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Aztec at Its Core: A Solution to Make Ethereum Transactions Anonymous

Aztec at Its Core: A Solution to Make Ethereum Transactions Anonymous

Aztec at Its Core: A Solution to Make Ethereum Transactions Anonymous Aztec at Its Core: A Solution to Make Ethereum Transactions Anonymous bitcoin , crypto , crypto news , news #bitcoin #invest #money
With the launch of Aztec, the Ethereum blockchain can finally become anonymous. What does this exactly mean, and how do we use it? On Feb. 1, part of the Ethereum ( ETH ) blockchain became anonymous. This is all thanks to the Aztec protocol that Thomas Walton-Pock and his team launched on the network’s mainnet last week. Aztec is designed not only to provide a high level of privacy on the ETH blockchain but also, according to its creators, it can significantly reduce transaction costs. Besides, as expected in the nearest time, users will be able to release their assets using the Aztec development toolkit. Under the hood The Aztec protocol is already known in the Ethereum community with the ETH blockchain previously used to convert the Maker DAI stablecoin into an anonymous asset. The accumulated experience has helped the Aztec developers realize the best compilation of ideas to improve the Ethereum network. What makes this stand out is the technology of zero-knowledge proofs (Zk-SNARK), which allows to hide transaction amounts using tokens with a high level of anonymity . The abbreviation Zk-SNARK stands for “Zero-Knowledge Succinct Non-Interactive Argument of Knowledge” and refers to a proof model where one can prove the presence of a particular piece of information, for example, an amount of tokens or a secret key, without revealing this data. Something similar has already been implemented in the Zcash ( ZEC ) blockchain, where the information about a sender and a recipient of the transaction, as well as its value, is hidden. However, unlike ZEC, the first version of Aztec launched on Ethereum does not hide the addresses of the recipient and sender — at least for now. The system runs on the Aztec Cryptography Engine smart contract, which validates transactions. The validation process is as follows: When a user transfers tokens, the system encrypts their amount in a separate note thus generating a proof of correctness. As a result, it becomes impossible to see the coins in the recipient’s account. The user can see notes, instead, which are a kind of promise or a claim for the number of coins they were sent. Buterin’s dreams about anonymous Ethereum are coming true The Aztec project has already received support from ConsenSys, JPMorgan, A.Capital, Libertus Capital and Coinbase. Notably, its team is trying to make Vitalik Buterin’s old dream come true. Earlier, the founder of Ethereum has repeatedly stated that he would like to implement private transactions in his brainchild. So far, it has been possible to achieve a certain degree of anonymity only with third-party Ethereum mixers. Related: Cryptocurrency Mixers and Why Governments May Want to Shut Them Down Mixers operate on the following principles: Coins belonging to service users are divided into small portions, after which they are mixed in a random order several times and then get sent back to the users minus a commission. As a result, tracking the source of transfers becomes almost impossible. How to use Aztec for anonymous transfers In total, according to the developers, there are two options to conduct private transactions using the Aztec protocol. The first option allows everyone to use Aztec to create a token that supports anonymous transfers. The second option refers to the creation of private versions of existing coins whether it’s ETH or ERC-20 tokens. Tokens themselves are supposed to get converted into notes, which are an encrypted representation of the value and are tied to the original coin in a 1:1 ratio. Created copies are stored in special Aztec repositories. Charlie Cowan, one of the project developers, expects to create an entire infrastructure based on privacy. He also noted that the issue of keeping personal data confident might soon turn into a matter of urgent importance, given that all users’ financial activity may soon become visible on the public blockchain. What to expect in the coming year? Currently, the network supports only ZkDAI — a private version of MakerDAO’s stablecoin. Meanwhile, Aztec developers promise to issue other tokens over the next few weeks and provide users with full access to the creation of custom coins in two months. The team has also said that the project’s ultimate goal is to create the so-called “triptych privacy” that could completely hide a separate part of the Ethereum blockchain. The team’s next step will be adding a particular function to hide the identities of the sender and recipient. Walton-Pocock said this feature could be added later this year. He added that the company intends to launch PLONK — SNARK’s ultra-fast universal proof — that will ensure the execution of closed smart contracts with a single trusted setup. Aztec developers have also announced their plans to release a full version of the open-source Aztec protocol sometime in the future. It will supposedly include anonymous voting on management mechanisms, anonymous personal data management systems — validating a user as a member without revealing the identity — and a decentralized, zero-disclosure cryptocurrency exchange that will allow people to trade Aztec assets without transaction values being publicly exposed. Where’s Ethereum heading? Until recently, the Ethereum network has been experiencing problems with processing large numbers of transactions. With the Aztec solution based on Zk-SNARKs, the true anonymity of Ethereum may finally become a reality. Zk-STARKs was implemented during the Istanbul hard fork in December — is designed to increase the network scalability . Besides, according to the developers, the update reduces the cost of gas of various operating codes to prevent spam attacks and increase the network’s resistance to denial-of-service attacks. StarkWare, a startup that specializes in blockchain scaling solutions, said that Ethereum has tremendous potential for scaling following the hard fork . According to its data , the scale of Ethereum operations at the first blockchain level can be increased 2,000 times. More specifically, the updated network will be capable of processing 9,000 transactions per second at the expense of 75 units of gas per transaction, whereas before that, the limit was 2,000 transactions at the expense of 300 units of gas per transaction. Related: Istanbul to Berlin: Ethereum Milestones on the Road to Serenity The second part of the upgrade — Berlin — is expected to be released in 2020. The exact date is not fixed, though, as the developers have recently reported that it can potentially be delayed. Berlin is supposed to include proposals, the implementation of which requires more time to test, for example, the actively debated EIP-1057 — a modified programmatic proof-of-work mining algorithm aimed at reducing the influence of ASIC devices. Ultimately, as the developers hope, upon the completion of both upgrades, that the Ethereum network will become faster, cheaper and more scalable. They expect all of this to be achieved without compromising the decentralization and flexibility of the network. ®ⓔⓢⓞⓤⓡⓒⓔⓢ : cointelegraph.com

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CryptoCorner: Bitcoin Breaks $10K… Briefly, Vo1t Partners with IBM for Key Storage, HIVE Announces 40% Operating Cost Reduction and Stock Options

CryptoCorner: Bitcoin Breaks $10K… Briefly, Vo1t Partners with IBM for Key Storage, HIVE Announces 40% Operating Cost Reduction and Stock Options

Point Roberts, WA and Delta, BC – February 10, 2019 (Investorideas.com Newswire) Investorideas.com, a leader in crypto and blockchain investing news brings you today’s edition of the Crypto Corner podcast and commentary on what’s driving the cryptocurrency market.
Listen to today’s Crypto Corner Podcast:
https://www.investorideas.com/Audio/Podcasts/2020/021020-CryptoMarket.mp3
CryptoCorner: Bitcoin Breaks $10K… Briefly, Vo1t Partners with IBM ( NYSE: IBM ) for Key Storage, HIVE ( TSXV: HIVE ) Announces 40% Operating Cost Reduction and Stock Options SHARE PODCAST:
Get the Crypto Corner Podcast on iTunes
Stocks discussed: (NasdaqGS:CME) ( NYSE:IBM ) ( TSXV:HIVE ) Bitcoin ( BTC ) poked its head above the much-hyped $10,000 support level over the weekend, even reaching a peak of about $10,160 on Sunday, only to drop suddenly to its current trading price of $9,850, according to data from CoinMarketCap . A report from Cointelegraph notes that this movement saw Bitcoin filling a closing “gap” from CME Group’s ( NasdaqGS:CME ) Futures on Friday. CME’s futures closed at $9,850 on Friday, which is more or less exactly where Bitcoin ended up trading this morning. Cointelegraph writer filbfilb characterized the rise and fall in price:
“This was a fairly mild dip. A backtest of the weekend breakout and the CME gap was a high probability.”
“The question is if we can quickly reclaim 10k or need to test lower.”
As for the wider crypto market, it currently boasts a total market cap of around $283 billion, which is still a bit higher than the $278 billion it entered the weekend with.
CoinDesk reports that Vo1t, a cold storage custody provider, has partnered with IBM ( NYSE:IBM ) to offer its clients secure private key storage and encryption. The option is part of IBM Hyper Protect, which provides security for cloud data, digital assets and workloads, and “can be installed on the premises or accessed remotely from a client’s computer.”
HIVE Blockchain Technologies Ltd. ( TSXV:HIVE ) has reported that it now anticipates a 40 percent reduction in the operating and maintenance costs at its GPU mining facility in Sweden, as compared to costs from its previous provider agreement. An “unusually warm winter in Sweden” has led to a lower cost in electricity production, according to the announcement. Frank Holmes, Interim Executive Chairman of HIVE, commented:
“We’re extremely pleased to have locked in advantageous electricity prices in Sweden through our direct agreements with local suppliers, the result of HIVE assuming full control of its Sweden operations in November. This provides cost certainty and allows us to plan for our next stage of growth. It is another successful step in our efforts to increase our underlying mining profitability in 2020.”
Furthermore, HIVE’s Board of Directors has approved the grant of 3,000,000 incentive stock options, “exercisable into the equivalent amount of common shares of the Company at a price of C$0.29 per share.”
HIVE’s stock is up some 22.4 percent at press time. This is likely helped by the news discussed today, but is probably largely fueled by the performance of the crypto market over the weekend.
Reuters reports that Kozo Yamamoto, one of Japan’s senior ruling party lawmakers, is urging his government to create a digital yen to check China’s development of its own digital currency. On the creation of such a currency, Yamamoto told Reuters:
“The sooner the better. We’ll draft proposals to be included in government’s policy guidelines, and hopefully make it happen in two-to-three years.”
Yamamoto acknowledged that adoption of digital currencies may undermine the supremacy of the dollar, but that:
“If each country manages to control flows of money with their own (digital) currencies, that could prevent a big swing at a time of crisis and stabilize their own economy.”
Sam Mowers, Investorideas
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Related Stocks: Bitcoin (Bitstamp) Bitcoin (Coinbase) Bitcoin Composite Hive Blockchain Technologies Ltd International Business Machines

