Tag: Privacy

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Cryptocurrencies

Dash Is Known for Privacy, But Should You Invest In It?

Dash was developed with privacy in mind and to overcome the shortfalls that Bitcoin was facing. Originally introduced as Xcoin in 2014, the crypto has rebranded twice – first as Darkcoin then as Dash. Speculation that Xcoin was a pump-and-dump scheme were rife and likely contributed to the name change. As the altcoin was being renamed to Darkcoin, it received press, which pushed its adoption among darknet markets. Ever since, Dash has had a somewhat controversial reputation to the effect that even some governments pushed for their delisting. 

Dash was developed with privacy in mind and to overcome the shortfalls that Bitcoin was facing. Originally introduced as Xcoin in 2014, the crypto has rebranded twice – first as Darkcoin then as Dash. Speculation that Xcoin was a pump-and-dump scheme were rife and likely contributed to the name change. As the altcoin was being renamed to Darkcoin, it received press, which pushed its adoption among darknet markets. Ever since, Dash has had a somewhat controversial reputation to the effect that even some governments pushed for their delisting. 

Dash was developed with privacy in mind and to overcome the shortfalls that Bitcoin was facing. Originally introduced as Xcoin in 2014, the crypto has rebranded twice – first as Darkcoin then as Dash. Speculation that Xcoin was a pump-and-dump scheme were rife and likely contributed to the name change. As the altcoin was being renamed to Darkcoin, it received press, which pushed its adoption among darknet markets. Ever since, Dash has had a somewhat controversial reputation to the effect that even some governments pushed for their delisting. 

Arguably, Dash offers the best privacy guarantee in the entire cryptoverse – and this can be proven by how authorities get all fidgety at the mention of the crypto. Just recently, the US Internal Revenue Service announced a mega reward for anyone who can help them break Dash’s privacy and find the origin of transactions.

Despite Dash appearing like privacy is all it offers, it’s hard to deny that the altcoin is a worthy competitor to the likes of Bitcoin, Ethereum, and Litecoin, which are darlings to many investors. The crypto features prominently among the top 30 cryptocurrencies by market cap. It has significant daily trading volumes and can be exchanged with most major currencies – both fiat and crypto.

But wait, considering the reputational and potential availability challenges the cryptocurrency is facing, should you invest in it? Well, read on to find out what makes Dash a worthy investment.

Performance in 2020 

When choosing a good crypto investment, financial performance is among the key metrics to look out for. Throughout 2020, dash has shown rather erratic performance – call it volatility. Opening the year at around $20, Dash quickly rallied to peak $140 within weeks. Those who took advantage of this bull run undoubtedly tripled their investment. 

But it wasn’t long before the bears came calling and sent the crypto back to $40 at the beginning of April. In the subsequent months until June, Dash traded at between $60 and $80. This was the least volatile period for the crypto in the year. Still, these fluctuations were significantly high by crypto market standards.

After a brief rally in August followed by a correction in October, Dash seemed to stabilize in December, trading at roughly between $90 and $100. 

As to whether the crypto has enough volatility to challenge investors, the answer is an unwavering yes.

24-hour trading volumes have consistently declined over the year, which could imply two things: either, investors are HODLing their coins or just not buying as much. Usually, declining trading volumes are associated with falling prices. As for Dash, this has not been the case, not at least in 2020. One conclusion we can draw from this observation is that Dash has a rare element of resilience, and we can expect it to remain afloat in both good and bad times. 

Does Dash Have a Future?

Dash’s performance in 2020 leaves little doubt about its potential for short-term profitability, particularly with reference to its volatility. Volatility in crypto trading, just like in forex, allows investors to take advantage of price changes to make their cuts. In 2020, Dash showed price changes of up to 500%, which implies massive trading potential.

Trading Dash seems lucrative in the short run, but if you choose to invest in it for the long-term, are returns promised? Well, the indicators below give more insights on the direction the crypto is likely to take in the future.

#1 Dash development is funded 

Worth noting is that Dash is a next-generation crypto and a decentralized autonomous organization (DAO). The DAO is a collection of privileged nodes (masternodes) that invest back 10% of gains earned from mining. Well, this is not their primary function, but the dedication of a tithe to the network’s development promises sustainability, for instance, by building integrations fast and reliably. Unlike other cryptos, the continuous development of Dash does not entirely rely on a vibrant user community.

#2 The crypto responds to bull runs

In 2017 when a majority of crypto joined the historic bull run, Dash gained over 8,000%. Launched only 3 years before and trading at $0.12, the crypto had rallied to trade at $1,494 by the end of 2017. Dash entered 2018 with pride, flying as high as $1,000 – at a time when other cryptocurrencies were also flourishing. The entry into 2019 was not as flamboyant given the bubble had long burst, and most cryptos were heading for a correction. Even so, Dash maintained an impressive $100-$170 exchange rate. During past bull runs, the crypto’s behavior gives hopes that it will keep rising as other cryptocurrencies gain adoption.

