Zář 24

John Newbery: I’m Responsible For ‘Worst Bitcoin Bug Since 2010’

Bitcoin Core developers have decried infighting between Bitcoin (BTC) and Bitcoin Cash (BCH) supporters after John Newbery claimed responsibility for last week’s CVE-2018-17144 network bug.


‘Embarrassed And Sorry’

In comments on Twitter September 23, Newbery, who is tasked with checking the Bitcoin codebase, said it was because of him that the bug had gone unnoticed.

As Bitcoinist reported, the incident occurred last week, with Core developers urging the entire network to upgrade to a patched version of the Core client as a matter of urgency.

A full summary of what happened, including the technical specifications of the bug and its eradication, has since been published.

“There’s no chance I haven’t read CheckTransaction(). When I read it, the “…so we skip it in CheckBlock” comment should have jumped out at me,” Newbery wrote discussing the technical details he claims he failed to notice.

“That comment and the fCheckDuplicateInputs flag don’t just smell, they stink. I should have followed my nose. At the very least I should have looked up Bitcoin Core PR #9049. I didn’t.”

While Newbery added he felt “embarrassed and sorry” as a result of the problems, community reactions appeared to reveal little interest in blaming any one party for it.

At the same time, other sources have warned over the serious nature of the oversight, with Bitcoin.org creator Cobra describing it as “very scary” and Bitcointalk’s Theymos considering it the “worst bug since 2010.”

Van Der Laan Blasts Community Squabbling

Fellow Core developer Wladimir van der Laan had previously said a collaborative failure had led to the situation emerging.

“It was wrong that the buggy code was merged. Yes, we screwed up but the ‘we’ that screwed up is very wide,” he commented in further tweets Sunday.

The whole community screwed up by not reviewing consensus changes thoroughly enough, more developers need to pay attention! It’s your all responsibility.

Van der Laan was writing as part of a debate on the bug’s discovery becoming fertile ground for supporters of both Bitcoin and hard fork Bitcoin Cash to criticize each other’s perceived shortcomings.

“‘Unprofessional’ doesn’t even begin to describe it,” he added.

What do you think about the fallout from Bitcoin’s code bug? Let us know in the comments below!


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Zář 19

Smart Contracts Becoming an Essential Tool for Business

Smart contracts are becoming an important part of conducting business. In the global payroll space, the technology can rid companies of redundant bureaucracy. 


The world of business is increasingly global, but some borders persist. Laws, directives and ways to enforce them change from country to country, rendering international business unnecessarily complicated.

This complication translates into a waste of many work hours. Those hours are spent trying to comply to the different legislation and make sure that the contracts that you care about are enforceable where you need them to. However, an alternative global system — that is both cheaper and more efficient — is emerging due to smart contracts.

A global alternative to archaic bureaucracy

Smart contracts are a native digital system that is more suitable for the world of modern business. The system works the same anywhere in the world, and it is near impossible to interfere with its functioning.

They are non-bribable since, in many cases, they are enforced automatically by software. Moreover, running on a blockchain ensures that data can’t be manipulated. The price of running a smart contract is way lower and faster than having a document notarized.

There are many reasons why smart contracts and blockchain will probably be a big part of conducting business in the future, and those are just some of them.

Smart contracts applied to international payroll

One of the aspects of global businesses deeply hurt by the fragmented bureaucracy is payrolling. The currently employed systems are plagued by fragmented regulations and laws, inefficient communications and intermediaries. Those problems contribute to making the system unnecessarily complicated and, as a consequence, error-prone.

Smart contracts have been employed to solve this issue by the U.S. startup Horuspay. The system is meant to eliminate middlemen, increase efficiency and simplify the procedures (wasting fewer work hours). The vast majority of organizations don’t contract a global payroll provider but instead use a global payroll aggregator. The middlemen — which is the aggregator — are incentivized to hire the lowest bidder in each country, regardless of the quality of the service.

What’s more, the aggregators also charge a significant premium on the services and — according to the Horus white paper — the smart contract counterpart will be 50-80 percent cheaper. Also, automating most of the process and simplifying — in part by disintermediating — the part of the procedure that is still manual, streamlining it so there is less probability of mistakes.

Another big advantage of smart contracts is how directly and quickly they can interact with funds. Instead of using wire transfers — which are notoriously slow and expensive — this system utilizes tokens for payments. Those transactions are way cheaper and near instant — thanks to the EOS blockchain.

