Cryptocurrency – Looking Ahead from May 2017

Cryptocurrency –
Looking Ahead from May 2017

For cryptocurrency enthusiasts, developers and investors,

the first half of 2017 has been nothing but exciting. Very few people would have predicted the trends that we are now seeing today: a vibrant and rapidly growing altcoin market, massive all time highs for both Bitcoin and Ethereum and an initial coin offering (ICO) crowdfunding mechanism that is creating enormous investor hype. Among all of this noise are a number of very interesting developments. These developments could indicate what’s to come in the second half of 2017, and this article aims to summarize events so far and what may be to come. Whatever your role in the cryptocurrency space, this piece should serve as some inspiration as to where to look next.

Ripple – Bitcoin for Banks

                                                

ripple logo

The popularity of Bitcoin’s blockchain stems from its ability to circumvent banks and allow users to engage in peer to peer transactions without authority; creating an enormous array of applications for Bitcoin gambling and dark net markets, as well as limitless “white hat” models. This ideology is more powerful than ever today, but the introduction of Ripple in 2013 has demonstrated that banks themselves can be revolutionized by overhauling their systems to use blockchain-based payments.

Ripple is unlike most other cryptocurrencies, in that it operates on a private or “consortium” blockchain, whereby the nodes (transaction verifiers) are controlled by trusted financial institutions that have been vetted to join the network – on the contrary, anyone in the world is free to join and use the Bitcoin network. The Ripple tokens (XRP) power international transactions on the network, whether that’s fiat to fiat, crypto to crypto or a mix of the two – with currency exchange conversions happening on the fly. Ripple allows banks to reduce global (and domestic) payment times from days and weeks down to seconds, with layers of transparency that are unprecedented in the traditional banking sector.

Despite being a private blockchain, anyone in the world is able to purchase XRP, and with a fixed supply of 100bn, scarcity may play an important role in the future price of XRP. This scarcity has also been compounded by the founding team of Ripple agreeing to verifiably “lock up” well over half of that total supply – adding some predictability to the XRP price. This lock up time is possibly planned for an extension, which – combined with the listing of XRP on major exchanges like Bitstamp, and Ripple’s partnership with Japan’s largest bank – has led to a meteoric rise in the value of XRP from $0.01 to $0.18 in a matter of weeks. Over the past several months, it has become apparent that large financial institutions are leaning towards consortium based blockchains as opposed to the public ones offered by Bitcoin – although Ethereum may buck that trend as discussed below.

Ethereum – EEA and Development Roadmap

                                                     

 Ethereum Logo

Ethereum was the first blockchain to successfully convince investors that altcoins had a viable place in what was largely considered a Bitcoin-only ecosystem. Popular due to its built-in smart contract protocol, Ethereum is able to run computations that can transact value without middlemen. As a result, the project has led to the formation of the Enterprise Ethereum Alliance (EEA) which connects dozens of businesses and academics who are rapidly researching and developing smart contract technology.

While a number of the projects being worked on are private forks of Ethereum – such as JP Morgan’s Quorum protocol – the interoperability with the main Ethereum chain, as well as the lessons being learned (and shared among EEA members and the open source community), is having profound effects on Ethereum as a whole. The EEA is just one offshoot of Ethereum that has attracted enormous investment, however, there are other developments which have led to a recent upsurge in the price of Ether, from $10 to roughly $90 at the time of writing.

Ethereum Name Service

In May 2017, the Ethereum Foundation (EF) launched the Ethereum Name Service (ENS). This protocol is analogous to the separate Domain Name Service (DNS), which ties domain names to i.p. addresses – making them more readable to human users. In a similar way, the ENS will tie long and unreadable smart contract or personal wallet addresses to a memorable “name” such as mywallet.eth. These names are currently at auction, and there has so far been $7m worth of bids, with the exchange.eth receiving a massive $600,000 bid. Note that this is a proxy bid, meaning the winner would only ever pay a trivial amount more than the next highest bidder.

