Why Israel's Banks Will Unite Over Blockchain

The general consensus is that there is huge potential in blockchain technology. Some say it may be as big as the Internet itself, doing for transactions of value what the former has done for transfers of information.

 

Blockchain could completely alter traditional industries, changing the face of financial transactions, legal contracts, verification mechanisms and even voting procedures. Where consensus is lacking, there possibly lie the future steps of blockchain.

What can we expect to see next? Our hunch: we are entering the phase of the institutionalization of blockchain, and it will be led by the financial system. Yes, by the banks.

The potential advantages to using blockchain are obvious. Most significant is the ability to remove the middleman, and allow for faster, cheaper and more secure transactions. This could prove to be economically beneficial to the financial system which facilitates billions of transactions every day.

 

No less important is the advantage it provides for developing countries, where trust in the authorities is relatively low, and especially for those which suffer from high levels of corruption. There, people are looking for different ways to realize their civil liberties, including voting, identity verification, registering land ownership, etc. Blockchain technology – direct, decentralized, and secure – provides a potentially unprecedented and private alternative to these.

 

Early adoptor

Arguably one of the most vibrant blockchain industries currently is in Israel. A combination of expertise in cryptography and Big Data gained in the world of security and defense, combined with a passionate and talented entrepreneurial ecosystem has led a growing number of companies to lead the way to the next big thing in the blockchain domain.

 

These companies include startups like Synereo (a decentralized communication platform), Simplex (a payments service working on enabling bitcoin purchases with credit cards), Colu (Colored Coins).

Yet, careful observation of the Israeli ecosystem shows that it comprises much more than early-stage startups. Major Israeli financial institutions, perhaps lacking the sheer magnitude and market share of their American and European counterparts, are showing increasing interest in various applications being developed by these younger companies.

 

Several banks (such as Bank Hapoalim, Leumi and Citi Bank) have launched accelerators with infrastructure designated to support early-stage initiatives. They offer much-needed funding, technical support and the opportunity to interact and collaborate with the banking system. This synergy could prove to be extremely valuable, as one of the major hurdles facing entrepreneurs in the field is developing products and solutions that could be adapted for, and used by, the highly conservative, heavily regulated environment such as that in which the banking system operates.

 

In addition, more investors are being drawn into the industry, incentivizing promising ventures and adding fuel to the growing excitement and expectations surrounding the field. Recently, we're also seeing increased involvement of lawyers and accountants in the sphere, discussing implications and working with their clients on some of the challenges associated with blockchain.

 

Regulation driven

One cannot ignore the resemblance between the current growth in the industry and the evolution of the Israeli cyber industry roughly a decade ago. What began as a small group of cyber startups soon became a deluge of hundreds of companies, providing innovative technology and multi-tier services around the globe. Similar, but not the same. Unlike the cyber industry, the blockchain industry is lacking crucial tail-wind from the regulator.

Almost two decades ago, the Israeli regulator came to the understanding that cyber was becoming a major new front. The main driver was the concern surrounding cyber-attacks on critical national infrastructure and security installations. The sharpest minds from the Israeli defense industry convened to discuss a national realignment to ensure Israel's ability to confront future challenges.

 

Eventually the government adapted a combined approach, emphasizing the development of human talent, investment in technology, building institutions, allocating funding and providing a regulatory environment that allowed the industry to thrive. All together this has led to an unprecedented boost to the Israeli cyber industry, a push that Israel is still reaping benefits from to this day.

This is not yet the case with blockchain. Regulators worldwide remain skeptical of virtual coins that circumvent banks and government authorities, and seem prone to criminal exploitations. We've seen that SilkRoad, Mt Gox and the recent Bitfinex scandal has not done anything to defuse this stereotype.

 

But resistance may be more deeply rooted than mere concerns over criminal misuse and consumer protection: a decentralized alternative to centuries-old systems of centralized governance and control is not something any regulator will be able to swallow too easily. Likewise, Israeli regulators are still 'sitting on the fence'. Given that both future uses, and implications of blockchain, are unpredictable, this is to be expected.

 

However, the regulator provides an indispensable support system, including supervision mechanisms and an appropriate legal framework. Such regulatory backing can bolster consumer awareness, understanding and confidence in the new technology and accommodate the move of blockchain from fringe to mainstream. But who will lead the charge?

 

Meeting of worlds

Various businesses worldwide are already beginning to take note of the potential economic value in using blockchain technology in myriad applications. And as competition grows, an even larger circle is beginning to feel the pressure to follow suit. Although the movement is certainly expanding, this grassroots growth may not suffice to live up to the disruptive potential of blockchain. This is where the big banks come in.

 

Looking back at the major developments over the past year, there is no doubt that the ripest industry for blockchain is the financial system. The big financial institutions would have the most to gain – or lose.

 

It is, however, the most highly regulated industry. Therefore, authorities need to deepen their engagement with the various applications of the technology with the aim of creating an appropriate regulatory framework applicable for the technology, whilst increasing consumer confidence, but without undermining the economic model of the financial system.

And who is best qualified for that role if not the financial system itself? It has both the knowledge and capacity to conduct meaningful dialogue with the regulator on the one hand, and the economic incentive to cut down costs by using blockchain on the other. If that happens, we could soon find ourselves in an era of institutionalized blockchain, where cutting-edge technology meets conservative infrastructure to generate a wholly new and fascinating system.

Wings - DAOs Are The Future

A Decentralized Autonomous Organization, which is also known as DAO is run through a set of rules that have been encoded as computer programs. Wings has specifically been designed for the use of DAOs. In other words, Wings can be defined as a smart contract and multi block chain based platform, which can be used for creation, participation and management of DAOs. 

Wings comes along with a variety of features, which have the potential to deliver an excellent support to DAOs. The support of popular block chains such as Bitcoin via Rootstock and Ethereum hold a prominent place out of it. On the other hand, people who subscribe with Wings will be able to implement AI-augmented assistance on top of leading instant messengers out there. While offering these innovative features, Wings tries to create a mass-market oriented DAO platform. They also want to be the owner of the most accessible DAO platform as well. With the help of Wings, both established companies as well as entrepreneurs will be able to launch their new DAO proposals without much hassle. That's because the token owners of the platform would review the submitted proposals and get them involved in promising projects. 

Conversational UX is another impressive functionality that is offered to the users of Wings. This feature is powered by Chatbots technology. Natural language communication has received much attention in the past and Chatbots has taken the maximum advantage out of it. Even leading companies in technological innovation such as Microsoft and Facebook have started creating similar solutions of their own. DAO interaction would take place in the form of a natural conversation through Chatbots. The users will also be able to control the member involvement of the DAO through instant messaging platforms. 

