Category Archives: Markethive

The Inventor of BitTorrent Plans His Own CryptoCurrency

The Inventor of BitTorrent Plans His Own CryptoCurrency

  

“I am gonna go make a cryptocurrency company,”

BitTorrent inventor Bram Cohen told Steal This Show podcast host Jamie King. “That is my plan.” Mr. Cohen plans to release a cryptocurrency to address Bitcoin’s mining inefficiency when it comes to wasting energy. “There is a loophole,” Mr. Cohen notes. “You can get them to work with proofs-of-work, but then this involves these warehouses burning electricity. But there is a loophole in that, which is proof-of-storage.” Mr. Cohen believes this problem can be solved by using the extra storage space on computers.

“…Instead of computers burning electricity to mine, you have storage space that is implicitly mining because it’s sitting there, and proves it’s sitting there.” The storage space is already “sitting online not doing anything” on desktop computers and cloud offerings with extra storage capacity, according to Mr. Cohen on the podcast. He adds: “There is lots of storage capacity out there, and its value is much greater than bitcoin mining rewards handed out.” Mr. Cohen’s vision for his cryptocurrency involves fusing proof-of-space and proof-of-time. Proof-of-space work when users have an interest in allocating non-trivial amounts of memory or disk space to solve a challenge presented by service providers. Proof-of-space is similar to proof-of-work. They do not, however, use CPU-bound functions.

“There are some technical issues, which adding in proofs-of-time fixes,” Mr. Cohen tells Crypto Insider over text chat, admitting the concept is difficult to explain. “The short of it is that proofs-of-time keep an attacker from making a whole new fake history instantly, a problem caused by the property that mining requires no power.”

Mr. Cohen adds: “’Proof-of-time’ refers to a sequential proof-of-work, like the old saying that one woman can make a baby in nine months, but nine women can’t make a baby in one month.” The main idea is zero waste in mining. “One of the benefits of storage based things is there is a lot less centralization in mining, so there is less concern about a 51% attack.” The good part of this is subtle, Mr. Cohen tells Steal This Show listeners. “There are economic resources that you can apply towards rewards,” he elucidates. “People will spend resources getting rewards. So it will still be wasteful, but there is a waste that has already happened and you’re leveraging that at no additional cost.”

The BitTorrent founder’s specialty might work well applied to the world of cryptocurrency. Mr. Cohen launched BitTorrent to solve problems with bandwidth scarcity in sharing data over the internet, and his platform still today enables individuals to distribute large files sans the need for specialized infrastructure. Before starting on his own cryptocurrency, Mr. Cohen must first tie up loose ends with BitTorrent, Inc., the business wing of his distributed software. “In the next few months, I’m going to devote myself full-time to the cryptocurrency stuff,” Mr. Cohen notes on the podcast. Burstcoin, an altcoin listed on Coin Market Cap, uses what the developers' term proof-of-capacity as its consensus method. It appears to merely be a re-brand of proof-of-space, the latter of which is the term preferred by academic literature.

As Mr. Cohen tells Crypto Insider, critics of Burstcoin lament the developers do not acknowledge Hellman time-space trade-offs in their coding. The coin, they say, attempts to solve problems by relying on a platform called NXT, instead of developing their own innovations. It’s not the first time Mr. Cohen mentioned this plan. The BitTorrent founder presented a talk at the Stanford Blockchain Conference, in which he examined the potential of proof-of-space and proof-of-time in a cryptocurrency. One slide in his presentation reads: “There are massive amounts of unused online storage in the world. [A cyptocurrency] requires no additional power to mine. No potential for ASICs. The available miners are highly decentralized.”

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

 

Alan Zibluk – Markethive Founding Member

As Cryptocurrencies Reach New Highs, The Ethereal Summit Paints A Rich Future

As Cryptocurrencies Reach New Highs, The Ethereal Summit Paints A Rich Future

From January 1 to today, the cryptocurrency Ether has gone from $8 to $130
— a 16x return.

Ether is the currency of the Ethereum network, a smart contract platform which currently has a market capitalization of $12 billion. Generally considered the second-most successful cryptocurrency after bitcoin, it has been the launchpad for myriad new tokens that make up the hot “initial coin offering” trend. Even companies such as JPMorgan Chase, Microsoft, Intel, BBVA, Santander, UBS, Credit Suisse, Accenture, and others have joined an Ethereum enterprise effort. These are remarkable feats for a cryptocurrency not even two years old.

One of the companies doing the most to promote the development and usage of Ethereum around the world is Consensus Systems (ConsenSys), which bills itself as a “venture production studio” devoted to building Ethereum-based software, whether in the form of decentralized applications or private blockchains for the enterprise.

Aside from its unconventional structure, the self-funded ConsenSys, founded by Joseph Lubin who is also one of the co-founders of Ethereum, stands out for the location of its headquarters: in the heart of hipster Brooklyn, in an area once known for underground dance parties at warehouse venues that went only by addresses. In recent years, the neighborhood has gotten trendier, with juice bars, top restaurants and even proper clubs that have actual names. (ConsenSys also has five other offices around the world.)

On Friday, in keeping with its offbeat nature, ConsenSys held the Ethereal Summit, a blockchain event with 650 attendees that, instead of centering like most others, around financial services, shined a spotlight on culture projects. “Blockchain events are either enterprise-focused or IT-focused. We thought, Why not do something culture-focused?” said Amanda Gutterman, ConsenSys’s chief marketing officer. Some of the industries aside from financial services that the

Event aimed to touch on were sustainability, arts, and humanitarian aid.

A panel on financial inclusion

I was invited to speak on a panel about what it’s like for media covering this technology, and in situations like these, since I freelance, the conference often covers my transportation and hotel. Aside from the somewhat atypical speaker lineup, the first clue I had that this wasn’t going to be a normal conference was when my Lyft pulled up to the hotel. Just from the look of it, I knew it would rank as one of the nicest places this budget traveler has ever rested her weary head. (As were the lodgings for this cryptocurrency-related conference.) When checking in, the friendly men at the front desk told me the hotel had Teslas that I should take for a spin. When I demurred, citing the challenge of driving in New York City, they said the Teslas came with chauffeurs. These first few minutes of my trip underscored one of the themes that have recently permeated coverage of the crypto space: that there’s money to be had in this new token-based internet.

Ethereal capped off a week in which the rampantly speculative ICO (“initial coin offering”) market grew by at least $50 million to total just under $470 million over two years, bitcoin's market cap as a percentage of all cryptocurrencies fell below 50% for the first time, the price of ether jumped from $90 to $126, and bitcoin surged from $1,762 to almost $2,000. And it may be just a taste of what is to come, with the largest industry conference, Consensus, organized by trade publication CoinDesk, to be held the next week, and right on the heels of that, Token Summit, a daylong conference dedicated to the new blockchain-based internet. Plus, in the coming days or weeks, the Tim Ferriss podcast, one of the most popular business podcasts, will be featuring a couple of prime guests from the cryptocurrency world.

