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Cryptocurrency	A cryptocurrency, crypto-currency, or crypto is a digital currency designed to work as a medium of exchange through a computer network that is not reliant on any central authority, such as a government or bank, to uphold or maintain it. It is a decentralized system for verifying that the parties to a transaction have the money they claim to have, eliminating the need for traditional intermediaries, such as banks, when funds are being transferred between two entities.Individual coin ownership records are stored in a digital ledger, which is a computerized database using strong cryptography to secure transaction records, control the creation of additional coins, and verify the transfer of coin ownership. Despite their name, cryptocurrencies are not considered to be currencies in the traditional sense, and while varying treatments have been applied to them, including classification as commodities, securities, and currencies, cryptocurrencies are generally viewed as a distinct asset class in practice. Some crypto schemes use validators to maintain the cryptocurrency. In a proof-of-stake model, owners put up their tokens as collateral. In return, they get authority over the token in proportion to the amount they stake. Generally, these token stakers get additional ownership in the token over time via network fees, newly minted tokens, or other such reward mechanisms.Cryptocurrency does not exist in physical form (like paper money) and is typically not issued by a central authority. Cryptocurrencies typically use decentralized control as opposed to a central bank digital currency (CBDC). When a cryptocurrency is minted, created prior to issuance, or issued by a single issuer, it is generally considered centralized. When implemented with decentralized control, each cryptocurrency works through distributed ledger technology, typically a blockchain, that serves as a public financial transaction database.The first cryptocurrency was Bitcoin, which was first released as open-source software in 2009. As of June 2023, there were more than 25,000 other cryptocurrencies in the marketplace, of which more than 40 had a market capitalization exceeding $1 billion. == History == In 1983, American cryptographer David Chaum conceived of a type of cryptographic electronic money called ecash. Later, in 1995, he implemented it through Digicash, an early form of cryptographic electronic payments. Digicash required user software in order to withdraw notes from a bank and designate specific encrypted keys before it can be sent to a recipient. This allowed the digital currency to be untraceable by a third party. In 1996, the National Security Agency published a paper entitled How to Make a Mint: The Cryptography of Anonymous Electronic Cash, describing a cryptocurrency system. The paper was first published in an MIT mailing list and later in 1997 in The American Law Review.In 1998, Wei Dai described "b-money", an anonymous, distributed electronic cash system. Shortly thereafter, Nick Szabo described bit gold. Like Bitcoin and other cryptocurrencies that would follow it, bit gold (not to be confused with the later gold-based exchange BitGold) was described as an electronic currency system which required users to complete a proof of work function with solutions being cryptographically put together and published. In January 2009, Bitcoin was created by pseudonymous developer Satoshi Nakamoto. It used SHA-256, a cryptographic hash function, in its proof-of-work scheme. In April 2011, Namecoin was created as an attempt at forming a decentralized DNS. In October 2011, Litecoin was released which used scrypt as its hash function instead of SHA-256. Peercoin, created in August 2012, used a hybrid of proof-of-work and proof-of-stake. Cryptocurrency has undergone several periods of growth and retraction, including several bubbles and market crashes, such as in 2011, 2013-2014–15, 2017-2018 and 2021–2023.On 6 August 2014, the UK announced its Treasury had commissioned a study of cryptocurrencies, and what role, if any, they could play in the UK economy. The study was also to report on whether regulation should be considered. Its final report was published in 2018, and it issued a consultation on cryptoassets and stablecoins in January 2021.In June 2021, El Salvador became the first country to accept Bitcoin as legal tender, after the Legislative Assembly had voted 62–22 to pass a bill submitted by President Nayib Bukele classifying the cryptocurrency as such.In August 2021, Cuba followed with Resolution 215 to recognize and regulate cryptocurrencies such as Bitcoin.In September 2021, the government of China, the single largest market for cryptocurrency, declared all cryptocurrency transactions illegal. This completed a crackdown on cryptocurrency that had previously banned the operation of intermediaries and miners within China.On 15 September 2022, the world's second largest cryptocurrency at that time, Ethereum transitioned its consensus mechanism from proof-of-work (PoW) to proof-of-stake (PoS) in an upgrade process known as "the Merge". According to the Ethereum Founder, the upgrade can cut both Ethereum's energy use and carbon-dioxide emissions by 99.9%.On 11 November 2022, FTX Trading Ltd., a cryptocurrency exchange, which also operated a crypto hedge fund, and had been valued at $18 billion, filed for bankruptcy. The financial impact of the collapse extended beyond the immediate FTX customer base, as reported, while, at a Reuters conference, financial industry executives said that "regulators must step in to protect crypto investors." Technology analyst Avivah Litan commented on the cryptocurrency ecosystem that "everything...needs to improve dramatically in terms of user experience, controls, safety, customer service." == Formal definition == According to Jan Lansky, a cryptocurrency is a system that meets six conditions: The system does not require a central authority; its state is maintained through distributed consensus. The system keeps an overview of cryptocurrency units and their ownership. The system defines whether new cryptocurrency units can be created. If new cryptocurrency units can be created, the system defines the circumstances of their origin and how to determine the ownership of these new units. Ownership of cryptocurrency units can be proved exclusively cryptographically. The system allows transactions to be performed in which ownership of the cryptographic units is changed. A transaction statement can only be