Reducing Miner Reward

A poll taking place on carbonvote.com has indicated that an overwhelming 99.73% are in agreement with a move to reduce the miner reward from 5 ETH per block to 2 ETH (with blocks continuing to be mined at roughly 15-second intervals). The motivation behind such a change is to reduce uncertainty about the future total ETH token supply, helping to drop ETH inflation from 13% to a figure that is more in line with Bitcoin’s 4% inflation.

Proof of Stake

Proof of Stake (PoS) is an alternative consensus protocol to the Proof of Work (PoW) mechanism that was made famous by Bitcoin’s blockchain. In order to secure a blockchain, miners must be rewarded by processing valid transactions and ignoring invalid transactions. In a PoW system, a miner must expend enormous amounts of energy (with a significant cost in doing so) to process a “block” of transactions and to earn their reward. PoW protocols are enormously inefficient, with huge energy requirements that are not in line with modern day environmental considerations.

Proof of Stake serves as an alternative consensus protocol that achieves similar levels of security but requires “miners” (called validators) to stake value in the form of cryptocurrency – expending little to no energy at all. If the validator tries to game the system for their own advantage, they lose all of their stated value. Validators that act honestly are rewarded by receiving what is analogous to interest payments. Ethereum plans to move from their PoW structure to a PoS one, and this move is pegged for the end of 2017/start of 2018. Such a change in protocol would lock enormous amounts of Ether in taking contracts, removing said Ether from the ecosystem and reducing circulating supply.

Bitcoin – Segregated Witness and the Litecoin test bed

                                                    

bitcoin logo

Bitcoin has been unswayed by the incredible rise in altcoin market caps over the past 6 months and remains one of the best performing cryptocurrencies in the market. Having matured beyond the “pump and dump” phase, the currency has now established itself as the gateway to the world of crypto. Bitcoin is, in its current form, the ultimate store of value and medium for exchange when dealing with other currencies. All of this is despite major concerns over the currency’s ability to scale. Transaction fees have increased several times, and the mempool (unconfirmed transactions) has seen enormous growth – leading to delays of several hours or even days.

Thankfully, Bitcoin’s little cousin – Litecoin – has played a vital role in abating fear amongst Bitcoin investors. Litecoin, whose market cap is a fraction of Bitcoin’s, has acted as a test bed for introducing Segregated Witness (SegWit) – a code change to help mitigate some of the scaling problems mentioned above. Litecoin’s activation of SegWit has given developers, users and miners renewed confidence in what this code change can do for Bitcoin, providing a “light at the end of the tunnel” on a 3-year long debate.

Where do cryptocurrencies go from here?

Many early adopters have hailed blockchain technology as “the internet 2.0”. In past years, a number of key figures in the industry analogized the current state of blockchain to that of email in the 1990s, suggesting that what we see today is a fraction of what can be achieved with the protocol in the years ahead. That analogy, which was (and still is) heavily criticized by skeptics, is now becoming too obvious to ignore. Rather than blockchains competing with one another, we are seeing interoperability take hold, and growth is practically ubiquitous amongst all major cryptocurrencies. Smart contract technology is destined to have an enormous impact on a broad range of markets in the years to come, and the impact that blockchain-based banking will have on global economics is undeniable.

It is likely that cryptocurrencies will continue to grow at an unprecedented rate until, in the same analogous way to the Internet, we experience a gigantic bubble. At what point the bubble bursts is an unknown, however – sticking with the analogy – it wasn’t until the Internet reached a value well into the trillions that the market crashed. Compare this figure with that of the blockchain market which is worth no more than $100bn and it seems that we may still be some way off. Despite what seems like an inevitable bubble, the very long-term outlook for blockchain users, investors and developers could not be brighter.

Chuck Reynolds
Contributor
Please click either Link to Learn more about Bitcoin.

 

Alan Zibluk – Markethive Founding Member

Launching Today: Liberalcoins.com – the First One-Stop-Shop for Cryptocurrency Trading

Launching Today:
Liberalcoins.com – the First One-Stop-Shop for Cryptocurrency Trading

Let's unite the diverse cryptocurrency market by also facilitating trades between cryptocurrencies.

  

The next generation of cryptocurrency trading has arrived:

Liberalcoins.com is the first local cryptocurrency exchange that offers Bitcoin and Altcoin trading for cash as well as inter-cryptocurrency trading all under one roof. The new user-friendly platform charges the lowest fees in the market and offers unrivaled security features.

