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BTC Inc. and Genesis Mining Launch Genesis Engineering and See Opportunity in Eurasia

November 7, 2017 Giulio Prisco 0

Genesis Mining

BTC Inc., parent group of BTC Studios, BTC Labs and BTC Media, and Genesis Mining, a cloud mining service provider, recently announced a partnership to launch Genesis Engineering, a Hong Kong–based joint venture focused on promoting and developing the cryptocurrency mining industry worldwide, with a special focus on emerging and underserved markets.

“We see opportunities in terms of excess capacity worldwide in such regions as the Americas and Eurasia, said David Bailey, CEO of BTC Media. “Centers of mining are often places with excess capacity and relatively cheap electricity rates. As a result, mining operations bring benefits to those areas in terms of both employment and resource allocation.”

“The excess energy supply in certain regions is a big opportunity for mining worldwide,” added Genesis Mining CEO and Co-Founder Marco Streng. “We see the positives of mining ranging from individuals to large organizations. Whether it is a hobby, someone’s way to accumulate a certain cryptocurrency or a business with a profit motive, mining has been a positive endeavor for people all over the world. We look forward to growing the base of miners worldwide through promotion, education and new initiatives.”

“The formation of a partnership between BTC Inc. and Genesis Mining to create Genesis Engineering is important because it combines the leaders in the cryptocurrency information space and the cloud mining space to grow the industry in underserved markets at a time when crypto is in a position to be embraced by and benefit new markets,” John Riggins, Head of Development for Eurasia at Genesis Engineering, told Bitcoin Magazine.

“Genesis Engineering will be positioned as a mining information leader, promoting the industry through workshops and consulting in developing regions. We see an energy landscape that includes excess and unused electricity in markets that could benefit from the introduction of a crypto mining industry in their economy as China has benefited over the last few years.

“The crypto industry is in a growth stage and mining is a cornerstone of the industry that must grow in lock-step,” added Riggins. “Markets with excess energy capacity are in a good position to benefit as the mining industry develops, benefiting local economies through job creation and energy utilization.”

Riggins noted that the market of the post–Soviet Union is especially ripe for this sort of growth; therefore, Genesis Engineering will have a special focus in these countries. According to the company, these countries have the hallmarks of key regions for the development of cryptocurrency mining, including huge excess energy capacity, developed infrastructure and favorable climate conditions. For instance, oil producers in the region face an ecological tax on excess gases produced in oil excavation that is not put to use and is burned; this is gas that can be used to power mining facilities, create local jobs and make these countries regional leaders in the crypto industry.

“On the information and promotion side, we will be opening the first of multiple showrooms and co-working spaces in November,” Riggins said. “This facility will house a mining museum and will be used as a venue to promote the industry through workshops and a speaker series. On the consulting and mining business side, we are in negotiations with the largest electro energy production companies in the region, consulting on the positives of mining and the opportunity to use their spare capacity in these territories.”

Genesis Engineering will support the crypto mining industry broadly, including not only bitcoin but additional coins. It considers mining to be an important feature of the cryptocurrency sector, ensuring security and decentralization through incentives. The target market of Genesis Engineering ranges from hobbyists and small businesses reached by the company’s showrooms, co-working spaces and speaker series, to multinational energy companies and large-scale miners reached by the company’s consultancy and mining projects.

Besides promotion of cryptocurrency mining and related consulting work, Genesis Engineering will offer cloud mining services through Genesis Mining, with an initial focus on markets that have been underserved in Eurasia. The pricing structure will be similar to Genesis Mining’s current offering, but with a focus on making the service and mining equipment attractive in emerging markets, as well as to organizations that are interested in large-scale mining but have not yet entered the industry and will need to be led through that process.

Persuaded that cryptocurrency mining can be a boon to energy suppliers and populations in these regions, “Genesis Engineering will consider partnerships with energy providers and analyze how crypto mining could add value to different markets,” concluded Riggins.


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No Picture

BTC Inc. and Genesis Mining Launch Genesis Engineering and See Opportunity in Eurasia

November 7, 2017 Giulio Prisco 0

Genesis Mining

BTC Inc., parent group of BTC Studios, BTC Labs and BTC Media, and Genesis Mining, a cloud mining service provider, recently announced a partnership to launch Genesis Engineering, a Hong Kong–based joint venture focused on promoting and developing the cryptocurrency mining industry worldwide, with a special focus on emerging and underserved markets.

