Čvc 31

Vitalik Buterin: ‘There’s Too Much Emphasis on Bitcoin ETF’

Vitalik Buterin, co-founder of the world’s second largest cryptocurrency by means of market capitalization, Ethereum, noted that the community is placing too much attention towards Bitcoin ETFs. Instead, he reiterated on the importance of creating ways of facilitating smaller, retail investments into the market.


Following the recent Bitcoin ETF saga, the co-founder of Ethereum outlined that the public is placing too much emphasis on cryptocurrency exchange-traded-funds (ETFs), when, instead, the focus should be on making means for smaller investments.

Why Not Both?

Buterin makes the case that Bitcoin ETFs are better for “pumping price,” while offering tools for small-time investments in the cryptocurrency market would streamline quicker actual adoption.

However, it’s also worth noting that by drawing a line of the kind, Buterin is also tapping into the two use cases of the world’s first and foremost cryptocurrency. As some users have pointed out, both BTC and ETH can function as investments and mediums of exchange. As such, a potential ETF would play an important role reinforcing the former, while the means for small-time cryptocurrency purchases would facilitate the latter.

Needless to say, Buterin’s tweet has received a fair amount of attention. The overwhelming majority of people, though, are seemingly sharing the belief that both are equally necessary for the success of the industry, in general.

The Race for Bitcoin ETFs Heats Up

ETFs: a Hot Topic

Bitcoin ETFs have become a widely discussed topic in the past few days. CBOE Global Markets filed an application for a VanEck/SolidX commodity-backed Bitcoin ETF on June 2. As Bitcoinist reported, it has fairly high chances of getting approved. Unfortunately, according to legal expert Jake Chervinsky, the SEC is likely to take its time and come up with a formal decision in early March 2019.

In the meantime, a Winklevoss-proposed rule change was met with swift disapproval from the SEC. The Commission refused to allow the listing of the Winklevoss Bitcoin Trust on the Bats BZX Exchange.

Bitcoin (BTC) 00 has also been quite dynamic. Over the past week, the world’s first and foremost cryptocurrency rallied to a two-month high upwards of $8,300. Following the announcement of the SEC regarding the disapproval of the Winklevoss-backed Bitcoin ETF, the price took a substantial dive, losing over $400 in a matter of minutes. The price has since recovered.

What do you think of Buterin’s opinion on Bitcoin ETFs? Don’t hesitate to let us know in the comments below!


Images courtesy of the Bitcoinist Archives.

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Čvn 27

Vitalik Buterin Demands Court Challenge Against New nChain Patent

Ethereum co-founder Vitalik Buterin has openly criticized Blockchain research company nChain’s latest patent award, calling for opponents to challenge it in court.


Pure Invention?

nChain, whose chief scientist Craig Wright claims to be Bitcoin creator Satoshi Nakamoto while heavily endorsing altcoin Bitcoin Cash, received its latest European patent for what it describes as a “digital security invention.”

“This Deterministic Key Generation technique provides for improved secure communication between a pair of nodes or parties on a network, while being able to keep their private keys secret,” a press release issued June 25 claims.

nChain is attempting to create a raft of Blockchain-based tools to facilitate transactions worldwide through what it calls the “Internet of Transactions.”

The company, often via Wright as a spokesperson, continues to hit the headlines in the cryptocurrency industry for its controversial approach to marketing.

craig Wright

Last month, Wright told a conference audience in Rwanda that he “had more money than their country” while plugging nChain’s future plans.

‘Can’t Someone Attack It In Court?’

Reacting to the patent meanwhile, Buterin appeared unimpressed at the prospect of the company using it as a basis for innovation, appearing to argue it contained no new “invention” at all.

“This looks like they’re trying to patent plain old public master key-based deterministic wallets, like what we had in 2013,” he wrote on Twitter Tuesday.

“Can’t someone attack it in court with the obvious mountains of prior art?”

Buterin had previously called Wright a “fraud” for his Nakamoto claims.

Discussing its implementation, nChain claimed a hook-up with Japanese conglomerate SBI had legitimized the technology.

“We will work with select partners on projects to produce maximum benefit for the Bitcoin Cash ecosystem,” CEO Jimmy Nguyen stated, the release adding SBI and nChain were “collaborating to develop a next-generation advanced secure cryptocurrency wallet system.”

