually started using Google Drive internally. Note that Google Drive is a third party to Gmail, although yes, it is managed by the same entity. The second side argues that bitcoin cannot work with such a scaling approach of pre-meditated MB increases. Arguments against block size increases include miner and node centralization, and bandwidth limitations. These are discussed in more detail in the third section of this overview. As an example of an alternative scaling approach, proponents of off-chain scaling want to jump to the internally integrated third party right away, without any MB increase and, sadly, without any discussion. Some of these proponents called one particular implementation method SegWit, which stands for Segregated Witness, and they argue that SegWit is the only way that we can ever scale up add the extra features to the bitcoin network. This is not necessarily true because other scaling solutions are feasible, such as already functioning Bitcoin Cash, and SegWit’s proposed solution will not use internally integrated third party as shown next. Note that although not as elegant as SegWit is today, there are other possibilities to integrate some extra features without SegWit (see /Bitcoin/comments/5dt8tz/confused_is_segwit_needed_for_lightning_network). Due to the scaling controversy and the current backlog of transactions and already high fees, a third side hastily proposed a compromise to a 2MB increase in addition to the proposed SegWit implementation. They called it SegWit2x, which stands for Segregated Witness with 2MB block size limit increase. But the on-chain scaling and Bitcoin Cash proponents did not accept it due to SegWit’s design redundancy and hub centralization which are discussed next and revisited in the third section of this overview. After a few years of deadlock, that is why the first side broke free and created the Bitcoin Cash fork. The second side stuck with bitcoin as it was. In a way, they inherited the bitcoin network without any major change to public eye. This is crucial because major changes are about to happen and the original bitcoin vision, as we have known it, is truly reflected only in what some media refer to as a forked clone, Bitcoin Cash. Note that to avoid confusion, this second side is referred to as Bitcoin Core by some or Legacy Bitcoin by others, although mainstream media still refers to it simply as Bitcoin. The core of Bitcoin Core is quite hardcore though. They too rejected the proposed compromise for SegWit2x and there are clear indications that they will push to keep SegWit only, forcing the third side with SegWit2x proponents to create another fork in November 2017 or to join Bitcoin Cash. Note that to certain degree, already implemented and working Bitcoin Cash is technically superior to SegWit2x which is yet to be deployed (see /Bitcoin/comments/6v0gll/why_segwit2x_b2x_is_technically_inferior_to). Interestingly enough, those who agreed to SegWit2x have been in overwhelming majority, nearly 87% of all bitcoin miners on July 31, 2017 prior to the fork, and a little over 90% of remaining Bitcoin Core miners to date after the fork (see https://coin.dance/blocks). Despite such staggering support, another Bitcoin Core fork is anticipated later in November (see https://cointelegraph.com/news/bitcoin-is-splitting-once-again-are-you-ready) and the "Outcome #2: Segwit2x reneges on 2x or does not prioritize on-chain scaling" seems to be on track from the perspective of Bitcoin Core SegWit, publicly seen as the original Bitcoin (see https://blog.bridge21.io/before-and-after-the-great-bitcoin-fork-17d2aad5d512). The sad part is that although in their overwhelming majority, the miners who support SegWit2x would be the ones creating another Bitcoin Core SegWit2x fork or parting ways from the original Bitcoin. In a way, this is an ironic example how bitcoin’s built-in resiliency to veto changes causes majority to part away when a small minority has status quo and holds off fully-consented progress. Ultimately, this will give the minority Bitcoin Core SegWit proponents the original Bitcoin branding, perhaps to lure in large institutional investors and monetize on bitcoin’s success as we have it seen it during the past 9 years since its inception. Recall that bitcoin of today is already a decentralized, distributed, immutable network by its definition. The bitcoin network was designed to be an alternative to centralized and mutable institutions, so prevalent in modern capitalist societies. Bitcoin Core SegWit group wants to change the existing bitcoin network to a network with dominant third parties which, unlike Google Drive to Gmail, are not internal. In particular, they intend to do so via the lightning network, which is a second layer solution (2L). This particular 2L as currently designed relies on an artificial block size limit cap which creates a bottleneck in order to provide high incentives for miners to participate. It monetizes on backlog of transaction and high fees, which are allocated to miners, not any group in particular. Cheaper and more instantaneous transactions are shifted to the lightning network which is operated by hubs also earning revenue. Note that some of these hubs may choose to monitor transactions and can possibly