My algorithm showed a "rubber banding" effect. With outliers excluded from my data, it was 94% accurate. With outliers included with my data, it was still 85% accurate.
When difficulty sees large gains, price (USD valuation) will rise steadily, then begin dropping sharply.
When BTC to USD sees large gains, difficulty will change at a slower rate at first, then drop sharply in terms of growth proportion to it's standard deviations of movement.
We are currently witnessing this rubber band lag on difficulty fueled by the giant price increase.
As difficulty drops, more miners will enter the market, and liquidity in the "minted" supply of Bitcoins will increase.
Ultimately, from an economics standpoint, this transition will act as a harmonious correction in either direction, for either rubber banding case.
Bitcoin has a built-in harmonic motion between the liquid market, USD valuation, difficulty, and supply/demand liquidity.
My algorithm lines up with most of the hedge fund guys throwing out large 5 figure valuations for 2018.
I would declare with a degree of certainty above 50% that we will see a valuation of between $12,500 and $20,000 in early spring/late winter.
This will be followed by a gradual decline until near mid-end of Summer.
At which point valuation will begin increasing again, and will hit more... asinine valuations, near the end of 2018. [[This timing range of Summer to Winter of 2018 is the most logical location for a major bubble and crash event, according my current algorithms.]]
The real threat of a bubble exists still, BUT, Bitcoin has developed a resistance to massive market swings, and as it's overall USD valuation increases, the risk is dropping steeply.
You must consider that these days, for Bitcoin's valuation to move $50 USD, requires BILLIONS of USD in trade transactions to occur.
Since mainstream Wallstreet isn't a heavy player in Bitcoin still, this makes BTC immune/resistant to flash crashes, as most long term HODLers are "indoctrinated" and won't fall prey to panic. (Yet, few players in the Bitcoin space are not and could not throw around hundreds of millions of dollars just to create a synthetic pump or crash, unlike 2011-2013 when some larger whales could tip the whole market.)
The amount of liquid capital in BTC owned by "panicky public" is becoming a negligible amount in proportion, and will soon cease having any real effect on day to day valuations.
Financiers, wall street, hedge funds. If anyone in your financial department has an opinion within the realm of the following:
"I don't understand it."
"It's a scam."
"It's not worth looking into."
"It is too volatile."
I would solemnly consider a one to one meeting with that employee. Bitcoin's market cap is higher than the majority of Fortune 500 companies annual revenue. Bitcoin's daily trade magnitudes are between 2 billion and 10 billion USD worth of DAILY active movement.
If an employee is refusing to even look into it, because they "don't understand" or "believe it is a scam"
Make them look into it, or fire their negligent ass. That level of ignorance is equally as bad, as if your company had a major competitor rising in their market space, and this employee refused to research that competitor at all.
That's the type of value movement going on now.
Tulip mania boomed and exploded in roughly 2-3 years.
This is NOT a tulip situation.
Bitcoin was established in 2010 and has had growth outpacing every other financial investment possible for the LAST SEVEN YEARS.
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Before half of 2020, the word "data breach" appears extremely active. All over the world are plagued by data breaches, but also cause major losses.
In today's Internet era, any behavior you have on the Internet is likely to be recorded, and then through big data summary and statistical analysis, you can basically say: everything you know, the network knows. In a centralized system, the system platform operator can get all your data in the background. Based on the drive of business interests, they will use this data to commercialize applications: sell data and sell services.
The world is interconnected. This is the status quo and an irreversible development trend. In this interconnection, there are no boundaries in the future. In this near future where there are no borders and everything is connected, imagine that your alarm clock, electricity meter, mobile phone, mobile detector, and other things that are needed every day are interconnected, so that others can understand your situation. What a terrible thing it is, like being in a completely privacy-free environment, such a future, you，Suffocation? Should we have privacy?
In December 1948, the United Nations promulgated the Basic Law, "Universal Declaration of Human Rights," Article 12 of which stated personal privacy as follows:
No one's private life, family, residence and correspondence must be arbitrarily interfered, and his honor and reputation must not be attacked. Everyone has the right to legal protection against such interference or attacks.
