Bitcoin satellites

Blockchain technology company Blockstream has switched on its fifth satellite, taking bitcoin to space.

The Blockstream satellite network will broadcast the entire bitcoin blockchain to every populated country on Earth. There are three huge implications here:

  1. It brings potential access to bitcoin for the 45% of the global population without internet access.
  2. It ensures bitcoin is still usable in the event of a natural disaster or internet network disruption. 
  3. It paves the way for uncensored messaging and communication services around the world, without internet service providers like Verizon.

Blockstream Satellite

The newest satellite is the fifth in Blockstream’s network, named Telstar 18V. It covers the Asia Pacific region, adding to its existing coverage in North America, South America, Europe, and Africa.

The bitcoin satellite node works by sending blockchain information from ground stations, called “Teleports” to the satellites in orbit. The satellites then broadcast it over a larger portion of Earth.

Blockstream bitcoin satellite coverage
Blockstream’s satellites now cover almost the entire land mass on Earth

Blockstream Satellite Phase 2

Moving into the second phase of the project, Blockstream will also allow users to send data and communications via the satellites in private, using encryption. It means people in the most remote parts of the world can send messages securely without an internet connection.

To do this, they’ll introduce an API in January 2019 giving developers free rein to build applications that “broadcast messages globally using the Blockstream Satellite network.”

Users will pay for the secure communications using bitcoin via the Lightning Network. The Lightning Network is designed to facilitate micropayments and speed up transactions.

“Bitcoin has always been about uncensorable money,” Blockstream chief strategy officer Samson Mow told Forbes“Now we have uncensorable communications as well.”

The Next Generation for Bitcoin

The move into space has unprecedented ramifications for cryptocurrency. It puts the bitcoin network far out of reach of governments – you can’t regulate space.

It gives power to people without an internet connection. Not only by giving them access to bitcoin and money transfer but to secure communication and even mining potential. As Blockstream CEO Adam Back explains:

 “You could set up a bitcoin mining operation in the middle of the desert powered by solar.”

It might be wildly ambitious, but Blockstream is quietly revolutionizing the way we send money and communicate around the world.

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vitalik buterin

In a bizarre series of tweets, Ethereum’s founder Vitalik Buterin has granted more than $300,000 worth of ether to three Ethereum startups.

Buterin, whose Twitter name “Vitalik Non-giver of ether” pokes fun at those asking him for free cryptocurrency, granted the money in 1,000 ETH installments. The three startups in question include:

  • Prysmatic Labs – a startup building a sharding client for Ethereum 2.0.
  • Chainsafe Systems – a company building blockchain platforms and smart contracts for other startups.
  • Sigma Prime – a cybersecurity startup working on the lighthouse project for Ethereum.

Buterin handed out the grants in a Twitter thread discussing Ethereum’s lack of focus and urgency regarding scalability. Preston Van Loon of Prysmatic Labs joined the conversation to lament that his team didn’t have the resources to focus on Ethereum full time:

To which Vitalik Buterin replied:

Buterin went on to donate 1,000 ETH to ChainSafe after one contributor claimed he would drop out of university for a grant. The final 1,000 ETH donation went to Sigma Prime after one developer promised to hire new team members.

Buterin confirmed all transactions with a link to the Etherscan block explorer and followed up with a tongue-in-cheek warning: 

Further reading: What is Ethereum? Absolutely Everything You Need To Know

crypto exchange manipulation

Major cryptocurrency exchanges are manipulating their own volume figures. That’s according to a new report by the Blockchain Transparency Institute (BTI). 

The BTI report claims as much as 80% of the volume on the top 25 bitcoin pairs are subject to wash trading and manipulative bot trading.

Exchanges are inflating their own volume numbers in an attempt to draw huge listing fees from new coin projects.

What is wash trading?

Wash trading is a practice by which an investor or company buys and sells an asset simultaneously. They are essentially buying and selling from themselves. Do this with enough frequency, and it gives the impression of huge volume.

The BTI claims that major exchanges use wash trading techniques to fake the volume on their exchanges.

By doing this, crypto exchanges appear larger and more active than they truly are.

In some cases, true volume is under 1% of reported volume

To find out how deep the problem goes, BTI calculated the true volume of CoinMarketCap’s top 25 BTC pairs. The research firm discovered that actual volume on most of the pairs is less than 1% of the reported figures.

