The investment banker Jamie Dimon caused a stir when he declared
recently that Bitcoin will collapse because it is “worth nothing.”
Bitcoin’s current market value, he claimed, is driven almost entirely by speculation,
rather than by any real and present intrinsic value that Bitcoin actually
Casting aside the debate over whether Bitcoin
has intrinsic value or not, it seems fair to say that Dimon doesn’t know the
cryptocurrency market well. If he did, he might have noted that Bitcoin is only
one of dozens of major tokens available. Some tokens were designed with
intrinsic value as a specific goal.
Particl, which was created last spring, is
building a decentralized eCommerce platform, a framework for third party apps,
and a suite of privacy tools to go with it.
PART solves various privacy problems associated with BTC, such as
the ability of third parties to trace transactions. Adding multiple cryptographic
proofs like Ring Signature Confidential Transactions (RingCT) and Confidential
Transaction (CT) plus trustless mechanisms like MAD escrow, Particl provides
100 percent anonymity to people who buy and sell using PART.
While the Particl privacy platform and upcoming Marketplace supports
most major cryptocurrencies, PART serves as its utility token.
and Intrinsic Value
The value of Bitcoin has risen astronomically over the past
several years in part because people believe Bitcoin will one day be widely
used and provide services that other forms of currency cannot. For this reason,
the growth in value of Bitcoin has far outpaced actual Bitcoin adoption.
PART is different. PART’s value is based on more than the
potential future worth of the Particl Platform or PART tokens. People who own
PART tokens derive immediate benefits from them, including the following.
PART is a flexible cryptocurrency, especially with respect to the
level of privacy and anonymity users wish to have.
Default transactions on the Particl network are pseudo-anonymous like Bitcoin. The network is Proof of Stake (PoS) so only default and stealth addresses can stake PART. Exchanges and services also transact with the network using public PART addresses.
If they wish, PART users can benefit from features like RingCT in order to gain a privacy experience equivalent to using a token like Monero, which created RingCT. Alternatively, they can use PART tokens with CT blinding features applied to hide amounts sent between addresses.
This flexibility adds to PART’s intrinsic value because it allows PART to be used for different sorts of transactions and is 100 percent based on user preference. If — as proponents of Bitcoin pointed out in response to Dimon’s criticisms — Bitcoin provides intrinsic value in part by enabling transactions that traditional currency can’t, then PART’s ability to accommodate a range of transaction types and use cases makes it even more valuable.
PART ownership confers voting rights within the PART community.
The future development of the Particl Project and its privacy platform is
decided by users who own PART tokens. In this sense, PART tokens have an
intrinsic value that is absent from a cryptocurrency like bitcoin, where the
ability to propose or vote on platform changes is not linked to coin ownership.
PART tokens generate passive income for their owners through
working for the network (staking) and from fees collected from privacy DApps
built on the platform like the upcoming Marketplace. PART is an inflationary
token, therefore its supply increases by 5 percent in the first year and
decreases by one percentage point until the fourth year, when the inflation
rate reaches 2 percent. Inflation is then maintained at a 2 percent rate
In each of these ways, simply owning PART tokens generates
additional income independent of increases in the market value of the tokens on
an exchange. Last but not least, as noted above, PART serves as the utility
coin on the Particl Platform. Sellers who use Particl Marketplace are always
paid in PART tokens (even though buyers can use any cryptocurrency of their
choice). In addition, like Ethereum, any decentralized application built on
Particl’s platform will transact using PART which also goes to stakers.
PART is therefore intrinsically linked to the Particl Platform. As
the adoption of the overall platform grows, so does the value of PART.
If you want to make the case that cryptocurrencies have intrinsic
value based on services they provide today, PART is a good subject to work
with. More so than Bitcoin, PART derives its value from benefits that it
provides to all token holders natively, on its own privacy platform. Owning
PART is the furthest thing from speculating on tulip bulb futures (a historical
blunder to which Dimon compared Bitcoin) as you can get.