Liberalcoins is the brainchild of entrepreneur Simon Lange, 26, who addresses the need for more flexibility, privacy, and safety in the cryptocurrency exchange market. After two years of development, his international one-stop-shop for crypto trading launches today (13/5/2017). With its secure, intuitive and easy interface, Liberalcoins is perfect for newbies who want to start their crypto portfolio as well as for experienced traders. Users can find local traders via the platform and arrange to meet face to face for cash for Bitcoin or cash for Altcoin exchanges. Alternatively, they can choose from a wide array of wire and transfer services.

Bitcoin/cash trades are charged at 0.5% per completed transaction. This is the lowest fee in the market. 

Here’s the brilliant thing: The platform aims to unite the diverse cryptocurrency market by also facilitating trades between cryptocurrencies. This will give users the option of easily balancing their cryptocurrency portfolio, and has potential to further drive the demand for Altcoins on the back of the recent surge in Bitcoin prices.  Currently supported are exchanges between Bitcoin, Dash, Monero and Litecoin in any combination, giving traders ultimate flexibility when balancing their portfolio. As Lange puts it, “Liberalcoins has the potential to bring the cryptocurrency community closer together to drive towards a common goal – a stronger integration of digital currencies into our daily lives.”

The company has gone to lengths to offer the best security features on the market: Shortly after launch, users will be able to encrypt access to their assets with a password – an industry first. A built-in escrow system releases the coins after the transaction is completed. Liberalcoins is business validated by Symantec, which also runs daily security checks. Users also benefit from the stringent privacy laws of the Isle of Man and Scandinavia, where servers and email storage are located respectively.

“At Liberalcoins we seek to give traders the opportunity to trade and invest in digital currencies minimizing dependence on the global banking system”, says Lange. “We firmly believe in the future of cryptocurrencies and the security and privacy of our users.” “We strongly advocate that the cryptocurrency market remains free from any governmental regulatory and legal intervention. In an economic reality of historically increasing inflation, rising prices and central bank printing of fiat currencies we are part of the evolution of our financial future.”

Chuck Reynolds
Contributor
Please click either Link to Learn more about Bitcoin.

 

Alan Zibluk – Markethive Founding Member

U.K. Land Registry Looks to Register Property on a Blockchain

U.K. Land Registry Looks to Register Property on a Blockchain

U.K. Land Registry Looks to Register Property on a Blockchain

 

Her Majesty’s Land Registry, a U.K. government agency responsible for registering land ownership, has announced it is seeking three non-executive board members as it undertakes a project using blockchain technology to register property.

The posting noted that the agency recently committed to making HM Land Registry “the world’s leading land registry for speed, simplicity and an open approach to data.” It referenced the project as the most substantial transformation in the registry’s 150-year history.

State-Backed Ownership Guarantee

The registry, an executive agency of the Department for Business, Energy and Industrial Strategy, provides state-backed guarantee of ownership on the register rather than requiring title insurance.

To meet its objectives, the registry will have to become more digitized. It plans to launch a live test in the near future of a “Digital Street” to allow property ownership changes to close instantaneously. The Digital Street will also allow the registry to hold more granular data than is presently possible.

Digital Street would be the world’s first such registry, having great transformational potential for the property market, the posting noted. Blockchain technology is an underlying technology for the project.

 

Three Positions Needed

The registry seeks three non-executive board members to ensure the right mix of expertise. Experience in transformational/digital issues is being sought, along with finance and legal issues.

The transformational/digital member is expected to have experience delivering transformational change to provide service improvements and cost savings.

The person will have to deliver change across most transformation disciplines, including technology, process and people. The candidate is expected to have knowledge of information technology developments, including the delivery of digital services to customers and in data rich organizations.

The closing date for applications is June 22, 2017. Remuneration is £20,000 per annum.

 

Other Governments Have Similar Tests

The U.K is not the only country to explore blockchain technology for registering and managing property.