Just like the vast majority of blockchain-based services, you need to have tokens to use Horuspay. The organizations will need one HORUS token per every employee that they wish to pay through the system. The transactions are conducted through the secondary tokens, eosCASH (called Horus dollars before the rebranding).

Security

The disintermediation and global nature of the smart contracts grant them great potential. Part of it lies in drastically improving the bureaucracy of the future in many ways, one of which is data security.

Many different copies of the data are stored. As a result,  even if one system is compromised and the documents are edited, the original versions are still retrievable. Also, the data is usually well encrypted in such systems (this is the case with Horuspay). What’s more, even when data is stored off-chain, is usually is still verified on the blockchain.

Also, blockchain enabled key management adds further security and convenience. All of this makes services like Horuspay much more secure than the centralized counterparts that are prone to getting hacked.

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Zář 18

New Samourai Wallet Feature Makes Bitcoin Transactions Private

A 2-wallet Samourai Stowaway offers to make transactions private by masking user identity while keeping funds safe.


Bitcoin Transactions Are Pseudo-Anonymous

Bitcoin (BTC) 00 transactions are often described as anonymous because users can exchange the cryptocurrency without providing any personally identifying information.

However, Bitcoin transactions are pseudo-anonymous. The history of each Bitcoin transaction is permanently stored on the blockchain. And, anyone can track and view this information.

The abstract of BIP0069 describes the issue of the leak of private information, as follows,

Currently there is no standard for Bitcoin wallet clients when ordering transaction inputs and outputs. As a result, wallet clients often have a discernible blockchain fingerprint, and can leak private information about their users.

Now, the 2-wallet Samourai Stowaway promises to protect user privacy with a mechanism which is based on the trusted cooperation established between two wallets.

In a separate tweet, user @SamouraiDev said,

We will err on the side of caution and privacy. Only two (or more) wallets that have engaged in a ‘trusted’ relationship will be permitted to collaborate in a cahoots spend.

Wallet Users Can Establish Private Transaction Channels

Currently, each time users perform a payment transaction, they must exchange the Bitcoin address. This handicap impedes Bitcoin from becoming a mainstream currency. For some experts, the implementation of Reusable Payment Codes might help to solve this issue.

BIP47, “Reusable Payment Codes for Hierarchical Deterministic Wallets,” proposes a technique that can help to simplify the payment process while enhancing the user’s level of privacy.

BIP47 allows for the establishment of an invisible channel between two users. As defined by Justus Ranvier, the BIP’s author:

This BIP defines a technique for creating a payment code which can be publicly advertised and associated with a real-life identity without creating the loss of security or privacy inherent to P2PKH address reuse.

The 2-wallet Samourai Stowaway can allow users to establish private payment channels with each other, without revealing their Bitcoin addresses.

In this regard, SamouraiDev indicates that they have taken “an undefined byte in the BIP47 payload and are using it as a ‘feature’ byte so other wallets can detect functionality.”

Do you think that concealing the Bitcoin address will improve the privacy of Bitcoin transactions? Let us know in the comments below.


Images courtesy of Pexels, Samourai, Shutterstock, Twitter/@SamouraiDev.

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Srp 15

New Transport Layer bloXroute Promises to Solve Bitcoin’s Biggest Problem

bloXroute Labs and a team of Northwestern University students believe Bitcoin’s biggest problem, scalability, can be solved without affecting its chief virtue — decentralization.

Northwestern and bloXroute Labs Are Working to Solve Scalability Issue

Critics have always identified the limited number of transactions that Bitcoin’s 00 network can process as its most significant problem. They point out that this is what has prevented Bitcoin from becoming the most effective form of payment in the world.

Several techniques have been and are currently being implemented to address the issue of scalability and high transaction fees. Nevertheless, they are not good enough to compete today with Visa, for example.

bloXroute Labs identifies the problem that affects Bitcoin and other cryptocurrencies’ networks, as follows:

Specifically, they employ a trustless P2P network model to propagate transactions and blocks, which does not scale as the volume of transactions increases, a fact research has shown time and again. Indeed, if blocks and transactions were to be instantly propagated, immense blocks could have been mined at a rapid pace, until the limitation of designated processing units and flash storage arrays was reached.