issued by an entity proving the current ownership of these units. If two different instructions for changing the ownership of the same cryptographic units are simultaneously entered, the system performs at most one of them.In March 2018, the word cryptocurrency was added to the Merriam-Webster Dictionary. === Altcoins === Tokens, cryptocurrencies, and other digital assets other than Bitcoin are collectively known as alternative cryptocurrencies, typically shortened to "altcoins" or "alt coins", or disparagingly "shitcoins". Paul Vigna of The Wall Street Journal also described altcoins as "alternative versions of Bitcoin" given its role as the model protocol for altcoin designers. Altcoins often have underlying differences when compared to Bitcoin. For example, Litecoin aims to process a block every 2.5 minutes, rather than Bitcoin's 10 minutes, which allows Litecoin to confirm transactions faster than Bitcoin. Another example is Ethereum, which has smart contract functionality that allows decentralized applications to be run on its blockchain. Ethereum was the most used blockchain in 2020, according to Bloomberg News. In 2016, it had the largest "following" of any altcoin, according to the New York Times.Significant rallies across altcoin markets are often referred to as an "altseason". ==== Stablecoins ==== Stablecoins are cryptocurrencies designed to maintain a stable level of purchasing power. Notably, these designs are not foolproof, as a number of stablecoins have crashed or lost their peg. For example, on 11 May 2022, Terra's stablecoin UST fell from $1 to 26 cents. The subsequent failure of Terraform Labs resulted in the loss of nearly $40B invested in the Terra and Luna coins. In September 2022, South Korean prosecutors requested the issuance of an Interpol Red Notice against the company's founder, Do Kwon. In Hong Kong, the expected regulatory framework for stablecoins in 2023/24 is being shaped and includes a few considerations. == Architecture == Cryptocurrency is produced by an entire cryptocurrency system collectively, at a rate which is defined when the system is created and which is publicly stated. In centralized banking and economic systems such as the US Federal Reserve System, corporate boards or governments control the supply of currency. In the case of cryptocurrency, companies or governments cannot produce new units, and have not so far provided backing for other firms, banks or corporate entities which hold asset value measured in it. The underlying technical system upon which cryptocurrencies are based was created by Satoshi Nakamoto.Within a proof-of-work system such as Bitcoin, the safety, integrity and balance of ledgers is maintained by a community of mutually distrustful parties referred to as miners. Miners use their computers to help validate and timestamp transactions, adding them to the ledger in accordance with a particular timestamping scheme. In a proof-of-stake blockchain, transactions are validated by holders of the associated cryptocurrency, sometimes grouped together in stake pools. Most cryptocurrencies are designed to gradually decrease the production of that currency, placing a cap on the total amount of that currency that will ever be in circulation. Compared with ordinary currencies held by financial institutions or kept as cash on hand, cryptocurrencies can be more difficult for seizure by law enforcement. === Blockchain === The validity of each cryptocurrency's coins is provided by a blockchain. A blockchain is a continuously growing list of records, called blocks, which are linked and secured using cryptography. Each block typically contains a hash pointer as a link to a previous block, a timestamp and transaction data. By design, blockchains are inherently resistant to modification of the data. It is "an open, distributed ledger that can record transactions between two parties efficiently and in a verifiable and permanent way". For use as a distributed ledger, a blockchain is typically managed by a peer-to-peer network collectively adhering to a protocol for validating new blocks. Once recorded, the data in any given block cannot be altered retroactively without the alteration of all subsequent blocks, which requires collusion of the network majority. Blockchains are secure by design and are an example of a distributed computing system with high Byzantine fault tolerance. Decentralized consensus has therefore been achieved with a blockchain. === Nodes === A node is a computer that connects to a cryptocurrency network. The node supports the cryptocurrency's network through either relaying transactions, validation, or hosting a copy of the blockchain. In terms of relaying transactions, each network computer (node) has a copy of the blockchain of the cryptocurrency it supports. When a transaction is made, the node creating the transaction broadcasts details of the transaction using encryption to other nodes throughout the node network so that the transaction (and every other transaction) is known. Node owners are either volunteers, those hosted by the organization or body responsible for developing the cryptocurrency blockchain network technology, or those who are enticed to host a node to receive rewards from hosting the node network. ==== Timestamping ==== Cryptocurrencies use various timestamping schemes to "prove" the validity of transactions added to the blockchain ledger without the need for a trusted third party. The first timestamping scheme invented was the proof-of-work scheme. The most widely used proof-of-work schemes are based on SHA-256 and scrypt.Some other hashing algorithms that are used for proof-of-work include CryptoNote, Blake, SHA-3, and X11. Another method is called the proof-of-stake scheme. Proof-of-stake is a method of securing a cryptocurrency network and achieving distributed consensus through requesting users to show ownership of a certain amount of currency. It is different from proof-of-work systems that run difficult hashing algorithms to validate electronic transactions. The scheme is largely dependent on the coin, and there is currently no standard form of it. Some cryptocurrencies use a combined proof-of-work and proof-of-stake scheme. === Mining === On a blockchain, mining is the validation of transactions. For this effort, successful miners obtain new cryptocurrency as a reward. The reward decreases transaction fees by creating a complementary incentive to contribute to the processing power of the network. The rate of generating hashes, which validate any transaction, has been increased