Newest 'mining-technical-details' Questions - Bitcoin ...

A word of caution about exchanges, privacy and your permanent history on the blockchain

I had an account restricted on a major exchange this year and it's not a pleasant experience. Just wanted to share my experience, since I see so many have been through something similar in several exchange-related subreddits. My case happened at Bittrex but I think it's important to note that this may happen on any exchange, not just Bittrex. People are depositing way too much trust in these exchanges and it may come back to bite them. Here's my experience as honestly as I'm able to put it. Bittrex is technically great, contrary to what many say the system just works. Works great in fact, fast and very few glitches in many many years. I think I must've been a very early customer back when things were very informal and until 2020 I had absolutely zero problems with Bittrex. I always thought they were above the pack when it came to system security design and reliability. Despite joining when it was very early, I did full KYC and had the top tier withdrawal limit even though KYC wasn't obligatory back when I joined. I did it all formally because I wanted to have a sort of bank account I could trust, I didn't want to be jumping from exchange to exchange like some crypto traders did. I never used as much as 0.01% of this withdrawal limit, I'm small fish but it was nice to know I could move tons of BTC like the whales if I ever needed to. So I sent them all my real data, work address and so forth. Then Bittrex got moved out of USA and into some country, don't know where. Which was fine by me, I thought it was the same people behind it, doing some formality. Then one day a person with a drawing for a profile pic and some strange username decides to contact me out of nowhere using the Bittrex tech support interface. They know everything about me, but I don't know anything about them. No contact info visible, nothing. This support person sends you a statement you must sign and then based on that they begin to ask for specific documents. I wanted to keep my relationship with Bittrex, so I filled signed and returned it. Then they dived into each item in the thing requesting more documents based on each. So if you said you previously worked for ACME, they'll ask to see ACME related stuff. I said I bought Bitcoin using Bank X, so they wanted to see Bank X statements. And so on. They begin to dig into each specific item you inform. Then it downed on me that maybe I was under some formal audit, in which case I'd have the right to know so I could hire an accountant or lawyer. So I politely asked. They don't tell you anything. You don't even know who the person is on the other side, there is no identification at all of who's contacting you. You're sending all your personal informations to someone who, as far as you know, could be a cat or a dog typing on a random keyboard. So I then asked them why so much detail was needed, since I'd provided lots already. They ignore and just say thank you for your cooperation and proceded to ask for more stuff. I said fine let's do this and went along. Then they asked for specific crypto addresses for the tokens I'd used in the past. Like the address of whoever sent me some XXXX token years ago. I then thought hey man this is too much, do you need me to fax or mail you my ID or something, I'd do it but whatever I enter in there could spell trouble for me. For example, if some guy whose ETH address did something nasty, but coincidentally paid me years ago using that same address, if I gave them my address from the past, in those several years it could mean this person is now a wanted criminal and it'd spell trouble for me, who knows what the person did afterwards, then my account would be forever linked to that rogue address. I began to reflect on this and thought wait, this is not good, I could put myself into a 'bad address' database for no reason. Then I told them I would not send the crypto addresses. They said thanks let's continue the process. It felt weird overall, it just keeps going and demanding more information. I then asked for someone to speak to or somewhere physical I could go to, to talk and show that I'm a real person, they never reply anything, they just ask for more. So I finally gave up and stopped replying and they apparently restricted my account or something. I'll have to go back and reopen the ticket and request account reactivation but then they'll probably restart the same process again. I'm not really that much of a fan of crypto these days, so I'm thinking maybe it's time to call it quits. The reason I'm writing this is to let everyone know that whatever you do in crypto gets forever linked to you. You begin thinking it's some informal thing and that there's some freedom but there really isn't. You may fool around with crypto but then someone is recording everything and will demand you make everything formal in the future. When I joined Bittrex everything was more informal in crypto, even shapeshift and others allowed you to trade crypto with no ID at all, 100% anonymous. Heck even faucets gave out free Bitcoin back in the day. Then all of a sudden everything you do in these exchanges will be audited and you'll need to provide formal documents for everything you did in the past 10 years. Some anonymous operator (this isn't specific to Bittrex, all of them do it that way) with no office has all your info but you know nothing about them in return. You don't even know where these exchanges are located at all. I saw a Facebook post about Binance not even having a formal country, they're "all over t he place". Sure that sounds cool but...who do you turn to when they demand legal stuff from you? Someone out there has all your financial information but you have nothing, you have no security, no legal protection, nothing and they have everything. So, be careful. This isn't all specific to Bittrex, any exchange can and probably will do the same. Point is crypto is a formal thing and will spell trouble for you in the future. Especially since blockchain analysis is way too primitive still, your addresses could somehow end up in a bad neightborhood. The pandemic kinda reminded me of blockchain transactions, you may end up infected because you have no way to know what others have been doing while you were doing everything right.
submitted by cromozomesten to Buttcoin [link] [comments]

⚡ Lightning Network Megathread ⚡

Last updated 2018-01-29
This post is a collaboration with the Bitcoin community to create a one-stop source for Lightning Network information.
There are still questions in the FAQ that are unanswered, if you know the answer and can provide a source please do so!

⚡What is the Lightning Network? ⚡

Explanations:

Image Explanations:

Specifications / White Papers

Videos

Lightning Network Experts on Reddit

  • starkbot - (Elizabeth Stark - Lightning Labs)
  • roasbeef - (Olaoluwa Osuntokun - Lightning Labs)
  • stile65 - (Alex Akselrod - Lightning Labs)
  • cfromknecht - (Conner Fromknecht - Lightning Labs)
  • RustyReddit - (Rusty Russell - Blockstream)
  • cdecker - (Christian Decker - Blockstream)
  • Dryja - (Tadge Dryja - Digital Currency Initiative)
  • josephpoon - (Joseph Poon)
  • fdrn - (Fabrice Drouin - ACINQ )
  • pmpadiou - (Pierre-Marie Padiou - ACINQ)

Lightning Network Experts on Twitter

  • @starkness - (Elizabeth Stark - Lightning Labs)
  • @roasbeef - (Olaoluwa Osuntokun - Lightning Labs)
  • @stile65 - (Alex Akselrod - Lightning Labs)
  • @bitconner - (Conner Fromknecht - Lightning Labs)
  • @johanth - (Johan Halseth - Lightning Labs)
  • @bvu - (Bryan Vu - Lightning Labs)
  • @rusty_twit - (Rusty Russell - Blockstream)
  • @snyke - (Christian Decker - Blockstream)
  • @JackMallers - (Jack Mallers - Zap)
  • @tdryja - (Tadge Dryja - Digital Currency Initiative)
  • @jcp - (Joseph Poon)
  • @alexbosworth - (Alex Bosworth - yalls.org)

Medium Posts

Learning Resources

Books

Desktop Interfaces

Web Interfaces

Tutorials and resources

Lightning on Testnet

Lightning Wallets

Place a testnet transaction

Altcoin Trading using Lightning

  • ZigZag - Disclaimer You must trust ZigZag to send to Target Address

Lightning on Mainnet

Warning - Testing should be done on Testnet

Atomic Swaps

Developer Documentation and Resources

Lightning implementations

  • LND - Lightning Network Daemon (Golang)
  • eclair - A Scala implementation of the Lightning Network (Scala)
  • c-lightning - A Lightning Network implementation in C
  • lit - Lightning Network node software (Golang)
  • lightning-onion - Onion Routed Micropayments for the Lightning Network (Golang)
  • lightning-integration - Lightning Integration Testing Framework
  • ptarmigan - C++ BOLT-Compliant Lightning Network Implementation [Incomplete]

Libraries

Lightning Network Visualizers/Explorers

Testnet

Mainnet

Payment Processors

  • BTCPay - Next stable version will include Lightning Network

Community

Slack

IRC

Slack Channel

Discord Channel

Miscellaneous

⚡ Lightning FAQs ⚡

If you can answer please PM me and include source if possible. Feel free to help keep these answers up to date and as brief but correct as possible
Is Lightning Bitcoin?
Yes. You pick a peer and after some setup, create a bitcoin transaction to fund the lightning channel; it’ll then take another transaction to close it and release your funds. You and your peer always hold a bitcoin transaction to get your funds whenever you want: just broadcast to the blockchain like normal. In other words, you and your peer create a shared account, and then use Lightning to securely negotiate who gets how much from that shared account, without waiting for the bitcoin blockchain.
Is the Lightning Network open source?
Yes, Lightning is open source. Anyone can review the code (in the same way as the bitcoin code)
Who owns and controls the Lightning Network?
Similar to the bitcoin network, no one will ever own or control the Lightning Network. The code is open source and free for anyone to download and review. Anyone can run a node and be part of the network.
I’ve heard that Lightning transactions are happening “off-chain”…Does that mean that my bitcoin will be removed from the blockchain?
No, your bitcoin will never leave the blockchain. Instead your bitcoin will be held in a multi-signature address as long as your channel stays open. When the channel is closed; the final transaction will be added to the blockchain. “Off-chain” is not a perfect term, but it is used due to the fact that the transfer of ownership is no longer reflected on the blockchain until the channel is closed.
Do I need a constant connection to run a lightning node?
Not necessarily,
Example: A and B have a channel. 1 BTC each. A sends B 0.5 BTC. B sends back 0.25 BTC. Balance should be A = 0.75, B = 1.25. If A gets disconnected, B can publish the first Tx where the balance was A = 0.5 and B = 1.5. If the node B does in fact attempt to cheat by publishing an old state (such as the A=0.5 and B=1.5 state), this cheat can then be detected on-chain and used to steal the cheaters funds, i.e., A can see the closing transaction, notice it's an old one and grab all funds in the channel (A=2, B=0). The time that A has in order to react to the cheating counterparty is given by the CheckLockTimeVerify (CLTV) in the cheating transaction, which is adjustable. So if A foresees that it'll be able to check in about once every 24 hours it'll require that the CLTV is at least that large, if it's once a week then that's fine too. You definitely do not need to be online and watching the chain 24/7, just make sure to check in once in a while before the CLTV expires. Alternatively you can outsource the watch duties, in order to keep the CLTV timeouts low. This can be achieved both with trusted third parties or untrusted ones (watchtowers). In the case of a unilateral close, e.g., you just go offline and never come back, the other endpoint will have to wait for that timeout to expire to get its funds back. So peers might not accept channels with extremely high CLTV timeouts. -- Source
What Are Lightning’s Advantages?
Tiny payments are possible: since fees are proportional to the payment amount, you can pay a fraction of a cent; accounting is even done in thousandths of a satoshi. Payments are settled instantly: the money is sent in the time it takes to cross the network to your destination and back, typically a fraction of a second.
Does Lightning require Segregated Witness?
Yes, but not in theory. You could make a poorer lightning network without it, which has higher risks when establishing channels (you might have to wait a month if things go wrong!), has limited channel lifetime, longer minimum payment expiry times on each hop, is less efficient and has less robust outsourcing. The entire spec as written today assumes segregated witness, as it solves all these problems.
Can I Send Funds From Lightning to a Normal Bitcoin Address?
No, for now. For the first version of the protocol, if you wanted to send a normal bitcoin transaction using your channel, you have to close it, send the funds, then reopen the channel (3 transactions). In future versions, you and your peer would agree to spend out of your lightning channel funds just like a normal bitcoin payment, allowing you to use your lightning wallet like a normal bitcoin wallet.
Can I Make Money Running a Lightning Node?
Not really. Anyone can set up a node, and so it’s a race to the bottom on fees. In practice, we may see the network use a nominal fee and not change very much, which only provides an incremental incentive to route on a node you’re going to use yourself, and not enough to run one merely for fees. Having clients use criteria other than fees (e.g. randomness, diversity) in route selection will also help this.
What is the release date for Lightning on Mainnet?
Lightning is already being tested on the Mainnet Twitter Link but as for a specific date, Jameson Lopp says it best
Would there be any KYC/AML issues with certain nodes?
Nope, because there is no custody ever involved. It's just like forwarding packets. -- Source
What is the delay time for the recipient of a transaction receiving confirmation?
Furthermore, the Lightning Network scales not with the transaction throughput of the underlying blockchain, but with modern data processing and latency limits - payments can be made nearly as quickly as packets can be sent. -- Source
How does the lightning network prevent centralization?
Bitcoin Stack Exchange Answer
What are Channel Factories and how do they work?
Bitcoin Stack Exchange Answer
How does the Lightning network work in simple terms?
Bitcoin Stack Exchange Answer
How are paths found in Lightning Network?
Bitcoin Stack Exchange Answer
How would the lightning network work between exchanges?
Each exchange will get to decide and need to implement the software into their system, but some ideas have been outlined here: Google Doc - Lightning Exchanges
Note that by virtue of the usual benefits of cost-less, instantaneous transactions, lightning will make arbitrage between exchanges much more efficient and thus lead to consistent pricing across exchange that adopt it. -- Source
How do lightning nodes find other lightning nodes?
Stack Exchange Answer
Does every user need to store the state of the complete Lightning Network?
According to Rusty's calculations we should be able to store 1 million nodes in about 100 MB, so that should work even for mobile phones. Beyond that we have some proposals ready to lighten the load on endpoints, but we'll cross that bridge when we get there. -- Source
Would I need to download the complete state every time I open the App and make a payment?
No you'd remember the information from the last time you started the app and only sync the differences. This is not yet implemented, but it shouldn't be too hard to get a preliminary protocol working if that turns out to be a problem. -- Source
What needs to happen for the Lightning Network to be deployed and what can I do as a user to help?
Lightning is based on participants in the network running lightning node software that enables them to interact with other nodes. This does not require being a full bitcoin node, but you will have to run "lnd", "eclair", or one of the other node softwares listed above.
All lightning wallets have node software integrated into them, because that is necessary to create payment channels and conduct payments on the network, but you can also intentionally run lnd or similar for public benefit - e.g. you can hold open payment channels or channels with higher volume, than you need for your own transactions. You would be compensated in modest fees by those who transact across your node with multi-hop payments. -- Source
Is there anyway for someone who isn't a developer to meaningfully contribute?
Sure, you can help write up educational material. You can learn and read more about the tech at http://dev.lightning.community/resources. You can test the various desktop and mobile apps out there (Lightning Desktop, Zap, Eclair apps). -- Source
Do I need to be a miner to be a Lightning Network node?
No -- Source
Do I need to run a full Bitcoin node to run a lightning node?
lit doesn't depend on having your own full node -- it automatically connects to full nodes on the network. -- Source
LND uses a light client mode, so it doesn't require a full node. The name of the light client it uses is called neutrino
How does the lightning network stop "Cheating" (Someone broadcasting an old transaction)?
Upon opening a channel, the two endpoints first agree on a reserve value, below which the channel balance may not drop. This is to make sure that both endpoints always have some skin in the game as rustyreddit puts it :-)
For a cheat to become worth it, the opponent has to be absolutely sure that you cannot retaliate against him during the timeout. So he has to make sure you never ever get network connectivity during that time. Having someone else also watching for channel closures and notifying you, or releasing a canned retaliation, makes this even harder for the attacker. This is because if he misjudged you being truly offline you can retaliate by grabbing all of its funds. Spotty connections, DDoS, and similar will not provide the attacker the necessary guarantees to make cheating worthwhile. Any form of uncertainty about your online status acts as a deterrent to the other endpoint. -- Source
How many times would someone need to open and close their lightning channels?
You typically want to have more than one channel open at any given time for redundancy's sake. And we imagine open and close will probably be automated for the most part. In fact we already have a feature in LND called autopilot that can automatically open channels for a user.
Frequency will depend whether the funds are needed on-chain or more useful on LN. -- Source
Will the lightning network reduce BTC Liquidity due to "locking-up" funds in channels?
Stack Exchange Answer
Can the Lightning Network work on any other cryptocurrency? How?
Stack Exchange Answer
When setting up a Lightning Network Node are fees set for the entire node, or each channel when opened?
You don't really set up a "node" in the sense that anyone with more than one channel can automatically be a node and route payments. Fees on LN can be set by the node, and can change dynamically on the network. -- Source
Can Lightning routing fees be changed dynamically, without closing channels?
Yes but it has to be implemented in the Lightning software being used. -- Source
How can you make sure that there will be routes with large enough balances to handle transactions?
You won't have to do anything. With autopilot enabled, it'll automatically open and close channels based on the availability of the network. -- Source
How does the Lightning Network stop flooding nodes (DDoS) with micro transactions? Is this even an issue?
Stack Exchange Answer

Unanswered Questions

How do on-chain fees work when opening and closing channels? Who pays the fee?
How does the Lightning Network work for mobile users?
What are the best practices for securing a lightning node?
What is a lightning "hub"?
How does lightning handle cross chain (Atomic) swaps?

