Misconceptions About Blockchain Technology and Bitcoin

There is a fundamental difference between the open and decentralised Bitcoin system and all other projects — whether in industry or government-backed ones — that are now claiming to “discover Blcokchain technology”, albeit 5+ years later than Satoshi Nakamoto…

These days, every would-be innovator and their grandmother believe it is “posh” to “do Blockchain technology” or what they believe to be it.

The most ridiculous attempt (so far) came out of that great City, where the Bank of England has ridiculed itself by presenting their shallow idea of “RSCoin” while claiming that this would be a “better Bitcoin”. Curiously, they have been echoed by some puppet newspapers in Britain who were fast to applaud the idea and “explain” why RSCoin, for being “backed by the trust of governments”, would be a “so much better Bitcoin”. Those explainers have only discredited themselves as to neither understanding Bitcoin technology nor doing proper news research (which would have shown why a scheme like that is stupid right away).

They should understand — or at least research until they do understand — that Bitcoin’s strength stems from solving the Byzantine General’s Problem and that this discovery is at the heart of Bitcoin technology as well as every other decentralised Crypto coin’s technology. Satoshi Nakamoto’s discovery is what made Bitcoin possible at all.

Bitcoin sacrifices a certain part of ledger efficiency for the sake of real-life decentralisation. This is made possible by using an autonomous and truly decentralised Blockchain recording Proof-of-Work calculations performed by miners who are also autonomous. As and added security feature, they are also anonymous. That way, they provide for a global, autonomous, censorship-free, and secure network.

If these features are not needed, then why use “Blockchain” technology in the first place, wasting efficiency features without any real need?

What “RSCoin” and similar not properly thought-out schemes are proposing is, in fact, a single-entity clearinghouse (run, not surprisingly, by the Bank of England in this case). The Bank of England apparently believes to be gaining some institutional advantage by pursuing this ridiculous venture, all the way failing to understand what it is they are really doing.

“RSCoin” is nothing more than a scheme built around a single-entity clearinghouse. A structure like this is known to be extremely vulnerable against all kinds of attacks, and it has already been said that cracking into this “would be a lot of fun”.

Bitcoin experts are also on record saying a single-entity clearinghouse is a ridiculously anachronistic and insecure idea that should have died two decades ago.

That would have been in the mid-1990s. The City of London’s “finest” are trying to build it now, in 2016, though. Funded by taxpayer money at that. They are also applauded by those parts of the British press even more stupid than that.

Well done.

 

Banks Increasingly Unusable for “Fraud Protection” Reasons

Just use your credit or debit card online or at a “real” ATM, and you’ll be almost as likely to run into some issues as you are to complete the desired transaction without trouble.

Problems range from “fraud alerts” triggered by legitimate every-day transactions at a local cash machine to payments for a simple (and common) Amazon order being “rejected” for obscure reasons.

While these all prove unfounded at closer scrutiny and can sometimes be resolved relatively easily, these unwarranted “arrests of your payment card” are very annoying — to say the least. Often they are also an outright violation of applicable Terms and Conditions. Banks apparently do not care though and continue their “policy” of doing as they please or deem appropriate when it comes to protecting their affairs.

If so, this can only mean banks are obsessed with fear and, in fact, are on the verge of being unable to deliver on services they owe customers under the various parts of their bank services contract.

With banks increasingly going overboard with what they believe to be “Fraud Protection”, using Visa, Mastercard or similar bank-issued “plastic” is increasingly useless for bank customers.

Alternative payment systems need to develop further, and having them in less-incompetent hands than your average retail bankers is also desirable.

Privately operated Crypto coins will possibly earn more user trust and prove to be the better option for payments and transactions very soon.

Depending on the type of Crypto coin, this is already becoming a de-facto phenomenon: particularly Litecoin, Peercoin, Dogecoin, and most recently Ethereum, appear to be good candidates for reaching widespread user acceptance apart from Bitcoin itself.

Get It, While You Can!

The Raspberry Pi single-board computer, originally just a small British hacker project, has gained tremendous popularity throughout the computing community for a wide range of applications.

Among both Bitcoin-related as well as DIY or life-hacker projects, it is common to stumble upon a Raspberry-Pi-recommendation in a recipe’s ingredients list. You may actually be hard-pressed to find Bitcoin or Alt coin miners and similar specialist hardware not using a “Pi” as a controller unit these days.

Another popular use for Raspberry Pis is Bitcoin cold storage, i e running a small, offline or “cold” and ultra-secure machine for crypto coin Private Key storage. Apart from its low price, a key suitability reason here is safety. Just like “dumb printers” without Wi-Fi capability, Raspberry Pis come equipped with only some rather basic functionality not including Wi-Fi or similar security risks.

