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11. 05/02/2019 22:11
Bitcoin’s ‘Lightning Torch’ Has Blazed Through 37 Countries So Far

The bitcoin community is currently immersed in an experiment called the “lightning torch.”

The effort is intended to show the value of bitcoin’s lightning network – an up-and-coming technology that is experimental and hard to use so far, but it does offer improvements over today’s most common payment systems by allowing users to pass money around the world quickly and without a third party, unlike Mastercard and Paypal.

And participants are out to show this facet of the technology in a kind of global relay race using an ever-increasing amount of BTC.

By way of the social media platform Twitter, people pass the “torch payment” from one person to another, adding 10,000 satoshis (worth about $0.34 at press time) to the payment before sending it further along. Imagine a kind of lightning network-style snowball effect and you get the basic gist of what’s happening around the world.

It’s been called the “LN Trust Chain” since whoever has the torch is supposed to send it on to someone they trust will send the payment on, rather than keep the payment to themselves.

Indeed, developers might still call lightning “reckless,” since it’s experimental software and users can lose money if they (or the software) makes a wrong move. There’s even a Twitter hashtag dedicated to this fact.

But so far, the experiment seems to be having its intended effect, The “torch” has attracted the participation of 139 people in at least 37 countries, according to the pseudonymous torch ringleader, who goes by the name Hodlonaut.

lightning, map

Screenshot from

The list of participants includes some notable names in the bitcoin community, such as advocate and Mastering Bitcoin author Andreas Antonopoulos.

“Heretical thought of the day: Playing #LNtrustchain is better than watching the Superbowl,” he tweeted after sending the torch to the next participant, adding:

“Ok, I lied. Anything is better than watching the Superbowl for this geek.”

Thus far, other participants include Morgan Creek Digital founder Anthony Pompliano and Lightning Labs engineer Joost Jager.

Humble beginnings

The torch started on a whim.

On January 19th, Hodlonaut said he would pass on 100,000 satoshis to the first person he trusts. “How many satoshis until it breaks?” he tweeted.

“The reason I started this was just to have some fun with the lightning network and maybe spread more awareness. I thought it would maybe do five or six hops and then die, without many people noticing,” Hodlonaut told CoinDesk.

But now, of course, it’s grown into a worldwide phenomenon as illustrated in the map above, equipped with its own website and an accompanying hashtag.

Not to mention, it’s come to mean a lot to its participants.

“The #LNTrustChain showed the world: 1. Lightning works and it’s amazing. All of us who’ve used it in a solo context (buying stickers, playing games, etc) already knew it, but this experiment was the first widespread public demonstration of its power,” said one user.

Antonopoulos told CoinDesk that the torch represents a way to test and uncover problems with the technology. And it’s not quite as easy to participate as it sounds: setting up a lightning node is a hard enough task, but there are other tricky factors as well.

“To be able to ‘play’, your [lightning network] node must be well connected, with enough capacity and well balanced (local vs remote balance),” he explained. “Since a lot of that is not fully automated yet, it poses a challenge for node operators and an opportunity to test their setup. As the amount gets bigger, it is harder and harder to find routes and keep it going.”

In this way, the lightning torch can help to unearth bugs, Antonopoulos added.

It’s even been used to experiment with new tech. The first so-called “hodlinvoice” – a new type of tech by LND – was used in the wild for the first time.

As Hodlonaut explained:

“The way this has played out has completely blown my mind, and made me realize how awesome the bitcoin community is.”

To that end, he’s been making sure people know who has the torch and cat-herding the community on Twitter.

Escape from extinguishing

As might be expected from any kind of globe-trotting experiment, the torch itself almost died a few times, most notable on Jan. 31 when a Twitter user by the name of edward_btc stole it.

“I’ll seize it because I can, and no one can stop me. This is bitcoin,” edward_btc wrote, his point being that bitcoin is supposed to be “trustless” money.

The community responded with irritation, not wanting the torch to die out.

“Are you really going to be *that* guy? Seriously?” responded Elizabeth Stark, the CEO of Lightning Labs and one of CoinDesk’s Most Influential awardees for 2018.

On a darker level, though, edward_btc went as far as to claim that he received death threats for keeping the torch.

And later on, he claimed that he was actually planning to send the torch on. But before he was given a chance, user Klaus Lovegreen swooped in and started a new torch.

“Is there anyone with some dignity around that that can be trusted with the Lightning Torch?” he said. Since then, the torch has jumped another 30 hops.