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Blockchain: The revolution that hasn't quite happened – BBC News

Blockchain: The revolution that hasn’t quite happened – BBC News

Image copyright Getty Images Image caption Blockchain could offer a back-up to payment systems Imagine you are out shopping and get to the till but your card doesn’t work. It turns out that your bank has had a computer meltdown and none of its customers, including you, can pay for anything.
But what if the till had access to a record, or ledger, of the balance on your credit and debit cards that was updated anytime you bought something?
Even with the bank’s systems down your card would still work at the supermarket, because the till itself would know your balance.
That is just one possibility offered by a distributed ledger, also referred to as a blockchain. The technology has been around for more than a decade and has been heavily hyped.
It sounds pretty handy, but in practice, it is hardly used. So what happened?
Image copyright Getty Images Image caption Cryptocurrency Bitcoin is perhaps the best-known use of blockchain Blockchain has struggled to find a purpose, beyond powering cryptocurrencies like Bitcoin.
In that scenario, the blockchain acts as a universal record of every Bitcoin transaction ever made. The blockchain is a ledger, or log, of those transactions and users on the network collaborate to verify new transactions when they occur. They’re rewarded financially for this effort – an enterprise known as “Bitcoin mining”.
But the basic idea, of a ledger of information distributed around lots of different users instead of held centrally, has provoked a lot of interest.
Media playback is unsupported on your device Media caption Bitcoin explained: How do crypto-currencies work? Proponents have long argued it could be a better alternative to traditional databases.
But how transformative would blockchain-style alternatives really be? The shop tills example was suggested by Dave Birch, an author and advisor on digital financial services, who has been critical of some proposed blockchain schemes in the past.
“I’m prepared to buy that,” he says, of the tills idea. “I think there’s some value to it.”
More Technology of Business
What happens to all the old wind turbines? How tech is helping catch rats, wasps and bedbugs What can you use instead of Google and Facebook? Robot tanks: On patrol but not allowed to shoot Giant jet engines aim to make our flying greener There are other ideas out there. Prof Gilbert Fridgen, a financial services expert at Luxembourg University suggests a distributed ledger system that keeps track of certificates and degrees issued by universities.
No one organisation would be responsible for it. Rather, copies of the ledger would be held by multiple parties and individuals would be able to check that records of their own qualifications were accurate.
It would certainly by useful. In 2018, a BBC investigation showed that there were thousands of fake degrees in circulation, so a decentralised system that tracks qualifications might appeal to employers.
That said, Prof Fridgen notes that nothing about a blockchain itself can stop some corrupt individuals trying to add fraudulent information to it. Additional checks are needed.
If those trust issues can be solved, then blockchains could have real benefits.
News surfaced recently of members of the Windrush generation of migrants from the Commonwealth who have had their legal status questioned because records were not kept of their being granted leave to remain in the 1970s. In the future, such errors might be avoided by keeping information like this on a distributed ledger instead of relying on the government to look after it.
Some big businesses have been incorporating the technology into their operations.
Image copyright Getty Images Image caption Maersk tracks paperwork for goods using blockchain technology Take shipping giant Maersk. It uses blockchain technology in TradeLens, a new system for tracking customs documentation on goods that are shipped internationally. The idea is that any stakeholder in the process, from a port to a customs authority, can quickly look up details pertaining to a shipment.
Maersk says that 10 million shipping events are now registered in the system every week.
Unlike Bitcoin, TradeLens uses a permissioned blockchain, this is a non-public ledger to which access is controlled.
But a similar system could be achieved with other technologies such as cloud-based ledger databases that encrypt data and control who can access what information.
Another project of interest is the real estate system trialled by the Swedish land registry, Lantmäteriet. A blockchain was designed to track documents during the sale of a property. The buyer and seller, brokers and banks involved could all take part in and keep track of the sale digitally.
Image copyright Getty Images Image caption Sweden’s land registry experimented with blockchain While the trial proved such a scheme was possible, a change in legislation would be needed before the system could be scaled up in the future, explains Mats Snäll, chief innovation officer at the Swedish land registry.
“It was never integrated into the production system of the land registry,” he tells the BBC.
In Thailand, cryptocurrency firm Zcoin developed a blockchain-based system so that members of the Thai Democrat Party could cast digital votes for their new leader in late 2018. Instead of having to trust a central authority to count the votes, they were instead collected on the Zcoin blockchain.
Votes were made at polling stations or via a mobile app, where voters needed to submit a photo of themselves when casting their ballot.
These digital votes were also audited by the election committee, a Zcoin spokesman tells the BBC. Zcoin says it is planning to announce a bigger scheme, involving “millions” of voters, in the near future.
These are thought-provoking ventures, though a debate remains as to whether blockchain is absolutely necessary for any of them.
Some say that eventually blockchain-style systems will prove to be the most efficient option for organising data at scale. Entrepreneur Helen Disney is one of them.
“In many cases there is a cost saving to be made once you’ve got past the initial hurdle – obviously bringing in any new system is expensive,” she says.
While blockchain bluster will surely continue, even sceptics like Mr Birch think there are some focused applications that could prove worthwhile. So far, blockchain might not have changed the world – but it has got a lot of people thinking.

