No zero number: 0x and the crypto trader

Decentralized crypto exchanges here, decentralized exchanges there. And right in the middle 0x (ZRX). The Ethereum protocol uses a number of smart contracts to implement very similar applications to decentralized exchanges. However, the project started with the firm goal of even surpassing the advantages of decentralized exchanges. With ZRX, not only a series of tokens can be traded among each other, but also all kinds of tokenized asset investments such as real estate or bonds.

Here are three possible uses for 0x.

ZRX: The fast alternative for crypto trader

Decentralized crypto trader exchanges are considered slow. This is because the transaction duration for crypto trader on decentralized exchanges is fundamentally dependent on the block times. Furthermore, trading partners have to pay transaction fees for each order, as they use capacities on the blockchain.

0x claims to have found a solution to these problems. Because ZRX is a so-called second-layer protocol. This means that trading partners can carry out any number of transactions with the help of 0x without having to resort to the Ethereum blockchain for each individual transaction. Only the „clearing“, i.e. the final balance sheet, must reach the blockchain. According to the 0x developers, this saves time and money.

The tokenized economy

One of the great value propositions of blockchain technology is the creation of tokenized digital investments. A number of start-ups are already working on the implementation of new token-based asset classes.

These bring some advantages. Transactions can be carried out significantly faster than traditional financial market transactions. In addition, asset tokenization offers the ability to divide high-volume investment products, such as real estate, into any number of small tranches. Each token then represents a percentage share of the total product.

0x could become an integral part of this „tokenized economy“. Because investors can trade all possible tokens on 0x, not just those based on ETH.

The integration of more and more tokenized investment products into the financial market would undoubtedly result in an efficiency gain: Market entry barriers would be eliminated, as investments could also be realized with less capital. The markets would be more transparent and transaction costs lower.

Private loans
The loan market could also be improved with 0x. Blockchain technology creates a level of transparency and commitment that is second to none.

This could increase the importance of peer-to-peer lending, in which private individuals act as lenders. With more competition on the money market, more efficiency and lower prices can be expected than at present.

0x is a promising project in the field of tokenized economy. It is a versatile, object-oriented protocol that is suitable for a variety of applications in the sense of token trading.

It remains to be seen whether ZRX will become the standard for decentralized trading in digital securities.

Innovation through Blockchain in the news spy

The United Kingdom is becoming increasingly involved in blockchain technology and its potential for innovation. Two recent reports highlight the potential benefits of the technology. The main aim is to improve communication between government and citizens.

Blockchain technology and its potential for innovation and infrastructure improvement are the focus of recent reports. In its report „The Future of public service identity: blockchain“, the House of Lords pointed out that technology could change communication and the relationship of trust between government and citizens.

In the report, the initiators emphasize that blockchain technology can make digital identity projects much more secure. They compared four existing systems.

Four ways to manage the news spy

They have come to the conclusion that the news spy approach promises the least control by the user. In this approach, a single entity has control over the news spy and the digital identity. A second approach is the „federated“ approach. Several interconnected entities control identities. This model is currently used by

With the user-centric approach, as used by the Estonian government, individuals or administrators can control identity across different authorities.

The use of blockchain would now allow governments to take a completely self-managed approach to digital identity. This would allow individual users to centrally control their identity and simultaneously synchronize it with different authorities and instances without losing control.

In this way, all processes involved could be organized decentrally, making it easier to synchronize data. This means that people who spend more time in different places can avoid having to go through the same processes to confirm their data. At the same time, the data remains secure.

The government that uses the technology can record all rules or laws in Smart Contracts. These are then executed each time by themselves – a high saving of bureaucratic effort. Identification then simply takes place via a smartphone app.

More innovation through Blockchain

A report by Lord Christopher Holmes highlights the implications of the technology, which can improve the country’s infrastructure. The report highlights the benefits in the public sector. These include the decentralised organisation of insurance, border control, taxation and healthcare.

Among other things, the report recommends the creation of interdepartmental initiatives in public services. It is proposed to launch pilot projects. In addition, an independent organisation should be set up to provide the necessary insurance and technical support.

Is it possible to crack Bitcoin’s private key with quantum computers?

A frequently mentioned problem is that ECDSA encryption can be cracked via quantum computers using this Shor algorithm. This is a very big problem, because the ECDSA encryption generates the public key from the private key. In order to crack an ECDSA encryption, the computational effort for determining a private key from a public key using the Shor algorithm would be reduced by a factor of 10^-34. Even a very slow computer, which can perform one calculation per second, would not even need two days to find the private key.

