This Time is Different Part 2: What Bitcoin ... - Hacker Noon

All you need to know about Yield Farming - The rocket fuel for Defi

All you need to know about Yield Farming - The rocket fuel for Defi
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It’s effectively July 2017 in the world of decentralized finance (DeFi), and as in the heady days of the initial coin offering (ICO) boom, the numbers are only trending up.
According to DeFi Pulse, there is $1.9 billion in crypto assets locked in DeFi right now. According to the CoinDesk ICO Tracker, the ICO market started chugging past $1 billion in July 2017, just a few months before token sales started getting talked about on TV.
Debate juxtaposing these numbers if you like, but what no one can question is this: Crypto users are putting more and more value to work in DeFi applications, driven largely by the introduction of a whole new yield-generating pasture, Compound’s COMP governance token.
Governance tokens enable users to vote on the future of decentralized protocols, sure, but they also present fresh ways for DeFi founders to entice assets onto their platforms.
That said, it’s the crypto liquidity providers who are the stars of the present moment. They even have a meme-worthy name: yield farmers.

https://preview.redd.it/lxsvazp1g9l51.png?width=775&format=png&auto=webp&s=a36173ab679c701a5d5e0aac806c00fcc84d78c1

Where it started

Ethereum-based credit market Compound started distributing its governance token, COMP, to the protocol’s users this past June 15. Demand for the token (heightened by the way its automatic distribution was structured) kicked off the present craze and moved Compound into the leading position in DeFi.
The hot new term in crypto is “yield farming,” a shorthand for clever strategies where putting crypto temporarily at the disposal of some startup’s application earns its owner more cryptocurrency.
Another term floating about is “liquidity mining.”
The buzz around these concepts has evolved into a low rumble as more and more people get interested.
The casual crypto observer who only pops into the market when activity heats up might be starting to get faint vibes that something is happening right now. Take our word for it: Yield farming is the source of those vibes.
But if all these terms (“DeFi,” “liquidity mining,” “yield farming”) are so much Greek to you, fear not. We’re here to catch you up. We’ll get into all of them.
We’re going to go from very basic to more advanced, so feel free to skip ahead.

What are tokens?

Most CoinDesk readers probably know this, but just in case: Tokens are like the money video-game players earn while fighting monsters, money they can use to buy gear or weapons in the universe of their favorite game.
But with blockchains, tokens aren’t limited to only one massively multiplayer online money game. They can be earned in one and used in lots of others. They usually represent either ownership in something (like a piece of a Uniswap liquidity pool, which we will get into later) or access to some service. For example, in the Brave browser, ads can only be bought using basic attention token (BAT).
If tokens are worth money, then you can bank with them or at least do things that look very much like banking. Thus: decentralized finance.
Tokens proved to be the big use case for Ethereum, the second-biggest blockchain in the world. The term of art here is “ERC-20 tokens,” which refers to a software standard that allows token creators to write rules for them. Tokens can be used a few ways. Often, they are used as a form of money within a set of applications. So the idea for Kin was to create a token that web users could spend with each other at such tiny amounts that it would almost feel like they weren’t spending anything; that is, money for the internet.
Governance tokens are different. They are not like a token at a video-game arcade, as so many tokens were described in the past. They work more like certificates to serve in an ever-changing legislature in that they give holders the right to vote on changes to a protocol.
So on the platform that proved DeFi could fly, MakerDAO, holders of its governance token, MKR, vote almost every week on small changes to parameters that govern how much it costs to borrow and how much savers earn, and so on.
Read more: Why DeFi’s Billion-Dollar Milestone Matters
One thing all crypto tokens have in common, though, is they are tradable and they have a price. So, if tokens are worth money, then you can bank with them or at least do things that look very much like banking. Thus: decentralized finance.

What is DeFi?

Fair question. For folks who tuned out for a bit in 2018, we used to call this “open finance.” That construction seems to have faded, though, and “DeFi” is the new lingo.
In case that doesn’t jog your memory, DeFi is all the things that let you play with money, and the only identification you need is a crypto wallet.
On the normal web, you can’t buy a blender without giving the site owner enough data to learn your whole life history. In DeFi, you can borrow money without anyone even asking for your name.
I can explain this but nothing really brings it home like trying one of these applications. If you have an Ethereum wallet that has even $20 worth of crypto in it, go do something on one of these products. Pop over to Uniswap and buy yourself some FUN (a token for gambling apps) or WBTC (wrapped bitcoin). Go to MakerDAO and create $5 worth of DAI (a stablecoin that tends to be worth $1) out of the digital ether. Go to Compound and borrow $10 in USDC.
(Notice the very small amounts I’m suggesting. The old crypto saying “don’t put in more than you can afford to lose” goes double for DeFi. This stuff is uber-complex and a lot can go wrong. These may be “savings” products but they’re not for your retirement savings.)
Immature and experimental though it may be, the technology’s implications are staggering. On the normal web, you can’t buy a blender without giving the site owner enough data to learn your whole life history. In DeFi, you can borrow money without anyone even asking for your name.
DeFi applications don’t worry about trusting you because they have the collateral you put up to back your debt (on Compound, for instance, a $10 debt will require around $20 in collateral).
Read more: There Are More DAI on Compound Now Than There Are DAI in the World
If you do take this advice and try something, note that you can swap all these things back as soon as you’ve taken them out. Open the loan and close it 10 minutes later. It’s fine. Fair warning: It might cost you a tiny bit in fees, and the cost of using Ethereum itself right now is much higher than usual, in part due to this fresh new activity. But it’s nothing that should ruin a crypto user.
So what’s the point of borrowing for people who already have the money? Most people do it for some kind of trade. The most obvious example, to short a token (the act of profiting if its price falls). It’s also good for someone who wants to hold onto a token but still play the market.

Doesn’t running a bank take a lot of money up front?

It does, and in DeFi that money is largely provided by strangers on the internet. That’s why the startups behind these decentralized banking applications come up with clever ways to attract HODLers with idle assets.
Liquidity is the chief concern of all these different products. That is: How much money do they have locked in their smart contracts?
“In some types of products, the product experience gets much better if you have liquidity. Instead of borrowing from VCs or debt investors, you borrow from your users,” said Electric Capital managing partner Avichal Garg.
Let’s take Uniswap as an example. Uniswap is an “automated market maker,” or AMM (another DeFi term of art). This means Uniswap is a robot on the internet that is always willing to buy and it’s also always willing to sell any cryptocurrency for which it has a market.
On Uniswap, there is at least one market pair for almost any token on Ethereum. Behind the scenes, this means Uniswap can make it look like it is making a direct trade for any two tokens, which makes it easy for users, but it’s all built around pools of two tokens. And all these market pairs work better with bigger pools.

Why do I keep hearing about ‘pools’?

To illustrate why more money helps, let’s break down how Uniswap works.
Let’s say there was a market for USDC and DAI. These are two tokens (both stablecoins but with different mechanisms for retaining their value) that are meant to be worth $1 each all the time, and that generally tends to be true for both.
The price Uniswap shows for each token in any pooled market pair is based on the balance of each in the pool. So, simplifying this a lot for illustration’s sake, if someone were to set up a USDC/DAI pool, they should deposit equal amounts of both. In a pool with only 2 USDC and 2 DAI it would offer a price of 1 USDC for 1 DAI. But then imagine that someone put in 1 DAI and took out 1 USDC. Then the pool would have 1 USDC and 3 DAI. The pool would be very out of whack. A savvy investor could make an easy $0.50 profit by putting in 1 USDC and receiving 1.5 DAI. That’s a 50% arbitrage profit, and that’s the problem with limited liquidity.
(Incidentally, this is why Uniswap’s prices tend to be accurate, because traders watch it for small discrepancies from the wider market and trade them away for arbitrage profits very quickly.)
Read more: Uniswap V2 Launches With More Token-Swap Pairs, Oracle Service, Flash Loans
However, if there were 500,000 USDC and 500,000 DAI in the pool, a trade of 1 DAI for 1 USDC would have a negligible impact on the relative price. That’s why liquidity is helpful.
You can stick your assets on Compound and earn a little yield. But that’s not very creative. Users who look for angles to maximize that yield: those are the yield farmers.
Similar effects hold across DeFi, so markets want more liquidity. Uniswap solves this by charging a tiny fee on every trade. It does this by shaving off a little bit from each trade and leaving that in the pool (so one DAI would actually trade for 0.997 USDC, after the fee, growing the overall pool by 0.003 USDC). This benefits liquidity providers because when someone puts liquidity in the pool they own a share of the pool. If there has been lots of trading in that pool, it has earned a lot of fees, and the value of each share will grow.
And this brings us back to tokens.
Liquidity added to Uniswap is represented by a token, not an account. So there’s no ledger saying, “Bob owns 0.000000678% of the DAI/USDC pool.” Bob just has a token in his wallet. And Bob doesn’t have to keep that token. He could sell it. Or use it in another product. We’ll circle back to this, but it helps to explain why people like to talk about DeFi products as “money Legos.”

So how much money do people make by putting money into these products?

It can be a lot more lucrative than putting money in a traditional bank, and that’s before startups started handing out governance tokens.
Compound is the current darling of this space, so let’s use it as an illustration. As of this writing, a person can put USDC into Compound and earn 2.72% on it. They can put tether (USDT) into it and earn 2.11%. Most U.S. bank accounts earn less than 0.1% these days, which is close enough to nothing.
However, there are some caveats. First, there’s a reason the interest rates are so much juicier: DeFi is a far riskier place to park your money. There’s no Federal Deposit Insurance Corporation (FDIC) protecting these funds. If there were a run on Compound, users could find themselves unable to withdraw their funds when they wanted.
Plus, the interest is quite variable. You don’t know what you’ll earn over the course of a year. USDC’s rate is high right now. It was low last week. Usually, it hovers somewhere in the 1% range.
Similarly, a user might get tempted by assets with more lucrative yields like USDT, which typically has a much higher interest rate than USDC. (Monday morning, the reverse was true, for unclear reasons; this is crypto, remember.) The trade-off here is USDT’s transparency about the real-world dollars it’s supposed to hold in a real-world bank is not nearly up to par with USDC’s. A difference in interest rates is often the market’s way of telling you the one instrument is viewed as dicier than another.
Users making big bets on these products turn to companies Opyn and Nexus Mutual to insure their positions because there’s no government protections in this nascent space – more on the ample risks later on.
So users can stick their assets in Compound or Uniswap and earn a little yield. But that’s not very creative. Users who look for angles to maximize that yield: those are the yield farmers.

OK, I already knew all of that. What is yield farming?

Broadly, yield farming is any effort to put crypto assets to work and generate the most returns possible on those assets.
At the simplest level, a yield farmer might move assets around within Compound, constantly chasing whichever pool is offering the best APY from week to week. This might mean moving into riskier pools from time to time, but a yield farmer can handle risk.
“Farming opens up new price arbs [arbitrage] that can spill over to other protocols whose tokens are in the pool,” said Maya Zehavi, a blockchain consultant.
Because these positions are tokenized, though, they can go further.
This was a brand-new kind of yield on a deposit. In fact, it was a way to earn a yield on a loan. Who has ever heard of a borrower earning a return on a debt from their lender?
In a simple example, a yield farmer might put 100,000 USDT into Compound. They will get a token back for that stake, called cUSDT. Let’s say they get 100,000 cUSDT back (the formula on Compound is crazy so it’s not 1:1 like that but it doesn’t matter for our purposes here).
They can then take that cUSDT and put it into a liquidity pool that takes cUSDT on Balancer, an AMM that allows users to set up self-rebalancing crypto index funds. In normal times, this could earn a small amount more in transaction fees. This is the basic idea of yield farming. The user looks for edge cases in the system to eke out as much yield as they can across as many products as it will work on.
Right now, however, things are not normal, and they probably won’t be for a while.