In the electronic age, privacy is essential for an open society. Privacy is different from secret. Privacy is something that someone does not want to make public. The secret is something he doesn’t want anyone to know. Privacy is a power. It gives someone the right to decide what to disclose and what not to disclose.
In a distributed Internet environment, the privacy of individuals from a macro perspective mainly covers four aspects: node privacy, content privacy, link privacy, and tunnel privacy. Let's expand one by one and look at the specific content of the four dimensions of privacy.
1) Node privacy
Node privacy refers to the fact that in an open distributed environment, both parties interacting with each other do not know each other's sensitive information, such as IP address and MAC address, so as to achieve the purpose of not exposing each other. At the same time, it is impossible for other nodes to perceive the location of the sender and the receiver through network sniffing.
The following uses the Bitcoin network topology as an example to illustrate the importance of node encryption.
As of now, there are about 8,000 nodes in the entire Bitcoin network. Based on current technology, the cost of building a parallel sniffing network is very low. Some researchers have done statistics. When the topology sniffing network starts, after about 10 blocks height, it can basically infer the connection topology of the entire network. Coupled with the fixed time interval of gossip message propagation, it is basically possible to infer the general distribution position of the construction nodes of a transaction information, thereby destroying the privacy of the nodes.
2) Privacy of communication content
The privacy of communication content means that the communication content is only visible to both parties of the interaction. No one can intercept the data from the network, or without the authorization of both parties, no one can see the plain text of the communication.
3) Link privacy
Link privacy refers to the connection established by both parties in communication, which is encrypted; No one has the ability to use the link for data transmission without the relevant key. As shown in the figure below, a-> b, b-> c, c-> d, etc.
4) Tunnel privacy
In some cases, the communication between the nodes will be completed by one or more relay nodes. In this way, based on the transceiver node and the relay node, a communication tunnel is formed; tunnel privacy means that only the sending node has the right to send data from the sending node to the receiving node via the relay node. Under the premise of authorization, there is no way to complete the transmission of data. As shown above, a-> d, e-> h logical communication tunnel.
For the four privacy dimensions mentioned above, there is a general solution that can effectively protect the security. Although the communication efficiency needs to be improved, functionally speaking, it can already take into account the four dimensions. And in the following, for this general security idea, gives the possible dimensions for further optimization.
1. Description of General Encryption Network Solution
Firstly, each relay routing node in the encrypted network creates a routing descriptor, which contains some contact information, mainly IP addresses, ports, public keys, and other broadband capabilities. After the creation is complete, send this information to the directory server of the whole network (usually also become the Bootstrap node). Based on this information, the directory server generates a unique descriptor for the routing node for the entire network, which is stored on the directory server along with the descriptor information. In the following, we will describe in detail how the privacy of the encrypted network is protected from three aspects: networking topology, message structure and link transmission construction.
1) Network topology
As shown in the following figure, in an encrypted network, we recommend that clients, relay agents, relay routing nodes, directory servers, and possibly bridge nodes together form the entire network topology. When the client builds a communication link, the steps are as follows:
A. The client initiates a node request to the directory server;
B. The directory server generally recommends three nodes to the client from the directory table based on the weight selection algorithm. Logically, they are called entrance node, intermediate node and exit node.
C. After receiving effective feedback from the directory server, the client builds a complete tunnel link step by step according to the Response message.
2) Link establishment
Based on the above description, we know that a client can obtain three nodes of a link through the directory server: entrance node, intermediate node, and exit node.
A. The client uses the DH handshake protocol (Diffie-Hellman) to shake hands with the ingress node to generate a shared session key. Based on the shared key, the client sends a CREATE message to the entrance node;
B. After receiving the CREATE message, the entrance node will establish a link with the intermediate node based on the address of the intermediate node in the message and complete the key exchange;
C. Based on the segmented encrypted link and DH handshake protocol completed above, the client completes key negotiation with the intermediate node;
D. Similarly, based on the two-level encrypted tunnel established above, the client sends a CREATE message to the intermediate node to complete the establishment of the encrypted link between the intermediate node and the exit node;
E. Finally, the client completes the key negotiation between the client and the egress node based on the above three-level segmented encrypted link, and then completes the establishment of the entire onion tunnel link;
3) Message structure and transmission
Before the message is sent from the client, it will use the shared key negotiated with the exit node, intermediate node, and entrance node to encrypt from the inside out. The innermost message is encrypted using the shared key of the exit node, then the intermediate node, and finally the entrance node.