In February, the Republic of Georgia teamed with Bitfury Group, a provider of blockchain infrastructure, to use the bitcoin blockchain to validate property related transfers, marking the first time a national government used the bitcoin blockchain to validate and secure government actions.

Blockchain technology has also be tapped to improve land ownership in developing countries.

Last year, a team of blockchain technology pioneers from Ghana, Denmark and the U.S., launched the Bitland initiative to establish usable land titles and free up trillions of dollars for infrastructure development in West Africa.

The Bitland initiative will educate the population about technology and provide the benefits of documented land ownership to those who don’t have it. It will begin in Ghana and expand throughout Africa, with hopes of catapulting infrastructure development and strengthening democracy.

 

David Ogden
Entrepreneur

 

Contributor: Lester Coleman

Alan Zibluk – Markethive Founding Member

Russians and Koreans are the biggest payers to the global ransomware hackers

Russians and Koreans are the biggest payers to the global ransomware hackers

  

                                     There for the taking, but who's watching?
Users with infected computers in Russia and South Korea are so far the two biggest ransom payers to the hackers who mounted a global ransomware attack, called “Wannacry,” yesterday, according to new data from Chainalysis, a provider of software that works with banks, law enforcement agencies, and bitcoin companies to analyze the blockchain for financial crimes.

All bitcoin transactions are permanently recorded on the blockchain, and anyone can view them. Chainalysis crunches these transactions and assigns them to clusters of “entities,” which could be bitcoin exchanges, wallet providers, or bitcoin miners. The firm found that the hackers, who ask for ransom to be sent to three bitcoin addresses, had received a total of nearly $23,000 so far in dollar terms, converted at the point the transaction was made. The two entities that sent the most money to the hackers were bitcoin exchanges serving the Russian and Korean markets. “If you look at the infection rates, a lot of it is in Russia, so [the data] is complementing that,” says Jonathan Levin, a Chainalysis co-founder. “Given that we know the infections are also in Russia, I would say, it’s Russian users.”

Analysis by information security firm Kaspersky Lab showed Russia had the most infections, although South Korea doesn’t appear among the top countries. Here’s the list of where ransoms originated from via Chainalysis:

Counterparty name Counterparty category US dollar value of bitcoins sent
BTC-e.com exchange $4,270.66
Bithumb.com exchange $2,163.48
Bitstamp.net exchange $2,012.15
Kraken.com exchange $1,917.03
Poloniex.com exchange $1,627.24
Unknown uncategorized $1,526.32
Coinbase.com exchange $1,043.04
CoinPayments.net merchant services $849.30
Unknown uncategorized $774.25
CoinOne.co.kr exchange $684.05
LocalBitcoins.com exchange $670.84
Gemini.com exchange $627.97
MaiCoin.com exchange $627.79
Unknown uncategorized $576.62
CoinJar.com exchange $550.05
BitPanda.com exchange $375.71
Bitfinex.com exchange $313.63
Korbit.co.kr exchange $312.10
Bittrex.com exchange $295.78
Unknown uncategorized $294.16
Unknown uncategorized $253.50
Unknown uncategorized $205.33
BitoEX.com exchange $168.11
Xapo.com hosted wallet $165.39
Circle.com exchange $101.01
Bter.com exchange $91.42
Yunbi.com exchange $60.14
Unknown uncategorized $45.28
Paxful.com exchange $44.24
Huobi.com exchange $43.28
Hashnest.com mining pool $20.88
OKCoin.com exchange $15.07
Unknown uncategorized $14.56
Unknown uncategorized $9.60
HaoBTC.com mining pool $7.21
Unknown uncategorized $5.82
AlphaBay Market Tor market $5.41
Unknown uncategorized $2.80
ANXPro (Payout wallet) uncategorized $2.07
Silk Road Marketplace Tor market $1.85
  Total $22,775.16
Source: Chainalysis

There are a few caveats to the data. Levin points out that the payments attributed to “Tor markets,” the term Chainalysis uses to describe darknet markets, are probably “noise” generated by his analysis, and should be ignored. The low payment amount also suggests that it’s unconnected to the ransomware. Each entity could be using thousands of addresses, and it’s Chainalysis’ job to group them accurately. For instance, Levin says that one exchange, Poloniex, uses 376,000 bitcoin addresses, all of which have been clustered by Chainalysis, allowing correct attribution.

