Landon Manning

BlockFi Adds Gemini Dollar Stablecoin Support

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Crypto lender BlockFi is rolling out support for the gemini dollar (GUSD) stablecoin, claiming an expected initial annual percentage yield (APY) of 6.2 percent for non-U.S. customers.Founded in late 2017, BlockFi…

LocalBitcoins Denies Service to Iranian Users

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LocalBitcoins

The popular peer-to-peer bitcoin trading network LocalBitcoins has shut down all trading operations for Iranian users.

LocalBitcoins’ website offers a variety of pages for users of different nations and, as of May 24, 2019, the Iranian page displays a message that “LocalBitcoins is currently not available in your selected region,” in English only. In an official correspondence regarding the update, a representative of LocalBitcoins confirmed that Iranians can no longer access the service.

“If you have an account already, you will be able to withdraw your bitcoins, but you will not be able to use the platform for trading,” the representative said of Iranian users.

LocalBitcoins is not the first peer-to-peer trading network to block Iran in this fashion. Major companies such as Coinbase and Binance have also begun rejecting Iranian customers on the basis of their nationality within the past year. Ziya Sadr, an Iranian bitcoiner, told Bitcoin Magazine that the move “shouldn’t come as a surprise.”

The reason for these companies’ blocks seems clear: the new wave of sanctions that the United States is levying against Iran and companies that conduct business within the country. Since the Trump administration unilaterally violated an agreement with the Iranian government regarding the nonproliferation of nuclear weapons in 2018, relations between the two countries have been deteriorating.

Iranian citizens have shown interest in the borderless nature of Bitcoin for just this reason, among the other natural advantages of the technology. In April, the country’s first Bitcoin ATM made a splash at a Tehran technology exhibition. Camera crews interviewed several passersby and the topic of using Bitcoin to circumvent unjust sanctions came up repeatedly.

Bitcoin is fundamentally a platform designed to connect users worldwide, regardless of the restrictions imposed on free exchange by various nations. After receiving the Lightning Torch from Bitcoin Magazine via Welsh bitcoiner Bitgeiniog in March, Sadr called Bitcoin “a safe haven.”

“Laws and regulations may force a business to take decisions against their will,” Sadr told Bitcoin Magazine regarding the LocalBitcoins ban. “This will force a business like LocalBitcoins to lose users and revenue, but the market operates and there will always be different business that will serve us.”

Indeed, the space as a whole is not abandoning the country of some 80 million people. Also on May 24, Hodl Hodl announced that it was offering full support for operations in the country. More than just keeping the site open, Hodl Hodl also announced that it would provide Farsi language support (unlike LocalBitcoins’ English-only error message), a discounted exchange fee and a Telegram group specific for Iranian users to establish contact with each other. Bisq, another decentralized bitcoin exchange, has also added Farsi support and offers Iranian bitcoiners a viable alternative.

Ironically, even in the wake of LocalBitcoins’ exit from the country, Iranians “actually now have more and better options for p2p exchanges than before,” Sadr said.

This article originally appeared on Bitcoin Magazine.

Dutch Authorities Shut Down Bestmixer

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The Dutch Financial Intelligence and Investigation Service (FIOD) has shut down cryptomixing site Bestmixer.io.According to local media, Dutch authorities moved to shut down the site on May 22, 2019, as part of a…

HTC to Launch EXODUS 1s, Smartphone With Full Node Capacity

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HTC

Electronics company HTC has announced that it is launching a smartphone to bring crypto and blockchain technology to a wider audience in Q3 2019.

According to a press release shared with Bitcoin Magazine, “The EXODUS 1s will be the first smartphone ever to have full node capabilities” containing the full Bitcoin blockchain.

“With the EXODUS 1, we gave people the power to own their own keys, now we’re giving people the power to run their own node,” Phil Chen, decentralized chief officer at HTC, told Bitcoin Magazine. “It’s about building technology for the free world.”

Without going into specifics, Chen added that he has been working on the project “for some time” and that the largest hurdle was “developing a device that can act as a true full node and hold the full Bitcoin blockchain on the device.” He believes that this goal has now been met.

Chen also described some of the phone’s technical challenges.

“The full Bitcoin blockchain is around 200 GB [and] increasing at about 60 GB per year,” he said. “The full ledger can also be pruned down to approximately 10 GB.”

