Digital cash

Is it possible to protect your privacy in the public world? Even cryptocurrency isn’t 100% anonymous. However, it can help in some cases. Here is simple example.

Is it possible to protect your privacy in the public world? Even cryptocurrency isn’t 100% anonymous. However, it can help in some cases. Here is simple example.

On my birthday, I received gifts from two banks were I have accounts — monthly subscriptions to an online cinema. They were for the same online cinema where I’ve paid for various films with different cards. So the banks thought that it would be a nice present.

On the one hand — yes, it is. But at the other — What??? The bank knows what would be a nice present for me? It knows my tastes? Sure, it knows. When you use a card instead of cash, you give your bank useful information about yourself.

By the way, the present was insidious. To watch films, you need to connect your card to the online cinema. If you don’t disconnect the card after the activation of a promocode, then at the end of the month the cinema automatically charges for the next month. A nice trick, isn’t it?

— Bitcoin is new gold, — they said. Nope. The real gold is information. Confidential information. All companies want your money. Where is the line between following clients’ tastes and manipulating clients’ tastes? The banks’ information together with Facebook data and AI algorithms can create an illusion of choice. But is it actually your choice or were you led precisely to this choice by using a specific ad?

Maybe, in the future, cryptocurrency will have the same problem. But for now, only the buyer and the seller know what was purchased. — Oh, it’s too complicated, you might say, and all bank data is depersonalized anyway.

Just remember two stories: about mr Snowden — about private information, and about the Petia virus — about the cybersecurity of data holders. While offline, you can choose to use cash and not give information about payments to third parties, or to use a card and to receive gifts from banks. But while online, you have no choice, until cryptocurrency payments for goods and services are accepted everywhere. After all, cryptocurrency is not digital gold. It’s digital cash.

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The beginning of the Cryptoutopia

A man sat in a room. He was scratching his face, clean-shaven in defiance of fashion, and reasoning -Yesterday I met an old chap. He was over 80. We talked about the weather, about politics... He shared his story of how when he was young he used to be an engineer and travelled around the country a lot. And after I in turn mentioned I was the head of a company that works in the field of cryptocurrency, the old guy began throwing questions at me showing great interest. Funny, but such episodes of oblivion don’t seize to surprise me in this day and age, when the information torrents are literally gushing at us from every each direction.

A man sat in a room. He was scratching his face, clean-shaven in defiance of fashion, and reasoning -Yesterday I met an old chap. He was over 80. We talked about the weather, about politics... He shared his story of how when he was young he used to be an engineer and travelled around the country a lot. And after I in turn mentioned I was the head of a company that works in the field of cryptocurrency, the old guy began throwing questions at me showing great interest. Funny, but such episodes of oblivion don’t seize to surprise me in this day and age, when the information torrents are literally gushing at us from every each direction.

Lately, I meet more and more people that are far from being even remotely proficient in any area of modern technology, yet are genially curious about mining, blockchain, bitcoin and other notions; these names alone sounding more like incantations from children’s books than terminology from the adult world.

But it is not just about the terms. It is a matter of ordinary users’ attempts to figure out ways to make a profit from cryptocurrency that resemble stumbling around a maze whilst wearing pink glasses. People search for a leprechaun with a pot of gold, getting a neurosis instead of a profit. Because nothing annoys us more than someone else’s easy money. People do not quite comprehend if its value is really as high, as its popularity, yet they are ready to invest their livelihood into intangible candy wrappers in order to duplicate the success of a friend of their colleague who gained $300. People try to jump into the last carriage of a train that’s leaving because of all the hype around profits in cryptocurrency.

But what is cryptocurrency? It is an Ouroboros that creates and devours itself. It’s multiplying in numbers, courtesy of all the computing gear laboring away, processing data records, phishing for the location and amount of available cryptocurrency. The more popular it is, the more people buy it and pay with it, the more time and energy is needed to process the records. These records grow in size and complexity and become more expensive to reproduce. Due to demand — yours and mine. Due to the fact that we keep transferring coins from one pocket into another pocket, endlessly re-writing the remaining balance on accounts.

This creates some weird associations. It is as if we are constantly peeking into one big communal fridge that refills itself solely by us opening the door and writing down how much and whose munchies remain in it ...over and over again.

The technology is as simple as it is invulnerable. It does not have national boundaries. It is not dependent on central banks with their emissions and taxes. It is understandable why most states want to control cryptocurrency. Cryptocurrency is the golden goose that keeps flying past the state’s «eggless» coffers. And is it a good thing that its movements are not regulated by the state?

It is a bad thing when you think that cryptocurrency facilitates drug and weapons money laundering — as if people had not been able to find ways to bypass the law in the past. It is a bad thing if Satoshi Nakamoto is just another Bernard Madoff to you, who is leading vulnerable people into an ocean of bankruptcies.