What do you think about nChain’s latest patent? Let us know in the comments section below!


Images courtesy of Shutterstock, Twitter, Bitcoinist archives

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Kvě 28

Vitalik Buterin Asks: Does Rothschild Conspiracy Theory Extend to Crypto?

· May 27, 2018 · 9:00 pm

Ethereum co-founder Vitalik Buterin questioned the authenticity of the Rothschild banking empire after rumors emerged of its plans to enter the cryptocurrency market.


‘Old-money-type High Society People’

In various posts in the /r/ethereum subreddit on May 26, Buterin focused on the potential impact of the Rothschilds’ IMMO project, adopting a critical perspective about their presence as a market force.

Ethereum co-founder Vitalik Buterin questioned the authenticity of the Rothschild banking empire after rumors emerged of its plans to enter the cryptocurrency market.

“Are ‘the Rothschilds’ even well-coordinated enough to be worth caring about as a group these days?” he queried on Reddit.

[…] If old-money-type high society people want to make their own currencies, go ahead, more power to them; see you in the moderately-free market.

Rothschild IMMO Rumors Abound

Reports about IMMO first surfaced in the local cryptocurrency industry press last week. While all information is based on rumors and leaked information, it is thought the Rothschilds plan to create a Tether-like stablecoin which its creators would tie to gold or similar commodities.

Other theories tie IMMO to The Economist, a publication which first floated the concept of a “world currency” in the late 1980s and which is also owned by the Rothschilds.

After fielding responses from Reddit users about the knock-on effect for sentiment regarding cryptocurrency should the rumors be true, Buterin, however, remained unconvinced of the Rothschild dynasty’s providence.

“[M]y updated view after seeing the replies is that they are just people born into various old-money-type high-society positions, and the theories that they are anything beyond that are fairly baseless,” he added in a later edition of his original post.

Previous third-party experiments with Bitcoin by the Rothschilds meanwhile appeared to have no impact. In July last year, Rothschild Investment Corporation invested in the Bitcoin Investment Trust, the grantor trust sponsored by Barry Silbert’s Grayscale Investments.

Digital Currency Group, of which Grayscale is a subsidiary, has invested in multiple well-known cryptocurrency businesses including CoinDesk, BitPay, and Blockchain.

Later, in February 2018, the empire gained further exposure to Bitcoin, when Rothschild Group member Goldman Sachs acquired exchange Poloniex through Circle, a company in which it is the major shareholder.

What do you think about Vitalik Buterin’s appraisal of the Rothschilds? Let us know in the comments section below!


Images courtesy of Shutterstock, Flickr

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Dub 28

4 Reasons Why Vitalik Buterin is Boycotting Coindesk’s Consensus 2018

· April 28, 2018 · 5:30 pm

In a series of tweets, Ethereum’s inventor Vitalik Buterin stated that he intends to boycott the 2018 annual blockchain summit organized by Coindesk – Consensus 2018. He went on to outline a few of the reasons for his decision, strongly urging others to do the same.


Buterin wasn’t too kind on Coindesk-organized Consensus 2018 conference, blasting the cryptocurrency news site, tweeting that the platform is “recklessly complicit in enabling giveaway scams.”

Apparently, the first reason for Vitalik’s boycott was the fact that the cryptocurrency news website posted an article, linking directly to a giveaway scam. The link led to a phony site, claiming to be the official blog of OmiseGo and it said that the latter is going to do an airdrop of 0.3 OMG tokens for each token the user owns.

Buterin goes on to say that this obvious scam went on undetected by the media’s radars, despite the fact that he had previously warned about instances of the kind. His position is that the lack of proper investigation or, in his own their “ignorance/stupidity” further legitimizes “twitter scams.”

It’s worth noting, though, that CoinDesk went on to remove that part of their story, adding that:

UPDATE: This article has been updated to remove a link to a fraudulent website that was misrepresenting OmiseGo in an effort scam users. CoinDesk regrets the error.

Nevertheless, at this point it became obvious that the damage was pretty much done, leading to OmiseGo sharing Buterin’s position in not attending the conference. Their sentiment on the matter was also expressed in an official tweet:

As a reason number two, ethereum’s founder pointed out the lack of proper coverage of EIP 999.

