BitPay Accepts Bitcoin Cash

Although we have used Bitpay I didn’t realize it was available for brick and mortar physical transactions since we’ve never done any.   On that end it puzzles me how on earth anyone would ever use them?

Bitcoin can take minutes and even hours to confirm!  Can you imagine waiting at the restaurant held hostage because “your transaction is unconfirmed?”.  This is the advantage fiat processing still has.

But, really I think Bitpay should rebrand to use currencies that are actually usable for instantaneous transactions at retail or restaurant.

They should be using a currency like Ripple or Lumens which is nearly instant.  There are a few currencies that have these properties but any Bitcoin or Ethereum derivative is simply not going to cut it in my opinion.

Personally I don’t know a single person who has or would use any of these coins for payments, we all reach for the cash, debit or credit.  These are people like me, who are crypto enthusiasts but we also value convenience and what works.  And I think a lot of the cryptoworld is stuck in a dream world that simply doesn’t exist.  Now, for us in IT we and the customer can often wait over night for the transaction to be confirmed, but at a grocery store or restaurant neither the seller or customer would be impressed.

 

Federal Reserve Says Bitcoin Cannot Replace the US Dollar

The new chief of the San Francisco branch, of the privately held, Federal Reserve Bank has stated that Bitcoin cannot, and will not ever replace the US Dollar.  First of all, they are doing a fantastic job and understand their market and duties.  They cannot step into this job and say anything else and expect to keep it.

I get it, Bitcoin is printed without supposed backing, although it is backed by a lot of physical hardware assets and electricity.  Fiat currency, especially the US Dollar is printed and floated without any controls or restrictions.  Well, actually, the only control and restriction is that there is none.  The Federal Reserve prints at will and on demand, without limitation or backing of any sort, and they have long abandoned the gold standard.

The fact that the Federal Reserve would comment at all on this matter and mention Bitcoin, to me, is very telling that it is very much a possibility.  When you have this much money put into something that is being traded worldwide, every second, and such an ecosystem I think it is an excellent contender to the US Dollar and fiat currency in general.  Remember, fiat is backed by nothing as well and printed without any limit.  Most cryptocurrencies actually are limited in how many coins can be mined or minted at any rate.

Cryptocurrency is currently at a $421 Billion USD market cap and I think it won’t be long before it is in the trillion dollar range.  This is ultimately the worst nightmare for any central banker with so many competitors, of course your number one priority should be outlawing them and shutting them down.

On that end the Fed is right to do it and is doing their job well.  However, for people who don’t essentially control the fiat financial system, we would do well to root for cryptocurrency as an alternative system.  I think both systems can survive and work together, but if fiat pushes it too much, I think there may be a digital currency revolution that far surpassed the digital rights movement of the late 90s and early 2000s that caught the RIAA and MPAA by surprise.

Study Shows Bitcoin Is More Centralized Than Ethereum

Here is the paradox, the study from this article claims that “Ethereum is more decentralized than Bitcoin” at the London, Genesis Conference.  Then another study quoted by Coindesk from a Caribbean conference says that “Ethereum is more centralized than Bitcoin“.  How can two set of stats say the opposite, what is going on?

It’s quite simple if you’re familiar with IT, networks, banking and coding.  It’s another to put it into perspective and it also depends on your views overall in business and IT.

