The Blockchain Bitcoin & Crypto Weekly CXO Briefing is all you need to know, each week, jargon free for CXO level business leaders and investors who will use this technology to change the world. Each week we select the 3 news items that matter and explain why and link to one expert opinion.
D.Tube is built on top of the STEEM Blockchain and the IPFS peer-to-peer network, making the platform is completely decentralized. Videos cannot be censored centrally and only other users can decide the fate of content through their upvotes and downvotes.
Because D.Tube is built on top of the Steem.it blockchain, any video uploaded on DTube becomes a STEEM content, and can earn rewards for 7 days
While platform is advertising free, users can upload content to advertise any product or service within the video itself, at the risk of possible downvotes from viewers.
Our take: For most of us, the day starts and ends using social media applications like Facebook, WhatsApp, YouTube and others. It can be a lot of fun and great way for creators to distribute their content and earn money. We receive likes, comments, shares, favorites, retweets, followers and the list goes all the way. The more likes we get, more popular our content becomes.
But do these likes, comments, retweets have any value?
In the world of blockchain, everything we do has an intrinsic value and anyone can benefit from the value they create and consume. When you post something and someone likes it, the credit comes directly to you, not just to the platforms that distribute your content.
In many ways D.Tube is similar to other video platforms, but at the same time its very different. D.tube is based on blockchain technology, and works just like Steemit. Actually, its built on the same blockchain as Steemit.
Contrary to YouTube, on D.Tube there is no censorship, no advetising or algorithms that will hide a post, and both creatives and viewers are incentivized using STEEMs.
Today one of the biggest problems with YouTube is censorship, with content creators looking for alternative options to distribute their content. Creators that upload their videos on YouTube, have found their content demonetized, as Google’s algorithms have shut down channels across the platform.
D.Tube is not at this alone in this. Lino, a Silicon Valley startup is planning to take on YouTube with a decentralized, collectively-owned video content distribution system that wants to cut out the middleman and compensate content creators more fairly. Lino has raised $20 million dollars and claims they say they will pay content creators 3-4 times more than what YouTube pays.
While these platforms are exiting and can potentially disrupt video distribution and monetization, they are still in the very beginning. Competing with giants like YouTube can be a daunting task.
For now content on social media gives massive power and financial gain to the platform rather than the creator. The hard work of content creators is consumed by the platform itself, leaving them with no financial gain, and just a few million likes and a moment of fame as compensation. Social media were supposed to be free and open, but as they have absolute power over the content that appears in our feeds, algorithmically censoring those voices that matter most.
Personally, I believe that decentralization is the future. Blockchain promises to fundamentally change social media by taking it to completely different level, resisting top-down censorship and control and reinventing the very nature of how content and information is privately and profitably distributed.
Decrypted: IOTA, currently trading at $1.90 USD is a blockchain distributed ledger which is scalable, lightweight and makes it possible to transfer funds without any fees.
The IOTA project has come under heavy scrutiny by security and cryptography researchers. Various flaws have been pointed out in recent weeks. Ethan Heilman, one of the people that has found some of these flaws, is now being threatened with legal action.
The latest discoveries include a viable attack on IOTA’s signature scheme altogether. The mention of making this weakness public seemingly irritated the Foundation members, as they don’t want this information to be revealed to the public. In an official blog post, IOTA said:
“Unfortunately, and much to everyone’s surprise, the communications between the IOTA team and DCI that occured prior to this report were recently leaked, and published on an external blog. We at the IOTA Foundation unequivocally condemn this leak. These were private communications between parties who did not consent to such release — the release of these emails without consent is detrimental to the IOTA Foundation, to our community, to our friends at the DCI with whom we maintain ongoing conversation (heated at times, to be sure, but such is the nature of a vibrant academic discussion) and to the entire DLT space.”
Our take: IOTA is a cryptocurrency that’s been around since 2014. Its designed for micro-transactions between machines in the Internet of Things. It doesn’t use a standard blockchain like most cryptocurrencies, but instead uses a Directed Acylic Graph (DAG) it calls “the Tangle”.
Last July, Ethan Heilman, a Boston University researcher affiliated with MIT’s Digital Currency Initiative, informed the IOTA team in an email that he and his colleagues at MIT had had found a way to make use of alleged security flaws in the IOTA’s cryptography, with the current implementation of Curl in IOTA.