The excitement over rising prices may have prompted these comments about the frothy ICO markets from one of the first keynotes, London-based Vinay Gupta of Hexayurt Capital, who could not fly to the U.S. due to visa issues and so sent his remarks in a video instead. “My hope for the ICO markets is that people will be extremely well-behaved and well-disciplined so there isn’t a mess for regulators to clean up,” he said to a standing room only crowd. “The price of freedom is to be effectively self-governing. We really, really want people to take that serious message, figure out how to keep those markets clean and then you protect the entire ecosystem.” (It looks like that is already happening to some extent.)

Comments about the bubble-like activity evident across the crypto space peppered the day, which had a packed agenda of panels and presentations on two stages, plus bean bags in both venues for worn-out attendees. “We’re living in a really speculative market right now,” said Jalak Jobanputra, founder and managing partner of FuturePerfect Ventures, adding that the market cap of all cryptos just surpassed that of Netflix. “I’ve been through two bubbles and crashes in my venture career — one was in ’99/2000, and the other was 2008. But as we saw with the internet, we’ll see some real value being created out of the experimentation happening right now.” As for what that would look like, Gupta said Ethereum was “moving toward a system where you can see the entire world reflected in the digital in a simple computing surface.” Comparing it to how maps made geography easier to understand, he said, “So it’s possible to look at the world with the blockchain mapping the geography with the institutions visible as actors. … Then you could get an overview of how the system as a whole, works.”

Underpinning the speakers’ visions of a blockchain future were at least optimistic if not utopian hopes that these new networks would also positively impact society. Joel Monegro, on the investing team at Union Square Ventures, contrasted tokens with stocks. “At a high level, a share of stock in a company means a proportional right to the profits of a business,” he said, adding that this, however, drives the holders to increase profits. “The problem is when companies are driven to increase profitability, they end up creating market failures because they expand too broadly or vertically into new business areas where they find it difficult to compete or amass market power,” he said. “The other problem with equity is it incentivizes the holders of that equity to hold as much of it as possible to concentrate the equity because it represents a perpetual right to profits.”

Tokens, he said, invert those incentives. “A token has financial value when the network or service it represents is being used an increasing amount, so you’re not incentivized to get a company to increase profits but rather incentivized to get as many as people as possible to use the service,” he said. This then leads to the value being distributed more broadly. William Mougayar, a venture capitalist and author of The Business Blockchain who is organizing next week’s Token Summit (and was a recent guest on my podcast), said that everyone has three jobs: First, the traditionally defined job — work you do for a paycheck — and then the work of taking care yourself and your family. “Then the third job was the work given to us by another company,” he said, “whether it’s buying a ticket or renting a car — all kinds of jobs are being given to us, and we’re not being compensated. However, in the future, more and more, the work we’ll be doing, whether it’s passive or active, will be compensated by a token of some sort.”

Other panels and presentations discussed everything from conscientious consumption via supply chains (in which SlaveFreeTrade president Brian Iselin removed his clothes on stage) to getting identity on the blockchain from birth; from whether the media has a responsibility to give a new technology like blockchain positive coverage to what it looks like to have many city functions run on blockchains; from what a decentralized entertainment network looks like to why this may be cryptocurrency’s “Netscape moment" (built, not on bitcoin, but on Ethereum).

The wide range of applications made possible with blockchain technology was reflected in the crowd, which seemed more creative and diverse than most blockchain conferences. On Thursday night, at a pre-conference cocktail party, while enjoying spicy snapper ceviche, black bean taquitos and steak, an economist and  Singularity University graduate talked up his work on Crowdjury, a network that will enable us to serve as arbitrators in other people’s disputes using tokens, and a virtual reality artist showed the art he had created using data from NASA and NOAA.

It was a scene reflected in Lubin’s closing remarks the next day. Remarking on how he majored in computer science and electrical engineering as opposed to economics, he said, “I was a computer nerd growing up on Star Trek … It was obvious to me that the geeks would inherit the earth.” Then, describing how 9/11 represented, for him, a loss of innocence that led him to explore the global economy and conclude that it was morally bankrupt, he talked about how top-down command-and-control methods had gotten society to a certain level of progress but “decentralized economic, social and political systems will be more effective, more fluid and far less susceptible to corruption.”

He finished with, “Many times, people have said to me and other ConsenSys members, You guys are going to dominate, you guys are going to take over the world. The whole point of decentralization, the Ethereum project, the work we do with ConsenSys is the exact opposite. We’re working to enable the planet to better organize itself, and we are building technology that we believe will make it impossible for any subset of actors to take over the world. Welcome to the decentralized future.” A whoop of cheers went up. Across the street, beers, bites, and beats awaited the attendees, who continued spinning up their dreams of the future in the summer night breeze. Ether, having started the day at $97, finished it at $127.

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

 

Alan Zibluk – Markethive Founding Member

As Price Reaches Record Highs, is Bitcoin in a Capacity Crisis? – CryptoCoinsNews

As Price Reaches Record Highs, is Bitcoin in a Capacity Crisis? – CryptoCoinsNews

As Price Reaches Record Highs, is Bitcoin in a Capacity Crisis? – CryptoCoinsNews

 

Imagine you are slightly late for work, quickly getting a shower, brushing your teeth and all the rest, walking – in an almost running manner – to the tube station, to then find out there are 200,000 people waiting outside to get the train.

What’s more, the train only handles 4,000 individuals and arrives every ten minutes, during which period new individuals arrive at a rate of 4 per second. Now, it’s ok, you’re busy, you can still be one of those 4,000 individuals and get to work if you pay a high enough fee.

So you check out the notice which says the current estimated fee is $1, but since others are seeing the same notice too and paying $1 too, the fee keeps going up every second, with these higher fees paid by the new individuals that come every second, pushing you down the queue.

Tough luck, you can’t make it to work today because your $1 bid is now as good as worthless to the super congested network. The next day you learn the lesson, so instead of bidding what the notice says, you bid 10% or 20% more, but you weren’t the only one who missed work yesterday, almost everyone else did too and they have this genius but obvious idea too, making you miss work again.

The next day you get angry and pay double the fee, but you’re not the only angry one. Now, sure, some in this lottery do get to make it to work, 4,000 every 10 minutes with 200,000 waiting, but a lot don’t, resulting in a bidding war which looks like below:

As can be seen, bitcoin’s fees have gone vertical, which is bad, but if you know you’d get through for x dollars then at least you can evaluate the proposition. Instead, you’re not only paying high fees, but you don’t even know whether you will get the service you paid for because of simple logics.

