Good Contents Are Everywhere, But Here, We Deliver The Best of The Best.Please Hold on!
SEARCH
SHOP
  • Your Cart Is Empty!
Your address will show here +12 34 56 78
Bitcoin, Blockchain, Blockchain technology, Encryption
Edward Snowden’s NSA spying revelations highlighted just how much we have sacrificed to the gods of technology and convenience something we used to take for granted, and once considered a basic human right – our privacy. It is just not just the NSA. Governments the world over are racing to introduce legislation that allows to them to monitor and store every email, phone call and Instant Message, every web page visited, and every VoIP conversation made by every single one of their citizens. The press has bandied parallels with George Orwell’s dystopian world ruled by an all-seeing Big Brother about a great deal. They are depressingly accurate. Encryption provides a highly effective way to protect your internet behavior, communications, and data. The main problem with using encryption is that its use flags you up to organizations such as the NSA for closer scrutiny. Details of the NSA’s data collection rules are here. What it boils down to is that the NSA examines data from US citizens, then discards it if it’s found to be uninteresting. Encrypted data, on the other hand, is stored indefinitely until the NSA can decrypt it. The NSA can keep all data relating to non-US citizens indefinitely, but practicality suggests that encrypted data gets special attention. If a lot more people start to use encryption, then encrypted data will stand out less, and surveillance organizations’ job of invading everyone’s privacy will be much harder. Remember – anonymity is not a crime!

How Secure is Encryption?

Following revelations about the scale of the NSA’s deliberate assault on global encryption standards, confidence in encryption has taken a big dent. So let’s examine the current state of play…

Encryption Key Length

Encryption Key 01Key length is the crudest way of determining how long a cipher will take to break. It is the raw number of ones and zeros used in a cipher. Similarly, the crudest form of attack on a cipher is known as a brute force attack (or exhaustive key search). This involves trying every possible combination to find the correct one. If anyone is capable of breaking modern encryption ciphers it is the NSA, but to do so is a considerable challenge. For a brute force attack:
  • A 128-bit key cipher has 3.4 x10(38) possible keys. Going through each of them would thousands of operations or more to break.
  • In 2011 the fastest supercomputer in the word (the Fujitsu K computer located in Kobe, Japan) was capable of an Rmax peak speed of 10.51 petaflops. Based on this figure, it would take Fujitsu K 1.02 x 10(18) (around 1 billion) years to crack a 128-bit AES key by force.
  • In 2016 the most powerful supercomputer in the world is the NUDT Tianhe-2in Guangzhou, China. Almost 3 times as fast as the Fujitsu K, at 33.86 petaflops, it would “only” take it around a third of a billion years to crack a 128-bit AES key. That’s still a long time, and is the figure for breaking just one key.
  • A 256-bit key would require 2(128) times more computational power to break than a 128-bit one.
  • The number of years required to brute force a 256-bit cipher is 3.31 x 10(56) – which is about 20000….0000 (total 46 zeros) times the age of Universe (13.5 billion or 1.35 x 10(10) years!
The NUDT Tianhe-2 supercomputer in Guangzhou, China

128-bit Encryption

Until the Edward Snowden revelations, people assumed that 128-bit encryption was in practice uncrackable through brute force. They believed it would be so for around another 100 years (taking Moore’s Law into account). In theory, this still holds true. However, the scale of resources that the NSA seems willing to throw at cracking encryption has shaken many experts’ faith in these predictions. Consequently, system administrators the world over are scrambling to upgrade cipher key lengths. If and when quantum computing becomes available, all bets will be off. Quantum computers will be exponentially more powerful than any existing computer, and will make all current encryption ciphers and suites redundant overnight. In theory, the development of quantum encryption will counter this problem. However, access to quantum computers will initially be the preserve of the most powerful and wealthy governments and corporations only. It is not in the interests of such organizations to democratize encryption. For the time being, however, strong encryption is your friend. Note that the US government uses 256-bit encryption to protect ‘sensitive’ data and 128-bit for ‘routine’ encryption needs. However, the cipher it uses is AES. As I discuss below, this is not without problems.

Ciphers

Encryption key length refers to the amount of raw numbers involved. Ciphers are the mathematics used to perform the encryption. It is weaknesses in thesealgorithms, rather than in the key length, that often leads to encryption breaking. By far the most common ciphers that you will likely encounter are those OpenVPN uses: Blowfish and AES. In addition to this, RSA is used to encrypt and decrypt a cipher’s keys. SHA-1 or SHA-2 are used as hash functions to authenticate the data. AES is generally considered the most secure cipher for VPN use (and in general). Its adoption by the US government has increased its perceived reliability, and consequently its popularity. However, there is reason to believe this trust may be misplaced.

NIST

The United States National Institute of Standards and Technology (NIST) developed and/or certified AES, RSA, SHA-1 and SHA-2. NIST works closely with the NSA in the development of its ciphers. Given the NSA’s systematic efforts to weaken or build backdoors into international encryption standards, there is every reason to question the integrity of NIST algorithms. NIST has been quick to deny any wrongdoing (“NIST would not deliberately weaken a cryptographic standard”). It has also has invited public participation in a number of upcoming proposed encryption-related standards in a move designed to bolsterpublic confidence. The New York Times, however, has accused the NSA of introducing undetectable backdoors, or subverting the public development process to weaken the algorithms, thus circumventing NIST-approved encryption standards. News that a NIST-certified cryptographic standard – the Dual Elliptic Curve algorithm (Dual_EC_DRGB) had been deliberately weakened not just once, but twice, by the NSA destroyed pretty much any existing trust. Encryption That there might be a deliberate backdoor in Dual_EC_DRGB had already been noticed before. In 2006 researchers at the Eindhoven University of Technology in the Netherlands noted that an attack against it was easy enough to launch on ‘an ordinary PC.’  Microsoft engineers also flagged up a suspected backdoor in the algorithm. Despite these concerns, where NIST leads, industry follows. Microsoft, Cisco, Symantec and RSA all include the algorithm in their products’ cryptographic libraries. This is in large partbecause compliance with NIST standards is a prerequisite to obtaining US government contracts. NIST-certified cryptographic standards are pretty much ubiquitous worldwide throughout all areas of industry and business that rely on privacy (including the VPN industry). This is all rather chilling. Perhaps because so much relies on these standards, cryptography experts have been unwilling to face up to the problem.

Perfect Forward Secrecy

Perfect Forward Secrecy 01 One of the revelations in the information provided by Edward Snowden is that “another program, code-named Cheesy Name, was aimed at singling out SSL/TLS encryption keys, known as ‘certificates,’ that might be vulnerable to being cracked by GCHQ supercomputers.” That these certificates can be “singled out” strongly suggests that 1024-bit RSA encryption (commonly used to protect the certificate keys) is weaker than previously thought. The NSA and GCHQ could therefore decrypt it much more quickly than expected. In addition to this, the SHA-1 algorithm widely used to authenticate SSL/TLS connections is fundamentally broken. In both cases, the industry is scrambling fix the weaknesses as fast as it can. It is doing this by moving onto RSA-2048+, Diffie-Hellman, or  Elliptic Curve Diffie-Hellman (ECDH) key exchanges and SHA-2+ hash authentication. What these issues (and the 2014 Heartbleed Bug fiasco) clearly highlight is the importance of using perfect forward secrecy (PFS) for all SSL/TLS connections. This is a system whereby a new and unique (with no additional keys derived from it) private encryption key is generated for each session. For this reason, it is also known as an ephemeral key exchange. Using PFS, if one SSL key is compromised, this does not matter very much because new keys are generated for each connection. They are also often refreshed during connections. To meaningfully access communications these new keys would also need to be compromised. This makes the task so arduous as to be effectively impossible. Unfortunately, it is common practice (because it’s easy) for companies to use just one private encryption key. If this key is compromised, then the attacker can access all communications encrypted with it.

OpenVPN and PFS

The most widely used VPN protocol is OpenVPN. It is considered very secure. One of the reasons for this is because it allows the use of ephemeral keys. Sadly this is not implemented by many VPN providers. Without perfect forward secrecy, OpenVPN connections are not considered secure. It is also worth mentioning here that the HMAC SHA-1 hashes routinely used to authenticate OpenVPN connections are not a weakness. This is because HMAC SHA-1 is much less vulnerable to collision attacks than standard SHA-1 hashes. Mathematical proof of this is available in this paper.

The Takeaway – So, is Encryption Secure?

To underestimate the NSA’s ambition or ability to compromise all encryption is a mistake. However, encryption remains the best defense we have against it (and others like it). To the best of anyone’s knowledge, strong ciphers such as AES (despite misgivings about its NIST certification) and OpenVPN (with perfect forward secrecy) remain secure. As Bruce Schneier, encryption specialist, fellow at Harvard’s Berkman Center for Internet and Society, and privacy advocate famously stated,
Trust the math. Encryption is your friend. Use it well, and do your best to ensure that nothing can compromise it. That’s how you can remain secure even in the face of the NSA.”
Remember too that the NSA is not the only potential adversary. However, most criminals and even governments have nowhere near the NSA’s ability to circumvent encryption.