The worst offenders: OKEx, Bithumb, Huobi

Among the worst offenders are some of the biggest crypto exchanges on the planet.

OKEx, the fourth-largest exchange by reported volume, was singled out for evidence of wash trading on all 30 of its traded tokens. Huobi, the fifth-largest by reported volume, appears to be wash trading most of its top pairs, according to the report. And Bithumb, the second-largest by reported volume, is accused of wash trading its Monero, Dash, Bitcoin Gold, and ZCash pairs.

Bithumb now tops the BTI’s Exchange Advisory List, which highlights risky or opaque exchange practices.

BTI Advisory List: use with caution

Binance, Bitfinex, Coinbase Pro get the green light

Not all exchanges are engaging in nefarious wash trading. The BTI found no evidence of manipulation at Binance or Bitfinex. Binance is currently the largest exchange by adjusted volume on CoinMarketCap.

Bitfinex has been accused of market manipulation in the past due to its close ties with stablecoin Tether. However, the BTI report confirms that 100% of trading volume is real.

Coinbase Pro, Kraken, and Gemini also appear to have 100% true volume.

Crypto exchanges reporting true volume, according to BTI

Why are crypto exchanges manipulating their volume?

By faking their volume, crypto exchanges appear bigger and more liquid than they truly are. A high “reported volume” also puts them near the top of CoinMarketCap rankings, which drives more traffic to the exchange.

With a bigger profile, the exchange can charge huge fees for projects looking to list their coins on the platform.

The BTI estimates that coin project teams spend an average of $50,000 on listing fees just for the exchanges on its advisory list. It amounts to $100 million stolen by shady exchanges.

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what is tether logo

Stablecoin Tether is supposed to remain “pegged” to the dollar to provide traders a stable cryptocurrency. According to the company behind Tether, every token is backed by a real dollar, held in a bank account.

“Every tether is always backed 1-to-1, by traditional currency held in our reserves. So 1 USD₮ is always equivalent to 1 USD.”

But Tether made headlines earlier this year when concerns arose over the legitimacy of these claims. Despite promising regular audits, no independent audit has been undertaken to prove the underlying funds. Researchers at Texas University looked into it and concluded that tether backing is “incomplete.”

Background reading: Everything you need to know about Tether (the controversial stablecoin)

“Bank statements reviewed by Bloomberg News suggest those fears may be unfounded.”

Bloomberg has reportedly seen statements spanning four separate months that confirm tether is fully backed. The documents were revealed by someone with access to company records, and confirmed by government officials. 

One statement confirmed that Tether held $2.2 million in its bank account at Puerto Rico’s Noble Bank Ltd. on January 31. At the time, there were 2.195 billion tether coins in circulation.

Statements in September and October also confirm that enough funds existed to back the circulation.

Not a complete account of Tether’s finances

Bloomberg admits the documents are not a complete account of Tether’s finances. For example, they don’t shine any light on where the funds originated from, only that they flow between Tether and crypto exchange Bitfinex. Tether and Bitfinex share an executive team.

Although the investigation may put some accusations to rest, Tether’s lack of transparency will continue to worry some traders.

Since the concerns dominated headlines this year, alternative stable coins have gained traction including Dai, Paxos Standard and Gemini Dollar.

Further reading: What are stablecoins? And how can we make them more… stable?

Tim May cypherpunks

Cypherpunk Tim May has reportedly died at his home in California. May was a co-founder of the Cypherpunk mailing list and author of The Crypto Anarchist Manifesto. His influence lay the groundwork for bitcoin, cryptocurrencies, and a new movement of privacy advocates.

Word of his death was announced by fellow cypherpunk Lucky Green: 

“My dear friend, co-conspirator in many things and for many years, fellow Freedom Fighter Tim May passed away earlier this week at his home in Corralitos, California… Tim May co-founded the Cypherpunks, perhaps the single most effective pro-cryptography grassroots organization in history.”

Founded in 1992, Tim May’s Cypherpunk mailing list was home to some of the most groundbreaking ideas in cryptographic and cryptocurrency history. Wei Dei shared his vision for a digital currency called b-money on the mailing list, many years before bitcoin was envisioned. Nick Szabo shared his concept for “smart contracts,” a decade before Ethereum came along to popularize the technology. And Adam Back outlined an early version of “proof of work,” which became the algorithm behind bitcoin.