Special Thanks and Notes

  • Many links found from awesome-lightning-network github
  • Everyone who submitted a question or concern!
  • I'm continuing to format for an easier Mobile experience!
submitted by codedaway to Bitcoin [link] [comments]

Information and FAQ

Welcome to the official IOTA subreddit.
If you are new you can find lots of information here, in the sidebar and please use the search button to see if your questions have been asked before. Please focus discussion on IOTA technology, ecosystem announcements, project development, apps, etc. Please direct help questions to /IOTASupport, and price discussions and market talk to /IOTAmarkets.
Before getting started it is recommended to read the IOTA_Whitepaper.pdf. I also suggest watching these videos first to gain a better understanding.
IOTA BREAKDOWN: The Tangle Vs. Blockchain Explained
IOTA tutorial 1: What is IOTA and some terminology explained

Information

Firstly, what is IOTA?

IOTA is an open-source distributed ledger protocol launched in 2015 that goes 'beyond blockchain' through its core invention of the blockless ‘Tangle’. The IOTA Tangle is a quantum-resistant Directed Acyclic Graph (DAG), whose digital currency 'iota' has a fixed money supply with zero inflationary cost.
IOTA uniquely offers zero-fee transactions & no fixed limit on how many transactions can be confirmed per second. Scaling limitations have been removed, since throughput grows in conjunction with activity; the more activity, the more transactions can be processed & the faster the network. Further, unlike blockchain architecture, IOTA has no separation between users and validators (miners / stakers); rather, validation is an intrinsic property of using the ledger, thus avoiding centralization.
IOTA is focused on being useful for the emerging machine-to-machine (m2m) economy of the Internet-of-Things (IoT), data integrity, micro-/nano- payments, and other applications where a scalable decentralized system is warranted.
More information can be found here.

Seeds

A seed is a unique identifier that can be described as a combined username and password that grants you access to your IOTA.
Your seed is used to generate the addresses and private keys you will use to store and send IOTA, so this should be kept private and not shared with anyone. If anyone obtains your seed, they can generate the private keys associated with your addresses and access your IOTA.

Non reusable addresses

Contrary to traditional blockchain based systems such as Bitcoin, where your wallet addresses can be reused, IOTA's addresses should only be used once (for outgoing transfers). That means there is no limit to the number of transactions an address can receive, but as soon as you've used funds from that address to make a transaction, this address should not be used anymore.
Why?
When an address is used to make an outgoing transaction, a random 50% of the private key of that particular address is revealed in the transaction signature, which effectively reduces the security of the key. A typical IOTA private key of 81-trits has 2781 possible combinations ( 8.7 x 10115 ) but after a single use, this number drops to around 2754 ( 2 x 1077 ), which coincidentally is close to the number of combinations of a 256-bit Bitcoin private key. Hence, after a single use an IOTA private key has about the same level of security as that of Bitcoin and is basically impractical to brute-force using modern technology. However, after a second use, another random 50% of the private key is revealed and the number of combinations that an attacker has to guess decreases very sharply to approximately 1.554 (~3 billion) which makes brute-forcing trivial even with an average computer.
Note: your seed is never revealed at at time; only private keys specific to each address.
The current light wallet prevents address reuse automatically for you by doing 2 things:
  1. Whenever you make an outgoing transaction from an address that does not consume its entire balance (e.g. address holds 10 Mi but you send only 5 Mi), the wallet automatically creates a new address and sends the change (5 Mi) to the new address.
  2. The wallet prevents you from performing a second outgoing transaction using the same address (it will display a “Private key reuse detected!” error).
This piggy bank diagram can help visualize non reusable addresses. imgur link
[Insert new Safe analogy].

Address Index

When a new address is generated it is calculated from the combination of a seed + Address Index, where the Address Index can be any positive Integer (including "0"). The wallet usually starts from Address Index 0, but it will skip any Address Index where it sees that the corresponding address has already been attached to the tangle.

Private Keys

Private keys are derived from a seeds key index. From that private key you then generate an address. The key index starting at 0, can be incremented to get a new private key, and thus address.
It is important to keep in mind that all security-sensitive functions are implemented client side. What this means is that you can generate private keys and addresses securely in the browser, or on an offline computer. All libraries provide this functionality.
IOTA uses winternitz one-time signatures, as such you should ensure that you know which private key (and which address) has already been used in order to not reuse it. Subsequently reusing private keys can lead to the loss of funds (an attacker is able to forge the signature after continuous reuse).
Exchanges are advised to store seeds, not private keys.

FAQ

Buying IOTA

How do I to buy IOTA?

Currently not all exchanges support IOTA and those that do may not support the option to buy with fiat currencies.
Visit this website for a Guide: How to buy IOTA
or Click Here for a detailed guide made by 450LbsGorilla

Cheapest way to buy IOTA?

You can track the current cheapest way to buy IOTA at IOTA Prices.
It tells you where & how to get the most IOTA for your money right now. There's an overview of the exchanges available to you and a buying guide to help you along.
IOTAPrices.com monitors all major fiat exchanges for their BTC & ETH rates and combines them with current IOTA rates from IOTA exchanges for easy comparison. Rates are taken directly from each exchange's official websocket. For fiat exchanges or exchanges that don't offer websockets, rates are refreshed every 60 seconds.

What is MIOTA?

MIOTA is a unit of IOTA, 1 Mega IOTA or 1 Mi. It is equivalent to 1,000,000 IOTA and is the unit which is currently exchanged.
We can use the metric prefixes when describing IOTA e.g 2,500,000,000 i is equivalent to 2.5 Gi.
Note: some exchanges will display IOTA when they mean MIOTA.

Can I mine IOTA?

No you can not mine IOTA, all the supply of IOTA exist now and no more can be made.
If you want to send IOTA, your 'fee' is you have to verify 2 other transactions, thereby acting like a minenode.

Storing IOTA

Where should I store IOTA?

It is not recommended to store large amounts of IOTA on the exchange as you will not have access to the private keys of the addresses generated.

Wallets

GUI Desktop (Full Node + Light Node)
Version = 2.5.6
Download: GUI v2.5.6
Guide: Download/Login Guide
Nodes: Status
Headless IRI (Full Node)
Version = 1.4.1.4
Download: Mainnet v1.4.1.4
Guide:
Find Neighbours: /nodesharing
UCL Desktop/Android/iOS (Light Node)
Version = Private Alpha Testing
Website: iota-ucl (Medium)
Android (Light Node)
Version = Beta
Download: Google Play
iOS (Light Node)
Version = Beta Testing
Website: https://iota.tools/wallet
Paper Wallet
Version = v1.3.6
Repo: GitHub
Seed Vault
Version = v1.0.2
Repo: GitHub7

What is a seed?

A seed is a unique identifier that can be described as a combined username and password that grants you access to your wallet.
Your seed is used to generate the addresses linked to your account and so this should be kept private and not shared with anyone. If anyone obtains your seed, they can login and access your IOTA.

How do I generate a seed?

You must generate a random 81 character seed using only A-Z and the number 9.
It is recommended to use offline methods to generate a seed, and not recommended to use any non community verified techniques. To generate a seed you could:

On a Linux Terminal

use the following command:
 cat /dev/urandom |tr -dc A-Z9|head -c${1:-81} 

On a Mac Terminal

use the following command:
 cat /dev/urandom |LC_ALL=C tr -dc 'A-Z9' | fold -w 81 | head -n 1 

With KeePass on PC

A helpful guide for generating a secure seed on KeePass can be found here.

With a dice

Dice roll template

Is my seed secure?

  1. All seeds should be 81 characters in random order composed of A-Z and 9.
  2. Do not give your seed to anyone, and don’t keep it saved in a plain text document.
  3. Don’t input your seed into any websites that you don’t trust.
Is Someone Going To Guess My IOTA Seed?
What are the odds of someone guessing your seed?
  • IOTA seed = 81 characters long, and you can use A-Z, 9
  • Giving 2781 = 8.7x10115 possible combinations for IOTA seeds
  • Now let's say you have a "super computer" letting you generate and read every address associated with 1 trillion different seeds per second.
  • 8.7x10115 seeds / 1x1012 generated per second = 8.7x10103 seconds = 2.8x1096 years to process all IOTA seeds.

Why does balance appear to be 0 after a snapshot?

When a snapshot happens, all transactions are being deleted from the Tangle, leaving only the record of how many IOTA are owned by each address. However, the next time the wallet scans the Tangle to look for used addresses, the transactions will be gone because of the snapshot and the wallet will not know anymore that an address belongs to it. This is the reason for the need to regenerate addresses, so that the wallet can check the balance of each address. The more transactions were made before a snapshot, the further away the balance moves from address index 0 and the more addresses have to be (re-) generated after the snapshot.

What happens if you reuse an address?

It is important to understand that only outgoing transactions reveal the private key and incoming transactions do not. If you somehow manage to receive iotas using an address after having used it previously to send iotas—let's say your friend sends iotas to an old address of yours—these iotas may be at risk.
Recall that after a single use an iota address still has the equivalent of 256-bit security (like Bitcoin) so technically, the iotas will still be safe if you do not try to send them out. However, you would want to move these iotas out eventually and the moment you try to send them out, your private key will be revealed a second time and it now becomes feasible for an attacker to brute-force the private key. If someone is monitoring your address and spots a second use, they can easily crack the key and then use it to make a second transaction that will compete with yours. It then becomes a race to see whose transaction gets confirmed first.
Note: The current wallet prevents you from reusing an address to make a second transaction so any iotas you receive with a 'used' address will be stuck. This is a feature of wallet and has nothing to do with the fundamental workings of IOTA.

Sending IOTA

What does attach to the tangle mean?

The process of making an transaction can be divided into two main steps:
  1. The local signing of a transaction, for which your seed is required.
  2. Taking the prepared transaction data, choosing two transactions from the tangle and doing the POW. This step is also called “attaching”.
The following analogy makes it easier to understand:
Step one is like writing a letter. You take a piece of paper, write some information on it, sign it at the bottom with your signature to authenticate that it was indeed you who wrote it, put it in an envelope and then write the recipient's address on it.
Step two: In order to attach our “letter” (transaction), we go to the tangle, pick randomly two of the newest “letters” and tie a connection between our “letter” and each of the “letters” we choose to reference.
The “Attach address” function in the wallet is actually doing nothing else than making an 0 value transaction to the address that is being attached.

Why is my transaction pending?

IOTA's current Tangle implementation (IOTA is in constant development, so this may change in the future) has a confirmation rate that is ~66% at first attempt.
So, if a transaction does not confirm within 1 hour, it is necessary to "reattach" (also known as "replay") the transaction one time. Doing so one time increases probability of confirmation from ~66% to ~89%.
Repeating the process a second time increases the probability from ~89% to ~99.9%.

How do I reattach a transaction.

Reattaching a transaction is different depending on where you send your transaction from. To reattach using the GUI Desktop wallet follow these steps:
  1. Click 'History'.
  2. Click 'Show Bundle' on the 'pending' transaction.
  3. Click 'Reattach'.
  4. Click 'Rebroadcast'. (optional, usually not required)
  5. Wait 1 Hour.
  6. If still 'pending', repeat steps 1-5 once more.

Does the private key get revealed each time you reattach a transaction?

When you use the reattach function in the desktop wallet, a new transaction will be created but it will have the same signature as the original transaction and hence, your private key will not revealed a second time.

What happens to pending transactions after a snapshot?

IOTA Network and Nodes

What incentives are there for running a full node?

IOTA is made for m2m economy, once wide spread adoption by businesses and the IOT, there will be a lot of investment by these businesses to support the IOTA network. In the meantime if you would like to help the network and speed up p2p transactions at your own cost, you can support the IOTA network by setting up a Full Node.
Running a full node also means you don't have to trust a 3rd party light node provider. By running a full node you get to take advantage of new features that might not be installed on 3rd party nodes.

How to set up a full node?

To set up a full node you will need to follow these steps:
  1. Download the full node software: either GUI, or headless CLI for lower system requirements and better performance.
  2. Get a static IP for your node.
  3. Join the network by adding 7-9 neighbours.
  4. Keep your full node up and running as much as possible.
A detailed user guide on how to set up a VTS IOTA Full Node from scratch can be found here.

How do I get a static IP?

To learn how to setup a hostname (~static IP) so you can use the newest IOTA versions that have no automated peer discovery please follow this guide.

How do I find a neighbour?