Let’s take, for example, a statement by Luke Dashjr, a Blockstream “open hash contractor,” who suggested everyone pay a $5 fee and you’ll get through. If we analyze this a bit further, we can start by asking why people are not paying $5 and one good reason is because then everyone would start paying $5 meaning newcomers would outbid them by paying $5.01.

Sure, one or two guys might currently “cheat” and jump the queue by paying $5, but as long as it’s a very tiny minority the rest let it go. If instead, it went to a point where say 1,000 of the 4,000 are paying $5, the other 3,000 will probably quickly start paying $5.01.

This clearly shows ordering transactions by fee is an unworkable idea which is why Satoshi Nakamoto ordered transactions by first seen in the bitcoin clients he/she released, a rule largely enforced by the bitcoin network until full capacity was reached.

The Easy Attack

Still, even the above problems, as bad as they are, might be bearable for desperate bitcoiners, but let’s imagine I’m a wealthy company, say Vusa, or Rapp Labs, or a wealthy guy who just doesn’t like bitcoin.

Just to be very clear, no one is suggesting either of them has behaved in any nefarious way, but say I’m a competitor to bitcoin or recently attracting much hype and attention due to gaining crazy high market cap in just days. You know what I could do with just $2 million?

I could send bitcoin down crashing as far as its sole purpose of moving bitcoins is concerned. That’s because bitcoin’s capacity is limited to around 250,000 transactions, but just to make it simple let’s say it can handle only 200,000 transactions a day.

At $1, it would cost me just $200,000 to take up that space, which is fine, everyone else could pay $1.50. But, at $10 per transaction it would cost me only $2 million to send everyone else at the back of the queue.

Now sure, you can pay $11 or $12, but even at a fee of $20 it would cost just $4 million, as good as nothing considering how much value may flood to the competitors and considering the shock bitcoin would receive if all the sudden everyone is asked to pay $25 per transaction.

There is no evidence to suggest this is happening at scale, but fees went up yesterday from around $1 to around $4 for a normal transaction. It could be ordinary demand, but it could also be someone or some entity which wants to send bitcoin crashing.

They have succeeded as far as bitcoin’s sole purpose of moving bitcoins around is concerned because around 200,000 bitcoins have been stuck for the past 24 hours while fees have gone parabolic pricing everyone out.

Another Obituary?

Bitcoin has only one job – to move data from a to b – and it is failing to do that simple task. A task which is not really rocket science as some claim because everyone and their cat have launched their own bitcoin like network which actually manages to continue performing their one task.

No wonder bitcoin’s market share has now fallen down to around 48%, nearly halved from just a few months ago, but its price has now doubled to more than $2,000 and its market cap keeps going up, so, who knows. Maybe $20 fees and days for one transaction are a good thing?

Or maybe it’s all just because of the recent advertising following allegations Trump’s Press Secretary and an aid to the French President Macron had used bitcoin, combined with the recent ransom global incident.

Or perhaps it’s only because bitcoin is the main gateway to other altcoins, although ethereum has started making inroads on that front due to its own tokens system and clones.

But maybe the market sees value in a limited coin you just buy and lock away in some paper wallet somewhere, forgetting about it, like actual gold and just as difficult as well as expensive to move around.

In which case, “Bitcoin: A Peer-to-Peer Electronic Cash System,” as bitcoin’s white paper describes it, has failed, because the current bitcoin is not a cash system. Cash can be exchanged almost instantly with 0 fee and can be moved around fairly easily without getting stuck for days.

Which might be why the market is giving conflicting signals. On the one hand, it’s falling market share is probably because bitcoin investors and other market participants are looking for the real bitcoin, the cash system, which many think has just changed its name to ethereum while getting some cool new tech like smart contracts.

It may be that these newcomers think bitcoin is still the cash system rather than seemingly having changed into something else, or maybe they like this idea of gold but with very high fees or they’re in markets which have no choice, although even they could easily diversify.

Bitcoin is Dead, Long Live Bitcoin

So, to conclude, bitcoin is definitely in crisis because the real bitcoin as described in the whitepaper does not exist anymore. The real bitcoin uses the first seen rule for transactions, rather than ordering by fee. The real bitcoin never operates at full blocks. The real bitcoin has as good as no fees and confirms almost instantly.

What now is called bitcoin is an aberration, something completely different and planned to become even more different. Far more similar to ripple with its hubs and intermediary banks than to bitcoin.

The real bitcoin, the digital cash, the codable money, the global, inclusive, permissionless network, the innovative powerhouse which has grabbed the world’s imagination, that has changed its name and is now called ethereum.

Disclaimer: The views expressed in the article are solely that of the author and do not represent those of, nor should they be attributed to CCN.

 

David Ogden
Entrepreneur

Alan Zibluk – Markethive Founding Member

Bitcoin Price Breached $2,000, Pundits Coin-Flip What Comes Next

Bitcoin Price Breached $2,000, Pundits Coin-Flip What Comes Next

  

Bitcoin price finally breached the much anticipated $2,000 line,

sending excitement throughout the burgeoning global cryptocurrency community. As early as five a.m. GMT+2 on Saturday, CoinMarketCap listed the pacesetter of digital currency for $2014 with almost $34 mln Market Cap. The $2,000 lane has been expected for some time now but it intensified three days ago when Satoshi Nakamoto's brainchild stabilized at the $1,800 range. On Friday it made it to the $1,900s further increasing the $2,000 price obsession. As much as it is good news for the whole community, what does this mean for all of us? What is in it for the ecosystem? Experts and community members differ on what’s ahead.

Lingham: not healthy

Bitcoin Price Pundit Vinny Lingham is not excited about the current price trend and sees it as very deleterious for space. "Not healthy in my opinion, but clearly everyone else knows best," he noted. "I'll just wait and see."

Malcolm Macleod: problems remain

More so, Gulden Wallet Developer, Malcolm Macleod's concern is that the price has been pushed too high, without the fundamentals to back it up and ultimately it is damaging to the ecosystem. He cites particularly the ongoing transaction queue problems. "These things are always a mixed bag, so probably some good and some bad things come from it," Malcolm stated.

More flow from fiat

But Alexandro Colorado of Bitcoin Mexico believes otherwise. For him, even though Bitcoin certainly has the availability issue but the rally has merits. "It makes sense as there is more money coming into the system," Alexandro explained to Cointelegraph. The Chief Cat Herder of Cryptopulco, the annual cryptocurrency conference in Acapulco, Mexico, Nathan T. Freeman had this to say:

"BTC increases in value relative to USD because people are willing to give up more fiat currency in exchange for Bitcoin. If you try to explain why they are willing, you are projecting a motive for their subjective value, and you're most likely full of shit. Even if the motive you ascribe is correct, you can't prove it. It's just an unfalsifiable claim in a sea of individual choices. It's all good."