The first article that says Ethereum is more decentralized, I believe is correct.  It is simply taking into account, known factors, variables and actors.  To this end, it is blatantly clear that there are massive Bitcoin mining farms by major players, more so than Ethereum it appears.  Of course, mining is just one aspect of centralization.  There are also some that just run “nodes” which are not mining.  It is not entirely clear from the article if a differentiation was made between the two (mining vs node runners).  Reading the article, however, it does seem to be a bit biased towards Ethereum and perhaps this is why the context in my opinion is completely missing.  It should be remembered that on that note, Ethereum’s whitepaper itself seems to indicate that centralization of nodes is imminent as small players will not have the CPU, memory and HDD resources to run full nodes for much longer as the blockchain grows.  To make it even worse in a more practical sense, geth/Ethereum can bring most computers to a crawl and a halt, whereas I can run a full Bitcoin or Litecoin wallet without breaking a sweat.  One factor I think Bitcoin in terms of mining at least is more centralized is because of ASIC mining, which Ethereum doesn’t have (although Bitmain is shipping Ethash miners soon).  I think this will change fairly quickly once Bitmain ships.  In fact I could sync the whole Bitcoin chain without a hitch than I could Ethereum.  The article also boasts that Ethereum could process thousands of transactions per second, however this is not in the real-world or implemented yet and the switch to PoS has been indefinitely delayed.  Currently Ethereum processes a meager and insufficient 15 transactions a second.

Then there is the second article which looked at centralization from another aspect. It found that 20% of code in the Ethereum commits was made by a single person, vs 7% on the Bitcoin codebase.  They are implying that a form of centralization is through the developers who create the code.  This is also true in my opinion but we should understand from a practical point that all coins are centralized from the beginning and some will inevitably become more centralized in a “bad way” in the future.  This is especially true for minable coins, it is a game today of who can buy enough hardware or hashing power, and they essentially control the network.  This is true of Ethereum and Bitcoin.

Let’s keep this in context, all coins by definition start out “centralized”.  Bitcoin was initially 100% centralized under Satoshi since him or his group created the entire codebase and ran the entire network initially.  For a time it wasn’t a bad thing at all, Bitcoin has proven fairly reliable, resilient over the years.  However, the bad part is that whoever runs the most full nodes and whoever has the most hashing power has defacto control of the network.  In general this means big corporate and government players control Bitcoin and may soon control it entirely.  Centralization under Satoshi was undoubtedly good and acceptable, but the path today is clearly “the bad way”.

At the end of the day all projects in IT are centralized to a certain degree.  With the first article above, noting that most cryptocurrencies are essentially centralized or will be soon, this shouldn’t be surprise.  Now it is a matter of what the community does and how we adapt.  Should we centralize ourselves in a good way so no bad actors can do what is happening to Bitcoin and Ethereum or should we wait like ducks in a barrel for the big players to fully centralize and control cryptocurrency?

Wikileaks Shutdown by Coinbase

Apparently Julian Assange’s Wikileaks merchant account on Coinbase was shutdown.  This is not at all surprising since PayPal, VISA, Mastercard and the banks did the same thing to him/them in the past.  In all fairness I don’t think Coinbase is to blame, aside from the fact they are a US based company and under the jurisdiction of the US of course.

PayPal came out and admitted they were forced to close down Wikileaks account, and I am certain the same thing has happened with Coinbase.

They have no say in the matter when the US government comes knocking.  Coinbase even recently had to give out information to the US tax department (IRS).

Of course users can still directly pay and donate to any wallets that Wikileaks controls.  As of now he lists addresses for Bitcoin, Litecoin, Ethereum, ZCash and Monero.  This is where things will heat up if he were to have a centralized currency like Ripple or Stellar Lumens.  The US government could possibly have those accounts in XRP/XLM frozen since they are a US based company.

This comes down to the wider issue of privacy, rights and freedom online and how cryptocurrency can prevent persecution for political reasons.  It also stands to reason that entities based in the US have very little say when the government comes knocking.  Coinbase and PayPal couldn’t have said no to the US government or by doing so they would be in seriously hot water.

I always advocate having some IT resources out of the reach of PRISM countries for reasons of privacy and freedom.  One of my current favorites are Singapore and Hong Kong in Asia.  Hong Kong I place particularly high value on because it has the British based system, yet it is under the protection of China.  Hong Kong is less likely to be influenced by a foreign entity than a smaller country like Singapore.  A good example of this is how Edward Snowden miraculously made it out of Hong Kong as a wanted fugitive.  Surely, Hong Kong was pressured and asked to hand him over, but somehow it never happened.

