Two meme cryptocurrencies, both inspired by shiba inu dogs, are now within the top 10 by market value.

As of Monday afternoon, dogecoin, which launched in 2013 as a joke, ranks No. 10 with a market value of over $35 billion, according to CoinGecko. It’s currently trading at around 27 cents. A token called shiba inu, which launched in 2020 to poke fun at dogecoin, ranks No. 9 with a market value of over $38 billion. Shiba inu hit an all-time high of $0.00008616 on Thursday.

Since Wednesday, both dogecoin and shiba inu have frequently swapped places in the rankings, competing in somewhat of a rivalry. In fact, the shiba inu community refers to the token as the “dogecoin killer.”

But although their supporters may not want to admit it, dogecoin and shiba inu have a key characteristic in common, Caitlin Cook, head of community at crypto asset management tech company Onramp Invest, tells CNBC Make It.

Both are largely driven by the communities behind them, Cook says. “The dogecoin community and the shiba inu community are both very, very vocal and committed,” she explains.

The strength of community

“Altcoins like [shiba inu] are primarily community-based, meaning their success is largely dependent on the success and growth of its community, instead of its utility,” Douglas Boneparth, certified financial planner and president of Bone Fide Wealth, previously told CNBC Make It. (The term “altcoins” refers to the multitude of cryptocurrencies aside from bitcoin.)

The shiba inu token creator even calls it an “experiment in decentralized spontaneous community building” in its white paper.

Both shiba inu and dogecoin’s growth can be largely attributed to supporters hyping up them up, Cook says. “It’s the power of the people who are amplifying it that kind of drives the performance a lot of the time,” she says.

That includes celebrity supporters like billionaire Elon Musk, CEO of SpaceX and Tesla. Musk often tweets about different cryptocurrencies, and in doing so, has seemingly impacted their prices.

A few times throughout 2021, shiba inu appeared to jump after Musk repeatedly posted images of his shiba inu puppy on Twitter. But on Oct. 24, Musk clarified that he doesn’t own any shiba inu tokens and that he only owns bitcoin, ether and dogecoin.

But overall, the current surge is “so much community-driven, and any token or coin out there has the opportunity to run up like this if someone with a big microphone is amplifying it,” Cook says.

The risk factor

However, the fact that these tokens are so susceptible to price swings based on who’s talking about them is a big part of what makes investing in them risky.

Both dogecoin and shiba inu are “speculative bets,” Cook says. “They’re not long-term investments for most people, and most people probably wouldn’t have a long-term thesis behind why they would hold them for a long period either.”

That’s because they’re considered to be bets on a community rather than a technology, she says. “There’s not a viable product.”

Experts warn that any cryptocurrency investment can result in the loss of your entire investment. They generally recommend that you only invest what you can afford to lose, regardless of which cryptocurrency you choose. And altcoins may require additional caution due to their differences from something like bitcoin, including their structure, supply and utility.

Bitcoin launched in 2009 with the intent to be a peer-to-peer financial system. Its blockchain was carefully created with a well-thought-out ecosystem. Bitcoin also has a limited supply, which allows for built-in scarcity by design. Because of that, it’s seen as a store of value by its holders, who also hope it becomes a prominent decentralized digital currency.

Most altcoins lack these characteristics. Though their communities are a strength, it’s something they’re very dependent on, since many lack technological development and don’t have a supply cap.

Due to volatility and risk, “I always say that crypto isn’t a suitable investment for a lot of people,” Cook says. “When you get into more volatile altcoins, it’s an even less viable investment for a lot of people that don’t have the stomach for it.”

Of course, it’s impossible to know how things will unfold for dogecoin and shiba inu. “Who knows? Maybe one day grandma will give her grandkids some SHIB for their birthday,” Boneparth says. “The future of either depends on wide-scale adoption and use in our current financial system.”

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After launching via a Discord channel on Oct. 28, AnubisDAO went on to raise roughly 13,256.4 Ether (ETH) using AlchemistCoin’s liquidity bootstrapping protocol (LBP), Copper. However, the funds were unexpectedly sent to a different address roughly 20 hours into the LBP.

CNBC spoke to one investor who claims to have lost almost $470,000 to AnubisDAO. The investor, Brian Nguyen, conceded to subscribing to a “buy first, do research later mentality,” describing the loss as “pretty painful.”

Nguyen noted that he was attracted to AnubisDAO because of its canine-themed branding amid the meteoric gains recently reaped by some dog-token investors after seeing Anubis promoted on Twitter by prominent pseudonymous decentralized finance advocate Sisyphus.

Anubis is the Greek name for the Egyptian god of death and the underworld, with Egyptian imagery depicting the god as donning the body of a human and the head of a dog.