Bitcoin Bubble to burst in 2019?

Though the network is growing impressively, hitting pass $2,000 seems like an impending doom for some experts. Whilst others point to some nagging fundamentals, many are optimistic it will keep growing without any blemish.

Alexandro Colorado says:

"A bubble is some sort of manipulation but actual growth is another thing. Companies grow billions in months, why crypto shouldn't? The Mexico-based Bitcoin enthusiast pointed out that a lot of the world still don't know or trust crypto but it doesn't mean we are heading into a bubble.”

When Cointelegraph asked Vinny Lingham if there is an impending bubble,

this was his answer:

"Yes, but people who called the bubble in 2011 were wrong. It took two years to burst."

Coin-flipper

Malcolm MacLeod is unsure if there is going to be a burst, but it is unclear to him what fundamentals if there are any behind the latest price growth. "I think there is a high chance that it is a bubble of some kind but I hope to be wrong," he indicated. Absorbingly, this is Nathan T. Freeman's take on whether it is a bubble and

Will it burst soon:

“There's only one major event in Bitcoin itself that could shape the future, and that's the outcome of the block size debate. All other factors are outside the purview of Bitcoin itself and therefore could shape out. Anyway, you're talking about predicting the simultaneous global effect of huge political shifts.”

"Predicting a bubble is a dice roll, and anyone who claims to know those outcomes is a coin-flipper," he added.

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

Alan Zibluk – Markethive Founding Member

Bitcoin Price Hits $2,087, Trading in Japan, South Korea for $2,350

Bitcoin Price Hits $2,087, Trading in Japan, South Korea for $2,350

  

Bitcoin price established its new all-time high at $2,087 earlier today

after surging past its previous all-time high set at $2,050, with demand toward Bitcoin rising from institutional investors in the US, Japan, and South Korea. At the time of writing, Bitcoin is being traded in Japan and South Korea, the second and third largest Bitcoin exchange markets in the world, at around $2,350, at an 11 percent premium relative to the global average Bitcoin price and the price listed by US-based Bitcoin exchanges. Analysts including Charles Hayter, the CEO of CryptoCompare, explained that the Japanese and South Korean Bitcoin exchange markets played a key role as the driving factor of Bitcoin’s recent price surge. In an interview with CNBC, Hayter stated:

"Arbitrage between the fiat pairs drags markets up or down in line with leading markets. At present, volumes on the KRW and JPY pairs dominate trading with a combined 48 percent market share.”

Cointelegraph previously emphasized the importance of the Japanese and South Korean exchange markets on the global Bitcoin market. The two markets hold over 48.6 percent of the global bBtcoin exchange market share and represent the vast majority of institutional investors within Asia.

Japan, in particular, has experienced an explosive growth in demand for Bitcoin as some of the country’s most influential conglomerates announced the launch of their independent digital currency exchanges, with the vision of facilitating fiat-to-digital currency trading securely and transparently, with low fees.

Forever blowing bubbles

Cointelegraph reported that a significant number of investors have started to fuel an altcoin bubble concentrated around Ripple and NEM. IndieSquare co-founder and Japan-based researcher Koji Higashi stated that the legalization of digital currency and the tax exemption of Bitcoin convinced beginner and casual cryptocurrency traders that every other cryptocurrency is legitimate and well-based. However, Higashi noted that most investors are investing in cryptocurrencies apart from Bitcoin with relatively shallow knowledge and understanding of digital currencies.

Higashi explained:

“I think I know the answer now. Newly entering Japanese investors are driving this great altcoin bubble and not-so-smart money is flowing into the space especially into some altcoins at a rather concerning rate. Another thing to note about this new trend is that the general lack of understanding or appreciation of the technology by many of new users.”

What happens next

In the next few months, as Bitcoin maintains its momentum and upward trend, it is likely that the Japanese cryptocurrency exchange market will demonstrate some stability and see a decline in interest over alternative cryptocurrencies or altcoins. If so, the demand for Bitcoin will likely increase over time. Currently, analysts and researchers at mainstream media outlets such as CNBC and Bloomberg are attributing Bitcoin’s recent upward momentum to the economic uncertainty and instability of the US. This is a rational conclusion considering that the US replaced the Japanese Bitcoin exchange market for the first time in the past 12 months to become the largest Bitcoin exchange market.

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

Alan Zibluk – Markethive Founding Member

Palestine Considers Launching Its Own Bitcoin, But Why Reinventing Wheel?

Palestine Considers Launching Its Own Bitcoin, But Why Reinventing Wheel?

  

In a bid to free its economy,

Palestine is considering a digital national currency. But with Bitcoin around, is it worth reinventing the wheel?

Using foreign currencies

There are many countries that do not have a national currency and instead use another country’s currency in daily lives. For example, East Timor, British Virgin Islands, Palau and Zimbabwe use the US dollar. Similarly, Montenegro, San Marino and Kosovo use the Euro. The case of Palestine is an interesting one as it uses multiple currencies like the US dollar, Jordanian Dinar and the Israeli Shekel. Now, it has emerged that the Palestine Monetary Authority (PMA) is planning its own digital currency, something of a Palestinian Bitcoin.

Enter the Palestinian Pound

There are a number of digital currencies already in circulation. Bitcoin, of course, is the most popular and widely used of them all. These currencies are not issued by a central monetary authority like a central bank. However, inspired by them some central banks have been mulling the idea of launching national cryptocurrencies as well. We reported that Senegal was introducing a national cryptocurrency as an example. Similar plans have also been discussed with regards to Sweden and China.

A Palestinian currency thus would not be the first or unique in this respect but it does bring to fore an interesting use case: countries that have trouble printing their own currencies due to one reason or another can explore a digital currency alternative. The proposed digital currency would be called the Palestine Pound.

Skirting Israeli curbs

The proposed digital currency can help Palestinians skirt around Israeli curbs that have been imposed and the need for obtaining clearance from them.

Azzam Shawwa, Governor of the Palestine Monetary Authority was quoted by Reuters as saying:

“If we print currency, to get it into the country you would always need clearance from the Israelis and that could be an obstacle, So that is why we don't want to go into it.”

The digital currency would largely eliminate that problem for the Palestinians. According to Reuters another problem that PMA might encounter is the 1994 Paris Protocol, which gives PMA the legitimacy of a central bank but does not allow it to issue currency. The Paris Protocol suggests that the Palestinians use the Israeli currency – The Shekel instead.