Read More…

Blockchain: The revolution that hasn’t quite happened

Blockchain: The revolution that hasn’t quite happened

Image copyright Getty Images Image caption Blockchain could offer a back-up to payment systems Imagine you are out shopping and get to the till but your card doesn’t work. It turns out that your bank has had a computer meltdown and none of its customers, including you, can pay for anything.
But what if the till had access to a record, or ledger, of the balance on your credit and debit cards that was updated anytime you bought something?
Even with the bank’s systems down your card would still work at the supermarket, because the till itself would know your balance.
That is just one possibility offered by a distributed ledger, also referred to as a blockchain. The technology has been around for more than a decade and has been heavily hyped.
It sounds pretty handy, but in practice, it is hardly used. So what happened?
Image copyright Getty Images Image caption Cryptocurrency Bitcoin is perhaps the best-known use of blockchain Blockchain has struggled to find a purpose, beyond powering cryptocurrencies like Bitcoin.
In that scenario, the blockchain acts as a universal record of every Bitcoin transaction ever made. The blockchain is a ledger, or log, of those transactions and users on the network collaborate to verify new transactions when they occur. They’re rewarded financially for this effort – an enterprise known as “Bitcoin mining”.
But the basic idea, of a ledger of information distributed around lots of different users instead of held centrally, has provoked a lot of interest.
Media playback is unsupported on your device Media caption Bitcoin explained: How do crypto-currencies work? Proponents have long argued it could be a better alternative to traditional databases.
But how transformative would blockchain-style alternatives really be? The shop tills example was suggested by Dave Birch, an author and advisor on digital financial services, who has been critical of some proposed blockchain schemes in the past.
“I’m prepared to buy that,” he says, of the tills idea. “I think there’s some value to it.”
More Technology of Business
What happens to all the old wind turbines? How tech is helping catch rats, wasps and bedbugs What can you use instead of Google and Facebook? Robot tanks: On patrol but not allowed to shoot Giant jet engines aim to make our flying greener There are other ideas out there. Prof Gilbert Fridgen, a financial services expert at Luxembourg University suggests a distributed ledger system that keeps track of certificates and degrees issued by universities.
No one organisation would be responsible for it. Rather, copies of the ledger would be held by multiple parties and individuals would be able to check that records of their own qualifications were accurate.
It would certainly by useful. In 2018, a BBC investigation showed that there were thousands of fake degrees in circulation, so a decentralised system that tracks qualifications might appeal to employers.
That said, Prof Fridgen notes that nothing about a blockchain itself can stop some corrupt individuals trying to add fraudulent information to it. Additional checks are needed.
If those trust issues can be solved, then blockchains could have real benefits.
News surfaced recently of members of the Windrush generation of migrants from the Commonwealth who have had their legal status questioned because records were not kept of their being granted leave to remain in the 1970s. In the future, such errors might be avoided by keeping information like this on a distributed ledger instead of relying on the government to look after it.
Some big businesses have been incorporating the technology into their operations.
Image copyright Getty Images Image caption Maersk tracks paperwork for goods using blockchain technology Take shipping giant Maersk. It uses blockchain technology in TradeLens, a new system for tracking customs documentation on goods that are shipped internationally. The idea is that any stakeholder in the process, from a port to a customs authority, can quickly look up details pertaining to a shipment.
Maersk says that 10 million shipping events are now registered in the system every week.
Unlike Bitcoin, TradeLens uses a permissioned blockchain, this is a non-public ledger to which access is controlled.
But a similar system could be achieved with other technologies such as cloud-based ledger databases that encrypt data and control who can access what information.
Another project of interest is the real estate system trialled by the Swedish land registry, Lantmäteriet. A blockchain was designed to track documents during the sale of a property. The buyer and seller, brokers and banks involved could all take part in and keep track of the sale digitally.
Image copyright Getty Images Image caption Sweden’s land registry experimented with blockchain While the trial proved such a scheme was possible, a change in legislation would be needed before the system could be scaled up in the future, explains Mats Snäll, chief innovation officer at the Swedish land registry.
“It was never integrated into the production system of the land registry,” he tells the BBC.
In Thailand, cryptocurrency firm Zcoin developed a blockchain-based system so that members of the Thai Democrat Party could cast digital votes for their new leader in late 2018. Instead of having to trust a central authority to count the votes, they were instead collected on the Zcoin blockchain.
Votes were made at polling stations or via a mobile app, where voters needed to submit a photo of themselves when casting their ballot.
These digital votes were also audited by the election committee, a Zcoin spokesman tells the BBC. Zcoin says it is planning to announce a bigger scheme, involving “millions” of voters, in the near future.
These are thought-provoking ventures, though a debate remains as to whether blockchain is absolutely necessary for any of them.
Some say that eventually blockchain-style systems will prove to be the most efficient option for organising data at scale. Entrepreneur Helen Disney is one of them.
“In many cases there is a cost saving to be made once you’ve got past the initial hurdle – obviously bringing in any new system is expensive,” she says.
While blockchain bluster will surely continue, even sceptics like Mr Birch think there are some focused applications that could prove worthwhile. So far, blockchain might not have changed the world – but it has got a lot of people thinking.

Read More…

Guide To Cryptocurrency Tax Rules

Guide To Cryptocurrency Tax Rules

15 lessons for bitcoin investors

How many bitcoin investors are not up to speed with the IRS crackdown? Millions, probably. Coinbase has 35 million customer accounts. The number of taxpayers reporting crypto trades was, until recently, in the hundreds.

If it was once hard to plead ignorance of tax laws regarding crypto, it’s now impossible. The new Form 1040 demands that taxpayers say whether or not they own any virtual currencies. The yes/no question parallels the one that was implemented years ago on offshore investment accounts and led to nasty treatment of people who lied.

1. Cryptocurrency is property.

Bitcoin and its competitors look a lot like money: they’re a store of value and a means of exchange. But the Internal Revenue Service has decreed that these assets are not currency and not securities either. They are property. More like a shopping mall than like a $100 bill.

As capital assets, they give rise to capital gains and losses when disposed of. A profit is taxable as a short-term gain if a position has been held for a year or less, as long-term if held for more than a year. If a coin is held for profit rather than amusement, which is presumably almost always the cases, then a loss on it is a deductible capital loss.

In computing a gain or loss you use as your starting point the “basis” of an asset, tax lingo for your original purchase price (after, occasionally, some adjustments).

2. Sales are not the only form of taxable transaction.

You have to report the disposition of a virtual coin if it is:

—sold for cash,

—traded for another crypto, or

—used to buy something.

But merely transferring coins, such as from a wallet to an exchange or vice versa, is not a disposition. Nor do investors who buy and hold owe a tax.

3. The tax code’s wash sale rule does not apply.

This rule forbids the claiming of a loss on sale of a security if you bought that security within 30 days before or after. If, for example, you buy a Tesla share at $800, sell it at $720, then buy it back quickly, the $80 loss is suspended.

But bitcoins and the like are not “securities.” They’re pieces of “property.” So you can go out at a loss and then right back in without losing the right to immediately claim the loss.

4. Exchanges squeal.

Coin exchanges based in the U.S. file information returns on customers with a lot of trades. The 1099-K is mandatory for a customer who in one calendar year does at least 200 transactions with proceeds totalling at least $20,000. This is the same cutoff for other intermediaries handling property transactions, such as Ebay. (Some states have lower thresholds.)

The 1099-K form is rather like the 1099-B that stockbrokers file, except that the latter form doesn’t have the 200-trade minimum and the K probably won’t tell you what your cost basis was for a coin.

As with 1099-Bs, so with the Ks, the fact that you didn’t get the form (because you didn’t do a lot of trading or for any other reason) does not absolve you of the obligation to report all sales and other dispositions.

5. Forks can create ordinary income.

When a share of stock splits in two, by and large, there’s no taxable transaction. Its purchase price gets carved up and assigned to the two pieces; you declare a sale on either of those pieces only when you dispose of it. If and when you do sell a piece at a gain you’ll get the favorable capital gain treatment. This is what would happen if one share of Exxon Mobil split into one share of Exxon and one share of Mobil.

The IRS has a different view of coin splitups that occur when a blockchain forks into two chains. It thinks that the split creates a windfall equal to the starting value of the newly created coin, and that this windfall should be taxed at high ordinary-income rates.

This is what happened when bitcoin (BTC) spun off bitcoin cash (BCH) in 2017. Each old BTC coin continued to live on one chain while one newly created BCH, on a new chain, was dropped into the lap of the BTC owner. You were supposed to declare the value of BCH as ordinary income. It’s a good bet that many coin holders neglected to do so.

How does the tax agency justify its rule? With some very strained logic. It sees a coin split as less like an oil company splitting in two than it is like a taxpayer stumbling on a $100 bill in a parking lot.

The new currency created by a fork is income when you can get your hands on it. This is true even if you hold on to the new currency. The cost basis for the new coins is whatever you had to report as income.

6. Airdrops create ordinary income.

;An “airdrop” is the random distribution of coins in the course of a marketing effort. (The IRS has also used the term, incorrectly, to describe the spin-off explained in the previous section.) With considerably more justification than it has taxing forks, the IRS considers marketing giveaways to be ordinary income.

You report the income from a marketing scheme as soon as you get the freebie. That reported income becomes the cost basis if you later dispose of the coins. The dollar amount will probably be small; people don’t give away valuable coins.

7. Mining creates ordinary income.

Suppose you join a mining pool, spend $8,000 on electricity and get rewarded with a bitcoin worth $9,800. Even if you don’t sell the coin, you have to report a $1,800 profit and that profit is ordinary income.

Your new possession has a basis of $9,800 and any gain or loss from that point is a capital gain or loss. That could create a painful result. If the coin collapses in value to $8,000 and you sell it then, you have broken even, but you’ll probably owe tax. That’s because you’d be combining $1,800 of ordinary income, taxed at a high rate, with $1,800 of capital loss, which may be worth considerably less on your tax return.