Investors appear to have lost roughly $57 million worth of Ether in what many are describing as a rug-pull executed by the upstart canine-themed OlympusDAO fork, AnubisDAO.

Sisyphus has published a detailed timeline outlining AnubisDAO’s formation and launch and claims to have engaged law enforcement in both the United States and Hong Kong. Sisyphus has also offered to cease the civil proceedings should the perpetrator return the stolen finds minus a 1,000-ETH bounty.

In lieu of a case number which can be released to the public (hopefully this is available tomorrow), please see below for confirmation I am actually in touch with authorities https://t.co/jCgOwaq129

Inside job?

According to Sisyphus, the idea for an OlympusDAO fork inspired by Shiba Inu’s branding arose from discussions among members of the PebbleDAO project during Tuesday and Wednesday.

A Telegram channel for the project was created on the same Wednesday, with its six original members all hailing from PebbleDAO. The following day, it is decided that the pseudonymous founding member “Beerus” would be tasked with deploying the LBP — a decision that Sisyphus now describes as a “critical mistake”:

“This was the critical mistake. This should have been done from the original multisig wallet.”
With just hours left until the LBP was scheduled to close on Friday, Beerus claimed “to have opened a malicious link from a PDF” and exposed the private keys used for the LBP launch. 13,556 ETH was then pulled from the LBP shortly after. However, Beerus’ personal wallet funds appear to remain “intact and under his control.”

Sisyphus also notes that “security researchers provided the PDFs from phishing emails” distributed during the day Beerus claimed to have clicked the malicious link, noting tha “at this point, none have found any malicious content contained in the PDFs.”

Beerus’ real-world information is also collated and partially published on Twitter, and Hong Kong authorities were contacted on Friday. Beerus filed a report and turned one computer over to Hong Kong police the following day.

Sisyphus also notes that wallets associated with the incident have since sent ETH to Coinbase, adding that the exchange has been notified of the transactions.

By Samuel Haig

The post Why Investors rug-pulled after pouring $57M into dog-themed OlympusDAO fork appeared first on Crypto Insider.

• Digital Currency Group Raises $700M in Investment Round Led by SoftBank, Attains $10B Valuation

• The round included contributions from GIC Capital, Ribbit Capital and CapitalG, the private equity arm of Google’s holding company, Alphabet.

Digital Currency Group (DCG), the crypto venture capital company whose holdings include asset manager Grayscale and CoinDesk, raised $700 million in an investment round led by SoftBank.

The round valued the firm at $10 billion and included contributions from GIC Capital, Ribbit Capital and CapitalG, the private equity arm of Google’s holding company, Alphabet, the Wall Street Journal reported.

Marcelo Claure, chief executive of SoftBank, described DCG as the “single-best asset that gives us the diversity of exposure to crypto, A-Z.”

As well as being the parent company of CoinDesk, DCG counts digital asset management firm Grayscale and crypto lender Genesis Trading among its subsidiaries.

SoftBank’s previous forays into crypto include blockchain analytics firm Elliptic and Block.one’s new subsidiary crypto exchange, Bullish.

By Jamie Crawley

The post How DCG raised $700 million in an investment round appeared first on Crypto Insider.

Two cryptocurrency lending platforms were asked to cease activities in New York by the state’s attorney general on Monday and three other platforms were directed to provide information about their business.

The move comes weeks after New York Attorney General Letitia James won a court order forcing the closure of cryptocurrency exchange Coinseed.

In a redacted version of a letter dated Monday, James said the Office of the Attorney General “was in possession of evidence of unlawfully selling or offering for sale securities and/or commodities”.

Regulators in the U.S. have been ratcheting up scrutiny of a world that has so far existed in a regulatory gray area, against the backdrop of rising tension between the crypto industry and regulators worldwide.

James filed a lawsuit in February to shut down Coinseed for allegedly defrauding thousands of investors, including by charging hidden trading fees and selling “worthless” digital tokens.

The state’s attorney general warned investors about “extreme risk” when investing in cryptocurrency and issued warnings to those facilitating in the trading of virtual currencies.

“Cryptocurrency platforms must follow the law, just like everyone else, which is why we are now directing two crypto companies to shut down and forcing three more to answer questions immediately,” James said on Monday.

Reporting by Noor Zainab Hussain in Bengaluru; Editing by Shounak Dasgupta @ Reuters

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With Bitcoin at $60,000 it’s likely Coinbase’s IPO this week will stimulate more institutional buying of crypto than ever before.

Revenue climbed more than nine-fold from a year earlier to an estimated $1.8 billion, spurred by a surge in the price of bitcoin. Coinbase, Binance, Kraken and Bakkt are certainly beneficiaries of Bitcoin’s rise due to a huge cash savings for those that surfed the Fed stimulated markets in 2020.