No coding experience is required to use Wings and get the best out of it. The developers have paid special attention towards making the life easy for Wings users. Therefore, users can simply use the friendly interface without having any understanding about EVM coding languages such as Serpent and Solidity. You just need to be the owner of a smartphone in order to use Wings and manage your DAOs. Automatic participation is another impressive feature that is offered by Wings. This helps the members of the platform in order to deposit funds to a Smart Contract controlled wallet. Then they will be able to set up their preferred purchase settings and spend the funds as per it across multiple DAOs. 

Large scale companies and entrepreneurs that are looking forward to launch new DAO proposals will be asked to go through a decentralized KYC process, which is followed by community voting. This method has the ability to minimize the amount of fraud activities that take place within the platform. On the other hand, it can create an ideal platform for the community members to focus on creating innovative products. Wings has a dedicated reputation system as well. Therefore, members who contribute and get a high rank will be able to launch new DAO proposals without much hassle. In other words, they will have to get a lower amount of votes when compared to others. 

These are few of the prominent features that are offered by Wings. It can be summarized as a fascinating project backing social platform, which comes with an array of advanced features. 

Read more about the Wings project here
Download the Wings whitepaper here

The Top 5 Weirdest Alternative Crypto-Coins in Circulation

 

Recently I was asked to compile a list of the strangest crypto-currencies I could find. I had no idea what I was in store for. I’ve tried to compile the Top 5 strangest I could find. Let the countdown begin!

 

Unobtanium (UNO)

UNO is a term for fictional engineering and scientific thought that describes an extremely rare and costly material. Conceptual Unobtanium is the full term; UNO is the short hand version given to this alt-coin by its followers. The UNO community, which is small but regarded as extremely loyal, refers to the coin in kilograms. Currently, only four exchanges are dealing in UNO. A rather small number of UNO coins are to be mined: 250,000 over the course of 300 years. UNO is mined right alongside bitcoin. By doing this it makes the process more secure, and it mines three times faster than bitcoin.

 

Potato Coin (Spuds)

This coin stands out among the rest, not so much for being weird, but for the ambitious idea behind it. First and foremost, the name is out of the norm for sure, even for weird crypto-coins. It’s creators chose the potato because it is a staple source of food in the area where this coin is going to be dispersed. Now for the really cool part. The main idea behind Potato Coin is to help improve the conditions in Africa for the farmers. It will also try to reduce their dependency on the normal fiat currency of the area. So far, 85 percent of the initial pre-mine is done, and going to an African Trust, as well as directly to the farmers themselves. A latin inscription adorns Potato Coin’s logo and translates to “Potato is light, potato is life, potato is love.” That’s weird to say the least, but the entire idea behind this coin is awesome.

 

Coinye (West)

If anyone has ever gotten too much attention by the media, in my opinion, its Mr. West. Apparently the creators of Coinye West feel completely different. In spite of a cease-and-desist letter filed by West’s legal team, the coin was released in 2014. The coin is still being released, but a few changes have been made. The South Park cartoon Kanye fish was substituted for the original Kanye head, and “West” was dropped from its name. The creators admit that other than the name and South Park reference, Kanye had nothing to do with the coin. They did mention on the website that they were avidly seeking Mr. West’s approval at the time. Turns out, though, that West didn’t approve, and sued the alt coin into ruin six short months after its release. It’s still trading on some exchanges, going by the ticker “COYE/KOI”.

 

NyanCoin (NYAN)

When I first heard of NYAN, I thought this would most certainly be number one on the list, but further research depicted a different story. NYAN came out in 2014, and despite its more than off- putting name and logo, it caught on surprisingly well with miners. It was released as the “first officially licensed cryptocurrency”. Creators named the coin after the viral YouTube video titled NyanCat that was uploaded in 2011, and has received over 100 million hits. In my few short years dealing with crypto currency, and cyber security, everything about this coin screams, “scam!” That obviously isn’t the case, though. It is mostly a reference to the 8-bit’esque website design and graphics. The coin has a substantial following still, and a dedicated sub-reddit. Anyone can get started with NYAN by simply going to the site and downloading the software.

 

Wankcoin(WKC)

This is the oddest crypto-coin I came across. It’s most certainly the strangest name so far. Wankcoin is the brain child of porno junkies with consciences. If you couldn’t tell, it was created as a way for porn enthusiasts to buy and trade NSFW porn anonymously. While it’s not the only coin of its kind, with this purpose it stands out from the rest because of its name. Everything about this coin makes me laugh. Any slogan for Wankcoin you ask? Well, it just so happens to be “Bank While You Wank!”. One thing I’ve noticed about the Wankcoin site is the ability to mine Wankcoin by watching porn, and apparently the more you “wank” the more you mine. It uses the same algorithm as Bitcoin, SHA-256.  Of all the alternative crypto-currencies I’ve looked into, this one takes the cake. Just imagine it…nevermind, don’t imagine it.

 

Well, there you have it–some of the weirdest alt-coins I could find. This, of course, is only a small list of what’s out there, so if you have a little extra change and want to do something strange with it, you might as well pick one (hopefully not number one) and see where it takes you.

OKLink Makes US$100 Million of Cross-Border Transfers Free for Global Remittance Companies

Hong Kong, 12 October 2016 – OKLink, the global blockchain money transfer network, announced today that it will subsidize all fees on the first US$100,000 of cross-border transfers for every partner on the OKLink network, up to a total of US$100 million. The initiative incentivizes money transfer companies to offer their customers the cheapest, fastest, and most transparent global remittance services.

Hong Kong-based OKLink empowers transfer and delivery companies to provide senders and recipients a superior experience on low-value transfers in their local currency. OKLink’s platform is built on the trust of the blockchain, using digital assets to settle among participants in an instant, secure, and transparent manner. It eliminates the need for pre-funding by settling every transaction in real-time using stable and native digital assets.

 

OKLink currently offers payouts in fifteen countries across Asia, the Americas and Africa.

Jack C. Liu, Chief Strategy Officer at OKLink, said, “The world's financial transfers run on antiquated technology built nearly half a century ago. Slow, costly, and favoring large sized transactions, these qualities are in contrast to the emerging payment needs of today’s ever-connected global economy. OKLink believes in a future where small-value cross-border transfers will be as simple, fast, and cheap as a text message. “We are thrilled with the reception OKLink has received from industry leading companies and we hope to support their growth further with this incentive promotion.”

 

Starting from today, participating companies on OKLink will be able to service individual payouts at the mid-market exchange rate for the first US$100,000 of transactions. Transactions under US$500 will qualify for the subsidy. Eligible companies must sign up by December 31, 2016 and have until March 31, 2017 to complete the free transfers.

 

Coinsecure, Coins.ph, Rebit, MOIN.Inc, Coinone, Coinplug, Coincheck, Bitoex and BitPesa, are among the early companies to join the OKLink network and take advantage of this initiative.

 

A selection of quotes from OKLink partner companies is provided below.

Mohit Kalra, CEO of Coinsecure in India, said, “India holds the largest share of remittances around the globe with over US$70 billion of inward remittance in 2015 at an average fee of 6 percent.  What Coinsecure and OKLink plan to do - is going to be phenomenal.”