censor who is allowed to participate in this no longer strictly peer-to-peer network. We lose the immutability and instead we have a peer-to-hub-to-peer network that is mutable and at best decentralized, and certainly not distributed (see https://medium.com/@jonaldfyookball/mathematical-proof-that-the-lightning-network-cannot-be-a-decentralized-bitcoin-scaling-solution-1b8147650800). For regular day-to-day and recurring transactions, it is not a considerable risk or inconvenience. And one could choose to use the main chain any time to bypass the lightning network and truly transact peer-to-peer. But since the main chain has an entry barrier in the form of artificially instilled high transaction fees, common people are not able to use bitcoin as we have known it until now. Peer-to-peer bitcoin becomes institution-to-institution bitcoin with peer-to-hub-to-peer 2L. To reiterate and stress, note the following lightning network design flaw again. Yes, activating SegWit and allowing 2L such as lightning allows for lower transaction fees to coexist side by side with more costly on-chain transactions. For those using this particularly prescribed 2L, the fees remain low. But since these 2L are managed by hubs, we introduce another element to trust, which is contrary to what the bitcoin network was designed to do at the first place. Over time, by the nature of the lightning network in its current design, these third party hubs grow to be centralized, just like Visa, Mastercard, Amex, Discover, etc. There is nothing wrong with that in general because it works just fine. But recall that bitcoin set out to create a different kind of a network. Instead of decentralized, distributed, immutable network with miners and nodes, with the lightning network we end up with at best decentralized but mutable network with hubs. Note that Bitcoin Core SegWit has a US-based organization backing it with millions of dollars (see https://en.wikipedia.org/wiki/Blockstream and https://steemit.com/bitcoin/@adambalm/the-truth-about-who-is-behind-blockstream-and-segwit-as-the-saying-goes-follow-the-money). Their proponents are quite political and some even imply $1000 fees on the main bitcoin blockchain (see https://cointelegraph.com/news/ari-paul-tuur-demeester-look-forward-to-up-to-1k-bitcoin-fees). Contrary to them, Bitcoin Cash proponents intend to keep small fees on a scale of a few cents, which in large volume in larger blockchain blocks provide sufficient incentive for miners to participate. On the one hand, sticking to the original vision of peer-to-peer network scaled on-chain has merit and holds potential for future value. On the other hand, 2L have potential to carry leaps forward from current financial infrastructure. As mentioned earlier, 2L will allow for extra features to be integrated off-chain (e.g. escrow, reversibility via time-locks), including entirely new features such as smart contracts, decentralized applications, some of which have been pioneered and tested on another cryptocurrency network called Ethereum. But such features could be one day implemented directly on the main bitcoin blockchain without the lightning network as currently designed, or perhaps with a truly integrated 2L proposed in the third section of this overview. What makes the whole discussion even more confusing is that there are some proposals for specific 2L that would in fact increase privacy and make bitcoin transactions less pseudonymous than those on the current bitcoin blockchain now. Keep in mind that 2L are not necessarily undesirable. If they add features and keep the main network characteristics (decentralized, distributed, immutable), they should be embraced with open arms. But the lightning network as currently designed gives up immutability and hub centralization moves the network characteristic towards a decentralized rather than a distributed network. In a sense, back to the initial email attachment analogy, even Gmail stopped with attachment limit increases and started hosting large files on Google Drive internally, with an embedded link in a Gmail email to download anything larger than 25MB from Google Drive. Anticipating the same scaling decisions, the question then becomes not if but when and how such 2L should be implemented, keeping the overall network security and network characteristics in mind. If you have not gotten it yet, repeat, repeat, repeat: decentralized, distributed, immutable. Is it the right time now and is SegWit (one way, my way or highway) truly the best solution? Those siding away from Bitcoin Core SegWit also dislike that corporate entities behind Blockstream, the one publicly known corporate entity directly supporting SegWit, have allegedly applied for SegWit patents which may further restrict who may and who may not participate in the creation of future hubs, or how these hubs are controlled (see the alleged patent revelations, https://falkvinge.net/2017/05/01/blockstream-patents-segwit-makes-pieces-fall-place, the subsequent Twitter rebuttal Blockstream CEO, http://bitcoinist.com/adam-back-no-patents-segwit, and the subsequent legal threats to SegWit2x proponents /btc/comments/6vadfi/blockstream_threatening_legal_action_against). Regardless if the patent claims are precise or not, the fact