The Importance of End-to-end Encryption

End-to-end (e2e) encryption means that you encrypt data on your own device. Only you hold the encryption keys (unless you share them). Without these keys, an adversary will find it extremely difficult to decrypt your data. Encryption Many services and products do not use e2e encryption. Instead they encrypt your data and hold the keys for you. This can be very convenient, as it allows for easy recovery of lost passwords, syncing across devices, and so forth. It does mean, however, that these third parties could be compelled to hand over your encryption keys. A case in point is Microsoft. It encrypts all emails and files held in OneDrive (formerly SkyDrive), but it also holds the encryption keys. In 2013 it used these to unlock the emails and files of its 250 million worldwide users for inspection by the NSA. Strongly avoid services that encrypt your data on their servers, rather than you encrypting your own data on your own machine.

HTTPS

Although strong encryption has recently become trendy, websites have been using strong end-to-end encryption for the last 20 years. After all, if websites were not secure, then online shopping or banking wouldn’t be possible. The encryption protocol used for this is HTTPS, which stands for HTTP Secure (or HTTP over SSL/TLS). It is used for websites that need to secure users’ communications and is the backbone of internet security. When you visit a non-secure HTTP website, data is transferred unencrypted. This means anyone watching can see everything you do while visiting that site. This includes your transaction details when making payments. It is even possible to alter the data transferred between you and the web server. With HTTPS, a cryptographic key exchange occurs when you first connect to the website. All subsequent actions on the website are encrypted, and thus hidden from prying eyes. Anyone watching can see that you have visited a certain website, but cannot see which individual pages you read, or any data transferred. For example, the BestVPN.com website is secured using HTTPS. Unless you are using a VPN while reading this web page, your ISP can see that you have visited www.bestvpn.com, but cannot see that you are reading this particular article. HTTPS uses end-to-end encryption. Secured website Firefox It is easy to tell if you visit a website secured by HTTPS – just look for a locked padlock icon to the left of the main URL/search bar. There are issues relating to HTTPS, but in general it is secure. If it wasn’t, none of the billions of financial transactions and transfers of personal data that happen every day on the internet would be possible. The internet itself (and possibly the world economy!) would collapse overnight. For a detailed discussion on HTTPS, please see here.

Metadata

An important limitation to encryption is that it does not necessarily protect users from the collection of metadata. Even if the contents of emails, voice conversations, or web browsing sessions cannot be readily listened in on, knowing when, where, from whom, to whom, and how regularly such communication takes place can tell an adversary a great deal. This is a powerful tool in the wrong hands. For example, even if you use a securely encrypted messaging service such as WhatsApp, Facebook will still be able to tell who you are messaging, how often you message, how long you usually chat for, and more. With such information, it would be easy to discover that you were having an affair, for example. Although the NSA does target individual communications, its primary concern is the collection of metadata. As NSA General Counsel Stewart Baker has openly acknowledged,
“Metadata absolutely tells you everything about somebody’s life. If you have enough metadata, you don’t really need content.
Technologies such as VPNs and Tor can make the collection of metadata very difficult. For example, an ISP cannot collect metadata relating to the browsing history of customers who use a VPN to hide their online activities. Note, though, that many VPN providers themselves log some metadata. This should be a consideration when choosing a service to protect your privacy. Please also note that mobile apps typically bypass any VPN that is running on your device, and connect directly to their publishers’ servers. Using a VPN, for example, will not prevent WhatsApp sending metadata to Facebook.

Identify Your Threat Model

When considering how to protect your privacy and stay secure on the internet, carefully consider who or what worries you most. Defending yourself against everything is almost impossible. And any attempt to do so will likely seriously degrade the usability (and your enjoyment) of the internet. Identifying to yourself that being caught downloading an illicit copy of Game of Thrones is a bigger worry than being targeted by a crack NSA TAO teamfor personalized surveillance is a good start. It will leave you less stressed, with a more useable internet and with more effective defenses against the threats that really matter to you. Of course, if your name is Edward Snowden, then TAO teams will be part of your threat model… I will discuss steps you should take to help identify your threat model in an upcoming article on BestVPN.com. In the meantime, this article does a good job of introducing the basics.

Use FOSS Software

Ultimate Privacy Guide Illustration 03 01The terrifying scale of the NSA’s attack on public cryptography, and its deliberate weakening of common international encryption standards, has demonstrated that no proprietary software can be trusted. Even software specifically designed with security in mind. The NSA has co-opted or coerced hundreds of technology companies into building backdoors into their programs, or otherwise weakening security in order to allow it access. US and UK companies are particularly suspect, although the reports make it clear that companies across the world have acceded to NSA demands. The problem with proprietary software is that the NSA can fairly easily approach and convince the sole developers and owners to play ball. In addition to this, their source code is kept secret. This makes it easy to add to or modify the code in dodgy ways without anyone noticing. Open source code The best answer to this problem is to use free open source software (FOSS). Often jointly developed by disparate and otherwise unconnected individuals, the source code is available to everyone to examine and peer-review. This minimizes the chances that someone has tampered with it. Ideally, this code should also be compatible with other implementations, in orderto minimize the possibility of a backdoor being built in. It is, of course, possible that NSA agents have infiltrated open source development groups and introduced malicious code without anyone’s knowledge. In addition, the sheer amount of code that many projects involve means that it is often impossible to fully peer-review all of it. Despite these potential pitfalls, FOSS remains the most reliable and least likely to be tampered with software available. If you truly care about privacy you should try to use it exclusively (up to and including using FOSS operating systems such as Linux).

Steps You Can Take to Improve Your Privacy

With the proviso that nothing is perfect, and if “they” really want to get you “they” probably can, there are steps you can take to improve your privacy.

Pay for Stuff Anonymously

One step to improving your privacy is to pay for things anonymously. When it comes to physical goods delivered to an actual address, this isn’t going to happen. Online services are a different kettle of fish, however. It is increasingly common to find services that accept payment through Bitcoin and the like. A few, such as VPN service Mullvad, will even accept cash sent anonymously by post.Ultimate Privacy Guide Illustration 04 01

Bitcoin

Bitcoin is a decentralized and open source virtual currency that operates using peer-to-peer technology (much as BitTorrent and Skype do). The concept is particularly revolutionary and exciting because it does not require a middleman to work (for example a state-controlled bank). Whether or not Bitcoins represent a good investment opportunity remains hotly debated, and is not within the remit of this guide. It is also completely outside of my area of expertise! You can read the full article on BestVPN.com.
0

Bitcoin, Blockchain, Blockchain technology, Cryptocurrency
A number of VPN providers now accept payment via Bitcoin, but which is the best one? In certain circumstances, remaining anonymous is important. When you pay for services from your bank account, you create a trail that leads straight to your door. Bitcoin allows you to store your money outside the banking system. You don’t need to attach any personal details to the “wallet” that stores your money. Instead, a code identifies your value store. However, you can easily destroy that anonymity if you create a trail into and out of your wallet. Receiving payments into your wallet can also give away your identity. However, if you can’t make or receive payments without giving away your identity, what good is Bitcoin?

How Can I Keep My Bitcoin Wallet Anonymous?

You can keep your Bitcoin wallet anonymous with a little planning. Firstly, you need to create a pseudonym by which you can be recognized without giving your identity away. You create lots of pseudonyms in your life on the internet without any difficulty. The usernames that you select when signing up for services or social media platforms are essentially pseudonyms. However, these usernames are usually linked to some real-world form of identification. You can create webmail accounts without giving any personal details. You can then use those relatively anonymous email addresses to access services. The next step is to prevent anyone tracing your Bitcoin payments through your IP address. This can be achieved using a Virtual Private Network (VPN). When you connect to websites through a VPN, your transactions are identified by the VPN server’s IP address, not yours. VPN companies own thousands of IP addresses. They cycle through them regularly. Most successful VPNs also have millions of customers. That makes it very difficult to trace your activities. One weak point in the privacy that VPN services offer is that the VPN company itself can keep track of your activities. It can identify you through its cross-reference between your allocated IP address and your real IP address. If your VPN keeps that information on file, a court order can force it to hand it over to the authorities. The simple solution to this is to pick a VPN service that keeps no logs. You can read more tips on how to mask your identity when using Bitcoin further on in this article. However, first take a look at the five best VPNs for Bitcoin payments. For any VPN to qualify for this list, it has to keep no records of customers’ activities, provide unbreakable encryption, and accept anonymous Bitcoin payments. Remember to create a pseudonym to use with your Bitcoin account. Also, don’t forget that you have to protect your identity when collecting payments as well as when paying out of your wallet. You probably don’t need full anonymity in your day-to-day life. As such, why not run your regular finances through a standard bank account? You can then reserve your Bitcoin transactions for activities that you want to remain private. Avoid contact between your Bitcoin account and your bank account(s) to avoid links between you and your Bitcoin wallet.