“We see opportunities in terms of excess capacity worldwide in such regions as the Americas and Eurasia, said David Bailey, CEO of BTC Media. “Centers of mining are often places with excess capacity and relatively cheap electricity rates. As a result, mining operations bring benefits to those areas in terms of both employment and resource allocation.”

“The excess energy supply in certain regions is a big opportunity for mining worldwide,” added Genesis Mining CEO and Co-Founder Marco Streng. “We see the positives of mining ranging from individuals to large organizations. Whether it is a hobby, someone’s way to accumulate a certain cryptocurrency or a business with a profit motive, mining has been a positive endeavor for people all over the world. We look forward to growing the base of miners worldwide through promotion, education and new initiatives.”

“The formation of a partnership between BTC Inc. and Genesis Mining to create Genesis Engineering is important because it combines the leaders in the cryptocurrency information space and the cloud mining space to grow the industry in underserved markets at a time when crypto is in a position to be embraced by and benefit new markets,” John Riggins, Head of Development for Eurasia at Genesis Engineering, told Bitcoin Magazine.

“Genesis Engineering will be positioned as a mining information leader, promoting the industry through workshops and consulting in developing regions. We see an energy landscape that includes excess and unused electricity in markets that could benefit from the introduction of a crypto mining industry in their economy as China has benefited over the last few years.

“The crypto industry is in a growth stage and mining is a cornerstone of the industry that must grow in lock-step,” added Riggins. “Markets with excess energy capacity are in a good position to benefit as the mining industry develops, benefiting local economies through job creation and energy utilization.”

Riggins noted that the market of the post–Soviet Union is especially ripe for this sort of growth; therefore, Genesis Engineering will have a special focus in these countries. According to the company, these countries have the hallmarks of key regions for the development of cryptocurrency mining, including huge excess energy capacity, developed infrastructure and favorable climate conditions. For instance, oil producers in the region face an ecological tax on excess gases produced in oil excavation that is not put to use and is burned; this is gas that can be used to power mining facilities, create local jobs and make these countries regional leaders in the crypto industry.

“On the information and promotion side, we will be opening the first of multiple showrooms and co-working spaces in November,” Riggins said. “This facility will house a mining museum and will be used as a venue to promote the industry through workshops and a speaker series. On the consulting and mining business side, we are in negotiations with the largest electro energy production companies in the region, consulting on the positives of mining and the opportunity to use their spare capacity in these territories.”

Genesis Engineering will support the crypto mining industry broadly, including not only bitcoin but additional coins. It considers mining to be an important feature of the cryptocurrency sector, ensuring security and decentralization through incentives. The target market of Genesis Engineering ranges from hobbyists and small businesses reached by the company’s showrooms, co-working spaces and speaker series, to multinational energy companies and large-scale miners reached by the company’s consultancy and mining projects.

Besides promotion of cryptocurrency mining and related consulting work, Genesis Engineering will offer cloud mining services through Genesis Mining, with an initial focus on markets that have been underserved in Eurasia. The pricing structure will be similar to Genesis Mining’s current offering, but with a focus on making the service and mining equipment attractive in emerging markets, as well as to organizations that are interested in large-scale mining but have not yet entered the industry and will need to be led through that process.

Persuaded that cryptocurrency mining can be a boon to energy suppliers and populations in these regions, “Genesis Engineering will consider partnerships with energy providers and analyze how crypto mining could add value to different markets,” concluded Riggins.


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Introducing a Programming Language so Simple, It “Fits on a T-shirt”

November 3, 2017 Giulio Prisco 0

http://plas2017.cse.buffalo.edu/

Blockstream is introducing Simplicity, a new programming language for blockchain-based smart contracts, intended for inclusion in Blockstream’s sidechains and eventually in Bitcoin. The new language was presented by its creator, Russell O’Connor, Infrastructure Tech Developer at Blockstream, at the ACM SIGSAC Workshop on Programming Languages and Analysis for Security (PLAS 2017).

“Simplicity is a blockchain programming language that is so simple, it fits on a t-shirt,” O’Connor told Bitcoin Magazine. “It is critical that smart contracts behave in ways that all participants expect, and applying formal verification to Simplicity allows us to achieve that.”

Simplicity is still a Blockstream Research & Development project, but there’s potential for its use in Blockstream products in the future, according to the company’s announcement.

“Simplicity is flexible enough that I anticipate many new, domain-specific, languages will generate Simplicity, and this will give users the freedom to generate smart contracts using the tools that most suit their needs,” added O’Connor.