#3 Crypto users are demanding more privacy

The demand for privacy across the globe is just increasing, and if there were a merchant trading this commodity, this would be the best time for them to cash in. From anonymous donations to buying what the government doesn’t want you to, privacy is increasingly becoming a selling point, and Dash takes care of this demand. To no one’s surprise, Alternative 36, Inc., an American e-commerce company, started accepting Dash payments for legal cannabis trade in the US.

#4 Dash offers superior performance 

Compared to Bitcoin and Ethereum, Dash payments are fast. As cryptocurrencies continue to gain adoption in the retail industry, Dash might become a more favorable option for payments than its mightier siblings.

#6 Dash’s ‘InstantSend’ and ‘PrivateSend’ 

Dash offers some transaction versatility. You can choose to send money instantly or wait for miners to work at their pace. Similarly, you can decide to send money anonymously or leave traces. This versatility makes Dash suitable for use in a wider range of applications, and hence, increases its utility. To guarantee the future of a cryptocurrency, the utility is everything. 

Regulators Have Their Eyes Fixed on Dash. Will That Affect You?

Regulators are clearly unhappy with the level of anonymity that Dash provides. In Japan, they pushed exchanges such as Coincheck to delist Dash and other anonymity-focused cryptocurrencies. The US Department of Internal Revenue also made clear its intention to crack Dash’s privacy and other anonymity cryptos. You probably have fears that you may become a victim of such heightened surveillance. While such an event is possible, it is worth noting that the crypto is used for many legitimate trades, and there’s no earthly reason why you would be victimized solely for investing in Dash. 

Final Thoughts

Dash is one of the best-known anonymity altcoins, and this reputation might have blinded investors from seeing the crypto’s investment potential. For short-term ventures, we have seen that Dash offers unmatched volatility, where investors can walk in and walk out with huge profits within months. In the long term, Dash is equally promising – based on past performance, support for network development, increasing demand for privacy, and its utility, which is likely to increase. While there might be concerns about the surveillance authorities have on Dash, overall, its prospects for profitability overshadow these concerns. 

Categories
Cryptocurrencies

Monero Reaches 2-Year High, Is It the Next-Best Alternative?

Recently (Oct 2020), Monero hit $139 – its 2-year high, and investors are expressing renewed confidence in this crypto. What’s even more inspiring is the fact that the cryptocurrency has maintained a consistent sideways or upward – but not downward – trend since then. Before the 2017 crypto bull run, Monero always shied from surpassing the $1 mark. But the boom seemed to have inspired this crypto to take on the major players. 

Recently (Oct 2020), Monero hit $139 – its 2-year high, and investors are expressing renewed confidence in this crypto. What’s even more inspiring is the fact that the cryptocurrency has maintained a consistent sideways or upward – but not downward – trend since then. Before the 2017 crypto bull run, Monero always shied from surpassing the $1 mark. But the boom seemed to have inspired this crypto to take on the major players. 

Recently (Oct 2020), Monero hit $139 – its 2-year high, and investors are expressing renewed confidence in this crypto. What’s even more inspiring is the fact that the cryptocurrency has maintained a consistent sideways or upward – but not downward – trend since then. Before the 2017 crypto bull run, Monero always shied from surpassing the $1 mark. But the boom seemed to have inspired this crypto to take on the major players. 

On the other hand, investors are all over the place scrambling for Bitcoin, partly why it is currently shining in glory. While most of those jumping onto the Bitcoin frenzy might be a bit late to the fiesta, the case could be different for Monero investors. Could it be the next-best alternative to Bitcoin at the moment?

Let’s take a closer look at this crypto and determine whether it can give Bitcoin a run for its money.

What Makes Monero Special?

Monero was invented in 2014 with one goal: to facilitate private and anonymous transactions. But Bitcoin was already doing that! Well, not quite. Bitcoin was thought to be anonymous, but that is not the case. With the Bitcoin blockchain (and many others), it is possible to trace the transaction’s origin because the blockchain is transparent. 

Monero, on the other hand, provides a high level of obscurity for transactions. We can’t say that it is impossible or not to tell the source of an XMR transaction, but as of now, that possibility remains a matter of conjecture. 

In this age, users seem to cherish privacy, even when they are doing nothing illegal. As Monero positions itself as one of the most private and anonymous cryptocurrencies, it is gradually becoming a darling to many. 

Other than providing unmatched privacy and anonymity, Monero is also cheap, fast, and easy to use – qualities that appeal to both neophytes and seasoned users.  

