Connect with us

Articles

Quantum Resistant Ledger Readies For Battle Against Quantum Computing, Hires Testers And Seeks Feedback

Published

on

Quantum Resistant Ledger (QRL), a blockchain technology designed to mitigate quantum computing attacks, has recruited testers to create 50 nodes and released an updated white paper by founder Peter Waterland. QRL is seeking comment on Slack prior to a presale.

Waterland has commented about the bitcoin scaling issue and the danger posed by quantum computing attacks on various bitcoin forums in recent years.

There are no known bitcoin quantum attacks at present. But if a quantum computer is created that can break ECDSA, one of the most common signature schemes, then all existing ledgers are susceptible to attack, according to Waterland.

Founder Sounds Warning

“Classical computers cannot break ECDSA through brute force attacks – there isn’t enough energy in the sun to guess a single private key correctly,” Waterland told Hacked.

“But a quantum computer may use Shor’s algorithm to reconstitute a private key from a public key. And the last time I checked, nearly half of all bitcoin addresses had revealed public keys. The problem is that when a bitcoin or Ethereum transaction occurs, the public key of the sending address is revealed and stored for all time in the blockchain. So at some point in the future, those addresses (currently nearly half) are at risk of quantum theft.”

“Once the public testnet has been hardened and is sufficiently stable, we will announce a launch date for the mainnet release,” Waterland said.

“It is exciting to be the first blockchain in the space to offer ledger-wide post-quantum security to users. Anyone interested may read the whitepaper or inspect our github repository via http://theqrl.org. We currently have a team of four devs, but are always looking for more volunteers.”

Jomari Peterson, a strategy, operations and development expert working with QRL, noted a vibrant community, along with the implementation of an extended merkle signature scheme (XMSS), is key to securing the technology’s future. For the system to be secure, it should not be feasible to break within the next 50 to 100 years.

The tester and public participation are expected to create a scalable and efficient quantum resistant security standard.

A small core of private investors (early bitcoiners and interested parties) are funding the research and development of the open source project, Waterland said.

How It Began

QRL began as a foray into coding a library of post-quantum secure hash-based digital signatures such as Lamport, Winternitz and Merkle Signature Scheme, he said. It then developed into a functional prototype ledger aiming to experiment with the use of post-quantum secure signatures in a live blockchain environment.

Development started around July 2016.

“After discussing post-quantum signatures with some members of the academic community, I realized that the EMSS would be an excellent design choice for a potentially successful blockchain ledger,” Waterland said.

“Over the last six months the QRL has developed gradually and now features fully integrated XMSS transactions with keys generated via a pseudorandom number function to allow much smaller keys and transaction sizes, as well as deterministic wallet recovery.”

While it was initially secured by proof-of-work, the team has moved towards a final proof-of-stake algorithm design.

“An ideal of the project is to allow all nodes to earn passive income, and several members of the team already have the QRL test node running from Raspberry Pi’s, so the hardware requirements are minimal,” Waterland said.

How It Works

The QRL uses a block selection algorithm based upon the closest hash of published reveal hashes from each stake validator (from a pre-signed iterative hash chain, logged to the blockchain as a transaction in the previous epoch) to a pseudo-randomly generated 32-byte number.

“Our latest design is extremely resistant to gaming and collusion as well as providing defenses against block withholding and Sybil stake attack strategies,” he said.

“We plan to integrate a proof-of-stake based voting/governance system regarding regular hard fork upgrades.”

The major aim of the QRL is to extend the longevity of absolute cryptographic security users rely upon with existing chains such as bitcoin well into the far future.

There are some challenges to working with hash-based signatures like XMSS – namely the size of signatures (and therefore transactions) is far larger than for a conventional ECDSA chain like Bitcoin or Ethereum, but also the signature scheme is stateful – so a signature can only be used once safely. The blockchain must store all public keys signed for an XMSS address forever.

Existing Schemes Are Vulnerable

The commonly used ECDSA, DSA and RSA signature schemes are vulnerable to quantum computing attack, the white paper noted. But a quantum resistant blockchain ledger can counter a sudden, non-linear quantum computing advance.

To spend unspent transaction outputs from a bitcoin address, it is necessary to create a transaction containing a valid elliptic curve signature from the private key for the specific bitcoin address. The chance of a specific bitcoin private key collision is one in 2,256. But when a transaction is signed, the sender’s ECDSA public key is revealed and stored in the blockchain. The best practice is not to reuse addresses. However, as of November 2016 49.58% of the bitcoin ledger is held in addresses with public keys that are exposed.

A quantum computer could theoretically reconstitute the private key given an ECDSA public key.