There are positives here, it looks like some brave entities in Europe have stood up for Wikileaks and at least for now, in France, Germany and Iceland there are some banks, foundations and even a University who are providing him access to the fiat system.

Why Hardforks In Cryptocurrency Are Bad

I’ve always felt this but hardforks are simply bad, even if in the rare case they intend to fix a problem with the original currency.  Most currencies which have issues like Bitcoin are simply not just a “single problem” but a collective bunch of inherent problems.   But most often it is so clear like is the case with Bitcoin Gold that the team just copies and counterfeits a coin to unjustly enrich themselves.

Risks and Issues with Hardforks

  1. Loss of value, normally the original coin is at least temporarily devalued when a hardfork is done.  People wonder which coin will survive or be more popular?
  2. Confusion leading to scams and fraud.  Which is the real Bitcoin or real Bitcoin Gold?
  3. Many forks don’t make a wallet (more evidence of bad intention) and more likely that fraudsters will make a wallet that steals your coins (eg. John Dass and the Bitcoin Gold team).
  4. Community frustration and division.

Instead of hardforking it is much better to do what Cloakcoin or Litecoin did and the many others did by just copying it, making changes and starting their own blockchain.  This ensures the process won’t allow fraud, confusion or devaluation of the original coin and no harm comes to the community that way.

All these coins have stolen value from the main coins like Bitcoin and then people ask why the value went down?  If Bitcoin was not hardforkable I think it should be several times the value we see now, almost certainly 2/3s or more of the crypto market cap.

Bitcoin Private and Cloak Cryptocurrencies

There is a huge emphasis on privacy with a lot of new coins but I do feel that a lot of coins focus on a single issue and leave the overall business and usability aspect out.  How do these newer coins fare?

Cloak

My first impression is why doesn’t the non-www version work while the www version does?  Does their team not know how to properly configure nginx or is it just a simple mistake and oversight?

Cloakcoin.com-Forbidden-ConfigError

They call their encryption ENIGMA which I am not sure is a joke or if they aren’t aware of the ENIGMA encryption box in Germany that was compromised during WWII?  I would more so be worried that it is a read between the lines joke or a hint that the team is doing something more than they claim?  Sorry but I just can’t get over the fact that they would not know about the Enigma box from Germany that was decoded.

For my second point I do like the privacy aspects but this is where I have concerns.  On one head they tout privacy, but then to have more privacy they obfuscate transactions by using other clients wallets?  Why would you allow a third-party and random strange to process or handle any part of the transaction?  I do realize they say it is fully encrypted and obfuscated so the random third party stranger on the network shouldn’t know anything about you or your transaction, but to me it violates the principle of privacy and security.  It reminds me of how everyone believed the TOR network is a good idea and secure, but in reality whoever runs an exit node can spy on other users, including the NSA.  This architecture of Cloak makes me worried that a vulnerability could be found and that privacy could be worse than most other Bitcoin-style coins.  Even if a simple vulnerability was not found, you are essentially passing private information to random strangers on the network, the NSA or other large funded organizations could use this to spy on other users or even perhaps modify transactions and create chaos on the network.

I also find it confusing how they say it is private but you have to enable “ENIGMA” on top of “Cloak Shield” to truly make it private?

Here are the parts I’ve picked on from their website:

Alice’s Cloak wallet then automatically sends a request to the network for other Cloak wallets who have elected to become ENIGMA mixer nodes to obfuscate her transaction. All of this is done privately and securely throughout with no identities or true IP addresses revealed.

Bob has cloaking mode enabled in his wallet and the wallet generates a secure CloakShield encryption channel for communications with Alice’s wallet. Bob’s wallet sends Alice a secure connection, containing encrypted inputs and outputs to commence the transaction.

With this confirmed, Alice, with full anonymity, creates an encrypted ENIGMA transaction containing her true inputs and outputs and Bob’s cloaking (obscured) inputs and outputs. Bob and Alice both sign the ENIGMA transaction before it is submitted to the network for inclusion into a PoS block.