Back in May of 2017, the IOTA team reached out to DCI, an MIT-affiliated academic research group of Ph.D. graduate students, developers, and research scientists, to audit IOTA’s Tangle for any vulnerabilities. On July 15th, they received a response from Ethan Heilman, alerting the team that DCI had executed a successful attack against the system:
“We have found serious cryptographic weaknesses in the cryptographic hash function Curl used by IOTA, Curl. These weaknesses threaten the security of signatures and PoW in IOTA as PoW and Signatures rely on Curl to be pseudo-random and collision resistant.”
After disclosure, the IOTA team disputed the vulnerabilities’ existence. Heilman and his colleagues published their findings in September, and ahead of the vulnerability disclosure in August IOTA changed their algorithm from Curl to the well-documented Keccak algorithm.
With Tangle blog’s disclosure of the email between IOTA developers and the DCI team, we have a source that gives us a closer look at what really happened. The emails reveal that the teams failed to arrive at a consensus regarding the nature or reality of the vulnerabilities in Curl. Eventually, the conversation degenerated to insults.
Now that the communication that led to the algorithm change have been made public, high-profile cryptographers have urged people to avoid IOTA based on how the team responded to Heilman and the DCI researchers’ attempt at disclosure.
While all this is going on, Volkswagen announced a cooperation agreement with the IOTA Foundation. Volkswagen plans to use IOTA’s Tangle to autonomously determine the pricing of its cars based on availability and demand, as well as to enable offline transactions without fees.
While IOTA’s market cap jumped to number 4 on the cryptocurrency list in December, with Its price surging over 600% going from $1 to $5.5, the Microsoft scandal and recent DCI controversy has affected IOTA value. Today, IOTA is the eleventh-largest cryptocurrency, roughly with a market cap of $5.2 billion.
Decrypted: Slowly but surely, the world’s wealth is being tokenized and transferred into cryptographic keys. Managing and safeguarding keys has become a significant concern for all cryptocurrency holders.
Casa recently launched a digital wallet to make cryptocurrency storage even more secure. Casa wants to provide users with the most cutting-edge wallet that will make it nearly impossible to obtain private keys from individuals.
Casa is targeting high net worth individuals and family offices, and its service doesn’t come cheap. Its annual fee will be in the five-figure range. Also the company added Jameson Lopp to its roster, that is one of the best known developers and figures in Bitcoin space.
Our take: Cryptocurrency is perhaps the safest instrument to transfer value between anonymous parties. But storing and trading cryptocurrency can be a risky affair.
Normally, people store their cryptocurrency in wallets, ranging from software, to hardware and paper. In Andreas Antonopoulos & Gavin Wood’s new book, Mastering Ethereum, they capture what a wallet is:
“At a high level, a wallet is an application that serves as the primary user interface…”
Wallets are the user interface into this new world that is easy and safe, to manage and store this digital wealth. But, most people, wouldn’t know where to begin, considering that computers are designed to make copying data trivial, especially over networks. We all know how to safely store gold: buy a safe, dig a hole in your garden, put it into a vault, etc. But efficiently protecting a piece of data stored on a computer against malware and keyloggers is another story.
We are living in the far west of crypto. The gold rush and the increased visibility of value of cryptocurrencies, has attracted the attention of more and more hackers. Properly storing cryptocurrency in wallets without running into risks is going to be a bigger issue than most people realize, as we advance into this space.
Casa is trying to solve this problem. It has raised $ 2.1 million from venture capital firms Lerer Hippeau and Boost VS to launch their initial product. Currently, this version only supports bitcoin. However, it plans to begin offering cryptocurrency services for Ether later this year.
Casa is a cutting-edge cryptocurrency storage solution for high net worth individuals. The digital wallet requires users make three individual requests to transfer funds before any transaction is authorized. The wallet itself uses five access keys. These must be stored in five different locations. One of these will be on the users’ phone and Casa will keep one for emergencies.
The launch of secure wallet Casa is an interesting. The multi-signature wallet offers the best protection for keys currently available, giving owners full key control, round-the-clock support via phone and email, and protection from physical threats such as theft, extortion, fire, and end-of-life.