by the use of specialized machines such as FPGAs and ASICs running complex hashing algorithms like SHA-256 and scrypt. This arms race for cheaper-yet-efficient machines has existed since Bitcoin was introduced in 2009. Mining is measured by hash rate typically in TH/s.With more people venturing into the world of virtual currency, generating hashes for validation has become more complex over time, forcing miners to invest increasingly large sums of money to improve computing performance. Consequently, the reward for finding a hash has diminished and often does not justify the investment in equipment and cooling facilities (to mitigate the heat the equipment produces), and the electricity required to run them. Popular regions for mining include those with inexpensive electricity, a cold climate, and jurisdictions with clear and conducive regulations. By July 2019, Bitcoin's electricity consumption was estimated to be approximately 7 gigawatts, around 0.2% of the global total, or equivalent to the energy consumed nationally by Switzerland.Some miners pool resources, sharing their processing power over a network to split the reward equally, according to the amount of work they contributed to the probability of finding a block. A "share" is awarded to members of the mining pool who present a valid partial proof-of-work. As of February 2018, the Chinese Government has halted trading of virtual currency, banned initial coin offerings and shut down mining. Many Chinese miners have since relocated to Canada and Texas. One company is operating data centers for mining operations at Canadian oil and gas field sites, due to low gas prices. In June 2018, Hydro Quebec proposed to the provincial government to allocate 500 megawatts of power to crypto companies for mining. According to a February 2018 report from Fortune, Iceland has become a haven for cryptocurrency miners in part because of its cheap electricity.In March 2018, the city of Plattsburgh, New York put an 18-month moratorium on all cryptocurrency mining in an effort to preserve natural resources and the "character and direction" of the city. In 2021, Kazakhstan became the second-biggest crypto-currency mining country, producing 18.1% of the global exahash rate. The country built a compound containing 50,000 computers near Ekibastuz. ==== GPU price rise ==== An increase in cryptocurrency mining increased the demand for graphics cards (GPU) in 2017. The computing power of GPUs makes them well-suited to generating hashes. Popular favorites of cryptocurrency miners such as Nvidia's GTX 1060 and GTX 1070 graphics cards, as well as AMD's RX 570 and RX 580 GPUs, doubled or tripled in price – or were out of stock. A GTX 1070 Ti which was released at a price of $450 sold for as much as $1,100. Another popular card, the GTX 1060 (6 GB model) was released at an MSRP of $250, and sold for almost $500. RX 570 and RX 580 cards from AMD were out of stock for almost a year. Miners regularly buy up the entire stock of new GPU's as soon as they are available.Nvidia has asked retailers to do what they can when it comes to selling GPUs to gamers instead of miners. Boris Böhles, PR manager for Nvidia in the German region, said: "Gamers come first for Nvidia." ==== Mining accelerator chips ==== Numerous companies developed dedicated crypto-mining accelerator chips, capable of price-performance far higher than that of CPU or GPU mining. At one point Intel marketed its own brand of crypto accelerator chip, named Blockscale. === Wallets === A cryptocurrency wallet is a means of storing the public and private "keys" (address) or seed which can be used to receive or spend the cryptocurrency. With the private key, it is possible to write in the public ledger, effectively spending the associated cryptocurrency. With the public key, it is possible for others to send currency to the wallet. There exist multiple methods of storing keys or seed in a wallet. These methods range from using paper wallets (which are public, private or seed keys written on paper), to using hardware wallets (which are hardware to store your wallet information), to a digital wallet (which is a computer with a software hosting your wallet information), to hosting your wallet using an exchange where cryptocurrency is traded, or by storing your wallet information on a digital medium such as plaintext. === Anonymity === Bitcoin is pseudonymous, rather than anonymous; the cryptocurrency in a wallet is not tied to a person, but rather to one or more specific keys (or "addresses"). Thereby, Bitcoin owners are not immediately identifiable, but all transactions are publicly available in the blockchain. Still, cryptocurrency exchanges are often required by law to collect the personal information of their users.Some cryptocurrencies, such as Monero, Zerocoin, Zerocash, and CryptoNote, implement additional measures to increase privacy, such as by using zero-knowledge proofs.A recent 2020 study presented different attacks on privacy in cryptocurrencies. The attacks demonstrated how the anonymity techniques are not sufficient safeguards. In order to improve privacy, researchers suggested several different ideas including new cryptographic schemes and mechanisms for hiding the IP address of the source. == Economics == Cryptocurrencies are used primarily outside banking and governmental institutions and are exchanged over the Internet. === Block rewards === Proof-of-work cryptocurrencies, such as Bitcoin, offer block rewards incentives for miners. There has been an implicit belief that whether miners are paid by block rewards or transaction fees does not affect the security of the blockchain, but a study suggests that this may not be the case under certain circumstances.The rewards paid to miners increase the supply of the cryptocurrency. By making sure that verifying transactions is a costly business, the integrity of the network can be preserved as long as benevolent nodes control a majority of computing power. The verification algorithm requires a lot of processing power, and thus electricity in order to make verification costly enough to accurately validate public blockchain. Not only do miners have to factor in the costs associated with expensive equipment necessary to stand a chance of solving a hash problem, they further must consider the significant amount of electrical power in search of the solution. Generally, the block rewards outweigh electricity and equipment costs, but this may not always be the case.The current value, not the long-term value, of the cryptocurrency