Additionally, just because a payment is from an exchange that serves Korean or Russian customers doesn’t necessarily mean the infected users are indeed in Korea or Russia—although it’s a reasonable inference. Lastly, little is known about BTC-E, the exchange at the top of the list, except that its operators are anonymous, it’s one of the longest running exchanges in bitcoin, and it notoriously doesn’t perform the identity checks that regulated exchanges must comply with, and it deals in the ruble-bitcoin market.

Chuck Reynolds
Contributor
Please click either Link to Learn more about Bitcoin.

Alan Zibluk – Markethive Founding Member

Top Safe Bitcoin Wallets

Top Safe Bitcoin Wallets

The only way to properly store your bitcoin wealth is by using a safe wallet solution.

It is hard to quantify what makes one wallet safer than the next, as users have their individual preferences and needs in this regard. However, there are some wallet solutions out there that take keeping funds safe to a whole new level. Keep in mind these wallets are listed in random order.

Electrum

On the software side of things, there are quite a few different bitcoin wallets to choose from. However, one of the primary wallets people use in this regard is Electrum, as it is a lightweight wallet that offers plenty of functionality. Thanks to proprietary – yet decentralized and redundant – servers, synchronizing with the bitcoin blockchain takes mere minutes. Moreover, the wallet offers a cold storage solution, as well as multisig wallet support. 

Trezor

Bitcoin users all over the world are familiar with the Trezor brand, as it is one of the most secure hardware wallets available today. Trezor is the original hardware wallet for bitcoin users and comes at affordable prices. It is also compatible with all major operating systems. Various bitcoin businesses implemented Trezor support, including Bitstamp, Bitwala, and BitPay. It also supports two-factor authentication for additional security.  

 Mycelium

On the mobile front, there is a lot of competition for the crown of being the most secure wallet solutions available today. Mycelium has gotten a lot of support in this regard, as they are considered to be a must-have secure bitcoin storage application. Their HD wallet support, as well as an option to delete the private key from the device and integrate “watch only” accounts make Mycelium one of the top secure mobile bitcoin wallets.

KeepKey

Hardware bitcoin wallets have become quite popular over the past few years. That is only normal, as storing bitcoin in a secure manner becomes more important than ever. Hardware wallets are designed to facilitate secure funds storage, with quite a few companies launching their products in recent years. KeepKey is one of the top solutions in this regard, as the device requires users to manually approve every transaction. Moreover, the device has PIN protection, adding an extra layer of security.

Ledger Nano (S)

The Ledger line of hardware bitcoin wallets can not be ignored. The company prides itself on making affordable yet secure bitcoin wallet solutions. There is no reason to pay hundreds of dollars for a device when the same goal can be achieved with a device costing a fraction of the price. Don’t let the cheap price fool you, though, as every one of Ledger’s devices is more than capable of keeping your wealth safe. All of Ledger’s wallets come in the form of a USB-size, although there are minor differences between each type. The Ledger Nano S is by far the most popular hardware wallet, as it is capable of storing both Bitcoin and Ethereum. Moreover, users can complete wallet actions through the display on the device or by using the browser plugins. An affordable, robust, and secure line of products, that much is certain.

Chuck Reynolds
Contributor
Please click either Link to Learn more about Bitcoin.

Alan Zibluk – Markethive Founding Member

Jaff Ransomware Demands a Two Bitcoin Payment to Decrypt Files

Jaff Ransomware Demands a Two Bitcoin Payment to Decrypt Files

Ransomware comes in many different shapes and sizes.

Some malware strains are rather easy to remove free of charge, whereas others can be a real pain in the rear. Jaff, a new type of ransomware, is perhaps one of the most expensive types of malware we have seen in quite some time. It demands a ransom of $3,700 to be paid in Bitcoin, which is a rather steep amount.

