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Cryptocurrencies PSA

Hello randians,
I don't know why I'm putting effort to write a post on cryptocurrency but here it is. I see a lot of people here longing for financial independence and I thought I'd write about the path I think is the most viable and futuristic right now.
15% interest rates aren't going to change your world. I'm not even gonna say that cryptocurrencies are not risky. They're risky af. They might go down 50% tomorrow and still have the have disruptive aspects but it's speculation which makes money. If you are one of those people who have a steadfast view that crypto is a scam and scheme for 'money-laundering and terrorism' and has no 'real value' behind it, you're free to stop reading. If you have an open mind, go ahead.
Our ancestors speculated on land and made shit ton of money and no-one calls land a bubble because they aren’t ready to sell at a low price even if it is. And because it's a ‘tangible' asset. But tell me, what tangible assets does facebook or uber or google have? The value of an asset is not just determined by what you see physically, it's also the value of the network which in facebook's case is worth a lot because it provides a platform for effective advertising.
Now if I say I make a facebook like network where besides facebook's transfer of information, you could also transfer value over the internet without a third-party institution, that network has a huge worth. Like Bitcoin shows us. And crypto goes up so much so fast because if 'being a part of one network' goes viral, a lot of people join it and very few are ready to exit. And they get paid a lot to allow new people to enter by holding the tokens which power these network.
https://twitter.com/naval/status/877467629308395521
I love the summary of political/economic/psychological/financial aspects of blockchain from the above tweets. Follow this guy and set notifications for his tweet and you’re in for great wisdom everyday. He’s one of the greatest thinkers of our times.
So okay, there are a lot of strategies to make money in crypto.
  1. Existing big-cap currencies (Bitcoin, Ethereum, Ripple, Monero, Stellar, Dash, Zcash etc.) - These aren’t great speculative investments and won’t give you 10x-20x but they surely are a good hedgeagainstb risk when you go for the low-cap coins in the rabbit hole. These should comprise probably half the value of your portfolio.
  2. Existing small-cap tokens (Origin Trail, Simple Token, Oddysey, Trinity, TheKey etc) - These are the ones that have higher speculative value because of low market cap and can go very high if the fundamental analysis (team, plan, execution, use-cases, markets, competitors, etc). Once you’re in the ecosystem, you’ll start hearing about these when they’re at a 100-200 million valuation and the good ones typically go to >500, so 5x return is the average I’ve got.
  3. ICOs - This is where is gets interesting. I keep hearing ICOs are a bubble, but let me tell you how many people in the ‘whole world’ invest in ICOs. 6 months back they were 5000 and now they’re 30000. Still an insanely low number given it’s such a ‘big bubble’. You can use this website to check out the stats for returns from various ICOs on https://icostats.com/. In my 1 year with crypto, I didn’t see even one ICO giving less than 5x till now. Not that past performance can predict future, this is still a great way to make money. The best way to research ICOs is to get in the rabbit hole and spend some time to find the ones with good specs and hype and go into it. And if the FA is good, 5x is really easy in a month.
Now after hearing all this, you’d be thinking this looks too insane to be true and I wholeheartedly supported your hypothesis till last year but when I entered the scene and saw how much work was being done and how many great products were being made, my views changed.
And this is a risky place to put your money in. My only point is, don’t miss out on a revolution or gold rush, whatever you want to call it, because governments or people around you say it’s a bubble without understanding any of it. I have gone into the rabbit hole and researched ICOs and currencies for day-in and day-out and the whole ecosystem is nothing short of a revolution.
If you are a student and don’t have money to invest, invest in a skill. Learn blockchain development. It is the hottest profession on Earth right now. Google/facebook/uber attrition rate went on record high because people kept leaving to be a part of the cryptocurrencies development. If you have some money you ‘can afford to lose and not care about it’, put it in a few currencies and ICOs. Buy a little more if it goes down and keep lowering the dollar cost average. Forget about this money and it could be like a home your grandad bought in pennies which most of the people can’t afford now.
The post is cringey and different from how I wanted to structure it but there is so much info that it’s difficult to put in in one post.
Now for the research, we in this community ask everyone to DYOR (do your own research, but I’d leave a few links as starters)
https://www.icodrops.com - A place to find upcoming ICOs and details on them.
https://twitter.com/naval/lists/crypto - A great twitter list by my favorite twitter person.
https://np.reddit.com/CryptoCurrency/ - Take coins mentioned here with a grain of salt, because they come here after everyone in the slack/telegram community have already accumulated at lower prices. But it’s a good source of info.
https://www.youtube.com/watch?v=T2zH-T_hmLs - Absolutely love Andreas Antonopoulos.
http://lopp.net/bitcoin.html - Technical resources for someone who wants to go into the technology. This is a great source of a holistic info.
https://www.upfolio.com/100-coins-explained - Info on usefulness of these tokens. Pick up the ons you find interesting and start researching.
I think I’ve given you guys a lot of do and think about over the weekend. Do your research, follow the market and observe how it moves. Then enter with a strategy when you feel comfortable. Just don’t completely miss out on it. PM me for anymore details and I’d probably respond if I feel like.
Rules I follow:
  1. Don’t panic sell. Don’t sell low and don’t try to time the market. HODL. I’ve seen >50% crashes more than 5 times and I just buy the dip each time and make profit.
  2. ICOs ICOs ICOs. They’ve just got started and the best way to make money.
  3. Don’t invest anymore than what you can afford to lose.
  4. Please don’t buy vaporware coins like Cardano, Ripple, Tron, Verge which have no real use-case and just run on hype.
  5. And last but not the least, have fun. This is a parallel universe with moon and lambo memes and billions of dollars. There’s so much drama everyday that once you enter, you won’t be able to live without it.
I hope to have sparked the curiosity of a few people here. Don’t believe anything I say. Do your research. Sit through the weekend and read about it and I can assure you, it will be life-changing. I have got a lot of people into crypto and it changed everyone’s life. I even acknowledge it can take a downturn anytime, but why not enjoy the ride till it lasts. At least you wouldn’t have missed out on a revolution bigger than the internet imho.
The whole thing sounds cringey af but I'll post it anyway. Feel free to DM for anything more you'd want to know.
submitted by nucky888 to india [link] [comments]

Ranking Privacy Coins by Anon-set! Dash comes out ahead of Monero!

EDIT Be aware, the moderators of cryptocurrency have SHADOW DELETED without cause the original thread. This is most likely at the request of the XMR community. Also, the Monero community continues to Vote-Brigade this thread. Originally 11-14 upvotes, and even today 5 upvotes, they make sure it stays around 1. This is manipulation.
https://np.reddit.com/CryptoCurrency/comments/9gl5xp/cutting_to_the_chase_or_how_to_properly_evaluate/
This causes the post to appear to me, but to everyone else its been deleted. Now, why would they undertake such an underhanded tactic?
End EDIT
There's a lot of talk about anonymity and privacy as it relates to blockchains. Recently a report surfaced mentioning that cryptos are basically bad news for criminals: https://dailyhodl.com/2018/09/16/bitcoin-is-actually-a-money-laundering-tracking-device-that-catches-criminals-report/
TL;DR is at the bottom
Why? Because they're easy to track. Once they've got a single piece of identifying info that's linked to an address (say that coinbase transfer to an exchange) then all transactions are linkable to that id. But, privacy coins are different because they obscure this history (or in some cases 'delete' it all together). However, it can be a little difficult to decide which privacy coin offers the best privacy, along with the best combination of fees, security and usability.
So with no further ado, here is your simple guide to evaluating privacy coins! Like daily tx throughput is a key metric of btc/blockchain adoption and usage, privacy coins have their own 'key metric' to determine their ability to hide your tx history: the size of their anonymity set. This is basically the number of other people with which your transaction is plausibly 'mixed' so at to sever the link between your address and that coin. The greater this number is, the more difficult it is to associate a coin with your address, thus making it more private.
To make this easier to understand, it helps to know the following: All privacy coins do the same thing, just in vastly different ways. What is that thing? Obscuring/removing your linkage to a coin by mixing it with a similar coin denomination from another wallet. Monero is a slight exception to this, since transaction amounts are hidden in the blockchain as well, so there's no need for denominations. Also, your coin is mixed with fake coins that aren't real, instead of coins from other wallets, but no one can tell that from the blockchain so it works.

Dash

It should be noted that in Dash, the anonymity set is the total set of each denomination. So if you send a .1 Dash privateSend transaction, the anonymity set is the set of all .1 Dash. The following only applies if you've bought up more than 70% of the masternodes, and only to transactions that are currently being mixed. Previously mixed transactions cannot be deanoned.
In Dash, it depends on how many rounds you mix. Each coin is once again broken down into standard denominations like 10, 1, .1 .01 Dash. Each round involves a minimum of three different wallets. So take the number of participants and raise it to the rounds you mix-th power, and that is your minimum anonymity set.
So mixing four rounds gives you a minimum anonymity set of (3 participants)4 rounds = 81. Eight rounds gives you a min set of 38 = 6,561. 16 rounds give you a min set of 316 = 43,046,721 which is currently the largest anonymity set of all the privacy coins.
Could be more if more than three wallets were involved in any single mix, which is possible. However, it could be less if the same participants are used per round, which is unlikely. This is still a HUGE anonymity set; however, its probably at least an order of magnitude less than PIVX and ZCoin unless you were to get 4-5 wallets mixing per round. Dash's largest Anon-set is the largest in the private coin space and is around 3x larger than PIVX's.
Still, even 81 could be rightly considered overkill, especially since Considering the nature of privateSend and the random separation between 'minting' and spending, Dash is immune to timing analysis attacks. The determination of which coin to use will come down to your anonymity needs. How private do you need to be?

PIVX

In PIVX, for example, ~10-20% of all pivx held in wallets is 'gathered' by the accumulator (note it never leaves your control) in a central pool of zpiv using standard denominations like 10 zpiv, 1zpiv, .1zpiv etc. This is a configurable setting in the wallet so some may wish to turn it on/off at their discretion, but recent research has shown that 24% of all PIVX held in wallets is private/zpiv, see u/turtleflax's comment below.
After all of that, by using a zero-knowledge proof which cryptographically proves you owned whatever zpiv was minted from your wallet without any linking information to you, zpiv is 'sent' to your wallet and shows up with no transaction history. So the anonymity set is 10%, ~24% nowadays, of all PIVX held in wallets, which is obviously huge.

ZCoin

ZCoin and PIVX uses the same strategy as both implement the ZeroCoin protocol, which itself is just a specification, PIVX and ZCoin are implementations of that spec. Same idea with the denominations. PIVX's implementation is much more advanced however. ZCoin doesn't have an accumulator or anything and its privacy is optional.
However, its not possible to break a Zerocoin/ZCoin/PIVX transaction because there is nothing to break. It would be like trying to guess someone's password just by them logging in and proving they know their password and it works. That doesn't give you any information that would help. Furthermore, the total anonymity set is around 6.5% of the total supply which puts it comfortably in the same region as PIVX.

ZCash

ZCash is an implementation of the ZeroCash protocol which is an improvement on the ZeroCoin protocol. The cool thing about ZCash is that it also hides the amount of the transaction. ZCash's privacy is optional and the blockchain is split between t-addresses and z-addresses. t-addrs are transparent and contain visible balances just like Bitcoin, which ZCash is a software fork of. z-addrs are shielded. ZCash appears to have two kinds of shielded transactions (shielded and fully shielded).
I'm not sure of the difference between them, but according to this handy block explorer: https://explorer.zcha.in/statistics/usage, shielded txs are far more prevalent than fully shielded ones. The difference between them may be that fully shielded txs are transactions between two z-addrs while a tx that is 'just shielded' may be one between a z-addr and a t-addr and possibly a t-addr and a z-addr, but again, I'm not sure.
The developers claim that the anonymity set is very large in comparison to coins like Dash, and since it is based on the ZeroCoin protocol like PIVX and ZCoin, it is reasonable to assume its anon set is similarly large and based on a proportion of the supply, though where among the three it stands is of course up for debate/verification. However, with Dash's recent protocol update to v0.13, privateSend has the largest possible anonymity set.
Zec's anon-set is perhaps as large as the shielded value colume for any time period, also note that is a lower bound, so for the past month: 394989 ZEC would be the total shielded ZEC, so this seems a reasonable lower-bound on the Anon-set. Its hard to Tell between this and PIVX which is larger.

Monero

In Monero, the anonymity set is the number of mixins used at the time of your transaction. Which is currently 11 with the most recent update to bulletproofs. Monero originally had optional privacy where the min mixin was 0 and those transactions were transparent like btc's.
However, having these 0 mixin transactions together with the higher mixin transactions allowed for higher ones to be deanoned, that and 3 forms of timing analysis attacks forced the min mixin to be raised to 3, then 5 then 7 and finally its current static value. With the latest update the ring size, previously a wallet-configurable parameter, is now fixed at 11 for everyone.

TL;DR

So in short, if you want to rank privacy coins by their anon-set size (which is the only thing that matters) the list is as follows:

1. Dash

2. ZeroCoin and ZeroCash implementations: PIVX, ZCoin, ZCash

3. Monero

Note: Each tier represents a range of at least >1 order of magnitude greater anonymity set. So ZCoin, ZCash and PIVX are all grouped together, even though PIVX may have an anon-set 10-50x greater than ZCash or ZCoin (just an example, not a real figure), all three of them are still going to have anon sets 1-4 orders of magnitude greater than Dash, and like 6-7 times greater than Monero. Monero's default min mixin is 7 and the max definable in the gui wallet IIRC is 26 ring size is fixed at 11 for everyone. It is no longer possible to select your own ring size per tx. Be aware however that using higher, rarer ring sizes causes your transaction to stick out.
Due to the nature of how they are selected, there are wide ranges for the anon sets of these coins, except for monero which is fixed at 11 currently. But especially so for that of Dash, which may on occasion cross into fall the grey zone between numbers 1 and 2 due to uncertainty around the number of wallets participating, and the fact that an attacker will never know how many rounds a tx is going through.
And because Dash doesn't rely on encryption for its privacy, if you don't catch/trace the transaction when its happening, i.e. by buying up 70% or more of the masternodes, you can never deanon it. If you use encryption, especially for the entire blockchain, you paint a large target on your blockchain. If your encryption is ever broken, then all past transactions will be deanoned at once, so not good. This is a benefit of steganography over some encryption based privacy schemes. Edit:
Don't worry, my comments and posts are always heavily downvoted, that's how you know they're good stuff!
submitted by thethrowaccount21 to dashpay [link] [comments]

Ranking privacy Coins by there Anon-set size - PIVX is the King of Privacy Coins!

EDIT Be aware, the moderators of cryptocurrency have SHADOW DELETED without cause the original thread. This is most likely at the request of the XMR community. Also, the Monero community continues to Vote-Brigade this thread. Originally 11-14 upvotes, and even today 5 upvotes, they make sure it stays around 1. This is manipulation.
https://np.reddit.com/CryptoCurrency/comments/9gl5xp/cutting_to_the_chase_or_how_to_properly_evaluate/
This causes the post to appear to me, but to everyone else its been deleted. Now, why would they undertake such an underhanded tactic?
End EDIT
There's a lot of talk about anonymity and privacy as it relates to blockchains. Recently a report surfaced mentioning that cryptos are basically bad news for criminals: https://dailyhodl.com/2018/09/16/bitcoin-is-actually-a-money-laundering-tracking-device-that-catches-criminals-report/
TL;DR is at the bottom
Why? Because they're easy to track. Once they've got a single piece of identifying info that's linked to an address (say that coinbase transfer to an exchange) then all transactions are linkable to that id. But, privacy coins are different because they obscure this history (or in some cases 'delete' it all together). However, it can be a little difficult to decide which privacy coin offers the best privacy, along with the best combination of fees, security and usability.
So with no further ado, here is your simple guide to evaluating privacy coins! Like daily tx throughput is a key metric of btc/blockchain adoption and usage, privacy coins have their own 'key metric' to determine their ability to hide your tx history: the size of their anonymity set. This is basically the number of other people with which your transaction is plausibly 'mixed' so at to sever the link between your address and that coin. The greater this number is, the more difficult it is to associate a coin with your address, thus making it more private.
To make this easier to understand, it helps to know the following: All privacy coins do the same thing, just in vastly different ways. What is that thing? Obscuring/removing your linkage to a coin by mixing it with a similar coin denomination from another wallet. Monero is a slight exception to this, since transaction amounts are hidden in the blockchain as well, so there's no need for denominations. Also, your coin is mixed with fake coins that aren't real, instead of coins from other wallets, but no one can tell that from the blockchain so it works.