Over the past weekend, two prominent video streaming sites were discovered to contain script that used visitors’ web browsers to mine Monero. The proceeds benefitted an unknown individual or group.
In any case, it seems unlikely that Showtime, a paid subscription service, targeted its own customers with a mining scheme, but it remains unclear if the insertion of the offending code was an inside job or the work of a malicious party outside the organization. At the time of this article’s publication, Showtime had not responded to a request for comment. If the organization does reply, this article will be updated accordingly.
Coin Hive’s own website explains that the firm collects the Monero mined through its code, then releases the funds to the wallets of account holders every two hours according to the following schema:
Put another way, Coin Hive pays users “per solved hash. The payout rate is adjusted automatically every few hours based on the global difficulty of the network and the average reward per block,” and users “get 70% of the average XMR we earn” so long as their accounts have mined above a “minimum payout threshold” of 0.5 XMR.
Coin Hive’s monetization model is reminiscent of that pioneered by Tidbit, a piece of software designed by MIT students that used a similar mechanism to mine bitcoin. The Tidbit team agreed to cease operations in 2015 after settling with the New Jersey Division of Consumer Affairs and the state’s then-acting attorney general, who alleged that the script violated New Jersey’s Computer Related Offenses Act and Consumer Fraud Act. While the body did not consider Tidbit’s actions malicious, the team nonetheless agreed to a $25,000 settlement, to be vacated after two years if they refrained from illegally accessing computers in New Jersey during that period.
Other malvertising incidents have made the news more recently. Shortly after Coin Hive introduced its code, administrators of the filesharing site The Pirate Bay implemented the browser-based mining operation on their own site. Later, site administrators scaled back the amount of harvested computing power following complaints from visitors.
Earlier this year, a malvertising scheme affecting computers mostly located in Eastern Europe and Central Asia commandeered the web browsers of visitors to certain gaming and video-streaming sites in order to mine the cryptocurrencies Feathercoin and Litecoin.
In July, ETHNews reported that a security breach at San Francisco State University saw a number of malware files, including bitcoin mining software, end up on the school’s servers. Bryan Seely, an ethical hacker who notified SFSU of the vulnerability, told ETHNews that while it’s unclear whether all the machines on the network (including students’ personal devices) were affected by the hack, the school’s servers alone were powerful enough to run a substantial mining operation.
Finally, as ETHNews reported earlier this month, the Russian cybersecurity firm Kaspersky announced that between January and August 2017, its products protected 1.65 million users from malicious mining software. The company also claimed to have discovered one culprit botnet that was responsible for mining cryptocurrency to the tune of over $30,000 each month.
Adam Reese is a Los Angeles-based writer interested in technology, domestic and international politics, social issues, infrastructure and the arts. Adam is a full-time staff writer for ETHNews.
Bitcoin linked to the infamous WannaCry malware attack which held thousands of computers ransom around the world is now on the move according to security experts.
Since the attack three Bitcoin wallets have been sitting idle with roughly 52 Bitcoin, but as of today they have been split into multiple tiny amounts and distributed to various other wallets and exchanged for a more anonymous cryptocurrency, a common tactic used by hackers to disguise and obfuscate trail. At this stage it is not yet known if the coins movement is related to the perpetrators or a law enforcement agency.
Victims were asked to pay between $300 and $600 to get their systems back. According to various security firms the Bitcoin has been exchanged for Monero on a swiss-based cryptocurrency exchanged named ShapeShift which facilities such transactions with minimal if none AML or KYC checks for small amounts.
Monero is the choice cryptocurrency for anyone looking to remain completely anonymous as it offers superior privacy and tumbling features. The link between the two currencies will be almost completely untraceable allowing the perpetrator to use the laundered Monero without any red flags.
Many people are still blaming the NSA for the thousands of victims computers being held ransom due to the 0day exploit used in the WannaCry attack originating from leaked NSA skyware.
It’s safe to say that despite the best efforts of security experts and government agencies it is likely the trail will now go cold.
