Tag: blockchain

Moscow Eyes Blockchain Tech for Infrastructure and Security

The Moscow City Government supports the optimization of the transport infrastructure with the use of blockchain technology through the “shared registry” system when it comes to controlling land-based transportation.

Blockchain technology will help create more transparent, just and reliable models for travel fare payment and system financing.

Sources in the room told Bitcoin Magazine that in a meeting with principal blockchain experts, Maksim Liksutov, deputy mayor of Moscow and head of the Moscow City Transport Agency, stated that the city’s primary task at the moment is to establish and support a safe and reliable data transmission system both within the department as well as with suppliers. He went on to suggest that a blockchain shared registry system would be an appropriate mechanism.

Liksutov was also enthusiastic about the potential for blockchain technology to facilitate the application of biometric information techniques, especially in terms of security solutions. He noted that with its data verification abilities, blockchain technology’s distributed nature could mean easier verification for travelers, while providing widespread confirmation of identities where necessary.

“Using blockchain technology in transactions between users and machines (which requires a high level of trust and permissions) is a question of time. This technology could be used also as an unprecedented anti-terror system,” the lead coordinator of Blockchain International, Alexander Mikheev, told Bitcoin Magazine.

According to the Mayor of Moscow, Sergey Sobyanin, these steps will become a part of a wider initiative the government will take to ensure advancement of new technologies. “Such projects are only begging to be realized in various areas, and we, without a doubt, owe it to ourselves to keep, in that respect, leading the array of cities across the globe,” Sobyanin said in a televised public address.

Among the other industries that will benefit from the integration of blockchain technology are the property sector, banks, health services, electrical power systems, digital commerce and tourism. “The users will just have to input their personal data once (or the company data), after which the information will be verified in the blockchain network in all the governmental and private structures, including banks and insurance companies,” Sobyanin said.

Written by Peter Chawaga for the Bitcoin Magazine | Original article: www.bitcoinmaga….

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Russian Bank’s VP Says Bitcoin is the Only Successful Blockchain

Over the past couple of months, Russian politicians and banks have been changing their tune when it comes to blockchain technology and cryptocurrency solutions. On February 21 Nikita Smirnov vice president of the state-owned bank Vnesheconombank had some positive things to say about the digital currency bitcoin. In fact, Smirnov believes the Bitcoin network is the only “successful” blockchain technology.

‘A New Philosophical Concept’

Russia’s relationship with digital currencies has been confusing, to say the least. Over the past few years, a few Russian bureaucrats have perceived bitcoin use as a criminal activity. Moreover, in the past, there have also been website blockades against bitcoin domains such as BTC-e and Localbitcoins. However, it seems politicians and banks are slowly changing their minds towards the country’s relationship with bitcoin. Just recently Russia’s Deputy Finance Minister, Alexey Moiseev told the public that bitcoin was “not a threat,” and Russia’s largest bank Sberbank has also been bolstering blockchain technology.

Now one of Russia’s well-known state banks Vnesheconombank (VEB) vice president has told the regional publication Kommersant that bitcoin has many benefits. Additionally, Nikita Smirnov says that bitcoin has an indisputable network effect.

“Bitcoin is the only blockchain technology in the world that has widespread adoption,” explains Smirnov. “It has existed for several years already, people tried to hack it, but no one has succeeded. So right now, if you ask whether there’s another algorithm, which established itself as a solution to distributed consensus problem, then the answer is probably NO.”

As of the present moment, the only successful solution to that problem is Bitcoin.

‘Bitcoin Forms a Symbiotic Relationship with Humans’

Meanwhile, the Russian bank Sberbank has been researching and developing its own enterprise-grade distributed ledger prototype for quite some time. Sberbank CEO Herman Gref believes commercial blockchains will be ready in two years and the company is working with the government on this project. However, according to the VEB vice president bitcoin is really the only successful blockchain today and can be considered a positive bacteria in his opinion.