Dash

It should be noted that in Dash, the anonymity set is the total set of each denomination. So if you send a .1 Dash privateSend transaction, the anonymity set is the set of all .1 Dash. The following only applies if you've bought up more than 70% of the masternodes, and only to transactions that are currently being mixed. Previously mixed transactions cannot be deanoned.
In Dash, it depends on how many rounds you mix. Each coin is once again broken down into standard denominations like 10, 1, .1 .01 Dash. Each round involves a minimum of three different wallets. So take the number of participants and raise it to the rounds you mix-th power, and that is your minimum anonymity set.
So mixing four rounds gives you a minimum anonymity set of (3 participants)4 rounds = 81. Eight rounds gives you a min set of 38 = 6,561. 16 rounds give you a min set of 316 = 43,046,721 which is currently the largest anonymity set of all the privacy coins.
Could be more if more than three wallets were involved in any single mix, which is possible. However, it could be less if the same participants are used per round, which is unlikely. This is still a HUGE anonymity set; however, its probably at least an order of magnitude less than PIVX and ZCoin unless you were to get 4-5 wallets mixing per round. Dash's largest Anon-set is the largest in the private coin space and is around 3x larger than PIVX's.
Still, even 81 could be rightly considered overkill, especially since Considering the nature of privateSend and the random separation between 'minting' and spending, Dash is immune to timing analysis attacks. The determination of which coin to use will come down to your anonymity needs. How private do you need to be?

PIVX

In PIVX, for example, ~10-20% of all pivx held in wallets is 'gathered' by the accumulator (note it never leaves your control) in a central pool of zpiv using standard denominations like 10 zpiv, 1zpiv, .1zpiv etc. This is a configurable setting in the wallet so some may wish to turn it on/off at their discretion, but recent research has shown that 24% of all PIVX held in wallets is private/zpiv, see u/turtleflax's comment below.
After all of that, by using a zero-knowledge proof which cryptographically proves you owned whatever zpiv was minted from your wallet without any linking information to you, zpiv is 'sent' to your wallet and shows up with no transaction history. So the anonymity set is 10%, ~24% nowadays, of all PIVX held in wallets, which is obviously huge.

ZCoin

ZCoin and PIVX uses the same strategy as both implement the ZeroCoin protocol, which itself is just a specification, PIVX and ZCoin are implementations of that spec. Same idea with the denominations. PIVX's implementation is much more advanced however. ZCoin doesn't have an accumulator or anything and its privacy is optional.
However, its not possible to break a Zerocoin/ZCoin/PIVX transaction because there is nothing to break. It would be like trying to guess someone's password just by them logging in and proving they know their password and it works. That doesn't give you any information that would help. Furthermore, the total anonymity set is around 6.5% of the total supply which puts it comfortably in the same region as PIVX.

ZCash

ZCash is an implementation of the ZeroCash protocol which is an improvement on the ZeroCoin protocol. The cool thing about ZCash is that it also hides the amount of the transaction. ZCash's privacy is optional and the blockchain is split between t-addresses and z-addresses. t-addrs are transparent and contain visible balances just like Bitcoin, which ZCash is a software fork of. z-addrs are shielded. ZCash appears to have two kinds of shielded transactions (shielded and fully shielded).
I'm not sure of the difference between them, but according to this handy block explorer: https://explorer.zcha.in/statistics/usage, shielded txs are far more prevalent than fully shielded ones. The difference between them may be that fully shielded txs are transactions between two z-addrs while a tx that is 'just shielded' may be one between a z-addr and a t-addr and possibly a t-addr and a z-addr, but again, I'm not sure.
The developers claim that the anonymity set is very large in comparison to coins like Dash, and since it is based on the ZeroCoin protocol like PIVX and ZCoin, it is reasonable to assume its anon set is similarly large and based on a proportion of the supply, though where among the three it stands is of course up for debate/verification. However, with Dash's recent protocol update to v0.13, privateSend has the largest possible anonymity set.
Zec's anon-set is perhaps as large as the shielded value colume for any time period, also note that is a lower bound, so for the past month: 394989 ZEC would be the total shielded ZEC, so this seems a reasonable lower-bound on the Anon-set. Its hard to Tell between this and PIVX which is larger.

Monero

In Monero, the anonymity set is the number of mixins used at the time of your transaction. Which is currently 11 with the most recent update to bulletproofs. Monero originally had optional privacy where the min mixin was 0 and those transactions were transparent like btc's.
However, having these 0 mixin transactions together with the higher mixin transactions allowed for higher ones to be deanoned, that and 3 forms of timing analysis attacks forced the min mixin to be raised to 3, then 5 then 7 and finally its current static value. With the latest update the ring size, previously a wallet-configurable parameter, is now fixed at 11 for everyone.

TL;DR

So in short, if you want to rank privacy coins by their anon-set size (which is the only thing that matters) the list is as follows:

1. Dash

2. ZeroCoin and ZeroCash implementations: PIVX, ZCoin, ZCash

3. Monero

Note: Each tier represents a range of at least >1 order of magnitude greater anonymity set. So ZCoin, ZCash and PIVX are all grouped together, even though PIVX may have an anon-set 10-50x greater than ZCash or ZCoin (just an example, not a real figure), all three of them are still going to have anon sets 1-4 orders of magnitude greater than Dash, and like 6-7 times greater than Monero. Monero's default min mixin is 7 and the max definable in the gui wallet IIRC is 26 ring size is fixed at 11 for everyone. It is no longer possible to select your own ring size per tx. Be aware however that using higher, rarer ring sizes causes your transaction to stick out.
Due to the nature of how they are selected, there are wide ranges for the anon sets of these coins, except for monero which is fixed at 11 currently. But especially so for that of Dash, which may on occasion cross into fall the grey zone between numbers 1 and 2 due to uncertainty around the number of wallets participating, and the fact that an attacker will never know how many rounds a tx is going through.
And because Dash doesn't rely on encryption for its privacy, if you don't catch/trace the transaction when its happening, i.e. by buying up 70% or more of the masternodes, you can never deanon it. If you use encryption, especially for the entire blockchain, you paint a large target on your blockchain. If your encryption is ever broken, then all past transactions will be deanoned at once, so not good. This is a benefit of steganography over some encryption based privacy schemes. Edit:
Don't worry, my comments and posts are always heavily downvoted, that's how you know they're good stuff!
submitted by thethrowaccount21 to pivx [link] [comments]

I ranked the privacy coins by their anon-sets, ZEC came out on top!

EDIT Be aware, the moderators of cryptocurrency have SHADOW DELETED without cause the original thread. This is most likely at the request of the XMR community
https://www.reddit.com/CryptoCurrency/comments/9gl5xp/cutting_to_the_chase_or_how_to_properly_evaluate/
This causes the post to appear to me, but to everyone else its been deleted. Now, why would they undertake such an underhanded tactic?
End EDIT
There's a lot of talk about anonymity and privacy as it relates to blockchains. And legacy coins like BTC and BCH that do not have privacy are more effected than those with it. Recently a report surfaced mentioning that cryptos are basically bad news for criminals: https://dailyhodl.com/2018/09/16/bitcoin-is-actually-a-money-laundering-tracking-device-that-catches-criminals-report/
TL;DR is at the bottom
Why? Because they're easy to track. Once they've got a single piece of identifying info that's linked to an address (say that coinbase transfer to an exchange) then all transactions are linkable to that id. But, privacy coins are different because they obscure this history (or in some cases 'delete' it all together). However, it can be a little difficult to decide which privacy coin offers the best privacy, along with the best combination of fees, security and usability.
So with no further ado, here is your simple guide to evaluating privacy coins! Like daily tx throughput is a key metric of btc/blockchain adoption and usage, privacy coins have their own 'key metric' to determine their ability to hide your tx history: the size of their anonymity set. This is basically the number of other people with which your transaction is plausibly 'mixed' so at to sever the link between your address and that coin. The greater this number is, the more difficult it is to associate a coin with your address, thus making it more private.
To make this easier to understand, it helps to know the following: All privacy coins do the same thing, just in vastly different ways. What is that thing? Obscuring/removing your linkage to a coin by mixing it with a similar coin denomination from another wallet. Monero is a slight exception to this, since transaction amounts are hidden in the blockchain as well, so there's no need for denominations. Also, your coin is mixed with fake coins that aren't real, instead of coins from other wallets, but no one can tell that from the blockchain so it works.

PIVX

In PIVX, for example, ~10-20% of all pivx held in wallets is 'gathered' by the accumulator (note it never leaves your control) in a central pool of zpiv using standard denominations like 10 zpiv, 1zpiv, .1zpiv etc. This is a configurable setting in the wallet so some may wish to turn it on/off at their discretion, but recent research has shown that 24% of all PIVX held in wallets is private/zpiv, see u/turtleflax's comment below.
After all of that, by using a zero-knowledge proof which cryptographically proves you owned whatever zpiv was minted from your wallet without any linking information to you, zpiv is 'sent' to your wallet and shows up with no transaction history. So the anonymity set is 10%, ~24% nowadays, of all PIVX held in wallets, which is obviously huge.

ZCoin

ZCoin and PIVX uses the same strategy as both implement the ZeroCoin protocol, which itself is just a specification, PIVX and ZCoin are implementations of that spec. Same idea with the denominations. PIVX's implementation is much more advanced however. ZCoin doesn't have an accumulator or anything and its privacy is optional.
However, its not possible to break a Zerocoin/ZCoin/PIVX transaction because there is nothing to break. It would be like trying to guess someone's password just by them logging in and proving they know their password and it works. That doesn't give you any information that would help. Furthermore, the total anonymity set is around 6.5% of the total supply which puts it comfortably in the same region as PIVX.

ZCash

ZCash is an implementation of the ZeroCash protocol which is an improvement on the ZeroCoin protocol. The cool thing about ZCash is that it also hides the amount of the transaction. ZCash's privacy is optional and the blockchain is split between t-addresses and z-addresses. t-addrs are transparent and contain visible balances just like Bitcoin, which ZCash is a software fork of. z-addrs are shielded. ZCash appears to have two kinds of shielded transactions (shielded and fully shielded).
I'm not sure of the difference between them, but according to this handy block explorer: https://explorer.zcha.in/statistics/usage, shielded txs are far more prevalent than fully shielded ones. The difference between them may be that fully shielded txs are transactions between two z-addrs while a tx that is 'just shielded' may be one between a z-addr and a t-addr and possibly a t-addr and a z-addr, but again, I'm not sure.
The developers claim that the anonymity set is very large in comparison to coins like Dash, and since it is based on the ZeroCoin protocol like PIVX and ZCoin, it is reasonable to assume its anon set is similarly large and based on a proportion of the supply, though where among the three it stands is of course up for debate/verification. Perhaps as large as the shielded value colume for any time period, also note that is a lower bound, so for the past month: 394989 ZEC would be the total shielded ZEC, so this seems a reasonable lower-bound on the Anon-set. Its hard to Tell between this and PIVX which is larger.

Dash

In Dash, it depends on how many rounds you mix. Each coin is once again broken down into standard denominations like 10, 1, .1 .01 Dash. Each round involves a minimum of three different wallets. So take the number of participants and raise it to the rounds you mix-th power, and that is your minimum anonymity set. So mixing four rounds gives you a minimum anonymity set of (3 participants)4 rounds = 81. Eight rounds gives you a min set of 38 = 6,561.
Could be more if more than three wallets were involved in any single mix, which is possible. However, it could be less if the same participants are used per round, which is unlikely. This is still a HUGE anonymity set; however, its probably at least an order of magnitude less than PIVX and ZCoin unless you were to get 4-5 wallets mixing per round. Still, even 81 could be rightly considered overkill, especially since considering the nature of privateSend and the random separation between 'minting' and spending makes Dash immune to timing analysis attacks. The determination of which coin to use will come down to your anonymity needs. How private do you need to be?

Monero

In Monero, the anonymity set is the number of mixins used at the time of your transaction. Which is currently 7. Monero originally had optional privacy where the min mixin was 0 and those transactions were transparent like btc's. However, having these 0 mixin transactions together with the higher mixin transactions allowed for higher ones to be deanoned, that and 3 forms of timing analysis attacks forced the min mixin to be raised to 3, then 5 and now 7.

TL;DR

So in short, if you want to rank privacy coins by their anon-set size (which is the only thing that matters) the list is as follows:

1. ZeroCoin and ZeroCash implementations: PIVX, ZCoin, ZCash

2. Dash

3. Monero

Note: Each tier represents a range of at least >1 order of magnitude greater anonymity set. So ZCoin, ZCash and PIVX are all grouped together, even though PIVX may have an anon-set 10-50x greater than ZCash or ZCoin (just an example, not a real figure), all three of them are still going to have anon sets 1-4 orders of magnitude greater than Dash, and like 6-7 greater than Monero. Monero's default min mixin is 7 and the max definable in the gui wallet IIRC is 26. Be aware however that using higher, rarer ring sizes causes your transaction to stick out.
Due to the nature of how they are selected, there are wide ranges for the anon sets of these coins, except for monero. But especially so for that of Dash, which may on occasion cross into the grey zone between numbers 1 and 2 due to uncertainty around the number of wallets participating, and the fact that an attacker will never know how many rounds a tx is going through.
And because Dash doesn't rely on encryption for its privacy, if you don't catch/trace the transaction when its happening, i.e. by buying up 70% or more of the masternodes, you can never deanon it. If you use encryption, especially for the entire blockchain, you paint a large target on your blockchain. If your encryption is ever broken, then all past transactions will be deanoned at once, so not good. This is a benefit of steganography over some encryption based privacy schemes. Edit:
Don't worry, my comments and posts are always heavily downvoted, that's how you know they're good stuff!
submitted by thethrowaccount21 to zec [link] [comments]

Does BCH need on-chain privacy? Here I list all the most popular privacy methods and compare them by anonymity set, choose the one that's best for your chain!

EDIT Be aware, the moderators of cryptocurrency have SHADOW DELETED without cause the original thread. This is most likely at the request of the XMR community. Also, the Monero community continues to Vote-Brigade this thread. Originally 11-14 upvotes, and even today 5 upvotes, they make sure it stays around 1. This is manipulation.
https://np.reddit.com/CryptoCurrency/comments/9gl5xp/cutting_to_the_chase_or_how_to_properly_evaluate/
This causes the post to appear to me, but to everyone else its been deleted. Now, why would they undertake such an underhanded tactic?
End EDIT
There's a lot of talk about anonymity and privacy as it relates to blockchains. Recently a report surfaced mentioning that cryptos are basically bad news for criminals: https://dailyhodl.com/2018/09/16/bitcoin-is-actually-a-money-laundering-tracking-device-that-catches-criminals-report/
TL;DR is at the bottom
Why? Because they're easy to track. Once they've got a single piece of identifying info that's linked to an address (say that coinbase transfer to an exchange) then all transactions are linkable to that id. But, privacy coins are different because they obscure this history (or in some cases 'delete' it all together). However, it can be a little difficult to decide which privacy coin offers the best privacy, along with the best combination of fees, security and usability.
So with no further ado, here is your simple guide to evaluating privacy coins! Like daily tx throughput is a key metric of btc/blockchain adoption and usage, privacy coins have their own 'key metric' to determine their ability to hide your tx history: the size of their anonymity set. This is basically the number of other people with which your transaction is plausibly 'mixed' so at to sever the link between your address and that coin. The greater this number is, the more difficult it is to associate a coin with your address, thus making it more private.
To make this easier to understand, it helps to know the following: All privacy coins do the same thing, just in vastly different ways. What is that thing? Obscuring/removing your linkage to a coin by mixing it with a similar coin denomination from another wallet. Monero is a slight exception to this, since transaction amounts are hidden in the blockchain as well, so there's no need for denominations. Also, your coin is mixed with fake coins that aren't real, instead of coins from other wallets, but no one can tell that from the blockchain so it works.

Dash

It should be noted that in Dash, the anonymity set is the total set of each denomination. So if you send a .1 Dash privateSend transaction, the anonymity set is the set of all .1 Dash. The following only applies if you've bought up more than 70% of the masternodes, and only to transactions that are currently being mixed. Previously mixed transactions cannot be deanoned.
In Dash, it depends on how many rounds you mix. Each coin is once again broken down into standard denominations like 10, 1, .1 .01 Dash. Each round involves a minimum of three different wallets. So take the number of participants and raise it to the rounds you mix-th power, and that is your minimum anonymity set.
So mixing four rounds gives you a minimum anonymity set of (3 participants)4 rounds = 81. Eight rounds gives you a min set of 38 = 6,561. 16 rounds give you a min set of 316 = 43,046,721 which is currently the largest anonymity set of all the privacy coins.
Could be more if more than three wallets were involved in any single mix, which is possible. However, it could be less if the same participants are used per round, which is unlikely. This is still a HUGE anonymity set; however, its probably at least an order of magnitude less than PIVX and ZCoin unless you were to get 4-5 wallets mixing per round. Dash's largest Anon-set is the largest in the private coin space and is around 3x larger than PIVX's.
Still, even 81 could be rightly considered overkill, especially since Considering the nature of privateSend and the random separation between 'minting' and spending, Dash is immune to timing analysis attacks. The determination of which coin to use will come down to your anonymity needs. How private do you need to be?