It is not certain how much quantum computing has advanced or that any breakthroughs will be publicized to allow cryptographic protocols to be made post-quantum secure.

Bitcoin could be an early target of a quantum computer.

If a significant quantum computing advance became public, node developers could deploy quantum-resistant cryptographic signature schemes into bitcoin and advise users to move from ECDSA-based addresses to new quantum-safe addresses.

A silent, non-linear quantum computing advance followed by a nuanced attack on bitcoin addresses with exposed public keys would be more problematic. The thefts could devastate the bitcoin exchange price due to heavy sell pressure and a loss of confidence in the system. The role of bitcoin as a store of value would suffer.

Crypotgraphic Schemes Offer Solutions

Several cryptographic systems are believed to be quantum-resistant, the white paper noted. These include lattice-based cryptography, hash-based cryptography, secret-key cryptography, code-based cryptography and multivariate-quadratic-equations cryptography. All are believed to resist both classical and quantum computing attack due to long key sizes.

One-time signatures offer satisfactory cryptographic security for verifying and signing transactions, but they can only be used once safely. Extending the signature scheme to incorporate more than one valid one-time signature (OTS) signature for each ledger address is a solution. A binary hash tree called a merkle tree can achieve this.

The Merkle Tree’s Role

A merkle tree is an inverted tree with parent nodes computed by hashing the linking of child sibling nodes upwards in layers to the root. Any node’s existence can be proven cryptographically by computing the root.

One strategy to defer computation during tree (and key) creation and extend the number of OTS keypairs available is to use a tree that is itself composed of merkle trees – a hypertree.

The cryptographic security of the signature scheme is secure against classical and quantum computing attack in the design of QRL.

QRL proposes an extensible, signature scheme composed of chained XMSS trees.

As the number of trees within a hypertree increases, signature and key sizes grow linearly, but the signature capacity grows exponentially.

A Public Blockchain

QRL is planned as a public blockchain secured by a proof-of-stake algorithm. Each stake validator signs a transaction containing the final hash of an iterative chain of length 10,000 hashes. With the stake transaction confirmed, each node can connect the cryptographic identity of the stake address to the hash chain for the next epoch.

The bigger transaction sizes in comparison to other ledgers require a transaction fee for each transaction. The market should set the minimum fee miners will accept. A minimum value will be set at the protocol level. As a result, miners will order transactions from the mempool to add to a block at their discretion.

The QRL will use a token as the base currency unit.

Like bitcoin, QRL will have a fixed upper limit to the coin supply. A smoothly exponential decay in the block-reward is favored up to the coin supply ceiling. This will remove the volatility associated with the bitcoin “halving” phenomenon.

Also read: Quantum computers will destroy bitcoin, scientists warn

Other Crytocurrencies Vulnerable

Bitcoin isn’t the only cryptocurrency at risk to quantum computer attack.

Other major ledgers use elliptic curve cryptography for their signatures within transactions.

“They are therefore all vulnerable to a quantum computing advance,” Waterland said.

“An important point to consider is that if just 10 or 20% of addresses remain in normal ECDSA, addresses, then funds can be stolen and the value of the whole ledger sent to zero by an attacker with a quantum computer,” he said.

“Some addresses being secure doesn’t protect a ledger with mixed address types. It was for this reason that we decided to create a ledger which is specially designed to be completely secure against classical and quantum computing attack – even if this poses some design challenges!”

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

Rate this post:

Important for improving the service. Please add a comment in the comment field below explaining what you rated and why you gave it that rate. Failed Trade Recommendations should not be rated as that is considered a failure either way.
0 votes, average: 0.00 out of 50 votes, average: 0.00 out of 50 votes, average: 0.00 out of 50 votes, average: 0.00 out of 50 votes, average: 0.00 out of 5 (0 votes, average: 0.00 out of 5)
You need to be a registered member to rate this.
Loading...

3.9 stars on average, based on 8 rated postsLester Coleman is a veteran business journalist based in the United States. He has covered the payments industry for several years and is available for writing assignments.




Feedback or Requests?

Click to comment

You must be logged in to post a comment Login

Leave a Reply

Articles

GDPR and Blockchain: Three Projects Seeking to Decentralize Data Protection

Published

on

Whether you’ve been keeping track of the news or are a citizen within the European Union yourself, there is a great chance that you have noticed the recent discussion regarding the newly implemented GDPR (or ‘General Data Protection Regulation’) in the bloc.

The rules came into effect this year alongside the recent vote in favor of implementing stricter copyright laws pertaining to intellectual property and ‘memes’ and has caused a fair bit of controversy, alongside the recent worldwide events including the USA, and their repeal of ‘Net Neutrality’ laws across the entire USA.