That wealth this expands even more in crypto. Forget DeFi, Coinbase thus centralizes crypto wealth in the hands of mega whales. Meanwhile younger investors who have retreated from the stock market may put their winnings back into crypto.

The listing of Coinbase could cause a gold-rush in Crypto investing in the Spring of 2021 as the next major movement of pent-up liquidity.

Coinbase said it has 56 million verified users and that could increase a lot in 2021. Celebrities like Elon Musk and Cathie Wood have boosted Bitcoin in 2020 as have companies that profit from it such as Square, PayPal and others who have put their a portion of their corporate cash in Bitcoin like MicroStrategy and Tesla.

Coinbase is poised to become the latest tech company to hit the market with a massive valuation, capitalizing on continued growth in the sector despite broader economic struggles caused by the coronavirus pandemic. It’s valuation is also likely to be completely ridiculous as compared with its size and future competition. Basically another distortion in the market brought on by endless Fed QE and debt-based stimulus.

This gives “crypto” a surge, but a rather unsustainable surge in user activity. Bitcoin above $80,000 will certainly be in a speculative bubble. Kraken and others are likely to follow in Coinbase’s footsteps to use the liquidity to grow even faster. These exchanges could also be acquired, for instance by the likes of Facebook, ByteDance or other companies.

Trading on the private market has valued the company at $68 billion, a number that swells to about $100 billion when factoring in a fully-diluted share count. In P/E terms this is all very far-fetched. Coinbase is unique because its valuation increase mirrors the trajectory of the top cryptocurrencies. Bitcoin is up about 700% in the past year, while ethereum has soared by more than 1,300%. This creates a FOMO environment for crypto in the immediate future.

The company offers an exchange to make it easy for the average investor to buy cryptocurrency, as well as a digital wallet to store it in. It doesn’t stop there. For more-advanced users, Coinbase Pro offers advanced charts and more-complicated trading options. However Coinbase has notoriously high fees and there are better options for crypto enthusiasts with much more innovative companies that have no plans to go IPO like Binance. Coinbase is essentially a crypto company dressed in Silicon Valley clothes, even with the usual controversies.

While bitcoin ETFs exist in the U.S., they do not directly own bitcoin. They own portfolios of stocks deemed to have exposure to blockchain technology. With the arrival of Bitcoin ETFs in Canada, the U.S. is a bit behind in crypto regulation. Meanwhile China’s digital Yuan based on blockchain technology will create a new paradigm in finance. China has also been accused of using Bitcoin (which is possible to manipulate) to de-stabilize the U.S. dollar at a time where it’s vulnerable with inflation.

At the Last Futurist we think the anticipation of Coinbase’s IPO creates a better on-ramp for Bakkt’s stock, which is more likely to become a convenient digital wallet for crypto with real-world interactions. Square is another company with huge Bitcoin exposure via its Cash app. Buying Bitcoin above $50,000 is likely not such a wise idea and the same could be said for Ether above $1,000. Coinbase’s asking price will also be way too steep compared to its resting place in the future ecosystem of crypto.

A bitcoin ETF that owns bitcoin is a long-awaited dream of crypto investors because it will greatly expand the class of potential owners. However the crypto investors have already increased due to Bitcoin’s exceptional rise in 2020, along with Millennials and GenZ further investing part of their inheritances in it.

Kraken is considering going public via direct listing in 2022 after bitcoin’s rally led to record trading volumes. Coinbase will register nearly 115 million shares of Class A common stock, which will trade under ticker symbol COIN. While Coinbase is heavily reliant today on attracting users who store and trade the two major cryptocurrencies, the company is betting on the development of a larger ecosystem of crypto-related assets in the coming years. But is Coinbase worth $100 Billion? That’s just Silicon Valley scamming its way to more access to liquidity like usual.

Coinbase is nothing more than a brokerage and an exchange with a shiny interface and high fees for crypto noobs. The potential $100 billion valuation of Coinbase Global ahead of the cryptocurrency exchange’s trading debut is “ridiculously high,” said New Constructs CEO David Trainer and many other analysts. Coinbase is the not the Unicorn of anything remotely that represents decentralization of the spirit of Bitcoin, in any way. Given the behavior of Jack Dorsey, Elon Musk, Cathie Wood and others, it’s hard to see how Bitcoin is not being manipulated by Billionaires (and likely China) in its incredible rise.

The Bitcoin pump is likely a worse manipulation than the EV Bubble and Tesla’s rise in 2020. None of it is based on fundamentals and that’s a problem and an easy way to rob the inheritance money of Millennials. Coinbase is set for a direct listing on the Nasdaq exchange on April 14. Happy crypto hunting!

The post What does Coinbase’s IPO mean? appeared first on Crypto Insider.