Ethereum Improvement Protocol 999 (EIP-999) was a proposal that would have freed up some 513,000 ETH which were previously frozen in 580 Parity Library Contract wallets after a bug that was written by a developer last year in November. The community went on to vote against the proposal.

CoinDesk covered the event with an article on Wednesday, and, needless to say, Buterin wasn’t really happy with it.

When the piece was first posted, its lead sentence read “Ethereum may be on the brink of a blockchain split.” It has since been changed to the much more hushed “Ethereum appears to be at a notable crossroads on technical direction.”

Buterin’s concerns also include the media’s failure to include the feedback that they had requested from one of Ethereum’s developers Peter Szilagyi.

It’s worth noting that the piece has since been updated, including an UPDATE section at the top and linking to the statements of Szilagyi. Yet, Vitalik’s sentiment remains unshaken:

Next, he outlines that CoinDesk’s reporting policies are riddled with “gotchas” and “traps.” Posting a screenshot of the website’s “off the record” policy page, Buterin tweeted:

Now, in all fairness, it does seem that Buterin doesn’t seem to have taken his time to research the matter. The page clearly says that if the journalist that is being addressed hasn’t previously agreed for a certain statement to be off the record, it will remain on it.

Therefore, when approaching a journalist with a sentence such as “this is off the record, but I want you to know that…” doesn’t mean that it has to stay off the record as the journalist hasn’t given his consent yet. It’s a common practice adopted in all serious media websites and publications.

Last, ethereum’s founder bashes the price of the Consensus 2018:

Price is always a subjective matter, so whether or not it’s high is left for the atendees to decide.

Do you think Buterin is right to call for a boycott of CoinDesk’s Consensus 2018? Please let us know in your comments below!


Images courtesy of Flickr, Shutterstock, Twitter

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Dub 01

OmiseGO and Vitalik Buterin Donate $1 Million in OMG to Impoverished Refugees

· April 1, 2018 · 4:00 pm

OmiseGO and Ethereum founder Vitalik Buterin are donating $1 million worth of OMG tokens directly to refugees living in extreme poverty. The donation will be made to GiveDirectly, a nonprofit organization operating in East Africa which will deliver the funds.


Helping the Unbanked

OmiseGO and Vitalik Buterin’s donation comes after many individuals in the cryptocurrency space have found themselves members of the newfound ‘crypto-rich’ community — often stereotyped as Lambo-buying millennials who’ve made fast fortunes from early cryptocurrency investments. The authors of the donation hope this newly-rich community will put their riches to good use.

refugee

In the official donation announcement, the philanthropists write:

The crypto economy has grown immensely over the last year, bringing a great deal of wealth to many people and organizations within the ecosystem. In part we simply see an exciting opportunity to share that wealth. We hope the fortunes made in the crypto space will lead not to extravagant lifestyles but to extravagant generosity.

OmiseGO has partnered with GiveDirectly to facilitate the donation, claiming both companies “share the view that providing alternatives to legacy systems can enhance accountability.” The authors note:

Refugees are a perfect population to serve through this effort. The world is in the midst of a refugee crisis, with more than 65 million displaced from their homes. […] Many also find it difficult to re-enter the formal financial system as they lack appropriate local documentation. They are precisely the people we wish to see benefiting from the “unbanking” effect that OMG is designed to create. We’re excited to plug them back in, transfer funds, and let them get to work.

Giving Season

OmiseGO and Buterin’s donation also comes alongside Ripple’s significantly larger $29 million to support public schools in the United States.

Ripple XRP

Ripple’s donation also comes in the form of cryptocurrency. The company donated XRP, Ripple’s scalable digital asset which aims to enable real-time global payments from anywhere in the world, to DonorsChoose.org — a US-based 501 nonprofit organization allowing individuals to donate directly to public school classroom projects. Claimed Ripple:

Our donation fulfilled every request listed on the nonprofit’s website yesterday. Today, nearly 30,000 public school teachers in every state and approximately one million students are receiving books, school supplies, technology, field trips, and other resources vital for learning through DonorsChoose.org.