O’Connor’s paper, titled “Simplicity: A New Language for Blockchains,” presents Simplicity as “a new programming language, designed to be used for cryptocurrencies and blockchain applications, which aims to improve upon existing cryptocurrency languages, such as Bitcoin Script and Ethereum’s EVM [virtual machine], while avoiding some of the problems they face.”

Bitcoin script is limited by design and unsuitable for complex smart contracts that need more than a small set of simple templates to perform tasks like digital signature verification. Ethereum, on the other hand, includes a more expressive and flexible, Turing-complete programming language, which allows for arbitrarily complex smart-contracts in principle.

But, in practice, Ethereum doesn’t support static analysis to pre-determine the computing resources that a program will require and, thus, filter out too costly contracts and infinite loops. Therefore, pre-paid “gas” fees are lost when an Ethereum program “runs out of gas.” The simpler Bitcoin scripting, which supports static analysis, doesn’t present similar issues.

In a post to the bitcoin-dev mailing list, O’Connor proposed Simplicity as an alternative to Bitcoin Script, noting that static analysis is important for both node operators and for Simplicity program designers.

“Static analysis is a technique that provides a universal algorithm to determine how much any Simplicity program will cost to run before you stake your money on it,” O’Connor told Bitcoin Magazine.

Simplicity can be seen as a more flexible alternative to Bitcoin scripting, not Turing-complete but expressive enough to build useful smart contracts for blockchain applications, or as an alternative to Ethereum, which will support static analysis and other desirable features including improved safety, formal semantics, and Merkelized Abstract Syntax Trees (MASTs).

While Simplicity is intended as a low-level language for smart contracts, O’Connor envisages the possibility of compiling programs written in higher-level languages (like Ethereum’s Solidity) to Simplicity.

“Ivy and the Σ-State Authentication Language are existing programming language development efforts that may be suitable for being compiled to Simplicity,” notes O’Connor in the paper. “For the time being, generating Simplicity with our [Haskell] and [Coq] libraries is possible.”

The next step in Simplicity’s development will be a bare-bones SDK (Software Developer Kit) that will include formal semantics and correctness proofs in Coq, a Haskell implementation for constructing Simplicity programs and a C interpreter for Simplicity. Then, the new language will be ready for initial deployment in the Elements project, Blockstream’s open-source codebase for sidechains, so that developers can start experimenting with the code.

But, as O’Connor stated on bitcoin-dev, “Only after extensive vetting would it be suitable to consider Simplicity for inclusion in Bitcoin.”

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Creating a Blockchain-Based Network of Interoperable Artificial Intelligences

October 31, 2017 Giulio Prisco 0

Creating a Blockchain-Based Network of Interoperable Artificial Intelligences

Artificial Intelligence (AI) startup SingularityNET, recently covered by Wired as “the most tech-hype idea of the year,” wants to democratize AI research and facilitate the emergence of human-level AI on a decentralized, open-source platform.

SingularityNET operates on a belief that the benefits of AI should not be dominated by any small set of powerful institutions but should be shared by all. A key goal of SingularityNET is to ensure the technology is benevolent according to human standards, and the network is being designed to incentivize and reward beneficial players. The startup is developing interoperability standards for AIs, which could radically improve the process of discovering and coordinating AI services, while allowing developers to easily monetize AI technology.

SingularityNET positions itself both as a critical mediator across all future AI developments, as well as a hub for free and open AI technologies owned by the crowd, where anyone can acquire or monetize AI services.

Blockchain-based smart contracts will be central to SingularityNET operations, allowing users to combine multiple AI technologies to create custom AI stacks. The initial implementation of SingularityNET will be built on Ethereum, with smart contracts written in Solidity.

“AI is currently very fragmented and narrowly trained,” Simone Giacomelli, founder of Vulpem and co-founder of SingularityNET, told Bitcoin Magazine. “Blockchain technology and smart contracts make economic collaboration over the internet easier than ever before, aligning incentives mechanisms for different AIs to be optimized as one. SingularityNET leverages this collaborative power to make AI work together.”

SingularityNET is the brainchild of AI researcher Ben Goertzel and robotics designer David Hanson, founder of Hanson Robotics. The robot Sophia, developed by Hanson Robotics, attracted media attention when it was recently granted citizenship in Saudi Arabia.

While the SingularityNET project is still partly in stealth mode, it has been presented at recent blockchain events, including Wired’s Nextfest in Italy, SWITCH Singapore and the World Blockchain Forum in London.

At the recent Ethereal Summit in San Francisco, Goertzel showcased Sophia to demonstrate the power of AI and the potential of incorporating AI and blockchain technology to create a decentralized, open-source, blockchain-powered AI network that operates like, and can be thought of as, a thinking brain.