Until now, or Raspberry Pi version Raspberry Pi 2 Model B (Quad Core CPU 900 MHz), that is.

The Raspberry Pi project has just revealed its latest model, a revised Raspberry Pi single board computer with somewhat, though not fundamentally, improved performance. One of the latest version’s key “features” is rather a bug when it comes to security considerations: the Raspberry Pi 3 Model B now has built-in Wi-Fi hardware for “improved” connectivity.

This may or may not be a “nice-to-have” for many Pi users, but the fact is that this dilutes the original Raspberry Pi concept of having a *simple* single-board computer that can be equipped with extra features (such as Wi-Fi or graphic interfaces or any sort of *peripherals*) when and *if* needed. From a professional or from a systems engineering point of view it does not make any sense whatsoever to load a single-board computer core unit with specialty peripherals like Wi-Fi, or maybe a CD or HD drive for that matter — which all are a specialty for a reason: security!

It, therefore, turns out that the Raspberry Pi 3 Model B is not an upgraded but a dumbed-up (as opposed to dumbed-down) version of a previously highly attractive little machine.

The obvious solution for the security-aware — as well as health-conscious and EMF averse — user is to buy the “old” or previously common Raspberry Pi 2 Model B (Quad Core CPU 900 MHz) that does not attempt to tell you what’s good for you if it isn’t and does not have built-in security leaks or potential backdoors by design.

While there may be users or potential Raspberry Pi buyers out there who appreciate the added Wi-Fi capability of the Raspberry Pi 3 model, anyone considering a “Pi” for Bitcoin cold storage or similar applications where a hardened machine is a pre-requisite should buy the existing or “old” Raspberry Pi 2 Model B (Quad Core CPU 900 MHz) model before the “Pi” makers might come up with the idea of stopping Raspberry Pi 2 Model B (Quad Core CPU 900 MHz) production.

Paper Wallets and General Bitcoin Security

With every security breach making it into the news, some people get the impression that Crypto currencies “weren’t safe” or even “had failed” or similar. Depending on the nefarious intent behind these headlines (as in the case of established banks bashing Bitcoin as part of their agenda) this may or may not scare potential users from even thinking about using Bitcoin.

The reality is that in the Credit Card Industry over 40% of profits have to be spent for “fraud prevention” (meaning they cannot prevent most cases of fraud anyway and need the amount for compensation). Still, this hasn’t prevented anyone from using credit cards nor similar “electronic” forms of payment — yet.

Crypto coins are quite different though. The level of security only depends on whether or not prudent steps are taken by the user individually. Unlike credit cards where trust has to be given to third parties, the very nature of peer-to-peer technology means that everyone is in control of their own funds and security.

Increasing security for your Bitcoin holdings is always easiest through the use of Paper Wallets: simply move all portions of your savings to Cold Storage (i e into your paper wallet) and only keep smaller amounts needed for spending in a Desktop wallet, online wallets, or less-secure exchange portfolios and similar places.

(A paper wallet is a simple piece of paper run from your printer — preferably a “dumb” one without Wi-Fi or similar security loopholes — containing your public address for deposits along with its private key for retrieval.)

That way, you are not only “your own bank” but (at least!!) as safe as one as well.

Forbes: BoE’s “RSCoin” Useless for Banking

Written by Guest Contributor for Bitcoin Financial.

The Bank of England boasted to have developed “their own Crypto currency”. The think they have found a good way of firing up a few nodes operating some blockchain-like network. Claims like these have been met with caution though.

Even from Forbes, there is far-going criticism of “RSCoin” with the magazine’s Tim Worstall pointing out that the requirements of payments processing and banking are quite different and that “RSCoin” has no use at all for the latter, http://www.forbes.com/sites/timworstall/2016/03/14/the-bank-of-englands-rscoin-would-be-useful-for-payments-but-not-banking/#63750357373f

Essentially, this means that our own initial view of “RSCoin”– published here, http://www.bitcoinfinancial.info/central-planners-rscoin-bank-england-now-laughing-stock-technology-experts-worldwide/ — is (strangely enough) shared beyond “just Technologists”, and the same views are held even in banking and the general  Wall Street vicinity (albeit less polemic, maybe).

Worstall explains in Forbes that a payments system needs to be “fast, cheap, makes sure that the person the payment is flowing from actually has the resources to make payment, gets the payment to the right person, doesn’t allow double payments and records who ends up with the payment”. He observes that “Bitcoin has its attractions in this sense”.

