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Vitalik Buterin: What Were You Thinking?

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Enough with all the stuff over fake news versus real news.  It is hard to find reality these days. What information is coming from trustworthy sources versus those with a secret interest to promote?  I am not talking about the stuff coming from the White House, FBI, CIA or any of those folks. I am talking about something much more important.

What I am getting at is news in the crypto world where our digital assets are invested. Just the other day, I wrote a piece raising the question whether crypto usership for acquiring goods and services was falling.  Those who collect data on these trends seem to think it is.

There could be lots of reasons for this, both in the method of collecting the data as well as real human behavior.  One thing seems clear, crypto prices keep getting further away from those frothy levels of last Christmas.

We also have to keep in mind that there is no such thing as long term history with crypto. It is inherently volatile.  So the analysis of data can change quickly.

Goldman Sachs Was Bad Enough

Last week’s conflicting headlines coming from Goldman Sachs via Business Insider claiming that the big investment bank was pulling back on its plans to open a crypto trading desk in favor of a more limited commitment to essentially offering a wallet for big institutional investors sent a quick shock through prices.  It didn’t matter that other sources at Goldman merely claimed they were delaying the rollout.

What’s With Vitalik?

So if you are the founder of some pretty amazing technology whose success ultimately depends on mass adoption, you would expect to hear a constant barrage of exciting news about your project, kind of like Elon Musk.

But not Vitalik Buterin.  Over the weekend headlines from Ethereum World News read: “There Isn’t An Opportunity For Another 1000x Growth”.

The source of the headline comes from Bloomberg News who interviewed Buterin at the recent Ethereum & Blockchain Conference in Hong Kong. Below is Vitalik’s direct quote:

“The blockchain space is getting to the point where there is a ceiling in sight.  If you talk to the average educated person at this point, they probably have heard of blockchain at least once. There isn’t an opportunity for yet another 1,000-times growth in anything in the space anymore.”  Buterin’s remarks were described as a shock to those attending the conference.

Nobody is challenging the depth of Buterin’s knowledge, but what is happening in that part of his brilliant mind that is devoted to common sense?  As the co-founder of Ethereum whose success thus far is build on applications developed by others, why would you want to disparage the future?  It positively makes no sense.

What makes sense, as the article points out, is a long-term growth plan that encourages a steady flow of adoption and real world use.  Bravo for that observation and one I totally agree with. But that wasn’t working at the conference. “That strategy (marketing and worldwide adoption) is getting close to hitting a dead end.”

But here is the killer. Rather than focusing on evolutionary developments like Bitcoin’s Lightning Network or Ethereum-based Raiden Network, Buterin chooses to dwell on the obvious.

“. . . every present day existing blockchain, including ETH and BTC, sucks. . . . “.

Connecting the Dots

Whether accurate or not, Buterin’s opinions, at best, were ill timed.  If you believe them to be accurate, why would you invest in Ether or any other crypto?  It would make no sense to do so. On the other hand if his comments were cleverly crafted to discourage rampant speculation and volatility, that is not his job.  In fact, it is a form of manipulation. That is not smart.

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.

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4.4 stars on average, based on 104 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.




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5 Comments

  1. CanadaWhite

    September 10, 2018 at 8:18 pm

    I agree. When I read his comments the first thing I thought was that he was having one of those days when you just want to quit and are fed up with the job you are doing. I mean if that’s how he really thinks why would you bother with Ether. I recall a previous article last week where another developer was saying that ether would be dead if payments for the ether network network were not required to be made in ether and he also agreed with that developer. It is a poorly timed quote; but, keep in mind d he is also quite young and immature. There is an incredible amount of opportunity in the crypto space. It seems like every day I receive a major headline about institutions or governments doing something new with blockchain or crypto. It does make me question ether though. Especially with all of the cryptos that have left it’s network in favor of their own like EOS and others.

  2. James Waggoner

    September 11, 2018 at 3:32 am

    Thanks for your comments. Yes we understand the he is quite young and immature. Unfortunately when you create something worth billions in market value, you better start to grow up fast. Otherwise there are these amazing new services call public relations. Thanks again for your spot on observations.

  3. James Waggoner

    September 11, 2018 at 3:32 am

    Thanks for your comments. Yes we understand the he is quite young and immature. Unfortunately when you create something worth billions in market value, you better start to grow up fast. Otherwise there are these amazing new services call public relations. Thanks again.

  4. enricogeck

    September 11, 2018 at 10:00 am

    Some personal problem for him, I suppose

  5. Speeddymon

    September 13, 2018 at 1:02 am

    “that is not his job.”

    I disagree.

    As the lead architect of a software project, it *is* his job to ensure that the software is not misused in a way that allows someone to gain an unfair advantage over the other users of that software.

    Therefore, his comments were spot on.

    Were they ill-timed? Sure. No doubt on that. But consider this: Pretend he didn’t say anything at all. Do you really think we are going to see another bubble in the next 1-2 years? The traditional markets enter bubble status when some new development happens to catch on and gain mass popularity (house flipping in 2006 for example)

    Even if he said nothing, the ebbs and flows of the market will prevail, and the crypto space would likely still not enter another bubble for a few more years to come.