Jaff Ransomware Swings For The Fences

It is evident criminals who rely on ransomware distribution are looking to make a lot of money in quick succession. That is much easier said than done, though, as security researchers often come up with free decryption tools to nullify these threats.  However, in the case of Jaff,  there is no free decryption option whatsoever right now. Similarly to virtually any other type of ransomware, the Jaff malware encrypts files and gives them a custom file extension. It appears the files are encrypted using AES, which has become the norm over the past few months. It also appears Jaff shares a lot of similarities with Locky, at least here the payment page is concerned. That is rather interesting, although Jaff demands a much higher amount compared to Locky.

This brings us to what puts Jaff on the radar of security researchers right now. The malware demands victims to pay $3,700 worth of Bitcoin to have the files restored. It is rated unusual for ransomware types to charge such a steep amount, considering most consumers won’t spend that amount of money on recovering their files. Then again, people who are genuinely worried about losing sensitive files may be tricked into paying the ransom in the end. Regarding the distribution of Jaff ransomware, it appears the malware is actively distributed through MALSPAM traffic originating from the Necurs botnet. People who have been following our ransomware coverage may recall the Necurs name, as it is a popular botnet to distribute malware on a rather large scale. Spam email campaigns have been a very popular tool among cybercriminals over the past few years, and it looks like things will not change anytime soon.

To be more specific, the Jaff ransomware is hidden in a malware-laden email attachment that requires users to enable macros in Microsoft Word. Once the user does so, they will download multiple malicious files on their machine, including the Jaff payload itself.  As soon as the download is finished, the files on the computer will be encrypted. Breaking this encryption is impossible right now unless the money is paid. A demand of a $3,700 payment in Bitcoin is rather unusual, to say the least. This aggressive method by the criminals will make their ransomware a type priority for security researchers to decrypt with a free tool, though. It is doubtful anyone would pay 2 Bitcoin to restore file access. It is unclear if files can be restored from a previous backup, though, as most ransomware types often delete shadow volume copies as well.

Chuck Reynolds
Contributor
Please click either Link to Learn more about Bitcoin.

Alan Zibluk – Markethive Founding Member

Why Bitcoin’s Price Has Been Surging and Where It Could Go From Here

Why Bitcoin’s Price Has Been Surging and Where It Could Go From Here

  

Bitcoin has shown amazing, and fairly steady, growth over the last year.

A single bitcoin was worth just $455 in May 2016. And even after retrenching slightly from a record Thursday high of over $1,800 per token, it has shown a stunning 286% annual return, based on prices from CoinMarketCap. As with most assets, explaining bitcoin’s bull stampede is more art than science. Bitcoin's price is fundamentally linked to how many people use the system to send money. But it's currently mostly driven by speculators, who trade on their belief that it will become more popular in the future. Positive news on that front has been plentiful in the last three months in particular.

Globally, Bitcoin is being treated with a great deal more respect by regulators. Positive comments about blockchain by Minneapolis Federal Reserve President Neel Kashkari coincided with the latest Bitcoin price surge. Japan approved Bitcoin as a legal method of payment in early April, and Chinese regulators have made progress in squaring Bitcoin usage with that country’s tight capital controls. There have been positive internal indicators, as well. Bitcoin’s major headwind is an ongoing debate over scaling up the system to handle more transactions. While that effort is still basically stalled by bitter infighting, some have seen a positive development in the successful deployment of a solution known as Segregated Witness on the LiteCoin system, which is largely a Bitcoin clone.

When considering further upside on Bitcoin and other cryptocurrencies, one factor looms above all: cryptocurrency is still essentially off-limits for institutional investors. While venture capitalists have poured more than $1.5 billion into blockchain startups, the tokens themselves don’t meet regulatory standards for more traditional funds. Once something like the Winklevoss twins’ proposed Bitcoin ETF is approved, the pool of potential Bitcoin investors will explode overnight. There are also two very important points of caution. First, Bitcoin is still a risky asset in the short term. Boosters were just as excited when it peaked at over $1,100 in late 2013—and the price then spent years gradually slumping, reaching a low of $200 in mid-2015.