But when will it end? As it stands, there’s a hard-coded limit to how large the torch can get: 4,390,000 satoshis, which worth about $150.

Once the torch reaches this threshold, the community plans to donate the proceeds to a charitable cause: likely Bitcoin Venezuela, a non-profit dedicated to raising awareness of cryptocurrency in the troubled South American country.

12. 04/02/2019 21:56
The Crypto-Surveillance Capitalism Connection

Don’t look now, but there’s an elephant in the room. Scratch that. It’s an entire herd of elephants.

While Crypto Twitter bickers and fights, leaving competing coin projects and blockchain startups to defend each others’ counter-allegations of centralizing misdeeds, the real centralizing power-mongers of our digital economy have been pillaging our data and reshaping humanity into an instrument of their domination.

That’s the alarming, bold conclusion of “The Age of Surveillance Capitalism: The Fight for a Human Future at the New Frontier of Power,” the recently released mega-tome by Harvard Business School professor Shoshana Zuboff.

My prediction: this book, which eviscerates the “applied utopianism” and “technological inevitablism” of data-gobbling Silicon Valley titans such as Google and Facebook, will become a defining text of our age. Read it. It is of vital importance.

I especially think it’s critical reading for the crypto community, where people will feel both vindicated and challenged by Zuboff’s thesis.

If blockchain technology is to play an integral role in the evolution of the digital global economy and be a force for good, rather than a vehicle of computerized subjugation, its advocates will have to contend with the angry backlash against digital technologies that this book will help fuel.

How, truly, is blockchain any better than GAFA (Google, Amazon, Facebook, Apple)? How do we ensure that it doesn’t fall for the same pattern of what Zuboff calls “behavioral surplus extraction?” A general public that’s increasingly anxious about their invaded privacy and lost personal agency deserves such questions answered.

Not left, not right

It’s hard to pigeonhole this writer. Zuboff’s instincts are liberal, and she takes a very hard view of raw market power. But her defiant support of the right to individual free will – framed in her elegant phrasing as the right to “sanctuary” and to “the future tense” – dovetails nicely with the views of many pro-privacy advocates in the blockchain community.

The lines between left and right have been blurred for some time. While Zuboff’s no fan of unfettered market capitalism and doesn’t think much of Friedrich Hayek, the Austrian economist who’s a darling of many bitcoin fans, there’s much that lines up here with the crypto world’s cypherpunk vision of freedom.

To be sure, the solutions are different. A blockchain solution for breaking down surveillance capitalism would naturally be a technological one, embracing the power of math and cryptography to design a new digital topography of trust that disempowers the centralized middleman and creates human agency within a decentralized system.

Zuboff, by contrast, is suspicious of the absolutism of math-based solutions, and focuses instead on the levers of government. And, since she’s very concerned with the complicity of Western governments in encouraging the current model, she first insists on restoring real democracy to change the system from outside the digital realm.

Her most important contribution to our reckoning with this problem is to craft a language with which to describe what has happened to society in the past two decades. Zuboff’s task is to get us beyond the pre-existing frames of reference that constrain our ability to define the unprecedented – as when people at the start of the last century described cars as “horseless carriages.”

Introducing new words and concepts such as “surveillance capitalism,” “instrumentarianism,” “Big Other” and, my favorite, “surveillance-as-a-service,” or SvAAS, she gives people a taxonomy for describing the previously indescribable.

That, in itself, will have powerful ramifications, as it will enable the counterattack from citizens, businesses and governments feeling dislocated by the social dysfunction that shows up in our politics, economic divisions and crumbling bonds of trust.

“If democracy is to be replenished,” Zuboff writes, “it is up to us to rekindle the sense of outrage and loss over what has been taken from us.”

A topic we can’t ignore

I personally found many of Zuboff’s anti-technology positions too extreme. Whereas she sees the concept of “hive minds” as dehumanizing, reducing individuals to automatons, I think it’s possible to envisage an information technology-enriched world in which truly autonomous, free-thinking humans more easily come together and collaboratively innovate. The open-source inventiveness of global blockchain development communities speaks directly to this.

But where people like Zuboff matter is that, right or wrong, their words stir discourse and debate. Like it or not, this is going to be a talking point for all of us.

So, if blockchain technology is to be relevant, if its advocates are to rise above the false but, sadly, prevailing mainstream view of them as scam artists and lambo-loving day traders, they will need to insert themselves into the debate.