The phone can support the pruned version at all times, but the use of the full blockchain will require an additional SD card. Additionally, it is recommended that users only run a node off of a stable Wi-Fi connection due to the large data requirements and have a way to recharge the phone on hand.

Chen claimed that “the phone will not be able to mine for bitcoin itself, but we have upcoming partners to announce that will offer hashrates.” The Bitcoin ecosystem relies on both mining activity and the operation of nodes, but Chen observed that mining is much more strongly incentivized. Ideally, the means of running nodes like this with a low cost of entry will help invigorate the overall system.

“Running a node is maybe the most important part of the blockchain as it helps secure the network; every one of them acts as an authoritative verifier of every single transaction of the block,” said Chen. “We first empowered the user by owning their own keys and now we’re focused on empowering the user to run their own node to help secure and grow the network.”

Ideally, the presence of nodes like this will also increase blockchain app operation. According to the press release, additional technical details will be available closer to the product’s commercial release.

This article originally appeared on Bitcoin Magazine.

Binance Hacked for $40M, CEO Backpedals on Recoup Via Block Reorganization

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Chinese crypto exchange Binance suffered a major hack on Tuesday, which the company’s CEO responded to by proposing a rollback of the Bitcoin blockchain to rectify — a suggestion that riled up the community.

The company formally notified the public via an announcement on the evening of May 7, 2019, claiming that the hackers had employed a diverse range of tactics from outright viruses to social engineering techniques such as phishing scams. In addition to gaining access to other sensitive information, Binance also admitted that a single transaction sapped 7,000 bitcoins from Binance’s wallet, roughly 2 percent of the company’s entire BTC holdings.

“The hackers had the patience to wait, and execute well-orchestrated actions through multiple seemingly independent accounts at the most opportune time. The transaction is structured in a way that passed our existing security checks. It was unfortunate that we were not able to block this withdrawal before it was executed. Once executed, the withdrawal triggered various alarms in our system. We stopped all withdrawals immediately after that,” the announcement reads.

Binance will use reserves from its Secure Assets Fund for Users (SAFU fund) to compensate clients, noting “[n]o user funds will be affected.” Trading is continuing uninhibited, but Binance has suspended deposits and withdrawals for the time being.

Later that same evening, Binance CEO Changpeng Zhao insinuated that he was considering a scheme proposed by Bitcoin Core contributor Jeremey Rubin to reorganize the Bitcoin blockchain to rewrite the hack. Ultimately, he backpedaled from this idea after deliberating with or industry leaders like Bitmain’s Jihan Wu, saying that such a move “may damage credibility of BTC” and/or “cause a split in both the bitcoin network and community.”

After speaking with various parties, including @JeremyRubin, @_prestwich, @bcmakes, @hasufl, @JihanWu and others, we decided NOT to pursue the re-org approach. Considerations being:

— CZ Binance (@cz_binance) May 8, 2019

Such a rollback scheme would be an incredibly ambitious undertaking. The most feasible plan would entail Binance sending its own 7,000 BTC transaction from the hacked address to another one that it owns with a hefty fee. With a substantial enough fee, miners would be incentivized to let Binance spend the 7,000 BTC it does have, reorganizing the blockchain’s transaction history to include this transaction in the ledger (miners would need a large fee to justify nullifying the block rewards they received since the hack). In this double-spend scenario, miners would forge an alternate chain, though this chain split would resolve itself once the chain became longer than the old one and all nodes accepted it.

Nevertheless, such a plan could have serious repercussions for the crypto asset space. Such a reorganization could shake user confidence in bitcoin’s immutability, possibly having an adverse effect on the price and reducing miners’ incentive to participate in the scheme. Participating in the rollback, after all, also contains opportunity costs. Zhao went back onto Twitter on the morning of May 8 to reiterate that the idea had some possible applications but, overall, was not worth the risks and would not be considered any further. Other critics of the proposal mentioned that, alongside being potentially hazardous to the network’s reputation, such a move is technically difficult and extremely unlikely.

a re-org is just not happening https://t.co/rTey7KU590, but if something like it did get started somehow in the future, many would support actions to reject it, UASF style. finality matters. I think cycles should be put into tested code to make ecosystem rejection of re-orgs easy

— Adam Back (@adam3us) May 8, 2019

This article originally appeared on Bitcoin Magazine.