Image source: Forbes.com

Advertising, Big Data and You

For a wide range of reasons, digital advertising is a huge industry – being near-perfect solutions for digital, web-based organisations which are seeking to maximise their revenue / profits, whilst minimising expenses.

A common phenomenon affecting advertising is ‘Big Data’, where user information is collected and processed through complex artificial intelligence (AI) algorithms.

Your usage of internet technology more likely than not creates an endless trail of digital footprints, which are gathered and interpreted by companies and their systems to provide and interpret detailed insights on user habits.

Data Protection Rights

GDPR is meant to result in transparent and honest interactions between consumers, big data companies, and even social media companies such as Facebook now face the challenge of how to market or rebuild trust with consumers. Though there is still a myriad of concerns amongst consumers regarding how companies will approach this.

Implementation of GDPR has caused quite a shakeup for the AdTech industry, with users are being given total control over how much data websites and applications can collect about them.

Now users can consent to which cookies web operators have access to, but there are still several ways for big data to continue to profit from your data without cookies. Methods such as incoming IP tracking scripts, Browser Fingerprinting and malware-infected websites are commonplace and could prove more malicious than previous methods.

Can Blockchain Further Increase Data Privacy?

Technology has already empowered websites visitors with the ability to overcome issues such regarding data privacy and invasive advertising tactics.

‘Adblocker’ for example is a web-browser extension which automatically removes almost all adverts from a website, and just like ‘NoScript’ (removing potentially malicious scripts from pages) has been utilised by software such as Tor Browser to achieve thorough user safety and anonymity.

Through these kinds of solutions, blockchain or not, website operators are going to be encouraged to increase the quality and value of content on their pages.

Considering such software and the exponential growth of blockchain as an industry, it is of little surprise that we have seen an influx of services, products and ICOs which seek to combine the benefits of these technologies with those of blockchain / cryptocurrency.

Here are a few of what we consider to be the most interesting in the present crypto space…

1. Online.io

Image source: Online.io

The Online.io project financially rewards website operators in a ‘proof of online’ system which essentially quantifies the time spent on each website and rewards website operators appropriately. It is also the only project in this article which we haven’t reviewed on this site so far (although I wouldn’t count it out for the near future, so watch this space!)

Their proprietary crypto-coin (OIO) will be used to distribute rewards to all parties based on visitor time-spent, bounce-rate and other established metrics. This presents a fascinating opportunity for website owners to still effectively monetize their website in compliance with GDPR and without the need to utilize other means of data collection.

Online.io could somewhat be considered a democratized system, as users rank each website based on their experience. The highest rated websites will be rated higher in ‘Trust’ through an algorithmic formula, which acts as an indicator of website quality for future visitors.

It’s likely to continue delivering a highly positive boost to the whole ecosystem as consumers now (especially millennials) would rather get rid of traditional advertising methods: hence ad-skipping buttons on YouTube as well as Ad-blockers and anti-tracker software.

2. Peer Mountain

A blockchain based project which seeks to connect so called “self-sovereign ID holders with businesses, enabling commerce at scale” by utilising technological solutions like smart contracts.

Peer Mountain is unique for providing customers (a private individual / citizen) with a greater level of confidence when looking to access a product or service – no matter where they are, or what their country of origin may be.

To the organisations taking part, budding entrepreneurs worldwide, a whole new market audience is available. A mutual benefit which is equally enjoyed by the ‘self-sovereign ID holder’ too – incentivised by not having to register their private information on a host of centralized servers.

The security is achieved through use of innovative code: which makes use of a combination of user-experience solutions, with the innate security benefits of distributed ledger technology and cryptocurrency.

3. DOVU

This team has put all its efforts into creating a ‘mobility’-focused solution which incorporates “a unified token, wallet and marketplace for earning and spending mobility related rewards”. By mobility, what they are referring to is of course transportation related activities: such as ride-sharing and courier services.

In this instance however, it also applies to mobility information – and how it is bought and sold in the data economy.

Unlike the other solutions listed, DOVU aims to resolve the contentious issue of data privacy by allowing service providing companies make direct offers to users of its ecosystem in return for a quantity of the platform’s proprietary token.

Key use cases and clients pegged to take advantage of this platform include automotive manufacturers and marketing organisations for use in big-data research and algorithmic insight / report generation.

Featured image courtesy of Shutterstock.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

Rate this post:

Important for improving the service. Please add a comment in the comment field below explaining what you rated and why you gave it that rate. Failed Trade Recommendations should not be rated as that is considered a failure either way.
1 vote, average: 5.00 out of 51 vote, average: 5.00 out of 51 vote, average: 5.00 out of 51 vote, average: 5.00 out of 51 vote, average: 5.00 out of 5 (1 votes, average: 5.00 out of 5)
You need to be a registered member to rate this.
Loading...