Some will rightly see an opportunity here for pro-privacy developers. Those building zero-knowledge-proof systems and other privacy-protection layers can talk to a vision of decentralized protocols that both empower individuals to control their own data and prevent the public ledger from becoming a new behavior extraction tool. That’s one potential answer to surveillance capitalism.

But it’s also important that crypto-savvy businessmen, lawyers, policymakers, academics and journalists are part of this conversation.

How can we ensure that the right regulations, standards, and best-practice norms are installed such that the technology develops on a much healthier trajectory than that with which the current Internet economy has evolved?

Let’s keep our eyes on that ball.

13. 03/02/2019 20:28
Bitcoin Is Now Officially In Its Longest Bear Market Ever

Bitcoin has officially entered the longest stretch of declining prices in its 10-year history.

The world’s oldest and most valuable cryptocurrency achieved an all-time high of $19,764 on Dec. 17, 2017 on the CoinDesk Bitcoin Price Index and has printed a series of lower price highs ever since, making February 2 (as per UTC time), the 411th consecutive day prices have been in decline. 

As such, bitcoin’s latest stretch surpasses the duration of the infamous 2013-2015 bitcoin bear market, which spanned 410 days from its price high to low.

Bitcoin’s Historical Price Declines

Indeed, bitcoin’s most recent stretch of declining prices is the longest in duration ever witnessed by the cryptocurrency, but it has yet to become the worst in terms of total depreciation.

As can be seen in the chart above, bitcoin’s first significant bear market in 2011 spanned just 163 days but remains the worst performer to date.

From its price high of $31.50 to $2.01 low, bitcoin’s price fell slightly more than 93 percent, which is a steeper drop than the subsequent 2013-15 bear market when prices fell 86 percent from the previous high. The current bear market still has yet to exceed a depreciation of more than 84 percent from its all-time high, while its current prices near $3,400 register an 82 percent decline.

No one can be certain if or when bitcoin’s record decline will come to an end, but whether it be the market’s subdued response to the withdrawal of a highly anticipated bitcoin exchange-traded fund (ETF) proposal or bitcoin’s next deflationary halving event slowly approaching, it does seem evidence is beginning to mount for a bitcoin bottom occurring in the not too distant future.

Weekly chart and halving history

As part of bitcoin’s deflationary monetary policy, the rewards per mined block get cut in half every four years or 210,000 blocks, as a result slowing the creation of new bitcoins.

The event is now known as a “halving” and has long been considered a bullish catalyst for bitcoin’s price since the existing or growing demand for the cryptocurrency is likely to outweigh the slowing production of supply. Simply put, since demand is greater than supply, it creates a higher valuation for the underlying asset, regardless of the market.

As the tweet below from CoinDesk Markets shows, bitcoin’s price trend tends to bottom out and rise substantially several months in advance of the actual halving date.

CoinDesk Markets@CoinDeskMarkets

Here's your halving and price guide.

- 1st halving (11/28/2012): Price bottomed 378 days before then rose 510%
- 2nd halving (07/09/2016): Price bottomed 539 days before then rose 309%
- 3rd halving (~05/25/2020): Roughly 497 days until halving


317 people are talking about this


While the sample size is small, bitcoin’s price finding a floor 378 days before the 2012 halving and 539 days before the 2016 halving creates an average “bottom” date of 458 days or one-and-a-quarter years before an actual halving event.

With the next halving likely to occur in late May of 2020, bitcoin is now just under 500 days away, so a potential bear market ending bottom date may not be too far off if investors preemptively price in the deflation of supply like they have in the past.

14. 31/01/2019 21:15
A Bitcoin-Backed Stablecoin Has Launched on the Ethereum Blockchain

A new token backed one-to-one with bitcoin is now live on the ethereum blockchain.

“Wrapped BTC” (WBTC) officially launched its ERC-20 token Wednesday evening. The project was first unveiled in October as a joint initiative between decentralized exchange startups Kyber Network and Republic Protocol, as well as cryptocurrency custody company BitGo.

As stated on the project’s website, the aim of WBTC is to bring “greater liquidity to the ethereum ecosystem including decentralized exchanges and financial applications.”

At the time, BitGo CTO Benedict Chan described WBTC as possessing both “the stability of bitcoin and the flexibility of ethereum,” likening the new crypto asset to traditional bank notes (the kind that were once redeemable for gold). While volatile compared to the U.S. dollar, bitcoin is the most liquid and stable of cryptocurrencies, he noted.

