Tag Archives: Ethereum

Bitcoin’s Monthly Recap of July 2015

Welcome to HolyTransaction’s seventh monthly recap for the year 2015. This past month of July has been marked by several long awaited news and events; during that time, the bitcoin price fell from a low of $272.50 on July 1st to a high of $280.19 on July 31st, according to Bitcoin exchange Bitstamp.
 
Ethereum Genesis Block Released and Mining Begins
Ethereum promises to do for contracts what Bitcoin has done for payments, and its release marks a new frontier in crypto/bitcoin 2.0. In fact, Ethereum’s launch product was called ‘Frontier’ and along with an ingenious open source method for generating the genesis block, Ethereum has started its decentralized app network. Many have complained that the bare-bones, command line interface of the release is unnecessarily elitist and keeps the network small and limited to those with extensive technical know-how. Ethereum notably raised $18 million USD in late 2014, and is now on its way.
 
Proposed California Bitcoin Regulation Moves Forward In Better Light Than BitLicense
AB 1326, which is making its way through the California legislative process currently, has gotten a vote of approval from Bitcoin regulatory lobbying firm Coin Center. After receiving constructive criticism from Coin Center, the bill was amended to specify exactly that only companies holding customers’ funds need a license. Coin Center has a set state digital currency framework that it hopes to promote in each state. They, and the Bitcoin community, believe that companies that don’t hold customers’ funds should be free to innovate with the blockchain or a blockchain.
 
Bitcoin Malware on the Decline According to Kaspersky Report
A quarterly security report by the noted Kaspersky Labs has noted a lessening in the amount of Bitcoin malware since 2015 began. Kaspersky Labs is a noted security firm that has informed the public on many hacks in the past. Recently, Bitcoin malware such as cryptolocker has been used by hackers and has stricken people, corporations, and even governments across the world. Overall, in the 2nd quarter of 2015, Kaspersky Lab determined that 379,972,834 instances of computer infection occurred.
 
Former Reddit Employee Creating a New Decentralized Media Platform
A former employee of Reddit, Ryan X. Charles, plans to create a new app featuring a blockchain that would function like Reddit but be truly decentralized, getting rid of as many third parties as possible. Charles was initially hired by Reddit in 2015 to work on some sort of Reddit token; however, in the upper management tumult that rocked Reddit recently, Charles was let go and his project scrapped. Charles commented: “I’ve collaborated with a lot of other people to produce some of the fundamental software necessary to make a decentralized reddit. […] It’s not done yet and there is no prototype, but I would love to find collaborators to build something concrete.”

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Satoshi
bitcoin 20 glass

Bitcoin’s revolution moves beyond currency

(CoinDesk) Just when people were getting used to the idea that bitcoin might not be a boom-and-bust fad destined for failure, entirely new applications of the technology have joined digital currency on stage.
Crypto 2.0 – also know as cryptography 2.0, decentralized applications, or, popularly, as bitcoin 2.0 – is the application of block chain or distributed ledger technology to things other than digital currency. The block chain offers the ability to facilitate decentralized ownership and store, transfer and process information in a decentralized, programmable way. Many consider that innovation to be the true value of this technology.
In May, New York-based investment firm Ledra Capital took to Twitter to crowdsource a list of what kinds of information the block chain could be used for. Currency transactions, of course, topped the list. But, it was followed by things like stocks, bonds, mortgages, land titles, gun permits, contracts, votes, bets, trademarks, data storage, domain names, proof of authorship and much, much more.
As Robby Dermody, co-founder of Counterparty, told CoinDesk:

“Bitcoin can be used to pay for things like a cup of coffee, but that’s not bitcoin’s ‘killer app’. To the average customer it’s just as easy to pay with their credit card. A killer app would need to offer massive advantages in another area.”

A community of developers and entrepreneurs recognize this notion and have been busy building out many crypto 2.0 concepts. Dominik Zynis, the former head of business development at Mastercoin, commented on the significance of this movement to CoinDesk, saying:

“We ought to be paying very close attention to crypto 2.0 because bitcoin has redefined how we launch web services.”

Zynis believes crypto 2.0 companies are laying the foundation for a new generation of “secure and scalable Internet applications” that will be more resilient to hacking, fraud, scalability and privacy problems.
Bitcoin’s role as a digital currency is still a work in progress, both at the code and implementation level, as well as on the consumer and institutional adoption side. Still, the wider impact of distributed ledger technology is beginning to rapidly take shape. Vitalik Buterin, co-founder of Ethereum, illustrated the movement’s broader vision to CoinDesk, adding:
“I think now might be the time when we have just enough cryptographic, crypto-economic building blocks to finally make a proper shot at advancing a radically different vision for Internet architecture and society.”