4.4 stars on average, based on 7 rated posts




Feedback or Requests?

Continue Reading

Analysis

Crypto Capitulation Is Upon Us

Published

on

Capitulation: kuh-pich-uh-LEY-shuhn (noun) the action of surrendering or ceasing to resist.

From their December peak, cryptocurrency assets have given back over $400 billion. This amounts to more than the GDP of many countries.  If this were values lost in the stock market whose worth is in the trillions, it would be called a minor correction. In crypto terms there is only one word to describe the carnage: capitulation.

As painful as it is, the point to be made here is the capitulation is a good thing.  Read on and I will share some thoughts for you to consider.

Mass Media Mania

First let’s take a look at some of the news that is causing such despair. Most recently the selling mania has been in response first to Facebook and more recently to Google.  Both of these mass social media giants have ban cryptocurrency advertising. Read closely and you won’t be shocked to realize that the target of their ire are the many ICOs.

The problem is not that Facebook and Google are the only advertising platforms.  The problem is that they are considered mainstream media and without these two, the trend of cryptocurrencies gaining legitimacy is delayed.  That is right, I said delayed not blocked or prevented.

The World Has Changed

Five years ago, when bitcoin was unknown to most people, this might have been a fatal move. Today is a different story. I recently traveled to a remote mountain town in the interior of Mexico.  Everyone I met had heard about Bitcoin and eyes lit up with excitement when I ask if I could pay for lunch with bitcoin.  

Today are dozens of websites dedicated to cryptocurrencies, either holding them, exchanging them or just writing about them.  Probably the most effective advertising remains on Google, it is called Google Search and it is free.

If someone wants to learn about owning bitcoin or any other currency, there is a ton of educational information.

Of course it would be far better all around if Mark Zuckerberg and Eric Schmidt had taken a different approach such as banning only advertisements for ICOs, but that didn’t happen so supporters of crypto aren’t comforted in their beliefs that bitcoin is going mainstream in 2018.

The Flipside Is Being Ignored

Every argument has a flip side.  If the removal of ads contributes to cleaning up ICO scams, that is a good thing.  We can all agree on that point. And let’s be honest there is more than one problem the crypto community needs to clean up.

This adds to the ongoing regulatory news including March 7th ruling in US Federal District Court that cryptocurrencies are commodities.  As such they can be regulated by the Commodity Futures Trading Commission (CTFC).

On the same day the Securities & Exchange Commission issued the following order:

“If a platform offers trading of digital assets that are securities and operates as an ‘exchange,’ as defined by the federal securities laws, then the platform must register with the SEC as a national securities exchange or be exempt from registration,” the commission said in its “Statement on Potentially Unlawful Online Platforms for Trading Digital Assets.”

Not All Regulation Is Inherently Bad

The mere hint of added government regulation typically sends stock market investors heading for the exits and the same holds for investors in crypto.  But this raises the question, is some regulation of crypto a good thing?

If we examine the full spectrum of regulation to this point on a global scale there is one common target most everywhere.  That is the practice of exchanges. So far there has been little or not regulation, threatened or enacted, to protect investors from loss of funds due to security breaches.  

The question that needs to be ask is this.  Will SEC regulation result in better pricing and lower trading costs; if So, then this would provide a desirable outcome.  It is understandable if you laugh at the prospect of any government regulation having a beneficial outcome, but if you look at past SEC practices, you would come away with different conclusion.

So when the next regulation catches the headlines will it be to ban the existence of bitcoin, Ethereum, Ripple, Litecoin and others or to protect the investor from scams and excess costs?

Capitulation Is A Good Sign

Over the course of a pretty long investment experience, I have witnessed true misery on more than one occasion.  The pain is unbelievable, there is no perspective on the future and all you want is to take action to end the misery.  That is when you know the worst is happening and nothing is ever going to make it better. That is when major stock market bottoms are formed. It surely is painful these days for crypto investors. This is a good sign.

Featured image courtesy of Shutterstock. 

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

Rate this post:

Important for improving the service. Please add a comment in the comment field below explaining what you rated and why you gave it that rate. Failed Trade Recommendations should not be rated as that is considered a failure either way.
26 votes, average: 4.77 out of 526 votes, average: 4.77 out of 526 votes, average: 4.77 out of 526 votes, average: 4.77 out of 526 votes, average: 4.77 out of 5 (26 votes, average: 4.77 out of 5)
You need to be a registered member to rate this.
Loading...