Thus far, he is right, but it suddenly ends here.

He then claims that “RSCoin” looked even better than Bitcoin in these respects and then claims that “RSCoin” seemed to “scale up to the size and speed of the Paypal or Visa networks without too much effort”. The latter proves the overall ignorance of conventional “wisdom” when it comes to Bitcoin. Claiming PayPal, Visa, and now “RSCoin” to be effortless is a joke: credit card processors spend over 41% of their revenue on “fraud prevention”, including stolen cards, forgery, fraudulent cancellations and refund requests, and much more.

The only valid point that can be raised against Bitcoin is its relatively slow network and limited transaction volume per second and limitation to a total of 21 million bitcoins, along with the infamous 51%-attack problem.

All these issues have long been addressed, and solved, though by people who are far more competent than your average central banker cashing in top salaries every month. There are Alternative coins that have different parameters and even different methods of securing their block indeces, like proof-of-stake and other variants, resulting in both faster transactions and an elimination of the risk of 51% attacks as known in proof-or-work blockchain systems.

Whether or not Bitcoin-the-coin succeeds in the end or will one day stop working does not really matter because Bitcoin-the-idea can always been improved and re-deployed. There are literally hundreds of Alternative cryptocoins. New coins can be set up literally in a matter of hours.

By comparison, BoE officials have said that the “expect” their “RSCoin” to be “ready within 18 months”.

This is further proof of Wall Street and banks in general, let alone governments, still not getting it: they still fail to understand the true implications of Bitcoin (which is a good thing) and are trying to build Bitcoin-clones in cloudcookooland. We wish them a lot of fun doing so.

Trouble is, they’re blowing taxpayers’ money in the process.

“RSCoin”: BoE Now Laughing Stock of Tech Experts Worldwide

The Bank of England has announced it is planning its very “own” Crypto currency, called RScoin.

The coin would be “so much better than Bitcoin” for the alleged advantage of being “backed by the trust of governments”. Exactly the “assurance” everyone needs these days.

Proving to know little more than what some central-bank controlled press office has fed them, Britain’s Daily Telegraph writes on what is actually just the latest wet dreams of the banking elites in a poorly researched article, http://www.telegraph.co.uk/business/2016/03/13/central-banks-beat-bitcoin-at-own-game-with-rival-supercurrency/. Just like the BoE itself, The Daily Telegraph has failed to understand what they’re actually doing, or talking about respectively.

If you want to read something really stupid about the very central bankers responsible for 2008’s economic crisis, then you might want to read that article. No one there is even getting the first thing about Bitcoin’s true innovation for being trustless and peer-to-peer decentralised in nature. The article entirely fails to even scratch on the implications of Satoshi Nakamoto’s solving the Byzantine General’s problem and thereby succeeding with managing distributed consensus for the first time in history. As every mathematician or computer scientist will confirm, this is the actual importance of “Bitcoin” and “Blockchain technology” though. Introducing some central-planners-controlled “RScoin”, the Bank of England’s latest brain fart, proves to only be yet more of the same: namely another attempt of the state at humanity, at freedom, and thus at everyone of us — backed by yet more state-control, central planning and government power. It also proves that governments are having a very hard time moving beyond the technological level of horse-drawn carriages and gunpowder.

With the alleged “trust” of RScoin, sold to us as an “advantage”, the real trouble proves to be the lack of this very trust when people are supposed to put it in governments once again, and after  governments and banking elites have empoverished the world for much more than merely the Federal Reserve’s 103 years of existence now.

At least, a “competing currency” RScoin is though. So let us see how this will play out. Let us see how, and if so, it really can compete with Bitcoin and Alt coins at the end of the day.

PPC (Peercoin) Advancing Further

Peercoin, the first proof-of-stake Crypto coin, is advancing further in price both in US dollar terms and against bitcoins.

Earlier today, peercoins traded over $.49 and around BTC .0012500 on many Crpyto coin exchanges, while briefly hitting 150’000 satoshis (BTC .00150000) on Malta-based Bitcoin exchange “The Rock”.

This development is quite in line with earlier expectations of Peercoin being under-valued (read our earlier report http://www.bitcoinfinancial.info/litecoin-and-peercoin-may-be-undervalued-now/ of 20 Feb 2016).

Peercoin had reached and exceeded the BTC .00150000 level briefly in January on Cryptsy before the troubled exchange’s breakdown, but that notation (topping at 159’0000 satoshis) had to be taken with a grain of caution. So whether or not the BTC .00150000 mark is of any technical significance may be uncliear in light of the nature of Cryptsy and the goings on around that outfit.