Bitcoin is kind of a philosophical concept. Compare it to a bacteria, which exists separately from humans, but is in a symbiotic relationship with humans. But the word bacteria has a negative connotation, whereas Bitcoin in many ways is a positive thing, which satisfies many necessities, involves people in the process and allows itself to exists in this way.

Vnesheconombank also works with the Russian government managing state debts and pension funds. The bank, instituted in 1922, has grown significantly over the past few years acting as a progressive “Russian Development Bank.” Smirnov’s opinion may not reflect the bank’s official stance towards bitcoin but may push the bank to research the cryptocurrency further.

“[Bitcoin] truly is a new philosophical concept, which isn’t very well understood quite yet,” Smirnov concluded in his interview.

Written by Jamie Redman for Bitcoin.com | Original article: https://news.bitcoin.co….

What do you think about the vice president of Vnesheconombanks statements? Do you agree that Bitcoin is the only successful blockchain implementation? Let us know in the comments below.

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Blockchain Education Network to Host Global Bitcoin Airdrop

BTC.com organize bitcoin airdrop

This September, blockchain hubs across North America will be giving out bitcoin to begin the next school year. Over a dozen regions including New York, San Francisco, Chicago and Boston in the United States and Toronto, Montreal, Vancouver and Ottawa, in Canada, are preparing their events. The giveaway, known as a Bitcoin Airdrop, has become a yearly tradition on university campuses.

The bits are to be given to students who come out to their local blockchain club’s first meeting. Students will also be introduced to concepts about bitcoin and the blockchain through their peers and a demonstration of a wallet creation and transfer.

History of the Airdrop

The first airdrop was hosted in 2014 by the MIT Bitcoin Club, after the club raised $500,000 worth of bitcoin to give to each incoming freshman. The event was then replicated in 2015 in Montreal by the McGill Cryptocurrency Club during their school’s frosh week, with donations given to the club. The Blockchain Education Network is now expanding the initiative throughout their network of regional hubs.

Why an Airdrop?

An airdrop allows people who would otherwise never have heard about bitcoin to try out using their first bits with their friends in a setting where their questions can be answered. Even if a student downloads a wallet and sells the bitcoin, they discover how easily it can be exchanged for fiat currency and would be more open to receiving bitcoin as payment at a future time.

Focus on Education

The Blockchain Education Network (BEN) believes that the blockchain revolution must happen through education. Most people are still unfamiliar with what digital currencies and the blockchain are, though almost everyone is curious when they first hear about it and want to learn more.

Bitcoin and blockchains are technologies with broad socio-economic impacts, which means that different parts of the world will have a different perspectives on it. BEN organizes as a swarm, a decentralized organizational model, to ensure that the education presented at each meeting is relatable to the region.

A Crucial Grassroots Movement for Students

BEN is comprised primarily of students aged 18-25 and the group believes that it is especially important for this demographic to be able to experiment with these technologies. The world is quickly moving into a sharing economy where people can operate remotely and companies have access to a global talent pool. Students will all enter the workforce after graduating and must be familiar with new technology.

Each year, the leadership from a university club graduates and must be replaced by the incoming class of students. Doing an airdrop at the beginning of each school year ensures a strong interest in blockchain technology and many new students joining the blockchain community in every region that participates.

In addition to the airdrop, BEN has an entire Fall 2016 initiative to bring new students into the blockchain ecosystem including a Blockchain Olympics event in October and a Blockchain Startup Gauntlet in November. BEN also hosts and promotes hackathons for students with a variety of skill sets, and assists students who are interested in attending bitcoin and blockchain conferences.

Future Implications

This initiative has become a tradition that can scale as wide as its reach. 500 students receiving bitcoin this September may not change the world; however, each year showing a new group of motivated university students how this technology works may cause a ripple effect of education that reaches farther than our expectations.