The Sudden Interest in Monero

It’s not only speculators and investors who have expressed increasing interest in Monero – hackers and regulators are also realigning their strategies around this crypto. For instance, Sodinokibi, a ransomware (criminal hacking) group, recently announced that they would start taking ransom in Monero instead of Bitcoin. They added that their decision to abandon Bitcoin was based on privacy issues, which Monero does not face. 

If you follow dark web affairs, you know that there is a close relationship between cryptocurrency adoption for illegal activities and the growth of Monero. This can be evidenced by Bitcoin’s momentary decline in 2013 after Silk Road, one of the largest black markets, was seized by the FBI. If we draw parallels between BTC’s adoption in the black market and Monero’s interest in the underworld, there can be no denying that Monero will soon become a much sought-after gem. 

Authorities are also showing interest in the crypto, albeit not for investment purposes. In September, the US Internal Revenue Service announced that it’s giving out a bountiful reward to anyone who can help them trace the source of Monero transactions. Europol also reported that Monero is fast rising as the standard for dark web transactions.

These events suggest that XMR’s adoption is likely to increase. With increased adoption comes increased volumes, market capitalization, and prices. 

Monero’s Historical Performance

The coin was launched in 2014, exchanging at about $2 or 0.005 BTC. After struggling for several years, the 2017 crypto bull finally came to its rescue, raising its value to over $400 at some point. However, XMR’s performance against BTC had started rallying way before the crypto boom. Since mid-2016, XMR had already started gaining against Bitcoin. This was a noteworthy trend since XMR has largely maintained its growth against BTC.

The crypto has also grown its 24-hour trading volumes tremendously. Just a year ago, Monero seemed to struggle to reach $100 million in daily transactions. Even during the 2018 peak when it was fetching $400 in XMR/USD trades, daily volumes hardly surpassed $200 million. At the time of writing, XRM was exchanging at only $116, but the 24-hour volume was hitting over $2 billion. In other words, 24-hour volumes have increased 20-fold in 12 months. There is no doubt investors are increasingly trying out this alternative. 

XMR/USD or XMR/BTC?

If you are convinced that Monero is a worthy alternative to Bitcoin, there’s one crucial decision you need to make – and that is whether to trade XRM with Bitcoin or with USD. After all, most exchanges that list XMR offer both pairs. It is important to evaluate this decision because XMR’s relationship with BTC and USD hasn’t been linear – there are times when the crypto has fetched more BTC than the equivalent in USD. In fact, this has been the case during most of its lifetime, except for the last few weeks where Bitcoin has grabbed headlines for its performance. 

Based on the historical exchange rates, it would be more profitable to exchange XMR with BTC when selling than with USD. However, owing to the trend reversal in the last few weeks of Bitcoin’s glory, it is important to watch how the curve extends. 

Concerns You Might Consider

While Monero is generally promising, there are two major concerns you might want to evaluate before picking it as an alternative to Bitcoin. 

#1: It might not be available on your favorite exchange – Due to the crypto’s high level of privacy, some major exchanges do not list it. This is especially true for exchanges that seek to comply with regulators. As we have seen, Monero is increasingly becoming popular in the underground economy, and reputable exchanges might want to distance themselves from it.

#2: Monero is widely associated with facilitating illegal trade – When you mention that you are a Monero, Zcash, or Dash investor, chances are you might be mistaken for being part of the dark web economy. Well, this won’t dampen your chances of successful crypto investment, but it’s worth keeping in mind all the same.

Final Thoughts

Monero is one of the fast-rising altcoins besides the fact that it has had a good track record in financial performance. In 2020, the coin has grabbed regulators’ attention due to its increased adoption in the underground economy. At the same time, the coin has consistently gained against both the USD and BTC throughout the year, save for the last few weeks where it has lost slightly against BTC. Also noteworthy is that the crypto’s daily volume has increased more than 20 times since the beginning of the year – signaling its increasing adoption. Although there might be a few concerns regarding the use of this cryptocurrency for covert activities, there is no denying it is a worthy alternative to Bitcoin.

Categories
Crypto Guides

Secure Trades using Safex- A Decentralised, Open-Source Crypto Marketplace

Introduction

Introduction

Introduction

If you are frequently updated with the blockchain trend, then you must have come across Safex. Unlike most blockchain technologies used for security and transactional purposes, Safex is focused on e-commerce. Even since Bitcoin emerged as a P2P electronic cash system (peer-to-peer), the idea of a decentralized system on which people could easily trade with each other without requiring a centralized governing body has been at the forefront of every technological leap in the blockchain industry.

Living up to crypto enthusiasts and professionals’ expectations of wanting a truly borderless and open P2P trading system that helps both sellers and buyers. Safex is a community and a decentralized protocol built and designed on the original concepts of the individual rights to control, security, and privacy over transactions.

Let’s understand why Safex is the real attraction for crypto investors all across the globe.