The Cypherpunk mailing list was a melting pot of concepts and ideas that eventually came to the mainstream via Satoshi Nakamoto’s famous bitcoin whitepaper.

Without Tim May and the cypherpunk movement, there would be no bitcoin.

The Eerily Accurate Predictions of The Crypto Anarchist Manifesto

May’s lasting contribution to the world, however, is The Crypto Anarchist Manifesto. A short, passionate piece of writing published in 1988 that predicted the future with eerie accuracy. 

May outlined how computer technology would provide “the ability for individuals and groups to communicate and interact with each other in a totally anonymous manner.”

However, he explained how governments would react negatively to the movement. 

“The State will of course try to slow or halt the spread of this technology, citing national security concerns, use of the technology by drug dealers and tax evaders, and fears of societal disintegration.”

May even predicted how the technology would lead to an internet black market: 

“[Cryptography] will allow illicit and stolen materials to be traded. An anonymous computerized market will even make possible abhorrent markets for assassinations and extortion.”

The prediction is not a million miles away from the infamous Silk Road marketplace which harnessed bitcoin as a payment method.

But May was right in predicting that these events would not bring down the wider movement:

“This will not halt the spread of crypto anarchy.”

“Satoshi would barf”

As bitcoin infiltrated the mainstream, May became somewhat disillusioned with the trajectory. In his last published interview with CoinDesk, he lamented the direction of cryptocurrency:

“I can’t speak for what Satoshi intended, but I sure don’t think it involved bitcoin exchanges that have draconian rules about KYC, AML, passports, freezes on accounts and laws about reporting “suspicious activity” to the local secret police… I think Satoshi would barf.”

The Crypto Anarchist Manifesto, in Full

For those that are interested in Bitcoin and its history, take some time to read through The Crypto Anarchist Manifesto in full. This is how cryptocurrency took shape. It’s how the early pioneers envisioned the technology and what it could do. RIP, Tim May. 

The Crypto Anarchist Manifesto – Timothy C. May

A specter is haunting the modern world, the specter of crypto anarchy.

Computer technology is on the verge of providing the ability for individuals and groups to communicate and interact with each other in a totally anonymous manner. Two persons may exchange messages, conduct business, and negotiate electronic contracts without ever knowing the True Name, or legal identity, of the other. Interactions over networks will be untraceable, via extensive re- routing of encrypted packets and tamper-proof boxes which implement cryptographic protocols with nearly perfect assurance against any tampering. Reputations will be of central importance, far more important in dealings than even the credit ratings of today. These developments will alter completely the nature of government regulation, the ability to tax and control economic interactions, the ability to keep information secret, and will even alter the nature of trust and reputation.

The technology for this revolution–and it surely will be both a social and economic revolution–has existed in theory for the past decade. The methods are based upon public-key encryption, zero-knowledge interactive proof systems, and various software protocols for interaction, authentication, and verification. The focus has until now been on academic conferences in Europe and the U.S., conferences monitored closely by the National Security Agency. But only recently have computer networks and personal computers attained sufficient speed to make the ideas practically realizable. And the next ten years will bring enough additional speed to make the ideas economically feasible and essentially unstoppable. High-speed networks, ISDN, tamper-proof boxes, smart cards, satellites, Ku-band transmitters, multi-MIPS personal computers, and encryption chips now under development will be some of the enabling technologies.

The State will of course try to slow or halt the spread of this technology, citing national security concerns, use of the technology by drug dealers and tax evaders, and fears of societal disintegration. Many of these concerns will be valid; crypto anarchy will allow national secrets to be trade freely and will allow illicit and stolen materials to be traded. An anonymous computerized market will even make possible abhorrent markets for assassinations and extortion. Various criminal and foreign elements will be active users of CryptoNet. But this will not halt the spread of crypto anarchy.

Just as the technology of printing altered and reduced the power of medieval guilds and the social power structure, so too will cryptologic methods fundamentally alter the nature of corporations and of government interference in economic transactions. Combined with emerging information markets, crypto anarchy will create a liquid market for any and all material which can be put into words and pictures. And just as a seemingly minor invention like barbed wire made possible the fencing-off of vast ranches and farms, thus altering forever the concepts of land and property rights in the frontier West, so too will the seemingly minor discovery out of an arcane branch of mathematics come to be the wire clippers which dismantle the barbed wire around intellectual property.

Arise, you have nothing to lose but your barbed wire fences!