Are you a single IOTA full node looking for a partner? You can look for partners in these place:

Resources

You can find a wiki I have been making here.
More to come...
If you have any contributions or spot a mistake or clarification, please PM me or leave a comment.
submitted by Boltzmanns_Constant to Iota [link] [comments]

Log of Slack Talk about Ark SmartBridge and ArkVM

grexx So I think we need to start thinking about blockchain systems as clusters of networks and not one main blockchain. You may have one core token/currency that the other chains recognize and can process as currency (through smartbridge transactions) but then have that pegged to the sidechains for the purpose of accounting in and out of the sidechain that processes the smart contracts. This might allow you to have a scalable network of sidechains running ARKVM and smart contracts that users could select between in congested periods while still using the main ARK token as currency in and out of the sidechain. If that makes sense. I missed a lot of the argument above and just saw some discussion on VM and sidechains so wanted to see what all the fuss was about but I don't have time to fully get caught up. So correct me if I missed the core of the concern/argument Ultimately for scaling efforts to work, people are going to have to start thinking outside of the box and doing everything on one chain isn't the answer. the one thing you want to avoid is having too much extra data being processed on the main chain you want to keep it lean and focused on payments as effectively as possible It's extremely cumbersome to spin off an entire blockchain just to run one dapp/smart contract I'll be better off joining an already popular chain with the vm enabled So this is something I think is misleading. One major facet of ARK is that we are going to seriously lower the barrier to entry for deploying blockchains. On top of that, there would be several economic models for the person running the chain to secure delegates. They could potentially offer profit sharing, i.e. if the contract charges a fee to run, a portion of the cost of using the dapp/smart contract goes to the delegate pool. They could fund it themselves as you mentioned through some form of contract, or they could create a model we haven't even thought of yet, like in game perks, company voting rights for delegates, etc. Remember that a sidechain isn't necessarily just a smart contract, it could be a companies entire product rolled into a dapp using a blockchain that they don't want bloated or effected by other data they could close off that blockchain to deploying or processing smart contracts outside of their dapp and simply have it serve the purpose of their product. That would be just one use case of deploying an ARK compatible chain You could accept ARK into your sidechain through a pegged mechanism as payment for utilizing your smart contract/dapp and then have the contract that accepts that ARK peg distribute tokens to the delegates that could then be withdrawn to the main ARK chain through the smartbridge from the associated main chain account which does the financial accounting for the sidechain
grexx No matter what you think about ethereum's scaling solutions, it has 100% not been proven to actually work up to this point. If I was a product owner, I would not want to rely on the ethereum developers or the ethereum blockchain at this point for my entire business model Look at how many businesses right now are effected when something like CryptoKitties kills the Eth blockchain how would you feel if you are a company with a product and some asshat mobile app for trading digital cats shuts down your business for 4 days and you lose a weeks salary for your employees due to the losses it's an unsustainable business model We are going to make it to where anyone can deploy a blockchain as easily as they would deploy a VPS or a website. In some industries, like gaming, it might become a badge of honor or an esteemed position to be a delegate for those chains. It could even be incorporated into the game itself. For larger corporate environments, they may not care about having it be as decentralized as you and may have a series of corporate partners collaborate on running a network they use among several companies for a product line who knows what people will come up with we are building the tools to create new business models, building them off the ARK brand and with built in compatibility to create inter-chain operations in the future as we learn where those new opportunities lie the reason everyone uses ERC20 and runs on Eth right now is because they have no other option without putting in serious man hours to launch their own eth chain We have talked to countless teams building on Ethereum right now who wish there was another option. Everyone in this sector has a different view of how this all plays out. Ethereum has their vision and anyone who wants to support them is probably making a great decision. They have some of the smartest minds working on the issues with their network but it doesn't mean it's the right answer in every situation.
moonman This doesn't address how to run trustless swaps when the main chain doesn't have a VM, which is one of the main Ark products people are looking forward to. You're saying that the sidechain needs to be funded by the runner, but then that again kills the point because then it's centralized and requires some dude to back his own tokens for the swaps, which is nonsense.
grexx I didn't say it needs to be. I said there are several options of how to secure delegates for a sidechain.
moonman I'm not talking about securing them. I'm talking about a specific product that has been hailed as the holy grail for ARK - trustless currency swaps How do you propose it works with a sidechain when sidechain tokens have no value compared to ARK?
grexx If the sidechain requires money to swap into the sidechain in order to secure an action, then the money is supplied by the people using the service.
goldenpepe There is lots of confusion and mixed messaging as to what Ark actually is Is Ark a way to connect blockchains? Or is Ark a platform?
goldenpepe The people that believed the former were confused as to why the VM isn't going to be on the main chain Since that would allow trustless swaps But apparently it isn't
moonman I'm asking about trustless swaps. There are 3 parties in this equation - the main chain ARK that is swapped in, the side chain token, and the target currency that is outside Ark's chains. If ArkVM was on the mainchain then it is simple to require collateral on the ArkVM side and then release it after. With a side chain, this isn't possible because the tokens used to faciliate the transaction between for ex BTC and ARK have no value @grexx
grexx I don't think there is confusion or mixed messages. I think ARK has the potential to fill roles we haven't even thought up yet. I think the confusion is in what YOU personally want ARK to be and what you see as the killer application, and maybe a difference in priorities.
goldenpepe No, based on everything I've seen it's the former
grexx But always remember I am only here to speak for myself and not the team in any sort of proper spokesman role.
moonman It's not "us personally" - we run the largest and most active Ark community outside of this slack.
goldenpepe If it's the latter then there needs to be better communication
moonman We have a point of reference to know what people are expecting or investing for / want
goldenpepe I keep seeing people pushing the "smartbridge" as a way to connect chains
grexx Does there? Why? Because you say so?
goldenpepe I see encoded listeners being pushed
moonman Because everybody says so.
goldenpepe
People keep talking about how Ark will connect every chain using encoded listeners and "embedding the code snippet"
grexx The intention was to fulfill both roles. To create push button blockchains with the ability to share data between each of those chains.
goldenpepe But how do you fulfill the former without a VM on the main chain?
You can't do trustless swaps without it
moonman Our question is directly regarding HOW this will technically be possible without VM on the main chain without trusting centralized nodes.
ArkVM was pitched as the solution to centralized nodes.
Without it in the equation it's just an open source ShapeShift
goldenpepe I said this earlier, but there needs to be a real whitepaper
A fully technical explanation of all the technology and how everything is supposed to work
grexx So let me ask you this just as a philosophy/feasibility question. Would you rather see a closed smart contract system on the main chain that only allowed contracts for trustless swaps between chains but not necessarily open deployment of smart contracts, i.e. you wouldn't be able to deploy cryptokitties to the main chain to run your business but we would be able to deploy a contract to allow trustless swaps between the sidechain that runs it, while still balancing out the need to keep the majority of application traffic off of the main chain to avoid bloat/congestion?
moonman If you're asking if we/people want main chain VM exclusive use for trustless swaps, the answer is absolutely YES
If main chain was limited to swaps it would address all the concerns we and fellow Ark holders we've talked to have
goldenpepe My concerns are slightly different and related to the forked chains themselves
the_stalker You tell them @moonman
goldenpepe I don't see how segregating the VM to another chain will solve bloat
grexx I see that the argument focuses down to trustless swaps being the key component that is desired, but the ARK teams major issue with allowing deployment of contracts in the way it works currently on Ethereum is with the bloat/congestion issue
goldenpepe devs that want to deploy a smart contract will just join a chain that has the VM enabled already
That will lead to the problem ethereum is having now
moonman If swaps were the exclusive use of VM on the main chain it would avoid bloat.
spghtzzz Sidechains will have ARK valuation?
goldenpepe That's the thing though
I don't see how segregating the VM into its own chain will solve bloat
Everyone will just congregate onto a single popular VM-enabled chain
goldenpepe It'll be an ethereum clone
grexx If application are functioning on individual connected sidechains then the majority of in-application processing could be accomplished on the sidechain with pegged trustless swaps back to the main chain and the only accounting on the main chain is the accounting
moonman I think I understand what the team is getting at with deploying sidechain VMs, I am simply worried that the biggest pitch that people have repeated back to us is not possible without the main chain VM being able to be used for swaps.
@goldenpepe They won't because there will be no valuation incentive.
spghtzzz So trustless swaps will be available then
moonman So the private chains will stay "private"
@spghtzzz No, he just asked us as a "what if", but hopefully he asked for a good reason :slightly_smiling_face:
grexx I am not allowed to divulge key internal information, but I do enjoy talking these things through and getting feedback/opinions (edited)
spghtzzz If sidechains can have proper valuation in ARK, just start a decentralized-oriented chain and make trustless swaps available
moonman That runs the risk of dethroning ARK, which would be the other issue.
goldenpepe I mean, answering technical details of how this should all work on a high level shouldn't be "key internal info"
That's our biggest worry: the promises aren't technically possible
moonman You're not selling to just investors here, developers like us want to know how this is going to be done because it's why we're here in the first place creating things on ARK and running delegates - we want to see it succeed and we're currently between a rock and a hard place trying to get an explanation for "HOW" this is going to happen.
If you're telling us that the intended use for ark is different from what nearly everybody we asked concluded from the marketing, it feels like we bought into a bait and switch or there was a severe breakdown in communication. (edited)
spghtzzz Dethroning won't be an issue though, if everything is measured out in ARK, that's incentive to have/use ARK. (edited)
moonman It can't be measured out in ARK if the main chain has no VM, because the sidechain token HAS to have a valuation in order to do the swaps - in which case there's no point in swapping to ARK in the end anyway @spghtzzz
spghtzzz I'm confused though, isn't that what smartbridge is for?
moonman smartbridge is a text field
jarunik Basically you need native bridging before it can work.
grexx I hear you and I am taking notes on some of the issues. From the very beginning, at least as far as I am concerned, ARK has been about community development and building this out as a team. Unfortunately in this industry, people do like to cannibalize and sometimes it's hard to know how open to be. I think we are seeing a little bit of a conflict between those two philosophies. I think it would only be beneficial to get input and to do some sort of technical sessions with some of the prominent devs in the community for feedback and solidifying some of these topics. All we can do is end up strengthening the final vision. That being said, everyone obviously on the development side keeps very busy and we have multiple time zones, so I am not sure how complicated it would be to setup.
I wish we had an upcoming event everyone could meet up at and have a 3 day whiteboard session lol
goldenpepe
If you're telling us that the intended use for ark is different from what nearly everybody we asked concluded from the marketing This. Ark was marketed to me as a middleman to let other chains communicate 1 reply Today at 7:13 AM View thread
goldenpepe Ark being a platform of forked chains is something different
moonman It can be both with your "philosophical" suggestion of only allowing main chain VM for swaps.
goldenpepe Maybe this is a reason to start marketing/doing PR :wink:
B.Lawrence.Lowe I always thought it would be both. Was I wrong?
goldenpepe It can be both if the VM was on the main chain
grexx I don't think ARK is an eitheor of the above proposed uses, I think the intention is a both.
arigard Isn't aces connecting the block chains?
goldenpepe Mostly on our discord with other devs
ACES is shapeshift
moonman ACES is centralized @arigard
goldenpepe It's not decentralized or trustless
grexx Aces requires trusted intermediaries
atm
moonman We were under the impression - and I think ryano was as well - that ArkVM would allow things like ACES to function trustlessly using a main chain VM implementation
goldenpepe Yea, I remember when ACES was first released and we talked to ryano about it
moonman So it could become more than just "open source shapeshift" (edited)
goldenpepe Even he said smart contracts could be used to do ACES in a trustless manner
But that's not possible without the VM on the main chain
grexx No I mean I get what you are saying. Look if we launch a fully integrated open source ARK blockchain with full ARKVM functionality and anyone in the world can clone it and publish an Ethereum competitor on the spot, we always ran the risk of someone forking/cloning ARK and stealing our thunder, but that is a risk we are willing to take.
We won't intentionally hamstring ourselves
who said that?
grexx ARKVM was on the initial roadmap from Day 1
grexx Technically it was on the roadmap at Crypti
mike The main chain is only to provide communications among bridged chains, and send payments in Ark among addresses, just as TCP/IP is only used to send data among IP addresses. Applications seeking trustless operation can run their own bridged chains with multiple delegates forked from Ark and configured to their own custom configurations, or they can even use a different consensus system altogether. Enterprise applications can run permissioned ledgers using an Ark fork since it is very similar to DPoS, except they control who can be delegates, like EduCTX as an example. ArkVM will be available for those who want to run Solidity contracts, either as their own forked and bridged chain, like if they have complex contracts and/or high volume, or can run their contracts on a public ArkVM chain bridged to Ark. ACES is also available as a trusted listener and relay node option to other chains. There are plenty of options for difference use cases and preferences.
goldenpepe But Mike, wouldn't being forced to fork off your own chain every time you wanted to create your own dapp/smart contract be extremely cumbersome?
jarunik It is already really easy to clone
goldenpepe How is it easy? You need to set up your own servers, find people to be your delegates, acquire a stash of ark
If you end up being your own delegate then there goes decentralization
moonman I understand and agree with the use case OUTSIDE of trust less swaps. But in the context of trustless swaps, which has been Ark's biggest selling point everywhere we asked, it would only be possible if the main chain had VM or a sidechain token had a valuation, in which case there would be no reason to swap back to ark. Were trustless swaps not a big part of the internal goal of what ArkVM aims to accomplish? How would it work with just side chains without stealing Ark's thunder? @mike
ryano I've talked about trust and the design of ACES in many posts. It often gets argued as not being trustless, but I do state that the ACES design is intentionally "trust agnostic" because there are many different views on the right way to build blockchain services. Not all parties believe trustless is even a thing. For example, even in smart contracts that are "trustless" you must trust the code, and very few people will critique the code, so you end up with a single point of trust failure. My personal favorite approach is M of N multisig, and this can reduce trust to a statistically insignificant amount (though by definition, as perhaps with all things, not 100% trustless).