PIVX

In PIVX, for example, ~10-20% of all pivx held in wallets is 'gathered' by the accumulator (note it never leaves your control) in a central pool of zpiv using standard denominations like 10 zpiv, 1zpiv, .1zpiv etc. This is a configurable setting in the wallet so some may wish to turn it on/off at their discretion, but recent research has shown that 24% of all PIVX held in wallets is private/zpiv, see u/turtleflax's comment below.
After all of that, by using a zero-knowledge proof which cryptographically proves you owned whatever zpiv was minted from your wallet without any linking information to you, zpiv is 'sent' to your wallet and shows up with no transaction history. So the anonymity set is 10%, ~24% nowadays, of all PIVX held in wallets, which is obviously huge.

ZCoin

ZCoin and PIVX uses the same strategy as both implement the ZeroCoin protocol, which itself is just a specification, PIVX and ZCoin are implementations of that spec. Same idea with the denominations. PIVX's implementation is much more advanced however. ZCoin doesn't have an accumulator or anything and its privacy is optional.
However, its not possible to break a Zerocoin/ZCoin/PIVX transaction because there is nothing to break. It would be like trying to guess someone's password just by them logging in and proving they know their password and it works. That doesn't give you any information that would help. Furthermore, the total anonymity set is around 6.5% of the total supply which puts it comfortably in the same region as PIVX.

ZCash

ZCash is an implementation of the ZeroCash protocol which is an improvement on the ZeroCoin protocol. The cool thing about ZCash is that it also hides the amount of the transaction. ZCash's privacy is optional and the blockchain is split between t-addresses and z-addresses. t-addrs are transparent and contain visible balances just like Bitcoin, which ZCash is a software fork of. z-addrs are shielded. ZCash appears to have two kinds of shielded transactions (shielded and fully shielded).
I'm not sure of the difference between them, but according to this handy block explorer: https://explorer.zcha.in/statistics/usage, shielded txs are far more prevalent than fully shielded ones. The difference between them may be that fully shielded txs are transactions between two z-addrs while a tx that is 'just shielded' may be one between a z-addr and a t-addr and possibly a t-addr and a z-addr, but again, I'm not sure.
The developers claim that the anonymity set is very large in comparison to coins like Dash, and since it is based on the ZeroCoin protocol like PIVX and ZCoin, it is reasonable to assume its anon set is similarly large and based on a proportion of the supply, though where among the three it stands is of course up for debate/verification. However, with Dash's recent protocol update to v0.13, privateSend has the largest possible anonymity set.
Zec's anon-set is perhaps as large as the shielded value colume for any time period, also note that is a lower bound, so for the past month: 394989 ZEC would be the total shielded ZEC, so this seems a reasonable lower-bound on the Anon-set. Its hard to Tell between this and PIVX which is larger.

Monero

In Monero, the anonymity set is the number of mixins used at the time of your transaction. Which is currently 11 with the most recent update to bulletproofs. Monero originally had optional privacy where the min mixin was 0 and those transactions were transparent like btc's.
However, having these 0 mixin transactions together with the higher mixin transactions allowed for higher ones to be deanoned, that and 3 forms of timing analysis attacks forced the min mixin to be raised to 3, then 5 then 7 and finally its current static value. With the latest update the ring size, previously a wallet-configurable parameter, is now fixed at 11 for everyone.

TL;DR

So in short, if you want to rank privacy coins by their anon-set size (which is the only thing that matters) the list is as follows:

1. Dash

2. ZeroCoin and ZeroCash implementations: PIVX, ZCoin, ZCash

3. Monero

Note: Each tier represents a range of at least >1 order of magnitude greater anonymity set. So ZCoin, ZCash and PIVX are all grouped together, even though PIVX may have an anon-set 10-50x greater than ZCash or ZCoin (just an example, not a real figure), all three of them are still going to have anon sets 1-4 orders of magnitude greater than Dash, and like 6-7 times greater than Monero. Monero's default min mixin is 7 and the max definable in the gui wallet IIRC is 26 ring size is fixed at 11 for everyone. It is no longer possible to select your own ring size per tx. Be aware however that using higher, rarer ring sizes causes your transaction to stick out.
Due to the nature of how they are selected, there are wide ranges for the anon sets of these coins, except for monero which is fixed at 11 currently. But especially so for that of Dash, which may on occasion cross into fall the grey zone between numbers 1 and 2 due to uncertainty around the number of wallets participating, and the fact that an attacker will never know how many rounds a tx is going through.
And because Dash doesn't rely on encryption for its privacy, if you don't catch/trace the transaction when its happening, i.e. by buying up 70% or more of the masternodes, you can never deanon it. If you use encryption, especially for the entire blockchain, you paint a large target on your blockchain. If your encryption is ever broken, then all past transactions will be deanoned at once, so not good. This is a benefit of steganography over some encryption based privacy schemes. Edit:
Don't worry, my comments and posts are always heavily downvoted, that's how you know they're good stuff!
submitted by thethrowaccount21 to btc [link] [comments]

Cutting to the chase or how to properly evaluate privacy coins - If you're into conspiracies and privacy, this thread is for you!

EDIT 2 I have been banned from cryptocurrency because of this thread. The reincarnation of this thread, since they shadow deleted the cross-posted original, has also been shadow deleted from the following subs:
Link - Click me! cryptocurrency
Link - Click me! xmrtrader
Link - Click me! monero
Link - Click me! zcoin
Which shows you the extent of control the xmr community has over reddit. This is a nice juicy conspiracy for you. Privacy-focused crypto community employs censorship, vote brigading and ridicule in order to hide information that they consider unfavorable to their coin.
End EDIT 2
EDIT Be aware, the moderators of cryptocurrency have SHADOW DELETED without cause the original thread. This is most likely at the request of the XMR community
https://np.reddit.com/CryptoCurrency/comments/9gl5xp/cutting_to_the_chase_or_how_to_properly_evaluate/
This causes the post to appear to me, but to everyone else its been deleted. Now, why would they undertake such an underhanded tactic?
End EDIT
There's a lot of talk about anonymity and privacy as it relates to blockchains. Recently a report surfaced mentioning that cryptos are basically bad news for criminals: https://dailyhodl.com/2018/09/16/bitcoin-is-actually-a-money-laundering-tracking-device-that-catches-criminals-report/
TL;DR is at the bottom
Why? Because they're easy to track. Once they've got a single piece of identifying info that's linked to an address (say that coinbase transfer to an exchange) then all transactions are linkable to that id. But, privacy coins are different because they obscure this history (or in some cases 'delete' it all together). However, it can be a little difficult to decide which privacy coin offers the best privacy, along with the best combination of fees, security and usability.
So with no further ado, here is your simple guide to evaluating privacy coins! Like daily tx throughput is a key metric of btc/blockchain adoption and usage, privacy coins have their own 'key metric' to determine their ability to hide your tx history: the size of their anonymity set. This is basically the number of other people with which your transaction is plausibly 'mixed' so at to sever the link between your address and that coin. The greater this number is, the more difficult it is to associate a coin with your address, thus making it more private.
To make this easier to understand, it helps to know the following: All privacy coins do the same thing, just in vastly different ways. What is that thing? Obscuring/removing your linkage to a coin by mixing it with a similar coin denomination from another wallet. Monero is a slight exception to this, since transaction amounts are hidden in the blockchain as well, so there's no need for denominations. Also, your coin is mixed with fake coins that aren't real, instead of coins from other wallets, but no one can tell that from the blockchain so it works.

PIVX

In PIVX, for example, ~10-20% of all pivx held in wallets is 'gathered' by the accumulator (note it never leaves your control) in a central pool of zpiv using standard denominations like 10 zpiv, 1zpiv, .1zpiv etc. This is a configurable setting in the wallet so some may wish to turn it on/off at their discretion, but recent research has shown that 24% of all PIVX held in wallets is private/zpiv, see u/turtleflax's comment below.
After all of that, by using a zero-knowledge proof which cryptographically proves you owned whatever zpiv was minted from your wallet without any linking information to you, zpiv is 'sent' to your wallet and shows up with no transaction history. So the anonymity set is 10%, ~24% nowadays, of all PIVX held in wallets, which is obviously huge.

ZCoin

ZCoin and PIVX uses the same strategy as both implement the ZeroCoin protocol, which itself is just a specification, PIVX and ZCoin are implementations of that spec. Same idea with the denominations. PIVX's implementation is much more advanced however. ZCoin doesn't have an accumulator or anything and its privacy is optional.
However, its not possible to break a Zerocoin/ZCoin/PIVX transaction because there is nothing to break. It would be like trying to guess someone's password just by them logging in and proving they know their password and it works. That doesn't give you any information that would help. Furthermore, the total anonymity set is around 6.5% of the total supply which puts it comfortably in the same region as PIVX.

ZCash

ZCash is an implementation of the ZeroCash protocol which is an improvement on the ZeroCoin protocol. The cool thing about ZCash is that it also hides the amount of the transaction. ZCash's privacy is optional and the blockchain is split between t-addresses and z-addresses. t-addrs are transparent and contain visible balances just like Bitcoin, which ZCash is a software fork of. z-addrs are shielded. ZCash appears to have two kinds of shielded transactions (shielded and fully shielded).
I'm not sure of the difference between them, but according to this handy block explorer: https://explorer.zcha.in/statistics/usage, shielded txs are far more prevalent than fully shielded ones. The difference between them may be that fully shielded txs are transactions between two z-addrs while a tx that is 'just shielded' may be one between a z-addr and a t-addr and possibly a t-addr and a z-addr, but again, I'm not sure.
The developers claim that the anonymity set is very large in comparison to coins like Dash, and since it is based on the ZeroCoin protocol like PIVX and ZCoin, it is reasonable to assume its anon set is similarly large and based on a proportion of the supply, though where among the three it stands is of course up for debate/verification. Perhaps as large as the shielded value colume for any time period, also note that is a lower bound, so for the past month: 394989 ZEC would be the total shielded ZEC, so this seems a reasonable lower-bound on the Anon-set. Its hard to Tell between this and PIVX which is larger.

Dash

In Dash, it depends on how many rounds you mix. Each coin is once again broken down into standard denominations like 10, 1, .1 .01 Dash. Each round involves a minimum of three different wallets. So take the number of participants and raise it to the rounds you mix-th power, and that is your minimum anonymity set. So mixing four rounds gives you a minimum anonymity set of (3 participants)4 rounds = 81. Eight rounds gives you a min set of 38 = 6,561.
Could be more if more than three wallets were involved in any single mix, which is possible. However, it could be less if the same participants are used per round, which is unlikely. This is still a HUGE anonymity set; however, its probably at least an order of magnitude less than PIVX and ZCoin unless you were to get 4-5 wallets mixing per round. Still, even 81 could be rightly considered overkill, especially since considering the nature of privateSend and the random separation between 'minting' and spending makes Dash immune to timing analysis attacks. The determination of which coin to use will come down to your anonymity needs. How private do you need to be?

Monero

In Monero, the anonymity set is the number of mixins used at the time of your transaction. Which is currently 11 with the most recent update to bulletproofs. Monero originally had optional privacy where the min mixin was 0 and those transactions were transparent like btc's.
However, having these 0 mixin transactions together with the higher mixin transactions allowed for higher ones to be deanoned, that and 3 forms of timing analysis attacks forced the min mixin to be raised to 3, then 5 then 7 and finally its current static value. With the latest update the ring size, previously a wallet-configurable parameter, is now fixed at 11 for everyone.

TL;DR

So in short, if you want to rank privacy coins by their anon-set size (which is the only thing that matters) the list is as follows:

1. ZeroCoin and ZeroCash implementations: PIVX, ZCoin, ZCash

2. Dash

3. Monero

Note: Each tier represents a range of at least >1 order of magnitude greater anonymity set. So ZCoin, ZCash and PIVX are all grouped together, even though PIVX may have an anon-set 10-50x greater than ZCash or ZCoin (just an example, not a real figure), all three of them are still going to have anon sets 1-4 orders of magnitude greater than Dash, and like 6-7 greater than Monero. Monero's default min mixin default ring size is 11 and the max definable in the gui wallet IIRC is 26. Be aware however that using higher, rarer ring sizes causes your transaction to stick out.
Due to the nature of how they are selected, there are wide ranges for the anon sets of these coins, except for monero. But especially so for that of Dash, which may on occasion cross into the grey zone between numbers 1 and 2 due to uncertainty around the number of wallets participating, and the fact that an attacker will never know how many rounds a tx is going through.
And because Dash doesn't rely on encryption for its privacy, if you don't catch/trace the transaction when its happening, i.e. by buying up 70% or more of the masternodes, you can never deanon it. If you use encryption, especially for the entire blockchain, you paint a large target on your blockchain. If your encryption is ever broken, then all past transactions will be deanoned at once, so not good. This is a benefit of steganography over some encryption based privacy schemes. Edit:
Don't worry, my comments and posts are always heavily downvoted, that's how you know they're good stuff!
submitted by thethrowaccount21 to conspiracy [link] [comments]