 

Ron Hose, CEO of Coins.ph in the Philippines, said, “We are very excited to allow our existing user base of over 500,000 customers in South East Asia to remit funds to Japan, China and South Korea using OKLink's platform, supporting our joint vision of providing cheaper cross-border payments and remittances across the region."

 

John Bailon, CEO of Rebit in the Philippines, said, “Rebit first pioneered using Bitcoin for remittances. We’re very excited to join the OKLink network, whose resources and influence will create a strong alliance of companies committed to making Blockchain remittances work for any customer, anywhere in the world.”

 

Ian Suh, CEO of MOIN.Inc in Korea, said, "OKLink has developed a new and revolutionary way to solve problems in the traditional money transfer system. MOIN is very proud to be a partner of OKLink. The partnership will enable Korean people to send money abroad cheaper, faster, and more conveniently. OKLink is going to become the future of global remittance, connecting the world much closer."

 

Wonhee Shin, CTO at Coinone in Korea, said, “This is a very meaningful milestone for blockchain technology, which is closely watched by regulators and practitioners from all over the world. Finally the technology has moved away from the concept phase and into the real usage phase.”

 

Joon Sun Uhr, CEO of Coinplug in Korea, said “Coinplug is very excited to work with OKLink in building the next generation global settlement network. We expect the market to grow significantly in micro-sized overseas remittances and we are preparing to be a dominant early mover with this partnership with OKLink.”

 

Koichiro Wada, co-founder of Coincheck in Japan, said, “We are excited to partner with OKLink. We believe blockchain based remittance will have a huge impact on the finance industry especially for people who do small transactions on a regular basis.”

 

Titan Cheng, CEO of Bitoex in Taiwan, said, “OKLink is an important partner for money transfer companies in Asia. Bitoex has more than 5000 locations in Taiwan. Our partnership with OKLink will help us expand the scope of our global remittance offerings and bring an unparalleled customer experience for the 600,000 expatriates in Taiwan."

 

For any questions about the program, please contact partner@oklink.com.

 

- Ends -

 

About OKLink

OKLink is a Hong Kong-based global blockchain money transfer network that gives every remittance and payment company the same cost advantage, global reach, and speed that took Western Union many decades to build. The company leverages the trust of the blockchain to connect and enable transactions between transfer and delivery companies worldwide using blockchain anchored digital assets and multi-signature technology.

 

Launched in August 2016, OKLink is growing rapidly with a payout network that is currently available in fifteen countries across Asia, Africa and the Americas. OKLink is a part of the OKCoin family of companies.  OKCoin is the largest digital asset exchange in China. The company raised US$10 million in its Series A round. For more information, please visit oklink.com or follow the company on Twitter @OKLink.

Can payments firms monetise data and meet new privacy laws?

The EU’s General Data Protection Regulation (GDPR) represents a watershed moment for the payments industry. This is not simply another data compliance headache. GDPR enshrines a new idea: that consumers have ultimate control of their data.

 

This concept will lead to a new model for the payments industry; one centred on the empowered customer and based on informed consent.

 

The impact on the payments industry

Payments industry businesses – from merchants to the financial services organisations that support them – are increasingly looking at how they can monetise their customer data.

Some adopt direct monetisation models, selling their customer data to third parties, whereas others indirectly monetise customer data through analysing payments history to drive up- and cross-sell of new services.

 

Much of this data is unfortunately anonymized given it is personally identifiable information (Pii) and there is a lack of customer knowledge and/or permission for use. As such it has essentially been stripped of a fair amount of its utility to directly personalise and make offers more customized and relevant.

Either in aggregated form or linked to an individual, how can firms continue to monetise data and also meet the privacy demands of GDPR?

 

Putting the customer in control

The challenge can be met through informed consent. Firms must take a customer-driven approach to information sharing, empowering the consumer to share and rescind their consent.

It is not enough to simply ‘ask’ for consent. Organisations must capture gained consent in an auditable workflow. This requires a sophisticated information management platform; one which enables an automated and secure digital communication link with the customer.

 

Once consent is secured, payments industry businesses then need a flexible, secure platform to store and manage the data in customer-driven way. One way firms are looking to build this framework is through digital rights management services that create a digital ‘vault’ for customers to store personal data.

 

This approach enables simplified and streamlined Data Portability and the Right to be Forgotten; empowering customers and meeting the stipulations of GDPR.

 

A new model for a changed world

While GDPR is a significant enabling event for the rollout of consent-driven data management, it is a symptom of a wider change. The sharing, and peer-to-peer economies are already shaking up the world of commerce and changing the payments landscape for good. At the same time people are becoming more aware of their personal rights over their own data.

 

Payments businesses can’t take anything for granted any more. They must proactively enable a customer-driven and customer-centric data framework and provide customers with the tools they need to view and manage their own data. The result will be GDPR compliance, a much better customer experience and a new method for building customer loyalty. It will also mean they can continue to monetise their data.

Korean Credit Card Giant to Integrate Blockchain Identity Service

South Korea’s largest credit card company is set to use a blockchain identity solution developed by local bitcoin startup Coinplug.

The service will be based on what Coinplug calls FidoChain, a “private blockchain technology” aimed at providing a distributed means of verifying and maintaining digital identities. KB Koomkin Card, a subsidiary of KB Koomkin Bank, plans to complete its integration by the end of this year.

 

The startup has been working in the area of digital identity for some time, netting a $45,000 prize last year after submitting a prototype system based on the concept to a competition held by JB Financial Group.

It’s a use case that has been pursued by established enterprises as well as new companies working in the blockchain space. Now, following additional development, Coinplug is pushing ahead with what it calls the “Coinplug Identification System”, or CIS.

According to Richard Yun, director and chief operation officer from Coinplug, KB Koomkin wants to integrate the tool into its credit card onboarding services.

In addition to its enterprise blockchain projects, Coinplug operates a bitcoin exchange service. The tech, launched last month, comes just under a year after Coinplug raised $5m in a Series B funding round. The startup has raised more than $8m to date.

 

Targeting identity pain point

Using FidoChain, the identity solution allows users – in this case, KB Koomkin Card – the ability to add, verify or revoke identities tied to a credit card product.

Yun said the startup wanted to potentially resolve security and user experience problems associated with existing identity solutions in South Korea.

 

“We thought it is very important to provide secure and easy to use identification and authentication service to banking service users, and we believed that private blockchain technology can be very effective to implement secure and scalable identification/authentication service.”

It’s a prospect that, according to Yun, has attracted significant interest from KB Koomkin. The company, which reported $2.6b in operating profit for 2015, is said to be looking at applying the tech to both services it offers now as well as new ones in the future.

“They [are considering whether to] expand the coverage of CIS to other existing and new services,” Yun explained.

KB did not immediately respond to a request for comment.