Why is yield farming so hot right now?

Because of liquidity mining. Liquidity mining supercharges yield farming.
Liquidity mining is when a yield farmer gets a new token as well as the usual return (that’s the “mining” part) in exchange for the farmer’s liquidity.
“The idea is that stimulating usage of the platform increases the value of the token, thereby creating a positive usage loop to attract users,” said Richard Ma of smart-contract auditor Quantstamp.
The yield farming examples above are only farming yield off the normal operations of different platforms. Supply liquidity to Compound or Uniswap and get a little cut of the business that runs over the protocols – very vanilla.
But Compound announced earlier this year it wanted to truly decentralize the product and it wanted to give a good amount of ownership to the people who made it popular by using it. That ownership would take the form of the COMP token.
Lest this sound too altruistic, keep in mind that the people who created it (the team and the investors) owned more than half of the equity. By giving away a healthy proportion to users, that was very likely to make it a much more popular place for lending. In turn, that would make everyone’s stake worth much more.
So, Compound announced this four-year period where the protocol would give out COMP tokens to users, a fixed amount every day until it was gone. These COMP tokens control the protocol, just as shareholders ultimately control publicly traded companies.
Every day, the Compound protocol looks at everyone who had lent money to the application and who had borrowed from it and gives them COMP proportional to their share of the day’s total business.
The results were very surprising, even to Compound’s biggest promoters.
COMP’s value will likely go down, and that’s why some investors are rushing to earn as much of it as they can right now.
This was a brand-new kind of yield on a deposit into Compound. In fact, it was a way to earn a yield on a loan, as well, which is very weird: Who has ever heard of a borrower earning a return on a debt from their lender?
COMP’s value has consistently been well over $200 since it started distributing on June 15. We did the math elsewhere but long story short: investors with fairly deep pockets can make a strong gain maximizing their daily returns in COMP. It is, in a way, free money.
It’s possible to lend to Compound, borrow from it, deposit what you borrowed and so on. This can be done multiple times and DeFi startup Instadapp even built a tool to make it as capital-efficient as possible.
“Yield farmers are extremely creative. They find ways to ‘stack’ yields and even earn multiple governance tokens at once,” said Spencer Noon of DTC Capital.
COMP’s value spike is a temporary situation. The COMP distribution will only last four years and then there won’t be any more. Further, most people agree that the high price now is driven by the low float (that is, how much COMP is actually free to trade on the market – it will never be this low again). So the value will probably gradually go down, and that’s why savvy investors are trying to earn as much as they can now.
Appealing to the speculative instincts of diehard crypto traders has proven to be a great way to increase liquidity on Compound. This fattens some pockets but also improves the user experience for all kinds of Compound users, including those who would use it whether they were going to earn COMP or not.
As usual in crypto, when entrepreneurs see something successful, they imitate it. Balancer was the next protocol to start distributing a governance token, BAL, to liquidity providers. Flash loan provider bZx has announced a plan. Ren, Curve and Synthetix also teamed up to promote a liquidity pool on Curve.
It is a fair bet many of the more well-known DeFi projects will announce some kind of coin that can be mined by providing liquidity.
The case to watch here is Uniswap versus Balancer. Balancer can do the same thing Uniswap does, but most users who want to do a quick token trade through their wallet use Uniswap. It will be interesting to see if Balancer’s BAL token convinces Uniswap’s liquidity providers to defect.
So far, though, more liquidity has gone into Uniswap since the BAL announcement, according to its data site. That said, even more has gone into Balancer.

Did liquidity mining start with COMP?

No, but it was the most-used protocol with the most carefully designed liquidity mining scheme.
This point is debated but the origins of liquidity mining probably date back to Fcoin, a Chinese exchange that created a token in 2018 that rewarded people for making trades. You won’t believe what happened next! Just kidding, you will: People just started running bots to do pointless trades with themselves to earn the token.
Similarly, EOS is a blockchain where transactions are basically free, but since nothing is really free the absence of friction was an invitation for spam. Some malicious hacker who didn’t like EOS created a token called EIDOS on the network in late 2019. It rewarded people for tons of pointless transactions and somehow got an exchange listing.
These initiatives illustrated how quickly crypto users respond to incentives.
Read more: Compound Changes COMP Distribution Rules Following ‘Yield Farming’ Frenzy
Fcoin aside, liquidity mining as we now know it first showed up on Ethereum when the marketplace for synthetic tokens, Synthetix, announced in July 2019 an award in its SNX token for users who helped add liquidity to the sETH/ETH pool on Uniswap. By October, that was one of Uniswap’s biggest pools.
When Compound Labs, the company that launched the Compound protocol, decided to create COMP, the governance token, the firm took months designing just what kind of behavior it wanted and how to incentivize it. Even still, Compound Labs was surprised by the response. It led to unintended consequences such as crowding into a previously unpopular market (lending and borrowing BAT) in order to mine as much COMP as possible.
Just last week, 115 different COMP wallet addresses – senators in Compound’s ever-changing legislature – voted to change the distribution mechanism in hopes of spreading liquidity out across the markets again.

Is there DeFi for bitcoin?

Yes, on Ethereum.
Nothing has beaten bitcoin over time for returns, but there’s one thing bitcoin can’t do on its own: create more bitcoin.
A smart trader can get in and out of bitcoin and dollars in a way that will earn them more bitcoin, but this is tedious and risky. It takes a certain kind of person.
DeFi, however, offers ways to grow one’s bitcoin holdings – though somewhat indirectly.
A long HODLer is happy to gain fresh BTC off their counterparty’s short-term win. That’s the game.
For example, a user can create a simulated bitcoin on Ethereum using BitGo’s WBTC system. They put BTC in and get the same amount back out in freshly minted WBTC. WBTC can be traded back for BTC at any time, so it tends to be worth the same as BTC.
Then the user can take that WBTC, stake it on Compound and earn a few percent each year in yield on their BTC. Odds are, the people who borrow that WBTC are probably doing it to short BTC (that is, they will sell it immediately, buy it back when the price goes down, close the loan and keep the difference).
A long HODLer is happy to gain fresh BTC off their counterparty’s short-term win. That’s the game.

How risky is it?

Enough.
“DeFi, with the combination of an assortment of digital funds, automation of key processes, and more complex incentive structures that work across protocols – each with their own rapidly changing tech and governance practices – make for new types of security risks,” said Liz Steininger of Least Authority, a crypto security auditor. “Yet, despite these risks, the high yields are undeniably attractive to draw more users.”
We’ve seen big failures in DeFi products. MakerDAO had one so bad this year it’s called “Black Thursday.” There was also the exploit against flash loan provider bZx. These things do break and when they do money gets taken.
As this sector gets more robust, we could see token holders greenlighting more ways for investors to profit from DeFi niches.
Right now, the deal is too good for certain funds to resist, so they are moving a lot of money into these protocols to liquidity mine all the new governance tokens they can. But the funds – entities that pool the resources of typically well-to-do crypto investors – are also hedging. Nexus Mutual, a DeFi insurance provider of sorts, told CoinDesk it has maxed out its available coverage on these liquidity applications. Opyn, the trustless derivatives maker, created a way to short COMP, just in case this game comes to naught.
And weird things have arisen. For example, there’s currently more DAI on Compound than have been minted in the world. This makes sense once unpacked but it still feels dicey to everyone.
That said, distributing governance tokens might make things a lot less risky for startups, at least with regard to the money cops.
“Protocols distributing their tokens to the public, meaning that there’s a new secondary listing for SAFT tokens, [gives] plausible deniability from any security accusation,” Zehavi wrote. (The Simple Agreement for Future Tokens was a legal structure favored by many token issuers during the ICO craze.)
Whether a cryptocurrency is adequately decentralized has been a key feature of ICO settlements with the U.S. Securities and Exchange Commission (SEC).

What’s next for yield farming? (A prediction)

COMP turned out to be a bit of a surprise to the DeFi world, in technical ways and others. It has inspired a wave of new thinking.
“Other projects are working on similar things,” said Nexus Mutual founder Hugh Karp. In fact, informed sources tell CoinDesk brand-new projects will launch with these models.
We might soon see more prosaic yield farming applications. For example, forms of profit-sharing that reward certain kinds of behavior.
Imagine if COMP holders decided, for example, that the protocol needed more people to put money in and leave it there longer. The community could create a proposal that shaved off a little of each token’s yield and paid that portion out only to the tokens that were older than six months. It probably wouldn’t be much, but an investor with the right time horizon and risk profile might take it into consideration before making a withdrawal.
(There are precedents for this in traditional finance: A 10-year Treasury bond normally yields more than a one-month T-bill even though they’re both backed by the full faith and credit of Uncle Sam, a 12-month certificate of deposit pays higher interest than a checking account at the same bank, and so on.)
As this sector gets more robust, its architects will come up with ever more robust ways to optimize liquidity incentives in increasingly refined ways. We could see token holders greenlighting more ways for investors to profit from DeFi niches.
Questions abound for this nascent industry: What will MakerDAO do to restore its spot as the king of DeFi? Will Uniswap join the liquidity mining trend? Will anyone stick all these governance tokens into a decentralized autonomous organization (DAO)? Or would that be a yield farmers co-op?
Whatever happens, crypto’s yield farmers will keep moving fast. Some fresh fields may open and some may soon bear much less luscious fruit.
But that’s the nice thing about farming in DeFi: It is very easy to switch fields.
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Crypto-Powered - The Most Promising Use-Cases of Decentralized Finance (DeFi)

Crypto-Powered - The Most Promising Use-Cases of Decentralized Finance (DeFi)
A whirlwind tour of Defi, paying close attention to protocols that we’re leveraging at Genesis Block.
https://reddit.com/link/hrrt21/video/cvjh5rrh12b51/player
This is the third post of Crypto-Powered — a new series that examines what it means for Genesis Block to be a digital bank that’s powered by crypto, blockchain, and decentralized protocols.
Last week we explored how building on legacy finance is a fool’s errand. The future of money belongs to those who build with crypto and blockchain at their core. We also started down the crypto rabbit hole, introducing Bitcoin, Ethereum, and DeFi (decentralized finance). That post is required reading if you hope to glean any value from the rest of this series.
97% of all activity on Ethereum in the last quarter has been DeFi-related. The total value sitting inside DeFi protocols is roughly $2B — double what it was a month ago. The explosive growth cannot be ignored. All signs suggest that Ethereum & DeFi are a Match Made in Heaven, and both on their way to finding strong product/market fit.
So in this post, we’re doing a whirlwind tour of DeFi. We look at specific examples and use-cases already in the wild and seeing strong growth. And we pay close attention to protocols that Genesis Block is integrating with. Alright, let’s dive in.