And it is a good thing that cryptocurrency is in neutral waters if you believe in self-regulation and do not want to feed banking institutions.

Cryptocurrency was created as a counterweight to the existing system of bulky, overly regulated and greedy financial behemoths. But no-one knows what this stand-off will lead to. Are we striving for freedom, cosmopolitism, equality and sub-orbital space flights for everyone? Or, maybe, evolution leads to us to the creation of bitcoin so that we would destroy our economy, as it has lead us to the creation of plastic to destroy the ecology? Because the state needs to live off something. Build roads, hospitals, schools...

In any case, there is no point in paying attention to any kind of predictions. Cryptocurrency should be treated as a gamble where you can lose it all and lose in an instant.

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The Curse of the Original Interface

The man is lying in a soft armchair by the window. Everything in the surrounding environment is organically selected to fit his character and style. From the powerful, urban perspective of the room, only Rubik’s cube sticks out, which he is twisting in his hands. The cube is smooth, shiny, with metal facets of different shades, that are not distinguishable by everyone. From a distance, it looks like a tiny sun, only from up- close it’s obvious that putting it together is all but impossible. The man is reasoning.

The man is lying in a soft armchair by the window. Everything in the surrounding environment is organically selected to fit his character and style. From the powerful, urban perspective of the room, only Rubik’s cube sticks out, which he is twisting in his hands. The cube is smooth, shiny, with metal facets of different shades, that are not distinguishable by everyone. From a distance, it looks like a tiny sun, only from up- close it’s obvious that putting it together is all but impossible. The man is reasoning.

What was the filter of success in the last decade? What drew a social boundary between well-dressed people meeting for a cup of coffee? Perhaps the brand of the device, which was their assistant in their career and a faithful companion in their personal life.

For example, that time when you asked for the latest generation «Apple’s» charger from your interlocutor, did you happen to hear slight apologetic overtones in his " umm... I don’t have one of these" answer? It’s not without a reason that owners of this device model had opted to call it by its brand name instead of an unpretentious word «phone». That was placing the accents.

Technologies have gone ahead, leadership in this area has become less obvious. The question has also changed. Can I pay with bitcoins? The availability of cryptocurrency, ability to make payments and conversions are The Destiny of The Chosen. The skill that makes you greater in your own eyes and slightly annoys the less advanced interlocutor. Not because he can not afford to buy a pair of Satoshi — but because this requires specific knowledge that few people have. Most modern services imply that we need original solutions. But in a world where comfort and speed play a decisive role, one must pay too high a price for the desire for uniqueness. An unusual interface turns from a competitive advantage into an acumen test that the user did not want to go through. This does not make the service better. This demonstrates disrespect by its creator and his own complexes.

The man twists the cube in his hands just a bit longer and throws it into the trash can. The sound of the broken glass is heard.

The cryptocurrency transaction service should be like the best friend — familiar, akin. The one that does not exude geek terminology, drowning in it, like in treacle. The one you trust. To which you do not need to get used.

All the gimmicks are for fun. For kicks. Not for daily work with financial instruments. A beautiful solution for an adult, thinking person is not curls fluttering in the wind, but a large-knitted hat and a nose buried deep in the scarf. A good device for an advanced investor is one that is simple and straightforward. The one that will provide protection.

The interface should decrease the number of steps to the target. The road to the transaction should not be as spectacular and complex as if you were making your way to Mordor. Seeing that kind of a path in front of him, a person does not believe in the safety of his means and the possibility of earning. He sees Valhalla and is unlikely to set foot on such a path.

Years go by, and the principle of a successful project remains the same. "If you can’t explain it to a six-year-old, you don’t understand it yourself."©. A. Einstein.

How to create a foolproof product for solving new tasks? Sometimes the surest and most profitable way is to look into the eyes of your competitors and invest your ambitions in a common cause. Few possess enough courage for that. Perhaps, that’s why there are not that many good ideas on the market.

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The Cryptocurrency Pantheon

A bird fluttered in a huge marble hall. A mere flap of her gigantic wings made the flags of the countries raised along the perimeter of Pantheon wave. There were chests placed underneath the flagpoles, into which occasional precious feathers would fall.

A bird fluttered in a huge marble hall. A mere flap of her gigantic wings made the flags of the countries raised along the perimeter of Pantheon wave. There were chests placed underneath the flagpoles, into which occasional precious feathers would fall.