Five-year strategy

According to what the PMA governor told Reuters, the Palestine Pound is a part of the bank’s ‘five-year strategy’, which will be published before the end of 2017. The governor also revealed that the digital currency route is a preferred alternative. It would be interesting to see if the Palestinians could pull off a national cryptocurrency in the short to medium term.

However, the governor seems to realize the scope of the wider challenge that awaits him. He revealed to Reuters:

“But it's not only the currency, you have to see the economy also. Issuing (a currency) is something, but you also need the backbone of the currency; reserves, gold, oil and that is part of the business plan.”

Bitcoin to help oppressed

While a national currency for Palestine may or may not happen, countries that do not have their own currencies can always use Bitcoin as an alternative.

As Max Keiser wrote way back in 2013 in RT:

“Bitcoin, like the spiritual leaders who have come before it in the Middle-Eastern desert, is a miraculous gift capable of transforming an oppressed, forgotten people. The Palestinian economy is a multi-billion dollar economy that unfortunately benefits mostly outsiders. But if Bitcoin were adopted as the official currency, Palestinians would be able to shape their own economic destiny and in so doing their sovereign destiny.”

If economic independence is the stated aim of the PMA, then it should probably explore what already exists instead of reinventing the wheel.

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

Alan Zibluk – Markethive Founding Member

Top 10 Reshuffles On CoinMarketCap: Ethereum vs. Ripple, Nem vs. Litecoin & More

Top 10 Reshuffles On CoinMarketCap: Ethereum vs. Ripple,
Nem vs. Litecoin & More

  

As Bitcoin continues to grow,

some altcoins are not being left behind either. Last week there was an intense competition on the Top 10 of CoinMarketCap with some casualties being posted. It was so engrossing to see some old cryptocurrencies uprooted from their longstanding positions. This registered the fact that no entity has a monopoly over a particular position.

Ethereum lost to Ripple

Smart Contract king, Ethereum in a very surprising circumstance lost its long-held number two spot to snowballing Bank Transfer giant Ripple. Fascinatingly, within the week it doubled its value and it was near twice the value of Ethereum. Rising almost 40 percent, its market cap was over $15 bln. It has now lost almost $2 bln and Ethereum is now closing the gap. Actually, it was the second best-performing cryptocurrency on the top 10 last week.

Yet still, Ripple leads Ether with almost $2 bln in Market Cap. Some analysts in the space are strongly convinced it is likely that it will recover and take back the number two position it nearly monopolized for a couple of years. It remained to be seen since Ripple keeps making deals with banks around the world expanding its portfolios. Anyway, Ethereum with no doubt as well has become a popular smart contract platform.

NEM pushed Litecoin

In a related development, on Thursday fast-growing NEM also pushed SegWit trailblazer, Litecoin to the fifth rank and became the world's fourth most valuable digital currency. This was when the Ethereum Token rose a towering 50 percent in growth rate. It became one of the notorious astonishments associated with altcoins rise since Litecoin, the silver of crypto has been performing awesomely in the market since choosing the SegWit path. Well in this space nothing is no more a bewilderment. NEM now holds more than $2 bln in Market Capitalization. Significantly New Economic Movement (NEM) was the best performing crypto in the week and continues to lead in altcoin growth in 2017. It seems to be attracting more investors to its fold.

Stellar Lumen vs. Monero

Another interesting raging battle is between the radioactivity of Ripple as a result of a misunderstanding, Stellar Lumen, and steadily declining Monero. On Thursday XLM dislodged Monero from the eighth rank but the latter fought back gallantly to take it back on Friday. Alas! This did not last long and the Microfinance Blockchain once again took over on Saturday. At the time of filing this report, the difference in Market Cap between the two was $20 mln. If Monero remains the way it is tanking, the likelihood of gaining back the position is slim. Moreover, Stellar Lumen so far has given all indications it has come to the top 10 to stay.

ByteCoin bites Steem

Among the other things, last week witnessed a newcomer in the ranks of the elites when Bytecoin crashed the gates of the top 10 sending Steem stumbling down below. For four days now Bytecoin has held the tenth position firmly. It is up to them to prove to the community if they have come to stay or not. Meanwhile, Siacoin is barking fiercely to gain entrance to the top as it is now at the eleventh spot. Cointelegraph anticipates a hot week ahead.

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

Alan Zibluk – Markethive Founding Member

Untraceable Coins Storming Into Top 10 Cryptocurrencies – Bytecoin Surge

Untraceable Coins Storming Into Top 10 Cryptocurrencies – Bytecoin Surge

Bytecoin, an untraceable privacy-preserving cryptocurrency,

has just seen an astronomical triple-digit percent surge in price. The cryptocurrency soared to the all time high market capitacapitalization44,000,000, before calming down to around $300,000,000 and establishing itself at the top 10 cryptocurrencies by market capitalization at the time of writing (according to CoinMarketCap). A symbolic turning point for one of the first untraceable cryptocurrencies launched in 2012.

The price hike happens upon the flourishing investor interest in cryptocurrency markets, and in particular upon the growing public appreciation of untraceable cryptocurrencies that contain privacy mechanisms (other examples are Monero, Dash and Zcash, which have also experienced an increase in value in the recent months). The Bytecoin surge may also be attributed to the announcement of the new features, which include allegedly never-before-implemented untraceable tokens – also known as “digital assets” or “colored coins”.

Bug discovery

Amid the Bytecoin price rise, a cryptocurrency Monero has released a statement disclosing a vulnerability in the CryptoNote protocol, that underlies both Monero and Bytecoin cryptocurrencies. As written in the statement, the bug “allows for the creation of an unlimited number of coins in a way that is undetectable to an observer unless they know about the fatal flaw and can search for it.” The statement does not list Bytecoin as one of the currencies that have updated the protocol following the detection of the bug.

According to the official response from the Bytecoin, its development team has been aware of the vulnerability in April 2017, when during software testing it has discovered that several malicious transactions creating 504 million Bytecoins had appeared in the network – which accounts for 0.2% of the total 183 billion Bytecoin supply.

Questions remain

The development team states that it patched the bug and worked with the mining services to update their software (that validates the transactions in the network), as soon as the bug was found. According to Minergate, the major Bytecoin mining pool, it was contacted by the Bytecoin team in the mid April and “the fix to the mining software has been implemented by adding more checks for the transactions consistency” shortly thereafter.

The updated version prevented blocks with malicious transactions to be mined and thus no extra coins could be created. The questions still remain about the cryptocurrency exchanges and wallets, who are supposedly “safe to stick with the previous version of software”, according to the Bytecoin statement, but “encouraged to update the protocol”.