supports the reward scheme to incentivize miners to engage in costly mining activities. In 2018, Bitcoin's design caused a 1.4% welfare loss compared to an efficient cash system, while a cash system with 2% money growth has a minor 0.003% welfare cost. The main source for this inefficiency is the large mining cost, which is estimated to be US$360 million per year. This translates into users being willing to accept a cash system with an inflation rate of 230% before being better off using Bitcoin as a means of payment. However, the efficiency of the Bitcoin system can be significantly improved by optimizing the rate of coin creation and minimizing transaction fees. Another potential improvement is to eliminate inefficient mining activities by changing the consensus protocol altogether. === Transaction fees === Transaction fees for cryptocurrency depend mainly on the supply of network capacity at the time, versus the demand from the currency holder for a faster transaction. The currency holder can choose a specific transaction fee, while network entities process transactions in order of highest offered fee to lowest. Cryptocurrency exchanges can simplify the process for currency holders by offering priority alternatives and thereby determine which fee will likely cause the transaction to be processed in the requested time.For Ethereum, transaction fees differ by computational complexity, bandwidth use, and storage needs, while Bitcoin transaction fees differ by transaction size and whether the transaction uses SegWit. In February 2023, the median transaction fee for Ether corresponded to $2.2845, while for Bitcoin it corresponded to $0.659.Some cryptocurrencies have no transaction fees, and instead rely on client-side proof-of-work as the transaction prioritization and anti-spam mechanism. === Exchanges === Cryptocurrency exchanges allow customers to trade cryptocurrencies for other assets, such as conventional fiat money, or to trade between different digital currencies. Crypto marketplaces do not guarantee that an investor is completing a purchase or trade at the optimal price. As a result, as of 2020 it was possible to arbitrage to find the difference in price across several markets. === Atomic swaps === Atomic swaps are a mechanism where one cryptocurrency can be exchanged directly for another cryptocurrency, without the need for a trusted third party such as an exchange. === ATMs === Jordan Kelley, founder of Robocoin, launched the first Bitcoin ATM in the United States on 20 February 2014. The kiosk installed in Austin, Texas, is similar to bank ATMs but has scanners to read government-issued identification such as a driver's license or a passport to confirm users' identities. === Initial coin offerings === An initial coin offering (ICO) is a controversial means of raising funds for a new cryptocurrency venture. An ICO may be used by startups with the intention of avoiding regulation. However, securities regulators in many jurisdictions, including in the U.S., and Canada, have indicated that if a coin or token is an "investment contract" (e.g., under the Howey test, i.e., an investment of money with a reasonable expectation of profit based significantly on the entrepreneurial or managerial efforts of others), it is a security and is subject to securities regulation. In an ICO campaign, a percentage of the cryptocurrency (usually in the form of "tokens") is sold to early backers of the project in exchange for legal tender or other cryptocurrencies, often Bitcoin or Ether.According to PricewaterhouseCoopers, four of the 10 biggest proposed initial coin offerings have used Switzerland as a base, where they are frequently registered as non-profit foundations. The Swiss regulatory agency FINMA stated that it would take a "balanced approach" to ICO projects and would allow "legitimate innovators to navigate the regulatory landscape and so launch their projects in a way consistent with national laws protecting investors and the integrity of the financial system." In response to numerous requests by industry representatives, a legislative ICO working group began to issue legal guidelines in 2018, which are intended to remove uncertainty from cryptocurrency offerings and to establish sustainable business practices. === Price trends === The market capitalization of a cryptocurrency is calculated by multiplying the price by the number of coins in circulation. The total cryptocurrency market cap has historically been dominated by Bitcoin accounting for at least 50% of the market cap value where altcoins have increased and decreased in market cap value in relation to Bitcoin. Bitcoin's value is largely determined by speculation among other technological limiting factors known as blockchain rewards coded into the architecture technology of Bitcoin itself. The cryptocurrency market cap follows a trend known as the "halving", which is when the block rewards received from Bitcoin are halved due to technological mandated limited factors instilled into Bitcoin which in turn limits the supply of Bitcoin. As the date reaches near of a halving (twice thus far historically) the cryptocurrency market cap increases, followed by a downtrend.By June 2021, cryptocurrency had begun to be offered by some wealth managers in the US for 401(k)s. === Volatility === Cryptocurrency prices are much more volatile than established financial assets such as stocks. For example, over one week in May 2022, Bitcoin lost 20% of its value and Ethereum lost 26%, while Solana and Cardano lost 41% and 35% respectively. The falls were attributed to warnings about inflation. By comparison, in the same week, the Nasdaq tech stock index fell 7.6 per cent and the FTSE 100 was 3.6 per cent down.In the longer term, of the 10 leading cryptocurrencies identified by the total value of coins in circulation in January 2018, only four (Bitcoin, Ethereum, Cardano and Ripple (XRP)) were still in that position in early 2022. The total value of all cryptocurrencies was $2 trillion at the end of 2021, but had halved nine months later. The Wall Street Journal has commented that the crypto sector has become "intertwined" with the rest of the capital markets and "sensitive to the same forces that drive tech stocks and other risk assets", such as inflation forecasts. === Databases === There are also centralized databases, outside of blockchains, that store crypto market data. Compared to the blockchain, databases perform fast as there is no verification process. Four of the most popular cryptocurrency market databases are