4.4 stars on average, based on 96 rated postsJames Waggoner is a veteran Wall Street analyst and hedge fund manager who has spent the past few years researching the fintech possibilities of cryptocurrencies. He has a special passion for writing about the future of crypto.




Feedback or Requests?

Continue Reading

Altcoins

What’s Behind Cardano’s Rising Popularity in South Korea?

Published

on

Cardano, better known as ADA in South Korea, pronounced as “aeda” in the local market, is growing at an exponential rate due to UpBit.

UpBit, South Korea’s second largest cryptocurrency exchange behind Bithumb, is operated by Dunamu, a subsidiary company of Kakao, the operating company of KakaoTalk and KakaoPay. The two mobile applications, KakaoTalk and KakaoPay, have a market penetration rate of over 90 percent in their respective markets–financial technology (fintech) and messaging.

Although UpBit remains as the only cryptocurrency exchange that has integrated Cardano within the local South Korean cryptocurrency exchange market as of date, the popularity of Cardano on UpBit is increasing rapidly. According to CoinMarketCap, 75 percent of Cardano’s daily trading volume is processed in South Korea, by UpBit.

Within its debut month, more than 3 million South Korean users signed up to use KakaoPay, the country’s most widely utilized fintech app. KakaoPay operates as a mobile bank, allowing users to send and receive money, obtain loans, and conduct financial activities. KakaoPay supports UpBit because a subsidiary company of Kakao in Dunamu operates UpBit.

Given that Cardano is one of the most popular cryptocurrencies on UpBit in terms of daily trading volume, naturally, as general consumers in the traditional finance market using KakaoTalk and KakaoPay move to the cryptocurrency market, the first few cryptocurrencies they are introduced to are bitcoin, Ethereum, and Cardano.

Cardano is also receiving significantly more mainstream and local media coverage than other alternative cryptocurrencies, specifically because the South Korean media has portrayed Cardano as a direct competition to Ethereum. Because Cardano is a smart contracts protocol, it is structurally similar to Ethereum.

The two key differences between Cardano and Ethereum are that Cardano uses a proof-of-stake (PoS) consensus algorithm and it also has two layers that are used for smart contracts processing and payment settlement.

In South Korea, cryptocurrency mania has swept across most major industries. 5 out of 10 people on the streets, in subways, buses, and cafes talk about bitcoin, cryptocurrency, and blockchain technology on a regular basis. As such, the majority of investors are more technical than other regions.

Most investors of Ethereum in South Korea understand that the Ethereum Foundation and its open-source development team has been planning a PoS update via Casper. When Cardano debuted with a PoS protocol, it led South Korean investors to believe Cardano is a more innovative platform and has a technical edge over Ethereum.

January 31

For cryptocurrencies with strong followers in the South Korean market, January 31 is an important date to keep track. On January 31, local cryptocurrency exchanges are expected to open account registrations to new users and six major local banks are set to provide banking services to cryptocurrency exchanges.

Consequently, on January 31, it is likely that a massive amount of Korean won will flow into the local cryptocurrency exchange market. The recent cryptocurrency exchange ban fiasco, which turned out to be false, further increased the presence and popularity of cryptocurrencies in South Korea.

Cryptocurrencies like Cardano, EOS, Qtum, and Ethereum that have strong bases in South Korea will likely increase in value throughout late January and early February.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

Rate this post:

Important for improving the service. Please add a comment in the comment field below explaining what you rated and why you gave it that rate. Failed Trade Recommendations should not be rated as that is considered a failure either way.
12 votes, average: 4.83 out of 512 votes, average: 4.83 out of 512 votes, average: 4.83 out of 512 votes, average: 4.83 out of 512 votes, average: 4.83 out of 5 (12 votes, average: 4.83 out of 5)
You need to be a registered member to rate this.
Loading...

3.4 stars on average, based on 3 rated postsJoseph Young is a finance and tech journalist based in Hong Kong. He has worked with leading media and news agencies in the technology and finance industries, offering exclusive content, interviews, insights and analysis of cryptocurrencies, innovative and futuristic technologies.




Feedback or Requests?

Continue Reading

5 of 15 Seats Available

Learn more here.

Recent Comments

Recent Posts

A part of CCN

Hacked.com is Neutral and Unbiased

Hacked.com and its team members have pledged to reject any form of advertisement or sponsorships from 3rd parties. We will always be neutral and we strive towards a fully unbiased view on all topics. Whenever an author has a conflicting interest, that should be clearly stated in the post itself with a disclaimer. If you suspect that one of our team members are biased, please notify me immediately at jonas.borchgrevink(at)hacked.com.

Trending