spghtzzz if native function is built in v2, we can see trustless swaps
ryano as far as ACES being shapeshift, this is true to an extent. But shapeshift is like one single provider. A 1 of 1 signature service. With a marketplace we can build a system that has ways to manage trust using well studied trust based marketplace. And despite its name, the trust factor can be minimized towards zero with multisig
goldenpepe Who knows what protocol changes v2 will bring
moonman @ryano There's no such thing as multisig swaps though - that's sort of what it would be if main chain got VM - you could have 51 delegates to "decentralize" the contract and ensure it stays trustless. The current ACES implementation is entirely centralized around the specific node running it.
moonman A marketplace isn't decentralized, it just means you have more trust options. It's not "trust agnostic". You're only trusting one node, but you get to pick the node.
ryano Thats not true if it a multisig service
goldenpepe Another thing: wouldn't the forked chains require a stash of Ark?
moonman The problem with that is you're still trusting the few running them - they're not backed by ARK voters.
goldenpepe From what I remember Mike said, the forked chain's delegates will also be running Ark nodes which is how the forked chains' clients can communicate to Ark
moonman If you could lock ACES down to be ran just under the delegate nodes ran under ARK itself, it could work.
goldenpepe But in order for that to happen, the delegates would need a stash of Ark in order to send Ark txs, no?
grexx I think there has always been an intention to have a marketplace of service providers who could be rated and would allow a more "trusted" environment but I get the argument against that model.
spghtzzz yes, it's a trust of consensus
moonman If ArkVM is being ported, it could be avoided and would renew and bring new faith into Ark if the main chain could become the central trustless hub for swaps. For other dapps I understand the hesitation due to bloat, but due to how the marketing was perceived or communicated I'm afraid that everyone we've spoken to or conversed with about the topic is expecting that specific dapp to play a central role in Ark development/adoption - which is why we were all taken aback when we were told that the main chain wouldn't have VM.
grexx But this here is exactly what led to the discussion above. What you describe here would then basically be a smart contract. Moon Man If you could lock ACES down to be ran just under the delegate nodes ran under ARK itself, it could work. Posted in #generalToday at 6:58 AM
moonman There's no way to lock it down trustlessly though without also having it interwined with ARK
He can't "Force" nodes to run ACES, that's the problem.
Then the issue is we don't know who we are trusting.
Then you get other issues like sybil attacks
ryano I'm trying to dig up an important article on this topic, but you should all get familiar with the advantages and disadvantages of smart contracts vs. M of N multisig
moonman That's why DPoS is good - it solves these issues.
ryano you'll find very material advantages to multisig that are not often discussed, ones that fit very nicely in well studied and proven marketplace-like ecosystems
goldenpepe Aren't atomic swaps basically that?
ryano Were building ACES trust-agnostic for this reason, because if people want to built "trustless" services, which can be argued to be trusted anyways, theres no reason not to provide the ecosystem to communicate their services
but there will be many other services just using multisig to reduce trust
jarunik Someone will sure launch a clone chain which offers VM services
ryano this is how its done in bitcoin and monero, and is more powerful than people let on
moonman And then it overtakes ark if it carries ark features but has a swaps-capable VM, which is our other concern.
jarunik You will better be running it then!
ryano If i have 5 service providers, and a service is set up as a 3 of 5 signature service, those 5 providers are all listening to the external chain, possibly subscribing to different listener sources, and then verifying back to ark, like an oracle, that the requested event occurred. This is a simple binary oracle response, and can be entered as signature. Sign = yes, no sign = no/unsure.
moonman You have to trust those 5 providers though.
ryano You would then need 3 bad actors for this to fail.
moonman And what happens when you have sock puppets
that's how sybil attacks work
You spam the network with sock puppets
goldenpepe Yea even Tor got sybil'd
moonman If you can't add your own sock puppets, then what's the point of having 5 sigs if one person chooses all 5? Then you're just trusting the creator
goldenpepe but tbh, monero is vulnerable to sybil too
moonman The reason ARK will help with this is you are tying the 51 sigs to existing delegates that were voted in by ARK users.
They're "trusted" but decentralized in a method that makes sense given the platform
ryano well, why not use those delegates as your signers then
moonman There's no way to force the delegates to run the service
That's the problem
ryano no forcing anywhere, but incentives
goldenpepe Not unless the ark team embeds aces into ArkCore
B.Lawrence.Lowe What about incentivizing the delegates to run the service somehow?
moonman It won't matter. It's too easy for them to just say "I'm not interested or don't want to" and then you get attacked by those who are running it. It just doesn't make any sense.
moonman A second layer solution doesn't work simply because you can't enforce delegates running the service.
ryano But why do you trust the delegates?
moonman I don't - voters do.
I trust the collective voter choice vs your choice of 5 signatories
B.Lawrence.Lowe Voter here. I tust my delegate. He;s always paid me on time.
moonman It's about who ARK voters trust.
Because ultimately that's what powers the platform - trust in ARK and ARK holders
spghtzzz why do you trust a delegate who won't even reduce your TX fees?
goldenpepe I don't get it
ryano even with smart contracts, since were dealing with external chains, you need to trust a source to confirm that something from the outside world happened
spghtzzz explanation provided yesterday in #delegates if that was toward me @goldenpepe
moonman Correct - but it is far less concerning when that source is the 51 delegates.
Rather, when the source is confirmed by the 51 delegates
ryano but now instead of 51 delegates its 51 listener hubs
or even more
moonman Yes, but again, sybil attacks...
B.Lawrence.Lowe Right, and just like a representational government, as a voter I trust my delegate. I thought this is how this worked, yes?
moonman If you select the hubs, it's centralized to YOU selecting them. If you don't, it's open to sybil attacks from sock puppets
If it's limited to the delegates, it makes sense in the context of the ARK ecosystem because you are trusting your currency to those 51 people in the first place
B.Lawrence.Lowe He takes my votes and makes decisions for the community in my best interest, as his constituent, right?
moonman The only way to enforce the consensus is to build it into the core so delegates have to run the platform and keep the swaps "dapp" secure and running.
anyway, I've explained my case. Hopefully what I said made sense.
mike The original plan, and still the plan, is to interconnect other blockchains, which can be existing chains or new ones forked from ark. We have added ArkVM as an option to be added to the deployable chains, and run a public ArkVM chain. Ryano has also come up with ACES, as another, streamlined method to exchange and interact with other chains, which is an example of Ark allowing different methods to be developed to accomplish objectives. A non-turing complete VM meant only to facilitate cross chain swaps is a viable option as well, and can run as a bridged chain.
ryano You could reduce the risk of sybil attacks by doing something similar to how ark does voting. A listener source would have to be tied to an ark address, so you would see their "stake". In this case attempting to run 51 listeners to do a sybil attack would require you to reduce your stake, and likely be less attractive to users
moonman @mike How does the bridged chain function as a method for these swaps though? What do you envision as the technical flow for this?
@ryano You could do that, but then you're doing almost exactly what I mentioned before - making your own ARK clone but with swaps. (edited)
What would be the requirements for running the nodes? How would you force consensus without running its own blockchain?
goldenpepe @mike I recall you saying deployed chains' delegates will also be running Ark nodes which is how these chains will be able to communicate with Ark. But wouldn't that require these forked-chain delegates to maintain a stash of Ark? Wouldn't the chain become completely isolated once their delegate nodes run out of Ark?
moonman If it's not an ARK clone and just listeners - that means no PoW, no DPoS, what are you going to do in your listener code to enforce consensus
The only thing you can do is have more oracles checking the top 51 delegates and matching it with signatures provided by listeners - but then THOSE oracles get sybil attacked!
mergatroid You know on the roadmap where it says all of the goals, and tech documentation is at 25%
B.Lawrence.Lowe @mike "The original plan, and still the plan, is to interconnect other blockchains, which can be existing chains or new ones forked from ark." This answered my main question. As long as by "existing chains" you clearly mean, Bitcoin, Ethereum, Litecoin, Dash, Stratis, Waves, etc.. Not sure how it will all work because I don't code, but if you're confident in getting it done, that works for me.
goldenpepe @mergatroid All the questions we're asking could have been answered with a technical whitepaper, but it doesn't exist and the existing whitepaper is outdated.
mike they would run ark clients, which interact with the Ark chain, the various ark-cli clients that are available, or they can run full nodes with their own copies of the ark blockchain, it's up to the developer of a particular bridged chain how he wants to configure it.
ryano time to update that white paper :stuck_out_tongue:
goldenpepe But the pushbutton deployed chains will all need a stash of ark, no?
spghtzzz it'd be nice for interoperability purposes
mike They will need Ark to write data to the main ark chain using the vendor field. they will not need ark to run listeners and read the vendor field from transactions addressed to that chain.
cannabanana Dudes, all I can say is that this blockchain is less than a full year old. We've been already been looking for a technical writer for a whitepaper 2.0 and techincal whitepaper.
mike if they want to use Ark as a reserve currency to back exchanges between other chains they would need that as well.
mike As canna says, we are hiring for a technical writer to update and add to the documentation, and hiring in general is ramping up now that the SCic is in place.
goldenpepe @mike Do you envision in the future there will be an ark-fork with the VM enabled that will essentially be an ethereum clone where all the devs gather to play with smart contracts/dapps?
mike yes
moonman Do you have any worries that any such chain may overtake ARK itself? @mike
goldenpepe I'm more concerned over that chain becoming bloated which defeats the purpose of moving the VM to its own chain in the first place
mike no, it is for a specific type of use, smart contracts to provide ETH type functionality.
moonman Grexx mentioned a separate chain for each major dapp.
That would reduce/remove bloat
goldenpepe It'll get very confusing if you have a bunch of large open VM-enabled chains.
"Have you seen ArkieKitties?" "Where? On ArkFork1? Fork2?Fork3?"
goldenpepe It'll lead to fragmentation
spghtzzz ecosystem, fragmentation is good
in some senses..
goldenpepe uhhhh
ryano Ark.Kitties
goldenpepe No it isn't lol
moonman It's good for the network, not for user interaction.
goldenpepe ^
ryano depends how its designed i think
can be done well
goldenpepe @ryano I also brought this up
moonman Yeah I think it's a minor issue as well, it can probably have a directory or its own DNS-like service in the wallet
goldenpepe So if I want to create a super cool new dapp, I'll need to fork off my own chain, find people to be my delegates, then give them a bunch of ark
ryano In ethereum you need to know the contract name to interact with it, so why not required to know the ark chain id?
goldenpepe It's too cumbersome
mike separate chains is the preferred method, and for a lot of things requiring complex code, Solidity contracts aren't the best way to go. But for those wanting to port Solidity code to Ark, either on a public chain or their own chain, ArkVM will provide that option.
goldenpepe Yea I was thinking that
Small contracts can exist on a shared chain while large dapps like kitties or an ICO can exist in its own chain
Large projects will have the resources to fork, find delegates, and fund them
But that will still create fragmentation if there exists multiple large public VM chains
mike I see ArkVM as a way to onboard projects and developers from Eth over to Ark, but then they may optimize for more efficient operation by writing code from scratch specific to their needs instead of running on solidity. As an example, non-turing complete application specific code is more reliable in that it has a finite set of states where as Turing complete code has an infinte set of state, not all of which can be known.
if the multiple large public chains are bridged, contracts running on them can still communicate with other contracts running on the other large public VMs.
goldenpepe Bridging them won't help if the dapp you want to access is on ChainA and ChainA takes hours to process a tx because of bloat
mike It's analagous to code running on Amazon servers can communicate with code running on OVH servers via TCP/IP, like delegates now communicate with each other while running on different data centers.
grexx just for reference, the intention is to make discovery extremely easy and for the average user, they will have no idea what chain they are on or how it works.
they will just buy kitties and be happy
goldenpepe @grexx It would be great if the wallet could do that and it would solve fragmentation issues
"Chain-hopping" being completely transparent to the user
grexx that is a top priority
goldenpepe But how will we deal with a certain chain containing data you need being slow?
grexx same way the free market deals with anything
if your service sucks, improve your service or get beat by competition
goldenpepe The bloated chain will lose users?
mike If a public VM degrades in performance then there is a market for another public VM, and the existing one can upgrade its performance to remain competitive.
grexx sidechains can increase capacity through better hardware with the upgrades being made
goldenpepe But blockchains are sticky (to use an economic term), people will be less prone to switch if all their assets exist in that slow chain
Look at bitcoin
grexx but then again like I mentioned way earlier
goldenpepe Slow as fuck but people still use it because they're invested
mike gress is a faster typist than I am...
grexx connected clusters with pegged assets I think are a potential answer
within the sidechains
well if you look at the main ark chain, we have 8s blockchains to maximize use case as currency
but a sidechain depending on its needs wouldn't necessarily have to have 8s and could probably do a lot to increase tps and other factors
those are all things we will min/max on devnet though
mike If a given VM chain becomes bigger than Ark and wags the dog, that is part of the evolution. We don't want to try to force the ecosystem to use Ark but instead attract them to do so. We don't want to be like New York banning railroads from entering New York City to force traffic to use the Erie Canal.
grexx all of crypto is an experiment and we have no idea what models will ultimately come out of it, especially when we make it easy for anyone to launch their own fully capable smart contract enabled blockchain (eth clone)
so there is definitely some inherent risk as with investing in any emerging technology
moonman Pegged assets would address my concern regarding sidechain valuations and their use in swaps, but pegged assets have never worked in crypto except for Tether which is centralized and potentially a fraud.
goldenpepe Didn't someone mention forking ark and printing USD-backed coins?
moonman We did lol
I never said it was a good idea
moonman I was going to mention bitshares @bluffet
Bitshares isn't stable
Their pegs have fluctuated WILDLY in the past
goldenpepe Bitshares got delisted from bittrex and is in deep shit with the SEC though
mike Yes, TCP/IP was originally just to connect academic and research lab computers to share files, evolved to add email, then web, and now all kinds of applications. None of this added functionality was planned or conceived when TCP/IP was first invented.
bluffet I know, moonman. It is a liquidity issue. The market solves it.
moonman Tether never had this issue though (I don't have a good reason for why - bitshares is infinitely better designed yet economically worse than tether)
grexx in 3 years we may look back and think, holy shit, I never saw that coming. People are innovative and when given time, always end up exceeding expectations. I guess we are starry eyed dreamers in that we want to create something that empowers a new generation of innovation and accessibility in the space.
bluffet I liked your discussion today, guys. I learn from it.
grexx bitshares along with all of dan's projects have the problem of being centralized within a small group of connected supporters (edited)
goldenpepe Yea this was a good conversation
submitted by Jarunik to ArkEcosystem [link] [comments]