Scam Projects

Hello!
My name is Kristina Semenova, I am the Head of Investors Relation Department at Platinum, the world’s number one business facilitator.
Our team knows how to start ICO/STO in 2019!
Why are we so sure? Well, our experience speaks for itself:
Platinum.fund
But what is the difference between ico and sto? What is the cornerstone of ICO marketing strategy? You will know this after finishing the UBAI courses!
Here’s just a quick preview of our Short Course lesson.
Real World Examples
Multinational accounting firm Ernst and Young found that $400 million of the $3.7 billion USD raised from ICOs (as of January 22, 2018) had been stolen. That is, up to 10% of all ICO funding is virtually being stolen from investors. Though ICO scams are the most common method of theft in the crypto world, some projects will actually operate for a period of time before disappearing with the money. Like in a Ponzi scheme, an exit scam may be planned for later, sometime after a manipulated pump; or some other time the team believes is most opportune to take the money and run. Giza: Giza marketed itself as a platform within which different cryptocurrencies could be stored securely. But after raising $2.4 million in one month, the team deleted the website and stopped replying to emails. Investors were duped by a very convincing whitepaper, and actors had been hired to appear in photographs promoting the project. No investor funds have ever been recovered. Centra: The SEC put an end to fundraising for the Centra ICO and charged the founders Robert Farkas and Sohrab Sharma with orchestrating a fraudulent ICO after they raised $32 million USD. They were promoting the ability to develop financial products backed by VISA and Mastercard, though it was later found that neither partnership was real. One of the major red flags in the Centra project was the use of celebrity endorsements for publicity, reportedly paying champion boxer Floyd Mayweather a significant sum to promote their project. Who wants to leave their Blockchain investment decisions up to Floyd Mayweather, regardless of his unbelievable skill as a boxer and regardless of his own financial success? He should still not influence where you invest your money!
Ponzi Schemes: Bitconnect: This is the most infamous Ponzi scheme in the history of cryptocurrency, and certainly the most damaging. Bitconnect was a Bitcoin-based project that rose to an all-time high of $463 per token on the back of a fictitious trading bot. The Bitconnect scam operated by paying dividends to users, proportional to the number of tokens they held and the number of referrals they made. The BCC tokens were exchanged for the users’ Bitcoin, and the highly sophisticated and wildly successful trading bot would trade BTC for them and distribute profits as dividends. The value of the dividends offered was approximately 1% of the initial investment per day. In other words, that is approximately 3,780% per year in cumulative gain! The referral system was capitalized upon most heavily by many of the biggest crypto YouTube channels, including CryptoNick and Trevon James, both of whom are now under investigation by the Federal Bureau of Investigation. Shortly after the Bitconnect Token reached its all-time high, they received cease and desist orders from the security regulators of Texas and North Carolina, which caused the owners of the Bitconnect exchange to shut down operations, and the price to plummet.
Davorcoin: Davorcoin was a lending platform very similar to Bitconnect. And Davorcoin was farcically promoted by the same Trevon James crypto Youtuber who promoted Bitconnect, and is currently under investigation by the FBI for promoting Ponzi schemes. The Texas State Securities Board, in likening Davor to Bitconnect, stated that “DavorCoin is telling investors they can earn lucrative profits by investing in a lending program based on a new cryptocurrency known as davorcoin. Investors allegedly purchase davorcoin and then lend it to DavorCoin”. Davorcoin promptly plunged from an all-time high of $180 to very close to zero after a cease and desist order was made against them on the 2nd of February 2018. Useless Ethereum Token: Despite brazenly stating in the name of the project that the token has no use, the UET managed to raise $340,000 in its crowdsale, and saw a significant pump of over 300% on the HitBTC exchange in February of 2018. The scam was an obvious case of pump and dump, with the total trading volume for UET crashing back down to as low as $3 per day, after reaching as high as $350,000 per day during the pump.
It is currently an unfortunate consequence of the decentralized nature of cryptocurrency, but there is a distinct lack of recourse for scammed investors. It is wise to become as well-acquainted with the various indicators of good and bad ICOs as you possibly can. In weighing the factors that will allow you to avoid expensive mistakes, ask yourself in whose favor are the terms of the ICO slanted, yours or the teams? To what extent are you actually likely to profit from this investment? Cryptocurrency is inherently a grey area, whether you are investing in it or not. Investing is another inherently grey area, no matter what the area or object of investing might be. Laws and regulations are not always able to keep up. Trying to define and prove what was or was not a scam is not likely to be as simple as the scammed investor would want it to be. A project can be set up in certain ways to avoid being technically classified or provable as a scam, but the unprepared investor can still be burnt or scammed just as badly. Now we look at more individual indicators that can help you form a valid impression whether or not an ICO or even a fully-fledged exchange-listed coin is a scam or a bona fide investment opportunity.
Common Signposts
Contrasting Scam & Legitimate Projects
Presale Bonus/Token Release If the ICO allots massive bonuses to team members, you may leave yourself open to getting dumped on by presale investors if you buy when the project tokens are listed on an exchange. Likewise, if the project has a short lock-up period for developers and founders, you run the risk of them selling as soon as the token is listed on a major exchange. The token release schedule for the founders of a worthwhile project should show long-term team commitment to that project. The Jibrel Network team tokens will be locked up for 5 years before release, and they had no early investor bonus in the main sale. Both of these factors instilled confidence in the JNT ICO investors, and the tokens were sold out weeks before the ICO was due to end. No Presale lock up If Presale investor tokens are not locked up at all for any period after listing, that could easily be a set up for an exit scam after the initial listing. No presale lockup for early investor tokens is a crystal clear warning, the project may be fatally rigged toward those in the inner circle, with little commitment to the long term health or success of that project.
Unsolicited Offers or Unasked for Additions to Groups Characters running scam projects will often add you to Telegram groups out of the blue or send you unsolicited emails with information about their project. Telegram is the most widely used messaging app in the cryptocurrency community and you should familiarize yourself with it to keep yourself in the loop for specific projects in which you invest as well as all kinds of other relevant crypto info. You can adjust the settings on the Telegram app to disallow anonymous additions to cryptocurrency projects if you find yourself bombarded with offers by scammers. Reputable projects at the ICO stage will spread by word of mouth, or by eloquent and meaningful articles posted on their Medium page. A project with serious potential does not need to actively seek participants for their ICO like that. They will often be able to fill their ICO hard cap in a matter of hours, or even just minutes!
Anonymous Team
Alarm bells, again, immediately, if the project has minimal online presence. The individual team members could be mere fabrications. The entire project could be a farce by utterly inexperienced characters. What if the project leaders are simply unaware of the importance of a strong social media profile? That in itself would be too strange to ignore. Top-level projects will have team members with experience in crypto and the LinkedIn accounts for those members will be easily accessible right there on the project website. You should be able to easily see and evaluate each individual’s experience in their field and ascertain what they bring to the project team. Bitconnect’s anonymous team should have been the only deterrent prospective investors needed to discourage them from putting money into that doomed project. Ethhorse, a current project with anonymous founders and operators should be steered clear of at all costs for the same reasons.
Community Atmosphere
The subreddits or Telegram groups of scam projects will often feature moderators that do not allow any kind of criticism in the group chat. If, in the process of your due diligence, you encounter didactic admins that only wish to silence your questioning of certain aspects of the whitepaper or mechanism of the tokenomics
, you should be concerned. Similarly if you see a coherent critical reply attacked by many different users who refuse to engage the substance of the point being made, that may be a subreddit infested with bots. Projects that have nothing to hide will allow free debate in the chat. Ideally, they hope to develop a positive community that is itself an asset to the long-term success and overall strength of the project. Good projects do not need to automatically brand all criticism as Fear Uncertainty and Doubt (FUD).
Whitepaper
One common tactic of scammers is to produce a whitepaper that uses too many buzzwords, and deliberately obfuscates and overcomplicates the explanation of the problem and/or its solution. A good whitepaper clearly and concisely lays out the problem and answer, as well as provides compelling arguments why a Blockchain solution is preferable to the current solution. Another point of concern is a whitepaper that gives unrealistic time frames and goals. Bitconnect’s almost comically optimistic profit projections are a prime example of this, as are the 1,354% yearly gains promised by Plexcoin. Respectable projects will set out development timescales in terms of quarters or years, rather than offering immediate profit projections, which are simply a red flag.
Advisors/Connections in the Cryptoworld
The most prestigious projects will already have partnerships made before the ICO stage, and the worst ones, i.e. the scams, will not mention any such partnerships. Icon (ICX) for example was spawned from a South Korean project named The Loop, a collaboration between 3 Korean universities and the DAYLIFinancial Group. They boasted an advisory panel consisting of the legendary investor Don Tapscott, Jehan Chu and crowdfunding expert Jason Best. On top of a solid team of advisors, good projects will also be visible at major Blockchain events such as the Consensus, and the World Blockchain Forum, etc. Scam projects will be unable to inspire this same level in confidence. As an investor, you should sense a certain presence and expect a certain feeling of trust that should guide you in your investments. After all, it is actually a people-to-people thing you are doing.
Key Stress points upon the Timeline to Identify Scam Projects Post Whitepaper Release The period in the immediate aftermath of the release of the whitepaper can also be decisive in establishing the validity of a project. How a team copes with the roadmap that they have laid out for themselves is key. Valuable insight into the operational efficiency and commitment to the project can be gleaned from the quality of and amount of code committed to GitHub. If you have any experience in computer programming you can see how clean and orderly the code is, which gives insight into the skill of the developers, and in turn the quality of project leaders’ decision-making in hiring team members. Scam projects will have little or no code committed to GitHub, or at best it will be copied and pasted from other projects just to cover their tracks. Start of ICO Sometimes, a scam project, or other project in which you would be better off not investing, will change the terms of the ICO just before the ICO starts. The Key (TKY) ICO doubled the price of tokens on the day before the ICO was due to take place, because the price of NEO had risen so drastically. Currently, the TKY token price is still only half of its ICO price. Initial investors are faced with the prospect of a 50% loss on their investment.
Exchange Listing
Some particularly greedy scammers will create a scam project with the intent of selling tokens in the ICO for BTC and ETH, and then pumping and dumping their share of the tokens immediately after listing. The team of fraudsters behind Monero Gold used this method after the crowdfunding of their useless ERC-20 token. After listing on CoinExchange.io, the team dumped their tokens until the exchange finally ceased trading. Although it is not uncommon for ICO tokens to sold after listing (just like can happen with shares of stock after an IPO), if the price does not stabilize and massive sell walls are continually placed, a scam is likely taking place and the token is being dumped.
Fake Ethereum Twitter giveaway
You may have noticed Ethereum creator Vitalik Buterin’s twitter handle has been changed to Vitalik “Not giving away Eth” Buterin in recent months. This is because a group of devious scammers had created fake accounts with almost exact replicas of his profile (deviating by only one character). The fake accounts promised to deposit 1 whole ETH for every 0.1 ETH the potential sucker deposited into the wallet address provided by the scammer. These fake account “Ether giveaway” scam tweets were set up to be sent in just a matter of seconds after the real person tweeted, and usually always appear immediately after the tweet of the real public figure. Fake bot profiles then came into play, thanking the fake Vitalik, or fake Elon Musk, for holding up their end of the bargain and depositing the ETH as promised. One scammer, or group of scammers, managed to fill a wallet up with almost $20 thousand worth of ETH, which they transferred out, never to be seen or heard from again.
Effect of Scam Customers, Upon the Affected Parties
Of course, this is no fun for the targeted public figure either. They need to take steps to avoid being targeted again. This will mean changing their handle, their username, or making their accounts private. However, the injured party with whom we are most concerned is the unfortunate scammed social media user, who has no chance whatsoever of getting his or her funds back, ever. It is a harsh lesson to learn. But it is a fact of crypto reality. Nearly every one that trades crypto will at least be exposed to frauds or scams in one way or another. In this case, we think it is better to learn about scams by studying them, rather than learn from your own unfortunate and expensive experience. In the case of Mr. Buterin, these incidents were awful public relations for the Ethereum project. It had only been a few years since cryptocurrency as a whole was primarily associated with criminality and seedy transactions on the Darkweb. Any connection with unscrupulous behavior is best avoided at all costs. Negative associations could have been particularly damaging for Ethereum’s brand because the vast majority of ICO fraud is committed using the ERC-20 token as the template for the scam tokens.
Any and all the scamming or fraudulent behavior in the cryptocurrency ecosystem is bound to have a negative impact on the speed at which mainstream uptake finally takes place. Cryptocurrencies, as an emerging asset class, will be painted in the worst possible light. Crypto is aiming to, and is in fact in the process of, causing great disruption in traditional centralized finance and business. Mainstream media organizations are also part of that traditional centralized economy. Press coverage will be damning. Something is happening here, but Mr. Jones doesn’t know what it is.
Legal Recourse for Scams
We clearly understand, there is a possibility of being scammed. We know the scams are happening. The SEC has made some arrests and actually charged people for operating fraudulent ICOs. But it is a struggle to deal with the flood of ICOs coming from anywhere at any time. The SEC filed charges against two founders of a purported financial services startup for orchestrating a fraudulent ICO that raised more than $32million from thousands of investors. As you know from the ICOs we have covered so far, the lack of regulation allows for direct contact and dealing between the entrepreneurs, business owners and potential investors. While we believe this is a blessing according to the founding principles of Bitcoin and other alternate Cryptocurrencies, because it frees us from traditional roadblocks, middle-men, and all kinds of time-consuming procedures; it also leaves investors in a place where there is often little to no hope of ever recovering funds lost in fraudulent schemes.
Actions after a Successful ICO
Good post-ICO practice is characterized by stringent security, well thought-out legal strategy and clear communication. Many projects have paid the price in damage to their reputation for failing to adequately guard customer information, leaving themselves open to phishing attacks by fraudsters. Investors in the Enigma project had half a million dollars stolen from them; and a whopping $8.4 million was defrauded from investors in Veritaseum via phishing attacks. After a successful token distribution, the team’s main focus is initially on switching the enterprise from one primarily focused on fundraising, to superficially at least, a fully-fledged, functioning business. This involves removing most of the token sale-related content from their main webpage, sending newsletters to all successful ICO participants, and sending refunds to those who may have missed the deadline or the hardcap. Then, with the stressful and complicated fundraising stage finally concluded, a portion of the funds raised can be assigned to fuel the growth of the project community. This can involve hiring community managers, forum admins, and social media managers to outsource the job of keeping investors in the loop. The founders can focus on growth strategy and product development. The cultivation of a thriving and energetic community is extremely important. The community will give you free marketing for your product and your business. Community members who believe in the project, and are engaged by professional moderators, can give you very effective promotion to other prospective investors. Communication with community members is a great way to test ideas and gauge sentiment related to various aspects of your project.
The project leads must set aside adequate funds for lawyers. The project will need to address potential future or imminent problems with regulators, at the very least. The transition from fundraising project to full-fledged business can be incredibly challenging, and even more stressful than the ICO itself. The main thing to remember is that your pre-sale and ICO investors are not just silent investors waiting for a return. They are the early adopters of your solution, of your product; they are the community and promoters of your project; and they are the individuals with a vested interest in the financial success of your venture. The ICO environment is not as heavily regulated, so quarterly and/or semi-annual reporting is not required the way it is in the traditional world. That means your own style of effective communication about the progress and key developments on your project matters even more. In the ICO world, you communicate with your press releases, social media, and Medium posts. You also communicate by the very nature of your relations with your exchange, and relationships with your cornerstone investors. Effective communication and good business relationships can play a prominent role in the success or failure of your venture (by token liquidity and valuation).
If your investors start to lose interest, and stop trading your token on the exchange, liquidity will dry up and cause increasingly volatile price swings. You need to keep certain things in mind, and follow effective practices to maintain a happy and motivated community.
Social Media & Medium
In addition to your website, your social media & Medium blog most likely formed a significant part of your ICO preparations. Your purpose pivots after the ICO from one of promotion to one of communication. Consistent, informative and material Medium blogs, also Facebook and Twitter updates, ensure that investors remain engaged and well-informed of what the company is up to. Frequent activity in this space makes investors feel much more comfortable. You can foster a kind of organic community expansion that is consistently advertising your project to potential new members.
Cornerstone Investors & Exchanges
As we mentioned, your relationship with investors in the ICO world is different from that of the traditional silent IPO minority equity partners. Consistent, Transparent & Honest communication is incredibly important here. Even if an ICO is struggling to overcome a problem or whatever issues are occurring, honest communication from the team is key to business survival. You should think of and treat your exchange like a business partner too, a very important one at that. Exchanges provide liquidity for you and your investors. That liquidity is like the blood for your business. Many top exchanges demand nothing less than absolute honesty and integrity, it is imperative to maintain strong and comfortable relationships with exchanges. Everything we have said so far, also applies to your Telegram channel and forums too. These give you another great opportunity to build a thriving community. Team members and investors can enjoy lively debates in their Telegram channels. This can be constructive discussion, or critical commentary too. But it is always valuable as a direct link between the team and the community. It is always good to know how people are feeling and what they expect from you and your project. You are able to use your Telegram channel and forums to consistently adapt your marketing and communication strategy. Keep your investors as happy and comfortable as possible, and you will be more likely to attract new investors and allocations. Other forums around the internet operate more or less in the same manner as Telegram.
After a successful funding round with the hardcap reached and time to spare, legal counsel has been secured, and the community is flourishing, the team will prepare for their first listing by paying the exchange fee and waiting for the announcement by the exchange. Unless they are willing to pay exorbitant fees for an immediate listing on Binance for example, teams will usually settle for an initial listing on a second-tier exchange. The fee charged by an exchange depends on many different factors that we will cover in more detail in the next section.
ICO Company actions after a Successful ICO
Real World Case Study
The Basic Attention Token (BAT) project, when used in conjunction with the Brave Browser, allows users to pay micro-fees in BAT to their most-used sites. The idea was conceived by Brendan Eich, the inventor of Javascipt and former CEO of Mozilla Firefox. Investors absolutely pounced on it at ICO and the project raised an amazing $35million in under 30 seconds. The BAT/Brave project has delivered on time on nearly all of its targets, helped in no small part by having a working product, the Brave Browser, for over a year before the token launch. The project secured a listing on the premier exchange, Binance, in November 2017.
A project can suffer through a disappointing funding phase and, for example, fail to reach 75% of its hardcap. The team will be only partially funded. Though they may be able to initiate the project, the value proposition of the token has been compromised, potentially forever. The market has spoken. There is limited faith in the team’s ability to complete or carry out their project. Failure to reach a hardcap is a serious obstacle on the project road map. This will mean massive revisions to the timescales for development and listing. Such a project may have to be content listing on decentralized exchanges for a period of time and they will lose any post-ICO hype that could have helped the project price to “moon” early on. There is less money to be allocated. Each section of the business will be underfunded compared to the original plan. There can be delays in code development, exchange listing, marketing and community development as well.
Calling the Tezos ICO a disappointment might seem strange considering they raised over $232million. But this open-source, smart contracts fintech platform became a victim of its own success post-ICO by devolving into multiple class-action lawsuits between the founders and its foundation chairman. They suffered from a distinct lack of clearly defined roles and expectations on key positions. There was infighting at the boardroom level. This all caused an as yet unresolved delay in listing and development. This is also one example why a capped ICO can be more desirable for investors than an uncapped ICO. If the team have a set amount of capital to work with, an amount that isn’t absolutely ridiculous, like in the case of Tezos, perhaps the resultant greed and discord is less likely. Although it may not be so easy for speculative investors to make a profit from an uncapped ICO with such a massive initial market cap, it is a very impressive feat of fundraising nonetheless. Tezos’s post ICO market cap of $232million is already 64th of all projects, and would have to perform brilliantly on listing to maintain this position.
Company actions after a Failed ICO
Failed ICOs can mean either fundraising initiatives that have failed to reach the softcap and will therefore not be economically viable, or fraudulent projects whose sole intention was to steal from investors and do an exit scam. We’ve already covered scams and fraud projects in detail, but what happens when an ICO just fails to raise the requisite funds? Projects that are legitimate, with honest founders and developers, refund the ETH or BTC deposited by investors as quickly as possible if the softcap is not reached. The same process that is followed by ICOs that are oversubscribed is employed by those that have failed to raise enough capital. The process of returning funds back to the sender ideally should take a period of days, but more likely will take a few weeks. The Sappy Network, advised by Dan Tapscott, failed to come anywhere near to their funding goals. They are currently in the process of sending all investor funds back to the wallets from which they came. The statement from the founders read as a textbook example of how you should react to failure with the founder stating “In the spirit of transparency and honesty, we are sharing with the community that we did not reach the soft cap, and thus we will be honoring our terms and conditions and returning the Ethers to all contributors”
Exchange Listing
A bottleneck developed in the ICO market after the explosion of crypto prices in 2017. There was a massive increase of ICO teams on all stages along the pathway from start-up to fully listed crypto asset. Certainly, a huge part of the value proposition for both the token and the project depends on securing a listing on an exchange. It is precisely the liquidity of the token as a valuable asset on a free market exchange, that determines or even defines its value. The liquidity is what makes tokens attractive to investors, but that liquidity simply does not exist without a platform for the exchange. Unfortunately for new projects, the balance of power is heavily weighted in favor of large centralized exchanges that can pick and choose which tokens to list, and the timescale within which listing will occur. Each large exchange has its own list of pros and cons as well as its own specific procedure for coin/token listing. They also have their own particular ethos regarding the type of projects they prefer to list. ERC-20 tokens will be available for trade immediately on decentralized exchanges (IDEX Forkdelta) but those platforms are generally quite low volume, and certainly not a long term solution. Projects must often pay huge fees to be listed on the larger centralized exchanges. At first those fees will be prohibitive. The usual route is to initially list on a more reasonably priced smaller exchange like Kucoin or Gate.io.
Listing Process
Major centralized exchanges have the power to list anything they want, and they also each have a unique structure that projects must adhere to if they wish to be listed. Each potential new listing will undergo a rigorous examination by the exchange operators to test the feasibility for listing the token. An exchange will likely have forms available on its website that you can fill out to give them all the necessary initial information. If a particular project and token qualify for listing, the team will invariably be put under a NDA, Non-Disclosure Agreement, to avoid any insider trading or other regulatory problem
s. In the case of larger exchanges like Binance, there is a period within which owners of a newly listed coin or token can transfer them to the exchange in preparation for trading. This is a fantastic opportunity for traders to make use of the likely pump that occurs after a new token is listed on a large exchange. It is common to see up to 100% increases on the first day of trading, and a subsequent dump of up to 50% or more can follow. This allows traders holding the coin already, to sell for a good profit, and maybe buy back in at a much lower price too, if they think that is a good idea.
Exchange Fees
There are no definitive figures available to the public regarding fees that major exchanges charge new projects to list. Binance, Bitfinex, Kraken and Bittrex have all been quoted as saying that they do not charge any fee at all but this is almost definitely untrue. Knowledgeable industry insiders estimate between $500,000 and $1,000,000 USD for listing on a top-tier exchange. (There have been more rumors of 7 figure exchange listing fees since January 2018 too). This figure will vary greatly from project to project. Various factors can affect how an exchange determines the fee for a particular project. These are some of the most important ones: Market Maker Service Required Whether or not the client project requires liquidity services directly from the exchange, or can connect proprietary ones via API, will lead to a huge reduction in listing cost.
Type of Token (ERC-20 NEP-5 or DAG) Not all tokens are created equal in the listing process. ERC-20 tokens and BTC based tokens have code architecture that will almost certainly be preferred by the exchange. NEO based tokens (NEP-5) such as Ontology will be far most costly to integrate because separate new wallets have to be built to facilitate NEO transactions. The costs involved in integrating Direct Acyclic Graph projects such as Nano into the exchange structure are even worse. Expected Daily Volume Exchanges derive their profits largely from transaction fees and withdrawal fees. The trading volume a new token is likely to bring in will have a great influence on the computation of the exchange listing fee. Exchange Listing Procedures Evaluation Different exchanges have different rules for new listings. A new project must of course abide by specific rules for that exchange before they are allowed to list there. There are procedures that must generally be followed for the most noteworthy exchanges. You can get a good idea of the hurdles to be overcome before listing can take place.
Ongoing relationship with Exchanges
Exchanges, usually Huobi or Kucoin, will sometimes make it essential for newly listed tokens to engage in “trading competitions” after listing. Competitions can last between 2 weeks, or a month or more, aiming to increase the trading volume for that token, thereby increasing trading fees collected by the exchange, and giving the project extra publicity too. The whales may have made a nice profit already and be very happy about it; but the project token can still get stuck in a long period of stagnation and a loss of post-ICO hype. Once a coin or token has been successfully registered for trading on a particular exchange, the project must focus on maintaining regulatory compliance and paying things like annual maintenance fees too. Exchanges can investigate and delist coins or tokens to see if they have fallen below a certain standard set by the exchange. The exchange is concerned about such things as: an extended period with an extremely low volume; a team member connection to an exit scam; or other such immoral/illegal behavior.
Post ICO Company Evaluation
After a presumably successful ICO, the necessary funds have been obtained, and the real business, the real team challenge is now, to bring the project to life as a bona fide disruptive Blockchain endeavor! The core advantage of the ICO method of funding business startups is the lack of regulatory hurdles to navigate with regards to fundraising and fund allocation. The funds that have been raised have, in effect, been freely given to the project leads to do with what they will in a no-strings-attached transaction. Of course, there are still strings attached in that the team are tasked with making that money grow for the investors. But there is no regulatory oversight of the process. The regulatory freedom is a double edge sword. It gives a good team freedom to work however they want; and it also allows for unscrupulous thieves to use the ICO process to defraud investors of their ETH and BTC.
Advantages of being Post ICO From Investor Perspective
You should have little to fear in terms of fraud from a project in which you have invested, if you have done your due diligence correctly. You can expect the tokens to be distributed, and the exchange listing to take place as expected. And you know your project is totally legitimate. There are different ways to think about your ICO tokens after the crowd sale has concluded. If you are a speculative investor looking for a quick flip, you can gauge the correct moment and sell anytime you like, assuming the ICO has been well-received by the markets.
From Team Perspective
The post-ICO period is, from the point of view of the team, a period where stress and responsibility for the safety of investor funds is passed, in the form of ICO tokens, from the team to the investors themselves. This responsibility for tokens is replaced with the stress of building the actual company itself, and succeeding in the business as planned. A small portion of the responsibility for the project’s success is also passed on to the exchange that has listed the tokens. This is especially true if market makers have been employed by the team or the exchange to provide liquidity. After the ICO has concluded, all funds are released to the project team immediately, so they can start building their business brand, and tackling each step on the road map right away. The freedom with which startups can operate is one of the main reasons behind the explosion in Blockchain businesses in 2017. With the ICO funds safe, and money being put to work on various areas essential to the growth of the project, and the tokens already distributed to investors, the risk of fraud is greatly diminished. If KYC and Anti-money Laundering procedures have been followed correctly during the ICO phase, the risk of phishing attacks and theft will also be marginal now. At any rate, with tokens safely delivered to all participants, the responsibility has passed from the team to the investor.
From Team Perspective
The release of all funds and the freedom to allocate them with no supervision, as cited above, is certainly a tremendous advantage empowering the team to fulfil the entire breadth of their vision unimpeded. But it does have its drawbacks. If there is a mistake made in the allocation of funds, or an unforeseen problem arises, there is nowhere to turn to, and no means of generating further money via crowdfunding. The ICO is over; it is finished. The project simply has to work with what it has. Your community can sometimes turn against you when the market is going down. Times like that just add to the already intense pressure of presiding over a startup Blockchain business.
Solution: DAICO
The DAICO, or Decentralized Autonomous Organization Initial Coin Offering, is a means to integrate a more specific, rigorous and regimented smart contract schedule into the ICO process. Doing so will eliminate fraudulent ICOs, exit scams, pump and dumps, and many of the other disadvantages listed above. The DAICO method, proposed by Ethereum creator, Vitalik Buterin, will merge the core concepts of both an ICO and a DAO to leverage the most relevant features of both, in order to solve the main problems in the ICO method. For example, to eliminate the risk of an exit scam, the release of funds will be spread out over a period of time, with the next allotment only being released when a certain set of parameters are met.
Buterin explains that the DAICO method will provide user protection in a manner not present in the current ICO model, ensuring funds are not misspent or used in any way contrary to the intention of investors. In simpler terms the DAICO will operate as follows: The DAICO will start with a smart contract by its executors that can set whether this is to be a capped or uncapped round of fundraising (amongst many other options) as well as including KYC requirements. After these settings have been configured, the DAICO is set into “contribution mode” and presented to the public. This stage will function identically to a normal ICO with ETH exchanged for project tokens. Once the funding period has elapsed, or the hardcap has been met, investors will have the ability to set the “tap” for the collected funds. This will set the amount per second, or amount per minute, that will be available to the executor to develop that specific portion of the project to which those funds have been assigned. If investors believe at any point that the team is misspending funds or otherwise wasting time, etc., the investors have significant options to take. Of course they could choose to release more funds to the team. But, they could also stop the tap altogether, and stop the entire ICO, by voting, and actually release all unused funds back to their own wallets from which the investment had first been made!
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Bitcoin's Dystopian Future