Going back to the concerns I have above, I really don’t like how Alice’s wallet would ever communicate with anyone other than the receiver or the Cloak network.  By introducing Bob, there is the chance that Bob could decipher and identify what Alice is doing.  Of course that’s not what should happen, but I believe it is a huge security whole to involve random third parties in confirming or obfuscating transactions.  The situation reminds me a lot of the vulnerabilities in the TOR network.  Essentially Bob is like an exit node, running transactions for Alice.  Bob shouldn’t know who Alice is or what she is doing, but what if there is an implementation error or other issue?  This could be avoided by not using any random third party.

I think Cloak does a great job but they’ve actually introduced a huge security hole by doing the random, third party, processes the transaction part.  It would be like saying “my data is encrypted so I’ll send encrypted copies to everyone”.  Sure it is encrypted but if someone can ever hack your encrypted data either through bruteforce or an algorithm/implementation error then you are done for.  The best solution is to never send private and sensitive data to an extra, third party.

I do think the Cloak project has worked hard and it has some great ideas but aside from privacy and what I believe are security holes in how they implement it, they have done a great job but it is not a coin that does everything right.

Bitcoin Private

For those who know me, I am very much against forks.  As I’ve stated before they decrease, value, lead to scams and confusion.  This can be evidenced with Bitcoin Gold regardless of who you believe was responsible.  Right off the bat Bitcoin Private is warning of scammers trying to confuse you with a warning on their website.

BitcoinPrivate-BTCP-Scam-Private-Keys

The problem with these types of coins, hardforks or what I think are really counterfeits is that you need to give up the very “private keys” of your real, valuable Bitcoin to claim the “new counterfeit coin”.  This is a huge security problem, regardless of who made the wallet what if the wallet is designed or hacked to maliciously steal your real Bitcoins?  There is no easy and secure way to claim your coins from these counterfeits.   Once you give up your private keys to Bitcoin Cash, Bitcoin Gold, Bitcoin Private they could steal your real Bitcoins.

Now there is a way around it, you could transfer your coins to another wallet but it’s a huge pain and a mistake could cost a novice user all of their Bitcoin.

Now in all fairness I appreciate this team at least has official wallets ready for download, unlike Bitcoin Cash.

Users who have the currency called “ZClassic” are also involved here, which is also another confusing fork of ZCash.

This is what I mean about all of the confusion.  It creates an environment where holders and buyers are easily confused about which is the real “Bitcoin”, which is the real ZCash.  And really, I can’t see any reason why people are forking except as a cash grab and counterfeiting spree.

For this reason I don’t trust Bitcoin Private anymore than I trust the other forks (although I trust Bitcoin Gold the least).  I personally feel there is no good reason to trust any of them.  If they want to make a new or better currency they should really just make their own, or at least copy it under a new name.  But of course forking, creates unwilling participants and owners of the new currency, while enriching and rewarding the hardforkers for their counterfeiting.

For those reason if I had to pick between the two, I think Cloak has our best interests at heart and hardforked coins are just a scam, counterfeit and cash grab by unscrupulous people.

Verge Coin Asks For More Money – Shady Things Coins Do

Verge Coin has faced a lot of issues lately such as a hack of their blockchain via an exploit in how it is mined.  Then, recently they announced a big mystery partner but they wouldn’t release who it is without people buying about $3M USD of XVG coins.

This upsets me, it reminds me of the Finom ICO scam (tokens I paid for but never received) and how instead of delivering the tokens they instead did another ICO asking for more money.

Because of how Verge did it, people accused them of trying to do a pump and dump as an exit scam.  In all fairness they did come through with a fairly big announcement, partnering with Pornhub which could increase the coin’s popularity and usage.  From an investment standpoint I don’t think it is the silver bullet people are looking for.  We want to see a coin that is actively used in everyday transactions and that actually replaces fiat.