The Bitcoin blockchain is an amalgamation of Bitcoin (BTC) and blockchain. A person or a group of people known as Satoshi Nakamoto created the Bitcoin protocol in 2008 to decentralize control of money when centralized entities had failed the world.

A publication called the Bitcoin white paper outlined a set of computational rules that determined a new type of distributed database: the blockchain. The network was launched in January 2009.

The most well-known cryptocurrency, Bitcoin, is the one for which blockchain technology was created. Like the United States dollar, a cryptocurrency is a digital means of exchange that uses encryption techniques to oversee the establishment of monetary units and verify financial transfers.

The Bitcoin blockchain refers to the data stored in “blocks” of information that are then linked together in a permanent “chain.” A block is a collection of Bitcoin transactions from a specific period. Stacks of blocks are stockpiled on top of each other, with each new block relying on the previous ones. As a result, a chain of blocks is formed, giving rise to the word “blockchain.”

Every time a new block is added, it makes the previous blocks unmodifiable. This ensures that each block is more secure over time, and it is an example of how Bitcoin technology is changing how banking and financial transactions are being made. 

Bitcoin blockchain, however, is much more than cryptocurrency: It is the technology that most cryptocurrencies are built on, including Bitcoin. The Bitcoin blockchain is unique because it ensures that all transactions are accurate. Every action in the blockchain is recorded and there is nothing that is left out of the network. Once an action is recorded and stored in one of the information blocks, it is time-stamped and secured, and the entire record is available to anyone in the system.

The Bitcoin blockchain is also decentralized, meaning it is not stored in one master computer or controlled by one company. It is distributed on many computers that are in the network.

In the Bitcoin blockchain, there are codes called a hash. A hash is unique to each block in the blockchain. Hashing allows every network user to identify each block and directs them to move in the chain since every block has its own hash and a previous block’s hash.

With the latter in mind, the critical parts of the blockchain include records, block, hash and chain. Block records and transactional records are the two types of records in the blockchain. A block contains the most recent Bitcoin transactions that have not yet been recorded in any previous block. Transaction records include the asset, price and ownership data that are recorded, approved and settled across all nodes in seconds. 

In essence, a hash is a fixed-length string generated after transforming any length of input data in the blockchain network, a block is similar to a page in a ledger or record book and a chain refers to blocks linked together in a network.

Short story of Bitcoin blockchain

The idea of blockchain technology was introduced in 1991 by Stuart Haber and W. Scott Stornetta in their paper “How to Time-Stamp a Digital Document.” In this paper, they explained the use of a continuous chain of timestamps to record information securely.

Bitcoin was created largely to facilitate the exchange of Bitcoin cryptocurrency. However, early adopters and inventors rapidly discovered that it had far greater potential. With this in mind, they designed Bitcoin’s blockchain to store more than just data on the token’s movement.

Bitcoin technology uses peer-to-peer (P2P) transactions, making it possible to function without any bank or third party to manage each financial movement. It allows online payments to be sent directly from one party to another without going through any financial institution.

The term peer-to-peer means that the computers that are part of the network are equal to each other, that there are no “special” nodes and that all nodes share the burden of providing network services. It is made up of thousands of Bitcoin nodes that run the protocol. The protocol is responsible for establishing and safeguarding the blockchain.

The formation of a peer-to-peer network is possible because users’ data is related to the person or entity they are interacting with, and they are in charge of keeping the distributed network up and running. The information regarding the individual or entity is then passed from their Bitcoin wallet to their location and IP address, which represents peer-to-peer Bitcoin interaction.

What is needed to make the Bitcoin blockchain work?

Bitcoin represents a digital, trustless form of money, alongside a movement to decentralize financial services. Before Bitcoin, there was a need for a trusted third party to keep a ledger — the record-keeping system of a company’s or person’s financial data — to record who owned how much. Everyone has a copy of this ledger with the Bitcoin network, so there is no need for third parties.

Every Bitcoin transaction happens in the Bitcoin blockchain network, which is the digital space where Bitcoin mining and hash power generation occur. Hashing power is the processing power used by your computer or hardware to perform and solve various hashing algorithms. These algorithms are used to create new cryptocurrencies and allow them to trade with one another. This process is called mining.

Usually, Bitcoin owners purchase their cryptocurrency supply through a cryptocurrency exchange, a platform that facilitates transactions of Bitcoin and other cryptocurrencies. The decentralized ledger is what makes the blockchain network. The latter shows that Bitcoin is a piece of software, a set of processes in which participants perform different tasks.

A blockchain is a digital ledger of duplicated transactions distributed across the blockchain’s network of computer systems. Each block on the chain contains several transactions, and whenever a new transaction occurs on the blockchain, a record of that transaction is added to the ledger of each participant.