While on the SingularityNET roadshow, Goertzel is taking time from his busy schedule to write a series of posts on SingularityNET.

“SingularityNET is intended as a platform in which an AGI [Artificial General Intelligence] can emerge from the combination of multiple humans and multiple human-created software programs, possessing varying degrees of general intelligence on their own,” Goertzel told Bitcoin Magazine. “It doesn’t eliminate the need for fundamental algorithmic work on AGI reasoning and learning and memory, but it provides a context in which such algorithmic work can have a rapid, transformative impact.”

Goertzel makes a distinction between narrow AI and Artificial General Intelligence (AGI). While narrow AI programs are finding applications in a growing range of industries, they are not effectively integrated into overall AGI systems with general-purpose intelligence like that of humans. Therefore, Goertzel is persuaded that the next big step in the evolution of AI is going to be the transition from AI to AGI. SingularityNET wants to support this transition with an open market in which various AI algorithms can cooperate and form new patterns of emergent intelligence.

“The actual design that has been formulated is a quite practical system that is being implemented in quality software code and will serve real corporate customers and become a large and lucrative business,” continued Goertzel. “But at the deepest level, the underlying philosophical and emotional motivations David Hanson and I had for creating SingularityNET, are transhumanist ones.”

Goertzel and Hanson are, in fact, among the leading advocates of transhumanism, defined as the prospect of using advanced technology to radically change, hopefully for the better, the human condition. Enabling transhumanist technologies would include life extension, uploading human minds to futuristic supercomputers, and sentient AGI way smarter than humans, which is the target of SingularityNET.

In his 2010 book A Cosmist Manifesto, which blends transhumanist technology and enlightened spirituality, Goertzel proposed a practical philosophy able to inform the next phases of human history and transhumanist evolution.

Ultimately, Goertzel wants to create “a massively transhuman, overwhelmingly beneficial Ubermind” that evolves and grows continuously out of human mind and culture.

“One way to achieve this would be to via brain-computer interfacing — and this is going to happen,” Goertzel told Bitcoin Magazine. “Of course the computer portion of cyborgs made with brain-computer interfaces will jack into this emerging AGI society, economy and culture as well, and then we will get a supermind.”

“This emerging supermind, as it grows, will provide ways for people to earn a living and sometimes even generate tremendous wealth, as part of its growth process,” concluded Goertzel. “And it will donate parts of its resources to the common good of all humans, including underprivileged ones, as a way of helping drive its growth forward toward its objectives of joy, growth and choice.”

Goertzel shared with Bitcoin Magazine parts of the draft SingularityNET white paper, a living document still under tight wraps.

“A blockchain-based framework designed to serve the needs of AI agents as they interact with each other and with external customers can enable the emergence of a collective intelligence,” notes the draft white paper. “The use of cryptocurrency and blockchain for AI services provides a number of advantages. It allows AI agents to exchange work and subcontract with a high degree of flexibility, and also enables AI-based microservices to be offered to any customer via easily accessible APIs (enabled by smart contracts under the hood).”

Goertzel, Hanson and the SingularityNET team want to balance long-term visionary thinking with practical market needs and business concerns. In their view, the platform could enable AIs to learn from each other and collaborate, which would be one of the biggest breakthroughs ever in the evolution of AI, causing a subsequent impact on the global AI market, which is projected to grow from $233.8 billion in 2017 to $3.1 trillion in 2025.

“From day one, SingularityNET will offer AI agents,” continues the white paper. “The open design of the network, and the economic incentives, should then encourage additional AI developers to add their own AI nodes via the SingularityNET API.”

While many nodes will run on powerful supercomputers in the cloud, others will be embedded in Internet of Things (IoT) devices, and humanoid robots like Sophia will be supplied with on-board SingularityNET nodes. The upcoming SingularityNET token, details of which haven’t been disclosed yet, will play a central role in the network’s operations.

The project is about to launch an Initial Coin Offering (ICO) to fund the full development of its platform, to be fully deployed in 2018. “This ICO will allow us to start with a bang,” said Goertzel. “We’ll be competing with Google and Facebook…so having a war chest would allow us to take on them more easily.”

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Decred Launches Proposal System to Advance Blockchain Governance

October 26, 2017 Giulio Prisco 0

Decred

Decred, which describes itself as an autonomous “digital currency for the people,” is announcing the launch of an “intelligent” blockchain proposal system. Powered by Politeia, a stand-alone tool for off-chain data storage, the system allows anyone in the community to submit a formal proposal for the evolution of the Decred platform. This proposal is time-stamped, versioned and permanently stored in an off-chain repository to promote transparency and eliminate the possibility of censorship.