remains that there is a corporate entity dictating and vetoing bitcoin developments. Objectively speaking, Bitcoin Core SegWit developers paid by Blockstream is a corporate takeover of the bitcoin network as we have known it. And on the topic of patents and permissionless technological innovations, what makes all of this even more complicated is that a mining improvement technology called ASICboost is allowed on Bitcoin Cash. The main entities who forked from Bitcoin Core to form Bitcoin Cash had taken advantage of patents to the ASICboost technology on the original bitcoin network prior to the fork (see https://bitcoinmagazine.com/articles/breaking-down-bitcoins-asicboost-scandal). This boost saved estimated 20% electricity for miners on 1MB blocks and created unfair economic advantage for this one particular party. SegWit is one way that this boost is being eliminated, through the code. Larger blocks are another way to reduce the boost advantage, via decreased rate of collisions which made this boost happen at the first place (see https://bitcoinmagazine.com/articles/breaking-down-bitcoins-asicboost-scandal-solutions and https://bitslog.wordpress.com/2017/04/10/the-relation-between-segwit-and-asicboost-covert-and-overt). Therefore, the initial Bitcoin Cash proponents argue that eliminating ASICboost through the code is no longer needed or necessary. Of course, saving any amount electricity between 0% and 20% is good for all on our planet but in reality any energy saved in a mining operation is used by the same mining operation to increase their mining capacity. In reality, there are no savings, there is just capacity redistribution. The question then becomes if it is okay that only one party currently and already holds onto this advantage, which they covertly hid for relatively long time, and which they could be using covertly on Bitcoin Cash if they desired to do so, even though it would an advantage to a smaller degree. To be fair to them, they are mining manufacturers and operators, they researched and developed the advantage from own resources, so perhaps they do indeed have the right to reap ASICboost benefits while they can. But perhaps it should happen in publicly know way, not behind closed doors, and should be temporary, with agreed patent release date. In conclusion, there is no good and no bad actor, each side is its own shade of grey. All parties have their own truth (and villainy) to certain degree. Bitcoin Cash's vision is for bitcoin to be an electronic cash platform and daily payment processor whereas Bitcoin Core SegWit seems to be drawn more to the ideas of bitcoin as an investment vehicle and a larger settlement layer with the payment processor function managed via at best decentralized third party hubs. Both can coexist, or either one can eventually prove more useful and digest the other one by taking over all use-cases. Additionally, the most popular communication channel on /bitcoin with roughly 300k subscribers censors any alternative non-Bitcoin-Core-SegWit opinions and bans people from posting their ideas to discussions (see https://medium.com/@johnblocke/a-brief-and-incomplete-history-of-censorship-in-r-bitcoin-c85a290fe43). This is because their moderators are also supported by Blockstream. Note that the author of this overview has not gotten banned from this particular subreddit (yet), but has experienced shadow-banning first hand. Shadow-banning is a form of censorship. In this particular case, their moderator robot managed by people moderators, collaboratively with the people moderators, do the following:
(1) look for "Bitcoin Cash" and other undesirable keywords,
(2) warn authors that “Bitcoin Cash” is not true bitcoin (which objectively speaking it is, and which is by no means “BCash” that Bitcoin Core SegWit proponents refer to, in a coordinated effort to further confuse public, especially since some of them have published plans to officially release another cryptocurrency called “BCash” in 2018, see https://medium.com/@freetrade68/announcing-bcash-8b938329eaeb),
(3) further warn authors that if they try to post such opinions again, they could banned permanently,
(4) tell authors to delete their already posted posts or comments,
(5) hide their post from publicly seen boards with all other posts, thus preventing it from being seeing by the other participants in this roughly 300k public forum,
This effectively silences objective opinions and creates a dangerous echo-chamber. Suppressing free speech and artificially blowing up transaction fees on Bitcoin Core SegWit is against bitcoin’s fundamental values. Therefore, instead of the original Reddit communication channel, many bitcoin enthusiasts migrated to /btc which has roughly 60k subscribers as of now, up from 20k subscribers a year ago in August 2016 (see http://redditmetrics.com/btc). Moderators there do not censor opinions and allow all polite and civil discussions about scaling, including all opinions on Bitcoin Cash, Bitcoin Core, etc. Looking beyond their respective leaderships and communication channels, let us review a few network fundamentals and recent developments in Bitcoin Core and Bitcoin Cash networks. Consequently, for now, these present Bitcoin Cash with more favorable long-term prospects.