Rise of the decentralized exchange

A year ago it might have been hard to believe that in just 12 month’s time, a publicly traded company would be openly exploring the possibility of launching a cryptosecurity on a decentralized asset exchange.
Overstock.com CEO Patrick Byrne has been outspoken in his support of digital currency, and he recently told CoinDesk that Overstock intends to figure out how to launch a cryptosecurity so other companies can use their system to raise funds. Overstock published a wiki on 29th July that currently details 12 organizations that have either launched decentralized exchanges or are building them.
Among them, Counterparty, NXT and BitShares have exchanges that are operational right now. Counterparty has been live since January and NXT’s Asset Exchange since May, while BitShares’s platform is only a few weeks old. Each exchange’s implementation differs in various ways, but they all share common features, namely the ability to create and trade user-defined assets without the need for a centralized third party.
Company shares are an obvious application of these platforms. On NXT’s Asset Exchange, for instance, where more than 220 user-defined assets have already been created, digital currency exchange service Coinomat has issued a cryptoasset that offers shareholders a 1.5% dividend of the company’s weekly profits. This is really an example of a smart contract that is automatically confirmed and processed over a block chain.
Other current examples of block chain implementations include the Digital Tangible Trust, which offers a tradable gold-backed cryptoasset. Non-traditional assets are also emerging, like those being created by MyPowers, whose digital tokens allow people to buy and trade brand equity in artists and organizations. Other projects are moving beyond assets, like Pavilion, which is planning to utilize block chain technology to sign and publicly publish contracts.
Future goals for cryptoassets include smart property linked to physical assets; imagine a rental car whose key was tradable as a token on a decentralized exchange and downloadable to a fob that would unlock the vehicle. There are also plans to launch what are called decentralized autonomous companies (DACs) – namely by projects like BitShares – which operate autonomously on top of a block chain and earn profit for shareholders.

Decentralized applications will hide the block chain

Beyond assets, there have been efforts to utilize the block chain as a way to store data. Namecoin, an attempt to create a decentralized domain name registry outside the control of ICANN, was arguably the second implementation of block chain technology after digital cash transactions. More recently, efforts like MaidSafe and Storj have completed fundraising rounds.
MaidSafe is attempting to use the bitcoin block chain to create a fully decentralized internet by sharing processing and memory power across a distributed network. Its April crypto-crowdsale notably raised $7m in five hours, although, due to the poor liquidity of the Mastercoin it received, it soon revised that number to $5.5m.
Storj completed its crypto-crowdsale on 20th August, raising 910 BTC. The Storj platform offers online storage similar to Dropbox or Google Drive, but does so over a distributed network. Utilizing the bitcoin block chain, Storj allows users to buy available disk space on the network, and in addition, allows users with free storage space to sell it to those in need.
Shawn Wilkinson, founder of Storj and a bitcoin developer, noted the value of expanded applications of the block chain, saying:

“Essentially you can take the technology from bitcoin, which is a $5bn–$6bn industry, and apply it to an existing area like cloud storage, which is a $150bn dollar industry.”

With applications like Storj, Wilkinson pointed out, you move past things like regulation, public perception, price volatility and the complexity of the underlying technology. Decentralized applications provide a user interface whose back-end could be a traditional network but happens to be a distributed one.

Sidechains, treechains and a question of blockchains

One important point of contention within the crytpo 2.0 space is what block chain this next generation of implementations should be built on top of. In one camp are the organizations like Ethereum and BitShares that are building their own, entirely new block chains on top of which their platforms will operate.
In June, bitcoin core developer Gavin Andresen addressed the Ethereum project in a blog post and suggested that Ethereum’s intentions to create a new proof of work system and currency seemed extraneous at first blush.
He wrote:

“Bitcoin already provides a global currency and distributed ledger – there is no need to reinvent those wheels. Combining real-world information with bitcoin is where things start to get really interesting.”

Alternatively, BitShares uses a mechanism called delegated proof-of-stake (DPOS), where stakeholders delegate their voting power to 101 delegates that take turns updating BitShares block chain. Distributed proof-of- helps prevent known risks of proof-of-work, including risk of a 51% attack.
Other crypto 2.0 initiative are seeking to adapt the bitcoin block chain to scale more effectively, be less decentralized and allow for permissionless development. One such effort is through bitcoin core developer Peter Todd’s treechain concept, which Todd is developing while working at crypto 2.0 start-up Viacoin. Side chains are another potential implementation that will allow new features to be added to the existing bitcoin block chain through new block chains that interact with it.

Open your free digital wallet here to store your cryptocurrencies in a safe place.

Satoshi