Is cryptosoft really insecure then?

What many people often overlook, however, is that in the case of Bitcoin there are two cryptosoft encryptions between the attacker and the private key. It is known that you have to determine a private key from a public key. This can be done as shown using the Shor algorithm. However, the attacker will normally not see the public key itself, but his hash. This hash is the wallet address.

Specifically, the following cryptographic processes interlock: From the 256-bit private key, a 512-bit public key can be generated via ECDSA encryption. A SHA256 algorithm converts this into a checksum, which in turn can be converted into the wallet address. The attacker does not only have to determine the private key from the public key. He must first generate the public key from the wallet address.

Hackers can in principle crack SHA256 using the Grover algorithm. However, this algorithm only achieves a quadratic acceleration. This means that an attack on a hash generated by SHA256 requires approximately 2^128 or 3.4*10^38 computing cycles. Currently the supercomputers of the world can process about 10^17 operations per second. This set is assumed to be the upper limit. In principle, it cannot be assumed that a so-called entangled state can be prepared again in such short time intervals after measurement processes have taken place. A quantum computer with so many Qubit operations per second would need only 107.9 trillion years instead of 4*10^52 years to find the Public Key. This is still much greater than the age of the universe!

Admittedly, there is another algorithm that promises a cubic runtime optimization. With this a quantum computer, in the case of 10^17 Qubit operations per second, could break the connection between wallet address and public key in 15 years.

Even under the assumption of a supercomputer that is currently physically impossible, and using a comparatively unknown algorithm, the cost of hacking would dramatically exceed the benefit.

What does Bitcoin do and what can you do?

It turns out: Bitcoin is comparatively quantum safe. Of course, this is only true as long as nobody develops a better algorithm than Grover for finding the public key. That’s why it’s still interesting to see whether Bitcoin developers even take up this question.

True to the motto „Be your own bank“, it would also be desirable if the individual Bitcoin user were not only crypto-fit, but quantum safe. In part two of this series of articles, we therefore discuss the possibilities we have for better protection of our Bitcoins.

Venezuela urges neighbouring states to accept petroleum

The president of Venezuela Nicolás Maduro has proposed to the members of the ALBA-TCP trade pact to accept the crypto currency Petro, which he had planned. This serves the „courageous“ and „creative“ integration of the 21st century, Maduro tried to convince the governments of the ten other nations of his intention.

Meanwhile, the Venezuelan parliament announced that it would ban the Bitcoin formula

Last Friday, an extraordinary meeting of the Political Council of the Bolivarian Alliance for the Peoples of America (ALBA-TCP) was held in Caracas. This is both an economic and a political alliance consisting of a total of eleven states of Latin America and the Caribbean. The alliance, founded by Hugo Chávez, is intended to be an antithesis to the free trade area ALCA planned by the USA: At the end of the extraordinary meeting, Maduro proposed to the „brother governments“ the integration of his planned crypto-coin Bitcoin formula. Maduro believes that his currency will replace all previous currencies that are already being traded. The head of state predicted the introduction within the next few days.

This declared the Petro in advance as illegal

The president, however, receives a strong headwind from the parliament, which is controlled by the opposition. In Parliament’s view, the new crypto currency should require approval because it is a form of debt collection. Each Petro-Coin should be deposited with a barrel of oil from Venezuela’s reserves. The opposition publicly frothed over the sale of the country’s fossil fuels. Opposition politicians were quoted in the press as saying that the petroleum also opens the door to corruption. The securities deposited would be void if the current head of state were to lose the next election. Even if Maduro can successfully circumvent the US sanctions with the help of the crypto currency, the ban should considerably reduce the attractiveness of the new coin for investors. Maduro hopes to raise $5.9 billion from the Petro to modernize the domestic economy.

Since Maduro’s defeat in the parliamentary elections there has been a real stalemate, paralysing the country. The Venezuelan President has repeatedly ignored the orders of the parliamentary majority because he is protected by the Constitutional Court, which repeatedly blocks the laws passed by Parliament. It is therefore still completely unclear at this stage whether the crypto-petro will come in the coming days. One thing is certain: If Maduros party wants to win the next elections, something must happen. The country is suffering from galloping inflation and a rapidly spreading shortage of food and medicines. It remains to be seen whether Petro will be able to lead the nation out of the deep crisis as hoped. Maduro twittered that the meeting of the ALBA-TCP states had strengthened „friendship and cooperation“ between the nations. However, he did not comment on how his proposal was reacted to last Friday.