The profit and loss described here applies if you are mining with the aim of making money. If, in contrast, the IRS can show that your mining is no more than a hobby, then you get stuck with hobby accounting. That’s a disaster. Hobbyists must report all their revenue as income but can’t deduct any of their costs.

8. Staking gives rise to ordinary income.

Some crypto chains, like tezos, reward participants for putting up their coins as collateral and then certifying transactions. The reward coins are treated, like bank interest, as ordinary income. Some exchanges handle this work for you and then split the revenue. In that case your income is your share of the fee, not the gross amount.

9. Gifts of crypto to charity get treated like gifts of stock, up to a point.

Buy a coin at $4,000, wait more than a year and donate when it’s worth $9,000, and you get a $9,000 deduction without having to pay tax on the $5,000 gain. But gifts of property (as opposed to securities) worth more than $5,000 need appraisals, so this can get messy.

If you donate appreciated property after holding it for less than a year, your deduction is limited to your cost basis.

What about depreciated property? Don’t give it away. Sell it and take the capital loss.

10. Gifts of crypto to friends and relatives are treated like gifts of stock.

A donee’s cost basis and holding period are the same as if you still held the coins, but with one small distinction: If the property has fallen in value during your ownership, then a special rule comes into play.

Say you bought a bitcoin at $12,000 and give it to your niece when it’s worth $11,000. If she sells at more than $12,000, then she uses $12,000 as her basis. If she sells at less than $11,000, she has to use $11,000 as her basis, reducing the capital loss that she can claim. Any sale between $11,000 and $12,000 is in a dead zone that creates neither a gain nor a loss.

11. Like-kind tax postponement doesn’t work.

With the like-kind rule, people aimed to treat the exchange of one crypto for another as a nontaxable event, postponing tax until sale of the new coin. It probably didn’t work for tax years before 2018, because coin exchanges didn’t meet the exacting requirements for like-kind intermediaries. It definitely doesn’t work for 2018 and later years because a new statute limits like-kind treatment to real estate swaps.

12. Bitcoin futures are Section 1256 contracts.

Futures on bitcoins, traded on the Chicago Mercantile Exchange, get the peculiar tax treatment of commodity futures: (a) Positions are “marked to market” on Dec. 31, with paper gains and losses recognized as if the futures position were sold and immediately bought back. (b) The gains and losses are assumed to be 60% long-term, 40% short-term, no matter how long the position has been held.

13. Crypto is probably subject to the straddle rule.

This rule forbids you to deduct a loss on closing a position (stock, option, whatever) while you maintain an open position that runs in the opposite direction. Thus, if you own an S&P 500 fund while simultaneously holding a short position in S&P futures, you can’t sell just one of these to claim a capital loss while still holding the offsetting position.

You could run into a problem here if you have multiple positions in bitcoin, bitcoin futures or bitcoin options.

14. Offshore crypto is probably not subject to FBAR and Fatca reporting.

These two regulatory regimes compel you to disclose cash and securities held in offshore accounts. They don’t, however, apply to property that isn’t cash or securities. So your bitcoin account at Malta-based Binance is not covered by these rules.

Some lawyers advise you to file the reports anyway. If you trade during the year into conventional currencies (like dollars or euros) you might cross a threshold and be required to file. The labor cost of filing is small; the penalties for not complying are severe.

The FBAR (Foreign Bank & Financial Accounts form), which kicks in if an offshore account tops $10,000 at any point during the year, must be filed electronically.

The Fatca (Foreign Account Tax Compliance Act), has different thresholds that start at $50,000. The form, number 8938, can be filed on paper.

You don’t need to file these reports for assets held at a U.S.-regulated exchange like Coinbase.

Exemption from account disclosure does not confer an exemption from the rule mandating the reporting of any sale at a gain. If you have a profit from crypto, even a dollar, then it has to go on your tax return no matter where the coin is held.

15. Identifying lots works as it does with securities.

Say you buy 5 bitcoins at $6,000 and 5 more at $8,000. Now you sell one coin for $9,000. Was it one of the early ones (creating a $3,000 gain) or one of the late ones (a $2,000 gain)? The IRS gives you two choices.

The default choice is first-in-first-out. In a rising market, that tends to give you high tax bills.

The second choice is “specific identification.” You maintain meticulous records enabling you to spell out to your broker or exchange which coin is to be sold.

For articles by this author on tax-wise investing, go here.

For news on crypto and blockchain, go here.