(1) The stress-test and/or attack on the Bitcoin Cash mempool earlier on August 16, 2017 showed that 8MB blocks do work as intended, without catastrophic complications that Bitcoin Core proponents anticipated and from which they attempted to discourage others (see https://jochen-hoenicke.de/queue/uahf/#2w for the Bitcoin Cash mempool and https://core.jochen-hoenicke.de/queue/#2w for the Bitcoin Core mempool). Note that when compared to the Bitcoin Core mempool on their respective 2 week views, one can observe how each network handles backlogs. On the most recent 2 week graphs, the Y-scale for Bitcoin Core is 110k vs. 90k on Bitcoin Cash. In other words, at the moment, Bitcoin Cash works better than Bitcoin Core even though there is clearly not as big demand for Bitcoin Cash as there is for Bitcoin Core. The lack of demand for Bitcoin Cash is partly because Bitcoin Cash is only 3 weeks old and not many merchants have started accepting it, and only a limited number of software applications to use Bitcoin Cash has been released so far. By all means, the Bitcoin Cash stress-test and/or attack from August 16, 2017 reveals that the supply will handle the increased demand, more affordably, and at a much quicker rate.
(2) Bitcoin Cash “BCH” mining has become temporarily more profitable than mining Bitcoin Core “BTC” (see http://fork.lol). Besides temporary loss of miners, this puts Bitcoin Core in danger of permanently fleeing miners. Subsequently, mempool backlog and transaction fees are anticipated to increase further.
(3) When compared to Bitcoin Cash transaction fees at roughly $0.02, transaction fees per kB are over 800 times as expensive on Bitcoin Core, currently at over $16 (see https://cashvscore.com).
(4) Tipping service that used to work on Bitcoin Core's /Bitcoin a few years back has been revived by a new tipping service piloted on the more neutral /btc with the integration of Bitcoin Cash (see /cashtipperbot).
3. Should we scale you on-chain or off-chain? Scaling bitcoin. Let us start with the notion that we are impartial to both Bitcoin Core (small blocks, off-chain scaling only) and Bitcoin Cash (big blocks, on-chain scaling only) schools of thought. We will support any or all ideas, as long as they allow for bitcoin to grow organically and eventually succeed as a peer-to-peer network that remains decentralized, distributed, immutable. Should we have a preference in either of the proposed scaling solutions? First, let us briefly address Bitcoin Core and small blocks again. From the second section of this overview, we understand that there are proposed off-chain scaling methods via second layer solutions (2L), most notably soon-to-be implemented lightning via SegWit on Bitcoin Core. Unfortunately, the lightning network diminishes distributed and immutable network properties by replacing bitcoin’s peer-to-peer network with a two-layer institution-to-institution network and peer-to-hub-to-peer 2L. Do we need this particular 2L right now? Is its complexity truly needed? Is it not at best somewhat cumbersome (if not very redundant)? In addition to ridiculously high on-chain transaction fees illustrated in the earlier section, the lightning network code is perhaps more robust than it needs to be now, with thousands of lines of code, thus possibly opening up to new vectors for bugs or attacks (see https://en.bitcoin.it/wiki/Lightning_Network and https://github.com/lightningnetwork/lnd). Additionally, this particular 2L as currently designed unnecessarily introduces third parties, hubs, that are expected to centralize. We already have a working code that has been tested and proven to handle 8MB blocks, as seen with Bitcoin Cash on August 16, 2017 (see https://www.cryptocoinsnews.com/first-8mb-bitcoin-cash-block-just-mined). At best, these third party hubs would be decentralized but they would not be distributed. And these hubs would be by no means integral to the original bitcoin network with users, nodes, and miners. To paraphrase Ocam’s razor problem solving principle, the simplest solution with the most desirable features will prevail (see https://en.wikipedia.org/wiki/Occam%27s_razor). The simplest scalability solution today is Bitcoin Cash because it updates only one line of code, which instantly increases the block size limit. This also allows other companies building on Bitcoin Cash to reduce their codes when compared to Bitcoin Core SegWit’s longer code, some even claiming