Now, a team comprised of bloXroute Labs engineers and students and academics of Northwestern University believe they have found a trustless scheme to overcome this scalability bottleneck.Now, a team comprised of bloXroute Labs engineers and students and academics of Northwestern University believe they have found a trustless scheme to overcome this scalability bottleneck. According to Watch Market:

The Northwestern University proposal attempts to address some of those issues by creating an infrastructure that compresses the information on the blockchain before sending, with the propagation being it will go faster.

In this regard, bloXroute Labs proposes bloXroute, a transport layer that would run underneath, allowing Bitcoin and all cryptocurrencies to scale to thousands of chain transactions per second.

According to the whitepaper entitled bloXroute: A Scalable Trustless Blockchain Distribution Network,”

“bloXroute allows to safely increase the block size and to cut down the time interval between blocks, without increasing the risk of forks, and provides real-time support for immediate transactions with zero-confirmation (0-conf).”

The whitepaper stresses that by using bloXroute, the network becomes even more decentralized because it requires neither consensus nor a protocol change beyond adjusting system parameters.

Technological Advances Are Fueling Bitcoin Optimism

Novel technological initiatives that include SegWit, Lightning Network, and Atomic Multi-Path Payments over Lightning, and new features in Bitcoin Core 0.16.0, are also promising to help to address Bitcoin’s scalability issue.

For example, Lightning Network is growing and enabling faster transactions among nodes. As of this writing, Lightning Network boasts over 3,000 nodes, with a capacity of about 82 bitcoins.

The Northwestern University team started working in this project in March 2018, and claims to be moving forward to solving the scaling issue. According to Sarit Markovich, professor of strategy at Kellogg School of Management at Northwestern University,

“We are scaling at 100 times better than what Bitcoin 00 is doing now. And we are hoping for 1,000.”

Do you think the newest technological innovations are helping to solve cryptocurrencies’ scalability issues? Let us know in the comments below!

_________________________________________________________________________

Images courtesy of Pixabay, Wikimedia/by Rdsmith4

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Čvc 28

Huge Wind Farm to Power Bitcoin Mining Will Be Built in North Africa

As Bitcoin mining becomes more expensive and is criticized as being detrimental to the environment, several initiatives are being put forward to reverse this situation. The latest move comes from Brookstone Partners, which involves building a 900-megawatt wind farm in Morocco dedicated to mining Bitcoin.


Bitcoin Mining To Minimize Carbon Footprint

Critics have always argued that Bitcoin mining is a threat to the environment. They point out that cryptocurrency mining consumes huge amounts of electricity, often citing the fact that the Bitcoin network consumes more power than the Republic of Ireland.

Bitcoin Mining To Minimize Carbon Footprint

Indeed, Digiconomist estimates that Bitcoin consumes more power than some countries, such as the Czech Republic, Chile, and Austria.

Moreover, Bitcoin energy consumption continues to grow relentlessly. By the end of 2018, the Bitcoin network could be using over 125 terawatt-hours per year, as the chart below forecasts. A terawatt is a unit of power that equals one trillion watts:

2018 Bitcoin Energy Consumption Forecast

However, Bitcoin’s biggest problem is its carbon footprint. According to Digiconomist:

Bitcoin’s biggest problem is not even its massive energy consumption, but that the network is mostly fueled by coal-fired power plants in China. Coal-based electricity is available at very low rates in this country. Even with a conservative emission factor, this results in an extreme carbon footprint for each unique Bitcoin transaction.

Thus, to address the issues of increasing electricity costs and environmental damage and to build computing centers powered by environmentally clean, utility-scale renewable green energy, Brookstone Partners founded Soluna.

Mining Bitcoins Using Clean, Low-Cost Renewable Energy

The planned giant 900-megawatt wind farm to mine Bitcoin will be built in North Africa, Bloomberg reports. The site chosen for the farm is at a remote Moroccan location, in Dakhla, on the edge of the Sahara Desert, by the Atlantic Ocean. According to Soluna’s website:

Soluna aims to address this problem by building computing centers powered by environmentally clean, utility-scale renewable green energy. Our mission is to power the crypto-economy with clean, low-cost renewable energy. To do this, we are building a blockchain infrastructure and mining company that owns its own renewable energy resources.

Brookstone is a private equity firm with its headquarters in New York. It specializes in strategic acquisitions, add-on acquisitions, and growth capital. The firm also focuses on middle market investments in public and private companies.