In our view, the “blockchain revolution” isn’t so far fetched. This is a technology which better maps to our worldviews after having grown up with the internet. It has taken 25 years for the internet to move from creation to our pockets. Through this historical lens, we see any current shortcomings of blockchain as an opportunity for our generation to solve.

Written by Michael Gord for the Bitcoin Magazine | Original article: https://bitcoinmag….

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Department of Homeland Security Awards Blockchain Tech Development Grants for Identity Management and Privacy Protection

In May, Bitcoin Magazine reported that both the Defense Advanced Research Projects Agency (DARPA) of the U.S. Department of Defense (DoD) and NATO have requested proposals for the development of military-related apps built on blockchain technology. In particular, DARPA wants to leverage blockchain technology to create a secure messaging service and NATO is interested in applications of blockchain technology to military logistics, procurement and finance, with a catch-all described as “other applications of interest to the military.” Previously, the U.S. Air Force worked with contractors to develop a Bitcoin payment gateway.

Now, the Department of Homeland Security (DHS) Science and Technology Directorate (S&T) has awarded $1.3 million in funding to 13 small businesses for the development of new cyber security technology. Four projects will use distributed ledger technology to develop new solutions for identity management and privacy protection.

“A technology such as the blockchain, if it can be validated to be able to support the appropriate level of security and privacy, has potential applicability to multiple information sharing use cases within the homeland security enterprise,” said DHS S&T Program Manager Anil John, as reported by FCW.

The program is managed by the Cyber Security Division (CSD), established in 2011 within S&T’s Homeland Security Advanced Research Projects Agency (HSARPA). The CSD develops and delivers new technologies, tools and techniques to enable the DHS to defend the U.S. against cyberattacks. Its mission includes technology transfer as well as coordination among domestic and international research partners.

The four firms below were awarded about $100,000 each in preliminary funding through the DHS S&T Small Business Innovation Research (SBIR) program and will be eligible for further funding depending on the results produced. The DHS seems especially interested in research results that, besides enhancing homeland security, show potential for commercial exploitation.

Digital Bazaar, a developer of technology and services for internet payments, is developing a Linked Data ledger format and architecture to demonstrate how to publish identity credentials.

Respect Network Corporation, a data network provider that enables customers and companies to safely share sensitive private data over trusted private connections, is developing a decentralized registry and discovery service to integrate with the public blockchain.

Narf Industries, an information security company focused on reverse engineering, vulnerability research and tool development, is developing an identity management solution built on a permission-less blockchain, with a focus on confidentiality (with selective information disclosure), integrity, availability, non- DHS repudiation, provenance and pseudo-anonymity.

Celerity Government Solutions (doing business as Xcelerate Solutions), a provider of security, IT and management consulting services, is researching blockchain solutions to enable users to establish and maintain trusted identity transactions with public and private organizations.

In June, the S&T awarded a $199,000 contract to Factom to study possible blockchain-based advancements for the security of digital identities for the Internet of Things (IoT) — the upcoming connection and convergence of mobile devices, information technology networks, connected sensors and devices.

The project, titled “Blockchain Software to Prove Integrity of Captured Data From Border Devices,” will create an identity log that captures the identification of a device, who manufactured it, lists of available updates, known security issues and granted authorities while adding the dimension of time for added security. The goal is to limit would-be hackers’ abilities to corrupt the past records for a device, making it more difficult to spoof. It’s interesting to note that the NATO request for proposal, mentioned above, also included an IoT section, which underlines the synergy between IoT and blockchain technologies for military applications.

“IoT devices are embedded within our daily lives — from the vehicle we drive to devices we wear — it’s critical to safeguard these devices from adversaries,” said DHS Under Secretary for Science and Technology, Dr. Reginald Brothers. “S&T is excited to engage our nation’s innovators, helping us to develop novel solutions for the Homeland Security Enterprise.”