Pineapple Fund donates $5 million to OMF

The Pineapple Fund has also notably donated large amounts of Bitcoin to charity. The philanthropic project created by an anonymous individual donated $1 million to the Open Medicine Foundation — an organization involved in research for ME/CFS (myalgic encephalomyelitis / chronic fatigue syndrome) and other related chronic complex diseases — on January 14th, 2018. The Pineapple Fund later upped their donation to $5 million following an outpouring of gratitude on social media.

What do you think about OmiseGO and Vitalik Buterin donating $1 million worth of OMG to refugees? Let us know in the comments below!


Images courtesy of Bitcoinist archives and Pixabay.

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Říj 25

Money 20/20 Recap: Ethereum, Consumer Protection, Investment

Source: bitcoin

Money 20/20

On Monday afternoon at the Money20/20 Conference in Las Vegas, Ethereum lead developer Vitalik Buterin, and Don Tapscott, author of Blockchain Revolution, took center stage to speak to the groundbreaking potential of the Ethereum network.

Also read: Money 20/20: Cybersecurity Panel Praises Information Sharing to Reduce Cybercriminal Risks

Buterin started off by going over his history within the Bitcoin space, going back to when he first learned about the technology in 2011, and then his involvement in various “Bitcoin 2.0″ projects starting in 2013 and onward.

Bitcoin as a network is optimized to append the text-based list of who-has-what, Buterin said, not run complex applications on a distributed blockchain network. To answer this problem, he began creating the Ethereum network, where each node doubles as a virtual machine and can run applications on the native scripting language and cryptocurrency, called Ether.

Don Tapscott, Author of Blockchain Revolution, framed the narrative early. “The internet is entering a second era,” he said. “We’ve seen the internet of information for many days, and now we are seeing the internet of value.” As the internet evolves, traditional infrastructural technology in the financial sector needs updating to lower reconciliation and overhead costs.

Banking in the Age of Blockchain: Scalability and Immutability in Bitcoin and Ethereum

Banks are going to have to change, Buterin claimed, the technological developments in financial infrastructure are inevitable. Banks have to adopt in turn to oncoming decentralization technological pressures.

As Buterin put the ongoing struggle, “Automated contract execution has a lot of exciting applications in general.” Centralization in payments infrastructure is also a bad idea, Buterin argued, echoing, “with credit cards, this is an insane notion that to make a payment you have to give an actor your private keys.”

A major problem of  Ethereum and Bitcoin blockchains is delay times due to an increasingly costly and crowded blockchain. With realistic scalability goals around 100,000’s of transactions per second, Ethereum would need to implement their Proof-of-Stake (POS) architecture to raise from the embryonic level of 15 transactions per second currently.

When discussing the possibility of redacting data from a blockchain solution, full-immutability may not service a societally beneficial purpose. Speaking to the notion that “Code is Law” and miners will have the final say over the networks, Buterin reiterated the final say that miners have over a given network, stating, “The fact is that you can 51% attack Ethereum or Bitcoin when you get that mining power. So you need to be realistic about where these systems stand today.”

At the end of Vitalik’s interview, Tapscott asked what the future holds for banks. “Are the banks toast?” he asked.

Buterin responded, “Toast, french toast!”

Panel Recap: Consumer Protection and Blockchain

In the second panel of the day, an all-star lineup consisting of former White House executive Jamie Smith, BTCC CEO Bobby Lee, and serial entrepreneur Eric Martindale spoke to the multi-faceted nature of blockchain technology.

Security and maintenance of the decentralized Bitcoin network is what gives the system finality, the panel established. In this sense, Bitcoin holds unique benefits, because the security on the extremely computationally intensive Bitcoin network enables for a secure list of who owns what to append without opportunity for redaction or recourse.

As Lee put it, “you can’t print more Bitcoin!”

The panel also raised an industry-wide problem, where as long as customers are not holding their own keys, then the companies who are managing funds on behalf of the customers essentially become centralized entities themselves in turn.

Bitcoin is not even in its 8th year, is still very young, and yet the Bitcoin blockchain itself is open to be compromised. Mr. Martindale echoed the paradigm shifting nature of these changes, stating, “These (blockchain) changes are exponential, we need to re-evaluate everything at a deep level, if you can sign with a private key then no authority can take that (capability) away from you.”