The Future of Artificial Intelligence & Ethics on the Road to Superintelligence

The human brain, consisting of roughly 86 billion neurons, rivals the world’s best supercomputers in terms of magnitude, efficiency, and speed, using as little energy as a small 20-watt light bulb. Human evolution took tens of thousands of years to adapt noticeable brain size and architecture changes.

 

Evolution is a slow process that can take eons for changes to occur. Technology, on the other hand, is amazing in terms of how fast it is moving along, blending into the world seamlessly. The technological evolution notably occurs at a faster pace compared to biological evolution.

 

To further understand the situation, imagine a frog in a pot of water that heats up 1/10th of a degree Celsius every ten seconds. Even if the frog remained in that water for, say an hour, it would be unable to feel the minute changes in temperature. However, if the frog is dropped into boiling water, the change is too sudden and the frog jumps away to avoid fate.

 

 

Let's take a gigantic chessboard and a grain of rice, for scale, and place each grain of rice to a corresponding chess square following a sequence: for each passing square, we double the amount. Upon applying this, we get:

 

1) 1

2) 2

3) 4

4) 8

 

And so on. You must be thinking, “What difference does doubling a grain of rice for every box make?” But one must remember that, at some point, the number from which the count started will be totally indistinguishable to the end result. Still on the 41th square, it contains a mountainous 1 trillion grains of rice pile.

 

41) 1,099,511,627,776

 

What started out as a measly amount, barely feeding a single ant, has become massive enough to feed a city of 100,000 people for a year.

 

 

The development of technology over time

In the year 1959, the global output of transistor production of 60 million was huge. It was deemed a manufacturing achievement to produce such an amount. Although looking at the world today, it pales because of how far the transistor development has come. A modern i7 Skylake processor contains around

 

(Skip to 5:15 in the video, to hear the global transistor manufacturing achievement in 1959)

https://www.youtube.com/watch?v=2466CBuOxVg

 

1,750,000,000 transistors. It would take 29 years of 1959’s transistor global production to match one i7 Skylake transistor count.

 

The transistor manufacturing size in an i7 Skylake processor is 14 nm. For reference, a silicon atom is about 0.1176 nm across: 14/0.1176=119 Meaning, a transistor in an i7 Skylake processor is only about 119 atoms across.

 

Therefore, one can conclude that it takes technology to build technology. In the past, civilization was limited to the usage of paper and writing. Calculations done by hand tend to be slow and tedious.

 

 

Whyfuture.com - Lets think about the future

Artifical Intelligence - Artificial Intelligence & Ethics on the Road to Superintelligence

 

Could Bitcoin Be the Future of Blockchain Post Trade?

Conventional thinking about blockchain technology's use in stock markets may be wrong, according to one academic.

The argument was put forward by Professor David Yermack, chairman of the finance department at New York University, this week at Imperial College London's first FinTech-focused academic conference.
There, Yermack presented an unpublished report that argues blockchains will evolve differently in capital markets than widely expected. For example, according to Yermack, functions such as stock settlements will one day be carried out on public blockchains like bitcoin, as opposed to private or premissioned alternatives.

Overall, Yermack, who teaches a cryptocurrency course at NYU’s Stern School of Business, offered a much broader vision for the use of blockchain in finance than what the industry is considering, as well as more critical takes on how incumbents are exploring the tech. Taking a dig at DTCC, for instance, Yermack said its report "Embracing Disruption" did little to show or illustrate how blockchain could change the current state of affairs.

Agents of change
That's not to say that Yermack didn't take a measured view of public blockchains. On the contrary, Yermak acknowledged the limitations of bitcoin's throughput and its proof-of-work consensus system today, but noted that it's something he believes the industry will need to work out better solutions for.

Still, he insisted that the future of finance will be brought about by a real decentralized blockchains that don’t have monopolies that guard access to stocks, bonds and currencies. Speaking of the direction where the disruption will come from, Yermack sees three potential players. These include challengers (complete outsiders looking for disruption); collaborators (like the DTCC and R3); and regulators (countries like the UK, Australia, and Canada).

Overall, he believes that the challengers were the most likely to succeed, but that some regulators (like those in the UK) are better positioned to bring about change than others.

Quick wins
Interestingly, Yermack believes one of the easiest and quickest ways for the industry to move to a blockchain model is by exploring use cases in corporate elections by shareholders, an avenue already being pursued by Nasdaq. Yermack said shareholder voting on corporate elections is currently inefficient when it comes to vote counting, and that the voting results are often plus or minus 5% of what they should be.

Further, in the current model, there are many challenges when it comes to corporate elections, he said. There are various different ledgers of ownership, maintained by the company, the broker, and the market in general, which gives rise to different voting results. Broadridge, which has what he called "a monopoly that is very inefficient" administers corporate elections voting, is also interested in blockchains.

But, Yermack went beyond words, showing that corporate elections are prone to favor management proposals. Such issues, he believes, could be eliminated with the help of blockchain-based voting systems.

In China, Two Cities Mirror Blockchain-Bitcoin Divide

Beijing and Shanghai, China's two most populous and developed cities, are often reminiscent of two siblings. They are similar, but each has its own distinct character.

In this light, some rivalry is as inevitable, and it's now spilling over into the country's blockchain industry.

In Beijing, visitors are likely to meet "bitcoin maximalists", those who shrug at the idea an alternative blockchain or bank consortium could challenge the network effect of a $10bn digital economy. In Shanghai, the difference of attitude is pronounced – there, you are more likely to be told that bitcoin is passé. Metaverse, a company based in the Shanghai's Huangpu district, is in many ways representative of the city's new blockchain startups.

Relatively unknown even in its home country, Metaverse has over 20 employees – no small feat for a blockchain startup that has been around for less than a year, and it recently held a blockchain token crowdsale, raising over ¥10m within weeks. The sight of a roomful of busy developers gives the impression the startup is onto something big – which is exactly what Eric Gu, CEO and co-founder, wanted to convey in interview. But he is also candid about his personal transition and what it says about the state of the blockchain industry.

According to Gu, support from local officials is strongest when they are presented with a project that he said avoids the revolutionary stigma that has surrounded bitcoin. "If you expect the government to back a blockchain project, it will at least be one that they feel more comfortable with," Gu explained.

Not quite a battle
Meanwhile, in Beijing, the city's outlook is defined by the notable startups that call it home, including bitcoin mining giant Bitmain and major exchanges like OKCoin and Huobi. Da Hongfei, CEO of Shanghai-based Onchain, argues that this has made for "a very different community and industry landscape" in each city. The creator of a "universal" blockchain platform that aims at adoption in both public and private markets, he acknowledges his firm would be an outsider in this location. "Beijing is well-known as an established bitcoin center. It enjoys a comprehensive bitcoin ecosystem," he acknowledged.

Like Metaverse, Onchain has also differentiated from the venture-backed startup model common in Beijing, raising more than $4.5m in a public token sale, while inking a partnership with Microsoft and contributing to the Linux-led Hyperledger project. By contrast, Beijing firms have often elected foreign venture capital over the token sale model, sometimes called an initial coin offering (ICO), whereby unaccredited investors back a firm by purchasing cryptographic assets.