“> 15 lessons for bitcoin investors
How many bitcoin investors are not up to speed with the IRS crackdown? Millions, probably. Coinbase has 35 million customer accounts. The number of taxpayers reporting crypto trades was, until recently, in the hundreds.
If it was once hard to plead ignorance of tax laws regarding crypto, it’s now impossible. The new Form 1040 demands that taxpayers say whether or not they own any virtual currencies. The yes/no question parallels the one that was implemented years ago on offshore investment accounts and led to nasty treatment of people who lied. Photo by INA FASSBENDER AFP via Getty Images
1. Cryptocurrency is property.
Bitcoin and its competitors look a lot like money: they’re a store of value and a means of exchange. But the Internal Revenue Service has decreed that these assets are not currency and not securities either. They are property. More like a shopping mall than like a $100 bill.
As capital assets, they give rise to capital gains and losses when disposed of. A profit is taxable as a short-term gain if a position has been held for a year or less, as long-term if held for more than a year. If a coin is held for profit rather than amusement, which is presumably almost always the cases, then a loss on it is a deductible capital loss.
In computing a gain or loss you use as your starting point the “basis” of an asset, tax lingo for your original purchase price (after, occasionally, some adjustments).
2. Sales are not the only form of taxable transaction.
You have to report the disposition of a virtual coin if it is:
—sold for cash,
—traded for another crypto, or
—used to buy something.
But merely transferring coins, such as from a wallet to an exchange or vice versa, is not a disposition. Nor do investors who buy and hold owe a tax.
3. The tax code’s wash sale rule does not apply.
This rule forbids the claiming of a loss on sale of a security if you bought that security within 30 days before or after. If, for example, you buy a Tesla share at $800, sell it at $720, then buy it back quickly, the $80 loss is suspended.
But bitcoins and the like are not “securities.” They’re pieces of “property.” So you can go out at a loss and then right back in without losing the right to immediately claim the loss.
4. Exchanges squeal.
Coin exchanges based in the U.S. file information returns on customers with a lot of trades. The 1099-K is mandatory for a customer who in one calendar year does at least 200 transactions with proceeds totalling at least $20,000. This is the same cutoff for other intermediaries handling property transactions, such as Ebay. (Some states have lower thresholds.)
The 1099-K form is rather like the 1099-B that stockbrokers file, except that the latter form doesn’t have the 200-trade minimum and the K probably won’t tell you what your cost basis was for a coin.
As with 1099-Bs, so with the Ks, the fact that you didn’t get the form (because you didn’t do a lot of trading or for any other reason) does not absolve you of the obligation to report all sales and other dispositions.
5. Forks can create ordinary income.
When a share of stock splits in two, by and large, there’s no taxable transaction. Its purchase price gets carved up and assigned to the two pieces; you declare a sale on either of those pieces only when you dispose of it. If and when you do sell a piece at a gain you’ll get the favorable capital gain treatment. This is what would happen if one share of Exxon Mobil split into one share of Exxon and one share of Mobil.
The IRS has a different view of coin splitups that occur when a blockchain forks into two chains. It thinks that the split creates a windfall equal to the starting value of the newly created coin, and that this windfall should be taxed at high ordinary-income rates.
This is what happened when bitcoin (BTC) spun off bitcoin cash (BCH) in 2017. Each old BTC coin continued to live on one chain while one newly created BCH, on a new chain, was dropped into the lap of the BTC owner. You were supposed to declare the value of BCH as ordinary income. It’s a good bet that many coin holders neglected to do so.
How does the tax agency justify its rule? With some very strained logic. It sees a coin split as less like an oil company splitting in two than it is like a taxpayer stumbling on a $100 bill in a parking lot.
The new currency created by a fork is income when you can get your hands on it. This is true even if you hold on to the new currency. The cost basis for the new coins is whatever you had to report as income.
6. Airdrops create ordinary income.
An “airdrop” is the random distribution of coins in the course of a marketing effort. (The IRS has also used the term, incorrectly, to describe the spin-off explained in the previous section.) With considerably more justification than it has taxing forks, the IRS considers marketing giveaways to be ordinary income.
You report the income from a marketing scheme as soon as you get the freebie. That reported income becomes the cost basis if you later dispose of the coins. The dollar amount will probably be small; people don’t give away valuable coins.
7. Mining creates ordinary income.
Suppose you join a mining pool, spend $8,000 on electricity and get rewarded with a bitcoin worth $9,800. Even if you don’t sell the coin, you have to report a $1,800 profit and that profit is ordinary income.
Your new possession has a basis of $9,800 and any gain or loss from that point is a capital gain or loss. That could create a painful result. If the coin collapses in value to $8,000 and you sell it then, you have broken even, but you’ll probably owe tax. That’s because you’d be combining $1,800 of ordinary income, taxed at a high rate, with $1,800 of capital loss, which may be worth considerably less on your tax return.
The profit and loss described here applies if you are mining with the aim of making money. If, in contrast, the IRS can show that your mining is no more than a hobby, then you get stuck with hobby accounting. That’s a disaster. Hobbyists must report all their revenue as income but can’t deduct any of their costs.
8. Staking gives rise to ordinary income.
Some crypto chains, like tezos, reward participants for putting up their coins as collateral and then certifying transactions. The reward coins are treated, like bank interest, as ordinary income. Some exchanges handle this work for you and then split the revenue. In that case your income is your share of the fee, not the gross amount.
9. Gifts of crypto to charity get treated like gifts of stock, up to a point.
Buy a coin at $4,000, wait more than a year and donate when it’s worth $9,000, and you get a $9,000 deduction without having to pay tax on the $5,000 gain. But gifts of property (as opposed to securities) worth more than $5,000 need appraisals, so this can get messy.
If you donate appreciated property after holding it for less than a year, your deduction is limited to your cost basis.
What about depreciated property? Don’t give it away. Sell it and take the capital loss.
10. Gifts of crypto to friends and relatives are treated like gifts of stock.
A donee’s cost basis and holding period are the same as if you still held the coins, but with one small distinction: If the property has fallen in value during your ownership, then a special rule comes into play.
Say you bought a bitcoin at $12,000 and give it to your niece when it’s worth $11,000. If she sells at more than $12,000, then she uses $12,000 as her basis. If she sells at less than $11,000, she has to use $11,000 as her basis, reducing the capital loss that she can claim. Any sale between $11,000 and $12,000 is in a dead zone that creates neither a gain nor a loss.
11. Like-kind tax postponement doesn’t work.
With the like-kind rule, people aimed to treat the exchange of one crypto for another as a nontaxable event, postponing tax until sale of the new coin. It probably didn’t work for tax years before 2018, because coin exchanges didn’t meet the exacting requirements for like-kind intermediaries. It definitely doesn’t work for 2018 and later years because a new statute limits like-kind treatment to real estate swaps.
12. Bitcoin futures are Section 1256 contracts.
Futures on bitcoins, traded on the Chicago Mercantile Exchange, get the peculiar tax treatment of commodity futures: (a) Positions are “marked to market” on Dec. 31, with paper gains and losses recognized as if the futures position were sold and immediately bought back. (b) The gains and losses are assumed to be 60% long-term, 40% short-term, no matter how long the position has been held.
13. Crypto is probably subject to the straddle rule.
This rule forbids you to deduct a loss on closing a position (stock, option, whatever) while you maintain an open position that runs in the opposite direction. Thus, if you own an S&P 500 fund while simultaneously holding a short position in S&P futures, you can’t sell just one of these to claim a capital loss while still holding the offsetting position.
You could run into a problem here if you have multiple positions in bitcoin, bitcoin futures or bitcoin options.
14. Offshore crypto is probably not subject to FBAR and Fatca reporting.
These two regulatory regimes compel you to disclose cash and securities held in offshore accounts. They don’t, however, apply to property that isn’t cash or securities. So your bitcoin account at Malta-based Binance is not covered by these rules.
Some lawyers advise you to file the reports anyway. If you trade during the year into conventional currencies (like dollars or euros) you might cross a threshold and be required to file. The labor cost of filing is small; the penalties for not complying are severe.
The FBAR (Foreign Bank & Financial Accounts form), which kicks in if an offshore account tops $10,000 at any point during the year, must be filed electronically.
The Fatca (Foreign Account Tax Compliance Act), has different thresholds that start at $50,000. The form, number 8938 , can be filed on paper.
You don’t need to file these reports for assets held at a U.S.-regulated exchange like Coinbase.
Exemption from account disclosure does not confer an exemption from the rule mandating the reporting of any sale at a gain. If you have a profit from crypto, even a dollar, then it has to go on your tax return no matter where the coin is held.
15. Identifying lots works as it does with securities.
Say you buy 5 bitcoins at $6,000 and 5 more at $8,000. Now you sell one coin for $9,000. Was it one of the early ones (creating a $3,000 gain) or one of the late ones (a $2,000 gain)? The IRS gives you two choices.
The default choice is first-in-first-out. In a rising market, that tends to give you high tax bills.
The second choice is “specific identification.” You maintain meticulous records enabling you to spell out to your broker or exchange which coin is to be sold.
For articles by this author on tax-wise investing, go here .
For news on crypto and blockchain, go here .
I aim to help you save on taxes and money management costs. I graduated from Harvard in 1973, have been a journalist for 45 years, and was editor of Forbes magazine fro …

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How Does Blockchain Work?

How Does Blockchain Work?

By Nathan Reiff Updated Feb 8, 2020
For investors new to the cryptocurrency world, one of the most overwhelming and confusing aspects can be blockchain. Blockchain technology is what powers and supports the digital currency space, and many analysts believe that it contains numerous viable applications and uses beyond cryptocurrencies as well. You may have heard about financial institutions and even mainstream corporations around the world exploring ways that they can integrate blockchain technology into their traditional practices. Beyond that, though, it can be a bit of a mystery as to what blockchain is exactly and as to how it works. Below, we’ll explore the ins and outs of blockchain, providing an overview of this technology, how it works with regard to cryptocurrencies and other potential applications and why it may be one of the most revolutionary inventions since the internet. Key Takeaways Blockchain technology underlies cryptocurrency networks, and it may also be used in a wide variety of other applications as well. Blockchain networks combine private key technology, distributed networks and shared ledgers. Confirming and validating transactions is a crucial function of the blockchain for a cryptocurrency. The Three Primary Components of Blockchain
Blockchain can actually be thought of as the combination of several different existing technologies. While these technologies themselves aren’t new, it is the ways in which they are combined and applied which brought about blockchain. According to CoinDesk , these three component technologies are: Private key cryptography A distributed network that includes a shared ledger Means of accounting for the transactions and records related to the network Private Keys
To illustrate the technology of private cryptographic keys, it helps to envision two individuals who wish to conduct a transaction online. Each of these individuals holds two keys: one of these is private and one is public. By combining the public and private keys, this aspect of cryptography allows individuals to generate a secure digital identity reference point. This secure identity is a major component of blockchain technology. Together, a public and a private key create a digital signature, which is a useful tool for certifying and controlling ownership. Distributed Network
The digital signature of the cryptography element is then combined with the distributed network technology component. Blockchain technology acts as a large network of individuals who can act as validators to reach a consensus about various things, including transactions. This process is certified by mathematical verification and is used to secure the network. By combining the use of cryptographic keys with a distributed network, blockchain allows for new types of digital interactions. Process of Confirmation
One of the most important aspects of blockchain technology is the way that it confirms and validates transactions. In the example above, in which two individuals wish to conduct a transaction online, each with a private and a public key, blockchain allows the first person (person A) to use their private key to attach information regarding the transaction to the public key of the second person (person B). This information together forms part of a block, which contains a digital signature as well as a timestamp and other relevant information about the transaction, but not the identities of the individuals involved in that transaction. That block is then transmitted across the blockchain network to all of the nodes, or other component parts of the network, which will then act as validators for the transaction.
All of this sending of information and validating of blocks requires huge amounts of computing power. In practical terms, it may seem unrealistic to expect millions of computers around the world to all be willing to dedicate computing power and other resources to this endeavor. One solution to this issue for the blockchain network is mining . Mining is related to a traditional economic issue called the ” tragedy of the commons .” Put simply, this concept summarizes a situation in which individuals who each act independently in their own self interests tend to behave in ways contrary to the common good of all users as a result of depleting a resource through their action at a collective level. In the process of blockchain validation, an individual who gives up a small portion of his or her computational power in order to provide a service to the network thereby earns a reward. By acting out of self-interest (aiming to earn the reward: in this case, a small amount of a cryptocurrency), that person has been incentivized to help serve the needs of the broader network. Chains of Blocks
Why go through this complicated process of validation anyway? For blockchain networks, this is a crucial step toward insuring that cryptocurrencies cannot be spent in multiple transactions at the same time, a concept known as double-spending . In order to protect against double-spending, blockchain networks have to ensure that cryptocurrencies are both uniquely owned and imbued with value . One way of providing this service is to have the nodes within the blockchain network act as components of the ledger system itself, maintaining a history of transactions for each coin in that network by working to solve complicated mathematical problems. These nodes serve to confirm or reject blocks representing bits of information about transactions. If a majority of node operators arrive at the same solution to a problem, the block is confirmed and it is added to the chain of blocks that exist before it. This new block is timestamped and is likely to contain information about various aspects of past transactions. This is where there is room for variation depending upon the particular network: some blockchain networks include certain types of information in their blocks, while others include different sets of information.
It is this last aspect of blockchain that some people believe provides the most potential for future applications in the future. The data making up blocks in a blockchain such as the one corresponding to the Bitcoin network, for example, is linked with the past transactions that have taken place between different individuals, acting as a public record of all past transactions. But the data included in blocks could be essentially anything. For governments, for example, aspects of blockchain technology might prove useful when it comes to authorizing transactions, which is normally done through compliance regimes. Blockchain technology could be useful for providing audit trails or to foster new connections between different financial institutions and potential partners. For other aspects of the financial world, blockchain may be able to streamline the process of clearing and settlement, which has traditionally taken days. This technology could also help to automate regulatory compliance by translating legal prose into code, for example, or by permitting certain types of transactions and blocking others. There are wide-ranging possibilities for blockchain technology both within and outside of the financial world.
As with any new technology, however, it’s not entirely clear how to best make use of the powerful capabilities of blockchain. As time goes on, it’s likely that continued experimentation will unveil new ways of utilizing blockchain for a variety of different purposes, as well as new methods of utilizing blockchain in order to make it more effective, efficient, secure and powerful. In the meantime, the largest blockchain networks, such as those for digital currencies like bitcoin, are only continuing to grow. Compare Accounts