This distributed database is managed by multiple participants using a technology called distributed ledger technology (DLT). Blockchain is a type of DLT in which transactions are recorded using an immutable cryptographic signature known as a hash. The transactions are then organized into blocks. Each new block includes a hash of the preceding one, effectively chaining them together, which is why distributed ledgers are commonly referred to as blockchains.

The blockchain works as a ledger, tracking every Bitcoin transaction, and is self-verifying, meaning that the entire network of nodes — different computers participating in the network — will constantly check and secure every movement. Here is where the “miners” come into the game: Their computers do the heavy lifting of maintaining the chain and thus, receive Bitcoin as a reward. These rules, collectively, are the Bitcoin protocol.

Bitcoin miners refer to the high-powered computers solving complex math problems to mint a coin. Miners are network-dedicated machines that verify all transactions and block any malicious actors. Bitcoin miners compile as many transactions as possible into a block, then verify the block and add it to the chain of previous blocks using a mathematical method. For providing their computing power to the network, miners are paid in newly minted Bitcoin.

How does the Bitcoin blockchain work?

A blockchain is a type of database which is a collection of information stored on a computer system electronically. What is kept in databases, information or data is usually structured in a table format that makes it easier to search and filter information. Databases are designed to store large amounts of information that can be accessed, filtered and edited easily and quickly by many users at any time. 

To do this, extensive databases house data on servers that are made of potent computers. Those servers can be built using hundreds and hundreds of computers. Why? To have the computational storage and power needed for many users to access the database simultaneously. This is the difference from a database too, let’s say, a storage cloud-like drive. 

Here’s how a blockchain differs from a database. The first difference is how data is structured. A database structures data into tables, while a blockchain collects information into groups, known as blocks, that hold data sets. Each block has a specific storage capacity that is chained onto the previous filled block when it gets filled, forming a chain of data. That’s why it’s called the blockchain: Millions of blocks filled with data are chained together.

This system means that every blockchain is a database that is more complex since it creates an irreversible chainline of data when implemented in a decentralized system. When one block is filled, it is unchangeable and becomes part of a timeline, and so, each block on the chain has an exact timestamp when added to the chain.

Thus, the goal of the blockchain is to allow digital information to be recorded and distributed, but not edited. That’s why it is not a database per se; no one can change it once it is filled and chained. With the appearance of Bitcoin technology, blockchain had its first actual application.

Reducing risks

Using a blockchain network comes with a lot of advantages. First, the accuracy of the chain. Transactions that are part of the blockchain have to be approved by thousands of thousands of computers. This removes all human involvement in the verification, which means there are fewer human errors, as well as a more accurate record of information.

But, what if one of the computers in the network makes a computational mistake? The error would only be in one copy of the blockchain. For it to spread, at least 51% of the network would need to have the same mistake, which is very unlikely.

Another advantage is that blockchain eliminates the need for third-party verifiers. Any member of the Bitcoin network can check and verify the blockchain at any time.

Blockchain data is decentralized, which means that it is not stored in a central location but instead copied and spread across a vast network of computers. This makes it very hard for anyone to tamper with the data since a kicker, for example, would need access to all of the networks to compromise it fully.

Finally, an instrumental part of the blockchain is that, although anyone with an internet connection can see the list of the network’s transaction history and access details about transactions, no one can access identifying information about the users that are making those transactions. Also, every time a transaction is recorded, it is verified by the network, meaning that the thousands of computers that compose it confirm if the details of the purchase are correct. 

Blockchain vs. banks

Blockchain works very differently from a traditional bank since it is 100% decentralized and it relies on thousands of computers to verify its transactions. This means it runs 24/7, every day of the year. The most significant advantage of all of the Bitcoin blockchain is its transparency because the blockchain acts as a public ledger for every transaction made in the Bitcoin network.

Other differences are that the speed of the transactions is as little as 15 minutes or as much as over an hour, depending on the network’s congestion. While card payments and check deposits can take from 24 to 72 hours.

The Bitcoin blockchain has variable fees, usually ranging from $0 to $50. While the fee is unrelated to the amount being transferred, it is determined by network circumstances at the moment and the transaction’s data size. Because a block on the Bitcoin blockchain may only hold one megabyte (MB) of data, the number of transactions included in a single block is limited. 

Another difference is in the way of making transactions. While the blockchain allows anyone with an internet connection to make a transfer, banks need you to have an account, a mobile phone, or a computer.

All of these differences make blockchain technology a great disruptor of traditional finances and the banking industry. They are tamper-proof and decentralized, set-in-stone chains that not only reduce costs but create a transparent network in which users can feel empowered and safe.