What is Safex?

Safex is a privacy-based, decentralized, and open-source e-commerce marketplace designed to help both sellers and buyers and make transactions hassle-free. It allows you to create powerful web stores that are powered by blockchain. Safex has been using the heavily modified blockchain technology called cryptonote that leads to a world-class marketplace. What’s interesting about Safex is that the platform boasts a unique type of commerce-focused smart contract function.

Since data breach is the major vulnerability suffered by most centralized commerce platforms, Safex primarily focuses on privacy, addressing issues like opaque and unfair system for visibility of listings and trades, snooping on online behavior, unwarranted collection of personal data, and arbitrarily large and non-transparent commissions.

Industry experts claim that Safex has revolutionized the e-commerce sector by streamlining the processes and providing the e-commerce ecosystem with sheer privacy, which was previously not there.

More than 10,000 individuals have already invested in Safex Token and Cash after recognizing the project’s potential.

Why Safex?

Credit card fraud, privacy issues, and unfairness to small to medium-scale sellers are a few of the many problems affecting everyday users. With Safex, users get a solution in the form of secure online payment, an embedded privacy coin for free, and a marketplace on a blockchain. Safex combines Shopify, Upwork, and Amazon’s functionalities into a single platform, creating a new future for online shopping that eliminates the difficulties and challenges that users have to deal with every day.

Safex Features and Functionalities

With Safex, small sellers from across the world will have access to a global client base.

Engine for E-Commerce – Safex offers a decentralized database and an integrated global payment engine, which adds security and a privacy layer to online stores.

Safex Marketplace – Safex is a decentralized marketplace on a privacy blockchain, allowing sellers to gain exposure to the wide network of Safex users.

Privacy Blockchain -Safex uses functionalities like One-Time Address and Ring Signatures to maintain the senders’ anonymity and recipients of transactions.

Conclusion

Safex has already developed a strong community of users who believe in the project. Since blockchain is the future of online payment, Safex can prove to be a game-changer in how people carry out online transactions.

Categories
Crypto Guides

What should we know about DEXs & its benefits?

Introduction A decentralized exchange or DEX is referred to as a platform that eliminates the middlemen and allows traders to trade with each other directly. This direct approach allows traders to control their funds instead of giving them to exchange providers where trades are performed via smart contracts. These exchanges are hosted on a collected […]

Introduction A decentralized exchange or DEX is referred to as a platform that eliminates the middlemen and allows traders to trade with each other directly. This direct approach allows traders to control their funds instead of giving them to exchange providers where trades are performed via smart contracts. These exchanges are hosted on a collected […]

Introduction

A decentralized exchange or DEX is referred to as a platform that eliminates the middlemen and allows traders to trade with each other directly. This direct approach allows traders to control their funds instead of giving them to exchange providers where trades are performed via smart contracts.

These exchanges are hosted on a collected ecosystem of distributed nodes. This not only reduces the hacking risk but also addresses the problem of downtime that limits the trading ability. These exchanges are designed to extend an open, transparent network that makes crypto trading accessible to all.

What Makes DEX Different from Centralized Exchanges?

A Centralized exchange is also an online platform where people can buy and sell digital currency, but they use a third-party to authenticate and execute the transactions. This needs the buyers and sellers to entrust their funds to exchanges and allow them to safely complete the transactions.

These exchanges are known to be easy to use and enable traders to buy digital currencies with cryptocurrencies or fiat. They offer a streamlined entry point to the market and cover the majority of cryptocurrency trading.

Benefits of DEX

Following are the reasons we should think about trading in decentralized exchanges:

Control

In centralized exchanges, traders do not tend to have full control over their funds, limiting the trading potentials. Recently, the event known as Proof of Keys was run by centralized exchanges to ensure that exchanges could generate more profits on deposits, the same way a bank works.

This limited the users’ rights to withdraw all their funds in a single day.  The open nature of DEXs implies that our money remains in our control. Users get to withdraw their amount whenever they intend to.

Security

Centralized exchanges collect a massive amount of money from investors. This makes these exchanges the prime target of cybercriminals. Bitstamp and popular exchange based on Slovenia was hacked in 2015.

The hackers got access to the hot wallet and stole 19,000 Bitcoins, which was worth $5 million. And with the increasing number of trading in cryptocurrencies, centralized exchanges are becoming more vulnerable to hackers. Decentralized exchanges offer more security and, over the years, have become more common choices for crypto trading.

Privacy

Centralized exchanges are categorized as MSPs or Money Service Providers. This implies that users have to undergo certain anti-money laundering (AML) and Know-your-customer (KYC) processes. But people are often resistant to providing their personal information to third parties. This is because they end up having no control over what will happen to the data.