There is not question about it, wallets are important. But the reality is that this layer needs to become simple and invisible, if crypto is going to go mainstream. People should not have to worry about private keys, transactions and gas. Wallets should offer a safe and frictionless interface, that actually allows users to easily interact with services and products they want to purchase, instead of the wallet itself.
News Item 4: Ethereum’s Raiden Network Has New Scaling Competiton
Decrypted: Liquidity Network is working on a relatively new off-chain network for Ethereum, that could possibly provide an alternative to the well-known in-development network, Raiden.
Liquidity Network will function with a mechanism similar Lightning Network, a payments protocol originally designed to enhance and scale Bitcoin. Liquidity Network aims to enable Ethereum users to transact back and forth, without having to pay the cost of moving coins on the blockchain itself. In short, users pay to start channels and to close channels.
Our take: The biggest problem is with cryptocurrencies today is scalability. Bitcoin and Ethereum’s blockchains are two of the largest and best-known blockchains on the market today. Despite their potential, these blockchains can only process several dozen transactions per second. In comparison, payment platforms like Visa and MasterCard process thousands of transactions per second.
The current mechanisms are not sufficient to maintain these levels of growth. Blockchain scalability is difficult, primarily because a typical blockchain requires every node in the network to process every transaction, storing all states for all transactions. This limits the transaction processing capacity of the entire system to the capacity of a single node.
The Ethereum blockchain currently supports approximately 7–15 transactions per second. While this is slightly higher than the number of transactions supported by Bitcoin, it is still too low. To put this number into perspective, Visa’s peak is approximately 45,000 transactions per second.
In a recent blog post, Vitalik Buterin revealed that the network is approaching 1 million transactions per day:
“Key developers and researchers and others have always recognized scalability as perhaps the single most important key technical challenge that needs to be solved in order for blockchain applications to reach mass adoption.”
While Raiden, another Ethereum scaling solution, is the furthest along in its development, it’s still not live.
Liquidity Network claims to be a trillion transaction blockchain payment network. It’s a simple, scalable, secure blockchain payment network that can be implemented into existing blockchains to provide significant improvements.
The goal of Liquidity Network is to reduce transaction costs across the blockchain industry, thereby encouraging mainstream adoption of blockchain.
The Liquidity Network architecture, described in the white paper, comes from a connection between two platforms created by the team, including the Payment Hub and REVIVE. Through these two platforms, Liquidity Network is scalable to millions of users worldwide, and it does not require funds to be locked up.
Today’s off-chain payment channels require collateral to be locked up. Liquidity Network allows any member of a payment hub to pay any other member of a payment hub with the allocated funds. Their REVIVE platform solves this problem by allowing payment refunds off-chain. REVIVE lets users rebalance payment channels off-chain, avoiding the degradation of payment channels without costly on-chain transactions.
The Liquidity Network has also issued an ERC20 token that will be used as an integral part of the off-chain ecosystem. The tokens will be sold in two phases. In the public pre-sale they plan to sell 15% of the token supply, and in the public sale we will offer the remaining 50% of the token supply. Both sales will follow a dutch auction model.
The Liquidity Network token (LQD) token is a special purpose utility token that is designed to be used in exchange for access to the off-chain payment processing services provided in the Liquidity Network to wallet end users, hub operators, auditors, developers and commercial users.
The other two main off-chain solutions to the Ethereum scaling issue, are Raiden and Plasma.
The Raiden Network implementation is very similar to the Lightning Network. The major difference between these two networks is that the Raiden Network supports all ERC20 tokens, whereas the Lightning Network is limited only to the transfer of BTC.
Plasma is another scaling network that will help the Ethereum blockchain handle much larger datasets than is currently possible. It will continue to handle smart contracts in a similar way to how they are handled currently, except it will only broadcast completed transactions to the public Ethereum chain. Think of it as a hierarchical tree of side chains that periodically transfers information back to the root chain.
There is no silver bullet to solving this scalability issue, and it is likely that a combination of approaches will ultimately be used to solve the problem.
Ilias Louis Hatzis is a Blockchain entrepreneur who writes the Blockchain Bitcoin & Crypto (BBC) Weekly CXO Briefing each Monday.
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