The limitations of the blockchain 

Although the blockchain comes with many benefits, like everything, it has its downsides. The first is that the blockchain can slow down when there are too many users on the network. It is also harder to scale due to its consensus method of work.

Another limitation is that data within the blockchain is immutable, you cannot go back and alter the previous block once it is written. Some may view it as an imitation that requires self-maintenance, which means that users have to maintain their own wallets or else they can lose access. 

A big limitation is that blockchain technology is still not mature. Also, it doesn´t offer interoperability with other blockchains and other financial systems, and is hard to integrate into legacy systems.

Technical advances

Lightning Network

The Lightning Network (LN) permits participants to transfer BTC between each other without any fees using their digital wallets. A second layer is added to the Bitcoin network to enable transactions between parties off of the blockchain, which is called off-chain transactions. A second layer boosts throughput without compromising any of the original blockchain’s decentralization or security features.

Lightning Network creates payment channels between two users in a distributed database so they can transact with each other, without all the other users receiving their information, defining off-chain transactions.

It is considered a game-changer in the cryptocurrency world since it has been designed to speed up transaction processing and decrease associated costs of the Bitcoin blockchain. It was conceived in 2015 and is being further developed and activated. 

However, researchers have cautioned that as the Lightning Network grows, it will become a more appealing target for attackers. Bitcoin on the developing payment network might be stolen if users aren’t careful and it may be hard to ensure the safety of assets in the future.

According to experts from the Hebrew University of Jerusalem, Bitcoin that is currently locked in the Lightning Network payments channel, which is currently roughly $9 million in Bitcoin, might be looted by attackers. While the flaw has the potential to be serious, the researchers are optimistic that it is fixable in the long run.

SegWit

Segregated Witness, or SegWit, refers to a process change in how Bitcoin maintains transaction data in the blockchain. Segregate means to separate and witnesses are the transaction signatures. It was created to renew the way in which data is stored on Bitcoin’s blockchain. This allows the network to hold more transactions in a single block, enhancing transaction throughput. SegWit went active on Bitcoin in August 2017 after the code for the update was released in 2015.

SegWit increases the block size limit of a blockchain by removing signature data from Bitcoin transactions. When parts of a transaction are removed, space gets freed and so does capacity to add more transactions to the chain.

SegWit not only improved Bitcoin’s transaction processing speed but also solved a weakness in the protocol that allowed nodes to tamper with transaction malleability problems (TXIDs) on the network. By removing what is known as “signature data” or “the witness data” from the input field of a block, Segwit increased the number of transactions that could fit into a block and fixed the transaction malleability flaw.

On the Bitcoin network, the SegWit update was introduced as a soft fork in August 2017. A soft fork is a backward-compatible update that allows upgraded nodes to communicate with non-upgraded nodes. A soft fork usually includes a new rule that does not conflict with the existing ones. However, due to the high cost of running a node (especially in developing countries), the upgrade was put on hold on November 8, 2017.

Taproot

Bitcoin Core developer Greg Maxwell proposed the Taproot improvement in January 2018. The 90% criterion of blocks mined with a support signal from miners was met three years later on June 12, 2021. It means that 1,815 of the 2,016 blocks mined throughout the two-week time frame had some encoded data left by miners to demonstrate their support for the upgrade. 

Taproot is a soft fork that improves Bitcoin’s scripts to enhance privacy and increase anonymity on the network. When a user does not use Taproot, anyone can detect transactions. When using Taproot, they can “cloak” their transactions. Taproot even makes it possible to hide that a Bitcoin script ran at all. As of October 2020, Taproot is merged with the Bitcoin Core library. 

One of the most significant changes to the network is the substitution of Schnorr signatures for Bitcoin’s current elliptic curve digital signature technique (ECDSA). The ECDSA technique generates public keys from randomly generated private keys, which makes it impossible to determine a private key from a Bitcoin address or public key. Moreover, the Schnorr signature will free up space and bandwidth on the Bitcoin network by making transactions faster and smaller. 

By permitting discrete log contracts (DLCs), the Schnorr signature can help simplify complex smart contracts on the Bitcoin blockchain. The DLCs are a proposal to add a smart contract implementation to Bitcoin, allowing the establishment of simple, safe and easy-to-use blockchain oracles.

It may also aid in the scaling of layer-two payment channels such as the Lightning Network, which allows for immediate transactions on the Bitcoin network.

The post A Complete Guide for Beginners: How Blockchain and Bitcoin Technology Works appeared first on Crypto Insider.

Brazilian retail giant Via Varejo has partnered with blockchain payment service Airfox, according to a September 12 press release.

Via Varejo, which owns home appliance and furniture chain Casa Bahia, is integrating Airfox’s digital banking platform on its e-commerce platforms, as well as in nearly 1,000 of its offline shops.