Stablecoins

Stablecoins are exactly what they sound like: cryptocurrencies that are stable. They are not meant to be volatile (like Bitcoin). These assets attempt to peg their price to some external reference (eg. USD or Gold). A non-volatile crypto asset can be incredibly useful for things like merchant payments, cross-border transfers, or storing wealth — becoming your own bank but without the stress of constant price volatility.
There are major governments and central banks that are experimenting with or soon launching their own stablecoins like China with their digital yuan and the US Federal Reserve with their digital dollar. There are also major corporations working in this area like JP Morgan with their JPM Coin, and of course Facebook with their Libra Project.
Stablecoin activity has grown 800% in the last year, with $290B of transaction volume (funds moving on-chain).
The most popular USD-pegged stablecoins include:
  1. Tether ($10B): It’s especially popular in Asia. It’s backed by USD in a bank account. But given their lack of transparency and past controversies, they generally aren’t trusted as much in the West.
  2. USDC ($1B): This is the most reputable USD-backed stablecoin, at least in the West. It was created by Coinbase & Circle, both well-regarded crypto companies. They’ve been very open and transparent with their audits and bank records.
  3. DAI ($189M): This is backed by other crypto assets — not USD in a bank account. This was arguably the first true DeFi protocol. The big benefit is that it’s more decentralized — it’s not controlled by any single organization. The downside is that the assets backing it can be volatile crypto assets (though it has mechanisms in place to mitigate that risk).
Other notable USD-backed stablecoins include PAX, TrueUSD, Binance USD, and Gemini Dollar.
tablecoins are playing an increasingly important role in the world of DeFi. In a way, they serve as common pipes & bridges between the various protocols.
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Lending & Borrowing

Three of the top five DeFi protocols relate to lending & borrowing. These popular lending protocols look very similar to traditional money markets. Users who want to earn interest/yield can deposit (lend) their funds into a pool of liquidity. Because it behaves similarly to traditional money markets, their funds are not locked, they can withdraw at any time. It’s highly liquid.
Borrowers can tap into this pool of liquidity and take out loans. Interest rates depend on the utilization rate of the pool — how much of the deposits in the pool have already been borrowed. Supply & demand. Thus, interest rates are variable and borrowers can pay their loans back at any time.
So, who decides how much a borrower can take? What’s the process like? Are there credit checks? How is credit-worthiness determined?
These protocols are decentralized, borderless, permissionless. The people participating in these markets are from all over the world. There is no simple way to verify identity or check credit history. So none of that happens.
Credit-worthiness is determined simply by how much crypto collateral the borrower puts into the protocol. For example, if a user wants to borrow $5k of USDC, then they’ll need to deposit $10k of BTC or ETH. The exact amount of collateral depends on the rules of the protocol — usually the more liquid the collateral asset, the more borrowing power the user can receive.
The most prominent lending protocols include Compound, Aave, Maker, and Atomic Loans. Recently, Compound has seen meteoric growth with the introduction of their COMP token — a token used to incentivize and reward participants of the protocol. There’s almost $1B in outstanding debt in the Compound protocol. Mainframe is also working on an exciting protocol in this area and the latest iteration of their white paper should be coming out soon.
There is very little economic risk to these protocols because all loans are overcollateralized.
I repeat, all loans are overcollateralized. If the value of the collateral depreciates significantly due to price volatility, there are sophisticated liquidation systems to ensure the loan always gets paid back.
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Investments

Buying, selling, and trading crypto assets is certainly one form of investing (though not for the faint of heart). But there are now DeFi protocols to facilitate making and managing traditional-style investments.
Through DeFi, you can invest in Gold. You can invest in stocks like Amazon and Apple. You can short Tesla. You can access the S&P 500. This is done through crypto-based synthetics — which gives users exposure to assets without needing to hold or own the underlying asset. This is all possible with protocols like UMA, Synthetix, or Market protocol.
Maybe your style of investing is more passive. With PoolTogether , you can participate in a no-loss lottery.
Maybe you’re an advanced trader and want to trade options or futures. You can do that with DeFi protocols like Convexity, Futureswap, and dYdX. Maybe you live on the wild side and trade on margin or leverage, you can do that with protocols like Fulcrum, Nuo, and DDEX. Or maybe you’re a degenerate gambler and want to bet against Trump in the upcoming election, you can do that on Augur.
And there are plenty of DeFi protocols to help with crypto investing. You could use Set Protocol if you need automated trading strategies. You could use Melonport if you’re an asset manager. You could use Balancer to automatically rebalance your portfolio.
With as little as $1, people all over the world can have access to the same investment opportunities and tools that used to be reserved for only the wealthy, or those lucky enough to be born in the right country.
You can start to imagine how services like Etrade, TD Ameritrade, Schwab, and even Robinhood could be massively disrupted by a crypto-native company that builds with these types of protocols at their foundation.
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Insurance

As mentioned in our previous post, there are near-infinite applications one can build on Ethereum. As a result, sometimes the code doesn’t work as expected. Bugs get through, it breaks. We’re still early in our industry. The tools, frameworks, and best practices are all still being established. Things can go wrong.
Sometimes the application just gets in a weird or bad state where funds can’t be recovered — like with what happened with Parity where $280M got frozen (yes, I lost some money in that). Sometimes, there are hackers who discover a vulnerability in the code and maliciously steal funds — like how dForce lost $25M a few months ago, or how The DAO lost $50M a few years ago. And sometimes the system works as designed, but the economic model behind it is flawed, so a clever user takes advantage of the system— like what recently happened with Balancer where they lost $500k.
There are a lot of risks when interacting with smart contracts and decentralized applications — especially for ones that haven’t stood the test of time. This is why insurance is such an important development in DeFi.
Insurance will be an essential component in helping this technology reach the masses.
Two protocols that are leading the way on DeFi insurance are Nexus Mutual and Opyn. Though they are both still just getting started, many people are already using them. And we’re excited to start working with them at Genesis Block.
https://preview.redd.it/wf1xvq3z12b51.png?width=700&format=png&auto=webp&s=70db1e9587f57d0c470a4f9f4523c216929e1876

Exchanges & Liquidity

Decentralized Exchanges (DEX) were one of the first and most developed categories in DeFi. A DEX allows a user to easily exchange one crypto asset for another crypto asset — but without needing to sign up for an account, verify identity, etc. It’s all via decentralized protocols.
Within the first 5 months of 2020, the top 7 DEX already achieved the 2019 trading volume. That was $2.5B. DeFi is fueling a lot of this growth.
https://preview.redd.it/1dwvq4e022b51.png?width=700&format=png&auto=webp&s=97a3d756f60239cd147031eb95fc2a981db55943
There are many different flavors of DEX. Some of the early ones included 0x, IDEX, and EtherDelta — all of which had a traditional order book model where buyers are matched with sellers.
Another flavor is the pooled liquidity approach where the price is determined algorithmically based on how much liquidity there is and how much the user wants to buy. This is known as an AMM (Automated Market Maker) — Uniswap and Bancor were early leaders here. Though lately, Balancer has seen incredible growth due mostly to their strong incentives for participation — similar to Compound.
There are some DEXs that are more specialized — for example, Curve and mStable focus mostly only stablecoins. Because of the proliferation of these decentralized exchanges, there are now aggregators that combine and connect the liquidity of many sources. Those include Kyber, Totle, 1Inch, and Dex.ag.
These decentralized exchanges are becoming more and more connected to DeFi because they provide an opportunity for yield and earning interest.
Users can earn passive income by supplying liquidity to these markets. It usually comes in the form of sharing transaction fee revenue (Uniswap) or token rewards (Balancer).
https://preview.redd.it/wrug6lg222b51.png?width=700&format=png&auto=webp&s=9c47a3f2e01426ca87d84b92c1e914db39ff773f

Payments

As it relates to making payments, much of the world is still stuck on plastic cards. We’re grateful to partner with Visa and launch the Genesis Block debit card… but we still don’t believe that's the future of payments. We see that as an important bridge between the past (legacy finance) and the future (crypto).
Our first post in this series shared more on why legacy finance is broken. We talked about the countless unnecessary middle-men on every card swipe (merchant, acquiring bank, processor, card network, issuing bank). We talked about the slow settlement times.
The future of payments will be much better. Yes, it’ll be from a mobile phone and the user experience will be similar to ApplePay (NFC) or WePay (QR Code).
But more importantly, the underlying assets being moved/exchanged will all be crypto — digital, permissionless, and open source.
Someone making a payment at the grocery store check-out line will be able to open up Genesis Block, use contactless tech or scan a QR code, and instantly pay for their goods. All using crypto. Likely a stablecoin. Settlement will be instant. All the middlemen getting their pound of flesh will be disintermediated. The merchant can make more and the user can spend less. Blockchain FTW!
Now let’s talk about a few projects working in this area. The xDai Burner Wallet experience was incredible at the ETHDenver event a few years ago, but that speed came at the expense of full decentralization (can it be censored or shut down?). Of course, Facebook’s Libra wants to become the new standard for global payments, but many are afraid to give Facebook that much control (newsflash: it isn’t very decentralized).
Bitcoin is decentralized… but it’s slow and volatile. There are strong projects like Lightning Network (Zap example) that are still trying to make it happen. Projects like Connext and OmiseGo are trying to help bring payments to Ethereum. The Flexa project is leveraging the gift card rails, which is a nice hack to leverage existing pipes. And if ETH 2.0 is as fast as they say it will be, then the future of payments could just be a stablecoin like DAI (a token on Ethereum).
In a way, being able to spend crypto on daily expenses is the holy grail of use-cases. It’s still early. It hasn’t yet been solved. But once we achieve this, then we can ultimately and finally say goodbye to the legacy banking & finance world. Employees can be paid in crypto. Employees can spend in crypto. It changes everything.
Legacy finance is hanging on by a thread, and it’s this use-case that they are still clinging to. Once solved, DeFi domination will be complete.
https://preview.redd.it/svft1ce422b51.png?width=700&format=png&auto=webp&s=9a6afc9e9339a3fec29ee2ae743c07c3042ea4ce

Impact on Genesis Block

At Genesis Block, we’re excited to leverage these protocols and take this incredible technology to the world. Many of these protocols are already deeply integrated with our product. In fact, many are essential. The masses won’t know (or care about) what Tether, USDC, or DAI is. They think in dollars, euros, pounds and pesos. So while the user sees their local currency in the app, the underlying technology is all leveraging stablecoins. It’s all on “crypto rails.”
https://preview.redd.it/jajzttr622b51.png?width=700&format=png&auto=webp&s=fcf55cea1216a1d2fcc3bf327858b009965f9bf8
When users deposit assets into their Genesis Block account, they expect to earn interest. They expect that money to grow. We leverage many of these low-risk lending/exchange DeFi protocols. We lend into decentralized money markets like Compound — where all loans are overcollateralized. Or we supply liquidity to AMM exchanges like Balancer. This allows us to earn interest and generate yield for our depositors. We’re the experts so our users don’t need to be.
We haven’t yet integrated with any of the insurance or investment protocols — but we certainly plan on it. Our infrastructure is built with blockchain technology at the heart and our system is extensible — we’re ready to add assets and protocols when we feel they are ready, safe, secure, and stable. Many of these protocols are still in the experimental phase. It’s still early.
At Genesis Block we’re excited to continue to be at the frontlines of this incredible, innovative, technological revolution called DeFi.
---
None of these powerful DeFi protocols will be replacing Robinhood, SoFi, or Venmo anytime soon. They never will. They aren’t meant to! We’ve discussed this before, these are low-level protocols that need killer applications, like Genesis Block.
So now that we’ve gone a little deeper down the rabbit hole and we’ve done this whirlwind tour of DeFi, the natural next question is: why?
Why does any of it matter?
Most of these financial services that DeFi offers already exist in the real world. So why does it need to be on a blockchain? Why does it need to be decentralized? What new value is unlocked? Next post, we answer these important questions.
To look at more projects in DeFi, check out DeFi Prime, DeFi Pulse, or Consensys.
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Other Ways to Consume Today's Episode:
Follow our social channels:https://genesisblock.com/follow/
Download the app. We're a digital bank that's powered by crypto:https://genesisblock.com/download
submitted by mickhagen to genesisblockhq [link] [comments]

UNSUBSTANTIATED RUMOUR: I'm hearing reports from normally reliable contacts that there are serious problems with the bitcon.com mining operation, and hackers are involved. Bitcon.com customers getting pissed. They're not mining on BTC or BCH. Looks like it's all over.