The Problem with Paying for Digital Services in the EU…

Paying for digital services when you’re in Europe can present a problem. EU requirements specify that all charges for online services have to include Value Added Tax (VAT). VAT is levied at the rate of the European country in which the customer is making the purchase. It is not levied at the rate of the service provider’s location. The VAT rule applies to companies that are based outside of the EU as well. That means that if you subscribe to a VPN service that is based in the US, such as IPVanish, that company has to identify your location and apply the VAT rate for the EU country that you’re in at the moment you pay. Vendors are required to seek two forms of location confirmation. Just about all of these include factors that will identify you. These can include the address of your bank account or your home address. These requirements make matters complicated if you’re travelling within Europe and not in your home country. That’s because online service companies have to provide the address of your bank account. This applies even if the payment is processed by a third party company. Thus having a PayPal account, or paying through Bitcoin, doesn’t protect you. The Bitcoin payment processor has to return details of your address to the service provider along with confirmation of payment. If the two identifying pieces of information don’t match the location of your IP address, the service cannot be provided.

…and the Solution

A simple solution to this problem is to make sure that you don’t appear to be in an EU country when you sign up for a VPN (or other service). That way, all of the location identification requirements disappear. You can perform this trick when signing up for a VPN by employing another VPN at the point of paying. This sounds a bit mad, but some free VPNs can help you out with that. AirVPN offers a three-day trial subscription for €1. You can take out that subscription using your real bank account, then turn the VPN on with a non-EU server location engaged. You can then sign up for another VPN service, such as IPVanish, or ExpressVPN. As a non-EU customer, the VPN company will not have collect your location details. You can thus proceed with the purchase via Bitcoin anonymously. So long as the VPN you use during your purchase doesn’t keep logs, there will be no way for anyone to connect you to the VPN account you set up with a Bitcoin payment. You can read the full article on BestVPN.com.
0

Bitcoin, Blockchain, Blockchain technology, Cryptocurrency
The nonstop increase of Bitcoin price over dollar has shown its reverse side. It has given birth to a brand new cybercrime industry based on numerous scams, even if they are easy to get. Crafty rascals target naive internet users in a bid to cause them to lose their Bitcoins. This article lists most popular cryptocurrency-related scams to help you separate the grain from the chaff when dealing with Bitcoin transactions.

Fake Bitcoin Exchanges

Fake Bitcoin ExchangesWhenever you encounter an advertisement promising to sell you Bitcoins at a low price, be aware that it might be trying to lure you to a rogue cryptocurrency exchange website. The primary thing to look at when you visit any exchange service is whether or not it makes use of HTTPS. If the web address begins with HTTPS, it indicates that all interactions of your web-browser and the service are encrypted and quite secure. In the event it’s HTTP, using this kind of an exchange is dangerous. Another sign of a phony service is the PayPal to BTC exchange fraud. Such websites offer a web form for you to type in your PayPal email and the sum of money you plan to spend. After that, a QR code appears to confirm the transaction. However, instead of receiving your Bitcoins, you just get your PayPal account stolen.

Rogue Bitcoin Wallets

Rogue Bitcoin WalletsIt’s slightly more difficult to recognize rogue Bitcoin wallets, since the primary goal of any wallet is to store BTC rather than trade it. Thus, this kind of fraud isn’t generally geared toward immediate monetary gains. In fact, they most often seek to trick you into installing malware that can steal sensitive data. To identify fraudulent wallets, be on the lookout for suspicious hallmarks. Ask people you trust if they’ve used the service before. Check online reviews and scores. If the Bitcoin wallet is an application for downloading, examine it for risky code. Sites like VirusTotal can scan software binaries for known infections using two dozen anti-viruses simultaneously.

Phishing

Crypto PhishingPhishing is probably the most prevalent scam in the online world. It’s aim, in relation to Bitcoin, is to get you to visit a rogue website camouflaged as a well-known and legitimate service. By visiting pseudo services, you’re at risk of not only losing your Bitcoins but having all of your sensitive data compromised, along with your identity stolen. The malicious phishing email message may appear to originate from an exchange or wallet service you’re using. The cyber-crooks could have acquired your personal details after a big data breach like the notorious Yahoo hack. The general guideline is to avoid clicking on hyperlinks inside emails. A malicious hyperlink can seem entirely genuine. It uses several redirect steps to finally bring you to the site controlled by hackers. To stay away from this hazard, type URLs directly into your browser or use your bookmarks. You should also approach email attachments with Attachments frequently deliver viruses like ransomware. Fraudsters may also use web ads or black SEO to direct you to visit a bogus Bitcoin exchange or wallet while Googling terms like “Buy Bitcoin” or “Bitcoin exchange.” Booby-trapped sites will frequently show up among top search results. Again, use VirusTotal to check if websites are safe.

Bitcoin Ponzi Schemes

Bitcoin Ponzi SchemesCertain websites propose tempting BTC deals. They look too good to be true. That’s because they are. Based on their claims, you can increase your BTC twofold by the very next day. This is a typical Ponzi scheme. As soon as you send your Bitcoin, the likelihood of you getting even the initial quantity back is very low. Such websites usually include referral programs that allow their members to earn some cash from new customer leads. As such, a referral link in URLs on social media should act as a warning sign. Referral links look like this: website.com/?ref=826.

Cloud Mining False Promises

Cloud Mining False PromisesCloud mining relates to a model in which individuals group together and put in money to rent Bitcoin mining equipment. This idea is great and totally legit. However, crooks launch their scams to attract interested people and eventually give a lower return on investment, rather than keeping their promises. To avoid cloud mining scams, look closely at possible indicators of risk. Stay away from services marketed via referral links. Be sure the website is open and honest when it comes to what pool is employed for mining, who operates it and the amount of income you can get. A professional service will generally include a dashboard to manage the process and monitor all operations.

In-person Trading Thefts

In Person Trading TheftsBitcoin theft extends past the online world. With new legislation and control over cryptocurrency trading gearing up in certain parts of the globe, citizens may have problems buying and selling Bitcoins in the usual way. These challenges have stimulated the Bitcoin economy to begin migrating offline. Traders are starting to meet face-to-face to conduct exchanges. A number of cases show how risky peer-to-peer Bitcoin exchanging may be. In April 2017, an entrepreneur from India was robbed when he tried to buy BTC at an attractively low price. He met with the supposed dealers at a shopping center. The crooks then abducted and robbed him. The lesson you can learn from this kind of offline cybercrime incidents is that it’s best to refrain from meeting unknown people in person to exchange BTC, especially when carrying large sums of money.

Bitcoin Security: Conclusion

The world of Bitcoin is growing. If you plan to be a part of it, hopefully the above steps will help you stay safe and secure while trading and using your BTC. You can read the full article on BestVPN.com.
0

Bitcoin, Blockchain, Blockchain technology, Cryptocurrency
We repeatedly read that the blockchain is very cool – it’s a breakthrough, it’s our future, and so forth. If you believe all this is true, you’re in for a disappointment. Important note: this article deals with the implementation of blockchain technology, which is used for the Bitcoin cryptocurrency. There are other applications and implementations of the blockchain and certain issues are resolved in some of them.

About Bitcoin

Bitcoin creators had a task: to make it work without a central control point; no-one should trust anyone. The authors fulfilled the task, the resulting electronic money functioned as intended and its adoption has grown. However, the decisions they made are monstrous in their inefficiency. The purpose of this post is not to discredit the blockchain. It’s a useful technology that has many great applications. Despite its shortcomings, it has unique advantages. However, in the pursuit of sensationalism, many journalists concentrate on the advantages of blockchain technology and often forget to assess the real state of affairs. They ignore the disadvantages. Therefore, it’s useful to consider the blockchain from all angles.

Myth One: Blockchain Is a Giant, Distributed Computer

Blockchain Distributed ComputerThose who don’t understand the basic principles of blockchain may be under the impression that it’s some kind of computer that performs distributed computing tasks, while its nodes around the world are gathering small bits of data to build something complicated and big. This is not the case. In fact, all the nodes that serve the blockchain are doing precisely the same thing. Millions of computers:
  1. Check the same transactions using the same rules. They perform an identical job.
  2. Add the same data to the blockchain.
  3. Store the whole history, which is the same and one for all.
There’s no parallelization, no synergy, no mutual assistance. There’s just duplication and, most importantly, it’s million-fold duplication. There’s no efficiency at all, as you can see.

Myth Two: Blockchain is Eternal – Everything Written There Will Remain Forever

Blockchain is Eternal The entire history of all transactions already runs to over 130 gigabytes of data. This is the full capacity of a cheap laptop or a modern smartphone. The more transactions that occur in the Bitcoin network, the faster the volume grows. The growth in the capacity of hard disks is probably not keeping up with the growth of the size of the blockchain. In addition to the fact that it needs to be stored, the whole database must be downloaded from the very beginning. It now takes several days to do so. You may ask: “Is it possible to store just part of the blockchain, since it’s the same thing on every node of the network?” Yes, you could, but then it would be a traditional client-server architecture instead of a peer-to-peer blockchain. Also, clients will be forced to trust servers. Thus the idea of “not trusting anyone,” which is the cornerstone of the blockchain, disappears. For most users, this principle has already gone. Bitcoin users are divided into two groups: enthusiasts who “suffer” and store it locally, and ordinary people who use online exchange services and wallets. The latter are much more prominent. These people trust the server and don’t care how it works.