I have seen the future of Bitcoin, and it is bleak.
The Promise of Bitcoin
If you were to peak into my bedroom at night (please don’t), there’s a good chance you would see my wife sleeping soundly while I stare at the ceiling, running thought experiments about where Bitcoin is going. Like many other people, I have come to the conclusion that distributed currencies like Bitcoin are going to eventually be recognized as the most important technological innovation of the decade, if not the century. It seems clear to me that the rise of distributed currencies presents the biggest (and riskiest) investment opportunity I am likely to see in my lifetime; perhaps in a thousand lifetimes. It is critically important to understand where Bitcoin is going, and I am determined to do so.
My hundreds of hours of thought experiments have been productive. I published a whitepaper about the future of Bitcoin, and because of that paper I’ll have the great privilege of sitting on the “Bitcoin in the Future” panel at the 2013 Bitcoin Conference in San Jose. Through these years of deliberation I have satisfied myself that the answer to the “Trillion Dollar Question” of whether any form of distributed currency can ever achieve a stable price, is “yes”. (There are three ways this will happen, as I have written elsewhere).
I have been predicting for years that the world’s first trillionaire by USD valuation will be an early investor in distributed currency — quite possibly Satoshi Nakamoto, whoever he/she/it/they may be. I own a few bitcoins, and I intend to keep them until I find a more attractive investment (that is, I want to invest in whatever replaces bitcoin or builds on top of it).
To many people, this sounds like an implausibly rosy future, and for early adopters that is true — it feels like winning the lottery every day. However, for most other people, the ascendancy of distributed currency systems will feel like a disaster. If you are involved in Bitcoin now, you should prepare to be almost universally hated someday.
In this article, we will examine a few simple thought experiments to show how the rise of distributed currencies such as bitcoin could create massive social upheaval due to governments’ rapidly degrading capability to fulfill their core functions of taxation and regulation of commerce. We’ll see how the end result could be extremely painful for common citizens due to previously unimaginable wealth disparities, hyperinflation of previously stable government-backed fiat currencies, and a greatly empowered criminal class.
The Bleak Future of Fiat Currencies
Anarchists and hardcore libertarians love Bitcoin, but most people outside those circles are not in favor of completely doing away with their government. If you aren’t part of a fringe political movement, chances are there is something the government does that you like, whether it’s handing out entitlement money, killing enemies, putting people in prison, building dams and roads, funding research, or any number of other things. The government can do these things because the government can collect taxes, which in turn they can do because the flows of money are highly regulated and tracked at every level. Whether you are collecting a paycheck, buying furniture, cashing out investments, or simply dying and leaving an inheritance, the government knows about it and takes a cut.
For our first thought experiment, let’s imagine a world where distributed currencies like bitcoin have become wildly successful due to technological advances which make them easy to use and completely stable. In this world government-issued money is as good as dead. It may take a few years for everyone to realize it, but there will come a point when the ever-increasing outflows of money from fiat money into untaxable, unseizable decentralized currency will reach a tipping point, and we’ll have a financial panic like the world has never seen. Frightened lawmakers and banks will try to stop people from cashing out, but that will just increase the panic. Those who don’t get out before the door closes will be in dire straits indeed. This is the ultimate bank run — the run on the world’s central banks, and who could possibly step in and restore order?
When people think of hyperinflation, they usually envision a Zimbabwean printing press running around the clock in the dark corner of a mud hut, putting ever more zeroes on cheap paper. Has it ever occurred to you that hyperinflation can happen while the printing presses are off? The value of the money in your pocket is not ultimately guaranteed by your government, but by simple supply and demand. The government controls the supply, and we control the demand. If demand falls precipitously, we have hyperinflation without ever needing to print another dollar or euro. If people start fleeing government currencies en masse, hyperinflation is the inevitable result.
The good news is that you don’t need to worry about current government debt in this scenario. If government currencies lose their value rapidly, debts which previously seemed overwhelming suddenly become much more manageable. Perhaps your debt-laden government will someday completely pay off it’s national debt by simply selling a few gold bars and a couple national parks.
The Bleak Future of Retirement
For our next thought experiment, let’s consider what will happen to Grandma. For her whole life, she has carefully saved her money, and now she is living in reasonable comfort. She gets money and health care from the government, and she has her own savings to fall back on. Grandma has done everything right, including taking her savings out of the stock market; most of her savings are now invested in the safest asset known to man: U.S. Treasury Bonds.
Rather suddenly, things start to go wrong. At the same time all her expenses start skyrocketing, the government has a liquidity crisis; they are having trouble collecting taxes and can no longer pay for her health care. Her savings are still “safe” in the sense that she will get U.S. Dollars out of them, but that is little comfort when those dollars which should have lasted years can barely pay her weekly grocery bill.
Grandma’s retirement has been sabotaged by the rise of a new kind of money that she can’t even begin to understand. All she knows is that she did everything right, and now she has nothing.
The Bleak Future Wealth Disparities
All the world’s wealth has essentially been stolen, but by whom? By you, dear reader.
We’ll be very lucky if we aren’t all rounded up and summarily executed. Thankfully, you’ll be able to use some of that money to purchase protection, but I’m not at all convinced that it will be enough. A wrathful government backed by an enraged population is a fearful enemy. Satoshi foresaw this long ago, and I doubt he/she/it/they will ever voluntarily come into the light.
If there are enough of us, and we are very careful and charming, we may be physically safe. However, the massive displacement of wealth will still have some awful consequences. People argue all the time about the societal benefits and drawbacks of wealth disparities, and the rise of distributed currencies will create disparities that previously did not seem possible. It seems clear that there will be a lot of jobs created by the new wealthy, but whether the average person is better off or not, one thing is sure to rise: resentment. What right do we have to take all the wealth of the world and put it in our pockets? Sure, a nifty new idea should pay off for early visionaries, but nobody ever expected a new idea to suck all the wealth out of the world like a financial black hole!
The Bleak Future of Law Enforcement
This is where things get really bleak. Currently distributed currencies facilitate money laundering, black market commerce (the Silk Road), and insider trading (TorBroker). These applications in their current form are just a snowflake on the tip of the iceberg. Not only will they get MUCH bigger, but we will see applications which are much less savory. Historically, the “Dark Net” accessible by Tor and private networks has been nothing more than a hidey-hole for illegal files and a hangout for paranoid schizophrenics, but it is quickly becoming the platform of choice for large-scale illegal commerce.
For this thought experiment, we will imagine that your child has been kidnapped and put up for sale on “TorSlaver”. Their business plan is to kidnap children and sell them to the highest bidder, whether parent or pedophile. The winning bidder is sent the location of the child, probably bound and gagged and dumped somewhere. As long as they don’t get caught doing the kidnapping, the kidnappers can do this again and again with complete impunity. Once someone proves it can be done, copycats will come out of the woodwork, and it won’t matter if the first mover gets caught.
As a parent of three small children, I cannot describe to you how awful this makes me feel. I have always been a very reluctant bitcoin investor, for this very reason. I don’t invest in bitcoin because I think it will bring about a happy utopian world. Quite the opposite. I invest in bitcoin because the rise of distributed currency is inevitable, and owning some bitcoins seems to be the best way to prepare for the chaos ahead. And just maybe, if I position myself correctly, I can make things a little less awful.
The Government Strikes Back
Does anyone really expect the government to sit back quietly and watch while their currency is debased, terrorism is funded, and children are kidnapped? The only question is when and how they will strike back against these forces. While the government does have a lot of options, ultimately those options only slow things down. At some point, we collectively with our governments face a difficult choice between trying to survive this deadly storm or attempting to destroy all decentralized computer networks (including the internet). The former seems unthinkable, the latter, impossible.
I wouldn’t be surprised if this chaos gives rise to a strong, centralized, one-world government which gets its revenues by tightly reigning in freedom of commerce in order to collect taxes. For instance, I will not be surprised to see a requirement someday that every person buying or selling have an implant which tightly binds their identity to the sale. Perhaps the implant will even be located on the back of the right hand or the forehead! This may seem repugnant to you now, but wait until you have lived in the storm for a while before you call it impossible. The natural reaction to the deadly chaos of decentralized currency is for the populace to embrace increasingly centralized controls on commerce. The battle lines are only just starting to be drawn, and your guess is as good as mine for how it will play out.
What Should We Do?
We need people thinking about this. I’ll admit that many of the things I wrote about may not happen at all, or may happen very differently than I imagine. However, there are lots of people touting the fantastic benefits that bitcoin and its children can give us, and I don’t see anybody talking about how bad things could potentially get.
We need solutions. When the government finally starts taking decentralized currency seriously, it will probably be doing so in a state of panic. We need to be advising governments now about how they can survive the storm and protect their populace. We need to think of ways the government can pay for its most critical operations, and what legislation makes sense to mitigate these new risks while preserving as much freedom as we can.
The Lifeboat Foundation is attempting to provide this thinking, advice, and solutions. They are already getting ready for a new advisory board, culled from computer scientists, economists, and bitcoin experts. If you make a fortune from your investments in decentralized currency, I urge you to consider how you can help all the people harmed by these rapid changes. Many bitcoin enthusiasts seem to think they will get to retire on a private island with a harem and a stable of Italian sports cars. This is wrong. Bitcoin investors need to someday become bitcoin philanthropists, and our giving needs to be targeted at helping all the people we have harmed. The Lifeboat Foundation is one option, but I’m sure there will be others.
I first published this article on the blog of the Lifeboat Foundation: http://lifeboat.com/blog/2013/04/bitcoins-dystopian-future
Bitcoin forum version is here: https://bitcointalk.org/index.php?topic=180798.0
tl;dr: Wildly successful distributed currencies could hurt a lot of people.
submitted by dacoinminster to Bitcoin [link] [comments]