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Pascal (PASC) One Day Volume Tops $22,008.00

Pascal (PASC) One Day Volume Tops $22,008.00

Pascal (CURRENCY:PASC) traded up 0.1% against the US dollar during the 24-hour period ending at 22:00 PM ET on February 8th. Pascal has a total market cap of $1.33 million and approximately $22,008.00 worth of Pascal was traded on exchanges in the last 24 hours. One Pascal coin can currently be purchased for $0.0440 or 0. 443 BTC on exchanges including Poloniex, CHAOEX and TOKOK. In the last week, Pascal has traded 3.6% higher against the US dollar.
Here’s how similar cryptocurrencies have performed in the last 24 hours: Get Pascal alerts: XRP (XRP) traded up 2.6% against the dollar and now trades at $0.28 or 0.00002811 BTC. Bitcoin SV (BSV) traded 23.8% higher against the dollar and now trades at $363.30 or 0.03660957 BTC. Tether (USDT) traded 0.1% lower against the dollar and now trades at $1.00 or 0.00010065 BTC. Binance Coin (BNB) traded up 3.9% against the dollar and now trades at $22.10 or 0.00222752 BTC. TRON (TRX) traded 3.2% higher against the dollar and now trades at $0.0221 or 0. 222 BTC. Stellar (XLM) traded up 2% against the dollar and now trades at $0.0711 or 0. 717 BTC. Chainlink (LINK) traded up 5.4% against the dollar and now trades at $3.41 or 0.00034327 BTC. Huobi Token (HT) traded up 0.7% against the dollar and now trades at $3.86 or 0.00038884 BTC. Neo (NEO) traded up 3% against the dollar and now trades at $12.90 or 0.00129954 BTC. IOTA (MIOTA) traded up 0.7% against the dollar and now trades at $0.31 or 0.00003128 BTC.
Pascal Profile
Pascal is a coin. It launched on August 11th, 2016. Pascal’s total supply is 30,290,150 coins. Pascal’s official website is www.pascalcoin.org . Pascal’s official Twitter account is @PascalCoin . The Reddit community for Pascal is /r/pascalcoin and the currency’s Github account can be viewed here .
According to CryptoCompare, “Average block time – 5 minutes 288 blocks per day105,120 blocks per yearNote: Average is an estimation, due to internal adjusting mechanism, real average time is a value between 4 and 5 minutes, having a range of 288-360 blocks/day or 105,120-131,400 blocks/yearPascal Coin use’s 4 decimal values: ex. 15.1234 (15.12345 is not a valid value) Initial reward per mined block is 100.0000 Pascal Coins per block.This value will be divided by 2 every 420,480 blocks (average 4 years), so the next cycle reward will be 50.0000, 25.0000, etc. … until reaching 1.0000 Pascal Coin per block.The minimum reward will be 1.0000 Pascal Coin. After block 2,943,360 (avg 32 years) the block reward will remain a constant 1.0000Pascal Coin uses self-creating accounts. Each block produces 5 accounts3 operation types can be done with Pascal Coin: Transaction 1 to 1: A single and simple transaction, from one account to another account.Change Account key: Change Public/Private key of an account.Recover funds: Explained on the White Paper. This is to prevent lost keys/lost coins inside the Pascal Coin blockchain. This operation can only be done by miners when mining.Recover funds can only be executed after 420,480 blocks when no operations occur in an account (approx 4 years)In order to easily operate with Accounts, each account has 2 extra verification numbers. Account “0” ->“0-10″Account “1” ->“1-22″Account “12345” ->“12345-54″Cryptographic keys (elliptic curve keys) used by Pascal Coin can be one of: secp256k1 (like bitcoin)secp384r1secp283k1secp521r1See “SEC 2: Recommended Elliptic Curve Domain Parameters:” [http://www.secg.org/SEC2-Ver-1.0.pdf]Genesis block was created on August 11 2016 This coin has NO PREMINE. All coins have been distributed to miners from block 0.Note: Current blockchain version is 1. The Pascal technical’s can only change with a blockchain version upgrade”
Buying and Selling Pascal
Pascal can be traded on the following cryptocurrency exchanges: TOKOK, CHAOEX and Poloniex. It is usually not possible to buy alternative cryptocurrencies such as Pascal directly using US dollars. Investors seeking to acquire Pascal should first buy Bitcoin or Ethereum using an exchange that deals in US dollars such as Gemini, GDAX or Coinbase . Investors can then use their newly-acquired Bitcoin or Ethereum to buy Pascal using one of the aforementioned exchanges. Receive News & Updates for Pascal Daily – Enter your email address below to receive a concise daily summary of the latest news and updates for Pascal and related cryptocurrencies with MarketBeat.com’s FREE CryptoBeat newsletter . «

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Decred Price Tops $21.20 on Top Exchanges (DCR)

Decred Price Tops $21.20 on Top Exchanges (DCR)