Bitcoin enthusiasts are encouraged to learn about Brookstone Partners’ initiative, which involves converting wind energy into valuable electrical energy to mine cryptocurrencies. Wind is considered the cheapest energy source available.

How do you think using alternate energy sources such as wind will impact Bitcoin mining? Let us know in the comments below!


Images courtesy of iStockPhoto, Digiconomist, Bloomberg/@business

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Čvn 01

4 Lies Your Economics Professor Will Tell You About Bitcoin

· May 31, 2018 · 9:00 pm

Stop trying to reinvent the monetary wheel with Bitcoin, argues Robert Skidelsky, a member of the British House of Lords and professor emeritus of political economy at Warwick University.

[Note: This is an op-ed]


Old Man Yells at Bitcoin

In an article published last week, Skidelsky draws similarities between gold and Bitcoin, concluding that it’s incorrect to perceive flaws in money itself as the cause of “sick” economies. In other words, boom and bust cycles are natural occurrences, and the incumbent financial system is the best humans can do, if only the sluggish economies could just get it together.

Skidelsky argues:

The fact is that human societies have discovered no better way to keep the value of money roughly constant than by relying on central banks to exercise control over its issue and to act directly or indirectly on the volume of credit created by the commercial banking system. 

Old man yelling at Bitcoin

But let’s leave the Keynes versus Hayek debate for another article. Instead, what stands out like a sore thumb is not only the complacency and the knee-jerk reaction to defend the status quo, but doing so through ignorance of Bitcoin’s fundamental properties.

Amusingly, Skidelsky even acknowledges that “the technical details of the new cash-generation systems are difficult to grasp; their inspiration is not.”

A person from the early 20th century might have also said that “the technical details of the airplane are difficult to grasp; their inspiration is not.”

Hence, the mere attempt to improve money is rebuked because all previous attempts have failed to come up with anything better than the paper mill that is today’s financial system. Skidelsky dismisses Bitcoin as merely the latest attempt to use new technology “to stop money from going bad.”

Let’s take a look at some examples of the erroneous statements made by the emeritus of political economy.

Lie 1: It’s Created Out of Nothing

Paradoxically, although it is created out of nothing, it will offer no possibility of money ‘creation.’

First, bitcoins aren’t created out of “nothing.” Second, since it’s already being accepted as a medium of exchange in many places online and across the globe for goods or services, then it’s de facto money. 

A Washington County is Taking Steps to Halt Illegal Cryptocurrency Mining

Furthermore, energy, coding skills, resources, and time spent on software and hardware development and production are just some of the components required to run and maintain the Bitcoin network. It is also underpinned by a globally distributed network of users who all agree to play by the rules of the network for their own benefit.

The more users in this network, the greater the value of Bitcoin will become, according to Metcalfe’s law

Lie 2: No Elasticity

Bitcoin will be ‘mined’ in diminishing quantities until it is exhausted in 2040, having delivered 21 million digital coins. In other words, there is no elasticity in the currency… [T]he currency will run into the same problem as the gold standard: not providing enough money to support a growing economy and population.

First, Skidelsky is off by a century as the last bitcoin will be mined in 2140, though most will enter the supply by 2030.

Second, the problem was never with gold itself but the debasement of gold and thus the distortion of value. For example, most scholars believe it was the “clipping” of gold coins that was largely responsible for the fall of the Roman Empire. The publicly verifiable and immutable ledger of bitcoin ensures that this monetary network can’t be tampered with, unlike with fiat. 

Third, unlike gold, a bitcoin is merely the name of a digital unit (whose value is determined by the market). This makes it highly divisible. In fact, the smallest possible unit is one hundred millionth of a single bitcoin (0.00000001 BTC) — called a ‘satoshi’— making it possible to send tiny fractions of a penny at current market prices. This can’t be done even with digital fiat today, let alone physical cash or metal coins.

This, in fact, makes Bitcoin the most elastic form of money ever created as the 21 billion digital units equal to roughly 2,099,999,997,690,000 (over 2 quadrillion) satoshis according to the calculations presented here. What’s more, new layer-2 applications built on top of the Bitcoin blockchain, such as the Lightning Network, will enable the ability to send even smaller amounts off-chain.

Lie 3: Deflation Will Lead to ‘Hoarding’

This [lack of money supply] would be exacerbated by any tendency to hoard bitcoins.