Despite this investor approval (and the heated debate around ICOs), Da went on to argue there is still a greater "stigma" associated with bitcoin, one his company has sidestepped. "As for blockchain technology, or DLT, a large extent, it's free from this burden," he said.

Trend or fad
But as for which brand of blockchain is winning, it might be too early to say. Da, for example, hinted he believes other cities are now following Shanghai's lead, in what could be a sign its view on the technology could win out. "Hangzhou is taking the lead in the lower-layer, distributed ledger technology R&D," he said, "not necessarily everything bitcoin."

Companies seem to be following their lead, as well. Metaverse, for instance, is utilizing this strength to tackle the country's collectable calligraphy and painting market, where collectors have been searching for tools to enable them to record their transactions and check previous ownership of art pieces to ensure authenticity. Onchain, on the other hand, is working with Everbright Bank, a major Chinese commercial bank, to build a blockchain-based reputation point system. Both projects see value in enterprise markets, particularly because there have been strong signals of interest from leading domestic firms.

In this way, Da argued that he believes "blockchain" might bring about the most benefits for Chinese consumers, though he sought to stress that there's a larger, more important goal that unites innovators in both Shanghai and Beijing, in bitcoin and blockchain.

Blockchain Surveillance is Accelerating Privacy Tool Development

When it comes to cryptocurrencies one treasured goal is the ability to remain private, which requires both an anonymous and fungible currency. At times, it seems fungibility is the holy grail of the ecosystem. Bitcoin definitely achieves most of the qualities of sound money, but some believe it needs a lot of work in the development of fungibility.

 

Privacy cannot work without the basics of a fungible asset as both fundamentals are mutually exclusive. The rise in popularity concerning both fungibility and anonymity can be seen with the latest trends in market trading and development.

 

Just recently Bitcoin.com spoke with Daniel Krawisz about his new bitcoin shuffler, Shufflepuff. Krawisz explained he was still in the developmental process but had achieved the first shuffled transaction on August 15th. The Coin Shuffle protocol finds other users to tumble their bitcoins as variants of this technology are the most common protocol for mixing Bitcoins.

 

On August 29th, another tumbling protocol called TumbleBit was announced on Reddit, with the post being very popular among cryptocurrency community. The project developers say they are producing a roadmap in the near future. The team gives credit to David Chaum’s ecash for inspiring some of the project’s attributes.

FW: Ways to stay anonymous and protect your online privacy

Now more than ever, your online privacy is under attack. ISPs, advertisers, and governments around the world are increasingly interested in knowing exactly what you’re up to when you browse the web. Whether you’re a political activist or simply someone who hates the idea of third-parties scrutinizing your surfing habits, there are plenty of tools available to keep prying eyes off of your traffic.

 

In this post, I’m going to highlight 19 ways to increase your online privacy. Some methods are more complicated than others, but if you’re serious about remaining private, these tips will help shield your traffic from snoops. Of course, internet security is a topic in and of itself, so you’re going to need to do some reading to remain thoroughly protected on all fronts. And remember, even the most careful among us are still vulnerable to imperfect technology.

 

The Onion Router (Tor)

If anonymity is what you're after, The Onion Router (Tor) is what you need. It uses a vast network of computers to route your Web traffic through a number of encrypted layers to obscure its origin. Tor is a vital tool for political dissidents and whistleblowers to anonymously share information, and you can just as easily use it to help protect your privacy. Get started by downloading the Tor Browser. This customized fork of Firefox automatically connects to the Tor network, and includes some of the privacy-enhancing browser extensions discussed later in this post. This package has everything you need to use Tor successfully, but you'll also need to change your web surfing behavior to retain as much anonymity as possible. Abide by the Tor warnings, and remember this isn't a magic bullet. It still has some significant weaknesses.

 

 

Justified paranoia

You might not think you have anything to hide, but that doesn’t mean you shouldn’t enjoy the benefits of online privacy. Some of these recommendations are a real hassle to live with — I’m well aware. It’s a lot easier to shove your fingers in your ears, and pretend like the NSA and your ISP aren’t watching every move you make. But what you browse is your business, and your business alone. Now is the time to stand up for yourself, and take back your privacy.

In time for Black Hat and DEFCON, we’re covering security, cyberwar, and online crime all this week; check out the rest of our Security Week stories for more in-depth coverage as the week goes on.

Jeff Garzik: “Blockstream Will Help Bitcoin Grow into The Future”

The world of Bitcoin and cryptocurrency never has a dull moment. Now that Blockstream has officially appointed Adam Back as their CEO, a few interesting things are bound to happen soon. But Jeff Garzik, who runs his own company called Bloq, hinted at a potential partnership between both groups.

Jeff Garzik Remains Keen on Blockstream
The name Blockstream has been a topic of substantial controversy among Bitcoin enthusiasts over the past few years. Even though this group of developers and engineers is looking to improve the Bitcoin ecosystem, there are lots of people in the community who feel they are trying to bring Bitcoin down eventually.

While there may have been some dubious discussions involving Blockstream in the past, they continue to receive a lot of support as well. Jeff Garzik, one of the most prominent people in the Bitcoin world, has high hopes for what the team is trying to achieve. In fact, he feels Blockstream will "help Bitcoin grow into the future".

This is a strong sentiment, and one that will hopefully come true. While Bitcoin is not designed to be steered in one particular direction by a group of coders, somebody has to propose improvements and changes to the code as they see fit. It is still up to the community to accept or reject these changes when they are implemented in a new Bitcoin Core client.

What is rather interesting is how Jeff Garzik openly hinted at "working together with Adam Back", the newly appointed CEO of Blockstream. This does not necessarily mean that Garzik will jump ship to the company, as they are both working towards the same goal. Making Bitcoin better and more robust is the top priority for both men. 

Bitcoin Price Increases 30% In Venezuela Due to Currency Devaluation

Venezuela, the South American country famous for its cheap gas (fuel) prices, has experienced a surge in both Bitcoin volume and price. The country is in the middle of the worst economic crisis ever seen in its recent history. According to the Venezuelan consulting firm, Ecoanalítica, the country’s annualized inflation reached the 1.108% mark.

The Venezuelan government has unofficially banned the country’s central bank (BCV) from releasing economic indicators such as inflation figures and price indexes. After much pressure from banks, consulting firms, and other institutions, the BCV reported an 180.9 percent inflation for last year. Consulting firm, Econoanalítica, criticized the methodology used by the BCV to calculate inflation. BCV altered the weight of several goods and services used to “embellish” the figure.

Amidst this grim landscape, bitcoin has gone through highs and lows. In Venezuela Bitcoin and other currencies prices are calculated using the unofficial black market rate. Traditionally, a website named Dolar Today has been used as the country’s market reference. However, its rate has slowly lagged behind. In consequence, many OTC transactions between private financial entities and individuals have ignored the 1,092 VEF/USD rate.