Decred (CURRENCY:DCR) traded 3.9% higher against the U.S. dollar during the one day period ending at 17:00 PM ET on February 6th. One Decred coin can currently be bought for approximately $21.20 or 0.00217443 BTC on popular cryptocurrency exchanges including Cryptopia, DragonEX, OOOBTC and OKEx. Decred has a market cap of $228.65 million and approximately $102.83 million worth of Decred 24 hours. During the last seven days, Decred has traded up 9.6% against the U.S. dollar.
Here is how other cryptocurrencies have performed during the last 24 hours:
Get Decred alerts: Dash (DASH) traded down 0.8% $120.36 or 0.01234542 BTC. Cosmos (ATOM) traded up 5.7% $4.57 or 0.00046870 BTC. MINDOL (MIN) traded down 9.4% $1.93 or 0.00019817 BTC. Oasis City (OSC) traded flat $0.0514 or 0. 627 BTC. Bitcoin Diamond (BCD) traded 1.4% $0.65 or 0.00006655 BTC. Hshare (HSR) traded down 29.9% $2.26 or 0.00034804 BTC. Aeternity (AE) traded 2.8% $0.21 or 0.00002174 BTC. GAPS (GAP) traded down 0.9% $6.31 or 0.00064763 BTC. Stratis (STRAT) traded up 5.3% $0.42 or 0.00004341 BTC. EXMR (EXMR) traded up 49.9% $3.08 or 0.00042838 BTC. About Decred
Decred is a PoW/PoS coin that uses the Blake-256 hashing algorithm. Its launch date was February 8th, 2016. Decred’s total supply is 10,786,831 coins. Decred’s official Twitter account is @decredproject and its Facebook page is accessible here . Decred’s official message board is medium.com/decred . The Reddit community for Decred is /r/decred and the currency’s Github account can be viewed here . The official website for Decred is www.decred.org .
According to CryptoCompare, “The features below are implemented in Decred and will be available in full at launch. For a deeper description, please consult the Decred Technical Brief. Novel hybridized proof-of-work/proof-of-stake (PoW/PoS) consensus system – A decentralized lottery is used to select PoS miners to vote on PoW blocks. The PoW and PoS subsidies account for 60% and 30% of each total block subsidy, respectively. This system is based on that of MC2, which is very similar to, but developed independently from, Proof-of-Activity (PoA) by Iddo Bentov, Charles Lee, Alex Mizrahi and Meni Rosenfeld.Cold staking and decentralized stake pooling – The ability to generate new coins without the risk of having your coins online when PoS mining. The PoS mining system has also been engineered with distributed, decentralized stake pooling in mind, so that even those with small amounts of stake can participate in network validation.Internal voting system for the addition of new features and hard or soft fork selection – Both PoW and PoS miners can vote for features and issues through bit flags, providing a sensible mechanism for resolving disputes about the features of the blockchain.Immutable transaction hashes (“transaction IDs”) by separating transaction signatures from the rest of the transaction data – A permanent fix for transaction hash malleability has been implemented that prevents mutability of the transaction hash by separating it from its input signatures. This allows more efficient SPV validation. Fraud proofs have also been added.Elliptic curve cryptography over secp256k1 with optional Curve25519 support – The Bitcoin scripting system has been modified to allow for simple, drop-in addition of new elliptical curve digital signature algorithms.Schnorr signatures with threshold n-of-n support – In addition to supporting Schnorr signatures, groups of signers can now jointly sign transactions off-chain in constant size signatures, ensuring higher privacy and less blockchain bloat.Script enhancements and new OP codes – New OP codes have been added to the existing Bitcoin scripting engine, and extensions for the plug-in use of future scripting engines have been added.PoW mining using BLAKE256 hash algorithm – Inspired by Bernstein’s Chacha stream cipher, SHA3 finalist BLAKE256 offers speed as well as high security.Compatibility with Bitcoin transaction scripting system – Decred’s scripting system has been derived from Bitcoin’s with care in ensuring that all future updates to the Bitcoin transaction script will be easily extensible to Decred. Further, any newly created functionalities will also be devised with backwards compatibility with Bitcoin in mind.Modularized, easy-to-use Golang btcsuite codebase – Thanks the to the codebase inherited from btcsuite, adding new features to the daemon or wallet will be facile. Decred will episodically sync updates from btcsuite, so that it benefits from the latest developments in Bitcoin.Hierarchical deterministic (HD) wallets – Wallets use a seed to deterministically generate addresses, so your wallet can be restored from a single BIP0032 seed.Transaction expiration – Transactions have a new expiration field to prevent inclusion into the blockchain after a certain height.Patches for intrinsic Bitcoin bugs – Extra push for multisignature scripts has been removed, SIGHASH_SINGLE behavior has been corrected.Approximately 21 million coins – Exponential decay in subsidy or the number of coins generated per year.Self-funded development via block subsidy – In order to have an ongoing source of funding for development work, a consensus rule has been added to allocate 10% of each block subsidy to a development organization. This entity is transparent and responsible for funding development work performed by current and new developers so that the project remains sustainable without a funding dependence on outside forces in the future. Decred therefore improves with growth in a sustainable way and is accountable only to its users. “
Decred Coin Trading
Decred can be bought or sold Upbit, Nanex, Bleutrade, OOOBTC, Kucoin, Cryptopia, Tux Exchange, Poloniex, Bittrex, YoBit, OKEx, DragonEX and Huobi. It is usually not presently possible to buy Decred directly using U.S. dollars. Investors seeking to trade Decred should first buy Bitcoin or Ethereum using an exchange that deals in U.S. dollars such as Changelly, Coinbase or GDAX. Investors can then use their newly-acquired Bitcoin or Ethereum to buy Decred using one of the aforementioned exchanges.

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Citi, Goldman Sachs Conduct First Blockchain Equity Swap On Ethereum-Inspired Platform

Citi, Goldman Sachs Conduct First Blockchain Equity Swap On Ethereum-Inspired Platform

On Tuesday, January 28, 2020, Citigroup and Goldman Sachs quietly conducted what some will consider a historic transaction: the first equity swap on a new blockchain built using tools originally designed for ethereum. While this first transaction, a total return swap in which one bank agreed to make a payment based on the returns of an underlying asset, and the other based on a set rate, involved only the two counterparties, another 13 are waiting in the rafters. Unlike more traditional equity swaps, which have to be constantly updated for countless variables, including end-of-day market prices, corporate actions like stock splits or dividend payments, and variable interest rates, the new equity swaps platform, powered by venture-backed blockchain startup Axoni’s technology, assures that every counterparty in every swap is seeing, and using, the same data. With trillions of dollars in equity swaps being conducted around the world last year, financial giants like Citi and Goldman Sachs have to employ small armies to constantly check—and cross-check—every step of the process until the swap comes to maturity, sometimes months later. When things go wrong, when the numbers at one bank don’t match the numbers at another, those armies can lose days of work and millions of dollars on each transaction. “When there is a break, and it could be something as silly as keying the wrong payment dates and accruing interest differently, each party has to go back into their data sets and spend hours or days digging through huge, huge chunks of data,” says Greg Schvey, 33, Axoni cofounder and CEO. “And now we can show you that instantly and in a way that both parties have full visibility into.”
To pull off this state of continual reconciliation, Citi integrated its existing back-office infrastructure directly with a distributed application (or “dapp”) built on top of Axoni’s Axcore blockchain, customized to reconcile any number of equity swaps, not just the total return the bank executed with Goldman Sachs, according to Puneet Singhvi, Citi’s head of finance market infrastructure and blockchain lead. Unlike many other enterprise implementations of blockchain, where the software that helps the counterparties instantly agree on a transaction life cycle (called a node) is run by cloud computing power, Citi opted to run its nodes on the premises at one of its physical offices. Similar to bitcoin, in order for the transactions to stay in a constant state of reconciliation, each counterparty also has to run its own node. Even Axoni runs specialized nodes that work with the other nodes to help the broader network reach consensus. The Axoni nodes, however, are partitioned off from the actual transaction data, giving each company valuable ownership of its own data.
Unlike bitcoin, where anyone can run a node and consensus is reached through a process called mining that also generates new cryptocurrency, only invited, or known counterparties can participate in Axoni’s equity swaps platform, with each of the other 13 financial institutions in the pipeline expected to run multiple nodes. No cryptocurrency is required, but also the network is less decentralized than bitcoin and other public blockchains. At the time of launch, more than ten nodes were running.
At the moment, equity swaps traders on the platform are expected to comply with existing regulatory obligations around each transaction, but in the future regulators themselves could be granted access to a unique regulatory node that grants direct access to transactions in certain circumstances, further reducing compliance paperwork, and removing the need for the expensive employees and organizations that process that paperwork.
In the current model where each counterparty in a trade manages its own records, disagreements related to swaps and derivatives take teams of experts at least an hour to resolve in 70% of all transactions, according to a quarterly report published last month by the International Swaps and Derivatives Association (ISDA), and more than a day to reconcile in 15% of all transactions. That adds up to as much as $1 million in losses in a third of all disputes over data. In 2% of disagreements, losses range from $1 million to $2 million per transaction, a massive chunk of the investment returns.
“If you look at most of the large dealers, they’ll have hundreds of people in their confirmations group and reconciliations group,” says Schvey. “These are massive operational teams, spending a huge amount of their time just figuring out where things went wrong.” “What you’re really replacing,” says Singhvi, “is phone calls, Excel spreadsheets, emails, etc. If you have disputes, the sooner and constantly concerned you are, the less risk you have from an operational and financial perspective.”
However, the ISDA report also warned that uncertainty about exactly where the data on a distributed ledger is domiciled is making it unclear which regulatory jurisdiction applies, and could hamper broad adoption. As a possible solution, ISDA last month coauthored a paper with distributed ledger startup R3 and others recommending that users of a distributed ledger should agree to be bound by a “common law of the platform.” To help with the process, called the Common Domain Model for equities, Axoni shared its equity swaps data model and trade template with ISDA and is working with other members of a working group to help standardize the distributed ledger process.
“Through this, you’re creating a level of standardization across the industry on terms so each entity, which might have their own internal data structures, now could actually enable consistency across that, further driving efficiency,” says Singhvi. At stake is a total of $3.142 trillion in swaps and forwards globally as of December 2019, according to data provided by global central banks to the Bank of International Settlements, based in Basel, Switzerland.
The history of the unnamed equity swaps platform goes back to November 2017, when Citi joined other investors in Axoni including, Goldman Sachs, JPMorgan and Thomson Reuters to test a pilot version of the Axcore blockchain. Axcore is a permissioned blockchain, meaning not anyone can build on it, developed by Forbes Fintech 50 alum Axoni and based in New York. After raising a total of $36 million, the company, valued at $171 million, according to Pitchbook, built the equity swaps platform on top of Axcore, for which it owns the intellectual property, and then leases access to users for an undisclosed amount.
Unlike the public ethereum blockchain, which reaches consensus by using a global network of computers, Axcore was built from the ground up to let counterparties who already know each other do business with fewer middlemen. While Axoni stops short of calling the current implementation of Axcore a “fork,” or copy, of ethereum, the company partnered with blockchain developer startup Truffle in April 2019 and is currently using an enhanced version of the company’s tools, originally designed for the public ethereum blockchain, to move $10 trillion from the Depository Trust and Clearing Corp.’s trade information warehouse to Axcore and to build the new equity swaps platform. Now that the platform has successfully conducted its first swap, Axoni will soon begin activating other nodes on Axcore managed by additional clients.
“The ability to have synchronous, peer-to-peer processing of data between institutions and have databases natively speaking to each other is just a huge, huge first step toward the future that I think a lot of people have been looking for in capital markets infrastructure,” says Schvey. “And for these huge firms that we’re working with—and then I’d argue for probably most of the world— this is a pretty substantial advancement toward that path.”