Myth Three: Blockchain is Effective and Scalable

Blockchain is ScaleableIf each node of the network does the same thing, it’s obvious that the bandwidth of the entire network is equal to the bandwidth of one node of the network. Bitcoin can process a maximum of seven transactions per second – that’s it. In addition, Bitcoin transactions are recorded only once every ten minutes. After the record appears, it’s agreed to wait another 50 minutes, because some records spontaneously roll back from time to time. Thus if you need to buy chewing gum, you may have to wait an hour or so in the store in order to complete the transaction! With such a transaction speed, it’s impossible to increase the number of active users substantially. For comparison, Visa processes thousands of operations per second. It can also quickly increase this rate, as traditional banking technologies are easily scalable.

Myth Four: Miners Provide Network Security

Bitcoin Miners Provide Network SecurityYou’ve probably heard of miners, and of giant mining farms built next to power stations. What are they doing? They’re just wasting electricity! They “shake” the blocks until they become “beautiful” and can be included in the blockchain. Rewriting the financial history in this way takes as much time as creating it (provided you have the same total capacity). To build one block, you need the same amount of electricity as an average city consumes per 100,000 inhabitants. Add to that the costly equipment, which is suitable only for mining, and you can formulate the principle of mining (the so-called proof-of-work) as: “Burning the resources of mankind.” Blockchain optimists assert that miners ensure the stability and security of the network. The problem here is that the miners protect Bitcoin from other miners. If there were a thousand times fewer miners who burned a thousand times less electricity, Bitcoin would function just as well as now – the same one block every ten minutes, the same number of transactions, the same speed. With regard to most blockchain solutions, there’s a risk of the “51% attack.” The essence of the attack is that if someone controls more than half of all mining capacities, he can secretly write an alternative financial history, in which he doesn’t send his money to others. And then he may present his own version of the blockchain – which will become a new reality. Thus, he gets an opportunity to spend his money several times. It’s not possible to attack traditional payment systems in this way. Ultimately, Bitcoin is a hostage of its own ideology. “Superfluous” miners can’t stop mining because there will be a sharp increase in the likelihood that one entity will control more than half of the remaining capacity. As long as mining is profitable, the network is stable, but if the situation changes (for example, because electricity prices rise), the network may face massive double-counted transactions.

Myth Five: The Blockchain is Decentralized and Thus Unbreakable

Blockchain is DecentralizedYou may think that since the blockchain is stored on each node of the network, the security services won’t be able to shut it down (since the blockchain doesn’t have a central server or something similar). This is just an illusion. In reality, all “independent” miners are united in pools, or rather, cartels. They have to unite because it’s better to receive a stable but small income than to wait 1,000 years to get a huge one. There are only about 20 large pools. The largest four of them control more than 50% of all Blockchain capacity. It’s enough to knock on just four doors and get access to four Command & Control servers to have the opportunity to spend the same BTC more than once. In fact, the threat is even more real. Most of the pools, along with their computing power, are located in one country – China – which simplifies the potential Bitcoin takeover.

Myth Six: Anonymity and Openness of the Blockchain is Good

Blockchain AnonymityWe know that the blockchain is open and everyone can see everything. Though Bitcoin doesn’t list your name, it’s not completely anonymous. For example, if a cybercriminal gets a ransomwarepayment to his wallet, then everyone understands that this wallet belongs to a bad guy. And since anyone can monitor and follow all the transactions from this wallet, it won’t be easy for the crook to take advantage of this money. It’s enough to make a small mistake and reveal your identity somewhere for law enforcement officials to catch you. This happens more often than you might think. These days, almost all Bitcoin exchanges require their users to go through identification procedures. Therefore, hackers have to use the so-called “mixer” services. Such services mix dirty BTC with lots of clean ones. Crooks pay large commissions for this and take a lot of risks, since the mixer is either anonymous (and could run away with the money) or is already under the control of law enforcement authorities. The pseudo-anonymity of Bitcoin may be bad for legitimate users too. Here’s a simple example: Someone transfers a small amount of BTC to his mother. After that, mother knows:
  • How much money her son has at any given time
  • What exactly he spent it on
Or, if someone pays a debt to a friend, that friend now knows everything about the first friend’s finances. It’s the equivalent of opening the financial history of your credit card for everyone on Earth to see. This is a critical issue for businesses. All their counterparties, purchases, sales, customers, transfer amounts and everything else becomes public and accessible by competitors.

Blockchain Myths: Conclusion

You have just read about the six main Bitcoin shortcomings. You may wonder why the media doesn’t cover these issues. Unfortunately, it’s simply not profitable for them to write about these matters. Many of those who bought Bitcoin began to advertise and promote it, as well as to profit from it. Why, then, would they write about the blockchain technology’s shortcomings? Bitcoin has many competitors, who have tried to solve certain problems. Although some ideas are very good, they’re all built around the same basic blockchain principles. Yes, there are other, non-monetary applications of blockchain technology, but the fundamental drawbacks of the blockchain apply there too. You can read the full article on BestVPN.com.
0

Bitcoin, Blockchain, Blockchain technology, Cryptocurrency
This is the ultimate guide to Bitcoin Privacy. Learn how to buy bitcoins anonymously and securely! How to spend it without worrying, and more! Of course, we’ll show you how to buy the best VPN anonymously, however, the same process can be used to anonymously purchase pretty much any product that accepts Bitcoins. Do note, however, that physical products need to be delivered to a physical address and/or be collected in person. This is an updated version of a guide I originally published on this website back in 2013. Since then, many things have changed. The value of Bitcoin has shot through the roof, well-known trading websites such as Mt. Gox have closed down, and much more. In some places, you can now even buy Bitcoins from ATM machines!

What Is Bitcoin?

Bitcoin is the original cryptocurrency. It is a decentralized and open source virtual currency that operates using peer-to-peer (P2P) technology (much as BitTorrent and Skype do). Like traditional money, you can trade Bitcoin for goods or services (such as a VPN subscription) and exchange it for other currencies. Unlike traditional currencies, however, there is no “middleman,” such as a state-controlled bank.
Bitcoins are instead generated using a free computer program, at a predictable rate determined by the amount of processing power dedicated to their generation. This process is known as Bitcoin mining. In theory, anyone can do it. A Bitcoin is not a physical thing; it is a cryptographic algorithm consisting of a public key and private key. Some vendors do sell physical notes and coins denominated in Bitcoin, but what they are really selling is a private key (usually protected by a seal which you must break) together with a public key that you can use to verify the balance.

Bitcoin Mining

In practice, Bitcoin mining requires a large amount of processing power – so much so that mining is impractical for most individuals. However, it is possible to join a Bitcoin mining pool (or similar organization) to help spread the costs (and rewards). The prohibitive cost of Bitcoin mining is in part responsible for the current craze for mining alternative cryptocurrencies such as Ethereum, which has a much lower entry point than mining for Bitcoins. Bitcoin mining is not the focus of this article, but if you are interested in the subject then there is an excellent article here. You may also be interested in our .

Other Cryptocurrencies

Since the release of Bitcoin in 2009, numerous other virtual cryptocurrencies have been developed. Many of these have features that offer distinct advantages over Bitcoin (including being more anonymous). None of these alternatives, however, have achieved anything near the popularity of Bitcoin. This limits their real-world usefulness when you want to buy things.

Bitcoin And Anonymity

There are two sides to the Bitcoin when it comes to anonymity. The first thing to stress is that Bitcoin is not inherently anonymous. However, it can be made so (at least to a high degree). Please always bear in mind that 100% anonymity can never be guaranteed. Central to the concept of Bitcoin is the . This is basically a public ledger that records Bitcoin transactions. Transactions in the form payer X sends Y bitcoins to payee Z are broadcast to the Bitcoin network for all the world to see. Thus, from this perspective, Bitcoin is much less anonymous than, say, good old cash. As Sergio Lerner, CEO of Argentinian company Certimix, notes, It is possible to purchase Bitcoins and hold a Bitcoin address without revealing your true identity. This only provides a form of pseudonymity, though. Interested parties can use advanced data analysis techniques to look for patterns to de-anonymize users. Such wide-scale and sophisticated data analysis is Google and Facebook’s entire business model. However…  You can use Bitcoin mixing techniques to further confuse who did what with Bitcoins. By randomly switching the ownership of Bitcoins, such techniques make de-anonymization via data analysis very hard to achieve. If you purchase and hold them without revealing your identity, and then properly mix them, Bitcoins canafford a high level of anonymity when performing transactions. I discuss ways to mix Bitcoins later in this guide. To more fully understand how Bitcoin and the blockchain works, The ultimate, 3500-word, plain English guide to blockchain by Mohit Mamoria is a fantastic introduction, as is our own Blockchain Explained guide.

The Bitcoin Cash Hard Fork

Because nothing is ever easy, on 1 August 2017 Bitcoin split into two derivative currencies: Bitcoin Classic (BTC or XBT) and Bitcoin Cash (BCH or BCC). This split is known as the Bitcoin Cash hard fork and the reasons are highly technical.