As the press release notes, customers will be able to purchase goods in Casa Bahia by paying directly via Airfox, or will be able to use microloans provided by the retail group. Customers can also reportedly use the app for personal finance, such as depositing and withdrawing cash, at the chain’s location.  

Airfox is a mobile financial service launched in February 2018 that includes fiat and blockchain payments via its AirToken (AIR) coin, an ERC-20 based token.

The press release outlines the importance of the collaboration for mass adoption of blockchain-powered payment services, letting the Airfox “extend its mobile digital wallet to Via Varejo’s national customer base and drive mainstream adoption.”

Via Varejo is one of the largest consumer electronics and home appliance retailers in Brazil, reaching 60 million customers in Brazil via its brands Casas Bahia and Pontofrio. The company owns over 900 stores in 350 Brazilian cities, reportedly making as much as 1 million deliveries per month.

According to the recent press-release, Via Varejo handled approximately $6.3 billion sales in 2017.

Last week, U.S. luxury automobile retailer Post Oak Motor Cars became reportedly the first Rolls-Royce, Bentley and Bugatti dealership in the country to accept Bitcoin (BTC) and Bitcoin Cash (BCH) as payment.

By

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The Google Cloud team has officially made the Ethereum (ETH) dataset available in BigQuery, the company’s big data warehouse for analytics, according to a post published on Google’s official blog August 29.

The Ethereum blockchain data is posted in the dataset and updated on a daily basis. As the team explains, the tool was created to help make business decisions, prioritize improvements to the Ethereum architecture itself (for example, to prepare updates), and balance sheet adjustments, e.g. how quickly a wallet can be rebalanced.

As Google explains, the Ethereum blockchain contains APIs for random functions such as checking transaction status, looking up wallet-transaction associations, and checking wallet balances. Still, the API endpoints cannot be easily reached. For that reason, BigQuery’s OLAP features help aggregate such types of data and and visualize it.

Furthermore, the software based on Google Cloud synchronizes the Ethereum blockchain to computers running Parity — a UK-based provider of infrastructure software for interacting with the Ethereum network, which performs a daily extraction of data from the Ethereum blockchain ledger and stores date-partitioned data to BigQuery for exploration.

Google also shows some examples of the uses of the new tool. One of them relates to CryptoKitties — a game based on the Ethereum blockchain that is the most popular ERC-721 smart contract by transaction count. BigQuery collects data on accounts that own at least 10 CryptoKitties (a color on the graphics indicates owner) and their mascots’ reproductive fitness (size).

Google has already expanded into blockchain-based tools and services this year. In February, the company created a similar tool for the Bitcoin (BTC) blockchain to visualize transactions, detect anomalies, and extract necessary data from the blockchain ledger.

As Cointelegraph wrote in July, Google also partnered with two blockchain-focused firms, Digital Asset and BlockApps, to offer new distributed ledger technology (DLT) solutions on Google’s Cloud Platform.

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Bitcoin (BTC) was made possible by the people who believed in it, and its future is heavily dependent on the torchbearers of this legacy — the general public.

While Bitcoin’s rise from an online blog post into mainstream finance is worthy of a novel in itself, the constant support from the ecosystem of traders, miners and users has helped Bitcoin beat all odds and grow into one of the most profitable assets in humanity’s financial history.

Living the dream in cryptoland would ideally translate to buying a cup of coffee from a local store with Bitcoin. And the good news is that many businesses across the globe have started accepting the truly borderless currency. Given the increase in Bitcoin’s acceptance and considering the possibility of a great return on investment, the new generation of business owners wants to accept Bitcoin as payment for their services. But how? 

The Bitcoin ecosystem currently hosts a plethora of players offering a safe place to store Bitcoin among other cryptocurrencies. However, the risk of storing the asset with an unsafe provider is very real, which can ultimately lead to losing your Bitcoin forever.

Here are various options available to get going with Bitcoin acceptance in a few clicks. 

The essentials to accept Bitcoin

Bitcoin wallet — This is like your leather wallet where you store cash. The only difference is that it’s digital and that it stores Bitcoin. As someone running a business, always remember that a Bitcoin wallet can only accept BTC and no other form of cryptocurrencies. 

Many wallet services allow users to store multiple types of cryptocurrencies using different addresses. Bitcoin wallets are protected by passwords and private keys and are the only possible options to gain access to the funds.

Bitcoin address — Every Bitcoin wallet comes with an address. This address will be unique to your wallet and can be shared with others to receive payments. Wallets also have the option to convert the Bitcoin address into a scannable QR code, which can be displayed at the store.

However, if you make a transaction to a wrong address or with an unsupported currency, the underlying technology will not allow users to reverse or cancel it. Since the creator of Bitcoin, Satoshi Nakamoto, did not hire a customer service agent before disappearing for good, it is impossible to request a refund on your Bitcoin transactions.