Decentralized exchanges, on the other hand, are not controlled by a central authority. Therefore, we do not need to register other than having a valid wallet address. Decentralized exchanges still remain a rather new concept in this ecosystem. But traders are rapidly comprehending its advantages over centralized exchanges.

Bottom line

Many new DEXs are coming in the market with better features, security options, and ease of use. When assessing these platforms, ensure to consider important factors such as security features, trading volume, currencies available, transaction fees, sign-up process, etc.

Categories
Blockchain and DLT

Can GDPR and Blockchain Coexist? 

The European General Data Protection Regulation (GDPR) came into effect more than two years ago. The law gives residents of the European Economic Area (EEA), power over their personal data and how it is used by organizations. This includes the right to ask for its erasure, the mandate for informed consent, and right over whom that information is shared with. The law applies not just to organizations based in (EEA), but also those based in other countries while serving European residents. 

The European General Data Protection Regulation (GDPR) came into effect more than two years ago. The law gives residents of the European Economic Area (EEA), power over their personal data and how it is used by organizations. This includes the right to ask for its erasure, the mandate for informed consent, and right over whom that information is shared with. The law applies not just to organizations based in (EEA), but also those based in other countries while serving European residents. 

The European General Data Protection Regulation (GDPR) came into effect more than two years ago. The law gives residents of the European Economic Area (EEA), power over their personal data and how it is used by organizations. This includes the right to ask for its erasure, the mandate for informed consent, and right over whom that information is shared with. The law applies not just to organizations based in (EEA), but also those based in other countries while serving European residents. 

With this in mind, it is clear that there is a direct clash of intentions between the GDPR Law and Blockchain – an emerging technology that is increasingly winning the attention of many organizations across the world. At what point exactly do the two collide, you ask? 

Well, by definition, Blockchain is a distributed and immutable ledger. This means that once the data is recorded on the network, it is impossible to alter it, let alone delete it. But, with respect to the GDPR Law, individuals have the right to revoke consent or ask for their personal data to be deleted. This puts organizations at crossroads, especially if they are looking to use Blockchain in the future to serve European clients. Now let’s examine the incompatibilities of these two entities: 

Personal Data

Personal data is a broad term used to define any information that can be linked to an individual. The same definition is used in the context of GDPR, where data consist of a variety of personal details from email addresses, health details, IP addresses, to device identifiers. This extends even to pseudonymized data that can be attributed to a specific individual by the use of additional information.

In the case of Blockchain, the technology uses anonymized data to record events associated with an individual. This is made possible by the use of public cryptographic keys that link a participant to a particular transaction. Even so, the mere use of an identifier — in this case, cryptographic keys — doesn’t mean that the data on the Blockchain is outside the scope of personal data as defined by the GDPR Law. Moreover, if an organization was to use blockchain solutions to establish customers’ identity under Know Your Customer (KYC) and anti-money laundering (AML) policies, it becomes even more subject to the GDPR Privacy Law. What causes even more friction between the two entities is that Blockchain is a permanent system of records. As such, the stored data, whether anonymized or not, can’t be erased even if the cryptographic key is destroyed. 

Data Controller and processor dilemma 

The GDP Law was first proposed by the European Commission long before blockchain technology was a trend. It is, therefore, not surprising that the law follows a centralized logic where the focus is entirely on data collectors who also play the role of processors. Articulating this logic in the case of Blockchain — a decentralized technology — definitely, there will be discrepancies. Here’s is why, in a decentralized system, anyone who joins the peer-to-peer network becomes what is called a ‘node.’ 

The nodes keep a local copy of the Blockchain and connect with others on the same network to verify each entry. Simply put, nodes take over the role of a data processor as defined by the GDPR Law. Yet, the nodes don’t have control over how the entire system works. In a similar fashion, the party that designed the blockchain network can’t really fit into the data controller description, since they are merely platform providers. Without a clear definition of who’s playing the controller’s role, the parties can’t enter into a ‘controller-processor’ agreement as mandated by the law. 

Additionally, the data on the network is made public for all nodes to see and verify. This goes against the principle of “data protection by default” under GDPR, which states that data shouldn’t be accessible to an indefinite number of persons without the subject’s intervention. Further, if the data is recorded in a public blockchain, it becomes even harder for data subjects (i.e., individuals) to exercise their right to revoke the consent of their data. 

Compliance with the privacy law can only be maintained in a private blockchain where the network is owned by one specific party. The party assumes the role of a data controller as the nodes take their place as processors. However, a private blockchain is less secure compared to its public counterpart, which, as a result, puts users’ data at risk. 

Storage limitation

Under the principle of storage limit, GDPR law stands for the proposition that personal data cannot be stored for an unlimited time. Therefore, a data retention period must be defined according to the purpose of data processing. In contrast, one of the core characteristics of Blockchain is that once the data is recorded on the network, it cannot be altered or deleted. As such, the data will be stored for an infinite period of time, which is clearly against the GDPR Law.