Bitcoin Classic Vs. Bitcoin Cash

If you had any Bitcoin in your wallet and have possession of the private keys, then you are now also entitled to claim an equal number of Bitcoin Cash coins. Thus, if on 1 August 2017 you had a wallet with one Bitcoin in it, you still have that Bitcoin and can nw also claim one Bitcoin Cash coin (BCH). If you are just starting with Bitcoins, then you’ll need to decide between purchasing Bitcoin Classic or Bitcoin Cash. Some points to bear in mind are:
  • Bitcoin Classic is much better established and far more vendors accept it as a form of payment.
  • Most Bitcoin wallets and many exchanges don’t accept Bitcoin Cash.
  • However, Bitcoin Cash allows for more transactions per second. This translates to faster payments and lower fees.
  • 1,500 more blocks were mined on the Bitcoin Cash chain than on the original one.
  • The market price for Bitcoin Cash has fluctuated wildly over the last month, but in general it has seen steady growth.
As already noted, this article was written just one month after the hard fork. It will be interesting to see how the situation develops. For the purpose of this article, I will assume regular Bitcoin Classic is used. However, while there may be big differences between the currencies from an investment viewpoint (on which I am not qualified to comment), there is almost no difference in the front-end of how they are used. Indeed, they are based on the same code. As such, you can expect to see more Bitcoin Cash versions of existing Bitcoin software going forward, as tweaking code for the new currency is almost trivially easy. You can read the full article on BestVPN.com.
0

Bitcoin, Blockchain, Blockchain technology, Cryptocurrency

To understand cryptocurrency, you first need to understand the history of the virtual coin. Virtual coin, or digital currency, differs from traditional fiat currency in that there is no physical representation to accompany each unit of value. Long before the crypto craze of 2017, there were the pioneers of electronic cash.

These early financial freethinkers shaped the market and prepared the world for the digitization of the economy. Fast forward to today’s crypto market, and thanks to the efficiency of blockchain technology, you now see digital money experiencing increased adoption globally.

Virtual Coin Before Bitcoin

Over the last twenty years, virtual currency payment systems have flourished. These systems existed long before the advanced blockchain technology of today made virtual coins, such as Bitcoin, a household name.

Virtual currencies are not considered a legal tender in most countries for many reasons. Governments do not issue these coins. Instead, virtual currencies are issued by the platform’s developers. Today, there are many ways in which companies release virtual coins. Before cryptocurrencies, bonuses were the most popular form of issuing digital currency.

 

 

Problems with Early Virtual Coin

The problem with these early virtual coins was that they were too susceptible to attack from hackers or scammers. Additionally, the lack of any form of material confirmation left many businesses skeptical of the true value behind these concepts. Remember, this was 20 years prior to the emergence of blockchain technology. Many people didn’t even own a computer at this time.

Netherlands, 1980s

One of the first examples of an attempt to create a digital cash comes from the Netherlands in the late 1980s. Gas station owners were fed up with their businesses being robbed. The problem got so bad that someone decided it would be safer to find a way to place money onto smart cards. Trucking company owners could load these cards and give them to their drivers. The drivers would then use the cards at the participating gas stations.

Flooz.com

Another example of virtual coin usage before cryptocurrency is the internet currency Flooz. Flooz.com issued these virtual coins in 1998 as part of a marketing campaign. Each Flooz equaled one dollar in value.

Users would receive Flooz coin for purchases made on the Flooz.com website. Users could then spend their Flooz on more products on the site, or they could take their bonus earnings and shop at numerous other participating vendors.

The concept was well before its time, and despite a multi-million dollar advertising campaign, Flooz never achieved the level of adoption required to sustain the project. The platform also took heavy losses after a combination of Russian and Filipino hackers made purchases using stolen credit cards. The company is now defunct, but the inspiration of their project lives on in the digital currencies of today.

Blinded Cash

In 1981, an American cryptographer by the name of David Chaum released his now famous paper titled Untraceable Electronic Mail, Return Addresses, and Digital Pseudonyms. Chaum described an anonymous digital currency system. In 1989, Chaum developed his protocol into a working virtual coin known as DigiCash.

David Chaum via Quartz

David Chaum via Quartz

The protocol was revolutionary and introduced the world to the concept of blind signatures. Blind signatures disguise the content of a message and utilize a combination of a public and private password to verify the validity of the participants. Today, this concept is used in major cryptocurrencies in the form of public keys.

B-Money

A decade after DigiCash entered the market, a developer by the name of Wei Dai made waves in the cryptographic community after publishing a paper called B-Money Anonymous, Distributed Electronic Cash System. This virtual coin concept utilized a decentralized network, which included private sending capabilities and auto-enforceable contracts. While the technical aspects of this virtual coin were far from blockchain technology, and the project never gained enough momentum to take flight, the concept greatly influenced the future cryptocurrency market.

Bit Gold

Longtime virtual coin advocate, Nick Szabo, pioneered the proof-of-work system used today by cryptocurrencies such as Bitcoin with his Bit Gold protocol. Bit Gold helped to cement the concept of a decentralized network and the elimination of third-party verification systems. Satoshi borrowed many of Bit Gold’s concepts. So much so, that many people believed Satoshi Nakamoto to be Nick Szabo. It took a public denial by Szabo to finally convince people otherwise.

HashCash

Many crypto enthusiasts consider HashCash to be the direct inspiration for Bitcoin. HashCash was introduced in 1997 by cryptographer Adam Beck. Beck incorporated a proof-of-work protocol to verify the validity of a transaction. HashCash’s proof-of-work protocol previously saw use as a spam reduction technique before being adapted for virtual coins. The concept impacted Nakamoto to the point that he cites Beck in the Bitcoin white paper. However, HashCash lost relevance after suffering scalability issues due to increased network congestion.

Enter Bitcoin and the Wonders of Blockchain

Satoshi Nakamoto, the anonymous creator of Bitcoin, labels the world’s most successful cryptocurrency as “a peer-to-peer electronic cash system.” Unlike the virtual coins before Bitcoin, Satoshi had the backing of powerful new technology, blockchain.

Blockchain technology stores information in duplicate over a vast network of computers. Prior to any changes to the blockchain, fifty-one percent of the nodes must agree on the validity of the chain. This validation process references the previous blocks. The longest verifiable chain of transactions remains the valid chain. In this manner, blockchain technology eliminates the need for third-party verification systems such as banks.

Advantages of Virtual Coins

The advent of blockchain technology increased the benefits of virtual coins significantly. Users can transfer cryptocurrency in near instant time, and at a much cheaper rate than the traditional methods of global money transfer. Cryptocurrencies eliminate the need for verification systems, which saves you big time.

To put the level of savings experienced by crypto users into perspective, look at the traditional international money transfer methods. Today, your funds require verification from potentially thirty-six different third-party organizations when sent globally. And, each organization tacks on a fee for their services.

Virtual Coins Are Here to Stay

Now, the world has multiple legitimate virtual currency options to consider. These digital currencies continue to shape the economics of the future. Today, virtual coins are more common than ever, and for the first time in history, digital money receives recognition from traditional financial firms.

 
 
  This article was originally published at CoinCentral.com.
0

Bitcoin, Blockchain, Blockchain technology, Cryptocurrency

Post Oak Motor Cars, the luxury automobile retailer which stocks Rolls-Royce, Bentley, and Bugatti vehicles has announced plans to accept Bitcoin and Bitcoin Cash payments at its dealership. The retailer is reportedly the first one in the U.S. to embrace the use of popular cryptocurrencies for retail payments.

The auto retailer will operate its crypto payment service via Bitpay, a popular payment service provider. According to Tilman Fertitta, renowned American businessman, and owner of Post Oak Motor Cars, the company is moving forward with this new plan to enhance the buying experience for its customers who are cryptocurrency holders or wish to use digital currencies for their own reasons. He also stated that crypto purchases will make it easier and faster for people to buy cars from the dealership.

The statement by Fertitta reads:

“Being a premier luxury car dealer, I always want to offer my customers the very best buying experience and this partnership will allow anyone around the world to purchase our vehicles faster and easier.”

In 2017, Fertitta opened up to reporters concerning his thoughts on Bitcoin, stating that people will most likely not buy it since it is not exactly insured by the Federal Deposit Insurance Corporation (FDIC). However, Bitcoin adoption has grown considerably since that statement was made and various corporations have risen to the task of catering to the ever-growing population of crypto investors. Currently, Post Oak Motor Cars is no exception.

According to the press release, Bitpay is embracing the dealership’s plan due to its reputation and the popularity of the luxury automobiles it stocks.

The statement by Sonny Singh, Chief Commercial Officer (CCO) of BitPay, reads:

“We’ve noticed people prefer to make larger purchases with bitcoin since it is a simple way to make payments. This partnership is timely with the increasing popularity of Rolls-Royce, Bentley and Bugatti vehicles. Post Oak Motors has a great reputation for selling the finest cars, and we are thrilled to be partnering with Tilman.”