Alpraking's The Kingpin Handbook - Chapter 1

The Kingpin Handbook - Chapter 1
1. Outsource
Outsourcing simply refers to the noble art of hiring other people, "pawns of the checker", to do the dirty work. You want to hire clean people that dont arise suspicions. They will be doing the dirty work so you want to hire someone who isn't already involved in drug trade or has priors. Don't get me wrong, you'll do everything in your power to protect them. Remember, if your guys catch heat, it can propagate to deeper layers fairly quickly and ultimately, to you.
2. Separate Administration & Execution
Have a layer of people who are doing the "boss" work and another one who is doing the "executive" work. Boss work is mainly paperwork and verifications to ensure everyone is doing his job properly and numbers balance and quality control is in check. Administrators dont get their hand dirty as that they will not handle the drugs themselves, but they will make sure packs are being shipped, tracking codes are being handled, productions are being made correctly and such. Administration is a promotion for executives who have shown a great degree of skill and loyalty. You can't put just anyone to overlook someone else's work. You have to get someone who has done it before and will be able to train new personnel or solve irregular issues. I normally promote my executors to administrators once they have shown that they can handle any issue from their business. I have them hire one of their friend and pay both from my own pocket. Employees kind of like hearing "hey, how about you keep your salary, train your friend to do your job, and you both will earn the same thing, paid from the big boss' pocket." More than money, people want power. Give power to people who want power and keep the money for yourself.
3. Treat your employees well but do NOT overpay them.
Treat your employees well by giving them insurances, paid vacations & trips, surprises bonuses, gifts and such. Do NOT give them a large payout even if they're pressing or shipping hundreds of thousands of pills. If someone becomes too comfortable with his pay, his quality of work will lower. you have to keep your employees dependant on you. Overpaying employees = Bad work. Double loss. For example in my own company all employees have a health insurance. they are allowed up to 1500/month in private medical, psychological bills paid by my expense) If not used, it will be given as a bonus vacation trip every couple months. Any lawyer time they might need for questions is also paid by the company.
4. Don't hire people under 30 years old
Both in the administrative and executive field. People under 30 years old are reckless, like to hang out in bars and brag to friends. People over 30 years old (get 40,50+ if you can) tend to be more straight with their shit. Much less likely to steal or botch the work and normally know the value of money. If you can get someone 40 yo+ that doesn't have a record, its most likely someone who already had a full-time job and knows how to work decently and not do dirty shit. Im 20 btw.
5. Inform your people
Tell them the truth. what they're risking, what to expect, have them meet your own loyal people who already been arrested for you and have them testify about the backup they had for not snitching. People will be much less likely to switch on you if you've told them exactly the truth. Don't go around with "There's no risk!" bullshit. Not only will your guys not believe you but they'll totally go nuts when they get arrested if you do.
6. Back your own people
Make sure all of your people are properly lawyered up. have them know by heart the name and phone number of their designated lawyer (under your control) and have them meet regularly, all expenses paid by you, in order to strengthen this trust between the lawyer and the employee.
7. Don't hire people yourself
People close to you, that you love and value, should not be getting their hands dirty on the long run. have them quit, or promote them quickly, if you have them on the field. As soon as they've mastered their work, have them hire their own friend to do your work, and pay both.
8. Rotate your employees between jobs
By rotating your employees between various work in your company you not only prevent heat from accumulating on one particular place or person, confusing investigations, but you're also contributing to their general training. this has various positive consequences; You are able to better target the quality and flaws of your various employees by having them try numerous different things. Also, if a branch of the operation is arrested, you can quickly reach out to your other personnel who has done similar work in the past to fill the voids.
9. Have separate different secret work spots, and different labs
In order to confuse investigations, its mandatory to have different personnel, work spots, and labs. If i feel that heat is growing on one lab, I can quickly clean it up, have the worker stop and lay low for a while, and i simply transfer the workload over another less-heated up lab and production-guy. Its very difficult to see all the connections amongst various people especially when dealing with over 30 employees, but its needed. These connections are what will carry heat. I tend to think of it a bit like a computer would:
10. Get it down to numbers
You suspect your packs are being profiled. If there is profiling going on, your courier is going to be considered the starting point of the heat. We will give it a 80% heat rating for this very event. Considering the courier access 3 times a week a stash, you will give the stash a 50% heat rating, just from this very link. the stash himself is linked to the lab, but only access it once every 2 weeks. you will give your lab a 15% heat rating from this very event. Your threshold of risk is 70% (meaning you will shut down someone/somewhere that has over 70% heat rating), at this point you will shut down the courier and have him lay low, but the heat is not yet sufficient to close the stash and the lab, at 50% and 15% respectively
Now a few days later you see a cop car parked on the street of your lab. This very event is worth 50% heat on your lab, and will also drip a 20% heat on your stash and 5% on your courier due to the links.
Now shit got hot. Everything is above 70% closing the entire branch.
You'll admit it doesn't take math to notice that if your packs are being profiled AND a cop car is seen near your lab, you must be pretty hot as a whole and you SHOULD shut down. All I did was add numbers to follow the flow of heat and decide wisely what is hot and what is not. My objective is to keep all places around 30-40% heat which i consider a stable zone. If 60-70% is reached im going to start investigating very closely, but I will not close it down. If it busts 80% then its being closed down and laid low for a few weeks. Its not accurate because you have to estimate everything with little to no information, but it definitely helps seeing things and calculate your moves. If an event bust 150%, i will completely dismantle the place and move it to another spot.
11. Trust buffers
Always have a layer of administration between you and your executives. You don't hire any executives, have your administrators do it. By doing so, NO ONE at risk of being busted knows who you are, let alone that you exist. If employees get caught and want to snitch, all they'll snitch is your administrator, who you should have sufficient trust in to believe he wont snitch you also.
12. Family links between employees are powerful
If you testify in court, you don't get to choose who you snitch and who you don't (In Canada at least). You snitch everything or nothing. So it helps if employees get caught with members of their families, because they are much less likely to snitch as it would involve having them snitch on their own family. You can also use the trust between members of a single family to your advantage. You can normally trust your employee's brother or sister pretty much the same as you can trust your employee. assuming both work for you.
13. Control the money
Do not reveal how much you're making or how much people are making relative to one another. Its none of their business. I normally fund in cash one of my administrators with a lot of cash and he pays everyone by sending them cash in the mail, or bitcoins. He makes comptability records and bring them to me so i can see where the money went, before I handle more cash/btc to him.
14. Encrypt everything
Have your employees familiar with tails & tor+pgp communications. Anyone minially professional will take some notes. Make sure all your employees from the top to the bottom is familiar with TAILS and has a secure passphrase. Have them place all their documentation and notes there. Any paper hanging around must be burned.
15. Avoid keeping illegal shit around the "dangerous hours"
I refer to "Dangerous hours" as week-days 5AM to 8AM. My experience has shown me 90% of large drug raids occur during this time period.
16. Not everyone has to know everyone
Its everyone's dream to think its like the movies where we gangsta organise "cartel parties" where everyone is invited. It doesn't work that way. If someone doesn't have to meet someone, don't make them meet. Don't take the risk of adding up more "heat rating" by creating un-necessary links between individuals who are not directly connected.
17. Keep "jokers"
Jokers are last-resort cards that allow you to solve dangerous issues or take-over control of your business in the event of catastrophic problems. Pictures of your employees naked, hacked passwords to their facebooks, knowing their addresses, etc. Anything you can use against them if shit goes wrong helps.
18. Be diplomat when kicking people out
Always be very diplomat when kicking people out. Give them a nice fat good-bye paycheck and specify you're giving them this paycheck to "forget everything". Keep good terms and explain your decisions with opsec and that you're doing this for their own protection.
19. If your company screw up, pickup the pieces, dont flee
Believe me, its worth more in the long run if you admit to being busted/admit to problems, refund everyone, close shop for a few months, and come back, than it is to exit scam and start under a new name. It builds confidence in the long run. Its easy to be honest when your business goes well. But its in the bad moments that you show your true face. If you've been fucked in the past, been honest with everyone then came back, it gives an assurance that the same will happen if there's a fuckup in the future. How many vendors look so perfect until they start having issues? and when they do, most will run with customers money. If you are honest with customers despite problems, it will reward you later. It also helps looking at yourself in the mirror in the morning knowing you haven't fucked over a ton of people with less wealth than you.
20. Always change
Always change lab locations, stealth, rotate employees, open and closes front or laundering shops. Have several at the same time so you can switch work between places. Its like playing whack a mole with LE. If you stay too long in one single place, you'll get caught. I do not believe in "mega-labs" with super OPSEC that are stable for years. A decentralized network of several small labs & dispatch places, constantly changing places, is the best. Its even better when you can afford to change places AND employee at the same time. Literally drops heat rating to 0%
21. Make sure your team's opsec is always on point
Meet regularly with your administrators and have them tell you all the problems. Never get angry and don't judge them. They'll be much more open if they do not fear your reaction. Everyone can make mistakes. Your administrators should have the same attitude toward their employees. A transparent company allows you to see more problems and react accordingly.
22. Don't flash
Don't. Just don't. Fuck nice cars & nice houses as long as you are on the field or know directly people who work on the field. That will get you heated up more than anything else. Pile your money, hide it and work on laundering it with as much care and opsec as you do with your drugs. Fuel it in a legitimate business, with customers, then start laundering it slowly. Remember, as long as your money isn't properly laundered, its virtual. Anything you buy with it is a cursed gift that will increase your own heat and can also potentially be seized by LE. You can start flashing when all your work has been securely outsourced or when you retire.
23. Don't get high on your own supply
You should actually never even have your own supply in your house or somewhere that could be linked to you. It also impairs your judgement and can worsen paranoia, narcissism and other personality problems you tend to develop being in the drug business. Especially Xanax. Dont take Xanax and make important decisions; you will regret it.
24. Prepare for an arrest
Prepare yourself, psychologically and with your lawyer, your family, your administrators, in the event of a bust. Make sure you have cash readily accessible by your trusted people and have a plan. You won't be able to interact much with the outside world starting the very moment your door is rammed. And you won't be told when it would happen. Run "simulations" of a scenario where you and several of your administrators are arrested. Make sure someone can take your place or at least handle your personal stuff, and get yourself a lawyer early on the payroll. Every time you go to sleep in your bed, it might be the last night you get to pass there for a couple years. And every time you wake up in the morning, congratulate yourself because you've survived yet another day.
submitted by ThePharmaInitiative to DNMBusts [link] [comments]

Ranking the Privacy coins by anon-set - ZeroCoin protocol takes the cake!

EDIT Be aware, the moderators of cryptocurrency have SHADOW DELETED without cause the original thread. This is most likely at the request of the XMR community
https://www.reddit.com/CryptoCurrency/comments/9gl5xp/cutting_to_the_chase_or_how_to_properly_evaluate/
This causes the post to appear to me, but to everyone else its been deleted. Now, why would they undertake such an underhanded tactic?
End EDIT
There's a lot of talk about anonymity and privacy as it relates to blockchains. And legacy coins like BTC and BCH that do not have privacy are more effected than those with it. Recently a report surfaced mentioning that cryptos are basically bad news for criminals: https://dailyhodl.com/2018/09/16/bitcoin-is-actually-a-money-laundering-tracking-device-that-catches-criminals-report/
TL;DR is at the bottom
Why? Because they're easy to track. Once they've got a single piece of identifying info that's linked to an address (say that coinbase transfer to an exchange) then all transactions are linkable to that id. But, privacy coins are different because they obscure this history (or in some cases 'delete' it all together). However, it can be a little difficult to decide which privacy coin offers the best privacy, along with the best combination of fees, security and usability.
So with no further ado, here is your simple guide to evaluating privacy coins! Like daily tx throughput is a key metric of btc/blockchain adoption and usage, privacy coins have their own 'key metric' to determine their ability to hide your tx history: the size of their anonymity set. This is basically the number of other people with which your transaction is plausibly 'mixed' so at to sever the link between your address and that coin. The greater this number is, the more difficult it is to associate a coin with your address, thus making it more private.
To make this easier to understand, it helps to know the following: All privacy coins do the same thing, just in vastly different ways. What is that thing? Obscuring/removing your linkage to a coin by mixing it with a similar coin denomination from another wallet. Monero is a slight exception to this, since transaction amounts are hidden in the blockchain as well, so there's no need for denominations. Also, your coin is mixed with fake coins that aren't real, instead of coins from other wallets, but no one can tell that from the blockchain so it works.

PIVX

In PIVX, for example, ~10-20% of all pivx held in wallets is 'gathered' by the accumulator (note it never leaves your control) in a central pool of zpiv using standard denominations like 10 zpiv, 1zpiv, .1zpiv etc. This is a configurable setting in the wallet so some may wish to turn it on/off at their discretion, but recent research has shown that 24% of all PIVX held in wallets is private/zpiv, see u/turtleflax's comment below.
After all of that, by using a zero-knowledge proof which cryptographically proves you owned whatever zpiv was minted from your wallet without any linking information to you, zpiv is 'sent' to your wallet and shows up with no transaction history. So the anonymity set is 10%, ~24% nowadays, of all PIVX held in wallets, which is obviously huge.

ZCoin

ZCoin and PIVX uses the same strategy as both implement the ZeroCoin protocol, which itself is just a specification, PIVX and ZCoin are implementations of that spec. Same idea with the denominations. PIVX's implementation is much more advanced however. ZCoin doesn't have an accumulator or anything and its privacy is optional.
However, its not possible to break a Zerocoin/ZCoin/PIVX transaction because there is nothing to break. It would be like trying to guess someone's password just by them logging in and proving they know their password and it works. That doesn't give you any information that would help. Furthermore, the total anonymity set is around 6.5% of the total supply which puts it comfortably in the same region as PIVX.

ZCash

ZCash is an implementation of the ZeroCash protocol which is an improvement on the ZeroCoin protocol. The cool thing about ZCash is that it also hides the amount of the transaction. ZCash's privacy is optional and the blockchain is split between t-addresses and z-addresses. t-addrs are transparent and contain visible balances just like Bitcoin, which ZCash is a software fork of. z-addrs are shielded. ZCash appears to have two kinds of shielded transactions (shielded and fully shielded).
I'm not sure of the difference between them, but according to this handy block explorer: https://explorer.zcha.in/statistics/usage, shielded txs are far more prevalent than fully shielded ones. The difference between them may be that fully shielded txs are transactions between two z-addrs while a tx that is 'just shielded' may be one between a z-addr and a t-addr and possibly a t-addr and a z-addr, but again, I'm not sure.
The developers claim that the anonymity set is very large in comparison to coins like Dash, and since it is based on the ZeroCoin protocol like PIVX and ZCoin, it is reasonable to assume its anon set is similarly large and based on a proportion of the supply, though where among the three it stands is of course up for debate/verification. Perhaps as large as the shielded value colume for any time period, also note that is a lower bound, so for the past month: 394989 ZEC would be the total shielded ZEC, so this seems a reasonable lower-bound on the Anon-set. Its hard to Tell between this and PIVX which is larger.

Dash

In Dash, it depends on how many rounds you mix. Each coin is once again broken down into standard denominations like 10, 1, .1 .01 Dash. Each round involves a minimum of three different wallets. So take the number of participants and raise it to the rounds you mix-th power, and that is your minimum anonymity set. So mixing four rounds gives you a minimum anonymity set of (3 participants)4 rounds = 81. Eight rounds gives you a min set of 38 = 6,561.
Could be more if more than three wallets were involved in any single mix, which is possible. However, it could be less if the same participants are used per round, which is unlikely. This is still a HUGE anonymity set; however, its probably at least an order of magnitude less than PIVX and ZCoin unless you were to get 4-5 wallets mixing per round. Still, even 81 could be rightly considered overkill, especially since considering the nature of privateSend and the random separation between 'minting' and spending makes Dash immune to timing analysis attacks. The determination of which coin to use will come down to your anonymity needs. How private do you need to be?