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Coordinated Pump Pushes Steem Coin Price Up 25%

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Steem (STEEM), one of the native currencies on the Steemit social media platform, felt a 25% pump in the early hours of Tuesday morning shortly after a bug saw the site go down temporarily.

Round about the same time a flurry of buy calls resounded around the Twitter ecosystem, urging traders to buy into STEEM in anticipation of the upcoming Hardfork 20, which is due to be implemented on September 25th.

With Hardfork 20 now a week away, it appears that a pump and dump group may be trying to draw new hands into STEEM with the intention of dumping their coins when the price hype reaches an appropriate crescendo.

Calling For Buyers

Several posts like this one appeared on Twitter in the late/early hours of last night, urging followers to accumulate STEEM:

“Accumulate $STEEM On Binance Its having HARDFORK on 25th sept price can go x2 soon !!”

The buy pattern started late last night and peaked this morning between 09:00 and 10:00 UTC. By 11:00 UTC tweets like this celebrated the price pump and the assumed gains made for the account’s followers:

“VIP members were told to buy #STEEM and hold. Btw it is 25% pure profit.”

As anyone who has used Steemit will know, whenever a large price movement takes place the platform suddenly receives its own flurry of activity, as users try to figure out where the price is going to end up. STEEM prices affect the subsequent value of Steemit profile accounts, and exchanges like this one were common on the site this morning:

Steemians, as the site’s users refer to themselves, will now be watching the run up to Hardfork 20 very closely. Hardcore users remain skeptical of today’s sudden rise in coin price, and naturally assume that pumpers are using Hardfork 20 as a trigger to make some easy money.

Steem’s 25% Price Hike

From yesterday’s low of $0.699509, STEEM rose in value to the tune of 25.9% en route to a valuation of $0.881178. That peak came at 10:00 UTC this morning, as trade volumes rose 261%, from $2.1 million yesterday to $7.6 million at the time of writing.

The above tweets suggested Binance as the hub for STEEM trades, and around 27.5% of activity has originated from there, with STEEM/BTC the most popular at 24.7% alone.

The most popular hub for STEEM trades, however, is Korea. Over 50% of the day’s movements have come from Upbit and Bithumb, where STEEM/KRW trades dominate. The STEEM price on Bithum even climbed as high as $4.27 at one point, however CoinMarketCap and other statistics aggregators have excluded this price from overall market readings.

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.

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4.3 stars on average, based on 57 rated postsGreg Thomson is a full-time crypto writer and digital nomad. He eats ICOs for breakfast and bleeds altcoins. Wherever he lays his public key is his home.




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Stellar Acquires Blockchain Startup Chain to Form Interstellar

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The commercial arm of the Stellar Development Corporation has acquired a promising blockchain startup by the name of Chain, paving the way for possibly higher enterprise adoption of distributed ledger technology. The deal adds to Stellar’s credibility as one of the world’s leading blockchain companies.

Chain Acquired

Chain, a San Francisco-based startup pursuing enterprise grade adoption of blockchain technology in finance, has sold to Lightyear in an undisclosed cash agreement. Lightyear, the subsidiary of the Stellar Development Corporation, will be re-named Interstellar, according to official reports. Jed McCaleb, Stellar’s founder, will be the chief technology officer of the newly formed company, which he said should help companies build on the Stellar network. He adds:

“Chain’s team has led the market for enterprise adoption of blockchain technology, which is a critical component of building a future where money and digital assets move over open protocols.”

Interstellar’s new CEO Adam Ludwin explained how the newly merged company will work together:

“Chain has worked from inside the enterprise while Stellar has focused on the network between organizations. As a single team we will have a complete view and set of capabilities to make value-over-IP a reality.”

Chain is said to be a leader in the world of fin-tech, having built enterprise-grade blockchain solutions for Visa, Citigroup and Nasdaq, among others. With the merger, Interstellar will have access to Sequence, Chain’s powerful cloud solution that enables companies to monitor assets moving between private ledgers and the Stellar network.

Previously, Chain had raised more than $43 million across multiple deals. Financiers included Capital One, Citigroup, Pantera Capital and Blockchain Capital.

XLM Price Update

Although the merger between Chain and Lightyear has not had a demonstrably positive effect on XLM’s price, the cryptocurrency continues to outperform leading assets such as Ethereum and bitcoin cash. The XLM price was down 4.4% on Tuesday but has gained 3.2% over the past seven days. By comparison, bitcoin has declined nearly 1% over that period while Cardano has lost more than 10%. Ethereum is trading in positive territory over seven days as prices recovered from 16-month lows.

XLM, which is currently valued at $0.197, has declined roughly 12% over the past month. At current values, it has a market capitalization of $3.7 billion, placing it sixth among active cryptocurrencies. Bitbox is the most active market for XLM traders, accounting for more than 54% of daily transactions.

Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

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.

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4.6 stars on average, based on 601 rated postsSam Bourgi is Chief Editor to Hacked.com, where he specializes in cryptocurrency, economics and the broader financial markets. Sam has nearly eight years of progressive experience as an analyst, writer and financial market commentator where he has contributed to the world's foremost newscasts.