Hoarding is a pejorative term for saving. If there is no saving, then there is no capital. And there can be no capitalism without capital.  

The “deflationary death spiral” argument against sound money is an overblown theory perpetuated by Keynesian economists, which is refuted here.

In fact, some argue that saving actually leads to greater consumption in the long-run. Saifedean Ammous explains this concept in his book, The Bitcoin Standard, stating:

A society which constantly defers consumption will actually end up being a society that consumes more in the long-run than a low savings society, since the low time-preference society invests more, thus producing more income for its members. Even with a larger percentage of their income going to savings, the low time-preference societies will end up having higher levels of consumption in the long-run, as well as a larger capital stock.

You can also read more about the advantages of having a capped supply in a new report from BitMex Research here.

Lie 4: Inflation

Cryptocurrencies provide no security against inflation.

Skidelsky doesn’t specify which inflation he’s actually referring to – monetary supply inflation vs. price inflation. Though the two are correlated, the latter is an integral feature of fiat currencies whose value is guaranteed to depreciate over time as more money is printed.

inflation versus deflation

Sooner or later, the incentive for governments and central banks to print more money becomes irresistible to the detriment of the population. Inflation is also sometimes referred to as a “hidden tax” that is much easier to impose on citizens as opposed to direct taxation. 

On the other hand, Bitcoin’s monetary supply is not only controlled but is fully transparent and known to all. Even the gold supply cannot be as accurately predicted. Whereas the 21 million digital units that will ever exist are a key property of the Bitcoin protocol that cements its digital scarcity.

Put differently, the millions of people around the world who use Bitcoin today know the supply is capped, which results in more accurate price discovery for goods and services. It is also important to note that people who use bitcoin are doing so voluntarily to store their wealth and move their money.

Bitcoin Is a Revolutionary Idea

With the advent of cryptocurrencies, for the first time in history, humans now have the option to choose their money. This is nothing short of revolutionary since throughout history there was always some central authority, be it the state, the church, or a banking cartel, maintaining a monopoly over money by decree, and ultimately, by force.

Bitcoin is a revolutionary idea

Comparatively, it is fiat currencies that provide no security against inflation. In fact, fiat currency supply is specifically designed to grow indefinitely as emission rate is controlled by a handful of unelected bankers through the artificial setting of interest rates.

Rubber will meet the road as more people realize they can now opt out of this system by buying Bitcoin. The good news is that people now have a choice between trusting bankers or a voluntary decentralized monetary network with no one in charge.

What other myths have you heard about Bitcoin? Share them below! 


Images courtesy of Shutterstock, Pexels, Bitcoinist Archives

Disclaimer: The views and opinions expressed in this article are solely those of the author and do not necessarily reflect those of Bitcoinist.com. Claims made in this article do not constitute investment advice and should not be taken as such.

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Kvě 16

Move Over Ethereum: RSK to Enable Smart Contracts on Bitcoin Blockchain

· May 15, 2018 · 7:00 pm

Smart contracts and off-chain computing are coming to the Bitcoin blockchain, thanks to a partnership between RSK and iExec.


RSK to Add Smart Contract Functionality to Bitcoin

The RSK project — which aims to build Turing-complete smart-contract capabilities for the Bitcoin blockchain — is partnering with iExec in an effort to provide off-chain computing to Bitcoin applications and afford decentralized applications the ability to access on-demand and scalable cloud computing resources.

According to a Medium post from iExec editor Wassim Bendella, “the developers under RSK aim at adding value and functionality to [Bitcoin’s] ecosystem by enabling smart contracts, near instant payments and higher scalability.”

This seemingly makes RSK the first general purpose smart contract platform secured by the Bitcoin network, as it uses BTC as its native currency via a 2-Way Peg system. Said system guarantees a fixed conversion between SBTC and BTC at a ratio of one-to-one.

At the same time, iExec is busy developing the self-proclaimed “first blockchain-based decentralized cloud computing network,” which “allows participants who need computing power to meet those who own computing power, thus supporting the most compute-intensive blockchain applications.”

The Bitcoin blockchain is not only the originator but the most battle-tested on the planet. By joining forces, the two companies are pushing the tried-and-true Bitcoin blockchain even further into the future.