The bitcoin price has gone from 650,000 VEF per bitcoin two weeks ago, to yesterday’s 850,000 VEF/BTC high. This accounts for a 30% increase in less than 2 weeks. Dividing the local bitcoin price with the international one gives us a rate of approximately 1377 VEF/USD, a 22% increase compared to Dolar Today’s rate. The volume has also been consistently making new highs on LocalBitcoins alone, with over 243 bitcoins transacted in the past week.

Economists and consulting firms are predicting an increase in devaluation, inflation, and good’s shortages. If the black market rate continues to increase, the bitcoin price will follow. Only a change in macroeconomic policies will scare away the hyperinflation and bond default ghosts.

Kim Dotcom: Bitcache Will Be ‘Off Chain Due to Limitations’

Kim Dotcom has told the public many times that Bitcoin will be an integral part of Mega Upload 2 and Bitcache. Now, with the help from BnkToTheFuture, Dotcom is raising funds to scale the project. According to Max Keiser, the project is nearing 50 percent of its $1 million minimum goal.

Over the course of the Summer, Kim Dotcom has been teasing his new "Mega" file-sharing project and Bitcache. Dotcom said every file transfer will be "linked to a tiny Bitcoin microtransaction." Now the infamous Mega creator is teaming up with investment platform BnkToTheFuture to raise funds. According to BnkToTheFuture CEO Simon Dixon, the Mega2 investment has raised half a million dollars using bitcoin only.

Appearing on the Max Keiser show, Dixon explained there have been many investors who wanted to invest, but came to a barrier at its "Bitcoin only" stipulation. He also detailed that many "hardcore bitcoiners" have also asked about technical aspects of the project. Many have also enquired about the legal standpoint for investing in Mega. Dixon explained Dotcom's attorneys will provide the details. According to Dotcom, he has added a "sweetener" for investors who participate in the first million dollars.

Another investor concern was share dilution after the second and third rounds. Dotcom says he hears what the critics are saying, and will offer a second sweetener. This entails a "warranty" that initial investors will not be diluted in subsequent rounds.

Following Dotcom's responses, BnkToTheFuture's Simon Dixon announced that due to investors' issues they've also opened the crowdsale to bank transfers. Then, Dixon asked Dotcom some of the questions from "die-hard techies" concerning the project's technical details. Dotcom explained a little about the Bitcache prototype, stating: "We have to take Bitcache transactions off the chain and basically do it all on our own system. Because we can't deal with these limitations when it comes to millions and millions of file transfers which are at the same time transactions. In order to provide a service that works with Bitcoin, we had to come up with our own payment solution. The Bitcoin basically enters the Bitcache wallet system and off the chain," Dotcom added.

blockchainDotcom said once the transactions leave the Bitcache system, they will be accounted for on the blockchain. He believes there really isn't a "major security concern" because the transfers are only dealing with microtransactions. The Mega creator did mention in the broadcast that the default transfer amount per file is roughly five cents. He said, however, he doesn't believe people will be keeping significant amounts of funds in Bitcache wallets.

The Mega 2/Bitcache fundraising round continues, and Dotcom seems very excited about the project. He's boasted many times that Mega 2 will bring Bitcoin's price to $2,000 per coin. He also noted he would love if developers fixed the limitation, as he would love to have the platform operate on-chain.

"Right now we just can't do it because our expectations are that we will have millions and millions of users from the get-go. Providing critical mass to the service and we don't want a limiting factor to be the blockchain," he said.

How Bots Are Fueling High-Speed Bitcoin Trading

Investors have benefited from algorithmic ('algo') trading programs under many different circumstances, but these 'trading bots' can prove particularly valuable to those interested in cryptocurrencies.

Bot trading has reduced user error, enabled more rapid processing of information and given traders more time and flexibility. However, it may hold even greater potential in the crypto markets due to their immature nature.

Trading bots have been around for decades, seeing growing use in stock markets as digitization has taken hold. However, the digital currency markets are less than a decade old and with far less tenure than more mature markets, have had significantly less time to integrate algo trading.

Tim Enneking, chairman of cryptocurrency investment manager EAM, highlighted the differences between high-frequency trading (HFT) in traditional markets and those for cryptocurrencies.

He told CoinDesk:

"When it comes to use HFT for stocks, milli – and even micro – seconds matter. However, for cryptocurrencies, these very small increments of time are not nearly as important."

By harnessing algo trading, investors can obtain access to a wide range of trading strategies. HFT, for example, necessitates the use of software because it involves very rapid trades.

Arbitrage trading

Another strategy traders can access through trading bots is arbitrage – buying assets in one market and then selling them in another for a higher price, thus earning profit on the difference.

"Generally, bot trading can be profitable beyond a short period of time if it involves a sort of insightful arbitrage," Petar Zivkovski, director of operations for leveraged bitcoin trading platform Whaleclub told CoinDesk.

Further, there is more than one form of arbitrage, said Arthur Hayes, co-founder and CEO of leveraged bitcoin trading platform BitMEX, who elaborated on several other approaches.

Traders can look to profit from strategies involving futures contracts, Hayes noted. For example, they can benefit from the difference that exists between a futures contract and its underlying asset, an approach called futures arbitrage.

Investors can seek profits from the difference in prices of futures contracts based on the same underlying asset, but that trade on different exchanges.

Market making

Another strategy investors can access through trading bots is market making.

Hayes described this practice as "providing continuous buy and sell prices on a variety of spot digital currencies and digital currency derivatives contracts" in an effort to "capture the spread between the buy and sell price".

Zivkovski said that this practice involves "placing limit orders, generally near the current market price, on both sides of the book" meaning both buy and sell orders. Over time, as prices fluctuate and a trader's algo program automatically and continuously places orders, he or she can profit from the resulting spread.

However, he added the caveat that the intense competition surrounding this practice can make the strategy unprofitable, "especially in low liquidity environments".

"There is only so much firepower to go around," Zivkovski said.

Getting started

Fortunately, anyone can participate in bot trading. Traders can use off-the-shelf solutions, though relying on pre-made software programs can prove dangerous, noted algorithmic trader Jacob Eliosoff.

"Any money-making machine you can just buy and turn on will quickly get bought by lots of other people too, and there go your profits," he said. "Often even the initial profits are a mirage."

Investors who are new to bot trading might want to either learn programming or find an open-source bot they can configure based on their view of the market, Zivkovski said.

Hayes offered some slightly more technical advice, emphasizing the key importance of risk management and error handling.

"There is no standard Application Programming Interface (API) for all digital currency exchanges, and some exchanges have better API's than others," he said. "This means that a lot of time and energy needs to be spent making sure the trading logic can handle outages and properly calculates portfolio risk metrics."