THE POST OAK MOTOR CARS LUXURY EXPERIENCE

Like other Tilman Fertitta companies, Post Oak offers a luxury experience to its customers, that seeks to integrate them into its ecosystem, making them return several times. At its prestigious uptown/galleria area of Houston, the dealership welcomes customers looking to purchase Bentley, Rolls-Royce, and Bugatti vehicles.

The world of cryptocurrency is often characterized by the presence of millionaires, flashy cars and real estate. This is why it makes sense that Post Oaks sees an emerging class of cryptocurrency owners among its clients. By allowing this group of customers pay with their digital currency, the firm is retaining customers and opening its doors to even more customers within the field.

The firm aims to create the best possible automotive experience and in the past, this has meant post-delivery services, including major repairs, oil changes, brake repairs, and tire replacements. Now, however, this includes catering to its crypto crowd and ensuring that people are not restricted when paying for luxury items. This is especially convenient for investors since it is not easy to convert cryptocurrency back to fiat currency without any hassle.

Cryptocurrency acceptance is still minimal, seeing as there is still much development going on, in terms of stability, security, and regulation. This means that businesses accepting cryptocurrency are few. There are currently over 20 million active Bitcoin wallets and about 5% of Americans use cryptocurrency, so this presents a unique opportunity, just waiting for brands to snatch it up.

WHO IS TILMAN FERTITTA?

Tilman Joseph Fertitta is an American entrepreneur as well as the Chairman, Chief Executive Officer, and owner of Landry’s, Inc. With over $3.5 billion in assets, the company operates more than 500 restaurants, hotels, and casinos across various international locations, generating $3.4 billion in revenue annually.

Fertitta is also a TV personality, Chief Executive Officer at The Oceanaire, Inc., and Co-Chairman as well as Chief Executive Officer of Landcadia Holdings, Inc. He currently serves as Chairman at Houston Police Foundation, Houston Children’s Charity, Golden Nugget, Inc. and University of Houston System Board of Regents. He is worth an estimated $3 billion and is regarded as the richest restaurateur in the world.

Born in Galveston, Texas, in 1957, Fertitta spent part of his childhood learning the ropes at his father’s seafood restaurant. According to many reports, Tilman Fertitta began investing in stock as early as high school and successfully established his first business in his twenties. After graduating from high school he got into Texas Tech University and later transferred to the University of Houston, where he studied business administration and hospitality management.

By 23, a young Fertitta, still in college, took a loan of $6,000 to start a seaside hotel in Galveston. This was his first business. Soon, he was able to build a restaurant empire which he has continued to expand till date.

In September 2017, he signed an agreement to purchase popular NBA team, the Houston Rockets, for $2.2 billion. He is also credited as one of the original investors who helped shape the future of the Houston Texans as an NFL team although he eventually sold his franchise. He served as the director of NBA team, the Houston Rockets for a long time.

Tilman Fertitta was the star of the reality show “Billion Dollar Buyer” which aired on CNBC from 2016 and featured the businessman traveling across the country to test innovative hospitality products to be used in Landry’s, Inc.’s hotels and casinos. In 2004, Tilman Fertitta became the second-youngest Texan to be inducted into the Texas Business Hall of Fame.

WHAT ARE OTHER CAR BRANDS DOING WITHIN THE CRYPTOCURRENCY INDUSTRY?

Luxury Car,  Bitcoin

As cryptocurrency users continue to increase, the auto industry is making moves to promote adoption and incorporate blockchain technology into their operations. One example is Daimler AG, the Germany based automobile giant responsible for a range of luxury cars including Mercedes-Benz.

The firm recently created MobiCoin, its own digital currency, as a way to reward drivers for maintaining eco-friendly driving practices like low-speed driving. The vehicles will transmit data directly to Daimler AG which will allocate MobiCoins based on this data, all carried out via a mobile app.

Other examples are BMW, Renault, Ford, and General Motors, which are among 30 companies in the Mobility Open Blockchain Initiative (MOBI), including IBM and Bosch. These companies hope to accelerate blockchain adoption and promote new use cases in areas like ride-sharing.

Recently, Ford also filed a patent for a vehicle-to-vehicle communication system, involving the exchange of cryptocurrency tokens as a way to facilitate traffic flow.

FINAL THOUGHTS

Brands continue to push for cryptocurrency adoption due to the rising demand and secure ways to purchase items with these currencies. For several reasons including anonymity, and transaction speed, many people find it easier to spend cryptocurrency. This is why it is important for companies to map out ways to cater to this portion of their customer base.

Post Oak Motor Cars is no amateur when it comes to the convenience of its customers. Under the leadership of Tilman Fertitta, the company is showing that it is more than willing to go to great lengths to improve the buying experience for them.

This article was originally published at MinDice.com.

0

Bitcoin, Blockchain, Blockchain technology, Cryptocurrency

Unlike the period in which Bitcoin first emerged, it is a lot easier to buy cryptocurrency today. The major upside of this is that users do not have to break their necks searching for a way to buy their favorite coin.

There are numerous ways to go about it, including exchanges and Bitcoin ATMs, as opposed to attending crypto meetups and hanging around chatrooms in the hopes of meeting people who are willing to sell their tokens. However, most exchanges have not completely figured out how to make it easy for users to buy Bitcoin using fiat currency. In fact, this is a major drawback since people mostly have fiat currency as their starting point for acquiring cryptocurrency.

Normally, fiat purchases can be carried out through third-party applications like Paypal. However, users have found it nearly impossible to do something as simple as buying some Bitcoin straight from their Paypal accounts. With the Paypal active user base falling to 250 million, this is a far-reaching problem.

Currently, attempting to buy cryptocurrency through Paypal is difficult and expensive, mostly due to the potential for users to take advantage of chargebacks. For example, a user could buy some Bitcoins on an exchange, directly from their Paypal account and use its support system to charge it back so that they receive a refund. This can be problematic for exchanges since they can’t request refunds from the Bitcoin wallets they’ve credited.

WAYS IN WHICH BITCOIN CAN BE PURCHASED WITH A PAYPAL ACCOUNT

Although they are few, there are still some other ways in which users can purchase Bitcoin directly from their Paypal accounts, including direct trade, Bitcoin loans, and centralized exchanges and Specialized payment apps.

1. P2P DIRECT TRADE

Since most exchanges do not accept Paypal payments in exchange for BTC, direct trade is the most efficient way forward for those bent on using the payment app.

This involves sites that facilitate peer-to-peer agreements to sell and purchase Bitcoin using Paypal. Essentially, one user connects with another, either in person or through the use of a decentralized exchange like Localbitcoins, Paxful or Cancoin. After connecting, both users can agree on Paypal as a method of payment for their mutual benefit.

LOCALBITCOINS

Localbitcoins is easily the most popular way to buy BTC from a Paypal account. It is a peer-to-peer marketplace that aims to connect buyers and sellers who want to carry out their transactions using Paypal.

The platform method has continuously proven to be an effective way to achieve this. However, users must be careful when choosing sellers to avoid any fraudulent issues. Traders can be filtered by looking at their trade volume and feedback.

PAXFUL

This is another popular marketplace which links buyers and sellers as well as provides escrow services. The fees on Paxful are higher than the market rate but may prove to be worth it. Its user interface bears some slight similarities to Localbitcoins. Apart from Paypal, the platform also conducts transactions via Skrill, Payoneer and gift cards. The site will only accept verified U.S. Paypal accounts.

CANCOIN

Cancoin is a relatively new, decentralized peer-to-peer exchange for Bitcoin traders. It facilitates transactions between users and allows them to carry out these transactions using Paypal. Cancoin greatly emphasizes its security and range of tools to make the user experience more convenient.

Some features include multiple escrow orders, multi-signature transactions, custom alerts via email, SMS, desktop or browser and Interactive price history graphs. Creating an account on the platform is free but sellers pay a 1% fee on each transaction apart from the normal Bitcoin transaction fees. Buyers on the other hand, do not pay fees.

2. P2P BITCOIN “LOANS”

Bitcoin lending is becoming increasingly popular and since a large number of users receive money through Paypal, several bitcoin lending platforms accept it as a payment method. In these systems, users who hold Bitcoin can decide to lend their tokens to other users in hopes of generating profits from interest.

Since Bitcoin lending is still a growing concept, there are not many lending platforms. As a result, the chances of finding one that accepts Paypal as a payment method are slim. xCoins has managed to stand out in this regard.

XCOINS

xCoins is a cryptocurrency exchange, which also serves as a peer-to-peer marketplace, offering additional services including Bitcoin lending. It primarily exists to act as a bridge between Bitcoin lenders and borrowers.

When users fund their xCoins account, they can decide on what interest rates they would like to charge their borrowers, with a starting point of 15%.

Borrowers on the platform are matched with loans, according to the needs they specify.

xCoins guarantees a high level of security through its internal rating system. This way, the credibility of users can be verified easily.

undefined

3. CENTRALIZED CRYPTOCURRENCY EXCHANGES

A handful of centralized exchanges have also developed their own systems for ensuring security while accepting Paypal as a payment method. They include Virwox and eToro.