One of the viable solutions to this problem is to store data in an alternative database. Consequently, Blockchain will then be used to store data that doesn’t necessarily point to an individual e.g., the hash generated from a keyed hash function. Also, organizations can use permissioned Blockchain to store the data and later incentivize all the nodes to ‘delete’ it by forking the network. Admittedly, doing so will break the hash pointers between blocks. However, it is possible to re-harsh the blocks since permissioned blockchains do not need Proof-of-work, and thus the process wouldn’t require much computational power. 

Using Blockchain to ensure compliance with GDPR Law

In an ironic twist, blockchain technology can be used to maintain compliance with the GDPR Law. This can happen in two main instances: 

Data accuracy 

One of the principles of GDPR Law is the emphasis on data accuracy. All organizations operating or serving clients in EEA are required to maintain an accurate record of their clients’ data. They are also required to have sound procedures to check and verify the accuracy of the data. Blockchain technology, with its virtually incorruptible trail, can be used by these organizations to guarantee the accuracy of the recorded data.

Data integrity 

Under the principle of data protection by design and default, organizations are required to protect clients’ data from manipulation or unauthorized access. In this case, Blockchain is the perfect tool for safeguarding data from third-party party intrusion while ensuring no single node alters what is already recorded. 

Conclusion 

Clearly, there is a direct clash between the newly imposed GDPR Law and blockchain technology. But on ideological grounds, the two entities share the same goal, which is the protection of data. By virtue of sharing a common ground, Blockchain can be used to enhance compliance with the GDPR data law. This will help organizations within and outside EEA embrace this revolutionary technology while still respecting the privacy of their clients. 

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Crypto Daily Topic

What is Graftroot: Here is Everything you need to know

Bitcoin is famously pseudonymous, meaning while your transactions are not directly linked to you and you don’t use your real name while transacting on the network, a Bitcoin address can still be traced to you by a person that’s determined enough. This is an issue that Bitcoin users have always grappled with: a lack of guaranteed privacy. 

Bitcoin is famously pseudonymous, meaning while your transactions are not directly linked to you and you don’t use your real name while transacting on the network, a Bitcoin address can still be traced to you by a person that’s determined enough. This is an issue that Bitcoin users have always grappled with: a lack of guaranteed privacy. 

Bitcoin is famously pseudonymous, meaning while your transactions are not directly linked to you and you don’t use your real name while transacting on the network, a Bitcoin address can still be traced to you by a person that’s determined enough. This is an issue that Bitcoin users have always grappled with: a lack of guaranteed privacy. 

This lack of absolute privacy means that hackers and other fraudsters are always lurking, waiting for the chance to exploit any loophole that might present in your handling of Bitcoin. 

The possibility of losing money is not the only reason why Bitcoin users would prefer a little more privacy. The very notion of privacy is important; everyone desires to have their business remaining their business. Also, in this era of social media and information available in a click, privacy is even more precious than ever. 

In light of these facts, Bitcoin developers have been at pains to improve privacy for the Bitcoin network. 

One of the more recent ideas is Graftroot, a technology proposed to improve the privacy of Bitcoin transactions and smart contracts. It aims to inject high-level privacy to the network so that transactions, no matter how complex, cannot be picked apart from regular transactions by outside observers. Graftroot is an improvement of Taproot, a previously proposed tool for the same end. 

What’s Taproot? A Brief Background

Taproot is an idea proposed by Gregory Maxwell, one of Bitcoin’s core contributors. The idea behind Taproot was to improve Bitcoin’s smart contracts function while providing more privacy. With Taproot, individuals would enter into the most complex smart contracts, and an outside looker wouldn’t distinguish it from regular transactions. 

There’s only one problem, though; a smart contract makes a transaction more data-heavy and less private than usual. Taproot does not have a way to fix this. Graftroot is a proposal by the same developer – Maxwell, to fix this while maintaining efficiency. 

He explains: “Taproot suffers from a limitation that it only provides for one alternative. Trees or Cascades or taproots can be done, but they have less privacy and efficiency than just a single level. E.g., a tree commitment has overhead that grows with the log of the number of alternatives.” 

What is Graftroot?

In Taproot, the participants in a Bitcoin smart contract combine their public keys to form a ‘threshold public key’ which they can access with a ‘threshold signature.’ It’s the same with Graftroot; only this time, participants create a threshold key but create threshold signatures for each set of conditions rather than an entire set of conditions. 

With Graftroot, participants have the option to delegate their ability to sign on a transaction to a ‘surrogate’, and they can also share that delegation with whomever they want. 