LOL. Any comment Salty Roger? MemoryDealers ?
Last block mined on BTC: 583242 (2 days ago)
Last block mined on BCH: 589572 (22 hours ago)
Apparently Emil Oldenburg has gone missing after publicly arguing with Roger, and Shaun Chong has been fired and for now Hans Engren is trying to fix things - and until we see any Proof of Work (i.e. mined blocks) from Bitcon.com it is obvious he is failing, and the hackers are in charge.
This is not a ransom attempt apparently - this is a seek/destroy takedown. All their office computers are down too!
UPDATE
Japan is getting this news right now How long for China?
UPDATE #2 2019-07-03 11:55 UTC
I've been provided with some technical details and it all makes sense:-
Of course /npc is quiet about all of this because of fear, uncertainty, doubt.. no not FUD about this news, but FUD about being banned for speaking against them or questioning the truth or their narratives in the "uncensored subreddit"
UPDATE #3 2019-07-03 13:16 UTC
cash.coin.dance really does need to fix its pie chart code. bitcoin.com still appears there in "blocks mined today" piechart however it's been over 26 hours now since last block mined on BAB.
Please anon sending me messaging stating: "Roger is 51% attacking his own chain as Unknown Miner to double-spend the 3 million BAB he is moving". Don't spread FUD. We know due to centralisation and checkpointing that it's impossible to do this so easily. I have 2 sources who I communicate with daily who are giving me all this info. More news to come, but I want to wait for some sort of signal.
There is now a thread of discussion on /npc will be nice to see how they deny/ignore this one, however attempts have already been made and corrected. Remember BLOCKCHAIN = TRUTH.
UPDATE #4 2019-07-03 14:00 UTC
About those 3 million BAB that moved across the chain.... hmmmmm.... what if Roger moved it, but didn't move it to where he expected, now knows it didn't go where he thought he sent it, and has additional problem of not being able to rollback the blockchain due to "checkpoints" after 10 blocks as other miners are mining including "Unknown Miner" ;) Miner collusion impossible if "Unknown Miner" says "NO". Do we get another emergency ABC release?
C'mon Roger - time to speak out and inform especially those people who idolise you on /npc. Nobody will blame you, easy errors to make. Blame Emil - he hired guy who setup the VPN.
UPDATE #5 2019-07-03 14:18 UTC
Finally coin.dance have fixed their piechart code! Now it's easy for all to see... where is bitcoin.com ?
OK I have been told I'm going to receive documentary evidence about all that has happened around 17:00hs UTC. They've told me they'd rather Roger be straight with his followers in the meantime, but hey - we all know Roger!
UPDATE #6 2019-07-04 05:12 UTC
I fell asleep watching coin.dance waiting for BTC block, sorry folks. I thought my contacts were late due to "variance" in their rendezvous time but no. They told me "will update at 5" and I presumed 17:00. Nope, it's 05:00. They've told me to watch the blockchain for clues, they realise best way to catch out Roger is to produce a series of events, and watch his social media reaction. We've already seen the "everything is OK" narrative at /npc as a block (589720) magically appeared after 26 hours on the BAB chain. In fact things were so good that David Shares was forced to make "dupe post" about it. If David Shares had been a user making a dupe post about a "bad topic" he'd of been banned by David Shares. We've got evidence logs of him banning 3 people in past few weeks just for making duplicate posts on the "we don't censor" subreddit.
Let's examine the blockchain, cause according to /npc "everything is OK".
Number of BTC blocks mined by bitcoin.com since this post was made: 0
Number of BAB blocks mined by bitcoin.com since this post was made: 3 (some are calling these "virtue signalling blocks", and it's a lot cheaper to virtue signal with BAB).
Last BTC block mined is still 583242 (2019-07-01 01:01:38). That's 76 hours without block.
Last BCH blocks mined:-
10 hour gap.
589747
589736
589720
26 hour gap. This post was made.
589572
589520
589487
589479
589442
If you think 3 BAB blocks in 36 hours is OK then I have a SHA257 (that's 1 better than a 256 model) miner to sell you.
"jim-btc we will update within 24 hours. Watch the blockchain. We repeat watch the blockchain". Roger that my secret contacts, thanks!
UPDATE #7 2019-07-04 10:24
I've posted all the block times for both BTC & BAB so you can see this "variance" lie is not going to work for very long.
This is NOT financial advise
If you have BAB - dump that shit faster than a smelly diaper... it's obvious to all except those trapped in the BAB BABble bubble that something really stinks!
submitted by jim-btc to bitcoincashSV [link] [comments]

Electroneum Blockchain Upgrade FAQ

FREQUENTLY ASKED QUESTIONS
ELECTRONEUM’S MODERATED BLOCKCHAIN
Q: What is a Moderated Blockchain?
A: Electroneum’s new Moderated Blockchain (a type of permissioned blockchain that is at the qualitative level of IBM’s Hyperledger or Facebook’s announced Libra open ledger network) that has been uniquely and cleverly developed to provide Electroneum with a minimal but sufficient level of interference. This will allow the highly skilled engineering staff to supervise the distributed ledger which is maintained by a list of trusted validators. And this allows the tech team to detect anomalies or irregularities that could come from hackers attempting to breach our security, and immediately stop them preventing a double-spend or 51% attack. Because Electroneum controls the list of trusted validators, this empowers them to guarantee, and that is similar to IBM’s hyper ledger or that of Facebook’s Libra blockchain.
Q: Why did you move to a Moderated Blockchain?
A: To improve the functionality of Electroneum at the exchanges, allowing them to confirm deposit transactions faster and to protect the network from 51% attacks, and also Electroneum can decide to where the block rewards are rerouted ensuring that they are used to help improve the lives of the poorer in underdeveloped countries.
Q: What is the role of blockchain in a permissioned network?
A: It is essentially an immutable history of financial transactions. Electroneum’s Moderated Blockchain, which is a type of permissioned blockchain, unlike other decentralised cryptocurrency networks, can guarantee a tamper-proof system of transactional records.
Q: What motivation would someone have to trade on a permissioned blockchain when their transaction could get rolled back, or worse still, never get confirmed?
A: With Electroneum’s new Moderated Blockchain reorganisations can still occur but never will an irregular transaction actually be fully confirmed and then overwritten.
Q: Is there any risk of manipulation with a moderated blockchain?
A: There is a risk of manipulation if an authenticator key is leaked. However, the extent would be negligible and therefore not affect users, exchanges or miners. We developed a system to closely monitor the behaviour of both the network and miners to ensure any foul play is immediately crushed.
Q: How is Electroneum’s Moderated Blockchain different to other decentralised blockchains?
A: We have the authority to decide who mines the blocks and therefore, we can increase the likelihood that they are trusted validators.
Q: Why doesn’t Electroneum move to a fully centralised blockchain?
A: Our unique and cleverly created Moderated Blockchain is meant to have minimal interference to remove the risks and add protection whilst remaining decentralised to the point wherein the unlikely event that a meteor was to wipe out all of the Electroneum staff out of the face of the Earth by a meteor, ETN would not cease to exist. This because those nodes currently mining our blockchain or anybody else for that fact could swap out the codes and fork the network to take over control and guarantee the permanence of the cryptocurrency thus shielding our users from losses.
Q: What is Proof of Responsibility or PoR?
A: Proof of Responsibility, or PoR for short, is a new mining paradigm which obligates the miners to two primary responsibilities which are: 1) Maintain the integrity of the payment network, and 2) Spend the block rewards they receive responsibly to help poor people in line with Electroneum’s humanitarian agenda.
Q: How does PoR compare to PoW or Proof of Work?
A: PoR saves a lot of time and energy compared to PoW because instead of working with block validators overtime to prove or not that they’re reliable miners, we save time and potential adverse issues by hand-picking the miners ourselves.
SECURITY AND 51% ATTACKS OR DOUBLE SPENDS
Q: What is a 51% attack?
A: It is when someone takes over 50% control of the hashing power of a cryptocurrency. Hackers usually use this to benefit themselves with double spends, which is a hard loss for the exchanges as well as users in many cases.
Q: What IS an example of a 51% attack?
A: You may know 51% attacks better from both Bitcoin Cash in 2018 and Ethereum Classic in 2019, where hackers acquired more than 50 percent of the hashing power on those networks and getting away with a significant loot.
Q: What is hashing power?
A: This is the rate with which the mining rigs solve mathematical problems.
Q: Why doesn’t Electroneum require large amounts of hashing power anymore?
A: The Electroneum network difficulty automatically adjusts to maintain the target block time of two minutes. Regardless of the magnitude of the hashing power in Electroneum’s network will be kept to a two-minute target block time.
Q: Is Electroneum now insusceptible to a 51% attack?
A: We’re no longer susceptible to a 51% attack – making us one of the most secure blockchains in existence today.
Q: What if someone hack one authenticated miner?
A: In the unlikely event that hackers were to succeed in breaching the security of an authenticated miner, the authentication key of that miner would not be accessible to the hacker in itself because of the unique way our blockchain team has come up to shield it from being discovered. The hacker, therefore, would not be able to affect the network because they would be unable to mine sequential blocks. And because of the uniqueness of the Moderated Blockchain, our moderating network layer would immediately detect the breach and rescind the rights of that miner.
Q: What if two or more hacks?
A: If one hack is highly unlikely due to two security breaches being necessary, two hacks are exponentially harder to achieve. But if it were to happen, the keys they may have stolen limit the hash rate of the miner. This means that if somebody were to take the code and run it on the highest-powered mining machine, it would still produce the same hash rate as it would in the lowest powered mining rig making it impossible for them to control over 50% of the network’s hash rate because of the way our Moderated Blockchain is set up. This also ensures the NGOs can run an Electroneum mining node on hardware with which their tech teams are familiar.
Q: How do you judge how responsible the miners are?
A: We look at how many blocks they are mining compared to how many blocks they are expected to mine going by the hashing power allotted to them.
Q: What happens after a mining node has been shut off?
A: Simply, it stops mining and needs to be restarted and then retype or re-enter the authentication key.
NEW TRUSTED MINERS
Q: Who are the miners?
A: We have chosen vocational NGOs as trusted mining partners who are also trustworthy organisations. We have done due diligence to ensure they are transparent, honest, and aligned with our vision to work within the developing world. We have made sure that they also want to accompany us in our goal to expand our Gig Fair project, which is aimed at helping provide people in the poorest regions of the world with an income opportunity and the opportunity to attain skills and means to generate an income that will empower them to live better. The NGOs that we’ve selected are trusted brands that have proven track records in helping people. Cryptocurrency is at its early stages and is met with skepticism by many people and entities around the world as well as in the developing world. So, our mission is to educate these NGOs about cryptocurrency so that they can, in turn, convey the message of the benefits of crypto, particularly ETN, to people in the developing world and make them feel more confident to use crypto, which ultimately will help spur crypto’s mass adoption.
Q: Why are these NGOs anonymous (initially)?
A: Because they themselves have decided to remain anonymous over concerns of how cryptocurrency could reflect on their organisations.
Q: What do NGOs do for the project?
A: They validate the blocks and rewarded for this and take the proceeds to help people?
Q: Where are the NGO’s and Charities located?
A: For now, locations of the NGOs are being kept undisclosed for security reasons until they themselves decide they if they want to make public that information.
Q: Five million ETN or about $22,500 at the then valuation was paid out daily before. How much is being paid out now?
A: Because the block rewards have been reduced by a whopping 75% creating scarcity which is a good thing to extend longevity, currently just over 1.2 million ETN or about $5,300 is being paid out in block rewards.
Q: Can we see who is mining and how much they are mining?
A: The block rewards will still be visible on the blockchain explorer and those with sufficient technical knowledge will be able to see the different miners signing blocks with different mining keys. But Electroneum is not forcing the NGOs to reveal their identities because they are still going through a learning curve and when they understand crypto and experience the benefits first-hand, they will more than likely reveal themselves.
Q: Where are their mining rigs stored?
A: We have suggested that mining rigs be run in the cloud to ensure uptime; however, ultimately, it is up to the NGOs themselves decide where their equipment is hosted. It is essential to point out that we have reduced energy and hash rates by a millionfold as such a standard rack-mounted server that you would find in any business today is sufficient to run an Electroneum mining node.
Q: Who setup their mining rigs?
A: At this stage, all mining rigs have been set up by the Electroneum team as this is the first foray for NGOs into the cryptocurrency mining space.
Q: Who is managing their mining rigs?
A: The mining rigs are self-sufficient and need very little if any, technical support, however, a moderator layer monitors the new Moderated Blockchain to ensure the mining rigs are online and benefit the network. If we were to detect a mining rig going offline, we would inform the NGO and provide assistance where required.
Q: How will NGOs use their ETN (from mining blocks)?
A: The NGOs, initially, almost certainly convert the ETN to USD or other currencies because they have always used fiat to deliver their donations and assistance because that is what they are used to doing. Once they see the benefits and value of ETN they may start using it on the ground to amongst the people they help. We have deliberately targeted NGOs that are in regions that were we are imminent to enable airtime top-ups directly with ETN from within the Electroneum mobile app.
FUTURE PROGRESS & CORPORATE PARTNERSHIPS
Q: How will this initiative affect corporate partnerships moving forward?
A: Because the network is more secure, Electroneum as a platform will be more attractive as a platform in the eyes of potential partners.
Q: How will it help to grow our on-the-ground initiatives?
A: The NGO’s we’re working with will be in the regions we’re targeting on the ground. So, this will be contributing to the eco-system, the NGO’s will be able to spend their ETN on education through the Gig Economy too.
Q: Can new NGOs apply to mine?
A: I If you know or are an NGO that focuses on vocational training and education, and that it is within the developing world, then we would love to hear from you via our community forum.
Q: How will the 75% reduction in the block reward benefit the community?
A: Reducing the block rewards means ETN ‘s expands the longevity of the coin by making ETN scarcer and thus lengthening the duration of the emission of coins.
submitted by xterest27 to Electroneum [link] [comments]