CoinMarketCap, CoinGecko, BraveNewCoin, and Cryptocompare. == Social and political aspects == According to Alan Feuer of The New York Times, libertarians and anarcho-capitalists were attracted to the philosophical idea behind Bitcoin. Early Bitcoin supporter Roger Ver said: "At first, almost everyone who got involved did so for philosophical reasons. We saw Bitcoin as a great idea, as a way to separate money from the state." Economist Paul Krugman argues that cryptocurrencies like Bitcoin are "something of a cult" based in "paranoid fantasies" of government power.David Golumbia says that the ideas influencing Bitcoin advocates emerge from right-wing extremist movements such as the Liberty Lobby and the John Birch Society and their anti-Central Bank rhetoric, or, more recently, Ron Paul and Tea Party-style libertarianism. Steve Bannon, who owns a "good stake" in Bitcoin, sees cryptocurrency as a form of disruptive populism, taking control back from central authorities.Bitcoin's founder, Satoshi Nakamoto, has supported the idea that cryptocurrencies go well with libertarianism. "It's very attractive to the libertarian viewpoint if we can explain it properly," Nakamoto said in 2008.According to the European Central Bank, the decentralization of money offered by Bitcoin has its theoretical roots in the Austrian school of economics, especially with Friedrich von Hayek in his book Denationalisation of Money: The Argument Refined, in which Hayek advocates a complete free market in the production, distribution and management of money to end the monopoly of central banks. == Increasing regulation == The rise in the popularity of cryptocurrencies and their adoption by financial institutions has led some governments to assess whether regulation is needed to protect users. The Financial Action Task Force (FATF) has defined cryptocurrency-related services as "virtual asset service providers" (VASPs) and recommended that they be regulated with the same money laundering (AML) and know your customer (KYC) requirements as financial institutions.In May 2020, the Joint Working Group on interVASP Messaging Standards published "IVMS 101", a universal common language for communication of required originator and beneficiary information between VASPs. The FATF and financial regulators were informed as the data model was developed.In June 2020, FATF updated its guidance to include the "Travel Rule" for cryptocurrencies, a measure which mandates that VASPs obtain, hold, and exchange information about the originators and beneficiaries of virtual asset transfers. Subsequent standardized protocol specifications recommended using JSON for relaying data between VASPs and identity services. As of December 2020, the IVMS 101 data model has yet to be finalized and ratified by the three global standard setting bodies that created it.The European Commission published a digital finance strategy in September 2020. This included a draft regulation on Markets in Crypto-Assets (MiCA), which aimed to provide a comprehensive regulatory framework for digital assets in the EU.On 10 June 2021, the Basel Committee on Banking Supervision proposed that banks that held cryptocurrency assets must set aside capital to cover all potential losses. For instance, if a bank were to hold Bitcoin worth $2 billion, it would be required to set aside enough capital to cover the entire $2 billion. This is a more extreme standard than banks are usually held to when it comes to other assets. However, this is a proposal and not a regulation. The IMF is seeking a coordinated, consistent and comprehensive approach to supervising cryptocurrencies. Tobias Adrian, the IMF's financial counsellor and head of its monetary and capital markets department said in a January 2022 interview that "Agreeing global regulations is never quick. But if we start now, we can achieve the goal of maintaining financial stability while also enjoying the benefits which the underlying technological innovations bring," === United States === In 2021, 17 states passed laws and resolutions concerning cryptocurrency regulation. The U.S. Securities and Exchange Commission (SEC) is considering what steps to take. On 8 July 2021, Senator Elizabeth Warren, part of the Senate Banking Committee, wrote to the chairman of the SEC and demanded answers on cryptocurrency regulation due to the increase in cryptocurrency exchange use and the danger this posed to consumers. On 5 August 2021, SEC Chairman Gary Gensler responded to Senator Elizabeth Warren's letter regarding cryptocurrency regulation and called for legislation focused on "crypto trading, lending and DeFi platforms," because of how vulnerable the investors could be when they traded on crypto trading platforms without a broker. He also argued that many tokens in the crypto market may be unregistered securities without required disclosures or market oversight. Additionally, Gensler did not hold back in his criticism of stablecoins. These tokens, which are pegged to the value of fiat currencies, may allow individuals to bypass important public policy goals related to traditional banking and financial systems, such as anti-money laundering, tax compliance, and sanctions.On 19 October 2021, the first bitcoin-linked exchange-traded fund (ETF) from ProShares started trading on the NYSE under the ticker "BITO." ProShares CEO Michael L. Sapir said the ETF would expose Bitcoin to a wider range of investors without the hassle of setting up accounts with cryptocurrency providers. Ian Balina, the CEO of Token Metrics, stated that the approval of the "BITO" ETF by the SEC was a significant endorsement for the crypto industry because many regulators globally were not in favor of crypto as well as the hesitance to accept crypto from retail investors. This event would eventually open more opportunities for new capital and new people in this space.The United States Department of the Treasury, on 20 May 2021, announced that it would require any transfer worth $10,000 or more to be reported to the Internal Revenue Service since cryptocurrency already posed a problem where illegal activity like tax evasion was facilitated broadly. This release from the IRS was a part of efforts to promote better compliance and consider more severe penalties for tax evaders.On 17 February 2022, the Justice department named Eun Young Choi as the first director of a National Cryptocurrency Enforcement Team to aid in identification of and dealing with misuse of cryptocurrencies and other digital assets.The Biden administration faced a dilemma as it tried to develop