VIRWOX

VirWoX, an acronym for Virtual World Exchange, is a centralized cryptocurrency exchange which accepts Paypal payments. It was launched in 2007 as a digital currency exchange even though it precedes Bitcoin.

Currently, the platform has over 1 million registered users and uses an automatic order system to match them. Like almost any other exchange, a user must create an account to use the platform.

After this step, funds can be deposited in a virtual wallet using Paypal, credit cards, and a host of other options. Subsequently, buy-sell pairs, market limits or order limits can be created on the exchange page and submitted.

ETORO

eToro is a popular social trading and online forex platform where users can invest in several digital assets. The platform offers a wide array of cryptocurrencies and ensures that all user assets are managed in a single place.

It also eliminates the need for a digital wallet and claims to use high-quality encryption technology to secure investors’ funds. Unfortunately, fees on the Etoro platform are relatively high.

4. SPECIALIZED PAYMENT APPS

Some payment apps act as intermediaries to allow Paypal users access cryptocurrency from their accounts. One example is WirexApp which is not an exchange, yet facilitates the purchase of digital currency.

WIREXAPP

WirexApp allows users to set up consistent Paypal cryptocurrency payments. Unfortunately, a user’s first transaction takes about 1-2 days but all transactions after that are carried out instantly.

It is available in several countries including Bahamas, Bahrain, Iceland, Indonesia, Italy, Malaysia, Malta, Philippines, Romania, Saudi Arabia, and the United Arab Emirates among others.

To get started, users must create and verify a WirexApp account. This gets them a free virtual visa card which they have to deposit about $3 into. The card can be added to Paypal and used to pay for cryptocurrency transactions.

FINAL THOUGHTS

Buying cryptocurrency from a Paypal account has many upsides. But fraud, its major drawback seems to trump them all. Until major exchanges find a way around chargebacks, users may be stuck jumping through hoops just to buy cryptocurrency conveniently.

At the same time, platforms that currently offer this service are few and as a result, there is more profit to go around in the form of transaction fees. While this is great for these exchanges it does not do users any favors– since the scarcity of a Paypal payment option on cryptocurrency exchange will only drive up the existing transaction fees on the few platforms that offer this option. Hopefully, exchanges will become fiat-friendly in the next future and allow users to pay for cryptocurrency more conveniently.

This article was originally published at MinDice.com.

0

Bitcoin, Blockchain, Blockchain technology, Cryptocurrency

What is Bitcoin Gold?

Only a few months after the Bitcoin Cash hard fork, the Bitcoin blockchain experienced another community-driven hard fork known as Bitcoin Gold (BTG).

Bitcoin Gold hopes to change the paradigm around mining on the Bitcoin blockchain. According to the founders, the Bitcoin blockchain has become too centralized. Large companies with huge banks of mining computers now mine the vast majority of Bitcoin. For the founders of Bitcoin Gold, having large companies control the Bitcoin network defeats the purpose of a decentralized ledger and peer-to-peer currencies.

In response, they’ve initialized the Bitcoin Gold project. It’s an alternate fork of the Bitcoin blockchain that implements changes that make mining more equitable. The goal of Bitcoin Gold is to create a network where anyone can become a miner with only basic hardware. As a result, Bitcoin Gold mining would be spread among many miners, instead of a few large companies.

In this guide, we cover all things Bitcoin Gold such as:


Decentralizing the Bitcoin Blockchain

In the very early days of Bitcoin, ordinary computers verified and completed the proof of work needed to power the Bitcoin blockchain. However, the past several years have seen rapid development in the hardware used to mine Bitcoin.

What started as normal computers on the original Bitcoin network soon graduated to specialized rigs with graphics processing units (GPUs) installed to hash the proof of work faster.

Today, the hardware has advanced even further. Application-specific integrated circuits (ASICs) now perform nearly all of the mining on the Bitcoin blockchain. These are devices built specifically for Bitcoin mining that are 1,000,000 times better at mining than your home computer. Buying, installing, and running ASICs has a high startup cost, making it difficult for the average user to get involved.

[Editor’s note: The more expensive mining becomes, the fewer people can actually do it. This means that the mining network becomes that much more centralized. The argument Bitcoin Gold wants to make is to make mining Bitcoin something everyone can do, therefore keeping the mining as decentralized as possible.]

In addition, most successful Bitcoin mining operations today involve entire rooms or warehouses full of ASICs running 24/7. Small time miners simply can’t compete.

Mining Farm

Mining farm. Photo by Marco Krohn – Creative Commons

Bitcoin Gold’s motto, “Make Bitcoin Decentralized Again,” is a tongue-in-cheek reference to Donald Trump’s election campaign slogan. However, it also references Satoshi’s original vision for Bitcoin of a peer-to-peer network where anyone could take part in the mining process. In order to change Bitcoin mining into something more equitable, Bitcoin Gold proposes changing the blockchain to eliminate ASIC mining.

SHA-256 vs Equihash

The fundamental change in Bitcoin Gold is choosing a different hashing algorithm that makes proof of work more difficult for ASICs. This is accomplished when a hashing algorithm requires more memory (RAM) to complete. Since ASICs are about pure processing power, requiring more memory bottlenecks their processing ability. This makes small-time mining on GPUs competitive once again.

The current, ASIC-driven Bitcoin blockchain uses a hashing algorithm known as SHA-256 for its proof of work. The founders of Bitcoin Gold instead use another algorithm known as Equihash. Alex Biryukov and Dmitry Khovratovich developed Equihash as an ASIC-resistant algorithm, and it has already seen success powering other cryptocurrencies, the most famous of which is Zcash.

Ultimately, changing to Equihash would make Bitcoin mining more distributed, and that’s really the only change that Bitcoin Gold proposes for the network. While mining centralization is an issue on the Bitcoin blockchain, with miners blacklisting some users or giving preference to certain transactions, there’s a limit to how much power these central miners can wield. It’s not clear that mining centralization has had an overly negative impact on Bitcoin.

If it ever did, the Bitcoin core developers could implement Equihash themselves, essentially firing all the current ASIC miners on the Bitcoin blockchain. The prospect of losing the hundreds of thousands of dollars they invested in their mining hardware with an algorithm change is enough to keep most miners on the network honest.


Who Received Bitcoin Gold?

Since Bitcoin Gold is a fork of the original Bitcoin blockchain, everyone who owned BTC before the fork received the same amount of BTG, at a 1:1 ratio. You didn’t need to do anything special to receive the BTG, but claiming it may have gotten tricky depending on how you had your wallet set up.

You’re able to trade BTG on nearly 20 exchanges. The most popular options are HitBTC, OKEx, Bitfinex, and Binance.

How to Mine Bitcoin Gold

If you’re interested in how to mine Bitcoin Gold, we’ve got good news. The set-up process is relatively simple, and you mine with just a GPU – no ASICs required.

First, you need to join a mining pool. You’ve got over ten to choose from with pool.gold as one of the most popular options. Next, download the mining software from the pool that you joined. Pool.gold has mining software available for NVIDIA and Radeon.

If you don’t have a BTG wallet, set one up. Your options include BTGWallet.online, the Bitcoin Gold Core Wallet, or any exchange that supports BTG.

Continuing with pool.gold as the example, you have separate instructions based on your GPU:

  • NVIDIA: Edit the start.bat file to include your Bitcoin Gold wallet address followed by the worker name.
  • Radeon: Edit the config.txt file to include your Bitcoin Gold wallet address followed by the worker name.

Finally, double-click “start.bat” and begin mining.


When Did It Go Live?

The Bitcoin Gold hard fork occurred on October 24, 2017, with block 491,407 on the Bitcoin blockchain.When that happened, Bitcoin Gold took a snapshot of all the balances and transactions on Bitcoin up to that point. The new blockchain began from there.

Is Bitcoin Gold a Competitor to Bitcoin?

Although Bitcoin Gold is a hard fork of the original Bitcoin blockchain, it’s not really a competitor to Bitcoin. While other hard forks, like Bitcoin Cash, cannibalized some miners from the Bitcoin network to work on the new blockchain, Bitcoin Gold’s anti-ASIC algorithm means virtually none of Bitcoin’s current miners will want to switch to mining BTG.

Instead, Bitcoin Gold competes with other anti-ASIC cryptocurrencies like Ethereum for mining power. Mining on such networks comes in the form of smaller-scale GPU mining. The problem for Bitcoin Gold is those other anti-ASIC cryptocurrencies have a longer history and are more predictable for miners. It’s not clear why a miner would want to switch to BTG, unless the price per BTG surges.

The one advantage that Bitcoin Gold has is wide dispersal. Everyone on the Bitcoin network received will receive BTG, so there’s potential for widespread adoption.