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Bullshit jobs

Dankzij de technologie kunnen we voor de werkelijke productiebehoefte ongeveer met een vijftienurige werkweek toe, en toch werken we allemaal volle dagen. Een groot deel van ons werk moet dus wel bullshit zijn, stelde antropoloog David Graeber in een online artikel. De reacties waren explosief: heel veel mensen – over de hele wereld – bleken het fenomeen te kennen. Nota bene: een bullshit job is een baan waarvan de persoon zelf weet en vindt dat het een onzinbaan is. Graeber beschrijft in dit boek het hoe en waarom van deze banen, die voortkomen uit het kapitalisme maar er eigenlijk haaks op staan (ze zijn niet productief en lijken dus meer op de werkverschaffing in het voormalige Oostblok). Een andere bron van onzinbanen is onze calvinistische overtuiging dat werkeloos zijn slecht is. De geciteerde verhalen zijn hilarisch en tragisch tegelijk, en Graebers betoog is uniek in zijn helderheid en scherpte. Voor iedereen die anders wil kijken naar werk, kapitalisme en zingeving is dit boek een must-read.

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Five Courses That Will Make You Understand Crypto Better

Five Courses That Will Make You Understand Crypto Better

Learning how to use cryptocurrency and bitcoin can often be a daunting task for the uninitiated. Throw into the mix the whole blockchain technology aspect and many feel it is just too complex a field of understanding to embrace. However, with blockchain and its uses now reaching far beyond financial transactions, there are so many benefits to be had. And with the U.S lagging far behind nations like China and South Korea, as well as Dubai, it’s time to embrace how blockchain, cryptocurrency and bitcoin can make a positive impact on the world in general. But where do you start if you are a novice? Especially if you are a beginner and want to get up to speed. Here is a run down of five of the best courses available. Knowmatix Course: Blockchain And Cryptocurrency Fundamentals Blockchain and cryptocurrency entrepreneur Aziz Al-Yaqout devised an online learning platform, which he says makes learning the technology as “easy as riding a bike.” When Aziz soft-launched his course with no advertising, he had 24,000 visitors interested in taking him up on his offer. It’s uncharted territory with many getting ripped off through no fault of their own. There are stories of extortion and threats for Bitcoin, which are usually carried out via email lists and claims of hacking of personal information. Aziz says its time to make people feel safe when it comes to investing in digital currency and technology: “Everyone has the right to learn how blockchain works. A lot of people are frightened of it and think it’s too difficult to understand. I intend to change that.” Aziz is seen as a leading authority in Florida block chain circles and beyond. An easy to use training course: ‘Block chain and Cryptocurrency Fundamentals, makes blockchain and cryptocurrency as easy as one, two, three. With a combination of workshops, in-person instruction, and easy to understand modules, Aziz is planning to take this technology to the masses. He points out there is a considerable gap and demand for blockchain engineers and blockchain professionals: “This gap will just continue to grow as time goes on because this technology is still in its infancy.” http://www.knowmatix.com Coinbase basics – Learn and Earn This course is simple and easy to use, as well as being a great resource for those who want to learn the basics.
There are 6 paid courses so far that can help you earn up to $186 while learning how Orchid (OXT), Tezos (XTZ), Dai (DAI), Eos (EOS), Stellar Lumes (XLM) and Basic Attention Token (BAT) works. It uses interactive flashcards to teach the core leanings of how blockchain works. Covering buying and selling as well as mining, it’s a good overview for beginners. Its a simple way for beginners to understand a few more things about some solid projects from the crypto space. This mini-course also means you can get through the basics in a short amount of time. If you are short on time, and a complete beginner, this will enable you to get up to speed fast. https://www.coinbase.com/learn EdX (Bitcoin and Cryptocurrencies) UC Be rkeley This UC Berkeley EdX course specializes in the Ethereum Virtual Machine. And it also has a dedicated module on the game theory of how an attack would impact the bitcoin blockchain. If you want to learn specifically about Ethereum then this course will provide an in depth approach. This is not for beginners in the field, rather someone who has some base knowledge to build from. It’s an innovative and creative approach to the theory and gives good analysis on security issues.
Almost 60,000 people took the course at the time of writing and the number is growing day by day.
The course will offer you a verified certificate to highlight your knowledge and skills learned.
With this course, you will also learn a lot about network attacks, the mechanics behind bitcoin, what is a consensus and also what are the main differences between Bitcoin and Ethereum – the use case for each cryptocurrency. Ethereum Course (from ethereum.org ) Where else can you learn exactly how ethereum works, than from the creators themselves? This is a free resource that goes in deep on ethereum, which is the second largest cryptocurrency. Starting with the basics, this course also looks at smart contracts, as well as giving the latest updates on the current market. It also has a dedicated section on how ethereum could improve from critics. A well-balanced view of how this cryptocurrency works.
This course is not a video one and there are a lot of things that you can learn from it. You can understand how Ethereum 1.x started or to how Ethereum can increase his scalability.
Or, you’re probably curious on what are Smart Contracts and how could they be applied in real world.
All these things are explained. And many, many others. There’s also a section where you can understand more about how cryptoeconomics work and what pushes the value of a certain project. https://www.ethereum.org/learn/ Cornell University Blockchain Essentials Certificate This certificate course aims to demystify how companies can use blockchain-based solutions to improve their productivity and solve business problems. Harnessing the knowledge of world-renowned experts from Cornell University it is a deep dive on how blockchain can enable peer-to-peer transactions. It also looks at the problems in the space and how to overcome them. So businesses can achieve their goals. It promises to give companies a “walk away” proposal so they can apply blockchain technology.
The course itself its dedicated for the people passionate about learning how things work – as this course will go in depth about what is cryptography, what is a cryptocurrency or what is a ledger.
Besides this, you’ll also understand how blockchain technology works and how could that be applied in day to day life.
The length of this course is over 2 months – so it’s only recommended to people that want to go in depth about cryptocurrency and understand it properly.
However, despite the long period of the course – there are only 3-5 hours per week required to do it. https://www.ecornell.com/certificates/technology/blockchain-essentials/

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