[Tutorial] How to use the Trezor to hold ANY cryptocurrency (xpost /r/CryptoCurrency)

I recently bought a Trezor hardware wallet to hold some BTCs and ETHs.
It's very convenient to have a single private key and a single recovery seed to hold all your crypto funds.
But what if you want to buy some altcoins that are NOT managed by the Trezor? Then you are back to square one, you have to install a custom wallet for each and everyone of them, and then have to manage the backup of the private key and recovery seed yourself. Worse, each new wallet you install on your computer is a bit of software that you have to trust, and must update it regularly.
The other solution is to let your coins on an exchange wallet. History told us that if you do this, you will lose your coins. DON'T.
Since I don't want to manage dozens of private keys, and want the safety of a hardware wallet, here's the solution I came up with. It's far from perfect, feel free to suggest any improvement you can imagine.
WARNING: This is for information purpose only, I won't be responsible if you lose access to your funds.
Overly simplified technical introduction
If you already know how cryptocurrencies work and why hardware wallets are important, skip that part.
Even if there are some differences between coins, most cryptocurrencies work the same way: a distributed electronic ledger is used to record coin balances for addresses.
An address is a public key that allows anyone to see the balance associated with it. To receive funds, just give away the address. You can't, however, spend coins if you only know the public key.
The counterpart of the public key is the private key. If you control the private key, you control the coins associated with the address.
Example of a IOTA private key: JPCM9VXNCGLEKRJHMPYUKDMFWF9TJRBIABSNE9EVFAB9VOZPDVQSUDVXRVYFHXAUOSYTDPHVVT9OOWSBH
A Bitcoin private key: E9873D79C6D87DC0FB6A5778633389
Generally speaking, public and private keys are just huge numbers that are converted into a slightly easier to read representation.
There is a mathematical relation between the private key and the public key. With the private key, you can regenerate the address, but not the other way around.
Moreover, with most coins, there is a way to generate more addresses with the same private key. It makes it easier to backup and protect your wallet that way, because one "seed" is the only thing that you need to regenerate all your addresses.
What some people often fail to grasp is that your coins are not "stored" anywhere physical. If you know the private key of an address, you can spend the coins on it, whether you are in Paris, Mexico, Toronto or New Dehli.
Coins are stolen all the time because it's very hard to protect private keys from preying eyes. Have a malware or keylogger on your computer? Coins are gone! You generated your key using an online service? Coins are gone! Your computer fails and you don't have a backup? Coins are gone! Your private keys are backuped on an online service like Dropbox? You are certainly playing with the fire…
Hardware wallets solve one part of this problem by allowing you to not have your private key on your computer. The private key is generated on the Trezor (or Ledger), and stays on it at any time.
But what if you lose the Trezor, or if it's broken? Then, you must have a recovery seed. A recovery seed is a list of words that can be used to algorithmically regenerate the private keys for the different wallets compatible with the Trezor. Sure, the problem is the same as before: if your seed is stolen, all your funds are gone. BUT ! You only have ONE seed to secure and backup to be able to restore access to ALL your funds in any currency compatible with the Trezor! It's easier to secure or memorize one list of 24 words than dozens of private keys.
Here is the problem I'm trying to solve for my own usage
Here's a rundown of what I want to achieve.
How to do it (example with IOTA)
You need a trusted and free from malware linux computer to do this. Best way is to use a live operating system that can be booted from a usb key, like tails.
Have your Trezor already set up and functional.
Follow the official instructions to install the official Trezor python client. This is official code published by SatoshiLabs, but don't trust me and check for yourself please.
Install the official wallet of the currency you want to manage with your Trezor.
Disconnect your computer from the internet.
Use the official way for the given currency to generate a private key. Most often, you will do this from within the wallet. For IOTA, you would type this in a shell:
cat /dev/urandom | tr -dc A-Z9 | head -c${1:-81} 
You get:
JPCM9VXNCGLEKRJHMPYUKDMFWF9TJRBIABSNE9EVFAB9VOZPDVQSUDVXRVYFHXAUOSYTDPHVVT9OOWSBH 
By the way. NEVER COPY / PASTE CODE FROM THE INTERNET DIRECTLY INSIDE A SHELL.
Using the IOTA wallet, use this private key to generate a new wallet, and go to the "receive" feature to generate a public key. Print that public key, or save it on an usb stick. That's all you need to receive funds.
Now, let's use the Trezor to encrypt the private key.
Check that trezorctl is working.
trezorctl --help Usage: trezorctl [OPTIONS] COMMAND [ARGS]... 
Use the following command (make sure the Trezor is plugged):
trezorctl encrypt_keyvalue -n "m/10016'/0" IOTA JPCM9VXNCGLEKRJHMPYUKDMFWF9TJRBIABSNE9EVFAB9VOZPDVQSUDVXRVYFHXAUOSYTDPHVVT9OOWSBHpad000000000000 
Here are some details on the command:
You will be required to enter your pin, then you will have to confirm the action on the Trezor. Then you get:
ce7abbaf8402b049506 
This value can be used to regenerate the private key provided you have the Trezor with the correct seed at hand. Otherwise, it is perfectly safe to backup anywhere, so make sure you do it on several different places.
Get your private key back
What if you must spend the funds? You must execute the reverse action to decrypt the private key.
Start over, then run this command:
trezorctl decrypt_keyvalue -n "m/10016'/0" IOTA ce7abbaf8402b049506 
You MUST use the same parameters than earlier to get the correct result.
Then again, you will be required for the Trezor pin, then to confirm the action on the Trezor, then you will get the private key back.
Also, note that the Trezor uses the private key it holds to decrypt the value, so if that key was changed, e.g you wiped your Trezor, you won't get the correct result. That's why it's vital to save your Trezor recovery seed.
For the sake of everything, do run heavy tests with this method before you really use it to manage real funds.
Conclusion
Using this method, you can securely backup private seeds for any coin you want, and still receive funds anytime. All you have to worry about is to securely backup one Trezor recovery seed. This is far from being convenient and easy, but much better than leaving your funds on and exchange, or keeping your private keys unencrypted on a connected connected to the Internet.
If you know any better method to hold altoins, please let me know.
submitted by thibaultj to TREZOR [link] [comments]

I tried to send my son bitcoin and now I’m too scared to open up my laptop again.

This is a sort of S.O.S. to any technically savvy people who are willing to help an old, confused and scared man figure out what just happened.
I have never been too good at typing on my iPhone, which by the way feels especially small for my fingers right now, but right now I am frantically doing my best while desperately trying not to spill on myself.
My wife used to warn me, “curiosity killed the cat ya know!”
While the irony would usually make me chuckle, the thought of her only reminded me that she would have been the first person to stop the following events from unfolding. Now that I think about it, I could really use some of her comfort right now, but my drink will do for now.
Alright enough with the tangent. You all are my only hope of finding out what the hell is going on. Here’s what happened.
Every year I send my only son in America money for Christmas. I have always figured that my son can use the money to buy my grandkids better presents and just slap my name on the tag. It’s easier and it usually saves me a lot of effort. Things haven’t been easy lately.
My son, being the de facto technical guru of the family, suggested I use bitcoin. I had seen an article or two about bitcoin but never really have taken too much interest. He noted that I could avoid annoying international banking fees by using bitcoin. Being tight on cash lately, I agreed I would consider it. Thinking about it now, I would gladly have paid the few dollars in banking fees. It seems now I’ll need it to supplement my blood pressure medication that I need now more than ever.
I was finally convinced when my grandsons instructions seemed simple enough. Download something called a wallet (he included a link) which allowed me to buy and then transfer the bitcoins to my sons account. To send the bitcoin there were two simple steps (that I remember) 1. Enter the number of bitcoins to send 2. Enter my sons address (which I think is like his bank account number)
My son said it could take some time to go through (for reasons that were beyond me) so after clicking send I relished in my accomplishment, pouring a few fingers of celebratory whiskey, my occasional guilty pleasure especially during the holidays.
I waited a few days for my son to confirm the transfer and finally this afternoon I received what I thought was a confirmation email titled “Bitcoin Payment Received.” I don’t remember giving my email anywhere but technology works like magic sometimes I guess.
Inside was a neatly worded message with what I recognized as the bitcoin logo.
From what I remember the message read something like:
Thank for your purchase, to review your purchase(s) please go to http:// . Thank you again and enjoy.
I didn’t remember my son telling me about this, but it didn’t seem that notable. After all, Amazon sends me these all the time. I thought it was simply the owners of bitcoin appreciating me using their new product over conventional bank transfers.
I clicked on the link above hoping to find some sort of receipt or proof of my transfer. I wish I had the courage to go home and take a picture of what I saw next so I could show you all. What I saw would probably help someone figure out what exactly just happened.
The website slowly loaded and after about 45 seconds plus or minus a few sips of whiskey, I saw a blank gray background with six names written in what I recognized as casino style font and a white die which bounced and flashed the words “Roll to begin.”
Begin what?
At the time I thought maybe the six owners of bitcoin had created some sort of rewards program, again like other websites, and I gladly participated. Right now, I am certain that was not the case.
What happened next seemed almost like a dream, the kind that leaves a lingering feeling in your stomach, but the details remain blurry. The die shuffled from number to number until it finally settled on three. Awaiting what I had previously thought might be a reward, I examined my screen closely. Just as I noticed that one of the names had disappeared, my computer emitted a bone chilling shriek that made me leap out of my chair, falling to the ground. My knees ached as I tried to protect my ears from the agonizing sound as it relented. I managed to end it as I slammed my laptop shut in what seemed like my body’s self defense mechanism.
Figuring that I needed some air, I went for a drive as I often do in situations like these. My knuckles whitened as I gripped the wheel until I decided to relieve them at the local dive, where I am right now. I decided to call my son figuring he would clear things up.
He tried to explain that messed up kids play pranks on older men like me all the time. He told me to rest easy and not worry about it. Now that I think about it, I never told him that it was about the bitcoin payment. I mistakenly just told him about the link, the disappearing name, and the scream. To make things worse he failed to tell me if he received the money or not before dismissing my “crazy” concerns and hanging up. After all it was awfully early in the states.
Little did he know I had already finished my first round and I couldn’t shake the pit in my stomach and my mind raced trying to rationalize that ethereal scream.
My mind is so jumbled right now and I can’t think straight.
I figure that someone has had this happen to them before or could at least help clear some of this up. I don’t function well without sleep, but tonight I might not have a choice.
I am going to try to muster up to courage to drive home after sobering up. Hopefully by then someone can debunk whatever just happened.
I’ll try to get some pictures/proof ASAP
Update: I finally made it back to find my front door unlocked. Nothing like whiskey and fear to make you forget to do the simplest things. I gradually opened my laptop and THANK GOD I was greeted with silence. In fact, google chrome was not open at all. Also, the website seems to be no longer available. I’m guessing the purpose of the website had been fulfilled whether it was a prank or something else. Looking for the email now. Shouldn’t it be at the top of my inbox still?
Update2: The email is nowhere to be found, but more worrying is that my son never received his payment. According to my son, I sent the bitcoin to the wrong person. So here we are, back at the beginning.
submitted by Bobsim21 to nosleep [link] [comments]

Check out Part 2 of our first Skycoin Official AMA with Synth

Enjoy Part 2 of 2 of the Skycoin Official AMA with Synth for March, 2018. Part 1 is posted here.
 
How will skywire stop centralization such as massive skywire node forwarding servers, like with the current internet?
There will be more competition between pools in Skycoin than there is in Bitcoin. If that problem occurs, then we will deal with it, we have strategies and models in place to handle this potential scenario.
 
How will it stop whales building humongous skyminer pools in massive cities such as New York that will forward all the nodes in that city?
If a whale wants to come in and invest 1 billion dollars, to take control of the internet service for a whole city, then it will only make Skycoin grow faster. If it becomes a problem like what is happening for Bitcoin right now, then we have plans in place to handle the issue.
The miner pools can only be so abusive in Skycoin, because if the pools are too abusive, then other people will switch to smaller pools that give them a better deal.
 
How do you solve mining for bandwidth? What is to stop an attacker putting two routers next to each other to print money?
This is of the reasons why Skycoin will work and we do not think we have any viable competitors. We know how to solve this problem.
The short answer is that we are not paying users for bandwidth. Users are paying each other. So if you put two routers next to each other in a loop, then you are paying yourself for your own bandwidth! So you are not printing money. It is the same as moving money from one of your wallets, to the other wallet.
Skycoin does not “print money”. There is zero inflation. It is a closed loop economy.
Our mathematical models show that if the network is not running in closed loop, that you can always game the system and eventually botnets will take over all of the rewards.
There is another way we found, which uses a bandwidth credit system and later we can build futures and derivatives markets. Since bandwidth is scarce, but is wasted if not used our algorithm allows a certain amount of fraud (acceptable loss ratio) to be factored in but mathematically guarantees that the fraud stays below a certain threshold. There is a maximum amount or upper bound a node can get away with, before it detected and the other nodes stop working with the node.
Basicly, eventually the nodes have a reputation system and nodes prefer other nodes who follow the rules over nodes that try to engage in bandwidth fraud.
We have a simple working solution for the testnet, then we will start building up the full solution, which will also improve the network performance a lot by directing most of the rewards at trustworthy nodes with a high uptime, lower latency and higher bandwidth capacity. The node reputation system will take a bit of work, but will allow us to do a lot of new thing with QoS and routing.
 
Since the people using Skywire resources depend on those resources to report what happens to the outside world, how do you stop adversarial actors from defrauding users using information asymmetry between the users and the blockchain? How do you do this without an enormous amount of overhead?
Adversarial actors are a major problem in any system where anything of value is concerned.
If you do not have a solution for fraud, then bots will come in and steal all the money. Imagine you are running a poker site with 100,000 humans on it. Then someone floods the poker site with 1 million bots (who are better at poker than humans). The bots are going to steal all the money from your users and they will leave (because they are only losing now and the game is not balanced anymore).
If you tell people “I will give you money for running this computer program”, there are people who control 15 million computers and they will just run the program on their botnet. All of the money will goto the bots.
Skywire solves the bot problem by a sort of peer-to-peer whitelisting protocol. We do not let people flood the network with bots. Each node maintains a peer list and if you want to peer a human has to add the peer on both ends by hand, so it’s harder for a botnet to come in and try to take over.
People, because they are social, will peer with people they know personally (their own social network or communities). It’s designed so that people with high quality, hand curated peer lists will have a significant advantage over someone who peers with 10 million slow botnet computers, running on laptops running windows XP. Also people who own dedicated hardware will also have much better performance metrics and will be rewarded more than botnet computers.
The overhead for the record keeping is only 2% to 6% of the total bandwidth in the network, depending on how long the sessions are and the specifics. So the overhead is at the same level as for the existing internet.
 
Why did you use Orange Pi’s, that have their NIC on a USB 2.0 bus, for the hardware in the Skynodes?
Ideally, for security, the NIC should not have DMA (Direct Memory Access). USB 3.0 is a nightmare. USB 2.0 is bad and USB 1.0 is actually better (more secure, but slower).
The NIC drivers or firmware usually have a lot of dangerous security problems.
We are designing a custom PCB and there are several security, cost, design issues that do not have a clear best solution. The NIC is on the USB 2.0 bus, primarily because that is what the chip supports and because of cost.
 