regulations for the cryptocurrency industry. On one hand, officials were hesitant to restrict the growing and profitable industry. On the other hand, they were committed to preventing illegal cryptocurrency transactions. To reconcile these conflicting goals, on 9 March 2022, President Biden issued an executive order. Followed by the executive order, on 16 September 2022, the Comprehensive Framework for Responsible Development of Digital Assets document was released to support development of cryptocurrencies and restrict their illegal use. The executive order included all digital assets, but cryptocurrencies posed both the greatest security risks and potential economic benefits. Though this might not address all of the challenges in crypto industry, it was a significant milestone in the U.S. cryptocurrency regulation history.In February 2023, the Securities and Exchange Commission (SEC) ruled that cryptocurrency exchange Kraken's estimated $42 billion in staked assets globally operated as an illegal securities seller. The company agreed to a $30 million settlement with the SEC and to cease selling its staking service in the U.S. The case would impact other major crypto exchanges operating staking programs.On 23 March 2023, the U.S. Securities and Exchange Commission (SEC) issued an alert to investors stating that firms offering crypto asset securities may not be complying with U.S. laws. The SEC stated that unregistered offerings of crypto asset securities may not include important information. === China === In September 2017, China banned ICOs to cause abnormal return from cryptocurrency decreasing during announcement window. The liquidity changes by banning ICOs in China was temporarily negative while the liquidity effect became positive after news.On 18 May 2021, China banned financial institutions and payment companies from being able to provide cryptocurrency transaction related services. This led to a sharp fall in the price of the biggest proof of work cryptocurrencies. For instance, Bitcoin fell 31%, Ethereum fell 44%, Binance Coin fell 32% and Dogecoin fell 30%. Proof of work mining was the next focus, with regulators in popular mining regions citing the use of electricity generated from highly polluting sources such as coal to create Bitcoin and Ethereum.In September 2021, the Chinese government declared all cryptocurrency transactions of any kind illegal, completing its crackdown on cryptocurrency. === United Kingdom === In the United Kingdom, as of 10 January 2021, all cryptocurrency firms, such as exchanges, advisors and professionals that have either a presence, market product or provide services within the UK market must register with the Financial Conduct Authority. Additionally, on 27 June 2021, the financial watchdog demanded that Binance, the world's largest cryptocurrency exchange, cease all regulated activities in the UK. === South Africa === South Africa, which has seen a large number of scams related to cryptocurrency, is said to be putting a regulatory timeline in place that will produce a regulatory framework. The largest scam occurred in April 2021, where the two founders of an African-based cryptocurrency exchange called Africrypt, Raees Cajee and Ameer Cajee, disappeared with $3.8 billion worth of Bitcoin. Additionally, Mirror Trading International disappeared with $170 million worth of cryptocurrency in January 2021. === South Korea === In March 2021, South Korea implemented new legislation to strengthen their oversight of digital assets. This legislation requires all digital asset managers, providers and exchanges to be registered with the Korea Financial Intelligence Unit in order to operate in South Korea. Registering with this unit requires that all exchanges are certified by the Information Security Management System and that they ensure all customers have real name bank accounts. It also requires that the CEO and board members of the exchanges have not been convicted of any crimes and that the exchange holds sufficient levels of deposit insurance to cover losses arising from hacks. === Turkey === On 30 April 2021, the Central Bank of the Republic of Turkey banned the use of cryptocurrencies and cryptoassets for making purchases on the grounds that the use of cryptocurrencies for such payments poses significant transaction risks. === El Salvador === On 9 June 2021, El Salvador announced that it will adopt Bitcoin as legal tender, becoming the first country to do so. === India === At present, India neither prohibits nor allows investment in the cryptocurrency market. In 2020, the Supreme Court of India had lifted the ban on cryptocurrency, which was imposed by the Reserve Bank of India. Since then, an investment in cryptocurrency is considered legitimate, though there is still ambiguity about the issues regarding the extent and payment of tax on the income accrued thereupon and also its regulatory regime. But it is being contemplated that the Indian Parliament will soon pass a specific law to either ban or regulate the cryptocurrency market in India. Expressing his public policy opinion on the Indian cryptocurrency market to a well-known online publication, a leading public policy lawyer and Vice President of SAARCLAW (South Asian Association for Regional Co-operation in Law) Hemant Batra has said that the "cryptocurrency market has now become very big with involvement of billions of dollars in the market hence, it is now unattainable and irreconcilable for the government to completely ban all sorts of cryptocurrency and its trading and investment". He mooted regulating the cryptocurrency market rather than completely banning it. He favoured following IMF and FATF guidelines in this regard. === Switzerland === Switzerland was one of the first countries to implement the FATF's Travel Rule. FINMA, the Swiss regulator, issued its own guidance to VASPs in 2019. The guidance followed the FATF's Recommendation 16, however with stricter requirements. According to FINMA's requirements, VASPs need to verify the identity of the beneficiary of the transfer. == Legality == The legal status of cryptocurrencies varies substantially from country to country and is still undefined or changing in many of them. At least one study has shown that broad generalizations about the use of Bitcoin in illicit finance are significantly overstated and that blockchain analysis is an effective crime fighting and intelligence gathering tool. While some countries have explicitly allowed their use and trade, others have banned or restricted it. According to the