The next update from iExec will be coming this month. On Max 29, iExec is slated to release its V2, which is comprised of a decentralized marketplace for the trading of cloud resources. Explains Bendella:

Once V2 is made compatible with RSK as a next milestone, RSK applications and their smart contracts will be able to access the same decentralized cloud that Ethereum dapps make use of. Compute-intensive applications in the fields of fintech, artificial intelligence, scientific research or gaming will be able to leverage these resources, making RSK and iExec the backbone of the Bitcoin ecosystem.

What do you think about smart contracts on the Bitcoin blockchain? Does the prospect of off-chain computing for Bitcoin applications excite you? Be sure to let us know in the comments below!


Images courtesy of Pixabay, Twitter/@RSKsmart.

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Úno 27

Crashes And Failed Payments: Peter Todd Urges Caution Over Lightning Network

· February 27, 2018 · 11:30 am

Bitcoin Core developer Peter Todd has delivered a frank appraisal of the Lightning Network, suggesting it is technically insufficient in its current form.


Lightning’s Growing Pains

Writing about his “initial impressions” of Lightning’s testnet implementation on Twitter Monday, Todd questioned aspects including operational resilience and programming language.

“Initial impressions of Lightning on testnet: c-lightning segfaults a lot, and when it’s not crashing payments fail more often than not. Writing it in C – a notoriously dangerous language – doesn’t strike me as a good idea,” he wrote.

Since its mainnet debut at the start of the year, the Lightning Network has grown rapidly, but cryptocurrency experts and developers remain divided over whether the technology is ready for use at all.

Future Vulnerability Today

The most hotly awaited of the so-called ‘Layer 2’ Bitcoin network improvements, Lightning promises near-zero transaction fees and confirmation times.

This month, Microsoft threw its weight behind the project, pledging support for it as an off-chain Bitcoin scaling solution while pouring cold water over on-chain solutions such as block size increases.

On a technical level, however, the experimental state of Lightning remains evident. Figures including Bitcoin.org creator Cobra preceded Todd in voicing doubts about a consumer rollout given the untested nature of many of its features. The result, both say, could be lost funds.

“As for the Lightning protocol, I’m willing to predict it’ll prove to be vulnerable to DoS attacks in it’s (sic) current incarnation, both at the P2P and blockchain level,” Todd meanwhile predicted.

“While bad politics, focusing on centralized hub-and-spoke payment channels first would have been much simpler.”

Lightning has also faced caution from Andreas Antonopoulos, who despite championing its technological promise saw regulatory woes forcing major cryptocurrency exchanges to avoid offering it.

This week meanwhile also saw Bitcoin Core release version 0.16.0, a major milestone incorporating full support for SegWit scaling improvements, itself a useful foundation for allowing Layer 2 solutions to spread.

What do you think about Peter Todd’s angle on the Lightning Network? Let us know in the comments below!


Images courtesy of Shutterstock, Twitter

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Úno 25

NEO vs. Bitcoin – Key Similarities & Differences

· February 25, 2018 · 9:00 am

NEO and bitcoin are two cryptocurrencies which have risen to prominence since their inceptions. These coins possess some similarities, however, they also possess a number of important differences. Here is a closer look at the key similarities and differences between NEO and bitcoin.


Similarities

Popularity – Both NEO and Bitcoin are extremely popular. That is why both coins are in the top ten coins by overall market cap as of February 12th, 2018. NEO and bitcoin are joined in the top ten coins by ethereum, ripple, bitcoin cash, cardano, litecoin, stellar, eos, and iota. All of the coins in the top ten have developed strong support from cryptocurrency users.

Exponential growth – NEO and bitcoin have both seen periods of exponential growth. 2017, in particular, was a year that was tremendous growth for both cryptocurrencies. In 2017, bitcoin rose from having a price of around $1,000 per coin to having a price of almost $20,000 per coin in December 2017. NEO rose from having a price of just a few cents in 2017 to having a price of over $100 by the start of 2018. 2017 was a very strong year for both coins, and in fact, both NEO and bitcoin were some of the best investments that anyone could have made in 2017.

Limited quantity – There are only a certain amount of coins for both the NEO and bitcoin cryptocurrencies. For NEO, the limit is 100 million coins. For bitcoin, the limit is 21 million coins. So, there is a finite amount of both coins. This means that if more people become interested in cryptocurrencies, this scarcity could drive up the price for both coins significantly higher than their prices already are in early 2018.