“Decred is Bitcoin as it should have been,” argued crypto investor Jon Creasy. According to Decred evangelists, Bitcoin was conceived as a decentralized community project, but, today, it’s de-facto controlled by an oligarchy of top developers and miners and vulnerable to pressures from powerful external actors.

The Decred project wants to build a more open and progressive cryptocurrency with a system of community-based governance integrated into its blockchain.

“We are more committed than ever to a sustainable and fair system of governance,” said Jake Yocom-Piatt, Decred Project Lead. “For Decred, Politeia will provide an off-chain public record of proposals, comments on proposals, and stakeholder votes. Although Decred will be using Politeia in a public capacity, it can provide similar utility as a private unalterable store of data. Public and private use-cases include document and record storage, reputation and identity systems, and supply chains.”

The Decred team wants to create an ideal infrastructure for self-governance of a cryptocurrency. Politeia, named after a classical Greek term that can be translated as “system of government,” is an off-chain store of data, both versioned and time-stamped (in other words, “git plus timestamping”). While Politeia will initially be used in Decred’s proposal system, it has been developed as a generic tool that allows its users to create and maintain arbitrary data in a version-controlled and time-stamped environment.

Time stamps and proposal anchors

All proposals for the evolution of the Decred platform, initially formatted as text with markdown and PNG images, will be stored in Politeia with version control and time stamps anchored in the blockchain. Proposal anchors in the Decred blockchain include a transaction hash and a merkle path to indicate that a particular git commit hash existed before the time stamp on the next anchor in its repository.

“In addition to powering our proposal system, Politeia has been developed as a stand-alone tool that allows its users to create and maintain arbitrary data in a version-controlled and timestamped environment,” Yocom-Piatt told Bitcoin Magazine. “Although it does depend on using a dcrtime server for creating time stamps, Politeia does not require users to hold any decred, and we believe it has a wide array of potential applications, e.g. for records storage, identity systems, supply chains and other provenance-driven domains. Open sourcing this technology will bring the real-world utility that is necessary to attract a broad community of users.”

According to Yocom-Piatt, having cryptographically verifiable public records will give users of Politeia the assurance that their governance is being executed in a transparent fashion, with all records independently verifiable and stored in a format that is difficult to forge. “By making Decred’s governance data time-ordered in a verifiable fashion, we ensure that attempts to manipulate Decred’s governance, either from outside or within, will be much more difficult than when using a conventional website or similar,” notes Yocom-Piatt.

Any proposal submitted to Politeia that is censored can be publicly demonstrated as having been censored, creating accountability for the administrators of the proposal system and avoiding “one of the more insidious and common practices of modern social media sites, where data is silently censored.”

Comments on proposals, editing proposals and voting on proposals will be added to the Politeia platform. Decred is also announcing a competition for projects based on Politeia with winners to be announced at an event in Austin, Texas, on December 1, 2017. The prizes for 1st, 2nd and 3rd place will be the equivalent of $10,000, $5,000 and $2,000, respectively, paid in decred.

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How Decentralized Exchanges Make Bitcoin More Resilient (and Us More Free)

September 28, 2017 Giulio Prisco 0

How Decentralized Bitcoin Exchanges Make Bitcoin More Resilient

Governments and central banks all over the world are gradually warming up to the idea of leveraging the unique advantages offered by blockchain technology — low-cost transactions permanently recorded in tamper-proof distributed ledgers — to modernize their financial systems.

According to sources familiar with the matter, the Indian government is considering a proposal to introduce its own cryptocurrency similar to Bitcoin, Business Standard reported last week. The new cryptocurrency would be managed by the Reserve Bank of India (RBI) and could be called “Lakshmi.” Other central banks are exploring similar ideas.

Of course, that will take time, and the governments are unlikely to support important features that make Bitcoin and other cryptocurrencies appealing to end users, such as mining and near-anonymous, paperwork-free transactions. Therefore, Bitcoin, Ethereum and at least some altcoins are likely to continue to prosper.

But some governments, such as China’s, don’t seem to like that. After banning Initial Coin Offerings (ICO), the Chinese government is moving to close the cryptocurrency exchanges operating in the country.