As Maxwell puts it: “With Graftroot, the participants establish a threshold key, optionally with a Taproot alternative, just as they do with Taproot. At any time, they can delegate their ability to sign to a surrogate script (and just the script) with their Taproot key, and sharing that delegation with whomever they choose. Later, when it comes time to spend the coin if the signers aren’t available and the script must be used, the redeeming party must do whatever is required to satisfy the script (e.g., provides their own signature and a timelock, or whatnot) and presents that information along with the signer’s signature of the script.”

How it Works

We can better explain the Graftroot function with this example:

  • Alice and Bob create a smart contract that allows them to spend funds together.
  • Alternatively, they can set the smart contract so that only Alice spends it after a week.
  • Alternatively, Bob can spend it alone if he provides a secret number. 
  • Alice and Bob will combine their public keys to form a threshold key, which will allow them to spend the funds if they provide the threshold signature.
  • Alice and Bob create and sign the alternative scripts. 
  • Alice keeps the threshold signature that will allow her access to the funds after a week. 
  • Bob keeps the threshold signature that lets him spend the funds after providing the secret number. 

When it’s time to settle the contract, Alice and Bob will likely sign the settlement transaction, which creates a threshold signature, and apart from them, no one else will be privy to the alternative spending condition, or even that the transaction involved more than one person. By all indications, it appears like a standard transaction.

Now, in the case of a ‘non-cooperative close’ (when one party disappears, for instance), whoever can meet an alternative condition gets to spend the funds alone. 

If, in the case of Alice and Bob, Bob has the secret number, he can reveal his alternative script condition corresponding to the script and the threshold signature to prove the authenticity of his spend. Thus, it will appear to everyone as if all parties to the contract agreed to the transaction. As such, Bob can rightfully spend the funds. 

In the same vein, Alice can reveal her stored alternative key in combination with the corresponding script and the threshold signature and spend the funds. 

Why Graftroot?

Graftroot presents with this main benefit: it can facilitate even the most complex smart contract, and no one would be none the wiser. The participants can even add more conditions after the initial contract is executed. 

The Downsides of Graftroot 

However, Graftroot has downsides too. For one, it’s interactive. The involved parties must communicate about the signing of the alternative scripts before they can spend the funds in the way they had agreed. 

Another downside is that if a participant loses their threshold signature for the alternative script, they lose with it their backup. 

When can Bitcoin Users Use Graftroot?

Bitcoin developers working on various upgrades to the Bitcoin network prefer to implement them at the same time since they complement each other. 

It’s likely that Graftroot will be implemented via a soft fork as an opt-in change for users, rather than having the mining community vote on it. If they so desire, nodes can update to the new version and access the new features. 

Final Thoughts

The Graftroot is a promising upgrade to the Bitcoin ecosystem. Bitcoin burst into the scene as the decentralized, peer-to-peer digital money. Now, with technologies like Graftroot that offer to improve its smart contract functionality, Bitcoin users and fans can derive even more value from the ecosystem. 

Graftroot and other innovations like it open a new world of possibilities for the development of the Bitcoin and the cryptocurrency space as a whole. And with Bitcoin being the pace setter, we can expect more exciting developments all around. 

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Crypto Guides

Which kind of Problems can be Solved by Cryptocurrencies?

Introduction
Cryptocurrencies have made an impact on the world’s financial system in an unprecedented way. The speed and agility of global transactions have changed with the advent of cryptos. At

Introduction
Cryptocurrencies have made an impact on the world’s financial system in an unprecedented way. The speed and agility of global transactions have changed with the advent of cryptos. At

Introduction

Cryptocurrencies have made an impact on the world’s financial system in an unprecedented way. The speed and agility of global transactions have changed with the advent of cryptos. At present, there are around 3053 cryptocurrencies trading across the world, with a market cap of more than $246 billion. Many global companies around the globe have started to accept cryptos as a mode of payment for the products and services they provide. Bitcoin atm’s and debit cards are making the widespread adoption of cryptocurrencies easy and worthwhile. In this article, let us understand the reason for this wide adoption of these cryptos by looking at some of the problems they solve.

🏳️ Centralization: Cryptocurrencies are built on blockchain platforms enabling them to adopt all the features of the blockchain technology. The fiat currency we use today is minted by the central banks of the respective countries. The presence of a central entity to control something is called centralization. Banks play a significant role in the financial status of any country. It is well known that the financial crisis of 2008 is due to the banking crisis. That was the time when Bitcoin came into the picture, paving the way for the decentralized currency. Cryptocurrencies are decentralized with no third-party control. They run on blockchain technology as per the network setup initially. The network is maintained and run by different entities mining the native currency. Thus by no one controlling the money, they remain unique and stable. This is the prominent problem that cryptocurrencies solve over fiat currency.