A. After the above message is sent from the client, the entrance node will judge the validity of the message based on the shared key negotiated and remove the outer encryption, and then send it to the intermediate node;
B. After receiving the message from the entrance node, the intermediate node will judge the validity of this message based on the shared key negotiated with the client and remove the encryption of this layer, and then send it to the exit node;
C. The exit node uses the shared key negotiated with the client and repeats the above steps. Eventually send the client's message to the real destination address.
2. Optimization for the above program
In the description of the above scheme, we can easily see that there are two obvious flaws, that is, the startup node is too centralized, which can easily lead to a single point of failure or suffer from a network hijacking attack. At the same time, because the data exchange is based on link exchange, when the network congestion is severe, it is easy to cause network service delay. Due to the single structure of the message, it also restricts the data in the link transmission process to a certain extent, and optimizes the transmission performance. Below we will give specific optimization ideas based on the above two points:
1) No central server
The aforementioned encrypted network node knows the existence of all relay and entry / exit nodes by connecting to the directory server. The optimized project node will know the existence of other nodes through the local network database (tentatively called NetDB). NetDB learns the existence of more nodes when connecting other nodes through the DHT algorithm. It is a distributed network database. It mainly provides router contact information and target contact information. Each piece of data is signed by the appropriate party and verified by anyone who uses or stores it.
2) Optimization of data exchange mode
The first point to note is that in the optimized encrypted network, there are two different links for the communication link of the two parties, that is, the entrance link and the exit link are different;
In the optimized encrypted network, the connection is broken up into data packets by the message mechanism (Message), after being cross-transmitted through different TCP or UDP tunnels, the receiver reassembles into a data stream, that is, the optimized encrypted network is based on Packet switching, packet switching can drive some implicit load balancing and help avoid congestion and service interruption.
Undoubtedly, open data sharing is the source of power for the development of data-related industries, but the existing data storage methods and network protocols have many shortcomings. Solving such problems has become a very important step on the road to the next generation of the Internet world. DSP Labs has always kept thinking and exploring the next generation Internet infrastructure. I believe that in the near future, DSP Labs can bring a new choice to the Internet world.
https://preview.redd.it/hl80wdx61j451.png?width=1200&format=png&auto=webp&s=c80b21c53ae45c6f7d618f097bc705a1d8aaa88fsubmitted by RumaDas to u/RumaDas [link] [comments]
A proof-of-work (PoW) system (or protocol, or function) is a consensus mechanism that was first invented by Cynthia Dwork and Moni Naor as presented in a 1993 journal article. In 1999, it was officially adopted in a paper by Markus Jakobsson and Ari Juels and they named it as "proof of work".
It was developed as a way to prevent denial of service attacks and other service abuse (such as spam on a network). This is the most widely used consensus algorithm being used by many cryptocurrencies such as Bitcoin and Ethereum.
How does it work?
In this method, a group of users competes against each other to find the solution to a complex mathematical puzzle. Any user who successfully finds the solution would then broadcast the block to the network for verifications. Once the users verified the solution, the block then moves to confirm the state.
The blockchain network consists of numerous sets of decentralized nodes. These nodes act as admin or miners which are responsible for adding new blocks into the blockchain. The miner instantly and randomly selects a number which is combined with the data present in the block. To find a correct solution, the miners need to select a valid random number so that the newly generated block can be added to the main chain. It pays a reward to the miner node for finding the solution.
The block then passed through a hash function to generate output which matches all input/output criteria. Once the result is found, other nodes in the network verify and validate the outcome. Every new block holds the hash of the preceding block. This forms a chain of blocks. Together, they store information within the network. Changing a block requires a new block containing the same predecessor. It is almost impossible to regenerate all successors and change their data. This protects the blockchain from tampering.
What is Hash Function?