But the bigger question to me is concern about the Verge team, tactics like this get you labeled as a scam fairly quickly.  It really seems a lot of teams are just that, scammers or they are completely out of teach with reality and basic practices of business, communication and how to treat your investors.

Ripple Wants Government Regulation of Cryptocurrency

I have always believed regulation was inevitable and this is actually one of the reasons I invested in Ripple.  It’s no surprise that they are calling for regulation as they benefit the most.  As worried about them as I am (saving for another article) this is an excellent hedge against this inevitability.  Ripple stands to profit from this as it already has very good relationships with big finance and governments.  Any regulation is very likely to benefit Ripple the most.

Ripple’s, Ryan Zagone, ironically titled, “head of regulatory relations” has called on the UK to adopt 3-regulatory moves and has suggested they take a cue from Japan.  This is both good and bad, regulation, if fair and easy to follow can remove uncertainty and strengthen the countries that do it right.  I think Japan is a good example of regulation that has gone right and helped cryptocurrency flourish.

Zagone has called on the three issues to be regulated “namely consumer protection, financial stability and anti-money laundering “.  Consumer protection is a given and I wonder why no one has also said “insurance coverage” as this would take most of the risk out of holding cryptocurrency and the risk of theft and hacks.  When it comes to “financial stability” it depends on what he means and what the UK government would take it to mean?  I would take it that this would be the part that would help out Ripple and possibly stunt the growth of competitors to Ripple.  When it comes to anti-money laundering this is a given but again, how do you do it without harming or offending law abiding citizens?  Or will these laws and regulations be a pretext for both Ripple and Big Banking to squash the abilities of everyone else?

The UK Central Bank’s, Mark Carney has said the following about cryptocurrency.

  • “The time has come to hold the crypto-asset ecosystem to the same standards as the rest of the financial system. Being part of the financial system brings enormous privileges, but with them great responsibilities,” Carney said in a speech on Friday.
  • “A better path would be to regulate elements of the crypto-asset ecosystem to combat illicit activities, promote market integrity, and protect the safety and soundness of the financial system,” Carney said.
  • Carney also slammed the ability for cryptocurrencies to fulfil the role of money, saying they are “failing” as a medium of exchange and are “proving poor short-term stores of value.”
  • “This extreme volatility reflects in part that cryptocurrencies have neither intrinsic value nor any external backing. Their worth rests on beliefs regarding their future supply and demand —ultimately, whether they will be successful as money.”
  • “At present, in my view, crypto-assets do not appear to pose material risks to financial stability,” Carney said.

Well, Mr. Carney was as honest as he could be, from the banking sphere and without losing his job.  I agree that there is almost nothing backing most cryptocurrencies, aside from mining investment.  However, this is about the same, if not better than fiat which is printed without any backing of assets since the gold standard has long been abandoned.  But let’s read between the lines, he wants regulation and he wants cryptocurrency held to the same standards as traditional finance, but at the same time slams it as being a poor store of value (like Soros who now says he’s investing).  Regulation will be tricky, because you are then giving all cryptcurrency legitimacy as currency by regulating it as such or even to traditional financial standards.

Everyone has their own interest in all of this but it will be interesting to see how this plays out.  The game is different now and governments cannot easily seize crypto assets, nor can they shutdown major players who can move away from their jurisdiction with the click of a button.  If smart people are in charge of regulation they will do it right, but if bankers alone are involved, and continued to feel threatened, I predict carnage, and that it will ultimately harm or even topple our current financial system.

Let’s hope things go smooth and that regulators are not influenced too much more when it comes down to it.

 

Cloud VPS Server Comparison by Techrich

Recently a friend asked me to compare ourselves to other large Cloud providers.  It didn’t take me long to think about it, considering essentially Techrich and Compevo architecture are identical. This wasn’t by accident, but by my own principles on how an IT company should function.  Since designing what is now known as the “Super High Performance Cloud Architecture” back in 2009. I knew I wanted Techrich to be smart on security, strict on reliability, and strong on IT protocols.