BlueWallet Brings Lightning Network to Apple Smartwatch With New App

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Popular Bitcoin and Lightning Network wallet BlueWallet has released a smartwatch-compatible version of their wallet app, the first attempt to bring Lightning support to the Apple hardware.

The developers announced this new app on Twitter, briefly describing some of its functionality. Giving users the same utility as BlueWallet’s mobile iteration, the new app packs plenty of use on such a small device.

I’m living in the Future 😎

Takes 5-10 seconds to prepare a lightning invoice on my watch

Immensely cool work from @bluewalletio @nvcoelho pic.twitter.com/4ftOVL7dKD

— JP [ ₿ ⚡️] (@jpthor__) May 6, 2019

Originally only a wallet for bitcoin itself, BlueWallet expanded into full functionality for the Lightning Network in late December 2018. Since then, it has been a popular option for mobile wallet access, with versions for both Android and iOS. Seeing as Android does not currently manufacture a smartwatch, however, this Lightning app is currently only available on the Apple Watch.

In addition to also clarifying that the watch app can be noncustodial, the team from BlueWallet has also described a more in-depth list of features that the app currently provides. Alongside features such as full encryption, the ability to use multiple wallets, support for 20 languages and more, BlueWallet’s app seems to have many of the same features that any other conventional wallet platform would hold. Ideally, this will serve as a litmus test for the possibility of greater smartwatch adoption in the crypto space.

In a bid to improve transaction speed and mitigate on-chain fees, the Lightning Network has been heralded as a game changer for Bitcoin’s technical development. Allowing users to send microtransactions over channels funded by both senders and receivers, it has the potential to greatly alleviate the problems of scalability and latency issues that have plagued the world of bitcoin.

Already a variety of prominent companies have begun adopting the Lightning Network in addition to new companies springing up to fill niches in the space. Bitrefill, for example, launched functionality for Lightning in January 2019 and made further improvements in April. Zap released a point-of-ale smartphone app to enable vendors to accept payments using the Lightning Network, and Twitter wallet and miscrotipping service Tippin.me has seen substantial growth since its launch in December 2018. Lightning Network development company, Lightning Labs, released the alpha of its own long-awaited desktop app in April as well.

This article originally appeared on Bitcoin Magazine.

Wikileaks Founder Julian Assange Arrested in London, Site’s Bitcoin Donations Spike

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Julian Assange, co-founder of Wikileaks and early Bitcoin supporter, was arrested at the Ecuadorian Embassy in London and faces extradition to the U.S. on conspiracy charges.

Having spent the last seven years seeking asylum in the embassy, Assange has at last lost the support of the Ecuadorian government. He was arrested on April 11, 2019, for failing to appear in British courts. Originally in hiding due to a Swedish arrest warrant over allegations of sexual assault completely unrelated to his involvement with Wikileaks, these charges have since been dropped altogether. Nevertheless, the British government has sought his arrest for failing to appear in court for these charges.

The elephant in the room for this prosecution is the involvement of the U.S. federal government. Pursuing him with only a single charge of conspiracy to commit computer hacking, law enforcement has made apprehending him a consistent priority as part of a campaign against Wikileaks’ whistleblowers on the War on Terror.

Wikileaks and Bitcoin

Assange has been a longtime supporter of the Bitcoin community for its ability to circumvent international crackdowns of this nature. After PayPal joined U.S. and Swiss-based banks in banning users from sending donations to Wikileaks, Assange began accepting bitcoin donations as the primary mode of funding in 2011. Wikileaks became one of the first major institutions to accept the payment method, bringing international press coverage to the fledgling crypto community.

Since then, Wikileaks has gone on to accept a gigantic amount of bitcoin over the years. In 2016, the site’s public donation address reached the milestone of a whopping 4,000 bitcoins, a sum worth millions of dollars. Even as Coinbase cut off support to Wikileaks’ online shop in 2018, the site continues to process sales and receive donations in bitcoin.

With the dogged persistence the U.S. government has shown in chasing Assange and other whistleblowers, his future upon extradition seems bleak. Chelsea Manning, the veteran who provided Assange with leaked evidence of U.S. war crimes, had her sentence commuted by U.S. President Obama. Nevertheless, she has been sent back to prison and was even condemned to solitary confinement for a month after refusing to testify against Assange in 2019.

Fellow whistleblower Edward Snowden, who has been in hiding in Russia for several years, called Assange’s arrest “a dark moment for press freedom.”