The rise of token untraceability

In spite of this bug discovery and patching, the CryptoNote-based cryptocurrency markets, including Monero and Bytecoin, has been positive, keeping them among the top 10 by capitalisation. Whether it is because the coin holders are not well-informed of the protocol issues or they are confident of the development teams’ ability to manage these issues, the fact remains that Monero’s and Bytecoin’s capitalizations jointly amount to $750,000,000 at the time of writing, and as a result many early adopters have gone from rags to riches.

With the ICO phenomenon coming into place this may not be all, as new cryptocurrency teams emerge stating their intention to adopt the privacy-preserving CryptoNote protocol. In fact, if the concept of untraceable tokens (untraceable digital assets) becomes a reality this year as promised in the Bytecoin roadmap, the major trends of the crypto world could in theory converge: the booming ICO phenomenon, the increasing capitalisation of tokens created on top of various blockchain platforms, and the growing market interest in untraceability and privacy. We are here to observe and see.

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

Alan Zibluk – Markethive Founding Member

Bitcoin Price Breaks $2,000 in Historic All-Time High

Bitcoin Price Breaks $2,000 in Historic All-Time High

Bitcoin Price Breaks $2,000 in Historic All-Time High

 

Bitcoin price has, for the first time in its history, reached $2,000 and beyond during trading on Saturday.

The world’s most prominent cryptocurrency began trading in 2017 at $1,000 per coin, with today’s new all-time high representing a doubling of value for bitcoin. On an average, bitcoin price climbed to $2,040.88 in global trading markets. On the Bitstamp Price Index (BPI), price struck a high of $2,020.

Trading leading into Saturday saw global average prices climb to $1,968.48. A steady period of trading during the day saw prices climb throughout before crossing the symbolic $2,000 milestone at 18:00 (UTC) on Saturday.

“Nearly seven years ago to the day, the first real-world Bitcoin transaction was completed in Florida, when two pizzas were bought for 10,000 bitcoins,” reminded eToro senior markets analyst Mati Greenspan in conversation with CCN. “If you’d invested $100 in bitcoin that day and left it there, you’d be sitting on over $20 million right now.”

He added: “The $2,000 mark is a historical moment for Bitcoin”.
 

Intriguingly, trading over the last 24 hours was led by US markets followed by Japan, the inverse of recent trading trends of the past few months. Bitfinex, GDAX and Bitstamp led the way in the US marketplace, altogether leading to over 35% of trading in the past 24 hours. Trading markets in Japan, China and South Korea combined for over 45% of trading volumes.

Bitcoin prices have gained 50% in May alone, a month that saw bitcoin in the headlines for being abused by ransomware extortionists behind the global WannaCry cyberattack.

“One might have expected that the WannaCry cyberattack – in which hackers asked for payment in Bitcoin – would have had a negative effect on price, but it seems like not even a ransomware attack can prevent the rise of Bitcoin,” Greenspan added.

The analyst also revealed that bitcoin’s soaring gains hasn’t put off existing investors from continuing to invest in the cryptocurrency. “Bitcoin is gaining some serious momentum among investors on our platform, with 88% of Bitcoin traders still buying the asset.”

Bitcoin’s flourish comes during a time of marked gains for the wider cryptocurrency ecosystem, led by the likes of Ethereum, Litecoin and Ripple.

After hitting an unprecedented $100 for the first time on Thursday, Ethereum’s ether token is now trading above $125.

Altogether, the entire cryptocurrency market cap is now valued above $70 billion, up from less than $30 billion a little over a month ago.

David Ogden
Entrepreneur

Author:Samburaj Das

 

Alan Zibluk – Markethive Founding Member

Can Applications Communicate Over Blockchains?

Can Applications Communicate Over Blockchains?

  

The author Benedikt Herudek pushes the frontiers of decentralized systems in describing how Turing Machines can communicate over Blockchains.

We will suggest introducing Turing Blockchain Machines, using Blockchains as a Turing Tape. Turing Machines are a simplified yet powerful Model for Computability and the every-day life programs we design and use. We introduce them as a ‘Gedankenexperiment’ on an abstraction of Blockchains as Turing Tapes with specific features to try to answer the question, if applications could communicate over the Blockchain.

This endeavor is connected to the question, how far we can push Software Decentralization and with them human relations and society organized by them? Decentralization is a promise because the Implications of using Technology in the way Bitcoin does, suggest it is possible to defeat large cartel-like organizations, which sit right and accepted in the middle of society.

Technology does have a liberating power if designed right: kicking out ‘middle-’ or ‘highwaymen’ is one of them.

The question raised here (we are not ready to give an answer) is a connected precursor to the vision to endow Blockchains with a ‘Turing Complete Language’. Such Blockchains, foremostly Ethereum aim to have ‘programmable money’ and want to allow decentralizing any application logic, (not ‘just’ money). The approach suggested here aims to have any kind of signal (not ‘just’ money) exchanged via Blockchains, such that it is clear ‘what it means’. Both approaches have in common to attempt to generalize Bitcoin‘s Blockchain approach.

Ingredients of decentralization

If you purchase a good or a service from someone, who doesn’t happen to be your neighbor or a family member, you typically need these three ingredients.

  1. ‘Money’ and an accepted way to pay, like cash or electronic payment
  2. A common nomenclature as a basis for agreeing what you buy and the seller sells
  3. A governance framework to ensure you get what you ordered, you pay what you received and can dispute if appropriate

One form of trade trading over the Internet, private-public key cryptography and browsers are practically indispensable but taken as a given here. When you want to decentralize trade in this sense you need

Regarding (1):
Bitcoin. Bitcoin solves the double spending problem with a distributed System and a ‘hardened’ Ledger based on the proof of work mechanism

Regarding (2):
We can solve this problem if we can prove that Turing Machines can teach each other languages over a Blockchain. This is the focus here.

Regarding (3):
Turing Complete Blockchains, e.g. Ethereum. If we can establish

Smart contracts which are distributed, verifiable and ‘unstoppable’ we have a good chance to digitalize and decentralize important and relevant parts of governance Above listed ‘smart contracts’ realm is sometimes referred to as ‘Internet of law’ as opposed to ‘Internet of money’ referring to Bitcoin and other digital currencies. In the digital realm you can easily imagine one get music files delivered, based on cryptocurrency payment was done or certain conditions (amount of clicks on your post) are fulfilled. Where conditions and delivery lap over into the real world (like delivering a book after you successfully ran a marathon) currently it takes a bit more imagination (and IoT, sensors and maybe even Artificial Intelligence) to imagine the general working of such smart contracts.

Note that questions like ‘Can Machines teach languages’ or ‘Can Machines understand each other’ are rather ‘fuzzy’ questions. They can easily lead astray into questions like ‘Can Machines Think?’ With Chomsky and others, it is important to realize that these questions are ultimately questions as to which metaphor one wants to choose. A better way is to reuse Alan Turing’s approach and try to formalize the question such, that it can be answered.