There’s also a serious long-term downside risk to Bitcoin. While the potential of Bitcoin’s underlying blockchain technology is widely acknowledged, Bitcoin itself is now only one of dozens of implementations of the idea. Bitcoin has a big first-mover advantage, but innovators with names like Ripple and Dash have already significantly expanded on its features. Foremost among those innovative competitors is Ethereum, the second-largest cryptocurrency, whose price has also spiked over the last month. Many entrepreneurs building blockchain applications are using Ethereum, so it’s likely to share in—and maybe even cannibalize—Bitcoin’s long-term growth.

Chuck Reynolds
Contributor
Please click either Link to Learn more about Bitcoin.

Alan Zibluk – Markethive Founding Member

Bitcoin’s Scaling Debate: The View From China’s Miners

Bitcoin's Scaling Debate:
The View From China's Miners

Dr. Paul Ennis
is a research assistant at The Centre for Innovation,
Technology & Organization at University College Dublin,
specializing in bitcoin and blockchain studies.

Dr. Ennis
investigates the daily activities and political attitudes of China's well-established bitcoin mining sector,
positioning his findings within the context of the network's scaling debate.

  

Positioned on one side are the Bitcoin Core developers

At present, the bitcoin community is engaged in a voracious debate about how best to scale the network. But in such a context, it's sometimes all too easy to overlook the human figures involved in that debate. Positioned on one side are the Bitcoin Core developers, (a term many wishes to avoid reifying) but who nonetheless are recognizable as a cadre of sorts. On the other side of the debate, underrepresented and frequently misunderstood, are the China-based mining pools and hardware providers. We reached out to three mining pools – AntPool, Bixin and BW – to get a varied perspective on how they feel about Western attitudes toward them, but also how the day-to-day operations of mining occur.

Bitcoin culture can, at times, be argumentative, and this is at least partially attributable to the communication gap between China and the English-speaking world. Virgilio Lizardo Jr, head of international for Bitbank Group (owners of BW pool), describes the language barrier between China and the English-speaking world as "immense", leading to a dialogue blighted by miscommunication. One significant effect of this divide, Virgilio emphasized, is that due to the lack of Chinese presence on English-speaking bitcoin forums, stereotypes of Chinese miners continue to proliferate. The sentiment is echoed by perhaps the most well-known Chinese miner of them all, Jihan Wu, co-founder of Bitmain, the operator of AntPool.

He told CoinDesk:

"A lack of a common discussion field has allowed for the creation of an echo-chamber in the technical community outside China, where the voice and interests of the Chinese miners are misunderstood and not represented."

Nature of the problem

Lizardo, a transposed Westerner with a strong sense of Chinese culture, noted that one overlooked issue is that the miners have no obvious media outlet to get their position across, leading to distorted narratives and the compounding of mistrust. He further emphasized that there is a tendency to group the Chinese miners together as a single "monolithic entity".

However, their visions for the future are predictably diverse. While Wu is an open supporter of Bitcoin Unlimited, positions toward the scaling debate vary enormously across the miners. Asked for his opinion, Tyler Xiong of Bixin, formerly HaoBTC, argued the importance of maintaining a single implementation of the protocol and a healthy community, stating: "We don't want the breakup of bitcoin".

This is contrary to Wu, who commented:

"I believe multiple implementations are healthy for the bitcoin ecosystem."

Business priorities

Wu also stressed that it is important to recognize that the mining operations in China and elsewhere are businesses, each with their own agenda and strategies. According to Wu, while there is a general consensus among miners that bigger blocks are needed, "most miners prefer to stay away from the discussion" and focus on the daily operation of their businesses.

As is well-known, information about the actual, day-to-day mining operations in China is hard to come by. Occasionally, we will get photographs or videos of vast industrial warehouses packed with whirring mining machines, but not much more. Often situated in the depths of the Chinese countryside they are, admittedly, aesthetically powerful: equal parts industrial traditionalism and science fiction. Most of the miners confirmed what many have long known about why China cornered the mining market – cheap electricity.

Wu, arguably the most successful mine operator in the history of bitcoin, said the most challenging part of planning a new mining farm is finding access to a low-cost and reliable electricity supply. Lizardo also reported that while constructing a mine is not difficult the "logistics of transporting thousands of miners is challenging."