What is to stop the cable lobbyist and the FCC who have already proven they will go against the will of the people from banning skywire? Couldn't they stop people from getting access to the backhaul and outright outlaw the entire concept? When I asked on the Telegram everyone dismissed the concern and said 'its impossible to stop us, look at the darknet'. And while that is true, for skywire to work don't you need widespread normie adoption? What percentage of people would actually run this if they banned it?
There are many, extremely wealthy and powerful groups that are being squeezed out by the FCC and the internet monopolies. There are some surprising large and powerful players that will support (publicly or clandestinely) any project that gives them some breathing room from the telecom squeeze out.
We want them to try to ban Skywire. That means we are winning.
You have to understand the context of the FCC and the cable companies.
The cable companies were forced to be very aggressive and remove net neutrality and start using mafia extraction tactics against companies like Netflix and Google, because of earnings pressure. The cable companies all have declining revenue because people are using the internet for video and are “cord cutting”. The CEOs and management are desperate to keep their stock prices up and slow down the earnings decline.
The CEOs of the cable companies are under extreme pressure to increase earnings in the short term, but are using tactics that will create a lasting long term backlash. The CEOs will increase earnings, they will see their stock prices go up, they will cash out their options and retire to the Hamptons. The backlash will be the next CEOs problem.
Skywire is global and the FCC only matters in the US. In Europe there is much more diversity in ISPs and you wont see the type of battle and resistance they will put on in the US.
The cable companies are dying. They are the dinosaurs whining and moaning before the meteor impact. Fighting technology innovations like Skywire is part of the process of the demise of these telecom monopolies, but it is not something to worry about.
If they are attacking us, it means we are winning. We will be ready.
 
Do you have an estimate for when coin hours will have value and be tradable?
We are working on getting the exchange up, but it will need to wait until the testnet. First we will make coinhours tradable, then we will open them up for exchange.
 
How, in simple terms, do coin hours prevent spam?
The more they spam, the more scarce and expensive the coinhours become. If someone spams or attacks Skycoin, the Skycoin price will actually go up.
Since there are only a finite, scarce number of Skycoin and each Skycoin generates a fixed number of coinhours per hour; then coinhours become scarce and valuable. They put a price on transactions.
An attacker or spammer has to ask “Should I just sell my coinhours for money or should I spam and lose money?”. Eventually the spammer will use up all of his coinhours and then will have to buy them from someone else to keep spamming. Eventually they will even drive the market rate of the coinhours up, until the spamming becomes so expensive that they run out of money or give up.
 
On telegram you wrote coin hours are meant to be volatile if I'm not mistaken. Will this be a problem in the future?
It depends. By shuffling volatility from Skycoin, to the coin hours it makes Skycoin more valuable as a store of value and as a currency for transactions.
We want people to spend coin hours. If Skycoin is going up everyday 5% a day, why would you spend it? If we priced the bandwidth in Skycoin, the whole network would shutdown because everyone would just be hoarding their Skycoin instead of spending them! That is why we introduced coinhours.
Coinhours solve the problem of hoarding and gives people a currency which they are encouraged to spend. Skycoin is a better store of value because there is no inflation, while coinhours are better for transactions because they have an inflation rate that encourages people to spend them.
The market cap of the Skycoin coinhours could actually be higher than the market cap of Skycoin under some conditions.
Everyone is very excited to see what the price coinhours settle at. People are betting on the market and cannot wait to trade and speculate on the coinhours (either dumping them before they go down to zero, or hoarding them incase they go up 500x). I was surprised at how excited people are about the coinhours.
 
Are there any more coins launching on skyledger soon you can talk about?
Kittycash.com, mdl.life, SPACO, solarbankers.com, and more...
I have been so busy with Skycoin I cannot even keep up with the new ICOs.
We are opening up the platform now and more people will be launching coins that I could possible keep track of. We should probably have a registry to track the Skyledger ICOs.
 
Will it be easier to launch coins on skyledger in the future? Any other skyledger updates?
Yes. We have a script now for launching new coins!
In 30 seconds you will be able to: Create your coin Have your ICO software running to collect money Have the coin automatically listed on an internal exchange (instead of waiting 8 months to get listed on some mega exchange) Have mobile, desktop and hardware wallet support Skyledger is getting a rebranding and its own marketing team. We have several flagship coins in development, that will help alot for Skycoin marketing.
 
Synth mentioned months ago in the telegram chat that Obelisk was still in development, when and how will the algorithm be tested and release? How are the actual transactions validated if obelisk is not the algorithm used?
We have done several simulations. There are several peer reviewed academic research papers published about it. There are open source simulations in the github repo.
The exchanges are worried about us enabling the full consensus algorithm without enough testing. We have to do a lot of testing before we turn everything on.
Currently the exchanges forced us to use a masternode dev check-point system. Over time, we are going to make extensive changes to the node and keep minting on the checkpoint system, while rolling out everything. Then after extensive testing, will roll out everything in stages.
The testing of the new features and stages, needs to be done on a smaller coin (other Skyledger coins) before being rolled out to Skycoin. Skycoin’s market cap is too large and we have to be cautious about bugs and not rolling out new code before its tested.
The dev check-point system is a compromise that allows us to test new consensus algorithms, while protecting the exchanges. If the exchanges lose money from a bug and lose $200,000 in Skycoin then we have to pay them for the lose basicly.
The exchanges are all short-staffed because of massive user base growth. They are taking weeks sometimes to upgrade the Skycoin node version, after we release a new version. We have to carefully coordinate our release and upgrade schedules to minimize exchange downtimes.
The short answer, is; we can roll out everything in a few weeks (if we had to). Everything is tested and ready to go. However, because of the exchanges are overloaded, we have to roll it out carefully in planned stages, with a months notification for any changes.
I think everything will be in place by the end of the year, but the Skywire testnet is taking a lot of development resources, so we will push it back if that means Skywire gets launched faster.
Also, then we are always improving things. So even after it “done”, its not really done. It always need more developers working on it and improving everything. We think “one second transaction are fast enough”, then someone comes in with a video game they want to put on blockchain and suddenly we need 200 ms. The demands are endless.
When all of this work is done, it will also mean that we have the best blockchain platform. So we need to have a marketing event built around this. It may not make sense to do it in the middle of Skywire launch mania, because we can only handle so many things at once.
News like this, we also have to make sure we release it into an upward market, when a lot of people are paying attention to innovations in blockchain technology. It would be wasted if we released big news or features, when people were not paying attention.
 
What's in store for Skycoin this year?
To many things. Everything. All at once. Its crazy.
We are opening a hardware incubator, which is the most exciting thing for me. I think we will not see the real applications of blockchain until we get blockchain into the physical world.
 
Where do you see this project in 5 years, where in 10 years? (What is your long term goal?)
We are moving so fast. I could not imagine that we did as much as we have, in such a short time. I cannot even keep up with how many things are in development now.
The goal this year is to demonstrate real world applications of blockchain technology. To bring blockchain to the physical world and make it tangible.
The goal in five years is to make blockchain obsolete and to create what comes after blockchain. We are experimenting with a thing we have started to call the “Fibre”. I do not think innovation will stop at blockchain.
The third generation of coins is going to be post-blockchain and want to be a leader in this area.
 
How long before I can buy a coffee with Skycoin?
As soon as I buy a coffee shop, lol.
 
When the community try to bring more people to skycoin, specially those with big money, we have to face the fact that the time locked distribution is not auditable (or it is?) is there any strategy to calm the doubts about the distribution method (the developers hold the majority of the coins/ are the only ones able to mint coins)
One of the advantages of blockchain is that all of the transaction are public. So the distribution schedule is auditable. Skycoin’s distribution is completely public. The distribution addresses are also public. So it is very transparent.
There is an api endpoint here with the distribution addresses and information updated in real time https://explorer.skycoin.net//api/coinSupply
 
In your blogs you are talking about the possibility of a ninja announcement that burns 80% tokens. That means it will be only 20 mil sky. So, in which circumstances devs would do that?
If we can find a closed loop, economic model for Skywire, that does not require a 15 or 20 year distribution period. Then we will burn the coins. Then the distribution would be capped at 30 million instead of 100 million.
Right now, we need the coins held aside for infrastructure investment, to grow the network and maintain the project.
There are some future components, that could eliminate the need for infrastructure fund and enable the network to be self-financing. Even if we get these components in place, what it means is that the infrastructructure fund will just allow us to grow even faster! So we might still not burn the coins.
You cannot underestimate what it will mean if we are investing 100 million dollars a year of coins into growth. This is the fuel that drives the growth of the ecosystem, so it does not make sense to “burn” the fuel. If there are more projects we can invest in, to grow faster, then we should do that.
 
In your opinion, what is the best exchange for buying Skycoin right now, and why? And on what other exchanges will Skycoin be listed, and when?
C2CX is good. Cryptopia is also good but withdrawals are slow.
We will be listed on larger exchanges this year, but cannot give details. We signed contracts but the exchanges grew from 1 million users to 8 million users in a few months, so their technical teams are overloaded. Listing a new coin can take 6 months after signing the agreement now. We are doing all we can to expedite the process.
 
Will the Kittycash platform be advertised across cat loving forums and the like?
LOL.
 
What will the value of legendary kittys be in 2019?
People are spending 1 or 2 Bitcoin per legendary kitty now. Kitty Cash had to stop selling legendary kitties, because fifty people were trying to buy each kitty and too many people were trying to buy them at once.
 
When will SKY be listed on new exchanges?
We were listed on four new exchanges this month. Wolfcrypto, Next, and two other exchanges. I cannot even keep track of it.
We signed contracts with the largest exchanges, but are still waiting for technical integration and we signed contracts not to disclosure information about specific exchange listings.
The exchanges are very overloaded right now, with technical problems from user growth and also from hundreds of coin ICOs that all want to be listed at once. Millions of people per month are registering on the Bitcoin exchanges now and the exchanges are overloaded. It can be a six month waiting list for listing now, after contracts have been signed, so we are just waiting at this point. However, big exchanges are coming soon.
submitted by MuSKYteer to skycoin [link] [comments]

Skywire Testnet FAQ Update (July, 2018)

Please keep in mind that this will be an evolving FAQ and a living document as we progress through our testnet, so check back here often for updates.

General Information

What is the objective of the Skywire Public Testnet?

There are several goals we will accomplish with the Skywire Public Testnet. The testnet will be split into several phases. The version running today is the internal version of our testnet, aimed to validate its function and performance. The coming revision will publicize the network, as well as establish a fair economic model reward mechanism for running nodes. This will be based upon analysis of node utilization during testing. This testing will provide us valuable information to design a robust mathematical model for the mainnet so that all nodes on the mainnet will be automatically incentivized under a fair economic model.

What is the function of this version?

Once a user sets up an operational node, they will be able to search for other nodes and be connected to users around the world, breaking down borders and barriers to access global information.
Note that any computer can become a node on the network, however, only whitelisted Skyminers (all Official and selected DIY) will be participating in the economic model testing program, and eligible for rewards.

What kind of Skyminers will be whitelisted for the Testnet?

There are three main categories of Skyminers:
The initial whitelist will include the Official Skyminers that have shipped to users around the globe. These will become the baseline for early DIY Skyminers. Since we are entering into uncharted skies, we want to initially reduce any variables possible and test the network in a controlled manner.
We have already been scaling out to include high quality DIY Skyminers with equivalent specifications, and eventually any Skyminer (official or DIY) that reaches the minimum specifications required. Those minimum specifications will be determined during the testnet and released to the Skyfleet community as they become available so stay tuned.

What will be the whitelisting process be like?

First, the Skywire core team will collect the public keys for each node within each Official Skyminer. Since there are 8 nodes in a Skyminer, each will have 8 public keys. These Official Skyminers will be whitelisted once public keys are provided to the Skywire core team.
Here is a link to the whitelist submission page
DIY Skyminers will be reviewed manually and approved weekly (approximately 50 per week) following the completion of the whitelisting process for the Official Skyminers.

Can DIY Skyminers join the whitelist?

While Official Skyminers will be on the whitelist by default (upon submission and receipt of their public keys), DIY Skyminers will be allowed to join the whitelist based on the benchmark set by the Official Skyminer’s hardware configuration. DIY Skyminers will be required to provide detailed specifications and photos, submitted to the corresponding team for review. Qualified DIY Skyminers will be added into the testnet whitelist. Please remember that only selected DIY miners will be whitelisted. You may refer to the Skywire community on Telegram or the community Skywug forum for more discussions around this topic.
The first generation Offiicial Skyminer hardware configuration is as follows:
8 hardware nodes made up of 8 Orange Pi Prime PCB boards
8+1 100Mbps router (custom 16-port OpenWRT in production)
16GB RAM (8 x 2GB DDR3)
ARM Cortex-A53 CPU
Hexa-core Mali450 GPU
LAN Bandwidth: 8 x 1000Mbps
64-bit Linux (Alpine Linux)

What kind of hardware will be able to participate in the Testnet?

Any computer can be added to the Skywire Public Testnet, set up as a node, and use the functions of Skywire. However, only a limited number of machines will be whitelisted (including Official Skyminers and some DIY Skyminers as noted above) and receive rewards during the testing stage.
Machines not on the whitelist will still be able to participate in the network and access the full service of the network, however they will not receive rewards.

Is a dedicated router part of the required spec? For example, if someone builds a miner that meets spec with 8 nodes and a switch, but just has it connected directly to their home/ISP Router will they be whitelisted?

They could be whitelisted. Official miner is just a benchmark and DIY Skyminer doesn’t require the exact same setup as the benchmark.

Is there any difference between Official Skyminers and DIY Skyminers?

In the current testnet, only ONE miner is allowed to be whitelisted per IP address. In the future when rewards is proportional to the bandwidth you are producing for the network, any rewards is directly tied to the bandwidth you are producing so you may have any number of miners as you want with a single IP address.

How do I setup the software for my Official Skyminer?

We have simplified the process of setting up a Skyminer by creating a Skywire software package image for users to directly flash to their SD cards. The image contains all the standard functions that the nodes will need to get started with Skywire, such as the operating environment, static IP address, auto-start function, etc.
Please visit the Skywire Github for a detail tutorial on the software set up process.

How do we join the Testnet?

Those who have previously installed a version of Skywire can update directly in the software. (Note: if the update fails, please reinstall it by following the instructions on Github: https://github.com/skycoin/skywire).
Please remember that only whitelisted miner will receive rewards at this stage. However, you can still access the same VPN functions with Skywire along with everyone else!

What do we do after installation?

It is simple! All you have to do is keep the node online so that other Skywire nodes can connect to yours, as we perform network tests and do all the heavy lifting from our end. Grab a drink, sit back, relax and enjoy using the new internet :).

Economics

What will be the reward mechanism for running nodes?

At the moment, whitelisted miners will require a minimum of 75% up time per month to receive that month's rewards. The reward ratio will be set carefully going forward. We will first need a rigorous dataset as a point of reference and will be adjusting the rate continuously throughout the process as the economic model gets established.
It is important to note that in the current testnet, Skycoin is rewarded independent to bandwidth production of your miner. In the future, Coin Hours will be earned instead of Skycoin depending on the bandwidth you are providing to the Skywire network.

Do we get extra rewards for maintaining >75% up-time?

No you will not. Everyone who maintain >75% up-time will receive the same rewards.

What is the mining rewards?