The metrics are so much better than its competitors. When you see the statistics head-to-head it quickly becomes apparent that there are two leagues for crypto-currency – the minor leagues and the major leagues. And XRP is definitely in the major leagues.
First, the Metrics Head-to-Head
Can you believe that there are still some crypto enthusiasts that still haven’t seen this chart? 1
It visually shows the dramatic difference in settlement speed between the three top crypto-currencies, along with the current traditional correspondence banking settlement times. The times quoted here are for what’s known in the crypto world as “on-ledger” transactions, or transactions that take place on the blockchain directly.
The Difference between “On-Ledger” and “Off-Ledger” Transactions
On-ledger transactions are the standard transactions that formed the basis for the blockchain revolution. When I send Bitcoin – or any other crypto-currency – to somebody’s wallet, I’m conducting an “on-ledger” transaction. This means that the transaction is an individual unit that can be tracked on the blockchain, using tools such as blockchain explorer,2 etherscan,3 or the XRP Account Explorer.4 If you’ve never done it before, you should try using one of these fascinating tools to track your own wallet and see for yourself how fascinating it is to be able to view all activity on the public ledger.
On-ledger transactions use the most resources of the network, and take the most time to process.
On each crypto-currency network, transactions are grouped into batches called “blocks.” Each one of these blocks is then confirmed and becomes a historical record for that crypto-currency.5 This is a common concept for Bitcoin, Ethereum, and XRP.
Off-ledger Transactions are grouped and batched before being communicated to the blockchain. In other words, if a payment processor processes ten transactions off-ledger, he or she may group the result and summarize it, and then at the end only transmit the final result to the network as one transaction.6
The reason that off-ledger transactions may be conducted has to do with how much more efficient and fast the batching can be done if each transaction doesn’t have to be communicated to the network – instead, a payment processor merely processes transactions as fast as their computing power will allow. This is why (and how) off-ledger transactions can scale directly to provide the maximum transactions per second for all three networks.
The XRP Ledger has an off-ledger system called “Payment Channels” that is ready for production usage.7 Bitcoin’s off-ledger system is (will be) known as the “lightning network.”8 Ethereum’s is called “Raiden”9
Each one of these off-ledger systems has very high TPS rate. XRP Payment Channel‘s TPS rate has been quoted in multiple news sources as one that can easily rival other popular centralized payment processors such as VISA.10 11
The Metrics Have Persuaded Many Banks and Financial Institutions
Bill Gates was famously quoted by Bloomberg12 about Bitcoin in a 2014 Bloomberg interview:
“Bitcoin is better than currency in that you don’t have to be physically in the same place and, of course, for large transactions, currency can get pretty inconvenient.”
commenting on how Bitcoin was more convenient than current systems, he was correct! But I doubt that he knew about XRP at the time. Perhaps it was more than a coincidence when he followed up with a quote later – during a SIBOS keynote address – in 2014:
(financial transactions will eventually) “be digital, universal and almost free.”
Keep in mind that that’s a very apt description of transactions using XRP as a bridge asset; the current XRP network fees are literally almost free. 13
Ripple technology is being used all over the world by a large and growing number of banks14 15 16, ForEx exchanges,17payment processors,18mobile applications19 and perhaps even central banks.20
The Ripple Protocol – the Secret Recipe
It’s not as famous as Coca-Cola, but the consensus algorithm for the XRP Ledger is open-source code in Github.21 Being open-source doesn’t mean that anybody can read the code and understand it, however; to get a high-level understanding of just how XRP is so much faster than rival crypto-currencies, we first need to understand the process of consensus.
Transaction Validation: Consensus
Consensus is the way in which each crypto-currency validates transactions. For both Bitcoin and Ethereum, this is known as “proof-of-work.” It was a revolutionary concept for digital currency, and it’s the reason that a currency can exist without issuance by a central government electronically; with no counter-party risk. (and nobody to redeem the token either) A crypto-currency has value only because its users ascribe value to it.