It appears that governments love blockchain technology but hate Bitcoin itself, as well as other “crypto-anarchic” digital currencies. Some governments are reacting in a panic because they are starting to realize that they can’t stop Bitcoin from becoming an alternative to their monopoly on currency, both as a means of exchange and a store of value. Centralized cryptocurrency exchanges are especially vulnerable, and other governments could follow China.

A Role for Decentralized Exchanges

Decentralized exchanges that use peer-to-peer (P2P) technology to bypass the need for a central exchange provider are an interesting option that could make blockchain-based digital currencies much more resilient.

Decred recently introduced atomic swap support for exchange-free cryptocurrency trading, showing that, at least for crypto-to-crypto trading (for example, exchanging bitcoin for litecoin), it’s perfectly possible to operate without exchanges. However, this doesn’t solve the problem of crypto-to-fiat and fiat-to-crypto trading, which is arguably of top concern for cryptocurrency users.

“Atomic swaps are the first sign in a new wave of decentralization,” Decred project lead Jake Yocom-Piatt told Bitcoin Magazine. “As trustless exchanges between pairs of cryptocurrencies, they offer new efficiencies for users who don’t need the formality of the traditional exchanges. It is going to be interesting to see how the trend develops, since for larger and more complex transactions with fiat currencies, LocalBitcoins and established exchanges are still the place to be.”  

Coinffeine is developing an open-source, P2P Bitcoin exchange platform that will enable users to buy and sell bitcoins securely and anonymously, without having to rely on a centralized exchange. The project seems promising, but it hasn’t shown much activity recently.

Bisq (formerly Bitsquare) provides an open-source desktop application that allows users to buy and sell bitcoins anonymously in exchange for national currencies or alternative crypto currencies. To protect users from fraud, both traders are required to place security deposits into a multisig-based escrow mechanism; the deposits are refunded after a trade completes. To handle disputes, Bisq features a decentralized and open arbitrator system. Bisq is now preparing to launch a decentralized autonomous organization (DAO) and an ICO for its BSQ token, a colored coin on the Bitcoin blockchain.

Bitcoin Magazine reached out to Bisq developer Chris Beams for comments on government attacks on cryptocurrency exchanges, likely attack vectors and the impact of decentralized exchanges. Beams also offered a passionate and forceful defense of individual liberty against government over-interference.

“The panic has to set in at some point,” argued Beams. “But it will do so at different times for different governments, and will produce a range of responses from them when it does. I don’t think China’s recent actions — whether they’re the product of panic or something more strategic — will necessarily cascade into similar actions in the U.S. or Europe. Shuttering all exchanges by diktat is the kind of textbook totalitarianism the world has come to expect from China, but a similar attack wouldn’t work as well in the U.S. Even if it would, it would be a blunder for the U.S. to attack Bitcoin with such a blunt instrument. It would be suboptimal, a bad use of available resources. It would strengthen the decentralized exchanges that already exist and it would incentivize the creation of better, even more censorship-resistant ones.”

According to Beams, the U.S. in particular has much more effective tools at its disposal, especially Know Your Customer (KYC). The U.S. government forces nearly every centralized exchange, on day one of operation, to collect personal identity information about their users and to correlate trading activity with those identities.

Beams explained that U.S. corporations tend to take compliance seriously and actually do cooperate with these rules, meaning that U.S. regulatory agencies have, in principle at least, access to enough information to de-anonymize a large and growing percentage of all Bitcoin transactions. And plausible traceability of transactions is all they need to keep the threat of tax collection in force.

“If I were the U.S., I’d be ushering new Bitcoiners through the Coinbase cattle gate just as fast as they can be prodded,” said Beams. “If I were the U.S., I would have long since concluded there’s nothing fundamental I can do to stop Bitcoin itself, so if I can’t beat ’em, I’ll at least make sure I can continue to tax ’em.”

Decentralization and Freedom

The recent John Doe summons delivered to Coinbase by the IRS shows that KYC is the attack vector of choice for the U.S., which could result in billions in taxes reported by people who fear that their Bitcoin activity can be audited. KYC appears to be a much more effective long-term attack vector than heavy-handed shutdown orders.

“So yes, by all means, let’s bring on the decentralized exchanges,” said Beams. “But they’d better be really and truly decentralized because if a government can stop them, they will — at least once they get big enough to become worth the effort. The attack vector with decentralized exchanges won’t be KYC, though, because any decentralized exchange that implements KYC will instantly be abandoned by its users.”

The attack vector for decentralized exchanges, said Beams, will be “the good ole four horsemen of the infocalypse.” In other words, decentralized exchanges will be vilified as tools for drug dealers, terrorists, pedophiles and money launderers.