While advances in the space are occurring rapidly, it is important to remember that blockchain technology is a double edged sword. Especially as cybersecurity attacks take on increased sophistication, the blockchain space is writing history as the industry progresses. Jamie Smith detailed use cases that BitFury is undertaking with the Blockchain Trust Accelerator, including land titling in Georgia, vaccine dissemination in developing countries, and other solutions in the marketplace that can help in solving a social good.

Still, potential for Orwellian monitoring of transactions on a blockchain needs to be approached with caution.

“Everyone in the world will have a phone, and will have wifi, and if now people can transfer a digital asset for free, then what do we do about that?  We all need to ask themselves this,” said Mrs. Smith.

At the end of the talk, the panelists were asked to predict the price of Bitcoin in one year’s time. Eric Martindale thought a 10x growth to $6,000 per Bitcoin was in reach, but Bobby Lee saw things doubling.  Jamie Smith thought that the industry could do better with branding and communication, leveraging the human spirit to explain blockchain technology and Bitcoin succinctly and accurately to a wider audience.

Money 20/20 Panel Recap: Investing in Blockchain Technology

To round out the day, a team of experienced industry investors across the blockchain space discussed the investment environment in the industry. What is starting to emerge as a Linux-type operating system — geared towards hardcore techies —  blockchain investments have a rocky track record at best. In turn, the space needs more success stories to demonstrate narratives which show success stories of real-world implementation and show the power of investing in R&D development.

Past paradigm-shifting technological changes such as the radio or internet have evolved way beyond initial use cases to realize exponential growth.  In the blockchain space, the same opportunities exist, but lots of hard work is still to be done.

In the end, however, people are the ones accessing the code. As Meltem Demirors of the Digital Currency Group put it: “People are underlying everything. People, not technology.  So we need better tools and standards around how cryptocurrency is stored and how it is exchanged. . .The user experience in blockchain today is not very friendly.”

However, panelists brought up the sheer newness of blockchain technology — which may serve to ease worries over its ease of use problem.

Over time, the emergence of the internet plays into a larger story of value transfer online functions and evolves.  Protocols for compute, storage, and verification will make up different levels of the global blockchain networks. Innovations will likely take a decade or two to develop fully and at scale, but will simultaneously add infrastructural substance to managing the industry-wide deployment of blockchain technology. Just as the, TC/IP protocol took decades to emerge, Blockchain protocols will need to be designed to both proactively and reactively handle challenges faced from regulators and scammers alike.

Matt Roszak, Founding Partner of Tally Capital, spoke to the nascent nature of blockchain technology:

“We are no where near the hype cycle on blockchain. . .20%, maybe rounding up on this. . .This is a 1000x opportunity.  We have so much to build. Think about Uber in 1997, we needed to build so many things first to have Uber in 2007.  We will need billions of dollars more in investment to move things on the rails that are blockchain”

Building equity trading directly into these protocols will enable for their proliferation. Eventually blockchains can make a huge impact and jump old tech just like mobile phones did.

Overall, the panels showed the growing interest in cryptocurrency among the wider financial services and FinTech crowd.  Blockchain and cryptocurrency remain hot topics at the event.  Coders, industry players, and investors alike are thinking along similar long term lines with a vision towards adopting blockchain technology into a wider set of walls.

It won’t be an easy ride, but discussion between industry leaders is helping to pave the path for future collaborations.

What do you think about Vitalik Buterin’s comments on Ethereum? What takeaway themes were these from the other two panels featured here? Share your thoughts in the comments below!


Images courtesy of Ryan Strauss, Ethereum.org.

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Money 20/20 Recap: Ethereum, Consumer Protection, Investment

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Čvn 20

DAO Soft Fork Revised to Allow Generic “Blacklisting”

Source: bitcoin

soft fork

The soft fork proposed to fix the sticky situation The DAO has dragged the Ethereum community into is here, and is a perhaps disproportionately drastic to the problem. The proposed solution to the DAO attack is to freeze all funds in the contract by blacklisting the hashes that correspond to the stored Ether. Want to withdraw funds from the DAO or “split” from the failed experiment? Be prepared to do so on an alternate Blockchain.