Monero

In Monero, the anonymity set is the number of mixins used at the time of your transaction. Which is currently 7. Monero originally had optional privacy where the min mixin was 0 and those transactions were transparent like btc's. However, having these 0 mixin transactions together with the higher mixin transactions allowed for higher ones to be deanoned, that and 3 forms of timing analysis attacks forced the min mixin to be raised to 3, then 5 and now 7.

TL;DR

So in short, if you want to rank privacy coins by their anon-set size (which is the only thing that matters) the list is as follows:

1. ZeroCoin and ZeroCash implementations: PIVX, ZCoin, ZCash

2. Dash

3. Monero

Note: Each tier represents a range of at least >1 order of magnitude greater anonymity set. So ZCoin, ZCash and PIVX are all grouped together, even though PIVX may have an anon-set 10-50x greater than ZCash or ZCoin (just an example, not a real figure), all three of them are still going to have anon sets 1-4 orders of magnitude greater than Dash, and like 6-7 greater than Monero. Monero's default min mixin is 7 and the max definable in the gui wallet IIRC is 26. Be aware however that using higher, rarer ring sizes causes your transaction to stick out.
Due to the nature of how they are selected, there are wide ranges for the anon sets of these coins, except for monero. But especially so for that of Dash, which may on occasion cross into the grey zone between numbers 1 and 2 due to uncertainty around the number of wallets participating, and the fact that an attacker will never know how many rounds a tx is going through.
And because Dash doesn't rely on encryption for its privacy, if you don't catch/trace the transaction when its happening, i.e. by buying up 70% or more of the masternodes, you can never deanon it. If you use encryption, especially for the entire blockchain, you paint a large target on your blockchain. If your encryption is ever broken, then all past transactions will be deanoned at once, so not good. This is a benefit of steganography over some encryption based privacy schemes. Edit:
Don't worry, my comments and posts are always heavily downvoted, that's how you know they're good stuff!
submitted by thethrowaccount21 to ZeroCoin [link] [comments]