For the first month, the rewards was set as 96 SKY per official miner and 6 SKY per node up to 48 SKY for DIY miners. As we figure out the most optimal economics to incentivise a global meshnet of hardware infrastructure for this new internet, this number will change depending on the growth of our network.

Does Skyminer mine Coin Hours?

Coin Hours is a separate currency produced by Skycoin. Each Skycoin produce 1 Coin Hour every hour. Coin Hour will be used in the future to pay for transactions in the Skycoin economy such as Skywire and Kitty Cash accessories. Once we move onto the main net, Skyminer will produce Coin Hour instead.

How often does the whitelist uptime monitoring refreshes?

It refreshes at the beginning of every month.

Do we need to be whitelisted once we move to the mainnet?

No. Anyone is free to join and start earning by contributing valuable resources (bandwidth, storage and computation) once we are on the mainnet.

Technical

When I visit 192.168.0.1 on my browser, I see my own home's router instead of the miner's router. How do I fix this?

There is a conflict in the LAN configuration between your home's router and the Skyminer's router. You need to change the miner's router IP to another IP address OR you can change the miner's router into your own network switch

Is Skycoin node the same as Skywire node?

No. They are a completely separate and independent decentralised network. Skywire node is responsible for sending, receiving and transmitting data. Skycoin node is only for validating transactions and the state of the blockchain much like Bitcoin nodes.

Do I need to leave my computer on once I have configured my Skyminer properly?

No you do not. As long as your home's internet modem is still turned on and providing bandwidth to the router and CPU boards on your Skyminer, your own personal computer doesn't need to be left on. That's the idea of having an independent purpose-built Skyminer.

My Skyminer was turned off because my power went out, will I need to re-register on the whitelist and lose my rewards?

No. All you need is to maintain a >75% up time as shown on the discovery address (http://discovery.skycoin.net:8001/)

Will I need to reflash if my miner was shut off?

No you will not. Installing Skywire on a Pi is like installing a program on your personal computer. You don't need to reinstall the program every time you turned off your computer.

Will changing the router affect my node's public key?

No it will not. The public key is attached to the software installed on the Pi. If you reinstall the program (eg. reflashing) then you will have a new set of public keys. If you have reflashed after submitting your public keys on the whitelist, you have to contact us to change you public keys otherwise you will not receive your rewards.

I can't log on to the router of my official Skyminer.

Ensure all the networking cables are attached correctly, turn off any wifi and VPN on your computer, ping 192.168.0.1 via the Windows or Mac command prompt interface. If you are able to ping your router than please wait 2 minutes and try again. Contact our community managers for support for more help on the Skywire Telegram

I have set my Skyminer's router's address on WLAN as 192.168.2.104. However, when I tried to access 192.168.2.104:8000 via another computer I am unable to connect?

Port 8000 is an address set for the Manager node's board. It isn't part of the router's address. If you haven't set up the port forwarding correctly, when you try to access from another LAN network (outside of the Skyminer's own LAN), you will not be able to connect to the miner's router. If you are uncertain about how to set up portfowarding rules, contact our helpful Skywire community managers for more support.

What cables do I need for the Miner's WAN port?

The same as your home's internet cable. We recommend CAT 5e or better cables.

I successfully used Skywire to access the internet by using the bandwidth provided by another peer. However after a while, I was unable to continue using the connection and have to reconnect, why is that?

This is normal. If there is a period of bandwidth inactivity, the connection will disconnect automatically. Another reason is that the peer you have connected to is providing a sub-par connection.

How do I know what my mining nodes' IP addresses are?

Enter the Skywire manager interface installed on the Manager node, turn on 'Terminal', and enter the prompt "ifconfig" in the command prompt. It will return with the IP of that exact node you are accessing.

The green lights on all 8 boards are lit. Why do I only see 7 nodes on my Skywire Manager interface?

First check if all 8 lights are lit on the miner's router. If not then check all connections are properly installed. Then use the "ifconfig" method mentioned above to identify exactly which board is not connected. Restart and reflash that SD card and try again.

If someone else has connected to my node, can I be hacked by them?

No they can't. Due to the restrictions set up in the software code, peers are not able to visit anywhere outside of the node they are connected to.
__

Where can we learn more about Skywire and join the discussions?

Chinese community:
Follow Skycoin China official Wechat Account - “SkycoinFans”, and join our Wechat discussion group
Join Skywire Chinese Telegram community: https://t.me/SkywireCN
Global community:
Join Skywire official Telegram community: https://t.me/skywire
Join Skywug forum: https://skywug.net/forum/Forum-Skywire
submitted by ChocolateyLab to skycoin [link] [comments]