Differences

Age – Although the entire cryptocurrency industry is new, bitcoin is significantly older than NEO, relatively speaking. Bitcoin was created in 2009, whereas NEO was created in 2014. Because of the fact that bitcoin was created five years before NEO was, it had a five-year head start over NEO and many other cryptocurrencies. This helped it benefit from the first-mover advantage, and to gain market share before many competitors even existed.

Overall market cap size – Despite the fact that both cryptocurrencies are in the top 10 for overall market cap size, bitcoin’s market cap is much larger than NEO’s. As of February 12th, 2018, the market cap for bitcoin is $149,160,858,393. The market cap for NEO on the same date is $7,318,805,000. This is a difference of more than $140 billion.

Creators – The creators of NEO are known. NEO was created by two Chinese developers: DA Hongfei and Erik Zhang. The creator of bitcoin is a complete mystery. This is because the person (or group of people) who created bitcoin used an alias. This alias is Satoshi Nakamoto. There have been many guesses as to who Satoshi Nakamoto might be. Some people speculated that it was Elon Musk, founder of Tesla, PayPal, and other major corporations. However, Musk has denied these claims, and the mystery of bitcoin’s creator lives on.

Function – Since 2009, when it was created, bitcoin has slowly become positioned as a long-term store of value, and a type of “digital gold.” It is the king of cryptocurrencies and it is the mark by which many other cryptocurrencies are judged. NEO, on the other hand, is designed to be both a cryptocurrency and as a platform for facilitating smart contracts and decentralized apps, or DApps. Technically, smart contracts can be facilitated with bitcoin, however, bitcoin is not known as the go-to platform for such contracts. NEO and ethereum have taken this role primarily.

Conclusion

NEO and bitcoin are similar in that they are both popular, have experienced exponential growth at times, and have a limited quantity. They are different in terms of age, overall market cap size, creators, and function. However, despite their differences, both NEO and bitcoin saw tremendous gains in 2017, and could potentially see them again in 2018.

If you are interested in investing in or trading NEO, bitcoin, or other cryptocurrencies, you can do so on the eToro platform. Etoro is the world’s social trading network. With eToro, you can not only invest in and trade cryptocurrencies, but you can also copy the moves of top traders. This can be extremely beneficial.

What is your outlook for NEO vs. Bitcoin? Let us know in the comments below!


Images courtesy of eToro, Shutterstock

Bitcoinist does not endorse and is not responsible for or liable for any content, accuracy, quality, advertising, products or other materials on this page. Readers should do their own research before taking any actions related to the company.

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Led 10

Bitcoin Fees Near-Zero as Company Launches Mainnet Lightning Payments

· January 10, 2018 · 6:00 am

Anonymous VPN service TorGuard has become one of the first consumer businesses to accept Lightning Network (LN) payments for Bitcoin.


‘Testnet Is So Boring’

In messages on Twitter staff since appeared to back up privately, TorGuard confirmed users can now pay for its services in Bitcoin using Lightning, significantly reducing transaction times and fees.

The news makes the company a pioneer of Bitcoin mainnet LN payments after the technology debuted as a testnet interface last month.

“Disclaimer: c-lightning is not production ready. TorGuard will cover loss of funds when sending us LN payments. Testnet is so boring,” tweets added.

One Transaction = One Satoshi?

Excited community members reacted broadly positively to a customer service representative similarly offering LN payments, seemingly unaware TorGuard had already publicly announced the new feature.

“Do you have (an) LN (mainnet) node up and running? If so, I can invoice you for 1 month of our service for only 1 satoshi,” the representative offered.

This last point appeared to cause contention, responses arguing the actual cost of a Lightning transaction would be significantly higher than the $0.‎00014167 quoted due to the need to open and close a channel before and after.

Bitcoin advocates have long championed Lightning as the crucial solution to the ongoing high transaction fees and slow confirmation times which have plagued the network since its mass uptake which began around one year ago.

While altcoins such as Bitcoin Cash and most recently Ripple have jumped on the problem as proof their offerings are more valuable than Bitcoin, early adopters remain confident that so-called Layer 2 updates such as LN payments will make such arguments null and void.

Late last month, Bitcoin-based cellphone top-up service Bitrefill also began using Lightning mainnet payments to fulfil customer orders as part of successful “limited testing”.

What do you think about the launch of mainnet Lightning Network payments? Let us know in the comments below!


Images courtesy of Twitter, Shutterstock

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