This infographic probably says it the best but I’ll do my best to explain it as well (explanation below the infographic).

Techrich Cloud VPS Server Hosting Comparison

In a nutshell most of the other Cloud architectures out there rely heavily on a shared storage pool for their VPS’s. We don’t do this.

Some companies have even gone down completely when one of their “main shared storage nodes” was hacked or had a hardware failure.

The problem with shared storage nodes/SANs (Storage Area Networks)

The problem with this architecture is that multiple physical hostnodes rely on a single point of failure for storage.  Not only that, but you can imagine the performance issues that shared network bandwidth cause when multiple hostnodes are competing for the same disk IO resources from a single shared node.

Now I know some companies have redundant shared storage but this is not good enough for both performance, security and reliability reasons.

The Techrich way of doing things is that we have tons of individual nodes that are active/failover.  This eliminates the possibility that a shared storage fault could take offline multiple hostnodes.

In our architecture we have Cloud in a 1-to-1 structure, that means data is live replicated to a standby server which does nothing but wait in case the main server fails or has an issue.

By doing this the performance is also higher, since storage is all local, you get the benefit of Cloud architecture but none of the high risks or performance issues that traditional “shared storage” Cloud brings you.

That’s the Techrich advantage and why we developed our own proprietary and hybrid system to accomplish this.  To date we’ve never been hacked or had any downtime and this is because of the architecture we’ve pursued while sparing no expense in delivering what we feel is the best product.  This is what I’d recommend all of my colleagues and friends to do if they went Cloud.  If they were going to use a shared storage cloud I’d recommend that they just make their own with a few dedicated servers or even a single dedicated server can sometimes be better, more affordable and reliable in the long-run.

When these large Cloud companies like Amazon and Alibaba started out, we did wonder would we lose out to customers who valued price over quality, security and reliability?  We were shocked when the opposite ended up happening- there was a sudden rush of sign ups, and not only that, we had to order a ton of extra servers to keep up with the demand.  I had my IT support staff double and working overtime to meet the crazy rush. It was a good problem to have, but it forced me to grow a lot faster than predicted.

In fact we’ve now noticed a trend that the bottom feeders (scammers, hackers, spammers) have gone to the cheap Cloud companies and a lot of larger players have moved to us.  This is in part, because companies who are more tech and privacy orientated who don’t want to be in a PRISM country or be at risk of the NSA being given access to their sensitive, private and proprietary business/ client information  (which is mandated for large-Cloud providers operating out of any PRISM country), so they moved to us and remain with us.

Now we get clients who even run small or middle scale businesses who have found us and switched to us simply because they do not want to be on something as risky as Amazon or Alibaba. I guess you could call Techrich and Compevo, the original IT business security company. And I plan to keep it that way.

Thanks to clunite.com for including us in their comparison

Facebook Tracks Non-Users Too!

As some people are just learning, Facebook has been tracking both users and even non-users in a violation of their privacy that most never opted into.  Anytime you visit a Facebook related or enabled site, they are tracking you.  Conversely as a Facebook user, they track and relate all of your off-Facebook activity on any site that uses Facebook plugins or functionality (which are a lot of sites).  This is horrible and should be stopped but in all fairness “they all do it” and if anything Google is probably worse.

If the above is not bad enough, the PRISM network has backdoors to all of these services so you are being violated directly by corporations and multiple governments who index all of your activity.  Privacy is a thing of the past unfortunately.

However there are ways to fight back such as disabling cookies and deleting all cookies regularly and especially to use a random VPN to make tracking harder.

It’s not so much that the majority of people have anything to hide, but privacy is a right everyone has.  Most people would object to having cameras in the washroom, not because they are doing something wrong but because you have the right to dignity and privacy.

Hopefully the longstanding issue with most giant online sites from Facebook, Google etc.. will drive demands from people around the world to restore privacy and digital rights in an era where infringement is common.