Private key — The private key acts as a mathematical gateway to your Bitcoin reserve. Without this key, you instantly lose access to your BTC wallet. While all Bitcoin wallets have a unique private key, digital wallets often have options to log in through passwords. In either case, it is recommended to store a copy of this information on other devices such as USB sticks as a backup.

All you need to accept Bitcoin

After getting familiar with the basic requirements to hold and store Bitcoin, there are a few more steps that need to be taken to set up a business for accepting BTC payments. One of the best practices is to do your own research and identify the platforms and services that best meet your business and regulatory needs.

Look out for local regulations — Before you put up a sign that says “Bitcoin accepted here,” it would be wise to check for regulations in your jurisdiction. Accepting Bitcoin in disputable geographies may incur serious legal charges ranging from hefty fines to jail time.

Wallet options — Setting up a new Bitcoin wallet is as easy as signing up for a new email address. Some of the most common platforms for a Bitcoin wallet include cryptocurrency exchanges, and online (websites) and app-based wallets. Businesses also have the option to procure point-of-sale machines for collecting payments in Bitcoin through cards. 

Recommending wallet options is risky because the wallets are only as safe as the intent of the private companies hosting your BTC reserves. To help you get first-hand information on the latest and greatest in Bitcoin innovation, take a look at our beginner’s guide for you to find the best places to discuss Bitcoin and how to subsequently choose the best BTC wallet.

Online businesses can also make use of third-party payment processors, such as Coinbase and BitPay, to set up website payments gateways for BTC transactions. To see how a store that processes BTC payments operates, check out the Cointelegraph Store.

What to be aware of

Considering the massive price volatility, businesses are advised to maintain invoice copies with Bitcoin’s price based on the time of the transaction. This will help you keep track of your “true” income. 

Taxes calculated on Bitcoin transactions are heavily dependent on local jurisdiction. For example, the United States considers Bitcoin as property and will tax it differently compared to a jurisdiction that accepts it as a currency. Portugal currently leads this space, allowing citizens to trade cryptocurrencies tax-free since 2018.

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A teenager who traded 157 BTC in the past three months has been arrested for alleged theft of Bitcoin from consumer devices.

A teenager who traded 157 BTC in the past three months has been arrested for alleged theft of Bitcoin from consumer devices.

Police in California have arrested an alleged hacker who stole Bitcoin (BTC) totalling more than $1 million by hijacking cellphones, investigative cybercrime blog Krebs on Security reported Wednesday, August 22.

Citing a police report, the publication reveals Xzavyer Narvaez, 19, used “SIM swapping,” a technique also known as a “port out scam,” to reportedly steal cryptocurrency from victims’ devices. Over a period of several years, Narvaez and another suspect already under arrest used the funds to buy items such as luxury sports cars.

From March to June 2018 alone, Narvaez’s account on cryptocurrency exchange Bittrex processed 157 BTC (around $1,009,000). The police report also confirms that crypto payment processor BitPay was used in Narvaez’s purchase of a 2018 McLaren from a car dealership in Southern California.

According to the report reproduced by Krebs On Security, Narvaez had used the same device to commit the crimes multiple times, which the publication summarizes “ultimately gave him away,” as “approximately 28 SIM swaps were conducted using the same employee ID number over an approximately two-week time period in November 2017.”

Further investigations by Vice revealed that the SIM swapping underworld regarded the 19-year-old as “one of the best SIM swappers out there.”

Nonetheless, Narvaez was unsubtle about his reportedly illegitimate cryptocurrency gains, posting photographs of cars he purchased on Instagram, Vice reports.

Earlier in August, a U.S. investor filed a $224 million lawsuit against telecoms giant AT&T over alleged negligence, claiming that $24 million in cryptocurrency was stolen via a “digital identity theft” of his cell phone account.

The episodes come as attitudes among U.S. law enforcement have become more nuanced regarding the use of cryptocurrency by malicious parties.

In an interview with Bloomberg earlier this month, Lilia Infante, an agent working on the Cyber Investigative Task Force at the U.S. Drug Enforcement Administration (DEA), said she hoped cryptocurrencies remained in favor in criminal circles, noting:

“The blockchain actually gives us a lot of tools to be able to identify people. I actually want them to keep using [cryptocurrencies].’’

The police report notes that the investigators had used the Bitcoin blockchain in order to “trace the flow of the bitcoins used to purchase the McLaren back to an address attributed to the cryptocurrency exchanger Bittrex,” also noting that “BitPay provided records that identified the Bitcoin transactions in which the vehicles were purchased.”

At the same time, the DEA reported the percentage of crimes involving Bitcoin had dropped dramatically since 2013.

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