Read Also: Exiting The DAO Legitimately Would Take 67 Steps, 48 Days

Soft Fork Praised Within, Decried by Ethereum ‘Outsiders’

 

The interesting facet of this development is the recent update to the blacklisting methodology being used by the Ethereum devs. It has become a “generic function” as of today. This means that Miners can discriminate against entire regions or groups of Ethereum users, effectively banning them from doing business on the network by freezing their funds:

“This will also allow anyone to make a proposal to the majority of the miners to ask them for help for any future possible soft forks by allowing them to ignore blocks that take certain actions undesirable by the community.”

While this soft fork comes as a boon to the Ethereum Community, as this intervention is certainly better than letting The DAO (and possibly Ethereum, by extension) crash and burn, It continues to be contentious in the wider Crypto community. The fear is that this solution has too much potential for abuse. For example, The blacklisting protocol could be used as an anti-competitive measure against disruptive DAOs, Dapps and Ethereum users by entrenched Ethereum miners and Users with large holdings to leverage.

Another possibility, discussed by Andreas Antonopoulos on Twitter, is that law enforcement or regulatory bodies could split the Ethereum Blockchain by region or along other lines with mandatory “blacklisting” legislation.

The strong measures taken by the Ethereum Devs are a very divisive issue, and while intervention was arguably needed to effect a positive outcome after The DAO’s collapse, the long-term concerns that the soft fork raises cannot be dismissed out of hand. Whether or not this new feature of Ethereum’s infrastructure is abused, or used effectively remains to be seen, and is largely dependent on what the masses involved with Ethereum deem “undesirable actions.” The new realities the resolution presents for DAO and Ethereum Dapp developers, individuals with significant ETH holdings will be complex and far reaching regardless of the outcome.

 

Thoughts on the soft fork? Let us know in the comments!


Images courtesy: The DAO, Ethereum Foundation, Jan Miranda

The post DAO Soft Fork Revised to Allow Generic “Blacklisting” appeared first on Bitcoinist.net.

DAO Soft Fork Revised to Allow Generic “Blacklisting”

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Čvn 20

Andrew Vegetabile of Litecoin Association Opposes DAO Fork

Source: bitcoin

Vegetabile

Andrew Vegetabile, Director of the Litecoin Association, came out against a fork of Ethereum/The DAO, Decrying interference with The DAO by outside crypto developers in an open letter to  “Vitalik Buterin, The DAO, future smart contract developers, and the throngs of individuals within the crypto ecosystem” today.

Read Also:  How The Verge’s Russell Brandom Misrepresented the DAO Attack, Bitcoin

Andrew Vegetabile Calls Buterin’s Intervention “Unprecedented”

 

He Cites the widespread negative impact outside of The DAO as significant disincentive:

“…now Ethereum is having to face this very situation. From legal to sociological effects, the direction the leadership of a coin takes can have long outstanding impacts not only to the specific coin, but also to the entire crypto ecosystem by setting a dangerous precedent.”

He calls Buterin’s involvement in affecting an outcome to The DAO attack  “unprecedented” and draws parallels to the bank bailouts of 2008 financial crisis due to the central nature of the intervention. This may seem an extreme comparison, but he isn’t far off here, unfortunately:

“Never in the history of crypto for as far as I can remember has a developer been intimately involved with a third party application in attempting to resolve said applications issues. The best analogy that I can think of at this point is if there was a bug in counterparty code and the Bitcoin core devs got involved.”

Buterin, unlike Satoshi, is a known entity in the crypto community, and the degree of influence he has over the Ethereum community  leads to frequent comparisons of his role to that of a “benevolent dictator.” His mention of a soft fork to “fix” The DAO attack has been overwhelmingly accepted by people with a stake in ETH and The DAO, while other, less invasive solutions have fallen by the wayside.

It is clear that Vegetabile wants the takeaway to be that central intervention is antithetical to the core concepts that make Ethereum and other Cryptocurrencies successful. Furthermore, he posits that the outcome of the DAO attack will not be isolated to Ethereum and smart-contracts.

“My word of advice to all of you is to do absolutely nothing at all.”

 

Vegetabile is also very careful to keep his statements reasoned and civil. It comes off as a level-headed, honest word of warning rather than a vitriolic attack on a competing cryptocurrency. The DAO’s failure will affect the entire cryptocurrency market, after all, and the handling of its consequences by Ethereum and DAO participants will shape how smart contracts and Crypto will be treated by investors, developers, and in court moving forward.