Why Apple Pay is a threat to Bitcoin news

Apple PayApple Pay is not even on the market yet and may already have won the battle against Bitcoin. Just like the digital currency, Apple Pay is a payment system, which people are likely to use more than Bitcoin.

Cupertino has taken great care to ensure that this will happen and to focus on three key areas: Front-end experience, financial institutions and traders.

So what will the Commnity of Bitcoin news do?

Apple’s Holy Trinity. Apple has the customer experience on its side. With the new iPhone, the Bitcoin news about the payment system will be rolled out and together with Apple Watch, Apple has attracted an incomparable amount of media interest.

On the first weekend alone, 10 million iPhone 6s were sold. The watch is also selling in droves. Of course not all users will also make use of Bitcoin news, but some will use it with great certainty and not so many people own Bitcoin.

Then there are the dealers. Long before Apple announced the payment system, the company had already signed contracts with well-known companies. Companies like Whole Foods, Bloomingdeals, Staple, Walgreens and Subway have already signed.

Thumbs up for security

Apple has also been waiting for the right time to introduce Apple Pay: Point-of-Sale (POS) systems require Near Field Cummunication (NFC) and the systems that support this technology can be very expensive. Many companies need to upgrade their systems by the deadline next October anyway. This is because American companies will then be required to set up the chip and pin technology that is already supported by most major credit card providers as a security feature. If the companies have not upgraded their systems to the aforementioned deadine, they can be held responsible for card misuse. So far, the credit card providers are still liable. If the companies have to make an update anyway, the simultaneous installation of an NFC system will certainly be cheaper.

On the financial side, Apple has already secured Visa, MasterCard and Amex.

Moreover, because Apple makes use of so-called tokens and a temporally dynamic number, no credit card part is transmitted to the merchant. This feature promises the customer a high level of security.

Then there is of course the biometric iTouch system, which is needed to identify the user. iTouch also has its critics, of course, but it is far better than the previous method of verifying the user’s signature. Most employees don’t even pay attention to the correspondence of the signature. Even the outdated PIN procedure, which can easily be spyed on, is no longer a match for the iTouch procedure.

Binance and Chainalysis fight against Bitcoin secret

Binance, the world’s largest Bitcoin exchange by market capitalization, is planning measures against money laundering with crypto currencies. By integrating the Chainalysis KYT software, the exchange is expanding its compliance with classic financial market regulations.

Binance crypto exchange and the Bitcoin secret

As Chainalysis announced yesterday, Thursday, 18 October, the company is now working with the Bitcoin secret. Binance uses the Chainalysis software KYT („Know Your Transaction“) to establish compliance in the area of money laundering. According to the company, KYT is software specially developed for the transfer of Bitcoin secret money laundering activities. Chainalysis on Medium describes how it works as follows:

„Chainalysis KYT provides real-time feedback on the underlying purpose of transactions and feeds this feedback into the stock exchange transaction processing engine. Compliance staff use our dashboard to generate high-risk customer alerts and export suspicious activity reports.“

Chainalysis KYT is based on a set of proprietary algorithms that use a number of open source resources to identify and report suspicious patterns in the transaction behavior of monitored wallets.

Since this year, the tool has also included the monitoring of BCH in addition to the analysis of BTC.

Binance drives professionalization forward

We have already reported in detail on Binance’s expansion efforts in Africa. The cooperation with Chainalysis must therefore be seen in the light of the exchange’s growth intentions. These are accompanied by strict regulations, which the exchange must comply with. Binance CFO Wei Zhou adds:

„By working with Chainalysis, we can build a compliance program that will enable the next phase of our growth. Our vision is to provide the infrastructure for a blockchain ecosystem and promote the freedom of money worldwide, while complying with the legal requirements in the countries where we operate“.

It is precisely these legal requirements that may have led Binance to partner with Chainalysis. The tool helps the Exchanges to comply with the legal know-your-customer and anti-money laundering regulations. This type of compliance could ultimately enable stock exchanges to get hold of their longed-for bank licenses.

IAMPASS: IOTAs Tangle as basis for Smart Cities

The IOTA Foundation has announced a new partnership. With this partnership, they want to further their efforts in the area of smart homes and digital identity. With IAMPASS, the areas of Digital Identity, Smart Cities and IOTAs Tangle will come together better.