Now listed on cryptocurrency market data site CoinMarketCap, as of early Wednesday evening there was a reported 72.4214 WBTC on the ethereum network, slightly over-collateralized with 72.4216 BTC (roughly $250,000) locked in custody on the bitcoin blockchain.

Leveraging a technology known as “atomic swaps” to facilitate cross-chain cryptocurrency trades, users on ethereum can request WBTC from certified “merchants” after undergoing necessary anti-money-laundering and know-your-customer (AML/KYC) identification procedures.

Playing a key role in the exchange and liquidation of new WBTC tokens, merchants are defined in the technology’s white paperas “the institution or party to which wrapped tokens will be minted to and burnt from.”

According to the WBTC team, there are presently eight merchants to facilitate conversion between WBTC and BTC. These include: AirSwap, Dharma, ETHfinex, GOPAX, Kyber Network, Prycto, Ren and Set Protocol.

How users receive WBTC tokens. Image courtesy of Kyber Protocol.

Traded on exchanges

In addition, a number of cryptocurrency exchanges have already procured part of the initial WBTC inventory and will be able to support its live supply directly on their respective platforms, according to a WBTC press release.

As well, several financially-focussed decentralized applications on ethereum, including bZx, Compound and dYdX, will allow “immediate usage” of the new token.

As such, despite the concern expressed by the creator of ethereum, Vitalik Buterin, on Twitter over the centralized nature of this token swap system, the press release states:

15. 29/01/2019 10:40
Iran Could Ban Bitcoin for Payments, Central Bank Report Suggests

The Central Bank of Iran appears set to prohibit “unapproved” cryptocurrencies from being used for payments in the country, according to a draft report obtained by CoinDesk.

According to a translation of the draft report entitled “Obligations and Rules Regarding Cryptocurrencies,” “any cryptocurrency wallets will be used only for holding and transferring cryptocurrencies and integrating any kind of services in wallets using cryptocurrencies is forbidden.”

If the plan is ultimately approved, the central bank will effectively seek to block the use of unapproved cryptocurrencies as a means of payment. However, the report indicates that the Central Bank of Iran will not directly restrict anyone from personally holding or transferring small amounts of approved cryptocurrency.

It’s not immediately clear which cryptocurrencies will receive approval, though a source with knowledge of the process told CoinDesk that regulators want all bitcoin transactions in the country to be settled in the Iranian rial and don’t approve of its use as an official means of payment.

As it stands, the report is in its first draft and is not yet official policy within Iran, according to sources. The report will be discussed during the Electronic Banking and Payment Systems conference in Tehran that starts on Jan. 29, they said.

Plus, Iranians could be barred from holding large amounts of cryptocurrency in the same way they are officially restricted from owning more than 10,000 euros outside of their regulated bank accounts, according to the report.

A Tehran-based cryptocurrency advocate and developer, who spoke to CoinDesk on the condition of anonymity, said that the community in Iran is “shocked” by the developments and that “this may be worse specifically for businesses that receive bitcoin from foreign customers, since there is little KYC [know-your-customer] procedures with foreign customers and now also businesses can’t have their bitcoins directly.”

Rial protection?

Several local sources contended this was a move by the Iranian government’s effort to protect the fiat Iranian rial from competition.

Notably, the report states that tokens pegged to fiat currencies, precious metals and commodities are similarly prohibited as means of payment. That said, tokens pegged to the Iranian rial are allowed provided that they are issued by the central bank itself – a move that Al Jazeera has reported is set to be unveiled at this week’s conference.

The report also states that Iranian exchanges are now obligated to seek licenses, although the document itself offers little clarity on when that process will begin or how exchanges can go about doing so. Further, the report indicates that the central bank will create and update a list every three months for cryptocurrencies that are allowed to be traded on exchanges.

Currently, Iranian exchanges collect know-your-customer information, such as addresses and government-issued IDs, but they otherwise operate more like independent sellers than their corporate counterparts abroad.

“Getting an exchange license is not an easy task,” an anonymous blockchain entrepreneur in Iran told CoinDesk, arguing that these regulations could cripple the nascent industry.

On the other hand, he said that at least the government finally recognizes bitcoin as an asset and didn’t completely outlaw it, as there is still some degree of allowance for people to hold and transfer small amounts of crypto for non-commercial purposes.

Still, an anonymous cryptocurrency miner told CoinDesk:

“The nature of cryptocurrencies is they are decentralized. And [this] limit to them eliminates that spirit.”


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