Library of Congress in 2021, an "absolute ban" on trading or using cryptocurrencies applies in 9 countries: Algeria, Bangladesh, Bolivia, China, Egypt, Iraq, Morocco, Nepal, and the United Arab Emirates. An "implicit ban" applies in another 39 countries or regions, which include: Bahrain, Benin, Burkina Faso, Burundi, Cameroon, Chad, Cote d’Ivoire, the Dominican Republic, Ecuador, Gabon, Georgia, Guyana, Indonesia, Iran, Jordan, Kazakhstan, Kuwait, Lebanon, Lesotho, Macau, Maldives, Mali, Moldova, Namibia, Niger, Nigeria, Oman, Pakistan, Palau, Republic of Congo, Saudi Arabia, Sengeal, Tajikistan, Tanzania, Togo, Turkey, Turkmenistan, Qatar and Vietnam. In the United States and Canada, state and provincial securities regulators, coordinated through the North American Securities Administrators Association, are investigating "Bitcoin scams" and ICOs in 40 jurisdictions.Various government agencies, departments, and courts have classified Bitcoin differently. China Central Bank banned the handling of Bitcoins by financial institutions in China in early 2014. In Russia, though owning cryptocurrency is legal, its residents are only allowed to purchase goods from other residents using the Russian ruble while nonresidents are allowed to use foreign currency. Regulations and bans that apply to Bitcoin probably extend to similar cryptocurrency systems.In August 2018, the Bank of Thailand announced its plans to create its own cryptocurrency, the Central Bank Digital Currency (CBDC). === Advertising bans === Cryptocurrency advertisements have been banned on the following platforms: Google - Ended August 2021 Twitter Facebook - Ended December 2021 Bing - Ended June 2022 Snapchat LinkedIn MailChimp Baidu Tencent Weibo Line Yandex === U.S. tax status === On 25 March 2014, the United States Internal Revenue Service (IRS) ruled that Bitcoin will be treated as property for tax purposes. Therefore, virtual currencies are considered commodities subject to capital gains tax. === Legal concerns relating to an unregulated global economy === As the popularity and demand for online currencies has increased since the inception of Bitcoin in 2009, so have concerns that such an unregulated person to person global economy that cryptocurrencies offer may become a threat to society. Concerns abound that altcoins may become tools for anonymous web criminals.Cryptocurrency networks display a lack of regulation that has been criticized as enabling criminals who seek to evade taxes and launder money. Money laundering issues are also present in regular bank transfers, however with bank-to-bank wire transfers for instance, the account holder must at least provide a proven identity. Transactions that occur through the use and exchange of these altcoins are independent from formal banking systems, and therefore can make tax evasion simpler for individuals. Since charting taxable income is based upon what a recipient reports to the revenue service, it becomes extremely difficult to account for transactions made using existing cryptocurrencies, a mode of exchange that is complex and difficult to track.Systems of anonymity that most cryptocurrencies offer can also serve as a simpler means to launder money. Rather than laundering money through an intricate net of financial actors and offshore bank accounts, laundering money through altcoins can be achieved through anonymous transactions.Cryptocurrency makes legal enforcement against extremist groups more complicated, which consequently strengthens them. White supremacist Richard Spencer went as far as to declare Bitcoin the "currency of the alt-right". === Loss, theft, and fraud === In February 2014, the world's largest Bitcoin exchange, Mt. Gox, declared bankruptcy. Likely due to theft, the company claimed that it had lost nearly 750,000 Bitcoins belonging to their clients. This added up to approximately 7% of all Bitcoins in existence, worth a total of $473 million. Mt. Gox blamed hackers, who had exploited the transaction malleability problems in the network. The price of a Bitcoin fell from a high of about $1,160 in December to under $400 in February.On 21 November 2017, Tether announced that it had been hacked, losing $31 million in USDT from its core treasury wallet.On 7 December 2017, Slovenian cryptocurrency exchange Nicehash reported that hackers had stolen over $70M using a hijacked company computer.On 19 December 2017, Yapian, the owner of South Korean exchange Youbit, filed for bankruptcy after suffering two hacks that year. Customers were still granted access to 75% of their assets. In May 2018, Bitcoin Gold had its transactions hijacked and abused by unknown hackers. Exchanges lost an estimated $18m and Bitcoin Gold was delisted from Bittrex after it refused to pay its share of the damages. On 13 September 2018, Homero Josh Garza was sentenced to 21 months of imprisonment, followed by three years of supervised release. Garza had founded the cryptocurrency startups GAW Miners and ZenMiner in 2014, acknowledged in a plea agreement that the companies were part of a pyramid scheme, and pleaded guilty to wire fraud in 2015. The U.S. Securities and Exchange Commission separately brought a civil enforcement action against Garza, who was eventually ordered to pay a judgment of $9.1 million plus $700,000 in interest. The SEC's complaint stated that Garza, through his companies, had fraudulently sold "investment contracts representing shares in the profits they claimed would be generated" from mining.In January 2018, Japanese exchange Coincheck reported that hackers had stolen $530M worth of cryptocurrencies.In June 2018, South Korean exchange Coinrail was hacked, losing over $37M worth of cryptos. The hack worsened an already ongoing cryptocurrency selloff by an additional $42 billion.On 9 July 2018, the exchange Bancor, whose code and fundraising had been subjects of controversy, had $23.5 million in cryptocurrency stolen.A 2020 EU report found that users had lost crypto-assets worth hundreds of millions of US dollars in security breaches at exchanges and storage providers. Between 2011 and 2019, reported breaches ranged from four to twelve a year. In 2019, more than a billion dollars worth of cryptoassets was reported stolen. Stolen assets "typically find their way to illegal markets and are used to fund further criminal activity".According to a 2020 report produced by the United States Attorney General's Cyber-Digital Task Force, the following three categories make up the majority of illicit cryptocurrency uses: "(1) financial transactions associated