 

How do you think The DAO’s failures should be handled? Leave your thoughts in the Comments below!


Images Credit to: Wikimedia, Litecoin Foundation

 

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Andrew Vegetabile of Litecoin Association Opposes DAO Fork

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Čvn 19

How the Verge Totally Misrepresented the DAO, and Bitcoin

Source: bitcoin

Verge DAO

According to The Verge’s Russell Brandom, The recent attack on the DAO is somehow related to the past failings of Bitcoin.

Also read: Technical Analysis: Long-Term Bitcoin Price Corrections to Come?

That’s right: your eyes are not playing tricks on you, I promise that you read that correctly.

I’ve seen my share of tinfoil-hatting on the subject of cryptocurrency and security, but Brandom’s conflation of these two completely different technologies takes the cake. The sheer ignorance required to put pen to paper and excrete a work like his recent article on the subject is astounding, but apparently achievable, as he so readily demonstrates.

For those  of you that aren’t fond of supporting the spread of FUD through ad revenue, I’ve compiled a few highlights:

“To understand how this could have happened, it’s necessary to know a little bit about how Ethereum works. The system is built on the same blockchain that powers Bitcoin.”

Indeed. ETH uses SHA256 based proof-of-work, all ETH transactions are logged transparently on the Bitcoin blockchain, bitcoin miners are rewarded in ETH upon a successful payout, changes to Ethereum need Bitcoin node consensus, and Vitalik Buterin continues to be one of the primary contributors to the Bitcoin specification.

Here’s an example of an equally accurate statement: ammonia is healthy to drink, because it’s a liquid, just like water.

“In hindsight, it’s easy to blame the developers for not spotting the problem early enough, but the nature of the DAO project put them at a disadvantage. A coder building a web database has decades of code and security standards to draw on, but coding on the blockchain is a completely new field.”

Oh, of course! We all know that traditional stores of personal information, financial services and networks are immune to malicious actors, because the technology they rely upon is older!

How naive of me to assume that an open source, frequently audited technology based on cryptography could have ever been secure when it isn’t based on protocols and standards from the early 80’s.

Regardless of the fact that this assumption about blockchain technologies recklessly ignores the scale of theft and fraud in traditional fintech, it also directly contradicts his previous statement about the DAO developers’ awareness of the vulnerability.

He is in effect claiming that not only are blockchain technologies hopelessly insecure because they are new, (because apparently traditional best security practices cannot transfer to new technologies) but also that the DAO developers, who knew about the bug, and decided not to halt trading, unlike several other similar DAOs, were not negligent.

The attack on the DAO clearly wasn’t a failing of blockchain security. Plenty of other DAOs are fine. The attack was a failing of people. The same people that claimed that the titanic Ethereum-based organization was unsinkable. They failed to address a publicly-known vulnerability properly, and there were consequences to their actions.

“Theft is a long-standing problem for cryptocurrency, particularly for any institution large enough to make a tempting target. In 2014, the foundational Bitcoin exchange Mt Gox was revealed as massively insolvent in the wake of a $400 million theft, an event that resulted in permanent damage to the currency’s reputation.”

I honestly don’t have it in me to mock this one.

Theft is a long standing problem with people, and this issue we collectively have applies to anything worth stealing, not just cryptocurrency.

This line of reasoning also dictates that no one should use knives because “Stabbings have been a long standing problem for knives, particularly with any blade large enough to puncture the skin.” But polearms, bayonettes, hatchets, axes, and the like are safer, because they don’t look like knives.

The Verge Doesn’t Know Much About the DAO, or Digital Currency in General

Brandom Could’ve just as easily used the 145 million account PayPal breach that happened the same year as Mt. Gox, or the $21 billion USD of US credit card fraud that occurred in 2014 alone to make his point about security, but he equates two unrelated thefts, on two distinct cryptocurrencies, because they both show up in the buzzword tag-cloud when you search for the term “blockchain.”

Mt. Gox and the DAO attack did not stem from problems with the underlying technology of cryptocurrency, but failings with the people behind them.

In the case of Mt. Gox, it was trusting the people in charge of the exchange to secure the traditional, web-facing elements of their business properly. For the DAO, it was an issue of trusting the developers to respond promptly to security problems, just like every other competently put together DAO did.