Decred Journal — May 2018

Note: New Reddit look may not highlight links. See old look here. A copy is hosted on GitHub for better reading experience. Check it out, contains photo of the month! Also on Medium

Development

dcrd: Significant optimization in signature hash calculation, bloom filters support was removed, 2x faster startup thanks to in-memory full block index, multipeer work advancing, stronger protection against majority hashpower attacks. Additionally, code refactoring and cleanup, code and test infrastructure improvements.
In dcrd and dcrwallet developers have been experimenting with new modular dependency and versioning schemes using vgo. @orthomind is seeking feedback for his work on reproducible builds.
Decrediton: 1.2.1 bugfix release, work on SPV has started, chart additions are in progress. Further simplification of the staking process is in the pipeline (slack).
Politeia: new command line tool to interact with Politeia API, general development is ongoing. Help with testing will soon be welcome: this issue sets out a test plan, join #politeia to follow progress and participate in testing.
dcrdata: work ongoing on improved design, adding more charts and improving Insight API support.
Android: design work advancing.
Decred's own DNS seeder (dcrseeder) was released. It is written in Go and it properly supports service bit filtering, which will allow SPV nodes to find full nodes that support compact filters.
Ticket splitting service by @matheusd entered beta and demonstrated an 11-way split on mainnet. Help with testing is much appreciated, please join #ticket_splitting to participate in splits, but check this doc to learn about the risks. Reddit discussion here.
Trezor support is expected to land in their next firmware update.
Decred is now supported by Riemann, a toolbox from James Prestwich to construct transactions for many UTXO-based chains from human-readable strings.
Atomic swap with Ethereum on testnet was demonstrated at Blockspot Conference LATAM.
Two new faces were added to contributors page.
Dev activity stats for May: 238 active PRs, 195 master commits, 32,831 added and 22,280 deleted lines spread across 8 repositories. Contributions came from 4-10 developers per repository. (chart)

Network

Hashrate: rapid growth from ~4,000 TH/s at the beginning of the month to ~15,000 at the end with new all time high of 17,949. Interesting dynamic in hashrate distribution across mining pools: coinmine.pl share went down from 55% to 25% while F2Pool up from 2% to 44%. [Note: as of June 6, the hashrate continues to rise and has already passed 22,000 TH/s]
Staking: 30-day average ticket price is 91.3 DCR (+0.8), stake participation is 46.9% (+0.8%) with 3.68 million DCR locked (+0.15). Min price was 85.56. On May 11 ticket price surged to 96.99, staying elevated for longer than usual after such a pump. Locked DCR peaked at 47.17%. jet_user on reddit suggested that the DCR for these tickets likely came from a miner with significant hashrate.
Nodes: there are 226 public listening and 405 normal nodes per dcred.eu. Version distribution: 45% on v1.2.0 (up from 24% last month), 39% on v1.1.2, 15% on v1.1.0 and 1% running outdaded versions.

ASICs

Obelisk team posted an update. Current hashrate estimate of DCR1 is 1200 GH/s at 500 W and may still change. The chips came back at 40% the speed of the simulated results, it is still unknown why. Batch 1 units may get delayed 1-2 weeks past June 30. See discussions on decred and on siacoin.
@SiaBillionaire estimated that 7940 DCR1 units were sold in Batches 1-5, while Lynmar13 shared his projections of DCR1 profitability (reddit).
A new Chinese miner for pre-order was noticed by our Telegram group. Woodpecker WB2 specs 1.5 TH/s at 1200 W, costs 15,000 CNY (~2,340 USD) and the initial 150 units are expected to ship on Aug 15. (pow8.comtranslated)
Another new miner is iBelink DSM6T: 6 TH/s at 2100 W costing $6,300 (ibelink.co). Shipping starts from June 5. Some concerns and links were posted in these two threads.

Integrations

A new mining pool is available now: altpool.net. It uses PPLNS model and takes 1% fee.
Another infrastructure addition is tokensmart.io, a newly audited stake pool with 0.8% fee. There are a total of 14 stake pools now.
Exchange integrations:
OpenBazaar released an update that allows one to trade cryptocurrencies, including DCR.
@i2Rav from i2trading is now offering two sided OTC market liquidity on DCUSD in #trading channel.
Paytomat, payments solution for point of sale and e-commerce, integrated Decred. (missed in April issue)
CoinPayments, a payment processor supporting Decred, developed an integration with @Shopify that allows connected merchants to accept cryptocurrencies in exchange for goods.

Adoption

New merchants:
An update from VotoLegal:
michae2xl: Voto Legal: CEO Thiago Rondon of Appcívico, has already been contacted by 800 politicians and negotiations have started with four pre-candidates for the presidency (slack, source tweet)
Blockfolio rolled out Signal Beta with Decred in the list. Users who own or watch a coin will automatically receive updates pushed by project teams. Nice to see this Journal made it to the screenshot!
Placeholder Ventures announced that Decred is their first public investment. Their Investment Thesis is a clear and well researched overview of Decred. Among other great points it noted the less obvious benefit of not doing an ICO:
By choosing not to pre-sell coins to speculators, the financial rewards from Decred’s growth most favor those who work for the network.
Alex Evans, a cryptoeconomics researcher who recently joined Placeholder, posted his 13-page Decred Network Analysis.

Marketing

@Dustorf published March–April survey results (pdf). It analyzes 166 responses and has lots of interesting data. Just an example:
"I own DECRED because I saw a YouTube video with DECRED Jesus and after seeing it I was sold."
May targeted advertising report released. Reach @timhebel for full version.
PiedPiperCoin hired our advisors.
More creative promos by @jackliv3r: Contributing, Stake Now, The Splitting, Forbidden Exchange, Atomic Swaps.
Reminder: Stakey has his own Twitter account where he tweets about his antics and pours scorn on the holders of expired tickets.
"Autonomy" coin sculpture is available at sigmasixdesign.com.

Events

BitConf in Sao Paulo, Brazil. Jake Yocom-Piatt presented "Decentralized Central Banking". Note the mini stakey on one of the photos. (articletranslated, photos: 1 2 album)
Wicked Crypto Meetup in Warsaw, Poland. (video, photos: 1 2)
Decred Polska Meetup in Katowice, Poland. First known Decred Cake. (photos: 1 2)
Austin Hispanic Hackers Meetup in Austin, USA.
Consensus 2018 in New York, USA. See videos in the Media section. Select photos: booth, escort, crew, moon boots, giant stakey. Many other photos and mentions were posted on Twitter. One tweet summarized Decred pretty well:
One project that stands out at #Consensus2018 is @decredproject. Not annoying. Real tech. Humble team. #BUIDL is strong with them. (@PallerJohn)
Token Summit in New York, USA. @cburniske and @jmonegro from Placeholder talked "Governance and Cryptoeconomics" and spoke highly of Decred. (twitter coverage: 1 2, video, video (from 32 min))
Campus Party in Bahia, Brazil. João Ferreira aka @girino and Gabriel @Rhama were introducing Decred, talking about governance and teaching to perform atomic swaps. (photos)
Decred was introduced to the delegates from Shanghai's Caohejing Hi-Tech Park, organized by @ybfventures.
Second Decred meetup in Hangzhou, China. (photos)
Madison Blockchain in Madison, USA. "Lots of in-depth questions. The Q&A lasted longer than the presentation!". (photo)
Blockspot Conference Latam in Sao Paulo, Brazil. (photos: 1, 2)
Upcoming events:
There is a community initiative by @vj to organize information related to events in a repository. Jump in #event_planning channel to contribute.