“It’s the same script every time a government is interested in talking people out of their own freedoms. This attack vector won’t work for the exchanges that have achieved escape velocity levels of decentralization, but it may stop some and will make life difficult for others.”

Beams suggested that the only way to really stop decentralized crypto-fiat exchanges would be to outlaw Bitcoin trading altogether. “This would force people to think twice about every trade, and to consider whether their counterparty might be an agent, which would result in a profound chilling effect.”

However, he thinks that this sort of heavy-handed attack seems unlikely to be attempted in the U.S. or Europe because there are just too many vested interests in Bitcoin now. It’s more likely that the authorities will continue to insist on KYC, tolerate compliant centralized exchanges and demonize the decentralized ones.

“With all that having been said, I’m actually optimistic,” concluded Beams. “Attacks by state actors — real and threatened — are making every part of this ecosystem stronger. Bitcoin has proven itself anti-fragile as hell thus far, and by the time all the battles have been waged, what will emerge on the other side are alternatives to existing financial institutions — money, banks, exchanges and all the rest — that are actually better in every way than their traditional counterparts.

“We are being forced by the threat of state violence to design crypto-economic systems with the highest degrees of security, privacy and censorship resistance baked in from the protocol level up. That very pressure is what is propelling these solutions forward, I think, into a bright future of genuine financial freedom for people. I wouldn’t be working on this stuff if I thought otherwise.”

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SPiCE VC Launches Liquid VC Fund With Tradable Token-Based Digital Securities

September 28, 2017 Giulio Prisco 0

SPiCE VC.jpg

Venture capital firm SPiCE VC is announcing today the launch of the first ICO for a “Liquid VC” fund that will use the Bancor protocol to offer immediate liquidity to investors. The fund is open to pre-qualified investors according to specific country regulations. In the U.S., the relevant regulation is Regulation D, Rule 506(c).

“While equity crowdsourcing brought startup investments to the public, we are hoping that SPiCE with its liquidity and inclusivity will bring more people to investing in a venture capital fund, taking the portfolio approach, and avoiding the inherent risk of investing into a single startup or ICO,” said Carlos Domingo, co-founder and managing partner of SPiCE and a former CEO of Telefonica R&D.

SPiCE wants to leverage blockchain technology to disrupt the venture capital industry with regulatory-compliant, tradable securities tokens that entitle holders to 100 percent of net exit revenues. The Ethereum-based SPiCE token will act as a digital security, assuring that token holders get their share of the exits when they occur, and a tradable asset.

SPiCE advisers include Brendan Eich, inventor of JavaScript and co-founder of Mozilla and Brave, which launched the Basic Attention Token ICO; Eyal Hertzog, co-founder of Metacafe and co-founder and architect of Bancor; and entrepreneur Loïc Le Meur, co-founder of LeWeb. SPiCE is also partnering with the Aragon Network, a digital jurisdictional platform for decentralized organizations based on digital tokens.

“We are excited about SPiCE’s decision to utilize the Bancor protocol to add liquidity to its security token,” said Hertzog. “The extreme efficiency that blockchain and smart contracts technologies enable resulted in a volume of ICO crowdfunding for blockchain companies that has surpassed traditional early stage VC investment, and now with SPiCE VC, this revolution is coming for the funding of VCs themselves.”

“For me joining SPiCE VC was a no-brainer, after being in the tech industry for more than twenty years, this is the most exciting project with the best team that I have been working in my entire career,” Domingo told Bitcoin Magazine.

In March of 2017, Blockchain Capital launched a similar liquidity-enhanced venture capital fund called Blockchain Capital III: a combination of a traditional limited partnership and the Ethereum-based BCAP digital token. According to Brock Pierce, the fund provides “the investor base across the globe with the opportunity to invest into a leading venture fund via a liquid, tradable, digital token.”

“SPiCE is building on the pioneering work of Brock Pierce for Blockchain Capital and taking it to the next level by providing a mechanism for our token holders to have a direct economic interest in our fund rather, than an indirect one as in the Blockchain Capital case,” said Domingo.

“In their case, Blockchain Capital uses part of the exit proceedings to buy tokens on the open market to raise their price so token holders can sell them, while SPiCE transfers the money of the proceedings from exiting startups directly to our token holders via buybacks from them directly and not the open market. This way, we have less dependency on the liquidity level of tokens for the token holders to benefit. Also, to increase liquidity from the beginning, we are implementing the Bancor smart reserve.”