Half way decentralization

Imagine you ‘don’t mind’ a translation layer as described above in (2). You only mind (1) the decentralized payment and (2) a Turing complete language as part of the Blockchain. Then, you set out to build a new kind of marketplace, a ‘decentralized eBay’ on top of it. Your infrastructure and your payment are decentralized, still, you will end up with a ‘large monolithic application’.

Even on decentralized platforms, for applications, some kind of organization has to define the rules, e.g. how to offer and purchase goods, which data formats they need to use and so on.

Everyone will have to abide the rules that ‘decentralizes eBay’ set up. Even if the founders have best intentions to not monopolize the process, centralization will have to happen because of the basic architecture of the System. A typical answer to this centralization on the Turing complete Blockchain is the so-called ‘Decentralized Autonomous Organization. The idea is essentially the organization defining all rules needed to run the applications, is itself democratic and decentralized.

But however well intended and efficient a Decentralized Autonomous Organization would be, it is still an institution to force parties into agreements on how applications should be set up. The more successful a DAO is the less an individual voice will count, the less autonomy there will be and the more centralized the DAO will look to the individual.

Seeking Decentralization in rich applications on top of a decentralized turing complete platform will lead to centralization on the Blockchain. The ‘trick’ to avoid this ‘successful DAO dilemma’ is to not place entire Applications on an immutable Blockchain. Rather, only the transactions that concern Communication between two parties should go to the Blockchain and only on those (but not on the entire Application Logic) should parties have to agree. To allow innovation you need to give autonomy to their applications and force them under agreements on the shared Blockchain, only where absolutely necessary. You want to keep your network dumb, allow autonomous edges to run innovation.

With ‘decentralization’ we foremostly target towards certain effects on power and social relations we would like to see in the real world, like e.g. making banks unnecessary for payment traffic and central banks obsolete for monetary (specifically inflationary) policies. Technology is an enabler only and technically, decentralization these days is typically implemented by a Distributed System with a consensus system, to ensure there is just one truth in spite of many copies of the shared database. If you stress values like ‘autonomy’, ‘resilience’ or ‘simplicity’ in your system you could with some right also claim that paradigms like ‘Service Oriented Architecture’ or ‘Micro-Architectures’ should be seen as part of the Decentralization Paradigm. Those are architecture patterns, describing how Systems can communicate while being decoupled. They are typically mentioned in an enterprise context and do not have the privilege of carrying the sub-service odor of Bitcoin but they certainly are architectures carrying the possibility to not build ‘huge monolith blocks’, which is really just another expression for ‘not Centralizing’. Some describe Microservice as Service Oriented Architecture without the so-called ‘Enterprise Service Bus’. This is the Integration Layer, which tends to take over a lot of logic like routing and translating different nomenclature. How ‘smart’ you want to design your network and how much logic you want to put into it, is a recurring theme in designing Systems and can have surprising effects, what power relations Systems can implicate.

Of course, there are legitimate usages of a turing complete Blockchain, e.g. for the Internet of Things. Nothing stops one (e.g. if one prefers DAO’s over conventional companies and that does hold a lot of promises) to rewrite known applications on a turing complete Blockchain. However, for the context we are looking at it, turing complete Blockchains main usage would be to – one fine day-(semi-) automate governance with smart contracts.

Automating Translation

Here is why you should care about (2), the translation layer: Your main reason, why Amazon or Ebay has a website you go to, is that it allows you get in touch with the creator or owner of something you would like to have. It allows you to pay (1) and when you paid, it gives you a governance framework (3) to ensure the process (like shipping) works for you because there are legal frameworks behind both the platform and the vendors offering their goods. Somewhat hidden is the fact that the platform delivers a significant (2) ‘translation exercise’ for you. That would be obvious if a Spanish person offers a good offered over eBay by a Chinese person and both only speak English. The platform just sets a common standard (English), how these people can interact. But that would be just the UI surface, the platform itself sets all kinds of standards that enable interaction: The vendor has to accept a certain User Interface and with that, a certain data format prescribing, how the article pictures and descriptions are rendered. That Data format to offer goods then works perfectly with the data format prescribed by eBay to purchase goods, which is the format working ‘under the hood’ when you press the order button. Ebay, in fact, acts as your translator, you have to pay for that. This might be more obvious if we think through this situation in a B2B context where companies would offer and order good via message Systems, automated and without a User Interface. The messages to offer goods would need to be matched with the messages wanting to buy goods. Someone needs to translate these messages into each other.

Typically this just happens via the man in the middle setting a standard. This is the common way these days to establish common terminology allowing applications to talk: per definition. In a typical enterprise, if you want two applications to talk to each other, you make a design, where both parties agree with which messages eg in formats like JSON or XML they will communicate. Whoever went through this, knows this can be a painful process and doesn’t make your projects ‘exactly agile’. On a broader scale, you will have entire bodies with the goal to set standards, like eg the World Wide Web Consortium. Many have good intentions, but the necessary effort and time for meetings and achieving agreements is not a healthy environment for fast innovation. Worse, there are ‘information-cartels’, whose business model eventually depend on establishing and dominating standards allowing people to connect. Ebay and amazon would dominate, even if we would all pay with Bitcoin and even if they were rebuilt on ethereum and ran as a DAO. But all they do is make sure technically people get in touch with each other.

Establishing a common nomenclature per definition is not only stifling innovation it also opens up the backdoor for monopolists and decentralization.

A different way of establishing communication could be to use an approach similar to how we translate natural languages with machines like google translate, essentially we just have a look at how so far parties communicated and draw our conclusion for the future. One could easily imagine building a general machine translation ‘google translate for apps’: all kinds of messages connecting different Systems would be fed in, working translations (typically initiated by humans via above described ‘definition’ approach) would be used to bootstrap the engine and then a self-learning ‘google translate for apps’ would be set up to translate message formats into each other. With the size and clumsiness of the Application Integration Business, it is a surprise, enterprises didn’t use Neural Networks to widely automate this part of the Application Integration Business, just as a decade ago cloud computing started automating (in the sense of ‘hiding from the client’) hardware setup.

Even more so because you don’t have to come up with fancy neural networks to predict, how some Systems will communicate. You could just say if two applications are part of the same industry, they probably use standard XYZ, if they are from the same vendor they probably use standard ABC, if similar Systems have used message formats 123 before for similar cases these two fellows might need just the same, maybe you can parse an XML and reassemble it with some other names and the target system will ‘eat it’. Sometimes a ‘nice & long if then statement’ is just about right.