Trading Cryptocurrency Markets

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Major Exchanges
In finance, an exchange is a forum or platform for trading commodities, derivatives, securities or other financial instruments. The principle concern of an exchange is to allow trading between parties to take place in a fair and legally compliant manner, as well as to ensure that pricing information for any instrument traded on the exchange is reliable and coherently delivered to exchange participants. In the cryptocurrency space exchanges are online platforms that allow users to trade cryptocurrencies or digital currencies for fiat money or other cryptocurrencies. They can be centralized exchanges such a Binance, or decentralized exchanges such as IDEX. Most cryptocurrency exchanges allow users to trade different crypto assets with BTC or ETH after having already exchanged fiat currency for one of those cryptocurrencies. Coinbase and Kraken are the main avenue for fiat money to enter into the cryptocurrency ecosystem.
Function and History
Crypto exchanges can be market-makers that take bid/ask spreads as a commission on the transaction for facilitating the trade, or more often charge a small percentage fee for operating the forum in which the trade was made. Most crypto exchanges operate outside of Western countries, enabling them to avoid stringent financial regulations and the potential for costly and lengthy legal proceedings. These entities will often maintain bank accounts in multiple jurisdictions, allowing the exchange to accept fiat currency and process transactions from customers all over the globe.
The concept of a digital asset exchange has been around since the late 2000s and the following initial attempts at running digital asset exchanges foreshadows the trouble involved in attempting to disrupt the operation of the fiat currency baking system. The trading of digital or electronic assets predate Bitcoin’s creation by several years, with the first electronic trading entities running afoul of the Australian Securities and Investments Commission (ASIC) in late 2004. Companies such as Goldex, SydneyGoldSales, and Ozzigold, shut down voluntarily after ASIC found that they were operating without an Australian Financial Services License. E-Gold, which exchanged fiat USD for grams of precious metals in digital form, was possibly the first digital currency exchange as we know it, allowing users to make instant transfers to the accounts of other E-Gold members. At its peak in 2006 E-Gold processed $2 billion worth of transactions and boasted a user base of over 5 million people.
Popular Exchanges
Here we will give a brief overview of the features and operational history of the more popular and higher volume exchanges because these are the platforms to which newer traders will be exposed. These exchanges are recommended to use because they are the industry standard and they inspire the most confidence.
Bitfinex
Owned and operated by iFinex Inc, the cryptocurrency trading platform Bitfinex was the largest Bitcoin exchange on the planet until late 2017. Headquartered in Hong Kong and based in the US Virgin Island, Bitfinex was one of the first exchanges to offer leveraged trading (“Margin trading allows a trader to open a position with leverage. For example — we opened a margin position with 2X leverage. Our base assets had increased by 10%. Our position yielded 20% because of the 2X leverage. Standard trades are traded with leverage of 1:1”) and also pioneered the use of the somewhat controversial, so-called “stable coin” Tether (USDT).
Binance
Binance is an international multi-language cryptocurrency exchange that rose from the mid-rank of cryptocurrency exchanges to become the market dominating behemoth we see today. At the height of the late 2017/early 2018 bull run, Binance was adding around 2 million new users per week! The exchange had to temporarily disallow new registrations because its servers simply could not keep up with that volume of business. After the temporary ban on new users was lifted the exchange added 240,000 new accounts within two hours.
Have you ever thought whats the role of the cypto exchanges? The answer is simple! There are several different types of exchanges that cater to different needs within the ecosystem, but their functions can be described by one or more of the following: To allow users to convert fiat currency into cryptocurrency. To trade BTC or ETH for alt coins. To facilitate the setting of prices for all crypto assets through an auction market mechanism. Simply put, you can either mine cryptocurrencies or purchase them, and seeing as the mining process requires the purchase of expensive mining equipment, Cryptocurrency exchanges can be loosely grouped into one of the 3 following exchange types, each with a slightly different role or combination of roles.
Have you ever thought about what are the types of Crypto exchanges?
  1. Traditional Cryptocurrency Exchange: These are the type that most closely mimic traditional stock exchanges where buyers and sellers trade at the current market price of whichever asset they want, with the exchange acting as the intermediary and charging a small fee for facilitating the trade. Kraken and GDAX are examples of this kind of cryptocurrency exchange. Fully peer-to-peer exchanges that operate without a middleman include EtherDelta, and IDEX, which are also examples of decentralized exchanges.
  2. Cryptocurrency Brokers: These are website or app based exchanges that act like a Travelex or other bureau-de-change. They allow customers to buy or sell crypto assets at a price set by the broker (usually market price plus a small premium). Coinbase is an example of this kind of exchange.
  3. Direct Trading Platform: These platforms offer direct peer-to-peer trading between buyers and sellers, but don’t use an exchange platform in doing so. These types of exchanges do not use a set market rate; rather, sellers set their own rates. This is a highly risky form of trading, from which new users should shy away.
To understand how an exchange functions we need only look as far as a traditional stock exchange. Most all the features of a cryptocurrency exchange are analogous to features of trading on a traditional stock exchange. In the simplest terms, the exchanges fulfil their role as the main marketplace for crypto assets of all kinds by catering to buyers or sellers. These are some definitions for the basic functions and features to know: Market Orders: Orders that are executed instantly at the current market price. Limit Order: This is an order that will only be executed if and when the price has risen to or dropped to that price specified by the trader and is also within the specified period of time. Transaction fees: Exchanges will charge transactions fees, usually levied on both the buyer and the seller, but sometimes only the seller is charged a fee. Fees vary on different exchanges though the norm is usually below 0.75%. Transfer charges: The exchange is in effect acting as a sort of escrow agent, to ensure there is no foul play, so it might also charge a small fee when you want to withdraw cryptocurrency to your own wallet.
Regulatory Environment and Evolution
Cryptocurrency has come a long way since the closing down of the Silk Road darknet market. The idea of crypto currency being primarily for criminals, has largely been seen as totally inaccurate and outdated. In this section we focus on the developing regulations surrounding the cryptocurrency asset class by region, and we also look at what the future may hold.
The United States of America
A coherent uniform approach at Federal or State level has yet to be implemented in the United States. The Financial Crimes Enforcement Network published guidelines as early as 2013 suggesting that BTC and other cryptos may fall under the label of “money transmitters” and thus would be required to take part in the same Anti-money Laundering (AML) and Know your Client (KYC) procedures as other money service businesses. At the state level, Texas applies its existing finance laws. And New York has instituted an entirely new licensing system.
The European Union
The EU’s approach to cryptocurrency has generally been far more accommodating overall than the United States, partly due to the adaptable nature of pre-existing laws governing electronic money that predated the creation of Bitcoin. As with the USA, the EU’s main fear is money laundering and criminality. The European Central Bank (ECB) categorized BTC as a “convertible decentralized currency” and advised all central banks in the EU to refrain from trading any cryptocurrencies until the proper regulatory framework was put in place. A task force was then set up by the European Parliament in order to prevent and investigate any potential money laundering that was making use of the new technology.
Likely future regulations for cryptocurrency traders within the European Union and North America will probably consist of the following proposals: The initiation of full KYC procedures so that users cannot remain fully anonymous, in order to prevent tax evasion and curtail money laundering. Caps on payments that can be made in cryptocurrency, similar to caps on traditional cash transactions. A set of rules governing tax obligations regarding cryptocurrencies Regulation by the ECB of any companies that offer exchanges between cryptocurrencies and fiat currencies It is less likely for other countries to follow the Chinese approach and completely ban certain aspects of cryptocurrency trading. It is widely considered more progressive and wiser to allow the technology to grow within a balanced accommodative regulatory framework that takes all interests and factors into consideration. It is probable that the most severe form of regulation will be the formation of new governmental bodies specifically to form laws and exercise regulatory control over the cryptocurrency space. But perhaps that is easier said than done. It may, in certain cases, be incredibly difficult to implement particular regulations due to the anonymous and decentralized nature of crypto.
Behavior of Cryptocurrency Investors by Demographic
Due to the fact that cryptocurrency has its roots firmly planted in the cryptography community, the vast majority of early adopters are representative of that group. In this section we cover the basic structure of the cryptocurrency market cycle and the makeup of the community at large, as well as the reasons behind different trading decisions.
The Cryptocurrency Market Cycle
Bitcoin leads the bull rally. FOMO (Fear of missing out) occurs, the price surge is a constant topic of mainstream news, business programs cover the story, and social media is abuzz with cryptocurrency chatter. Bitcoin reaches new All Timehigh (ATH) Market euphoria is fueled with even more hype and the cycle is in full force. There is a constant stream of news articles and commentary on the meteoric, seemingly unstoppable rise of Bitcoin. Bitcoin’s price “stabilizes”, In the 2017 bull run this was at or around $14,000. A number of solid, large market cap altcoins rise along with Bitcoin; ETH & LTC leading the altcoins at this time. FOMO comes into play, as the new ATH in market cap is reached by pumping of a huge number of alt coins.
Top altcoins “somewhat” stabilize, after reaching new all-time highs. The frenzy continues with crypto success stories, notable figures and famous people in the news. A majority of lesser known cryptocurrencies follow along on the upward momentum. Newcomers are drawn deeper into crypto and sign up for exchanges other than the main entry points like Coinbase and Kraken. In 2017 this saw Binance inundated with new registrations. Some of the cheapest coins are subject to massive pumping, such as Tron TRX which saw a rise in market cap from $150 million at the start of December 2017 to a peak of $16 billion! At this stage, even dead coins or known scams will get pumped. The price of the majority of cryptocurrencies stabilize, and some begin to retract. When the hype is subsiding after a huge crypto bull run, it is a massive sell signal. Traditional investors will begin to give interviews about how people need to be careful putting money into such a highly volatile asset class. Massive violent correction begins and the market starts to collapse. BTC begins to fall consistently on a daily basis, wiping out the insane gains of many medium to small cap cryptos with it. Panic selling sweeps through the market. Depression sets in, both in the markets, and in the minds of individual investors who failed to take profits, or heed the signs of imminent collapse. The price stagnation can last for months, or even years.
The Influence of Age upon Trading
Did you know? Cryptocurrencies have been called “stocks for millennials” According to a survey conducted by the Global Blockchain Business Council, only 5% of the American public own any bitcoin, but of those that do, an overwhelming majority of 71% are men, 58% of them are between the ages of 18 and 35, and over half of them are minorities. The same survey gauged public attitude toward the high risk/high return nature of cryptocurrency, in comparison to more secure guaranteed small percentage gains offered by government bonds or stocks, and found that 30% would rather invest $1,000 in crypto. Over 42% of millennials were aware of cryptocurrencies as opposed to only 15% of those ages 65 and over. In George M. Korniotis and Alok Kumar’s study into the effects of aging on portfolio management and the quality of decisions made by older investors, they found “that older and experienced investors are more likely to follow “rules of thumb” that reflect greater investment knowledge. However, older investors are less effective in applying their investment knowledge and exhibit worse investment skill, especially if they are less educated and earn lower income.”
Geographic Influence upon Trading
One of the main drivers of the apparent seasonal ebb and flow of cryptocurrency prices is the tax situation in the various territories that have the highest concentrations of cryptocurrency holders. Every year we see an overall market pull back beginning in mid to late January, with a recovery beginning usually after April. This is because “Tax Season” is roughly the same across Europe and the United States, with the deadline for Income tax returns being April 15th in the United States, and the tax year officially ending the UK on the 6th of April. All capital gains must be declared before the window closes or an American trader will face the powerful and long arm of the IRS with the consequent legal proceedings and possible jail time. Capital gains taxes around the world vary from jurisdiction to jurisdiction but there are often incentives for cryptocurrency holders to refrain from trading for over a year to qualify their profits as long term gain when they finally sell. In the US and Australia, for example, capital gains are reduced if you bought cryptocurrency for investment purposes and held it for over a year. In Germany if crypto assets are held for over a year then the gains derived from their sale are not taxed. Advantages like this apply to individual tax returns, on a case by case basis, and it is up to the investor to keep up to date with the tax codes of the territory in which they reside.
2013 Bull run vs 2017 Bull run price Analysis
In late 2016 cryptocurrency traders were faced with the task of distinguishing between the beginnings of a genuine bull run and what might colorfully be called a “dead cat bounce” (in traditional market terminology). Stagnation had gripped the market since the pull-back of early 2014. The meteoric rise of Bitcoin’s price in 2013 peaked with a price of $1,100 in November 2013, after a year of fantastic news on the adoption front with both Microsoft and PayPal offering BTC payment options. It is easy to look at a line going up on a chart and speak after the fact, but at the time, it is exceeding difficult to say whether the cat is actually climbing up the wall, or just bouncing off the ground. Here, we will discuss the factors that gave savvy investors clues as to why the 2017 bull run was going to outstrip the 2013 rally. Hopefully this will help give insight into how to differentiate between the signs of a small price increase and the start of a full scale bull run. Most importantly, Volume was far higher in 2017. As we can see in the graphic below, the 2017 volume far exceeds the volume of BTC trading during the 2013 price increase. The stranglehold MtGox held on trading made a huge bull run very difficult and unlikely.
Fraud & Immoral Activity in the Private Market
Ponzi Schemes Cryptocurrency Ponzi schemes will be covered in greater detail in Lesson 7, but we need to get a quick overview of the main features of Ponzi schemes and how to spot them at this point in our discussion. Here are some key indicators of a Ponzi scheme, both in cryptocurrencies and traditional investments: A guaranteed promise of high returns with little risk. Consistentflow of returns regardless of market conditions. Investments that have not been registered with the Securities and Exchange Commission (SEC). Investment strategies that are a secret, or described as too complex. Clients not allowed to view official paperwork for their investment. Clients have difficulties trying to get their money back. The initial members of the scheme, most likely unbeknownst to the later investors, are paid their “dividends” or “profits” with new investor cash. The most famous modern-day example of a Ponzi scheme in the traditional world, is Bernie Madoff’s $100 billion fraudulent enterprise, officially titled Bernard L. Madoff Investment Securities LLC. And in the crypto world, BitConnect is the most infamous case of an entirely fraudulent project which boasted a market cap of $2 billion at its peak.
What are the Exchange Hacks?
The history of cryptocurrency is littered with examples of hacked exchanges, some of them so severe that the operation had to be wound up forever. As we have already discussed, incredibly tech savvy and intelligent computer hackers led by Alexander Vinnik stole 850000 BTC from the MtGox exchange over a period from 2012–2014 resulting in the collapse of the exchange and a near-crippling hammer blow to the emerging asset class that is still being felt to this day. The BitGrail exchange suffered a similar style of attack in late 2017 and early 2018, in which Nano (XRB) was stolen that was at one point was worth almost $195 million. Even Bitfinex, one of the most famous and prestigious exchanges, has suffered a hack in 2016 where $72 million worth of BTC was stolen directly from customer accounts.
Hardware Wallet Scam Case Study
In late 2017, an unfortunate character on Reddit, going by the name of “moody rocket” relayed his story of an intricate scam in which his newly acquired hardware wallet was compromised, and his $34,000 life savings were stolen. He bought a second hand Nano ledger into which the scammers own recover seed had already been inserted. He began using the ledger without knowing that the default seed being used was not a randomly assigned seed. After a few weeks the scammer struck, and withdrew all the poor HODLer’s XRP, Dash and Litecoin into their own wallet (likely through a few intermediary wallets to lessen the very slim chances of being identified).
Hardware Wallet Scam Case Study Social Media Fraud
Many gullible and hapless twitter users have fallen victim to the recent phenomenon of scammers using a combination of convincing fake celebrity twitter profiles and numerous amounts of bots to swindle them of ETH or BTC. The scammers would set up a profile with a near identical handle to a famous figure in the tech sphere, such as Vitalik Buterin or Elon Musk. And then in the tweet, immediately following a genuine message, follow up with a variation of “Bonus give away for the next 100 lucky people, send me 0.1 ETH and I will send you 1 ETH back”, followed by the scammers ether wallet address. The next 20 or so responses will be so-called sockpuppet bots, thanking the fake account for their generosity. Thus, the pot is baited and the scammers can expect to receive potentially hundreds of donations of 0.1 Ether into their wallet. Many twitter users with a large follower base such as Vitalik Buterin have taken to adding “Not giving away ETH” to their username to save careless users from being scammed.
Market Manipulation
It also must be recognized that market manipulation is taking place in cryptocurrency. For those with the financial means i.e. whales, there are many ways in which to control the market in a totally immoral and underhanded way for your own profit. It is especially easy to manipulate cryptos that have a very low trading volume. The manipulator places large buy orders or sell walls to discourage price action in one way or the other. Insider trading is also a significant problem in cryptocurrency, as we saw with the example of blatant insider trading when Bitcoin Cash was listed on Coinbase.
Examples of ICO Fraudulent Company Behavior
In the past 2 years an astronomical amount of money has been lost in fraudulent Initial Coin Offerings. The utmost care and attention must be employed before you invest. We will cover this area in greater detail with a whole lesson devoted to the topic. However, at this point, it is useful to look at the main instances of ICO fraud. Among recent instances of fraudulent ICOs resulting in exit scams, 2 of the most infamous are the Benebit and PlexCoin ICOs which raised $4 million for the former and $15 million for the latter. Perhaps the most brazen and damaging ICO scam of all time was the Vietnamese Pincoin ICO operation, where $660million was raised from 32,000 investors before the scammer disappeared with the funds. In case of smaller ICO “exit scamming” there is usually zero chance of the scammers being found. Investors must just take the hit. We will cover these as well as others in Lesson 7 “Scam Projects”.
Signposts of Fraudulent Actors
The following factors are considered red flags when investigating a certain project or ICO, and all of them should be considered when deciding whether or not you want to invest. Whitepaper is a buzzword Salad: If the whitepaper is nothing more than a collection of buzzwords with little clarity of purpose and not much discussion of the tech involved, it is overwhelmingly likely you are reading a scam whitepaper.
Signposts of Fraudulent Actors §2
No Code Repository: With the vast majority of cryptocurrency projects employing open source code, your due diligence investigation should start at GitHub or Sourceforge. If the project has no entries, or nothing but cloned code, you should avoid it at all costs. Anonymous Team: If the team members are hard to find, or if you see they are exaggerating or lying about their experience, you should steer clear. And do not forget, in addition to taking proper precautions when investing in ICOs, you must always make sure that you are visiting authentic web pages, especially for web wallets. If, for example, you are on a spoof MyEtherWallet web page you could divulge your private key without realizing it and have your entire portfolio of Ether and ERC-20 tokens cleaned out.
Methods to Avoid falling Victim
Avoiding scammers and the traps they set for you is all about asking yourself the right questions, starting with: Is there a need for a Blockchain solution for the particular problem that a particular ICO is attempting to solve? The existing solution may be less costly, less time consuming, and more effective than the proposals of a team attempting to fill up their soft cap in an ICO. The following quote from Mihai Ivascu, the CEO of Modex, should be kept in mind every time you are grading an ICO’s chances of success: “I’m pretty sure that 95% of ICOswill not last, and many will go bankrupt. ….. not everything needs to be decentralized and put on an open source ledger.”
Methods to Avoid falling Victim §2 Do I Trust These People with My Money, or Not?
If you continue to feel uneasy about investing in the project, more due diligence is needed. The developers must be qualified and competent enough to complete the objectives that they have set out in the whitepaper.
Is this too good to be true?
All victims of the well-known social media scams using fake profiles of Vitalik Buterin, or Bitconnect investors for that matter, should have asked themselves this simple question, and their investment would have been saved. In the case of Bitconnect, huge guaranteed gains proportional to the amount of people you can get to sign up was a blatant pyramid scheme, obviously too good to be true. The same goes for Fake Vitalik’s offer of 1 ether in exchange for 0.1 ETH.
Selling Cryptocurrencies, Several reasons for selling with the appropriate actions to take:
If you are selling to buy into an ICO, or maybe believe Ether is a safer currency to hold for a certain period of time, it is likely you will want to make use of the Ether pair and receive Ether in return. Obviously if the ICO is on the NEO or WANchain blockchain for example, you will use the appropriate pair. -Trading to buy into another promising project that is listing on the exchange on which you are selling (or you think the exchange will experience a large amount of volume and become a larger exchange), you may want to trade your cryptocurrency for that exchange token. -If you believe that BTC stands a good chance of experiencing a bull run then using the BTC trading pair is the suitable choice. -If you believe that the market is about to experience a correction but you do not want to take your gains out of the market yet, selling for Tether or “tethering up” is the best play. This allows you to keep your locked-in profits on the exchange, unaffected by the price movements in the cryptocurrency markets,so that you can buy back in at the most profitable moment. -If you wish to “cash out” i.e. sell your cryptocurrency for fiat currency and have those funds in your bank account, the best pair to use is ETH or BTC because you will likely have to transfer to an exchange like Kraken or Coinbase to convert them into fiat. If the exchange offers Litecoin or Bitcoin Cash pairs it could be a good idea to use these for their fast transaction time and low fees.
Selling Cryptocurrencies
Knowing when and how to sell, as well as strategies to inflate the value of your trade before sale, are important skills as a trader of any product or financial instrument. If you are satisfied that the sale itself of the particular amount of a token or coin you are trading away is the right one, then you must decide at what price you are going to sell. Exchanges exercise their own discretion as to which trading “pairs” they will offer, but the most common ones are BTC, ETH, BNB for Binance, BIX for Bibox etc., and sometimes Tether (USDT) or NEO. As a trader, you decide which particular cryptocurrency to exchange depending on your reason for making that specific trade at that time.
Methods of Sale
Market sell/Limit sell on exchange: A limit sell is an order placed on an exchange to sell as soon as (also specifically only if and when) the price you specified has been hit within the time limit you select. A market order executes the sale immediately at the best possible price offered by the market at that exact time. OTC (or Over the Counter) selling refers to sale of securities or cryptocurrencies in any method without using an exchange to intermediate the trade and set the price. The most common way of conducting sales in this manner is through LocalBitcoins.com. This method of cryptocurrency selling is far riskier than using an exchange, for obvious reasons.
The influence and value of your Trade
There are a number of strategies you can use to appreciate the value of your trade and thus increase the Bitcoin or Ether value of your portfolio. It is important to disassociate yourself from the dollar value of your portfolio early on in your cryptocurrency trading career simply because the crypto market is so volatile you will end up pulling your hair out in frustration following the real dollar money value of your holdings. Once your funds have been converted into BTC and ETH they are completely in the crypto sphere. (Some crypto investors find it more appropriate to monitor the value of their portfolio in satoshi or gwei.) Certainly not limited to, but especially good for beginners, the most reliable way to increase your trading profits, and thus the overall value and health of your portfolio, is to buy into promising projects, hold them for 6 months to a year, and then reevaluate. This is called Long term holding and is the tactic that served Bitcoin HODLers quite well, from 2013 to the present day. Obviously, if something comes to light about the project that indicates a lengthy set back is likely, it is often better to cut your losses and sell. You are better off starting over and researching other projects. Also, you should set initial Price Points at which you first take out your original investment, and then later, at which you take out all your profits and exit the project. That should be after you believe the potential for growth has been exhausted for that particular project.
Another method of increasing the value of your trades is ICO flipping. This is the exact opposite of long term holding. This is a technique in which you aim for fast profits taking advantage of initial enthusiasm in the market that may double or triple the value of ICO projects when they first come to market. This method requires some experience using smaller exchanges like IDEX, on which project tokens can be bought and sold before listing on mainstream exchanges. “Tethering up” means to exchange tokens or coins for the USDT stable coin, the value of which is tethered to the US Dollar. If you learn, or know how to use, technical analysis, it is possible to predict when a market retreatment is likely by looking at the price movements of BTC. If you decide a market pull back is likely, you can tether up and maintain the dollar value of your portfolio in tether while other tokens and coins decrease in value. The you wait for an opportune moment to reenter the market.
Market Behavior in Different Time Periods
The main descriptors used for overall market sentiment are “Bull Market” and “Bear Market”. The former describes a market where people are buying on optimism. The latter describes a market where people are selling on pessimism. Fun (or maybe not) fact: The California grizzly bear was brought to extinction by the love of bear baiting as a sport in the mid 1800s. Bears were highly sought after for their intrinsic fighting qualities, and were forced into fighting bulls as Sunday morning entertainment for Californians. What has this got to do with trading and financial markets? The downward swipe of the bear’s paws gives a “Bear market” its name and the upward thrust of a Bull’s horns give the “Bull Market” its name. Most unfortunately for traders, the bear won over 80% of the bouts. During a Bull market, optimism can sometimes grow to be seemingly boundless, volume is rising, and prices are ascending. It can be a good idea to sell or rebalance your portfolio at such a time, especially if you have a particularly large position in one holding or another. This is especially applicable if you need to sell a large amount of a relatively low-volume holding, because you can then do so without dragging the price down by the large size of your own sell order.
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