The wilkelvoss are trying to make bitcoin legit according to esquire magazine

Every idea needs a face, even if the faces are illusory simplifications. The country you get is the president you get. The Yankees you get is the shortstop you get. Apple needed Jobs. ISIS needs al-Baghdadi. The moon shot belongs to Bezos. There's nothing under the Facebook sun that doesn't come back to Zuckerberg.
But there is, as yet, no face behind the bitcoin curtain. It's the currency you've heard about but haven't been able to understand. Still to this day nobody knows who created it. For most people, it has something to do with programmable cash and algorithms and the deep space of mathematics, but it also has something to do with heroin and barbiturates and the sex trade and bankruptcies, too. It has no face because it doesn't seem tangible or real. We might align it with an anarchist's riot mask or a highly conceptualized question mark, but those images truncate its reality. Certain economists say it's as important as the birth of the Internet, that it's like discovering ice. Others are sure that it's doomed to melt. In the political sphere, it is the darling of the cypherpunks and libertarians. When they're not busy ignoring it, it scares the living shit out of the big banks and credit-card companies.
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It sparked to life in 2008—when all the financial world prepared for itself the articulate noose—and it knocked on the door like some inconvenient relative arriving at the dinner party in muddy shoes and a knit hat. Fierce ideological battles are currently being waged among the people who own and shepherd the currency. Some shout, Ponzi scheme. Some shout, Gold dust. Bitcoin alone is worth billions of dollars, but the computational structure behind it—its blockchain and its sidechains—could become the absolute underpinning of the world's financial structure for decades to come.
What bitcoin has needed for years is a face to legitimize it, sanitize it, make it palpable to all the naysayers. But it has no Larry Ellison, no Elon Musk, no noticeable visionaries either with or without the truth. There's a lot of ideology at stake. A lot of principle and dogma and creed. And an awful lot of cash, too.
At 6:00 on a Wednesday winter morning, three months after launching Gemini, their bitcoin exchange, Tyler and Cameron Winklevoss step out onto Broadway in New York, wearing the same make of sneakers, the same type of shorts, their baseball caps turned backward. They don't quite fall into the absolute caricature of twindom: They wear different-colored tops. Still, it's difficult to tell them apart, where Tyler ends and Cameron begins. Their faces are sculpted from another era, as if they had stepped from the ruin of one of Gatsby's parties. Their eyes are quick and seldom land on anything for long. Now thirty-four, there is something boyishly earnest about them as they jog down Prince Street, braiding in and out of each other, taking turns talking, as if they were working in shifts, drafting off each other.
Forget, for a moment, the four things the Winklevosses are most known for: suing Mark Zuckerberg, their portrayal in The Social Network, rowing in the Beijing Olympics, and their overwhelming public twinness. Because the Winklevoss brothers are betting just about everything—including their past—on a fifth thing: They want to shake the soul of money out.
At the deep end of their lives, they are athletes. Rowers. Full stop. And the thing about rowing—which might also be the thing about bitcoin—is that it's just about impossible to get your brain around its complexity. Everyone thinks you're going to a picnic. They have this notion you're out catching butterflies. They might ask you if you've got your little boater's hat ready. But it's not like that at all. You're fifteen years old. You rise in the dark. You drag your carcass along the railroad tracks before dawn. The boathouse keys are cold to the touch. You undo the ropes. You carry a shell down to the river. The carbon fiber rips at your hands. You place the boat in the water. You slip the oars in the locks. You wait for your coach. Nothing more than a thumb of light in the sky. It's still cold and the river stinks. That heron hasn't moved since yesterday. You hear Coach's voice before you see him. On you go, lads. You start at a dead sprint. The left rib's a little sore, but you don't say a thing. You are all power and no weight. The first push-to-pull in the water is a ripping surprise. From the legs first. Through the whole body. The arc. Atomic balance. A calm waiting for the burst. Your chest burns, your thighs scald, your brain blanks. It feels as if your rib cage might shatter. You are stillness exploding. You catch the water almost without breaking the surface. Coach says something about the pole vault. You like him. You really do. That brogue of his. Lads this, lads that. Fire. Stamina. Pain. After two dozen strokes, it already feels like you're hitting the wall. All that glycogen gone. Nobody knows. Nobody. They can't even pronounce it. Rowing. Ro-wing. Roh-ing. You push again, then pull. You feel as if you are breaking branch after branch off the bottom of your feet. You don't rock. You don't jolt. Keep it steady. Left, right, left, right. The heron stays still. This river. You see it every day. Nothing behind you. Everything in front. You cross the line. You know the exact tree. Your chest explodes. Your knees are trembling. This is the way the world will end, not with a whimper but a bang. You lean over the side of the boat. Up it comes, the breakfast you almost didn't have. A sign of respect to the river. You lay back. Ah, blue sky. Some cloud. Some gray. Do it again, lads. Yes, sir. You row so hard you puke it up once more. And here comes the heron, it's moving now, over the water, here it comes, look at that thing glide.
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The Winklevoss twins in the men's pair final during the 2008 Beijing Olympic Games. GETTY There's plenty of gin and beer and whiskey in the Harrison Room in downtown Manhattan, but the Winklevoss brothers sip Coca-Cola. The room, one of many in the newly renovated Pier A restaurant, is all mahogany and lamplight. It is, in essence, a floating bar, jutting four hundred feet out into the Hudson River. From the window you can see the Statue of Liberty. It feels entirely like their sort of room, a Jazz Age expectation hovering around their initial appearance—tall, imposing, the hair mannered, the collars of their shirts slightly tilted—but then they just slide into their seats, tentative, polite, even introverted.
They came here by subway early on a Friday evening, and they lean back in their seats, a little wary, their eyes busy—as if they want to look beyond the rehearsal of their words.
They had the curse of privilege, but, as they're keen to note, a curse that was earned. Their father worked to pay his way at a tiny college in backwoods Pennsylvania coal country. He escaped the small mining town and made it all the way to a professorship at Wharton. He founded his own company and eventually created the comfortable upper-middle-class family that came with it. They were raised in Greenwich, Connecticut, the most housebroken town on the planet. They might have looked like the others in their ZIP code, and dressed like them, spoke like them, but they didn't quite feel like them. Some nagging feeling—close to anger, close to fear—lodged itself beneath their shoulders, not quite a chip but an ache. They wanted Harvard but weren't quite sure what could get them there. "You have to be basically the best in the world at something if you're coming from Greenwich," says Tyler. "Otherwise it's like, great, you have a 1600 SAT, you and ten thousand others, so what?"
The rowing was a means to an end, but there was also something about the boat that they felt allowed another balance between them. They pulled their way through high school, Cameron on the port-side oar, Tyler on the starboard. They got to Harvard. The Square was theirs. They rowed their way to the national championships—twice. They went to Oxford. They competed in the Beijing Olympics. They sucked up the smog. They came in sixth place. The cameras loved them. Girls, too. They were so American, sandy-haired, blue-eyed, they could have been cast in a John Cougar Mellencamp song.
It might all have been so clean-cut and whitebread except for the fact that—at one of the turns in the river—they got involved in the most public brawl in the whole of the Internet's nascent history.
They don't talk about it much anymore, but they know that it still defines them, not so much in their own minds but in the minds of others. The story seems simple on one level, but nothing is ever simple, not even simplification. Theirs was the original idea for the first social network, Harvard Connection. They hired Mark Zuckerberg to build it. Instead he went off and created Facebook. They sued him. They settled for $65 million. It was a world of public spats and private anguish. Rumors and recriminations. A few years later, dusty old pre-Facebook text messages were leaked online by Silicon Alley Insider: "Yeah, I'm going to fuck them," wrote Zuckerberg to a friend. "Probably in the ear." The twins got their money, but then they believed they were duped again by an unfairly low evaluation of their stock. They began a second round of lawsuits for $180 million. There was even talk about the Supreme Court. It reeked of opportunism. But they wouldn't let it go. In interviews, they came across as insolent and splenetic, tossing their rattles out of the pram. It wasn't about the money, they said at the time, it was about fairness, reality, justice. Most people thought it was about some further agile fuckery, this time in Zuckerberg's ear.
There are many ways to tell the story, but perhaps the most penetrating version is that they weren't screwed so much by Zuckerberg as they were by their eventual portrayal in the film version of their lives. They appeared querulous and sulky, exactly the type of characters that America, peeling off the third-degree burns of the great recession, needed to hate. While the rest of the country worried about mounting debt and vanishing jobs, they were out there drinking champagne from, at the very least, Manolo stilettos. The truth would never get in the way of a good story. In Aaron Sorkin's world, and on just about every Web site, the blueblood trust-fund boys got what was coming to them. And the best thing now was for them to take their Facebook money and turn the corner, quickly, away, down toward whatever river would whisk them away.
Armie Hammer brilliantly portrayed them as the bluest of bloods in The Social Network. When the twins are questioned about those times now, they lean back a little in their seats, as if they've just lost a long race, a little perplexed that they came off as the victims of Hollywood's ability to throw an image, while the whole rip-roaring regatta still goes on behind them. "They put us in a box," says Cameron, "caricatured to a point where we didn't really exist." He glances around the bar, drums his finger against the glass. "That's fair enough. I understand that impulse." They smart a little when they hear Zuckerberg's name. "I don't think Mark liked being called an asshole," says Tyler, with a flick of bluster in his eyes, but then he catches himself. "You know, maybe Mark doesn't care. He's a bit of a statesman now, out there connecting the world. I have nothing against him. He's a smart guy."
These are men who've been taught, or have finally taught themselves, to tell their story rather than be told by it. But underneath the calm—just like underneath the boat—one can sense the churn.
They say the word—ath-letes—as if it were a country where pain is the passport. One of the things the brothers mention over and over again is that you can spontaneously crack a rib while rowing, just from the sheer exertion of the muscles hauling on the rib cage.
Along came bitcoin.
At its most elemental, bitcoin is a virtual currency. It's the sort of thing a five-year-old can understand—It's just e-cash, Mom—until he reaches eighteen and he begins to question the deep future of what money really means. It is a currency without government. It doesn't need a banker. It doesn't need a bank. It doesn't even need a brick to be built upon. Its supporters say that it bypasses the Man. It is less than a decade old and it has already come through its own Wild West, a story rooted in uncharted digital territory, up from the dust, an evening redness in the arithmetical West.
These are men who've been taught, or have finally taught themselves, to tell their story rather than be told by it. Bitcoin appeared in 2008—westward ho!—a little dot on the horizon of the Internet. It was the brainchild of a computer scientist named Satoshi Nakamoto. The first sting in the tale is that—to this very day—nobody knows who Nakamoto is, where he lives, or how much of his own invention he actually owns. He could be Californian, he could be Australian, he could even be a European conglomerate, but it doesn't really matter, since what he created was a cryptographic system that is borderless and supposedly unbreakable.
In the beginning the currency was ridiculed and scorned. It was money created from ones and zeros. You either bought it or you had to "mine" for it. If you were mining, your computer was your shovel. Any nerd could do it. You keyed your way in. By using your computer to help check and confirm the bitcoin transactions of others, you made coin. Everyone in this together. The computer heated up and mined, down down down, into the mathematical ground, lifting up numbers, making and breaking camp every hour or so until you had your saddlebags full of virtual coin. It all seemed a bit of a lark at first. No sheriff, no deputy, no central bank. The only saloon was a geeky chat room where a few dozen bitcoiners gathered to chew data.
Lest we forget, money was filthy in 2008.
The collapse was coming. The banks were shorting out. The real estate market was a confederacy of dunces. Bernie Madoff's shadow loomed. Occupy was on the horizon. And all those Wall Street yahoos were beginning to squirm.
Along came bitcoin like some Jesse James of the financial imagination. It was the biggest disruption of money since coins. Here was an idea that could revolutionize the financial world. A communal articulation of a new era. Fuck American Express. Fuck Western Union. Fuck Visa. Fuck the Fed. Fuck the Treasury. Fuck the deregulated thievery of the twenty-first century.
To the earliest settlers, bitcoin suggested a moral way out. It was a money created from the ground up, a currency of the people, by the people, for the people, with all government control extinguished. It was built on a solid base of blockchain technology where everyone participated in the protection of the code. It attracted anarchists, libertarians, whistle-blowers, cypherpunks, economists, extropians, geeks, upstairs, downstairs, left-wing, right-wing. Sure, it could be used by businesses and corporations, but it could also be used by poor people and immigrants to send money home, instantly, honestly, anonymously, without charge, with a click of the keyboard. Everyone in the world had access to your transaction, but nobody had to know your name. It bypassed the suits. All you needed to move money was a phone or a computer. It was freedom of economic action, a sort of anarchy at its democratic best, no rulers, just rules.
Bitcoin, to the original explorers, was a safe pass through the government-occupied valleys: Those assholes were up there in the hills, but they didn't have any scopes on their rifles, and besides, bitcoin went through in communal wagons at night.
Ordinary punters took a shot. Businesses, too. You could buy silk ties in Paris without any extra bank charges. You could protect your money in Buenos Aires without fear of a government grab.
The Winklevoss twins leave the U.S. Court of Appeals in 2011, after appearing in court to ask that the previous settlement case against Facebook be voided. GETTY But freedom can corrupt as surely as power. It was soon the currency that paid for everything illegal under the sun, the go-to money of the darknet. The westward ho! became the outlaw territory of Silk Road and beyond. Heroin through the mail. Cocaine at your doorstep. Child porn at a click. What better way for terrorists to ship money across the world than through a network of anonymous computers? Hezbollah, the Taliban, the Mexican cartels. In Central America, kidnappers began demanding ransom in bitcoin—there was no need for the cash to be stashed under a park bench anymore. Now everything could travel down the wire. Grab, gag, and collect. Uranium could be paid for in bitcoin. People, too. The sex trade was turned on: It was a perfect currency for Madame X. For the online gambling sites, bitcoin was pure jackpot.
For a while, things got very shady indeed. Over a couple years, the rate pinballed between $10 and $1,200 per bitcoin, causing massive waves and troughs of online panic and greed. (In recent times, it has begun to stabilize between $350 and $450.) In 2014, it was revealed that hackers had gotten into the hot wallet of Mt. Gox, a bitcoin exchange based in Tokyo. A total of 850,000 coins were "lost," at an estimated value of almost half a billion dollars. The founder of Silk Road, Ross William Ulbricht (known as "Dread Pirate Roberts"), got himself a four-by-six room in a federal penitentiary for life, not to mention pending charges for murder-for-hire in Maryland.
Everyone thought that bitcoin was the problem. The fact of the matter was, as it so often is, human nature was the problem. Money means desire. Desire means temptation. Temptation means that people get hurt.
During the first Gold Rush in the late 1840s, the belief was that all you needed was a pan and a decent pair of boots and a good dose of nerve and you could go out and make yourself a riverbed millionaire. Even Jack London later fell for the lure of it alongside thousands of others: the western test of manhood and the promise of wealth. What they soon found out was that a single egg could cost twenty-five of today's dollars, a pound of coffee went for a hundred, and a night in a whorehouse could set you back $6,000.
A few miners hit pay dirt, but what most ended up with for their troubles was a busted body and a nasty dose of syphilis.
The gold was discovered on the property of John Sutter in Sacramento, but the one who made the real cash was a neighboring merchant, Samuel Brannan. When Brannan heard the news of the gold nuggets, he bought up all the pickaxes and shovels he could find, filled a quinine bottle with gold dust, and went to San Francisco. Word went around like a prayer in a flash flood: gold gold gold. Brannan didn't wildcat for gold himself, but at the peak of the rush he was flogging $5,000 worth of shovels a day—that's $155,000 today—and went on to become the wealthiest man in California, alongside the Wells Fargo crew, Levi Strauss, and the Studebaker family, who sold wheelbarrows.
If you comb back through the Winklevoss family, you will find a great-grandfather and a great-great-grandfather who knew a thing or two about digging: They worked side by side in the coal mines of Pennsylvania. They didn't go west and they didn't get rich, but maybe the lesson became part of their DNA: Sometimes it's the man who sells the shovels who ends up hitting gold.
Like it or not—and many people don't like it—the Winklevoss brothers are shaping up to be the Samuel Brannans of the bitcoin world.
Nine months after being portrayed in The Social Network, the Winklevoss twins were back out on the water at the World Rowing Cup. CHRISTOPHER LEE/GETTY They heard about it first poolside in Ibiza, Spain. Later it would play into the idea of ease and privilege: umbrella drinks and girls in bikinis. But if the creation myth was going to be flippant, the talk was serious. "I'd say we were cautious, but we were definitely intrigued," says Cameron. They went back home to New York and began to read. There was something about it that got under their skin. "We knew that money had been so broken and inefficient for years," says Tyler, "so bitcoin appealed to us right away."
They speak in braided sentences, catching each other, reassuring themselves, tightening each other's ideas. They don't quite want to say that bitcoin looked like something that might be redemptive—after all, they, like everyone else, were looking to make money, lots of it, Olympic-sized amounts—but they say that it did strike an idealistic chord inside them. They certainly wouldn't be cozying up to the anarchists anytime soon, but this was a global currency that, despite its uncertainties, seemed to present a solution to some of the world's more pressing problems. "It was borderless, instantaneous, irreversible, decentralized, with virtually no transaction costs," says Tyler. It could possibly cut the banks out, and it might even take the knees out from under the credit-card companies. Not only that, but the price, at just under ten dollars per coin, was in their estimation low, very low. They began to snap it up.
They were aware, even at the beginning, that they might, once again, be called Johnny-come-latelys, just hopping blithely on the bandwagon—it was 2012, already four years into the birth of the currency—but they went ahead anyway, power ten. Within a short time they'd spent $11 million buying up a whopping 1 percent of the world's bitcoin, a position they kept up as more bitcoins were mined, making their 1 percent holding today worth about $66 million.
But bitcoin was flammable. The brothers felt the burn quickly. Their next significant investment came later that year, when they gave $1.5 million in venture funding to a nascent exchange called BitInstant. Within a year the CEO was arrested for laundering drug money through the exchange.
So what were a pair of smart, clean-cut Olympic rowers doing hanging around the edges of something so apparently shady, and what, if anything, were they going to do about it?
They mightn't have thought of it this way, but there was something of the sheriff striding into town, the one with the swagger and the scar, glancing up at the balconies as he comes down Main Street, all tumbleweeds and broken pianos. This place was a dump in most people's eyes, but the sheriff glimpsed his last best shot at finally getting the respect he thinks he deserves.
The money shot: A good stroke will catch the water almost without breaking its seal. You stir without rippling. Your silence is sinewy. There's muscle in that calm. The violence catches underneath, thrusts the boat along. Stroke after stroke. Just keep going. Today's truth dies tomorrow. What you have to do is elemental enough. You row without looking behind you. You keep the others in front of you. As long as you can see what they're doing, it's all in your hands. You are there to out-pain them. Doesn't matter who they are, where they come from, how they got here. Know your enemy through yourself. Push through toward pull. Find the still point of this pain. Cut a melody in the disk of your flesh. The only terror comes when they pass you—if they ever pass you.
There are no suits or ties, but there is a white hum in the offices of Gemini in the Flatiron District. The air feels as if it has been brushed clean. There is something so everywhereabout the place. Ergonomic chairs. iPhone portals. Rows of flickering computers. Not so much a hush around the room as a quiet expectation. Eight, nine people. Programmers, analysts, assistants. Other employees—teammates, they call them—dialing in from Portland, Oregon, and beyond.
The brothers fire up the room when they walk inside. A fist-pump here, a shoulder touch there. At the same time, there is something almost shy about them. Apart, they seem like casual visitors to the space they inhabit. It is when they're together that they feel fully shaped. One can't imagine them being apart from each other for very long.
The Winklevoss twins speak onstage at Bitcoin! Let's Cut Through the Noise Already at SXSW in 2016. GETTY They move from desk to desk. The price goes up, the price goes down. The phones ring. The e-mails beep. Customer-service calls. Questions about fees. Inquiries about tax structures.
Gemini was started in late 2015 as a next-generation bitcoin exchange. It is not the first such exchange in the world by any means, but it is one of the most watched. The company is designed with ordinary investors in mind, maybe a hedge fund, maybe a bank: all those people who used to be confused or even terrified by the word bitcoin. It is insured. It is clean. What's so fascinating about this venture is that the brothers are risking themselves by trying to eliminate risk: keeping the boat steady and exploding through it at the same time.
It is when they're together that they feel fully shaped. One can't imagine them being apart from each other for very long. For the past couple years, the Winklevosses have worked closely with just about every compliance agency imaginable. They ticked off all the regulatory boxes. Essentially they wanted to ease all the Debting Thomases. They put regulatory frameworks in place. Security and bankability and insurance were their highest objectives. Nobody was going to be able to blow open the safe. They wanted to soothe all the appetites for risk. They told Bitcoin Magazine they were asking for "permission, not forgiveness."
This is where bitcoin can become normal—that is, if you want bitcoin to be normal.
Just a mile or two down the road, in Soho, a half dozen bitcoiners gather at a meetup. The room is scruffy, small, boxy. A half mannequin is propped on a table, a scarf draped around it. It's the sort of place that twenty years ago would have been full of cigarette smoke. There's a bit of Allen Ginsberg here, a touch of Emma Goldman, a lot of Zuccotti Park. The wine is free and the talk is loose. These are the true believers. They see bitcoin in its clearest possible philosophical terms—the frictionless currency of the people, changing the way people move money around the world, bypassing the banks, disrupting the status quo.
A comedy show is being run out in the backyard. A scruffy young man wanders in and out, announcing over and over again that he is half-baked. A well-dressed Asian girl sidles up to the bar. She looks like she's just stepped out of an NYU business class. She's interested in discovering what bitcoin is. She is regaled by a series of convivial answers. The bartender tells her that bitcoin is a remaking of the prevailing power structures. The girl asks for another glass of wine. The bartender adds that bitcoin is democracy, pure and straight. She nods and tells him that the wine tastes like cooking oil. He laughs and says it wasn't bought with bitcoin. "I don't get it," she says. And so the evening goes, presided over by Margaux Avedisian, who describes herself as the queen of bitcoin. Avedisian, a digital-currency consultant of Armenian descent, is involved in several high-level bitcoin projects. She has appeared in documentaries and on numerous panels. She is smart, sassy, articulate.
When the talk turns to the Winklevoss brothers, the bar turns dark. Someone, somewhere, reaches up to take all the oxygen out of the air. Avedisian leans forward on the counter, her eyes shining, delightful, raged.
"The Winklevii are not the face of bitcoin," she says. "They're jokes. They don't know what they're saying. Nobody in our community respects them. They're so one-note. If you look at their exchange, they have no real volume, they never will. They keep throwing money at different things. Nobody cares. They're not part of us. They're just hangers-on."
"Ah, they're just assholes," the bartender chimes in.
"What they want to do," says Avedisian, "is lobotomize bitcoin, make it into something entirely vapid. They have no clue."
The Asian girl leaves without drinking her third glass of free wine. She's got a totter in her step. She doesn't quite get the future of money, but then again maybe very few in the world do.
Giving testimony on bitcoin licensing before the New York State Department of Financial Services in 2014. LUCAS JACKSON/REUTERS The future of money might look like this: You're standing on Oxford Street in London in winter. You think about how you want to get to Charing Cross Road. The thought triggers itself through electrical signals into the chip embedded in your wrist. Within a moment, a driverless car pulls up on the sensor-equipped road. The door opens. You hop in. The car says hello. You tell it to shut up. It does. It already knows where you want to go. It turns onto Regent Street. You think,A little more air-conditioning, please. The vents blow. You think, Go a little faster, please. The pace picks up. You think, This traffic is too heavy, use Quick(TM). The car swings down Glasshouse Street. You think, Pay the car in front to get out of my way. It does. You think, Unlock access to a shortcut. The car turns down Sherwood Street to Shaftsbury Avenue. You pull in to Charing Cross. You hop out. The car says goodbye. You tell it to shut up again. You run for the train and the computer chip in your wrist pays for the quiet-car ticket for the way home.
All of these transactions—the air-conditioning, the pace, the shortcut, the bribe to get out of the way, the quick lanes, the ride itself, the train, maybe even the "shut up"—will cost money. As far as crypto-currency enthusiasts think, it will be paid for without coins, without phones, without glass screens, just the money coming in and going out of your preprogrammed wallet embedded beneath your skin.
The Winklevosses are betting that the money will be bitcoin. And that those coins will flow through high-end, corporate-run exchanges like Gemini rather than smoky SoHo dives.
Cameron leans across a table in a New York diner, the sort of place where you might want to polish your fork just in case, and says: "The future is here, it's just not evenly distributed yet." He can't remember whom the quote belongs to, but he freely acknowledges that it's not his own. Theirs is a truculent but generous intelligence, capable of surprise and turn at the oddest of moments. They talk meditation, they talk economics, they talk Van Halen, they talk, yes, William Gibson, but everything comes around again to bitcoin.
"The key to all this is that people aren't even going to know that they're using bitcoin," says Tyler. "It's going to be there, but it's not going to be exposed to the end user. Bitcoin is going to be the rails that underpin our payment systems. It's just like an IP address. We don't log on to a series of numbers, 115.425.5 or whatever. No, we log on to Google.com. In the same way, bitcoin is going to be disguised. There will be a body kit that makes it user-friendly. That's what makes bitcoin a kick-ass currency."
Any fool can send a billion dollars across the world—as long as they have it, of course—but it's virtually impossible to send a quarter unless you stick it in an envelope and pay forty-nine cents for a stamp. It's one of the great ironies of our antiquated money system. And yet the quark of the financial world is essentially the small denomination. What bitcoin promises is that it will enable people and businesses to send money in just about any denomination to one another, anywhere in the world, for next to nothing. A public address, a private key, a click of the mouse, and the money is gone.
A Bitcoin conference in New York City in 2014. GETTY This matters. This matters a lot. Credit-card companies can't do this. Neither can the big banks under their current systems. But Marie-Louise on the corner of Libertador Avenue can. And so can Pat Murphy in his Limerick housing estate. So can Mark Andreessen and Bill Gates and Laurene Powell Jobs. Anyone can do it, anywhere in the world, at virtually no charge.
You can do it, in fact, from your phone in a diner in New York. But the whole time they are there—over identical California omelettes that they order with an ironic shrug—they never once open their phones. They come across more like the talkative guys who might buy you a drink at the sports bar than the petulants ordering bottle service in the VIP corner. The older they get, the more comfortable they seem in their contradictions: the competition, the ease; the fame, the quiet; the gamble, the sure thing.
Bitcoin is what might eventually make them among the richest men in America. And yet. There is always a yet. What seems indisputable about the future of money, to the Winklevosses and other bitcoin adherents, is that the technology that underpins bitcoin—the blockchain—will become one of the fundamental tenets of how we deal with the world of finance. Blockchain is the core computer code. It's open source and peer to peer—in other words, it's free and open to you and me. Every single bitcoin transaction ever made goes to an open public ledger. It would take an unprecedented 51 percent attack—where one entity would come to control more than half of the computing power used to mine bitcoin—for hackers to undo it. The blockchain is maintained by computers all around the world, and its future sidechains will create systems that deal with contracts and stock and other payments. These sidechains could very well be the foundation of the new global economy for the big banks, the credit-card companies, and even government itself.
"It's boundless," says Cameron.
This is what the brothers are counting on—and what might eventually make them among the richest men in America.
And yet. There is always a yet.
When you delve into the world of bitcoin, it gets deeper, darker, more mysterious all the time. Why has its creator remained anonymous? Why did he drop off the face of the earth? How much of it does he own himself? Will banks and corporations try to bring the currency down? Why are there really only five developers with full "commit access" to the code (not the Winklevosses, by the way)? Who is really in charge of the currency's governance?
Perhaps the most pressing issue at hand is that of scaling, which has caused what amounts to a civil war among followers. A maximum block size of one megabyte has been imposed on the chain, sort of like a built-in artificial dampener to keep bitcoin punk rock. That's not nearly enough capacity for the number of transactions that would take place in future visions. In years to come, there could be massive backlogs and outages that could create instant financial panic. Bitcoin's most influential leaders are haggling over what will happen. Will bitcoin maintain its decentralized status, or will it go legit and open up to infinite transactions? And if it goes legit, where's the punk?
The issues are ongoing—and they might very well take bitcoin down, but the Winklevosses don't think so. They have seen internal disputes before. They've refrained from taking a public stance mostly because they know that there are a lot of other very smart people in bitcoin who are aware that crisis often builds consensus. "We're in this for the long haul," says Tyler. "We're the first batter in the first inning."
GILLIAN LAUB The waiter comes across and asks them, bizarrely, if they're twins. They nod politely. Who was born first? They've heard it a million times and their answer is always the same: Neither of them—they were born cesarean. Cameron looks older, says the waiter. Tyler grins. Normally it's the other way around, says Cameron, grinning back. Do you ever fight? asks the waiter. Every now and then, they say. But not over this, not over the future.
Heraclitus was wrong. You can, in fact, step in the same river twice. In the beginning you went to the shed. No electricity there, no heat, just a giant tub where you simulated the river. You could only do eleven strokes. But there was something about the repetition, the difference, even the monotony, that hooked you. After a while it wasn't an abandoned shed anymore. College gyms, national training centers. Bigger buildings. High ceilings. AC. Doctors and trainers. Monitors hooked up to your heart, your head, your blood. Six foot five, but even then you were not as tall as the other guys. You liked the notion of underdog. Everyone called you the opposite. The rich kids. The privileged ones. To hell with that. They don't know us, who we are, where we came from. Some of the biggest chips rest on the shoulders of those with the least to lose. Six foot five times two makes just about thirteen feet. You sit in the erg and you stare ahead. Day in, day out. One thousand strokes, two thousand. You work with the very best. You even train with the Navy SEALs. It touches that American part of you. The sentiment, the false optimism. When the oil fields are burning, you even think, I'll go there with them. But you stay in the boat. You want that other flag rising. That's what you aim for. You don't win but you get close. Afterward there are planes, galas, regattas, magazine spreads, but you always come back to that early river. The cold. The fierceness. The heron. Like it or not, you're never going to get off the water—that's just the fact of the matter, it's always going to be there. Hard to admit it, but once you were wrong. You got out of the boat and you haggled over who made it. You lost that one, hard. You might lose this one, too, but then again it just might be the original arc that you're stepping toward. So you return, then. You rise before dark. You drag your carcass along Broadway before dawn.
All the rich men in the world want to get shot into outer space. Richard Branson. Jeff Bezos. Elon Musk. The new explorers. To get the hell out of here and see if they—and maybe we—can exist somewhere else for a while. It's the story of the century. We want to know if the pocket of the universe can be turned inside out. We're either going to bring all the detritus of the world upward with us or we're going to find a brand-new way to exist. The cynical say that it's just another form of colonization—they're probably right, but then again maybe it's our only way out.
The Winklevosses have booked their tickets—numbers 700 and 701—on Branson's Virgin Galactic. Although they go virtually everywhere together, the twins want to go on different flights because of the risk involved: Now that they're in their mid-thirties, they can finally see death, or at least its rumor. It's a boy's adventure, but it's also the outer edge of possibility. It cost a quarter of a million dollars per seat, and they paid for it, yes, in bitcoin.
Of course, up until recently, the original space flights all splashed down into the sea. One of the ships that hauled the Gemini space capsule out of the water in 1965 was the Intrepid aircraft carrier.
The Winklevosses no longer pull their boat up the river. Instead they often run five miles along the Hudson to the Intrepid and back. The destroyer has been parked along Manhattan's West Side for almost as long as they have been alive. It's now a museum. The brothers like the boat, its presence, its symbolism: Intrepid, Gemini, the space shot.
They ease into the run.
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