Media

Decred scored B (top 3) in Weiss Ratings and A- (top 8) in Darpal Rating.
Chinese institute is developing another rating system for blockchains. First round included Decred (translated). Upon release Decred ranked 26. For context, Bitcoin ranked 13.
Articles:
Audios:
Videos:

Community Discussions

Community stats: Twitter 39,118 (+742), Reddit 8,167 (+277), Slack 5,658 (+160). Difference is between May 5 and May 31.
Reddit highlights: transparent up/down voting on Politeia, combining LN and atomic swaps, minimum viable superorganism, the controversial debate on Decred contractor model (people wondered about true motives behind the thread), tx size and fees discussion, hard moderation case, impact of ASICs on price, another "Why Decred?" thread with another excellent pitch by solar, fee analysis showing how ticket price algorithm change was controversial with ~100x cut in miner profits, impact of ticket splitting on ticket price, recommendations on promoting Decred, security against double spends and custom voting policies.
@R3VoLuT1OneR posted a preview of a proposal from his company for Decred to offer scholarships for students.
dcrtrader gained a couple of new moderators, weekly automatic threads were reconfigured to monthly and empty threads were removed. Currently most trading talk happens on #trading and some leaks to decred. A separate trading sub offers some advantages: unlimited trading talk, broad range of allowed topics, free speech and transparent moderation, in addition to standard reddit threaded discussion, permanent history and search.
Forum: potential social attacks on Decred.
Slack: the #governance channel created last month has seen many intelligent conversations on topics including: finite attention of decision makers, why stakeholders can make good decisions (opposed to a common narrative than only developers are capable of making good decisions), proposal funding and contractor pre-qualification, Cardano and Dash treasuries, quadratic voting, equality of outcome vs equality of opportunity, and much more.
One particularly important issue being discussed is the growing number of posts arguing that on-chain governance and coin voting is bad. Just a few examples from Twitter: Decred is solving an imagined problem (decent response by @jm_buirski), we convince ourselves that we need governance and ticket price algo vote was not controversial, on-chain governance hurts node operators and it is too early for it, it robs node operators of their role, crypto risks being captured by the wealthy, it is a huge threat to the whole public blockchain space, coin holders should not own the blockchain.
Some responses were posted here and here on Twitter, as well as this article by Noah Pierau.

Markets

The month of May has seen Decred earn some much deserved attention in the markets. DCR started the month around 0.009 BTC and finished around 0.0125 with interim high of 0.0165 on Bittrex. In USD terms it started around $81 and finished around $92, temporarily rising to $118. During a period in which most altcoins suffered, Decred has performed well; rising from rank #45 to #30 on Coinmarketcap.
The addition of a much awaited KRW pair on Upbit saw the price briefly double on some exchanges. This pair opens up direct DCR to fiat trading in one of the largest cryptocurrency markets in the world.
An update from @i2Rav:
We have begun trading DCR in large volume daily. The interest around DCR has really started to grow in terms of OTC quote requests. More and more customers are asking about trading it.
Like in previous month, Decred scores high by "% down from ATH" indicator being #2 on onchainfx as of June 6.

Relevant External

David Vorick (@taek) published lots of insights into the world of ASIC manufacturing (reddit). Bitmain replied.
Bitmain released an ASIC for Equihash (archived), an algorithm thought to be somewhat ASIC-resistant 2 years ago.
Three pure PoW coins were attacked this month, one attempting to be ASIC resistant. This shows the importance of Decred's PoS layer that exerts control over miners and allows Decred to welcome ASIC miners for more PoW security without sacrificing sovereignty to them.
Upbit was raided over suspected fraud and put under investigation. Following news reported no illicit activity was found and suggested and raid was premature and damaged trust in local exchanges.
Circle, the new owner of Poloniex, announced a USD-backed stablecoin and Bitmain partnership. The plan is to make USDC available as a primary market on Poloniex. More details in the FAQ.
Poloniex announced lower trading fees.
Bittrex plans to offer USD trading pairs.
@sumiflow made good progress on correcting Decred market cap on several sites:
speaking of market cap, I got it corrected on coingecko, cryptocompare, and worldcoinindex onchainfx, livecoinwatch, and cryptoindex.co said they would update it about a month ago but haven't yet I messaged coinlib.io today but haven't got a response yet coinmarketcap refused to correct it until they can verify certain funds have moved from dev wallets which is most likely forever unknowable (slack)

About This Issue

Some source links point to Slack messages. Although Slack hides history older than ~5 days, you can read individual messages if you paste the message link into chat with yourself. Digging the full conversation is hard but possible. The history of all channels bridged to Matrix is saved in Matrix. Therefore it is possible to dig history in Matrix if you know the timestamp of the first message. Slack links encode the timestamp: https://decred.slack.com/archives/C5H9Z63AA/p1525528370000062 => 1525528370 => 2018-05-05 13:52:50.
Most information from third parties is relayed directly from source after a minimal sanity check. The authors of Decred Journal have no ability to verify all claims. Please beware of scams and do your own research.
Your feedback is precious. You can post on GitHub, comment on Reddit or message us in #writers_room channel.
Credits (Slack names, alphabetical order): bee, Richard-Red, snr01 and solar.
submitted by jet_user to decred [link] [comments]

Bitcoin Trading vs Investing In Bitcoin: How To Squeeze Better Returns?

Some commentators believe that many of today’s coins will die off, but those that survive - including bitcoin, of course - will transform the world in a similar way that Amazon did when it emerged from the dot-com bubble in 2001.
This year, the cryptocurrency market has achieved some spectacular milestones. The value of bitcoin has risen to all-time highs, hitting $11,599, while ether struck a new all-time high price of $482,81.
There has never been a better time for savvy traders, investors and speculators to grab a piece of this ever-growing pie. In this article, we are exploring the benefits and risks of investing in and trading bitcoin.
Bitcoin trading vs Investing in bitcoin
If you’re expecting to hear a straightforward answer on which option is better, we’ll have to disappoint you. The choice will mostly depend on your knowledge about bitcoin and the available capital and assets. But we can take a closer look at these money-making strategies individually and unpack their benefits and risks to help you make the decision.
Bitcoin trading: a quick evaluation of risks and benefits
Unlike the traditional stock markets, bitcoin trading never stops; it’s a 24/7 affair. As there is no official bitcoin exchange, there is no official bitcoin price either. If you give it a go, you will find that typically, most exchanges stick to the same price range. However, an adventurous trader can spend hours tracking prices on different exchanges and waiting for the golden opportunity to pounce.
Buyers and investors often approach bitcoin with caution due to its infamous volatility. The price movements are so frequent that the value of bitcoin can sometimes change several times throughout the day. Traders, on the other hand, take this as yet another opportunity to earn a quick profit.
In general, bitcoin trading is a rather nerve-racking experience, and bitcoin traders are known to be price-sensitive, abandoning the market the moment it becomes unprofitable. They are often likened to professional gamblers -- to stay abreast with the market movements and win big, they must act quickly, have in-depth knowledge and, most importantly, know when it’s time to go all in or leave the game.
Typically, bitcoin trading is riskier than investing due to the volatile nature of the currency. Additionally, there are other novice mistakes that can hurt inexperienced bitcoin traders. The most notable one is keeping the crypto coins in an exchange wallet. While it is natural to assume that these wallets were built for exactly that purpose and can considerably improve the experience of trading, they are not the safest option. There’s always a risk of losing your crypto coins to hackers and in case the exchange goes bust.
Bitcoin investment: a quick evaluation of risks and benefits
For the average person, the best and simplest way to invest in bitcoin is to buy and hold. While historically the bitcoin market has experienced some extreme ups and downs, investors who held onto their coins are reaping the rewards today. Compared to bitcoin trading, investing is more of a long-haul game. Even if you start from minuscule amounts, stick to your investment strategy and don’t give up your investment regardless of the price volatility.
For more experienced investors, building a well-diversified portfolio of crypto assets is key. Like in “real-life investing”, putting all your eggs in one basket will likely result in a loss. You should never invest under pressure or give in to the market hype. Successful investing rests on your ability to embrace the speed of change before it transforms the market.
One of the hottest crypto investment tactics at the moment is funding blockchain-based projects through ICO token sales. For investors who have a bit of knowledge and are willing to take a risk, ICOs provide a unique opportunity to achieve colossal returns.
Fast Invest will also hold its first ICO in December. As a fintech company, we are extremely excited about the innovation and the transformative impact spawned by the blockchain technology. We will expand our platform’s infrastructure on the decentralized Ethereum blockchain technology to be able to offer a full spectrum of crypto services geared towards the investment sector. Our token holders will have exclusive access to crypto-wealth management platform that will streamline their crypto investing experience.
Crypto investing must be approached with the same business mindset as the traditional markets, including a robust risk mitigation plan.
Trading vs Investing in bitcoin
As you can see, both options have their pros and cons. What is less obvious but what you certainly need to take into consideration is your character and nature. For you to stay interested in and excited about the crypto market, you need to get a kick out of playing with it.
Things to know before investing in bitcoin
Since the beginning of the year, the price of bitcoin has gone from roughly $965 to $10,400, a gain of more than 1000%. The combined market capitalization of all the world’s cryptocurrencies, including other major players like ether and Ripple, has rocketed even faster this year.
This growth is pushing curious investors to not only learn more about crypto assets but to finally have a crack at it. Here’s what you should consider before investing in bitcoin.
Will bitcoin retain its leader position?
So far, everyone believes that the value of bitcoin will continue to increase, as the supply of coins slows and it remains the predominant cryptocurrency in the world. But is it really the case? Currently, the aggregate value of all cryptocurrencies is over $200 billion, with bitcoin market cap at a record-high of more than $120 billion. The second biggest cryptocurrency, ether, has a market cap of nearly $30 billion, with another 1000 or so rival coins making up the rest of the $200 billion. While bitcoin still demands more than half of the total market capitalisation, the question is whether it will manage to compete against the growing number of new digital tokens issued by emerging companies?
There is a real possibility for another player to up-end the “the mother of all cryptocurrencies” in the future. So perhaps, instead of blindly trusting the future dominance of bitcoin, you should diversify your crypto asset portfolio and keep your finger on the market’s pulse to spot the dark horse in the early days.
Some general pointers for buying and holding bitcoin
6 must-know bitcoin trading tips
Learn the top cryptocurrencies
Although bitcoin is the strongest and most popular digital currency, other virtual currencies are starting to eat into its market share. It’s a good idea to know the frontrunners of the “altcoin” scene, too. Expanding your trading portfolio will add more meat to the bone, and that’s what you need to succeed.
Follow the bitcoin news
It doesn’t just mean read a few articles now and then. Staying up-to-date with the most important, trending articles should be a daily task. Make a list of the best crypto blogs and news sites, and ensure you follow the hot topics and discussions to pick up on new trends and brewing changes.
Set goals for each trade
Setting goals for each trade help traders stay focused even during the periods of extreme volatility. All you need to do is determine what price to cash out your profits or cut losses in advance. This simple psychological trick will prevent trading decisions based purely on emotions. Emotional trading clouds a trader’s thinking and can enhance their greed when they experience euphoria or intensify despondency when the market crashes.
Know your charts
It is critical for a bitcoin trader to have at least the basic understanding of chart reading. Without this skill, identifying market trends will be very, very difficult. Bitcoin Wisdom is the most widely used bitcoin charting tool that you can have a look before trading on the market.
Don’t set your stop-losses too low
A stop-loss is an automated trigger designed to limit your loss in a short-sale position. Once the crypto coins reach a certain price, it automatically liquidates your assets reducing potential losses. It is definitely a tool you want to look into before hitting the market.
Know when to scale out
As the well-known speculator Jesse Livermore once said:
“Nobody can catch all the fluctuations. In a bull market your game is to buy and hold until you believe that the bull market is near its end. To do this you must study general conditions and not tips or special factors affecting individual stocks. Then get out of all your stocks; get out for keeps! You have to use your brains and your vision to do this; otherwise my advice would be as idiotic as to tell you to buy cheap and sell dear. One of the most helpful things that anybody can learn is to give up trying to catch the last eighth-or the first. These two are the most expensive eighths in the world.”
submitted by FASTINVEST_COM to u/FASTINVEST_COM [link] [comments]