Sure, Bitcoin is an easy target, but that doesn’t excuse the lazy and inaccurate comparisons drawn between Mt. Gox, the DAO attack, Ethereum, and Bitcoin, nor the intellectually bankrupt reasoning behind the comparisons.

Whether they stem from ignorance on the subject of cryptocurrency or sheer lack of due diligence, I’d take anything Russell writes related to the field with a grain of salt moving forward.

I genuinely don’t know which is worse: the ignorant and fallacious assertions made by Brandom in his article, or that the Verge saw fit to print his drivel.

What do you think about mainstream coverage of the DAO incident? Is it accurate? Let us know in the comments below!


Image courtesy of Ethereum.

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How the Verge Totally Misrepresented the DAO, and Bitcoin

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Kvě 17

Bitcoin Is the Original DAO

Source: bitcoin

DAO Bitcoin

Decentralized autonomous organizations have received much attention in recent weeks since Ethereum launched its new Decentralized Autonomous Organization platform, featuring projects such as Slock.it and Digix, among others. Ethereum has chosen to ignore the elephant in the room in its press releases: there’s another DAO. It’s Bitcoin, and it’s the biggest blockchain technology around.

Also read: Everyone’s Favorite Crypto Just Might Scale After All

The First DAO

Ethereum

Bitcoin is undoubtedly an online creation community: an internet based ecosystem of participants who contribute – often in isolation of each other – towards one single stated project or goal. Online creation communities create a robust cross-section of the Internet, and while a quiet phenomenon, they have built, and will continue to build, the Internet of the future.

Bitcoin, based on a distributed protocol that provides financial services based on certain parameters, represents a distributed autonomous organization. Jeff Garzik, early Bitcoin developer, calls Bitcoin the decentralized autonomous organism.

While Ethereum has garnered attention for the DAO concept, it’s true that Bitcoin has existed in a similar form since 2008. And, since then, we have seen it evolve as a decentralized organization and incorporated numerous services. Side chains, a blockchain application interoperable with Bitcoin, offer a promising horizon to extend the Bitcoin protocol’s features.

Although the connection of Bitcoin as a DAO does not grace press releases of projects promoting their products, Ethereum has admitted that “Bitcoin is an interesting case here” and likely constitutes a DAO more than other blockchain organizations. In a May 2014 blog post at Ethereum.org, Vitalik Buterin – co-founder and developer of Ethereum – admits Bitcoin takes the form of a DAO.

Buterin posits Bitcoin, however, is not a perfect DAO. He cites an incident in 2013 when a block was accidentally produced and confirmed by BitcoinQT 0.8 clients. That block was invalid according to the parameters of BitcoinQT 0.7, the previous Bitcoin client. This caused the blockchain to fork, meaning nodes did not know which chain – 0.7 or 0.8 – was the correct one.

Most mining pools had upgraded to BitcoinQt 0.8, so they followed B1, but most users were still on 0.7 and so followed B2,” Buterin writes. “The mining pool operators came together on IRC chat, and agreed to switch their pools” in such a way that meant as little stress for users as possible.  

“Thus,” Buterin proceeds, “in this case, there was a deliberate 51% attack which was seen by the community as legitimate, making Bitcoin a DO rather than a DAO. In most cases, however, this does not happen, so the best way to classify Bitcoin would be as a DAO with an imperfection in its implementation of autonomy.”

Buterin adds that some people do not classify Bitcoin a DAO because the digital currency, founded in 2008 by Satoshi Nakamoto, “is not really smart enough.” Buterin sees the sense in this opinion.  

“Bitcoin does not think,” the Ethereum developer writes. “It does not go out and ‘hire’ people with the exception of the mining protocol, and it follows simple rules the upgrading process for which is more DO-like than DAO-like. People with this view would see a DAO as something that has a large degree of autonomous intelligence of its own. However, the issue with this view is that there must be a distinction made between a DAO and an AA/AI. The distinction here is arguably this: an AI is completely autonomous, whereas a DAO still requires heavy involvement from humans specifically interacting according to a protocol defined by the DAO in order to operate. We can classify DAOs, DOs (and plain old Os), AIs and a fourth category, plain old robots.”


Sources:

ja/satoshi


Images courtesy of Digital City Tickets, Ethereum.

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Bitcoin Is the Original DAO

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