Once a trader has developed and implemented their solution, constant revision is required, Enneking explained, adding:

"Algo trading is not a fire-and-forget missile. You don't just let it run by itself for extended periods."

Why Weight? Bitcoin Scaling is Moving Beyond Block Size

"We were all busy arguing about the block size, but everything else is crucial."

That statement, by Cornell's Emin Gün Sirer, may have come in the middle of the second and final day of the Scaling Bitcoin conference, but it was perhaps the overriding theme of this year's edition of the digital currency network's developer summit.

Despite the public visibility of a protest event scheduled in parallel with the conference, the content of this year's event did much to showcase that, for many developers, the "block size" is no longer a significant factor in discussions on how the network should increase capacity.

Over the course of both days, talks largely moved on to more incremental discussion of the various "trade-offs" that should be considered when making changes to bitcoin's basic components and the complex ways they interact.

Bitcoin Core developer Eric Lomborozo told CoinDesk:

"All engineering requires trade-offs. We're trying to figure out the range of possibilities and what trade-offs are more preferable."

Still, Lombrozo acknowledged that the block size (and the pronounced and public feud over whether to change the hard-coded limit to the number of transactions bitcoin can process) remains a "cultural phenomenon", one its technical community is still trying to move forward from as it navigates a market now dominated by blockchain solutions.

The day's talks provided a deeper explanation of subtle change in thinking, with Blockstream principal architect Christopher Allen noting that the social consensus of developers has deemed the block size a non-issue.

"I think it was very clear after [the previous conference], which debuted SegWit, that there's now a rough consensus of how things are going. The technical community is already a few steps beyond that," he explained.

Blockstream's Greg Sanders, emphasized the argument in his morning talk centered on lessons he hopes the community takes away from progress on Segregated Witness, a planned soft fork that will change how transactions are stored by the network and that continues to inch toward implementation.

"Let's stop talking about the block size. Let's talk about weight, the weight of a transaction, the weight of a block, the externalities it puts on the system. Let's talk about throughput. We can put more information in small spaces, so let's look at these problems," Sanders said.

Put more flatly, Blockstream's Jorge Timón said the block size is simply: "not an interesting topic."

'Social fork'

Yet while Timón spoke for the majority of attendees surveyed, a vocal minority was still represented at the conference in full force, a development Wong called a "social fork".

Investor Roger Ver, a vocal proponent for larger blocks, held a "Free Speech Party" on the night of the first event. Attracting roughly 20 guests to a nearby hotel, the event saw the screening of proposals that were rejected from the Scaling Bitcoin conference, as well as discussion on why capacity should be dramatically increased to accommodate more users.

That meeting emphasized discussion of a proposal for "Xthin blocks", as well as work by researchers to prove how larger bitcoin blocks, as enabled by an alternative proposal called 'Bitcoin Unlimited', could be executed on the network without increasing the time it takes for the blocks to relay to nodes and miners located around the globe.

Also aired were reasons why the initiative should have been considered by the Scaling Bitcoin conference, as well as fears that an alternative digital currency could overtake bitcoin's market position. Further, attendees criticized the conference's approach as "not data driven", while top-level bitcoin scaling initiatives like Lightning were dismissed as "vaporware".

Bitcoin Unlimited's Jerry Chan, who spoke and attended both events, said he believes the decision to exclude the talk was due to a desire to "avoid contention at all costs".

"I think that some of the talks that were excluded would have been very useful because they directly address issues that were brought up in the past," he said.

Perhaps most notable, however, was who the protest event attracted, as major mining sector representatives, including Bitmain's Jihan Wu and ViaBTC's Haipo Yang attended.

Incremental changes

Elsewhere, the theme of the day's talks was on smaller changes that could be made to the network, and the sometimes intricate side-effects they may have on bitcoin at large.

For instance, Blockstream's Peter Wiulle gave a talk on Schnorr signatures and how they compare to the elliptic curve digital signature algorithm (ECDSA) bitcoin uses to ensure funds are spent by their owners. Still, the talk highlight just how much work would need to happen should even this small tweak to bitcoin's gears be considered.

"Schnorr signatures are not a standard. ECDSA is a document that exactly specifies all the math that needs to happen," Wiulle said. "Schnorr is a general idea."

With Schnorr signatures, Wiulle presented how the concept is now enabled by SegWit and how it could require only one signature for transactions with multiple inputs, and that only this signature to be sent across the network for the transaction. However, he noted how bitcoin's address structure posed a problem for the change, as did new potential attack vectors, leading him to ultimately call for more academic work on the idea.

Yet another talk, on the performance of proof-of-work blockchains, saw a comparison of block propagation on the bitcoin network and other alternative blockchains.

Here, presenter Arthur Gervaise of ETH Zurich reviewed how simulations conducted at the Swiss university show the time between bitcoin blocks, currently set for roughly 10 minutes, could be reduced to 1 minute, while enabling 60 transactions per second safely.

That's not to say that big ideas were not discussed, as some proposals saw prominent developers including Peter Todd and David Vorick overview radical ways to rethink how bitcoin could work.

Particularly notable was Todd's talk on scaling via client-side validation. Here, Todd posed the question of whether miners were needed to validate transactions at all, questioning how redefining their relationship with nodes (a fundamental building block) could lead to better scalability.

"You can say miners validating is kind of an optimization. It does have some interesting social effects. I can create this rule and a litecoin and bitcoin can exist on the same system," Todd theorized.

Academic mindshare

Yet, there was a sense that bitcoin's emphasis on fundamentals is perhaps frustrating to academics intrigued by how it could solve larger issues.

For example, Sirer's talk on an update to his 'Bitcoin Vault' proposal, in which 'covenants' would be added to transactions as a way to restrict the risk they could be executed a malicious actor in the event of theft. In a Q&A session, the idea was met with more pointed questions.

There was particular disagreement, acknowledged in the talk by Sirer, about how this would compromise the fungibility of individual bitcoins, or the property by which any one bitcoin can be exchanged for any other. However, Sirer called for a willingness to except perhaps imperfect solutions to the negative side effects.

"At the end of the day fungibility is already not protected by any in-protocol mechanism, it's protected by the social contract that we must have fungibility," he said.

In comments, visiting academic Bryan Ford of École polytechnique fédérale de Lausanne (EPFL), noted he would have liked to have seen more examples of "significant improvements".

A self-proclaimed "outsider", Ford questioned how much he would continue to invest in the community given that the narrow focus.

As such, the comments point to the divisions that could be forming around the bitcoin community, even as it tries to put more contentious scaling debates in the past.

However, Ford at least acknowledged progress has been made, adding:

"It's good that it's at least diversified beyond block size."

Nasdaq Wants to Patent Blockchain Backups for Exchanges

Nasdaq is looking to patent a way in which a blockchain can be used to record exchange transaction records.

On 6th October, the US Patent and Trademark Office (USTPO) released an application for "systems and methods of blockchain transaction recordation", originally submitted by Nasdaq on 31st March. It is attributed to Tom Fay, Nasdaq's senior vice president of enterprise architecture, and Dominick Paniscotti, associate vice president for enterprise architecture.