Bitcoin Gold vs Bitcoin, Bitcoin Cash, & SegWit2x

With so many forks on the Bitcoin blockchain in such quick succession, it can be confusing to keep track of the differences. Here’s a table to help you out:
 BitcoinBitcoin GoldBitcoin CashSegWit2x (cancelled)
PoW TypeASICASIC-resistant (GPU)ASICASIC
Block Time~10 mins~10 mins~10 mins~10 mins
Difficulty adjustment~2 weeksEach block~2 weeks~2 weeks
SegWitYesYesNoYes
Replay ProtectionYesYesNo
Total Coin Supply21 million21 million21 million21 million
Bitcoin Gold is the only Bitcoin fork to date to implement a new ASIC-resistant proof of work algorithm. Along with that new hashing algorithm, Bitcoin Gold implements a new difficulty adjustment with every block, gradually increasing the difficulty based on past block times. Finally, Bitcoin Gold is one of the only Bitcoin forks to support both Segregated Witness (SegWit) technology and replay protection. SegWit increases the number of transactions possible per block and replay protection prevents fraudulent parallel transactions on two forks.

Replay Protection After a Fork

hard fork

A hard fork.

Replay protection is critical when implementing a fork of an existing blockchain. The shared code and wallet addresses between BTC and BTG make it possible to implement a replay attack. Basically, if you want to conduct a transaction on both BTC and BTG at the same time, you’re fine. However, if you want to pay someone in BTC and keep your BTG, you’re open to an attack. An attacker could send a false signal between the forks that causes you to lose both currencies when you only meant to send one.

Bitcoin Gold offers full replay protection on BTG to prevent such attacks. The solution involves a SIGHASH_FORK_ID mechanism that rehashes transactions, meaning they can’t be transferred across from BTC to BTG.

What People are Saying About Bitcoin Gold

Most new cryptocurrencies involve ASIC-resistant hashing algorithms, and it’s becoming something of an industry standard to promote decentralization. In that respect, Bitcoin Gold holds a lot to be excited about. At its core, it’s about transitioning the Bitcoin network to more decentralized mining.

However, as we saw above, there’s not much evidence that the current Bitcoin mining system is broken. There have been some small complaints, and it’s not ideal that the network is so centralized. Nevertheless, miners on Bitcoin have a lot to lose if they wield their power too aggressively. There are also new entrantsto the Bitcoin mining community that are decentralizing control from a few key ASIC farms.

The general consensus from Bitcoin experts is there’s not enough new in Bitcoin Gold to warrant an independent investment. While it certainly doesn’t hurt to hold onto your free BTG that you receive as a result of the fork (if you owned Bitcoin before Oct 24), wait until the dust settles before deciding whether to buy more.

  This article was originally published at CoinCentral.com.
 
 
0

Bitcoin, Blockchain, Blockchain technology, Cryptocurrency

Bitcoin was all the rave last year, with its high-profit margins and an influx of new investors. However, it is safe to say that over the span of one year, it has matured considerably. Like Ethereum founder Vitalik Buterin told CNBC, Bitcoin may never have as much hype as it did in 2017 because so many people are now aware of cryptocurrency and how it works.

A lot of things have changed in the cryptocurrency sector since over-the-top forecasts were made in 2017, including a $160,000 price estimation for Bitcoin. One of such changes is the introduction of Bitcoin Futures which control the price of BTC by allowing large investors to exert pressure on it.

This means that predictions of large price values like the one above are unlikely to be met in the near future. Another change is the start of Bitcoin institutional investing. For example, both the Bakkt and the Nasdaq platforms claim to be open to offering cryptocurrency investing to institutions.

While stakeholders struggle to keep the BTC price at bay, one daunting question still looms: Will Bitcoin crash again in 2019 or will it peak and stabilize at a better price point than it currently has?

WHAT DOES THE FUTURE LOOK LIKE?

The last major cryptocurrency crash which followed the December 2017 peak brought about a need for an evolution in Bitcoin investment. Where Ethereum had ICOs as a new way to pour funds into the cryptocurrency industry, Bitcoin lacked one.

Soon, industry experts like the Winklevoss twins started looking towards exchange-traded funds (ETFs) to create long-term sustenance of Bitcoin as an investment vehicle. Unfortunately, these ETFs cannot function without approval from the Securities and Exchange Commission, so the industry is at a crossroads: evolve and survive, or continue at the same pace and end in a bubble burst.

 

undefined

AN EMPHASIS ON NON-PHYSICAL BITCOIN ETFS

An exchange-traded fund is a security that tracks underlying real-world assets like gold, equities, oil, bonds, commodities or cryptocurrency. It allows investors to buy into it and earn dividends from their investment. Such shares are easy to trade like stocks and can get rid of any barriers faced by investors when trying to purchase those underlying assets themselves.

The submitted ETFs proposals describe funds that are primarily derivatives. They can be shorted or coordinated with a Bitcoin future. Only physical Bitcoin ETFs are currently a good fit for the Bitcoin market since derivatives bring about the unfavorable market to another state.

Bitcoin exchange-traded funds have been in the headlines lately, mostly for their rejections. Just recently, theWinklevoss twins faced a rejection of their own. This has not deterred other parties who are bent on seeing this new form of investment come to life.

Unfortunately, the SEC is building up quite a track record of rejections with a toll of up to 15 rejected Bitcoin ETFproposals since 2013.

BITCOIN PRICE FORECAST VS. BITCOIN USAGE     

One major factor to consider when looking at the possibility of another crash is the adoption rate of Bitcoin. Currently, ownership is still quite low, only a few points higher than last year. This implies stagnation and also that investors have found other coins which they deem more competitive. The younger generation is generally more bullish on Bitcoin usage since they consider it a product of their age, but the older generation remains skeptical.

However, this brief stagnation does not prove that Bitcoin will crash. If anything, the introduction of Futures and the demand for ETFs make up for it and shows that Bitcoin is here to stay.

It also shows that users are serious about integrating it into their daily transactions, which may eventually save the pioneer digital currency.

The introduction of stable coins like tether and application-tolerant platforms like Ethereum and EOS have given Bitcoin a serious run for its money. The high price point, which has been Bitcoin’s most attractive feature in the past has also turned out to be its Achilles’ heel.

Percentage increases in profit are simply not as good as those in cryptocurrencies with lower prices. For example, a user who buys $2000 worth of XRP at $0.3 can afford to purchase 6666 tokens while the same amount will only purchase about 0.3 BTC at $6000 per unit. While XRP can easily rise by 100% to $0.6, it will take a lot more for BTC to hit $12,000. This makes it more profitable to buy into smaller cryptocurrencies.

But what about the earlier forecasts of Bitcoin? How do they tie in with this new usage information? Simple, they do not. Several forecasts were made with assumptions of an ideal situation in which adoption would progress quickly and at a steady rate. Some of these forecasts have been revisited, with extended timelines that seem more realistic in light of Bitcoin’s recent performance.

WHAT ARE THE BITCOIN PRICE PREDICTIONS FOR 2019 AND 2020?

The recent issues faced by Bitcoin have not stopped industry figures from making future predictions about its price. Industry predictions generally fall between $25,000-$29,000 as a realistic price point for Bitcoin.

This is especially because it has been trending in its transition band, in which it will trade most of the time, since May 2018. This signifies an imminent major bull run in the cryptocurrency industry.

Some other significant Bitcoin price predictions for 2019 include:

  • $28,000 by the end of 2019, according to Ronnie Moas, crypto bull and founder of Standpoint Research, in a report published by Cointelegraph.
  • $36,000 by the end of 2019, according to Sam Doctor, Quantamental Strategist at Fundstrat Global Advisors, who based his prediction on the historical average 1.8x P/BE multiple.
  • $25,000 according to Thomas Lee, Co-Founder and Head of Research at Fundstrat Global Advisors
  • $1 million, according to John McAfee, Founder of McAfee Associates, who earlier predicted a $500,000 price point before modifying it. McAfee claims that he used the same model which was used to predict $5000 at the end of 2017.
  • $10,000-$100,000 in the next 5 years, according to Joe DiPasquale, CEO of BitBull Capital.
  • $10,000 by the end of 2020 according to Fred Schebesta, Co-Founder and CEO of Finder.
  • $61,900 by the end of 2020 according to Bobby Ullery, CTO of Waysay who also predicted a shared market capitalization of $4.5 trillion between Ethereum and Bitcoin.
  • $30,000 by the end of 2020, according to Matias Dorta, Founder of ICO Informer, who also sees several countries adopting Bitcoin as a reserve currency by 2030.
  • $30,000 by the end of 2020, according to Craig Russo, Co-founder of sludgefeed.com
  • $75,000 by the end of 2020 and a market capitalization of $1.3 trillion, according to Brandon Quittem, a cryptocurrency analyst & writer.

FINAL THOUGHTS

Due to all the factors discussed above, including pending ETF proposals, stagnation, the introduction of Bitcoin futures and the competition among cryptocurrencies, it is difficult to say whether Bitcoin will indeed crash again in 2019. Considering its current performance, the leading cryptocurrency is at a point where it could either crash again or blossom into a widely accepted medium of exchange and investment.

As with almost everything else in this relatively new industry, the future of Bitcoin is shrouded in unpredictability and falls heavily in the hands of investors and regulators. However, there is no denying that Bitcoin is evolving every day as more people become exposed to it, including those who are not direct users.

This article was originally published at MinDice.com.

0

PREVIOUS POSTSPage 1 of 4NO NEW POSTS