If today’s BTC .00150000 price at The Rock is exceeded, this would mark a possible breakout of Peercoin to the upside, a development that has gradually been preparing and building for Peercoin over the last few months.

Litecoin and Peercoin May Be Undervalued Now

Written by and © 2016 Mark Mage. All rights reserved. This obviously includes unauthorized harvesting, iframing, or duplicating of content.  Please note that cryptocurrencybuzz.com are stealing our content.

After their rally of roughly two weeks ago, both LTC (Litecoin) and PPC (Peercoin) have retraced from their short-term highs of BTC 0.00849000 and BTC 0.00159000 respectively.

Both Litcoin and Peercoin are very popular and established Crypto coins with a large following of their own in the overall Bitcoin field.

LTC having tested lower levels around BTC 0.00770000 a few days ago appears to now regain some momentum and is moving back up towards the BTC 0.00800000 level again. If that level is cleared to the upside, there may be room for significantly higher Litecoin prices.

PPC, at the same time, is now sitting around 105000 satoshis or BTC 0.00105000 which appears to be an intermediate support level after PPC had met previous resistance around this level from the beginning of the year. If the 105000 satoshis support holds or can be cleared to the upside, Peercoin may resume a broader upward move.

For both coins, current levels represent strong support and hint at these coins possibly holding price gains throughout the next days and weeks of Crypto Exchange or CX Trading.

Bitcoin Price Testing $420 to $440 Resistance Area

The price of Bitcoin in US dollars is currently trading around a significant level. Bitcoin price history shows the rough $420 to $440 area to be a repeated level of support. Conversely, this level is now a rather strong line of resistance on Bitcoin’s renewed way up.

With a large flat-top triangle currently forming at this level, Bitcoin prices are preparing to rise more significantly. We may expect larger movements to the upside, once this level is cleared.

Bitcoin Has Not at All “Failed”

Wall-Street recently manufactured an ongoing series of mass media “news” about Bitcoin “having failed” or “being dead”. It wasn’t long, however, before the true nature as just statements of banksters who are obviously beginning to worry about Bitcoin came to light. The third part in this questionable chain of events, or rather non-events, finally admits that all this “failure talk” does not have any substance at all — just by revealing a name of its source for the very first time,

“News” like these do not come from true sources. They come from the banksters who are obviously now starting to worry, after they were stupid enough to ignore Bitcoin and decentralized peer-to-peer technology altogether for over six years in the first place.

They have, all of a sudden, “discovered” what this whole Bitcoin thing is all about. Hence their effort to smear it in order to still stop it. Claims that it had “failed” or that Bitcoin was “dead” have been surfacing. To not much avail though. J P Morgan CEO Jamie Dimon is the latest puppet “speaking out”, or rather fulfilling orders from his masters — albeit without having done any of his homework on the subject, very much like the rest of Wall Street, it seems. What has some J P Morgan CEO, of all people, got to say? Here comes: “Bitcoin is going nowhere” but “Blockchain” had “potential”. Unsurprisingly, because Wall Street banks are known to “study blockchain technology”, and it is also a well-known fact that the banksters deliberate about starting “a blockchain of their own”. Great idea — if you really do not know the difference between a public blockchain and a private one, that is.

Curiously, knowledge of a difference like that is taken for granted among Chinese officials. As Mr Dimon was showing his incompetence by not having properly researched his subject before shooting his mouth, Zhou Xiaochuan, the governor of the People’s Bank of China, eloquently came forward with a lengthy interview on Chinese currency policy. That piece also included some views on digital currencies. At least someone has done their homework, because he mentioned in well-versed terms the fundamental difference between public and private blockchains and continues with the trade-offs between the two.

That matters like these are discussed, is vivid proof of Bitcoin being anything but dead, nor a failure. On the contrary, talks about matters like these — along with ample chances for embarrassment for Mr Dimon and the likes — mean that Bitcoin already has had tremendous success, independent of the future that lies ahead for “Bitcoin the digital currency” itself.

Unsurprisingly, the ones most ignorant about the actual properties of decentralized peer-to-peer currencies like Bitcoin and their overall meaning are Wall Street and friends. As of late, they seem to be discovering some of them and are increasingly trying to hijack portions of overall Bitcoin technologies. What they fail to understand though is that even if they (or anyone else) ever succeeded with attacking Bitcoin, new and improved versions of Crypto coins would be started that very moment; just like Bitcoin itself, again based on a public blockchain — you know, that ingenious distributed consensus mechanism…

Less of a genius themselves, banksters are still having a hard time arriving at a centrally-controlled one that works.