Essentially, the application details an exchange system comprising digital wallets, an order book and matching engine, with a "closed blockchain" utilized as a record of transactions that is updated in real-time as participants act.

As the application details:

"A match is identified between data transaction requests and hashes associated with the digital wallets associated with the respective data transaction requests are generated. The counterparties receive the hashes of the other party along with information on the match and each party causes blockchain transactions to be added to the blockchain of the blockchain computing system."

From there, the exchange checks the contents of the blockchain, looking for the data associated with those digital wallets. An additional backup of that information is also kept in a separate database.

It's perhaps unsurprising that Nasdaq would move to file applications related to the technology. Last year, the exchange operator unveiled Linq, a blockchain project focused on private markets, and in May, it launched new blockchain services for its global client base.

The application's contents reveal that the company is largely looking to apply claims to the method of using a blockchain in an exchange environment, rather than the system itself. USTPO records show that Nasdaq originally sought a number of claims related to the tech, but that these were cancelled after the application was first filed in March.

So, Ethereum's Blockchain is Still Under Attack…

You might not have noticed, but ethereum is under attack.

What began over two weeks ago with spam attacks that led to large-scale ethereum node outages has escalated into a battle that has pitted the platform's developers against unknown antagonists. This might sound like an exciting Hollywood movie, but it's mostly been carried out on message boards and with code.

Shots were first fired at ethereum's big developer conference, Devcon2, with a mysterious message written in German and delivered via transaction method payload. The message said "Go home", but to those who have been following the network's contentious changes this summer, the full meaning was clear.

Since then, block creation and transactions have continued to be impacted, with nodes syncing up to the network more slowly. But while various fixes have since been implemented, the attacker continues to find vulnerabilities to exploit and, in turn, create new ways to launch denial-of-service (DoS) attacks.

The result: the network is being flooded with transaction spam.

Blockstack co-founder Muneeb Ali called it a "cat-and-mouse game" that could potentially continue to slow down transactions on the network, the second most popular by market cap.

Most of the attacks have thus far affected nodes running the Go-version ethereum client (Geth), the most popular implementation of ethereum, though Parity, an alternative client released at the conference, has been impacted in some instances.

The latest release, called "Dear Diary", aims to stop the "root cause" of many of the attacks with a technique called "journalling."

Anatomy of an attack

One problem that has emerged for client developers is that those behind the attack are constantly switching their tactics.

The attacker or attackers are deploying smart contracts to the ethereum blockchain, and then committing transactions that impact how clients handle data, slowing them down to the point that blocks and transactions become delayed.

(For a peek into what's going on, see the barrage of small transactions sent by the attacker to overwhelm the network).

The first line of attack targeted an out-of-memory bug, which the Geth team moved to fix in a subsequent software update.

"In ethereum one of the challenges is that we have this huge database that grows much faster for example than bitcoin," said ethereum developer Péter Szilágyi, who works on Geth, adding that the attackers have taken advantage of this issue.

"We never thought about this attack vector," he added.

The focus on Geth has prompted some users to spin up nodes using Parity. In the wake of the first attacks, most miners made the switch.

However, Geth is still by far the most popular client, numbering nearly 7,000 nodes compared to Parity's 900, although the numbers are constantly fluctuating.

Meanwhile, Ethereum Foundation IT consultant Hudson Jameson chose to emphasize that the Geth team has been able to fix every issue that's been thrown at it so far. This argument was also stressed by ethereum miner Jonathan Toomim, who called the fixes, deployed within days, "impressive".

"The network will go on, and these nuisance attacks will stop eventually," he reasoned.

Yet for how long remains unclear. Each time Geth or Parity releases an update, the attacker finds a new vulnerability.

Those behind the attacks don't seem to mind the cost of doing so, having spent thousands of dollars worth of ether – the cryptocurrency of the ethereum network – to fuel the attacks.

"To date, the attacker has spent over $3,000 worth of ether, solely in gas-costs," Jameson estimated.

Impact on users

Many argue that the attacks are an inevitable result of the way ethereum is designed, and that it has a  "large attack surface."

More on-platform capabilities means that there are more opportunities for trouble, at least compared to other blockchain networks, which are less ambitious..

"The larger problem is that the way ethereum is designed. There's too much exposure so the attacker can trigger certain things or send certain types of transactions," Ali said. "Think of it this way: ethereum allows people too much freedom over what they can do to someone else's computer."

Even if Geth nodes are no longer crashing completely, however, it has resulted in an overall slower network, making ethereum less available to anyone who want to spin up a smart contract or send a transaction.

Since the attacks, some users have reported having problems accessing their funds with Mist, the popular ethereum wallet.

One user even observed when switching pools that mining profitability has decreased for smaller pools, which is potentially a concern for an ecosystem that doesn't want bigger miners to have more control.

The network is also more vulnerable overall if all of its nodes are not functioning properly.

"Causing large portions of the nodes or miners to drop off the network, or fall behind, is naturally rather severe, since such attacks can be a prequel to a double spending-attack," Jameson said.

However, some users seem unfazed, with many developers continuing to work on other projects. Two ethereum projects, FirstBlood and SingularDTV, held crowdsales to raise project funds amid the attack.

Finding a fix

As far as reducing the impact, developers have come up with ideas for how to fix the problem with medium- to long-term changes, in what Jameson calls an "ecosystem-wide effort."

"One of the solutions is to make it more expensive to perform these kinds of attacks," Szilágyi said.

He explained that raising the prices for certain ethereum commands might mean protocol-level changes to Metropolis, ethereum's next big software release that is intended to be more developer-friendly.

Jameson also mentioned rebooting the bounty program, through which developers can earn bitcoin for detecting and reporting bugs. "That way people can submit their flaws legitimately instead of attacking the network," he said.

However, his hope is that the detection of these bugs will make ethereum stronger in the end.

"In the long-term, these attacks increase the resiliency of the Ethereum network," Jameson added said, arguing that the diversity of clients handicaps an attack from impacting all nodes.

Role of the foundation

Others seem to think that it's unclear how quickly that ethereum will recover.

"The Ethereum Foundation is trying to downplay them and spin the situation in a good way, saying that attacks will help to harden the network," ethereum classic lead developer, Arvicco, argued.

While the comments are not surprising given that he leads an alternative project, they point to the overall sentiment of those who have been critical of the organization that funds protocol development and its handling of the situation.

Others remain uncertain what to take away just yet.

Ali said he thinks ethereum team has done a good job thus far in addressing the vulnerabilities.

Still, he suggested there might be no end in sight should ideological motivations to disrupt the network continue unabridged, but that this ultimately might be the best outcome.

"[By then,] most of the practical issues with the software are fixed so that it becomes hard enough and it's no longer a problem," he said, adding: 

"I think it's hard to predict."