Domingo also said that whereas Blockchain Capital is an evergreen fund that reinvests up to 100 percent of all exit proceedings back into the fund, SPiCE is a closed ended fund that will be returning 100 percent of the proceedings form the exits to the token holders.

“We are very excited about how advances in blockchain technology can actually solve one of the major problems of investing in VC funds, having your investment tied into the fund for 7–10 years before you can see any returns,” Domingo said. “We also believe that this increased liquidity will bring inclusivity as well, and will open up the option to invest in VC funds to a new breed of investors that have been left out of this asset class till SPiCE VC appeared.”

The SPiCE fund will invest in promising pre-series-A and pre-ICO technology startups, bridging the gap between seed funding from angels or incubators, and the first-series-A or ICO funding round. “SPiCE VC will focus on companies in that gap, either pre-series-A or pre-ICO, because once a company crosses the chasm, it achieves the fastest growth in valuation, which SPiCE investors may benefit from via its liquidity,” notes the announcement.

The SPiCE token ICO is scheduled for late November.

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Japanese Company Will Launch New Bitcoin Mining Operation With 7 nm Chips

September 12, 2017 Giulio Prisco 0

GMO Internet Group Launches Massive Bitcoin Mining Operation With 7 nm Chips

GMO Internet Group, a Japanese provider of a full spectrum of internet services for both the consumer and enterprise markets, is launching a new Bitcoin mining business utilizing next-generation 7 nanometer (7 nm) semiconductor chips. “[We] believe this new business has high potential for increasing corporate value in the future,” states the company.

Headquartered in Tokyo, GMO IG comprises more than 60 companies in 10 countries. GMO IG’s size and financial muscle, as well as the novel technologies it wants to leverage, will make it a serious entrant in the Bitcoin mining industry, and one that could have a disruptive impact.

“We will operate a next-generation mining center utilizing renewable energy and cutting-edge semiconductor chips in Northern Europe,” GMO stated, emphasizing that they will invest in R&D and manufacturing of hardware including the next-generation mining chip. “We will use cutting-edge 7 nm process technology for chips to be used in the mining process, and jointly work on its research and development and manufacturing with our alliance partner having semiconductor design technology.”

The International Technology Roadmap for Semiconductors defines 7 nm semiconductor chip technology as the next technology iteration following 10 nm technology, which, in turn, follows the 14-16 nm technology that currently represents the state-of the-art hardware in the Bitcoin mining industry. Commercial production of 7 nm chips is still in the development stage with GlobalFoundries, IBM, Intel, Samsung and Taiwan Semiconductor Manufacturing Company (TSMC) competing for market leadership.

According to a recent article in Android Authority, TSMC seems to be in the pole position in this race, having already showcased a preliminary 7 nm SRAM chip — not yet a full system on a chip (SoC) but an important milestone. Intel is said to be planning the upgrade of a manufacturing plant in Arizona to start building 7 nm SoCs. Samsung and GlobalFoundries are also striving to catch up.

According to Quartz, 7 nm technology would be four times more energy efficient than the current Bitcoin mining industry standard. Therefore, once 7 nm chips are in use, all other miners will have to upgrade to stay in the game.

“It’s clearly the next generation of miners,” Diego Gutierrez, CEO of mining software developer RSK Labs, told Quartz. “The other [mining chip makers] will surely follow and create their own 7 nm chips if they are not already doing it. As [chip manufacturers] get the new technology, everybody can access it.”

“We believe that cryptocurrencies will develop into ‘new universal currencies’ available for use by anyone from any country or region to freely exchange ‘value,’ creating a new borderless economic zone,” notes GMO IG. “[Bitcoin] can be regarded as a distributed system whose credibility is secured by mutual monitoring by network participants, as opposed to legal currencies which are a centralized system whose credibility is secured by the issuer. And management of a distributed system such as [Bitcoin] requires a mining process.”

The entry in the Bitcoin mining sector of these new Japanese players with relatively deep pockets is likely to be welcomed by those concerned about China’s dominance of the mining industry. For example, Chinese mining operator and hardware manufacturer Bitmain plays a dominant role in the $70 billion Bitcoin economy. Its mining pools, Antpool, BTC.com and ConnectBTC, account for around 30 percent of all the processing power on the global Bitcoin network, while the company is also the market leader for specialized mining hardware, including ASIC chips.

In related news, another large Japanese company, DMM, announced the launch of its own Virtual Currency Division, scheduled to begin operation of a virtual currency mining business “DMM Mining Farm” in October 2017. According to the company, which hasn’t released further information, DMM will operate one of the 10 largest mining farms in the world before the end of 2018.

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