ten-fold reductions (see /btc/comments/6vdm7y/ryan_x_charles_reveals_bcc_plan). The bitcoin ecosystem not only includes the network but it also includes companies building services on top of it. When these companies can reduce their vectors for bugs or attacks, the entire ecosystem is healthier and more resilient to hacking disasters. Obviously, changes to the bitcoin network code are desirable to be as few and as elegant as possible. But what are the long-term implications of doing the one-line update repeatedly? Eventually, blocks would have to reach over 500MB size if they were to process Visa-level capacity (see https://en.bitcoin.it/wiki/Scalability). With decreasing costs of IT infrastructure, bandwidth and storage could accommodate it, but the overhead costs would increase significantly, implying miner and/or full node centralization further discussed next. To decrease this particular centralization risk, which some consider undesirable and others consider irrelevant, built-in and integrated 2L could keep the block size at a reasonably small-yet-still-large limit. At the first sight, these 2L would remedy the risk of centralization by creating their own centralization incentive. At the closer look and Ocam’s razor principle again, these 2L do not have to become revenue-seeking third party hubs as designed with the current lightning network. They can be integrated into the current bitcoin network with at worst decentralized miners and at best distributed nodes. Recall that miners will eventually need to supplement their diminishing mining reward from new blocks. Additionally, as of today, the nodes have no built-in economic incentive to run other than securing the network and keeping the network’s overall value at its current level. Therefore, if new 2L were to be developed, they should be designed in a similar way like the lightning network, with the difference that the transaction processing revenue would not go to third party hubs but to the already integrated miners and nodes. In other words, why do we need extra hubs if we have miners and nodes already? Let us consider the good elements from the lightning network, forget the unnecessary hubs, and focus on integrating the hubs’ responsibilities to already existing miner and node protocols. Why would we add extra elements to the system that already functions with the minimum number of elements possible? Hence, 2L are not necessarily undesirable as long as they do not unnecessarily introduce third party hubs. Lastly, let us discuss partial on-chain scaling with the overall goal of network security. The network security we seek is the immutability and resilience via distributed elements within otherwise decentralized and distributed network. It is not inconceivable to scale bitcoin with bigger blocks as needed, when needed, to a certain degree. The thought process is the following:
(1) Block size limit:
We need some upper limit to avoid bloating the network with spam transactions. Okay, that makes sense. Now, what should this limit be? If we agree to disagree with small block size limit stuck at 1MB, and if we are fine with flexible block size limit increases (inspired by mining difficulty readjustments but on a longer time scale) or big block propositions (to be increased incrementally), what is holding us off next?
(2) Miner centralization:
Bigger blocks mean that more data will be transferred on the bitcoin network. Consequently, more bandwidth and data storage will be required. This will create decentralized miners instead of distributed ones. Yes, that is true. And it has already happened, due to the economy of scale, in particular the efficiency of grouping multiple miners in centralized facilities, and the creation of mining pools collectively and virtually connecting groups of miners not physically present in the same facility. These facilities tend to have huge overhead costs and the data storage and bandwidth increase costs are negligible in this context. The individual miners participating in mining pools will quite likely notice somewhat higher operational costs but allowing for additional revenue from integrated 2L described earlier will give them economic incentive to remain actively participating. Note that mining was never supposed to be strictly distributed and it was always at worst decentralized, as defined in the first section of this overview. To assure at best a distributed network, we have nodes.