Melissa Ho, managing director, S&T’s Silicon Valley Innovation Program, added that collaborating with the many companies that are already developing commercial solutions that can be reused to enhance homeland security is in the best interest of the DHS.

The growing interest of military agencies in distributed ledger technology and in particular, its potential for distributed, resilient and tamper-proof identity systems, is one more signal that blockchain technology is becoming mature and ready for real-world application and could bring more mainstream credibility and funding to the blockchain sector.

Written by Giulio Prisco for the Bitcoin Magazine | Original article: https://bitcoinmagazine…

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World Economic Forum Examines How Blockchain Can Reshape Financial Services

On August 11, 2016, the World Economic Forum (WEF) released a 300-page report entitled “The future of financial infrastructure: An ambitious look at how blockchain can reshape financial services,” exploring how the financial sector “could overcome current-state pain points through distributed ledger technology (DLT).”

The WEF has been one of the most vociferous advocates for the potential of the blockchain technology. Bitcoin Magazine reported that in 2015 the WEF predicted that blockchain technology was one of the 21 changes in technological transformations and that the tipping point for its adoption would be in 2025.

A year later, World Economic Forum repeated that “virtual currencies and their underlying technologies can provide faster and cheaper financial services and can become a powerful tool for deepening financial inclusion in the developing world.”

In this latest report, the WEF concluded that blockchain technology could have impressive ramifications but would need the collaboration of government and technological experts to succeed.

It took a year for the World Economic Forum (WEF) to research how blockchain technology could help nine financial sectors, which included global payment and foreign trading. More than 200 innovators, subject matter experts and executives from prominent institutions, such as JPMorgan Chase, Visa and MasterCard, contributed their opinions. The results was assembled in this latest report. These are some ifs most significant conclusions:

Blockchain helps by being transparent and effective

“Distributed ledger technology (blockchain) has the potential to drive simplicity and efficiency by establishing new financial services infrastructure and processes” (p.19).

The blockchain ledger can be proven enormously useful to banks and financial institutions by providing them with an unprecedented layer of transparency and trust. The operational transparency of DLT will cut down, if not eliminate, the number of disputes, minimize frauds and ensure that obligations and settlements are met. The ledger could also give companies a more secure, effective way of moving money and tracking transactions. Regulators could employ real-time monitoring of transactions, while operations could better source liquidity of assets and move money between accounts.

Blockchain merges with other transformative technologies

“Distributed ledger technology will form the foundation of next generation financial services infrastructure in conjunction with other existing and emerging technologies” (p.20)

Over the last 50 years, a number of emerging technologies have merged to transform the financial services industry of the future. These include biometrics, cloud computing, cognitive computing, quantum analytics, predictive analytics and robotics. Distributed ledger technology is one of these but the WEF cautions that blockchain should be seen as “part of the toolbox” rather than a panacea. Each industry, too, would use DLT in its own ways and for its own means, so for instance, the trading sector will likely use the ledger for real-time tracking and efficacy while payers that deal with global payments will use DLT for, among other reasons, preventing friction.

Blockchain is revolutionary

“Similar to technological advances in the past, new financial services infrastructure will transform and question traditional orthodoxies in today’s business models” (p.24)

Blockchain upends all aspects of the traditional financial services sector from standard accounting habits to lending practices. Blockchain provides its own distributed, transparent record-keeping, leverages real-time trust among market participants and balances the information flow between lenders and borrowers. It also boosts dispute resolution since it provides regulators and regulated entities with a common transparent ledger. Finally, DLT reduces the need for intermediaries because of its shared and trusted environment.

Blockchain needs collaboration to succeed

“The most impactful distributed ledger technology applications will require deep collaboration between incumbents, innovators and regulators, adding complexity and delaying implementation” (p.23)

The World Economic Forum cautions that “updating financial infrastructure through DLT will require significant time and investment.” The three imperatives are: Resolving security issues, aligning competing interests and imposing a legal, regulatory and governance framework. This sounds easier than stated since divergent company interests are involved. If, and once achieved, this would provide DLT with a standardized system and superior efficacy that would boost the financial success of all nine sectors.