Collapse Daily Links

Julian Assange Told Young Catalans What Chat Apps To Use To Avoid Spanish Authorities (The Buzzfeed)
https://www.buzzfeed.com/ryanhatesthis/the-story-of-the-catalan-independence-vote-in-spain-for-now
App Data: Water Balance Changing Over Time (livingatlas.arcgis.com) : Total geekazoid coolness.
https://livingatlas.arcgis.com/waterbalance/
The water under Colorado’s Eastern Plains is running dry as farmers keep irrigating “great American desert” (denverpost.com)
http://www.denverpost.com/2017/10/08/colorado-eastern-plains-groundwater-running-dry/
South Australia's criminal water theft in the Murray-Darling Basin (abc.net.au)
http://www.abc.net.au/news/rural/2017-10-09/murray-darling-basin-states-bump-heads-as-sa-government-defends/9030434
Pollution from ships is changing maritime weather (economist.com)
https://www.economist.com/news/science-and-technology/21729974-lighting-strikes-are-double-average-shipping-lanes-pollution-ships
A War Plan Orange For Climate Change (US Naval Institute)
https://www.usni.org/magazines/proceedings/2017-10/war-plan-orange-climate-change
Hidden cost of feeding grain to farm animals to hit $1.32tn a year (theguardian.com)
https://www.theguardian.com/environment/2017/oct/07/feeding-grain-to-farm-animals-wastes-more-than-1bn-a-year-data-shows
According To Science, This Is How To Talk To Friends & Family About Climate Change(cleantechnica.com) : Hahahaha. Good luck with that.
http://cleantechnica.com/2017/10/08/according-science-talk-friends-family-climate-change/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+IM-cleantechnica+%28CleanTechnica%29
Pollution, drought, and climate issues the world over (irishexaminer.com)
http://www.irishexaminer.com/ireland/paying-for-water-services-pollution-drought-and-climate-issues-the-world-over-460563.html
The strong global impact of ageing populations and climate change (thestar.com.my)
http://www.thestar.com.my/business/business-news/2017/10/09/the-strong-global-impact-of-ageing-populations-and-climate-change/
European countries spend billions a year on fossil fuel subsidies, survey shows (theguardian.com)
https://www.theguardian.com/environment/2017/sep/28/european-countries-spend-billions-a-year-on-fossil-fuel-subsidies-survey-shows?utm_source=ODI+email+services&utm_campaign=820ba9a36d-ODI_newsletter_7_September_2017&utm_medium=email&utm_term=0_bb7fadfa38-820ba9a36d-76515261
The Bad Bet That Undid Rotterdam's Fight Against Climate Change (Next City) : Forgot to reduce emissions, style over substance.
https://www.google.ca/url?sa=t&rct=j&q=&esrc=s&source=newssearch&cd=15&cad=rja&uact=8&ved=0ahUKEwjd6f3WwuPWAhXn6IMKHYyyBiI4ChCpAgg3KAAwBA&url=https%3A%2F%2Fnextcity.org%2Ffeatures%2Fview%2Frotterdam-climate-change-carbon-emissions&usg=AOvVaw3I0TBfTmNW-o9DwBO2ox-V
Weekly Climate Change & Global Warming Digest #40 (skepticalscience.com)
https://skepticalscience.com/2017-SkS-Weekly-Digest_40.html
Battery technology keeping electric car adoption in the slow lane. (upi.com)
https://www.upi.com/Science_News/2017/10/06/Battery-technology-keeping-electric-car-adoption-in-the-slow-lane/6271507213065/?utm_source=sec&utm_campaign=sl&utm_medium=5
India : 700 farmers in hospital die due to pesticide poisoning, 20 Dead (indiatoday.intoday.in)
http://indiatoday.intoday.in/story/maharashtra-20-farmer-deaths-in-yavatmal-due-to-pesticide-poisoning/1/1064128.html
Australian cities could soon experience “unprecedented” temperatures of 50C, even if international climate targets are met. (independent.co.uk)
http://www.independent.co.uk/news/world/australasia/australia-cities-temperatures-50c-melbourne-sydney-global-warming-a7988881.html
Tree cover loss spikes again in Queensland Australia (Mongabay)
https://news.mongabay.com/2017/10/trending-tree-cover-loss-spikes-again-in-queensland/
12,000 years ago, Florida hurricanes heated up despite chilly seas (Science Daily) : Despite colder oceans, slower oceans made cat 5 storms normal.
https://www.sciencedaily.com/releases/2017/10/171005125028.htm
High marine extinction risk by 2100 (Climate News)
http://climatenewsnetwork.net/23166-2/
Schäuble: Another Financial Crisis Is Coming Due To Spiraling Global Debt (ZH)
http://www.zerohedge.com/news/2017-10-08/schauble-another-financial-crisis-coming-due-new-bubbles-and-spiralling-global-debt
Hackers And Fraudsters Are Causing Cryptocurrency Chaos (Independent)
http://www.independent.co.uk/news/business/analysis-and-features/cryptocurrencies-hackers-fraudsters-digital-financial-transactions-bitcoin-virtual-currency-failures-a7982396.html
US Intelligence Unit Accused Of Illegally Spying On Americans’ Financial Records (Buzzfeed)
https://www.buzzfeed.com/jasonleopold/us-intelligence-unit-accused-of-illegally-spying-on?utm_term=.ruE94oyB3&bftwnews#.bfa3X0m5l
The Uber Game (FT) “Can you make it in the gig economy?”
https://ig.ft.com/uber-game/
Deep Neural Networks (Wired)
https://www.wired.com/story/new-theory-deep-learning
Why One Trader Thinks The Turkish Crash Will Lead To EM Contagion (ZH)
http://www.zerohedge.com/news/2017-10-09/why-one-trader-thinks-turkish-crash-will-lead-em-contagion
Facebook Security Chief Lashes Out: "Censorship Is Easy If You Don't Worry About Becoming The Ministry Of Truth" (ZH)
http://www.zerohedge.com/news/2017-10-08/facebook-security-chief-lashes-out-censorship-easy-if-you-dont-worry-about-becoming-

FEATURED SHIT CROCK ARTICLE

Disrupting Climate Change
http://www.newtimes.co.rw/section/read/221395/
Qutoes:
"The hardware of the clean-energy revolution has more in common with mobile phones and laptops than with mines and refineries." -- Because phones and laptops are made of fairy dust.
"Today, the planet has more phones than people." -- This is held up as a good thing.
"Limiting the increase in global temperature to within 2º Celsius... is possible" -- But not practical. James Hansen calls 2º Celsius suicide. A bullshit target inconsistent with reality.
submitted by BeezelyBillyBub to collapse [link] [comments]

Deep Web Diver [Continuation]