Why did it take until 2008 for somebody to create crypto-currency? Because nobody knew how to technically prevent the “double-spend” puzzle. Basically, if I send you tokens from a database I control, and now you *think* you have those tokens in your database, what’s to prevent me from just creating more tokens in my own wallet, or to deny that I ever sent those tokens to you? This is the problem of “double-spend” – how do you prevent users from violating the trust of other users on a shared network?
How you solve the problem impacts how fast you’re able to process transactions.
Proof-of-Work ‘mining’ is a record-keeping service. Miners keep a blockchain consistent, complete, and unalterable by repeatedly verifying and collecting newly broadcast transactions into a new group of transactions called a block. Each block contains a cryptographic hash of the previous block, which links it to the previous block.
In order to be accepted by the rest of the network, a new block must contain a so-called ‘proof-of-work.’
The proof-of-work requires miners to find a number called a nonce, such that when the block content is hashed along with the nonce, the result is numerically smaller than the network’s difficulty target. This proof is easy for any node in the network to verify, but extremely time-consuming to generate, as for a secure cryptographic hash, miners must try many different nonce values before meeting the difficulty target.
How many? Between 1 March 2014 and 1 March 2015, the average number of nonces miners had to try before creating a new block increased from 16.4 quintillion to 200.5 quintillion. 22
Does that seem inefficient? Because it is.
The XRP Ledger uses a “Byzantine Consensus Algorithm” known as the “Ripple Protocol” to determine if a transaction is legitimate.23 This requires a number of steps:
A transaction is submitted to the next candidate ledger
Each network node evaluates proposals from “N” peers: a high number chosen based on low probability of collusion
Consensus among nodes is reached with super-majority of peers
The network recognizes the new validated ledger
This consensus algorithm solves a classical mathematical problem of trust known as the Byzantine Generals problem, and allows the state of the network to move forward with consensus.24
Unlike centralized mining pools for both Bitcoin and Ethereum, this consensus algorithm allows the network to be secured with a minimum of electrical power, and much more quickly, as we’ve seen.
XRP Doesn’t Require Mining
Because of its consensus algorithm, XRP doesn’t require centralized mining pools. This allows its network to truly be decentralized in a way that supports the redundancy provided by a distributed system. It also saves an exceptional amount of electrical energy, and is categorically better for the environment than Bitcoin or Ethereum.
Effect on Speed
The Ripple Protocol results in blazing confirmation time that doesn’t require mining. In that way, it’s much better for the environment, and provides near-instant conformation of transactions no matter where you are in the world.
RippleNet provides the high-speed rail lines for the next generation of payments. Like a bullet train of passengers, each ledger contains transactions that can be confirmed in the time it takes to blink. It achieves these speeds through the use of its confirmation protocol.
Regular Ledger Close Times
Because of the Ripple Protocol, the ledger close times to not vary appreciably like block times.25 For both Bitcoin and Ethereum, a third party cannot predict with any degree of accuracy how fast a new block will be created. We can calculate “average block times” for both Bitcoin and Ethereum, but even those numbers sometimes see a material variation26 depending on network usage, along with how many transactions are awaiting confirmation.
The XRP Ledger, on the other hand, has very regular ledger close times, and each one closes (currently) on average every four seconds (or less).27
This consistency provides a benchmark that can be used by third parties, software, and other systems to predict normal communication with and from the XRP Ledger at a rate that supports near-instant global commerce.
Banks, financial institution, government agencies and corporates are all looking for a blockchain solution that is fast enough to process transactions on an immutable, decentralized ledger in a way that supports near-instant responsiveness for Internet-and-mobile based software.
XRP clearly provides this – either natively through direct XRP Ledger transactions, or through the use of XRP Payment Channels which provide direct scaling throughput.
It’s easy to see which blockchain solution is going to be receiving the lion’s share of the attention when it comes to real-world implementations. XRP has the ability to transform the globe’s cross-border value transfer into an instant communication system where transitioning from one currency to another takes only a few seconds instead of days. RippleNet is quickly becoming the new payment rails on which the world’s inter-bank communication system can operate with maximum efficiency and speed; Does your bank ‘Run On Ripple?’