(3) Node centralization:
Bigger blocks mean that more data will be transferred on the bitcoin network. Consequently, more bandwidth and data storage will be required. This will create decentralized nodes instead of distributed ones. Again, recall that we have a spectrum of decentralized and distributed networks in mind, not their absolutes. The concern about the node centralization (and the subsequent shift from distributed to decentralized network property) is valid if we only follow on-chain scaling to inconsiderate MB values. If addressed with the proposed integrated 2L that provides previously unseen economic incentives to participate in the network, this concern is less serious. Furthermore, other methods to reduce bandwidth and storage needs can be used. A popular proposal is block pruning, which keeps only the most recent 550 blocks, and eventually deletes any older blocks (see https://news.bitcoin.com/pros-and-cons-on-bitcoin-block-pruning). Block pruning addresses storage needs and makes sure that not all nodes participating in the bitcoin network have to store all transactions that have ever been recorded on the blockchain. Some nodes storing all transactions are still necessary and they are called full nodes. Block pruning does not eliminate full nodes but it does indeed provide an economic incentive for the reduction and centralization (i.e. saving on storage costs). If addressed with the proposed integrated 2L that provides previously unseen economic incentives to participate in the network, this concern is less serious. In other words, properly designed 2L should provide economic incentives for all nodes (full and pruned) to remain active and distributed. As of now, only miners earn revenue for participating. The lightning network proposes extra revenue for hubs. Instead, miner revenue could increase by processing 2L transactions as well, and full nodes could have an economic incentive as well. To mine, relatively high startup costs is necessary in order to get the most up to date mining hardware and proper cooling equipment. These have to be maintained and periodically upgraded. To run a full node, one needs only stable bandwidth and a sufficiently large storage, which can be expanded as needed, when needed. To run a full node, one needs only stable bandwidth and relatively small storage, which does not need to be expanded. Keeping the distributed characteristic in mind, it would be much more secure for the bitcoin network if one could earn bitcoin by simply running a node, full or pruned. This could be integrated with a simple code change requiring each node to own a bitcoin address to which miners would send a fraction of processed transaction fees. Of course, pruned nodes would collectively receive the least transaction fee revenue (e.g. 10%), full nodes would collectively receive relatively larger transaction fee revenue (e.g. 20%), whereas mining facilities or mining pools would individually receive the largest transaction fee revenue (e.g. 70%) in addition to the full mining reward from newly mined blocks (i.e. 100%). This would assure that all nodes would remain relatively distributed. Hence, block pruning is a feasible solution. However, in order to start pruning, one would have to have the full blockchain to begin with. As currently designed, downloading blockchain for the first time also audits previous blocks for accuracy, this can take days depending on one’s bandwidth. This online method is the only way to distribute the bitcoin blockchain and the bitcoin network so far. When the size of blockchain becomes a concern, a simpler distribution idea should be implemented offline. Consider distributions of Linux-based operating systems on USBs. Similarly, the full bitcoin blockchain up to a certain point can be distributed via easy-to-mail USBs. Note that even if we were to get the blockchain in bulk on such a USB, some form of a block audit would have to happen nevertheless. A new form of checkpoint hashes could be added to the bitcoin code. For instance, each 2016 blocks (whenever the difficulty readjusts), all IDs from previous 2015 blocks would be hashed and recorded. That way, with our particular offline blockchain distribution, the first time user would have to audit only the key 2016th blocks, designed to occur on average once in roughly 2 weeks. This would significantly reduce bandwidth concerns for the auditing process because only each 2016th block would have to be uploaded online to be audited. Overall, we are able to scale the bitcoin network via initial on-chain scaling approaches supplemented with off-chain scaling approaches. This upgrades the current network to a pruned peer-to-peer network with integrated 2L managed by miners and nodes who assure that the bitcoin network stays decentralized, distributed, immutable.
Note that the author u/bit-architect appreciates any Bitcoin Cash donations on Reddit directly or on bitcoin addresses 178ZTiot2QVVKjru2f9MpzyeYawP81vaXi bitcoincash:qp7uqpv2tsftrdmu6e8qglwr2r38u4twlq3f7a48uq (Bitcoin Cash) and 1GqcFi4Cs1LVAxLxD3XMbJZbmjxD8SYY8S (Bitcoin Core).
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