🏳️ Intermediary costs: The transaction costs to send money between different countries is too high. The respective entities charge a certain percentage of the transaction amount, and it depends on the amount we send and the service we utilize. Also, it takes more time to settle transactions across different countries. There is no limit for cryptocurrency transfer across the world. It is instantaneous with a minimal amount as a transaction fee when compared with the standard bank wire transfers.

🏳️ Privacy: The transactions you make in cryptos are semi-anonymous; some cryptos even ensure complete anonymity. Each of the users will have their crypto addresses, which are used to make transactions. These addresses ensure privacy while transacting cryptos. Having said that, the level of privacy varies from one crypto to others.

🏳️ Security: Blockchain assures the utmost protection when it comes to cryptocurrency transactions. The transactions in the blockchain cannot be reversed; once committed, they are committed for a lifetime. The cryptographic techniques used to secure the transactions are almost impossible to hack.

🏳️ Inflation: Any cryptocurrency has a limit of coins that it can ever have or in some coins, the number of coins that can be mined per year will be capped. In the case of fiat currency, the government can issue bonds and manipulate interest rates to increase the circulating money, thus decreasing its value leading to inflation. Since the number of coins that ever will be available is capped in the case of crypto, inflation can be effectively handled.

These are only a few problems that cryptocurrencies can solve, but with the widespread usage, there would be solutions for problems that we don’t even see now. We hope you find this article informative. Cheers!

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Crypto Guides

What Is A Bitcoin Address & Why Should You Know About Them?

Introduction
In our previous articles, we have seen the properties, purpose, and working of cryptocurrencies taking bitcoin as an example. Now, let’s understand what a Bitcoin address is. This topic

Introduction
In our previous articles, we have seen the properties, purpose, and working of cryptocurrencies taking bitcoin as an example. Now, let’s understand what a Bitcoin address is. This topic

Introduction

In our previous articles, we have seen the properties, purpose, and working of cryptocurrencies taking bitcoin as an example. Now, let’s understand what a Bitcoin address is. This topic is vital since It is this address that enables Bitcoin to hold the property of Psuedonomity.

The transactions of Bitcoins are stored in a public decentralized distributed ledger. When we say its a public ledger, anyone can go to the Bitcoin website and check the transactions which are validated in the blockchain platform in real-time. One might wonder, in such case, how the pseudonymity of the user is ensured? Here comes the role of the Bitcoin address.

What is a Bitcoin address?

Two people transact Bitcoins using the Bitcoin address of each other. If we take the analogy of a bank, a Bitcoin address can be compared to the bank account number of a person. One should let the other person know their Bitcoin address for the transaction to happen. A typical Bitcoin address is alphanumeric, with 16-35 characters.

Currently, there are three types of address formats. The address formats only differ with respect to the characters which they begin with. The addresses start with either 1, 3, or bc1. Below are some of the examples of standard Bitcoin addresses.

1BvB6SEYstWetqTFn5Au8m6GFg7xJaNVN2

3J9891WpEZ73CNmQviecrn7iWrnqR4WNLy

bc1qar6srrr78fkvy5l643ly9nw9re59gtzzwf5mdq

Generating a Bitcoin Address

To generate a Bitcoin address, you should first download a bitcoin wallet. A Bitcoin wallet is a software that allows users to send, receive, and store Bitcoins securely. Storing Bitcoins is nothing but storing the private keys of that Bitcoin. These private keys are used to authorize a transaction and thereby unlocking the Bitcoins. More about Private keys and types of wallets will be discussed in further articles. So basically, once you download the wallet, you can generate a countless number of Bitcoin addresses. Every time you want to sell or receive Bitcoins, you can request a new Bitcoin address.

How to use the Bitcoin address effectively?

Even though your identity is not mentioned upfront, you can be traced by your Bitcoin address. Some wallet providers might ask for your identities while creating a Bitcoin wallet. Some times, even your e-mail ID will be linked to your Bitcoin address. So it is always advisable to generate a new Bitcoin address for each transaction you choose to do. Since Bitcoin is a public ledger, anyone can know how many Bitcoins you hold using your Bitcoin address. It is a time-consuming process, but there is a possibility. That is what we are trying to say. However, if a single-use address is used, they can’t know the exact amount you hold.

Since the Bitcoin address is long with alphanumeric characters, it gets difficult for someone to actually type out the entire address to send Bitcoins to you. So the best way to share your Bitcoin address is by getting a relevant QR code. Using a QR code to represent your address is the best way to make your address easily accessible to anyone. Anyone can scan and process the payments just by scanning the QR code without any hiccups.

Conclusion

The Bitcoin address plays an essential role in the entire Bitcoin functionality as it is the face of any Bitcoin transaction. One thing a person will know through your Bitcoin address is the account balance associated with that address. So it is not recommended to share your address publically on any of the social media platforms. As discussed, try to use different Bitcoin addresses every time you transact. However, you can publically share any one of your addresses in order to be extra secure. Cheers!