Digital identity, Internet of Things and Smart Homes – these are probably the key words when it comes to our digital future. The fact that the IOTA Foundation with its Tangle wants to offer the technical infrastructure for this should be familiar to most people interested in cryptography by now. With a new partnership, this goal should now come a few bytes closer.

A dream for the Bitcoin loophole

The Tangle will soon be the basis for a new identification system like this A dream for all data collectors: The vein patterns in the palm of the hand should be used to perfectly identify, register and digitally image people on the tangle. With IAMPASS all this should become possible – one expects a secure and no longer manipulable illustration of Bitcoin loophole identity data.

IOTA: Digital Identity and the Tangle

In connection with Smart Cities, the project is still thinking ahead. A process called Masked Authenticiated Messaging will make it possible to recharge smart cars via the digital account. IOTA recently announced this in a blog post.

The advantages of a decentralized administration of identity are obvious. The distribution is moving away from centralized mountains of data to decentralized individual nodes that are designed to simplify identification.

Toan Nguyen, Director Business Development & Cloud Platform of IAMPASS:

„Distributed ledger technologies are becoming a key component of new initiatives in smart cities and digitization. This is especially true for data management and security. IOTA’s Tangle is particularly suitable for the emerging security applications for digital identity and personal data. Together, we expect the IOTA ecosystem and IAMPASS to help drive the next phase of digital identity management for high-security environments such as data centers and the smart city.“

So when IAMPASS‘ plans work out, it will soon be possible to identify yourself by the arrangement of veins on the palm of your hand, recharge your smart car and let it drive you into a fully networked smart home. (Provided the necessary small change is there).

Nano-Theft on BitGrail: Lawsuit against the Nano-Core Team

In the United States, a class action lawsuit was filed in the District Court of the Eastern District of New York by Nano Investors (XRB, formerly Raiblocks). The plaintiff, like Exchange BitGrail, is demanding a hard fork from the Nano Core team to compensate the investors. The consequences of such a judgement are not foreseeable for Nano and the crypto economy.

Nano, formerly RaiBlocks, is a blockchain-based system in which individual wallet hosts own their own blockchain. The individual blockchains of the users are compared with each other via a blockchain lattice. According to the team behind Nano, the scaling problem will be solved and free transactions will be possible. BTC-ECHO presented the system in more detail some time ago.

Demanding a hard fork to save the money

With this lawsuit one wants to enforce a kind of „rescue fork“ into a new crypto currency by the Nano-Core team in order to compensate the investors. BitGrail operator Francesco „The Bomber“ Firano revealed the theft on 09.02.2018. Subsequently, there was a conflict with the nano developers over the question of whether the blockchain should be adapted afterwards to the advantage of the investors. Nano then accused Firano on the official blog of wanting to mislead the developer team and the community.

Silver Miller will contact numerous other alleged co-plaintiffs during the investigation phase. The firm sees itself as a strong defender of crypto fraud. The firm is currently involved in various legal disputes against large crypto exchanges such as Coinbase and Kraken as well as ICO promoters such as Monkey Capital and Tezos. In addition, the firm advertises with a fee on a success basis: This is therefore only due if the plaintiff receives compensation in full or at least in part.

Rescue of investors or attack on decentralization?

Due to the loss of possibly several hundred euros, it is understandable that investors are now reacting emotionally. There is, however, to consider, with which carelessness the affected persons want to put the decentralization of a blockchain-based web system into the centralized hands of the judiciary. It is therefore questionable whether the philosophy of a decentralised blockchain can be justified. There is a danger that such a precedent will emerge with which one wants to control decentralized systems.

In mid-February 2018, 17 million nano (then worth 160 million euros) were stolen from the crypto exchange. The BitGrail team then requested a hard fork from the Nano Development team to undo this theft, which the team behind Nano rejected. This Hard Fork was not simply rejected, but was considered impossible from the developer’s point of view.

This classification, however, does not seem to be shared by all. By Alex Brola as the named plaintiff, represented by the law firm Silver Miller, a lawsuit was filed. Brola bought on 10.12.2017 Nano worth 50,000 US dollars. He is not suing against the Italian Exchange BitGrail itself, but against the Nano-Core team. The lawsuit alleges the improper sale of unregistered securities and the fact that Exchange has been negligently failed to provide reliability.

Whatever side of this debate you may be on, the whole BitGrail case is one of many examples that show that you should not keep large sums on an exchange. These should be transferred to wallets where you have the power over the private key.