A hash function is a function that is used to map data of any length to some fixed-size values. The result or outcome of a hash function is known as hash values, hash codes, digests, or simply hashes.
The hash method is quite secure, any slight change in input will result in a different output, which further results in discarded by network participants. The hash function generates the same length of output data to that of input data. It is a one-way function i.e the function cannot be reversed to get the original data back. One can only perform checks to validate the output data with the original data.
Nowadays, Proof-of-Work is been used in a lot of cryptocurrencies. But it was first implemented in Bitcoin after which it becomes so popular that it was adopted by several other cryptocurrencies. Bitcoin uses the puzzle Hashcash, the complexity of a puzzle is based upon the total power of the network. On average, it took approximately 10 min to block formation. Litecoin, a Bitcoin-based cryptocurrency is having a similar system. Ethereum also implemented this same protocol.
Types of PoW
Proof-of-work protocols can be categorized into two parts:-
This protocol creates a direct link between the requester (client) and the provider (server).
In this method, the requester needs to find the solution to a challenge that the server has given. The solution is then validated by the provider for authentication.
The provider chooses the challenge on the spot. Hence, its difficulty can be adapted to its current load. If the challenge-response protocol has a known solution or is known to exist within a bounded search space, then the work on the requester side may be bounded.
These protocols do not have any such prior link between the sender and the receiver. The client, self-imposed a problem and solve it. It then sends the solution to the server to check both the problem choice and the outcome. Like Hashcash these schemes are also based on unbounded probabilistic iterative procedures.
These two methods generally based on the following three techniques:-
This technique depends upon the speed of the processor. The higher the processor power greater will be the computation.
This technique utilizes the main memory accesses (either latency or bandwidth) in computation speed.
In this technique, the client must perform a few computations and wait to receive some tokens from remote servers.
List of proof-of-work functions
Here is a list of known proof-of-work functions:-
o Integer square root modulo a large prime
o Weaken Fiat–Shamir signatures`2
o Ong–Schnorr–Shamir signature is broken by Pollard
o Partial hash inversion
o Hash sequences
o Diffie–Hellman–based puzzle
o Cuckoo Cycle
o Merkle tree-based
o Guided tour puzzle protocol
A successful attack on a blockchain network requires a lot of computational power and a lot of time to do the calculations. Proof of Work makes hacks inefficient since the cost incurred would be greater than the potential rewards for attacking the network. Miners are also incentivized not to cheat.
It is still considered as one of the most popular methods of reaching consensus in blockchains. Though it may not be the most efficient solution due to high energy extensive usage. But this is why it guarantees the security of the network.
Due to Proof of work, it is quite impossible to alter any aspect of the blockchain, since any such changes would require re-mining all those subsequent blocks. It is also difficult for a user to take control over the network computing power since the process requires high energy thus making these hash functions expensive.
Strange it may seem, but the concept of blockchain was invented long before Satoshi Nakamoto created Bitcoin as A Peer to Peer Electronic Cash System.submitted by y0ujin to NovemGold [link] [comments]
Let’s take a look at the events preceding Bitcoin’s blockchain appearance.
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DropBit Wallet Exclusive: Introducing Shared MemosHey All!
In continuing with the mission to make using and sending Bitcoin more user friendly, the DropBit app has released its feature to Securely Send Memos. This is a unique to our wallet feature that significantly enhances the user experience for those users who send or receive multiple Bitcoin transactions in their wallet.
Many wallets offer the ability to add local memos to a wallet transaction, but no other wallet solution offers the capability to securely share memos between sender and recipient. The DropBit user has the ability to decide at each transaction if they want to share the memo with the recipient or if they just want to keep the memo private, on their own wallet. Not only does DropBit allow this powerful capability, it does so while keeping the messages encrypted and secure.
The shared memo feature works for both Android and iOS, allowing users to decide with each transaction if they want to add a memo and keep it to themselves, or securely share the memo with the recipient. This brings Bitcoin closer to the standard and ease of use of some FIAT wallets, like Cash App and Venmo, in which the memo is an important part of the transaction experience. Gone are the days where recipients and senders are left guessing which transaction was sent or received for which reason while looking at their transaction history.