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Kovri & Bulletproofs: How Monero is Improving Privacy

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Kovri Bulletproofs Monero

Monero is one of the premier privacy conscious cryptocurrencies currently on the market.

It makes use some of the most advanced technologies in cryptography and blockchain technology. These include such features as stealth addresses, transaction mixing and Ring Confidential transactions.

These have made Monero (XMR) almost untraceable. Yet, “almost” is not good enough for the Monero community as they have strived to improve the protocol in their latest updates.

These updates include the Monero Kovri I2P implementation as well as what are termed “bulletproofs”. These developments have been in the pipeline for sometime and we are starting to see them being actively rolled out.

So what are they and how are they going to make Monero even more secure?

Before we can delve into the technology, we have to take a look the current state of Monero’s privacy.

Secure, Untraceable Digital Cash

Currently, Monero is able to hide all details about a transaction. Making use of stealth addresses, they are able to hide the recipient’s and payers’ details from the rest of the network. They are also able to hide the amount that has been transacted.

Making use of Ring Confidential transaction and transaction Mixin, information about future transactions is also hidden from the original sender of these funds.

Therefore, a Monero transaction is probably the closest you will get to making a payment with untraceable bank notes.

Monero USPs. Image source: Monero.

However, there are two outstanding quirks that the Monero community was not 100% comfortable with.

The first related to the potential of user IP address leaks and the other revolved around the inefficiencies of current Monero “Range proofs”.

Kovri and IP Anonymization

As mentioned, Monero is almost completely private. However, there was always a question that remained around the IP addresses of those who interacted with the Monero network.

When you initiate a transaction on the Monero blockchain, your IP address is being exposed to the network. If there was a malicious actor, they could observe this event and log your IP address. This could create the potential for meta data analysis by large and determined adversaries.

While this is a really difficult attack to complete, it is still a concern for some.

This is the reason that the community has been excited about the release of Kovri and its potential to encrypt and route transactions through I2P (Invisible Internet Protocol) nodes. Technically, Kovri will make use of “Garlic encryption” and “Garlic routing”

We won’t go into more detail about Garlic routing but one can think of it as a more secure version of the Onion routing. Onion routing is the current networking implementation that is on use in the TOR network.

By using this routing protocol, your connection to the Monero network is masked and your IP address cannot be identified. According to the Kovri lead developer, Anonimal, the Kovri protocol will:

“Essentially, we will be able to anonymise monero transactions even more than what monero is capable of doing right now, technically speaking, at the network layer”

Kovri is currently in alpha release stage and there is still a great deal of testing that needs to be done. There are currently 48 contributors who are working on it and the project still has a healthy chunk of funding to move the project forward.

BulletProofs and Lower Fees

While Monero transactions are completely private, they are relatively inefficient. This basically comes down to the nature of Monero’s “range proofs”.

Range proofs basically allow anyone to verify that a particular commitment represents an amount within a particular range without revealing anything else. These are needed in order ensure that transaction input and output amounts are positive.

This may sound like a mouthful, but all you need to know is that these range proofs are essential components for the private transaction.

However, the current range proofs on the Monero network are inefficient as they make up the bulk of the size of the transaction. This means that a great deal of mining resources goes towards verifying these range proofs and increases the cost of these transactions.

This is where BulletProofs come in.

Despite the catchy name, BulletProofs are the ideal solution to the Monero range proof problem. They scale in size differently to Monero’s current proofs and as a result, save space as transactions inputs and outputs increase.

A full explanation of Bulletproofs is beyond the scope of this article but if you wanted to flex your intellectual muscles you could read the paper on it by Bünz, Bootle et al.

The most important takeaway from the bulletproofs is the space that it saves in Monero transactions. For example, a simple Monero transaction that has two outputs is about 13.2kb in size. However, with bulletproofs the transaction is only 2.5kb in size. This is a full 80% reduction in size which will translate into a commensurate reduction in fees.

Given that bulletproofs scale logarithmically, the space savings on these transactions are even more pronounced with multiple output transactions.

In short, bulletproofs is a solution that all Monero users will notice immediately.

So where in the pipeline are Monero bulletproofs?

In July, Kudelski securities completed their audit of Monero compatible bulletproofs. While there were a few minor issues, it passed audit stage and was ready for implementation on the Monero test network.

If all goes well in the testing phase, then the bulletproofs are expected to be released live on the Monero network in October.

Conclusion

Monero has proven itself to be one of the premier privacy coins on the market. The community is thriving and is comprised of some of the smartest and most privacy conscious individuals in the world.

Of course, as Monero has garnered attention from government backed entities, so too have the risks increased for vulnerabilities and deanonymization.

The Monero developers are well aware of this and are always looking for solution to improve on the Protocol.

Kovri and bulletproofs are two really important improvements that will help cement Monero’s market leading status.

We will keep a keen eye on the rollout of this technology.

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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.

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5 stars on average, based on 3 rated postsNic is an ex Investment Banker and current crypto enthusiast. When he is not sitting behind six screens trading Bitcoin, he is maintaining his numerous mining rigs.




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