Assange’s arrest has already seen pushback from the crypto community, with the Wikileaks public address again seeing a large spike in bitcoin donations from a variety of sources. Nevertheless, his upcoming trial in the U.S. is all but certain.

If you would like to donate to Wikileaks’ mission, the organization’s cryptocurrency donation addresses can be found here.

This article originally appeared on Bitcoin Magazine.

Decentralized Exchange Hodl Hodl Is Launching a Bitcoin-Based Prediction Market

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Hodl Hodl, a peer-to-peer cryptocurrency exchange, has announced that it is launching a prediction market on Bitcoin. Slated for launch in the spring of 2019, it would be the first Bitcoin-based prediction market to go live on Bitcoin’s mainnet.

A prediction market is a novel application of blockchain technology. The betting platforms allow users to secure odds, futures and outcomes with smart contracts. Two users place funds (traditionally, ether) into a smart contract to bet on futures for any given outcome; when the outcome arrives, the smart contract automatically pays out to the winner.

Most prediction markets are built on blockchains with a more flexible smart contract language, like Ethereum. Augur, for example, pioneered the model when it launched in July 2018 as the first decentralized prediction market to make use of Ethereum’s ERC-20 token contract. Other prediction markets have followed suit, including Gnosis on Ethereum and Bhodi on QTUM.

Despite Augur’s frontrunning status, Hodl Hodl believes that it can improve on aspects of the platform’s operations — specifically, in its solution to the “oracle problem:” How, for example, does the smart contract know who wins the World Cup, if bitcoin closed above $3,850 by midnight on March 8, or who won an election?

You need software and people (oracles) to feed this data to the smart contract. The inherent counterparty risk becomes an issue of trust and accuracy: How do you keep oracles honest and how do you verify their inputs? To mitigate this risk, Augur leverages decentralized oracles. Multiple users are in charge of inputting data/results to make sure that the reported results of an outcome are accurate and that the smart contract pays out to the winning prediction.

Decentralizing the sources of inputs, in theory, should ensure that every prediction market’s payout is consistent with real-world outcomes, but some opponents argue that there aren’t enough participants on these decentralized platform to prevent bad actors from gaming the system.

“We’re approaching this slightly differently,” Roman Ditko, Hodl Hodl’s chief technology officer, told Bitcoin Magazine. “The oracle [is] the two parties participating in a contract. In case of a dispute, Hodl Hodl steps in with its third key and is able to influence the decision.” It is the company’s belief that, whereas a decentralized system for judging bet outcomes can be influenced by bad actors, a peer-to-peer contract might be more ironclad.

To contrast with the established model of prediction markets, on February 27, 2019, Hodl Hodl announced their own prediction market, the first to be built on the Bitcoin blockchain. Additionally, their oracle system, according to Ditko, “is not decentralized — we have a central server. But we’re non-custodial. In the case of a prediction contract, both parties lock bitcoins in a 2-of-3 [key] escrow. Both of their keys are required to send the locked funds somewhere — unless they both sign the release transaction, bitcoins cannot be moved from there.”

Under this system, there is no incentive to try and dispute the outcome of a bet, as the funds will not be released if the two parties disagree. If someone fudges the results of an outcome and both parties claim the coins, a tiebreaker ensues.

“In case of a dispute,” said Ditko, “both parties may actually never come to a decision to unlock the funds, in which case Hodl Hodl can step in and use its third key along with one of the parties keys to unlock funds in their favor. Hodl Hodl cannot unilaterally move bitcoins to wherever it wishes to because we still need one of the user’s keys (which we don’t have) to sign the release transaction.” The company warns, however, that forcing the impartial mediator to step in may negatively impact a user’s ability to convince other users to enter new contracts.

One solution to this problem could be having a third party mediator who, unlike Hodl Hodl, is not a stakeholder in the situation in any regard. Ditko is entertaining the idea, telling Bitcoin Magazine that “in the future we might have a user group called ‘mediators’ who would take on the role Hodl Hodl currently performs in case of a dispute — with a third key.” He added, however, “it’s probably wrong to call that party an oracle, as the decision is not made by that single party.”

“At launch,” he said, “we want to keep it as simple as possible and then see what needs to be improved.”

Bitcoin Magazine asked Hodl Hodl to explain how its reputation system works but has not yet received a response.

This article originally appeared on Bitcoin Magazine.