For power users, or even merchants, this becomes even more important as memos give an ability to catalog activity between the user and recipient. In the comparison graphic below, you can see the image on the right is much more helpful when looking at transaction history.
Left: Transactions listed from BRD Wallet. Right: Transactions with Secure Shared Memos from DropBit
Transactions with Securely Shared Memos
Some other wallets allow you to add a memo to a transaction, but it only shows up on the memo creator’s wallet. DropBit allows for this capability as well, but there is a lot of power in being able to share this memo with the Bitcoin recipient.
Safe and Secure
As important to us as enhancing the utility and user experience of Bitcoin transactions are to us, ensuring that privacy remains unaffected by the features we implement is most important.
Shared memos are encrypted by using the Elliptic-curve Diffie-Hellman Ephemeral (ECDHE) key agreement protocol and AES-256-CBC. ECDHE requires two keys in order to work: our API stores a receiver’s address and corresponding public key, the sender generates an ephemeral key pair. The ECDHE shared secret is used to encrypt the memo which is then temporarily stored by our API. When the receiver sees a new transaction for that address it checks for any memos and the process is performed in reverse using the ephemeral public key and the corresponding private key for that address.
International Accessibility + Open Source Transparency coming soon…
In the coming weeks, DropBit will be made available in almost every country globally. We have heard from countless people who want to use DropBit around the world and soon that restriction is lifted. Additionally, we’ll be working on localizing languages and native currency to a handful of countries in the coming months.
Finally, we have also heard the requests for open source and we are in the final testing phase to open source the DropBit Wallet. Verification is essential in the Bitcoin space, and we are happy to open our solution up to the world so they can have the confidence to make DropBit one of their primary Bitcoin wallet solutions.
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Bitcoin-Mining ist ein Geschäft mit einer sehr grossen Konkurrenz. Mining macht nur Sinn, wenn Sie es aus Spass machen und es Ihnen nicht so wichtig ist, ob Sie Profit daraus schlagen. Es ist aber auch möglich, dass Sie es sehr effektiv betreiben und davon profitieren. Aktuelle Bitcoin Nachrichten. Kryptografie bildet den Kern des Bitcoins, und nur wer sie versteht, begreift, weshalb der Bitcoin so unglaublich sicher ist. Das Problem ist nur, dass moderne Kryptographie ziemlich schwer zu durchschauen ist und man sich schneller, als einem lieb ist, einen dicken Knoten in die Gehirnwindungen hineindenkt. Zum Glück hat dieses Blog Leser, die nicht nur… The Bitcoin difficulty chart provides the current Bitcoin difficulty (BTC diff) target as well as a historical data graph visualizing Bitcoin mining difficulty chart values with BTC difficulty adjustments (both increases and decreases) defaulted to today with timeline options of 1 day, 1 week, 1 month, 3 months, 6 months, 1 year, 3 years, and all time Bitcoin - Wie geht es weiter bei BTCUSD? vom 19.10.2020, 06:45 Uhr. Bild: pixabay.com. In den letzten Wochen gab es noch keine trendentscheidende Kursbewegung beim Bitcoin und daher befindet sich ... Bitcoin's mining difficulty adjusts with every 2,016th block. Depending on the speed at which these blocks are mined, this happens roughly once every two weeks. If blocks are created faster than usual, the difficultly tends to increase, thus preventing miners from overproducing coins (and vice versa). The metric plunged 15.95 percent — the second-biggest drop in Bitcoin's history ...
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The history behind public key cryptography & the Diffie-Hellman key exchange algorithm. We also have a video on RSA here: https://www.youtube.com/watch?v=wXB... New video every Tuesday! Today we are taking a look at the Gekkoscience NewPac USB miner. We'll check all the hardware you need for setting it up, discuss so... Difficulty is a value used to show how hard is it to find a hash that will be lower than target defined by system. The Bitcoin network has a global block difficulty. Valid blocks must have a hash ... From RSA Conference 2015, Cryptography Panel In this episode, I talk with legend of cryptography, Whitfield Diffie. Whit was working on cryptography long before Bitcoin existed, building the foundations for which Bitcoin relies upon. We ...