Looking ahead

To date, more than 24 countries and 90 corporations use blockchain technology with many more expressing interest. The WEF notes that large banks around the world, including more than 90 central banks, have developed blockchain groups that hail its potential impact and study how to harness its technology. In fact, the report predicted that a full 80% of these banks could launch their own blockchains by 2017. Blockchain technology has “captured the imagination and wallets of the financial services ecosystem” but the WEF concluded that DLT has to resolve critical issues moving forward. These include: How to develop a roadmap to achieve market collaboration and standardized regulation, how to structure a regulated tax framework and how to implement a cost-benefit analysis to determine the financial viability of distributed ledger technology.

Article written by Leah Zitter for the Bitcoin Magazine | Original article: https://bitcoinmagazine….

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Mimblewimble: How a Stripped-Down Version of Bitcoin Could Improve Privacy, Fungibility and Scalability All at Once

All (full) Bitcoin nodes verify all transactions on the network. This allows the system to be entirely trustless and decentralized, but also presents significant drawbacks. Privacy and fungibility are at odds, because public transactions allow anyone to trace the flow of bitcoins over the blockchain. Meanwhile, verifying a growing number of transactions adds to the cost of running a node, which could be a centralizing force.

But perhaps these drawbacks can be tackled. Last week, a new white paper was somewhat mysteriously dropped on a Bitcoin research channel, written by the pseudonymous author “Tom Elvis Jedusor” (Voldemort’s real name in the French edition of the Harry Potter novels). His proposal “Mimblewimble” — a reference to a Harry Potter spell — presents a radical slimming-down of the Bitcoin protocol that could not only dramatically increase privacy and fungibility, but also present significantly more scalability than Bitcoin’s current blockchain architecture.

Mimblewimble may just hit two giant birds with one stone. Here’s how.

Hiding Amounts

Mimblewimble is based on some of Bitcoin’s familiar privacy features. One of these is Confidential Transactions, which was mostly developed by Bitcoin Core and Blockstream developer Gregory Maxwell and is currently deployed on Blockstream’s Elements Alpha sidechain.

Confidential Transactions lets senders encrypt the bitcoin amounts in transactions with random strings of numbers called “blinding factors.” This process works because transactions also include information with which (only) receivers can decrypt the amounts. And, by utilizing a cryptographic trick called the Pedersen Commitment, anyone else can still perform math on the encrypted amounts. Specifically, Bitcoin nodes can subtract the encrypted amounts on the sending side of transactions (“inputs”) from the encrypted amounts on the receiving side of transactions (“outputs”). If the two sides cancel out to zero, it means the combined inputs and the combined outputs are equal, and no bitcoins were created out of thin air.

Mimblewimble sort of turns this trick on its head as the receiver of a transaction generates the blinding factor. This is important because as one of the main deviations from the current Bitcoin protocol, this blinding factor is effectively used to prove ownership of the (blinded) bitcoins — private keys are no longer in play at all. (Nor are public keys or addresses.)

Proving ownership of the blinding factor itself revolves around a series of cryptographic tricks that are Mimblewimble’s closest equivalent to Bitcoin’s cryptographic signatures, though the full extent of these tricks is beyond the scope of this article.

It is important to note, however, that part of these mathematical maneuvers includes the introduction of a sort of “dummy output.” Where transaction outputs normally indicate under what conditions the receiver of a transaction may later spend the bitcoins, these dummy outputs are really just random numbers to ensure that only the person who generated the blinding factor can spend the bitcoins in the real outputs.

Combining Transactions

Another familiar Bitcoin trick that inspired Mimblewimble is CoinJoin, first proposed by (again) Maxwell.