The name of this bird is Cryptocurrency. In January 2018, her capitalization reached almost $600 billion. Being a humble chick, she did not often get enough food growing up. A rare farmer fed her with the fruits of his labor. Some believed that she would turn into real Phoenix and with her rich feathers drive away dull weekdays preoccupied with savings instead of endeavor. Some would throw her a couple of seeds and walk on. States did not give a damn as long as the outflow of capital was not excessive. Suddenly the fruits that were to go into circulation and on which taxes had to be paid, were fed by the whole ‘field-fulls’ to the gluttonous bird and disappearing irrevocably. Irrevocably for the governments. Farmers who have invested their modest — or immodest — resources, bathed in the gold of the dividends, provided they had guessed her movements correctly.

And now she was in the Pantheon. In the temple of directive management, taxes and elective power. Fundamental and strict. Cryptocurrency could easily fly between its columns out to freedom, but for the moment was curiously looking around, trying to understand if she had an interest in weaving a nest in this strange building. Representatives of different countries congregated around the flagpoles by the chests. Among them were politicians, military men, scientists, even several Nobel laureates. They stared at Cryptocurrency with a strange gaze: cautious and demanding at the same time....as if she were deity. They did not know what to expect of her, but they were ready to entrust her with the most daring hopes — or blame for the destruction. Some saw her as a threat, others as an opportunity. But everyone agreed that it was impossible to ignore this semi-mythical being. Cause then the money with which they intended to build buildings, teach children, grow food, buy private residences would leave the economy...

The foundation of this Pantheon was laid by the USA. The European Union acted as its continuation, erecting most of the walls. Belarus was responsible for the roof and made a huge hole in it, advocating the freedom of the bird. Russia stood in the middle of the hall with a «nanotechnological» ornithological net, trying to understand what kind of an animal it was and how to tear her apart to make profit from all components. China was pulling barbed wire ... A team of engineers from Israel designed drawings to create their own, more perfect Cryptocurrency. Others tried to put the birdie on a diet, so that she would survive but not pose a threat.

The Pantheon would be approached by farmers. In the hands of some were pitchforks, the weapons of others were the ability to lead, some gave in to the general upheaval. They did not want taxes. Neither they wanted schools nor hospitals. They did not want the fruits of their labor to be taken away by some money-bags. Can you understand their desire to escape the «rat race» and play in the Big League? Of course. Why do they need a hospital if they can pay for the best doctor at any time? For the best tutor, the best commercial university? Perhaps it’s just one type of greed against another? Money-bags fighting those who hate them only because they are jealous? Or is this about the free market? About independence, absence of any borders, cosmopolitanism?

Too many questions. We will understand who is on the bright side, and who is not, only at the end of this story. Because wherever money is involved, rhetoric can always be made beautiful and sublime, under the guise of good intentions. The indicator will be either the well-being, prosperity of the society or the rupture of its layers. Until Cryptocurrency has become a mass instrument, the market can be steered in any direction. The Future is ours.

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Let’s try to find out what PoW, PoS and their alternatives are.

PoW — Proof-of-Work — the first implementation of the blockchain network. On client side, a complex computational task is performed, and a simple verification task is performed on server side. Due to the fact that the computation time on client and on server is asymmetric, the algorithm can bring a stable solution for the blockchain network. Those with more computing power, have a greater chance of creating the next block.

PoW — Proof-of-Work — the first implementation of the blockchain network. On client side, a complex computational task is performed, and a simple verification task is performed on server side. Due to the fact that the computation time on client and on server is asymmetric, the algorithm can bring a stable solution for the blockchain network. Those with more computing power, have a greater chance of creating the next block.

Disadvantages of PoW: The more computing power you have — the more chances there are to create a block. Huge electricity consumption.

Some vulnerabilities that can be exploited in PoW: Attack «51%» — if someone can control 51% of the processing power on the network, then they can only confirm their own blocks and ignore the others ones. Double spending or generation of two transactions, the first one — the payment itself, the second one — the transfer of the identical amount to your other wallet. After some manipulation, the first block can be deemed invalid or simply non-existent. Selfish mining — an attacker publishes blocks in such a way that the computing resources of other miners and pools are wasted.

PoS — Proof-of-Stake — the second implementation of the basic blockchain network. With this method, you do not utilize a small nuclear power plant to create blocks. The creator of the next block is selected using various combinations of random selection, the number of coins in possession or the period of ownership of coins. Basically, those who hold more coins are more likely to create a new unit. Computation in this way is not that difficult.

Disadvantage: «Owning nothing» is a problem with sites that can vote for several blocks at once.

PoA — Proof-of-Activity — a combined blockchain network method. First, after the PoW Miner has calculated the hash, it creates a block pattern. The hash is interpreted as N coins. In the second stage, the N holders of these coins (PoS miner) sign the block. Disadvantage: Huge data transfer over the network

Exotic! PoB Method — Proof-of-Burn is a method when you send money to an address from which no one can spend it. The more money is burned — the more chances there are to create a block.

PoC — Proof-of-Capacity method, when you use memory for mining. The more memory there is

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