Tyler painted a picture of what occurs once construction is complete:

"The daily job includes 1) the installing, maintenance and repairing of miners and other facilities, and 2) monitoring the temperature in different areas of the mining farm. It requires a lot of passion because there are tens of thousands of miner at the same time and you want all of them are available 24/7."

Important function

At BW pool, most of the labor is drawn from local communities, trained by the company to become technicians and maintenance workers. Each miner we spoke to stressed that looking after the mines was a 24-hour job, requiring constant supervision by employees.

Jihan highlighted this same phenomenon, stating:

"You need to human resource to constantly look after the farm, you need to maintain constant and direct communication with the investors of your farm, you need to maintain the mining equipment."

The take home across all the interviews was that mining was, at heart, a difficult, costly and time-consuming job. Further, that perhaps in the fog of endless debates we have lost sight of the important function Chinese miners have for bitcoin’s maintenance and security.

Chuck Reynolds
Contributor
Please above Link to Learn more about Bitcoin.

Alan Zibluk – Markethive Founding Member

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HOW TO GET STARTED:

Please join FREE HERE: http://hive.pe/2v

Minimum to participate actively is 0.30 BTC (0.25 plus a one time 0.05). Other entry levels are at 1 BTC and the highest at 5 BTC from which one will earn the most the fastest.  Duplicate the process by sharing these resources if you decide to build your own teams: Pass these instructions on to them. (Note: You need to be upgraded to at least the lowest Apprentice level package to refer.)

REGISTRATION LINK – http://hive.pe/2v

INSTRUCTIONS VIDEOS –

Use these as detailed guides, follow these step by step.

1. SIGN UP PAGE:
https://youtu.be/p8dFkcWlEF4

2. BUY YOUR PACKAGE:
https://www.youtube.com/watch?v=EyDEPYAV3Yk&t=10s

4. SUBMITTING DOCS CORRECTLY:
https://youtu.be/zVAM7jDlwOk

and then….

6. Enjoy a better life in a richer world.

***NOTE: Your trading package can ONLY be activated from Sunday at 7 pm EST to Monday at 7 pm EST (GMT -5).  So, take ACTION for the next 24 period of activation coming up!

REGISTRATION LINK -> http://hive.pe/2v

How to get Bitcoin: http://buybtc.weebly.com/

Don't wait… join now and get ready to turn on your trading! This thing flat out works amazing!

Chuck

Skype: chuck212

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Chuck Reynolds
Contributor & Member

There is more information here and for your own use. Simply Amazing..!!

Alan Zibluk – Markethive Founding Member

And a Bitcoin Is Now Worth…

And a Bitcoin Is Now Worth…
Be careful with your price comparisons.

The Future of Crypto-Currencies

With a 94 percent year-to-date gain, and a single "coin" now worth $1,843, bitcoin has been on a helluva run lately.  The increase in the cost of the massively-volatile electronic tokens has led to many comparisons with that other favorite outsider "currency'' — gold — recently. True, a unit of Bitcoin passed the dollar value of one troy ounce of gold this year and is now more than $600 higher. 

  

But the daily swings in the digitally created asset have been vast. Even during the huge run up this year, it has moved more than five percent on 21 different days, with nine of those being moved lower. Gold, on the other hand, has been much more stable.  

Volatility aside, there is a major problem with gold as a comparator for the software-based unit. Nobody thinks compared to one share of Apple Inc.  — current price around $155 — with one share of, for example, outdoor lighting company Acuity Brands Inc. — current price around $178 — is valid. It certainly does not show that Acuity (market cap $7.9 billion) is worth more than Apple (market cap $814 billion).

By the time the supply of new bitcoins ends, sometime after the year 2110, there will be 21 million bitcoins in (digital) existence, meaning the total value of all of the electronic tokens that will ever exist, at today's market price, is just under $39 billion. According to the World Gold Council, total gold stocks amount to approximately six billion troy ounces or $7.3 trillion at today's price. To put it another way, in order for bitcoin to be worth more than gold, a one 'coin' would have to trade at $347,000 in order for 'bitcoin worth more than gold' to be a defensible statement. Must dash now, one bitcoin is about to be worth more than one aluminum future…

Chuck Reynolds
Contributor

 

Alan Zibluk – Markethive Founding Member