CoinJoin allows users to bundle their transactions into one bigger transaction, scrambling all inputs (the “from” part of a transaction), as well as all outputs (the “to” part). This potentially obfuscates which bitcoins were sent from which address to which address, and breaks the assumption that all inputs belong to the same user.

Mimblewimble (and a fix by Blockstream mathematician Andrew Poelstra) takes this concept a bit further and completely gets rid of transactions once a new block is created. Instead of transactions, Mimblewimble blocks mainly consist of three lists: a list of new inputs (referring to old outputs), a list of new outputs and a list of cryptographic signatures created with the aforementioned dummy outputs.

Utilizing the Pedersen Commitment scheme, all nodes can use the input list and the output list, and verify that no bitcoins were created out of thin air. The dummy output signatures, meanwhile, prove that all individual transactions must have been valid. Acting rather like “stamps of approval,” these dummy output signatures only add up mathematically if the whole transaction itself does.

And since it is never revealed which inputs spent bitcoins to which outputs exactly, nor how many bitcoins were actually spent, no trace of funds can be established at all. As such, Mimblewimble presents a tremendous boon for privacy and fungibility.


And then there’s the scalability improvement.

Currently, many transactions on the Bitcoin network are linked. Spending a bitcoin really takes an output from a previous transaction and turns it into an input of a new transaction. This means that if an older transaction is invalid, a newer transaction that relies on the older transaction is invalid, too. So to be able to validate all transactions on the Bitcoin network, nodes must know all transactions that ever took place; the entire blockchain. (That’s currently some 80 gigabytes worth.)

But with Mimblewimble there is no longer really such a thing as a transaction history per coin. Each coin does have a specific block in which it was first created. But from then on, its value simply becomes part of the combined Unspent Transaction Output (UTXO) set, which defines all outputs that store coins and could potentially be spent at any time.

This means that in order to verify new transactions, nodes no longer need to care about previous transactions. All they need to care about is that the specific outputs used are valid.

With even more clever math, nodes can establish the validity of outputs relatively easily. They just need the block headers of all blocks (a sort of index of blocks without all transaction data) and the aforementioned dummy output signatures: both relatively compact data-sets. All other transaction data — almost the entire blockchain — can be safely discarded.

The benefit compared to other anonymizing techniques is substantial. If Confidential Transactions and CoinJoin had been used in Bitcoin from day one, nodes would currently require more than a terabyte of data to operate. With Mimblewimble, they would need closer to 120 gigabytes. And perhaps even more interesting: where the blockchain necessarily has to grow over time, the required Mimblewimble dataset does not, and can actually shrink if more bitcoins are stored in fewer outputs.


Now for the bad news. Mimblewimble, in its current form, is not very compatible with the Bitcoin protocol. This is mainly because for Mimblewimble to work, script must be purged from transactions. As such, there would no longer be room for a whole set of Bitcoin features, like time-locked transactions (used for the Lightning Network among other things), atomic swaps (for cross-blockchain interoperability), and more.

But that doesn’t make Mimblewimble useless. Mimblewimble may, for instance, be the perfect fit for a privacy-focused sidechain. Bitcoin users could lock their bitcoins into a specific output on the Bitcoin blockchain and “move” their coins to the Mimblewimble chain. On this sidechain, users could transact freely and privately for as long as they want, until the new owner decides to “move” the funds back to the Bitcoin blockchain by unlocking the original output.

Due to the efficiency offered by Mimblewimble’s sidechain, the added burden of maintaining it would be very manageable. Moreover, it could potentially unload much data from the Bitcoin blockchain, increasing scalability even for those who don’t use Mimblewimble at all. Where sidechains are typically not considered a scaling solution, Mimblewimble offers one.

For a full technical explanation of Mimblewimble, including the mathematical details, see the white paper.


Written by  Aaron van Wirdum for the Bitcoin Magazine | Original article: https://bitcoinmagazine.co…

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