Just like centuries ago explorers ventured to distant lands to satisfy their curiosity, prove something to the world or get fame, I’ve decided that a deep web was my “Terra Incognita” from which I would return with glory. For those of you who don’t know, the deep web is a part of the internet that cannot be accessed through ordinary search engines. The usual comparison of the Internet to an iceberg is pretty on the spot: you can only see the tip of it, which accounts for all of the websites you can see, and the rest of it is buried under the water. However, I think that comparing it to the ocean, with its many layers, where you can’t see the bottom and the light eventually fades away as you go deeper, would be more suitable.
Most of the websites and pages there are nothing special: if the search engine can’t see them it doesn’t immediately make them shady. No, this first layer is just beneath the waterline of search engines’ digital ships, containing things like databases, unlinked pages, online dropboxes, scripts and private data.
A large chunk of this layer is a virtual analog of the Dead Sea - hundreds of millions of websites that weren’t finished or indexed properly, and thus remained dead and aborted by their creators; carcasses of someone’s ambitions, silently floating around the world.
In oceanology, this place is known as the Epipelagic Zone or The Sunlight Zone as I like to call it. You can “swim” safely here, taking some occasional dives, with the greatest risk being getting a virus or leaving your e-mail for some spambot to find.
Just below it lies “the Twilight Zone” of the web: still accessible to the common public, but not without some hardships. It is comprised of everything we, people, find embarrassing and shameful enough to hide from unwanted eyes: online casinos, porn sites that balance on the edge of being legal, specific forums and encrypted transmissions. Many of us have been there, although we hate to admit that fact for obvious reasons. If you’re willing to find more, to go deeper, you’ll need special equipment: entering the true infamous Deep Web – or the Dark Web, as it is also called, - is impossible without required software, due to its encrypted nature. If popular search engines are ships, then this software is your personal submarine, and only by using it you can get to The Midnight Zone of the Internet, the legendary Bagdad of the web, where you can find anything, and beyond which I’ve found an evil genie that still haunts me to this day.
Just like on the streets of the aforementioned city, you can meet all kinds of people here, but this shadowy digital alternative has its reasons to be hidden so well. There are merchants, selling mostly illegal things like drugs, unregistered firearms, intel that should not be shared and, of course, illegal pornography, which is a disgustingly popular product here. All of that with a simple and comfortable design of an online shop located near you and ready to serve you around the clock. All it takes is a click of a button.
You can also find shady figures that can provide you with services you can’t find on higher levels of accessibility: if you want to spend a night at your place with a naughty guest for a moderate price but don’t know who to call, you can just search here and surely you’ll find an online brothel nearby ready to take your request and bring service to you.
Hackers are also very common here, and from what I’ve heard for a fair price their skills will become yours for some time. Most of them communicate on secluded websites which are nearly impossible to enter if you’re not wanted there: there are dozens of encryptions and surveys to stop anyone who’d like to try. For a fair price, their skills will become yours, although you better pay up at the end of your deal: these guys can ruin your life from the other side of the world.
The deep web even has its own money, bitcoins: the untraceable digital currency, very popular for its former quality. Anything on the deep web can be bought for them, even more, money, as weird as that sounds: fake or stolen credit cards are just another type of goods here.
Sometimes, the services offered seem almost absurd: for a reasonably large monthly fee, you can subscribe to a database of hacked credit cards, which is renewed on a daily basis. The digital robbery has evolved and entered the whole new level: hackers don’t go for one pocket, but instead they rob them by the gross and leaving it up to you to actually empty them. The development of the economy made them successfully re-qualified from thiefs to entrepreneurs.
It may seem that the Dark Web was “a wretched hive of scum and villainy”, but, believe it or not, I’ve found this kingdom of mischief to be relatively innocent. Mostly because I knew that people there were small fry. They were doing wrong things every minute, every second all around the world at once, constantly busy with stealing, selling and distributing things, but they weren’t the final instance of evil on the web. No, there was also a place known as the Dark Web, hidden beyond what was hidden. An ocean beneath an ocean. The place that I’ve only heard about, largely because it was completely inaccessible, but also because even my curiosity wouldn’t lead me there.
I know that I’ve already used this term, but let me clarify: over the course of time these two terms got confused and people started calling the Dark Web with a more generic Deep Web term. Most IT specialists attribute this confusion to public ignorance that was only spread through mass media. However, I believe that there had never been any confusion: the term “Dark Web” was coined to forever differentiate the most nefarious part of the Internet from the rest of it. Remember the analogy with the layers of an ocean? Welcome to the Abyss Zone.
I’m not saying it lightly: The Dark Web is really the deepest pit of hell, only it has been built by sinners themselves. It is the most restricted part of the Internet, and its creators had a good reason to make it such since it is used for the most despicable purposes in the world. The gift of freedom and anonymity here is perverted into a tool of terror and crime and serves the murkiest corners of humanity’s collective consciousness.
If someone was kidnapped for the purpose of later being sold into slavery, he would most likely turn up here as another item for sale. Unfortunately, in the 21st century slavery was still a thriving, and the existence of global encrypted communication and transactions only served its cause. Most of those poor souls would go under the hammer to the highest bidder. Others were, for the lack of better word, expendable: their fate was to be abused and killed during the filming of snuff videos and other disturbing content. Ending up in a private clinic where their organs would be harvested was also a possibility for them.
Organized groups of hackers also operated from there: while their activity was a stuff of speculations, the level of encryption that they used meant that they were up to nothing good. My only guess was that they were the organizers of all the activity on the Dark Web, administrators of their own tidy hell that, just like the original one, existed underground, only in a different meaning of the word.
The Dark Web was also a place where you could hire a killer, and their services had a much greater demand and supply that one could assume. They operated all around the world, in every large city, and anonymity and untraceable nature of bitcoins provided them with perfect alibis, as well as drew in new candidates for the job. From what I’ve heard, they weren’t even always professionals, just some usual people, office clerks who after a long day of work wanted to provide themselves with an additional income. Their fees were disgustingly low: apparently, the cost of human life was no higher than a table in IKEA.
I stayed away from that place and never tried to gain entry, instead only going as deep as the Deep Web. And it may seem like a very strange and maybe even bizarre thing to say, but despite the criminal nature of the deep web, there was something that I found very appealing to me. I didn’t realize it at first, but the deep web was so attractive not because of the incriminating nature of its content, but because it had a spirit of adventure surrounding it. It was the last hub of that true, anarchic freedom in our regulated world, where we could set our inner child free and do whatever we want. I didn’t engage in any unlawful activities, but even without that, the sheer presence of opportunities intoxicated me. Among all the mischief, gambling and illegal trading I, ironically, felt like one of Peter Pan’s lost boys.
So, even though my mission of impressing my peers was over, I returned to the depths of the Deep Web afterward. My journey was only beginning.
II.
Everything I’ve told you so far was information that I’ve prepared for a presentation, and, lucky for me, I still have it with me after two years, so I didn’t have to think twice of what to tell you. But everything from this point on is linked to my experiences with the DW afterward.
I’ve started to spend a lot of time on the deep web. With university, homework and a part-time job I didn’t have any other time to browse the net other than late at night. I barely slept, and my eyes always had characteristic dark circles under them, but I didn’t regret that. In my eyes, I was becoming a part of something secretive, some mystery that was bigger than me. I became a net-stalker, only my obsession was not someone’s social network profile, but the Internet and its dark corners itself.
Aside from its illegal uses, the deep web could also be used for other, less incriminating purposes. Since it was not regulated and essentially existed under the radar of “the Big Brother”, people all around the world used it to communicate and share information without restraints – which was very useful for those who lived in countries under dictatorship’s rule. North Koreans were common guests on local forums, but the most welcome ones were whistleblowers.
There were a lot of people on local encrypted forums who were willing to share some insight on politics, economics, social studies and just some insider information that they wouldn’t be able to share on common open forums. Their stories and statements they made to their anonymous addressees were sometimes absolutely crazy and seemed made up, but they never failed to gather listeners, and I was one of them.
Naturally, the credibility of their statements was up to you to decide. However, in some rare cases, people went to great lengths to provide their audience with proofs of their words. In their cases, you could tell that they were very eager to spread the word and to make it believable, and from the nature of said information, it was obvious that, if it was true, they risked a lot doing so.
There were a few “stories” that stood out to me both in terms of impossibility and credibility. One of such “speakers” was a guy who worked at Moscow’s underground as an accountant. From him, I learned everything about it, including what a massive structure it is. It consists of one circular line in the center which is crossed by numerous other ones that stretch in all directions, gaining the resemblance of squid’s tentacles that try to seize their prey. Constantly being expanded, the network has already outgrown the city, and some of its lines go even beyond it.
The network lies very deep under the capital, as it also doubles as the largest in the world bunker. It was built with this intention even before the Cold War, and over the years it only expanded and got deeper and bigger, connecting to a vast network of other bunkers for civilians, military personnel and “privileged” of the country.
There was also a system of the tunnels that the poster referred to as “Metro-2” – a restricted area only for the government figures. If the metro was a circulatory system of the city, then Metro-2 was its lymphatic system, connecting Kremlin, the Russian parliament, government bunkers, airports and even military structures that were located far outside of Moscow, into one single organism.
All of the above facts only added to the shock when the man provided a very interesting and grim piece of statistics: every day, the number of people who entered the metro network exceeded by the tiniest margin the number of people who left it. According to him, there couldn’t be any mistake: not a fly would go in or out unnoticed, as such an important part of infrastructure was heavily surveyed. The statistics also included suicides and gatecrashers, so they weren’t the cause of the mismatch. People were going down, under their city, and just disappeared without a trace in a vast network of underground tunnels without any obvious reason, never to be seen again.
Every year, 100,000 people disappear in Russia without a trace – a truly horrendous number. Yet to know that some of them vanish not just in the middle of Russian capital, but on its public transport, was both distressing and horrifying. Its size comes back to haunt me, as looking for gone people there seemed like an impossible task. Pinpointing the exact place and time where they were disappearing was not possible, too.
But the most disturbing thing about the whole report was not the fact of disappearances. No, it was the photocopy of top-secret “eyes only” document that restricted the personnel of the metro from speaking about them. Repercussions for the disclosure of said information mentioned there were severe, and being pleaded guilty for treason was among them. But, according to the man, it was the fact that his higher-ups knew about what was happening and hid that fact from the public that pushed him to share this information with the world in the first place. He only wondered if they knew what was really behind it, and if they even were somehow involved in that.
It wasn’t the only case when something shocking was shared there: remember, only the place like deep web could welcome people like these to open up and speak. Yet sometimes, finally feeling safe under the protection of anonymizers, they would speak about things they would speak about things that were not meant to be mentioned beyond heavily secured doors.
One of the craziest, yet most backed up statements I’ve seen there was that for the last 50 years, humanity was involved in the one-sided war against aliens. To make that ludicrous proclamation even more bizarre, the author of the report stated that it was the aliens who had been on the receiving end.
Reports of alien activity were quite popular on the Internet in general, not just on the deep web, where the posters hoped to look more convincing by pretending that they were covering their tracks. So naturally, another statement like that didn’t surprise anyone. What was really unexpected was the number of documents that followed after that. Protocols of presidential meetings and secret G7 assemblies, numerous non-disclosure agreements, cash flows of money going seemingly nowhere, research reports, sky surveillances reports – all of it was there. Even if someone went so far as to fabricate all that, which would be a colossal amount of work, they would probably not post it for such a limited number of people after that.
That particular whistleblower stated that he was a high-ranking official of a secret governmental body in one of G7’s country members, and that the official reason for that organization’s existence was just a cover up for its true purpose – to coordinate the actions of the world’s strongest economic powers in the “defense”, as they called it, against extraterrestrial visitors. All other activity, while also essential, was ultimately just a ruse to conceal their main goal.
It sure sounded impossible to wage a war against extraterrestrials, and secretive at that. Our space program, while ambitious, was not at the interstellar level, and there were no reports from battlefields, not to mention the general difference in technology between humanity and the species that mastered interstellar travel. If such a war were to occur, it would be similar to pest extermination.
But that confusion was just a product of our ignorance. In pop-culture and, by extension, in the minds of the general population aliens usually carried out the role of invaders. In reality, they were no more than visitors, ambassadors of peace that were not welcomed. When they first arrived, they offered their help and cooperation to the world leaders, promising them, that, if they agreed to cooperation, then humanity would soon be among other prosperous races that fared among the stars. They asked for nothing in return, doing everything just out of desire to help other intelligent life – or to be less lonely in space.
But such a treaty would mean changes, and among them were the ones that governments couldn’t agree to. The ideas that aliens offered were progressive, phenomenal – but also too ahead of time, and if the rulers of Earth agreed to them, they would cease to exist due to not being necessary anymore. When everyone is their own ruler, there’s no place for laws and taxes.
So instead of doing what was for the best for humankind, they decided to do what was best for their power. They’d secretly put aside their differences and united in the face of a common enemy, the one who threatened to take away their privilege, their sovereignty. It was always speculated that common adversaries would unite people, but whoever said that probably didn’t imagine such self-destructive results.
And so, the secret war had begun. It was wrong to say that it was a war of humanity against aliens. No, in reality, it was aliens versus the 1%.
In a way, they turned the whole Earth into North Korea. And the irony is rich: we take pride in our technological advancements, we think that we are the only ones who have the privilege of intelligence, but at the same time our brothers shoot the messengers of peace and knowledge out of the sky without us even knowing about that.
I guess the aliens could just use the brute force, but that would undermine everything they’ve been working on. The governments wouldn’t lose that chance to prove their point and to tighten their grip on masses. No, violence wasn’t their way, and it wasn’t even a possibility.
And now, whenever you hear of alien sightings, whenever you see unexplained lights in the sky, you will know that those may well be starmen, trying to reach out to people like you, to show you the truth. But if for 50 years we’ve been told by the Big Brother that there’s nothing to see there, why would we think otherwise now?
There were many other stories that I would want to share with you. The stories about "killer files" that supposedly roam the internet - songs and videos that on at first glance seem harmless, but in reality contain frequencies deadly to humans. The stories about ancient websites that existed since the dawn of the internet and were rumored to be the gates of Hell. The tales and gossips of a wholly independent country of hackers in the Pacific situated off-coast on one of the abandoned oil platforms. Yes, there were different stories. But the one that I'm about to tell you is the one that got me into the mess I'm in. The information so dangerous that it is forbidden to even share. The true curse of our days.
That's it for now, expect to see the full and polished version in a few months. Thank you guys for sticking with me!
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One of the points that makes Bitcoin so special is that it solved the double-spending problem. This is something no one in the world was able to do prior to Satoshi Nakamoto's concept of ... 51% ( majority ) hash power attack in bitcoin ! what is double spend ? monopoly of blockchain - Duration: 15:53. Hacks And Security - Concepts of Technology 1,414 views 15:53 In diesem Tutorial behandeln wir das Double-Spend-Problem. Früherer Zugang zu Tutorials, Abstimmungen, Live-Events und Downloads https://www.patr... Bitcoin ATM’s have recently been targeted in Canada, and thieves made away with $200,000 in cash because of a double spend exploit. The Bitcoin core code has a replace by fee tool which allows a ... "Double-spending" Bitcoin -- the process of making someone believe you sent them funds when you didn't -- used to be only for the tech-savvy. Thanks to Glass...

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