But doing trade predicting future terminology based on the past just isn’t good enough in many circumstances. Sending Bitcoin over the Blockchain and establishing smart contracts on platforms like ethereum is a binding agreement, which absolutely cannot or should not be changeable: immutability leaving no room for disputes is the cornerstone of such use cases. If you inject now a level of uncertainty as to what your terminology was really supposed to mean, you open the backdoor for irrefutable disputes Imagine Application A sends a message, B takes the translation from an Integration layer, reasoning (‘messages XYZ usually mean in other contexts ABC for applications like me’) and delivers an expensive good. Now, A can always claim ‘well, you misunderstood me. The fact that in cases before the message XYZ translates into ABC doesn’t hold here. I want my money back.’

Predicting future translations based on past successful translations isn’t good enough for Blockchains and the level of trust and binding agreements to base smart contracts on them.

Another way of thinking of this is the following thought experiment. Imagine, a Mars-UFO lands in Amsterdam, Central Station. It’s an unmanned ship, but there is a pretty smart Computer inside. We want to communicate with this device. Connect it to the best and super-trained machine Language Integration layer. It will deliver no results, because saying that our ‘earth-machines’ communicate in ways XYZ, doesn’t mean anything for ‘mars-machine’. Even if we think we ‘understand’ the machine (with an assumption as ‘there are only so many ways how digital systems can operate’), we never really know, if we understand the machine correctly. Now, if ‘setting standards’ stifles innovation, fosters centralization and ‘predicting based on the past’ isn’t a safe enough bet, one way out of the deadlock could be machines teach each other the language, unambiguously and retraceable over an immutable Blockchain, with which they will transact.

Talking Turing Machines

A ‘Blockchain Turing Machine’ is a conventional Turing Machine with the following specifics:

  1. The Blockchain is the shared Turing Tape. There is one machine sending, while the receiving machine is attempting to detect the state machine table of the sending machine
  2. More general, in a Blockchain Turing Band, we will have several participants talking to each other. For our purposes, we will just consider one pair of sender and receiver
  3. Machines can never erase fields, that is for one direction when they move they can only read but not write. This is reflecting the Blockchain immutability feature.

State Machines would be any Applications behind an address, which write transactions onto the Blockchain to communicate with other Applications. There would be no Turing Complete Language, the endpoints, however, could have any Turing Complete Language and any rich features they like. The logical translation and communication layer would be connected to layers for payment and governance, the latter potentially turing complete.

Here is a simple example, Bit Inversion.

The Sender holds a State Machine with the Following State Table. So we write a 1 and move the tape right by one square. The symbol being read is now 1, so we write a 0 and move the tape right by one square Similarly, the symbol read is a 1, so we repeat the same instructions. If, in any case, the Receiver can ‘figure out’ the state table of the sending Turing Machine only if the Sender presents ‘all he got’ (operations, symbols) within a fixed time limit. With that in mind, our question is:

Can we describe a Blockchain Turing Receiver Machine, that is capable of noting down any Blockchain Turing Machine Sender state table unambiguously while watching all the Senders operations and symbols on a shared Blockchain Tape?

If this is the correct question, then one way of investigating is going over the numerous theorems proven over Turing Machine to see what they can contribute. Some other interesting questions to investigate could be:

  1. Are Blockchain Turing Machines (no erase possible) useful
  2. Do we need to restrict the language types (e.g. along the Chomsky hierarchy) sending Machines can use to make translation for the receiver possible
  3. Are there languages or certain statements that can in principle not be translated unambiguously?

We will not discuss those but ask, how we could interpret a ‘yes’ to the question we ask. My conjecture: It means ‘quite a bit’. Take a Computer Program that essentially ‘figured out’ what another Application does, of which it ‘just sees’ some messages. It means this program ‘knows’ what these signals mean and can, therefore, initiate appropriate action. Now, it’s a quite a leap from the Turing Machine sparse notation towards a full Web or Enterprise Applications sending JSON or XML message (‘Clients want a uber- ride Berlin Brandenburger Tor to Tiergarten right now’). But that’s the beauty of Turing Machines, they are simple but can simulate essentially ‘anything’ you need in the digital world. Note also that Applications absolutely do not need to know everything about each other, lots of the typical application logic (how the app works to order an Uber ride, what internal states are saved, how the UI works) is entirely irrelevant to the trading partner (the individuals offering the ride application): Only the transactions counts and that is often much simpler than the entire application producing the message.

Having such a Blockchain Turing Machine Translation Mechanism (transforming a Blockchain into a ‘Babel-chain’ if you will), would have considerable advantages over the above-listed Mechanism to connect Application. The Mechanism wouldn’t offer any ‘wiggle – room’ and no room undue transaction fees. Take the approach, where we assume Application ABC ‘probably meant that’ because similar applications ‘meant that’ in ‘similar cases’. You can’t base important transaction on that unless a human checked it. Because whoever ordered, could always argue there was a misunderstanding, and in this case, the machines cannot just conclude from the past to the future. If you involve humans to review Machine translations or simply set standards for communication from the beginning, you will have all the disadvantages that ‘middlemen’ bring along, best studied with the example of Banks: They will want a share of your transaction, even though they add little value other than facilitating a transaction. They tend to inflate their importance beyond their due position.

If you can automate the translation between Machines and run this over a public and immutable Blockchain, you leave no room for misunderstandings no backdoors as to what ‘was meant’. Everyone can check the ‘understanding handshake’ and the language the two machines agreed upon for their transaction. There is no place for humans or organizations taking an undue tax on your producers and consumers transactions.

After the terminology is agreed, the transaction itself goes into an immutable and verifiable Blockchain, payments and governance can be processed. If we can’t make turing machines teach their language we need to revert to one of the two other ways to make machines talk. Agreements can work, the internet, for example, is widely build on accepted standards like http and smtp – it works, but it is hard to imagine how you could get monopolists agree to standards today. Making a prediction based on past experience can take us far but also only so far as to the binding character we would like to see on Blockchains. A hybrid approach could be another interesting option, where you agree for example on an algorithm to generate translations based on past working translations. And the agreement is that whatever a certain algorithms spits out, will be the agreed message format.

Request for Comment

Decentralization is the task of relieving us of the ‘middle-man’ tax. Gain and fame should be with the producers of goods and much less with cartels dominating trade – just like banks should have a serving, not a dominating role in the economy. Technology allowing true peer2peer transactions with no room for centralisation can play a liberating role. Avoiding centralisation in Networks implies placing the rich application in autonomous endpoints of the network. Doing this requires making ‘Applications talk’ such that there is no human intervention required and certainty over common nomenclature. Asking the question, if Turing Machines can communicate over Blockchains is a way of trying to push the frontiers of Decentralised Systems.

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

Alan Zibluk – Markethive Founding Member