with the commission of crimes; (2) money laundering and the shielding of legitimate activity from tax, reporting, or other legal requirements; or (3) crimes, such as theft, directly implicating the cryptocurrency marketplace itself." The report concludes that "for cryptocurrency to realize its truly transformative potential, it is imperative that these risks be addressed" and that "the government has legal and regulatory tools available at its disposal to confront the threats posed by cryptocurrency's illicit uses".According to the UK 2020 national risk assessment—a comprehensive assessment of money laundering and terrorist financing risk in the UK—the risk of using cryptoassets such as Bitcoin for money laundering and terrorism financing is assessed as "medium" (from "low" in the previous 2017 report). Legal scholars suggested that the money laundering opportunities may be more perceived than real. Blockchain analysis company Chainalysis concluded that illicit activities like cybercrime, money laundering and terrorism financing made up only 0.15% of all crypto transactions conducted in 2021, representing a total of $14 billion.In December 2021, Monkey Kingdom, a NFT project based in Hong Kong, lost US$1.3 million worth of cryptocurrencies via a phishing link used by the hacker. === Money laundering === According to blockchain data company Chainalysis, criminals laundered US$8,600,000,000 worth of cryptocurrency in 2021, up by 30% from the previous year. The data suggests that rather than managing numerous illicit havens, cybercriminals make use of a small group of purpose built centralized exchanges for sending and receiving illicit cryptocurrency. In 2021, those exchanges received 47% of funds sent by crime linked addresses. Almost $2.2bn worth of cryptocurrencies was embezzled from DeFi protocols in 2021, which represents 72% of all cryptocurrency theft in 2021. According to Bloomberg and the New York Times, Federation Tower, a two skyscraper complex in the heart of Moscow City, is home to many cryptocurrency businesses under suspicion of facilitating extensive money laundering, including accepting illicit cryptocurrency funds obtained through scams, darknet markets, and ransomware. Notable businesses include Garantex, Eggchange, Cashbank, Buy-Bitcoin, Tetchange, Bitzlato, and Suex, which was sanctioned by the U.S. in 2021. Bitzlato founder and owner Anatoly Legkodymov was arrested following money-laundering charges by the United States Department of Justice.Dark money has also been flowing into Russia through a dark web marketplace called Hydra, which is powered by cryptocurrency, and enjoyed more than $1 billion in sales in 2020, according to Chainalysis. The platform demands that sellers liquidate cryptocurrency only through certain regional exchanges, which has made it difficult for investigators to trace the money. Almost 74% of ransomware revenue in 2021 — over $400 million worth of cryptocurrency — went to software strains likely affiliated with Russia, where oversight is notoriously limited. However, Russians are also leaders in the benign adoption of cryptocurrencies, as the ruble is unreliable, and President Putin favours the idea of "overcoming the excessive domination of the limited number of reserve currencies."In 2022, RenBridge - an unregulated alternative to exchanges for transferring value between blockchains - was found to be responsible for the laundering of at least $540 million since 2020. It is especially popular with people attempting to launder money from theft. This includes a cyberattack on Japanese crypto exchange Liquid that has been linked to North Korea. === Darknet markets === Properties of cryptocurrencies gave them popularity in applications such as a safe haven in banking crises and means of payment, which also led to the cryptocurrency use in controversial settings in the form of online black markets, such as Silk Road. The original Silk Road was shut down in October 2013 and there have been two more versions in use since then. In the year following the initial shutdown of Silk Road, the number of prominent dark markets increased from four to twelve, while the amount of drug listings increased from 18,000 to 32,000.Darknet markets present challenges in regard to legality. Cryptocurrency used in dark markets are not clearly or legally classified in almost all parts of the world. In the U.S., Bitcoins are labelled as "virtual assets". This type of ambiguous classification puts pressure on law enforcement agencies around the world to adapt to the shifting drug trade of dark markets. === Wash trades === Various studies have found that crypto-trading is rife with wash trading. Wash trading is a process, illegal in some jurisdictions, involving buyers and sellers being the same person or group, and may be used to manipulate the price of a cryptocurrency or inflate volume artificially. Exchanges with higher volumes can demand higher premiums from token issuers. A study from 2019 concluded that up to 80% of trades on unregulated cryptocurrency exchanges could be wash trades. A 2019 report by Bitwise Asset Management claimed that 95% of all Bitcoin trading volume reported on major website CoinMarketCap had been artificially generated, and of 81 exchanges studied, only 10 provided legitimate volume figures. === As a tool to evade sanctions === In 2022, cryptocurrencies attracted attention when Western nations imposed severe economic sanctions on Russia in the aftermath of its invasion of Ukraine in February. However, American sources warned in March that some crypto-transactions could potentially be used to evade economic sanctions against Russia and Belarus.In April 2022, the computer programmer Virgil Griffith received a five-year prison sentence in the US for attending a Pyongyang cryptocurrency conference, where he gave a presentation on blockchains which might be used for sanctions evasion. == Impacts and analysis == The Bank for International Settlements summarized several criticisms of cryptocurrencies in Chapter V of their 2018 annual report. The criticisms include the lack of stability in their price, the high energy consumption, high and variable transactions costs, the poor security and fraud at cryptocurrency exchanges, vulnerability to debasement (from forking), and the influence of miners. === Speculation, fraud, and adoption === Cryptocurrencies have been compared to Ponzi schemes, pyramid schemes and economic bubbles, such as housing market bubbles. Howard Marks of Oaktree Capital Management stated in 2017 that digital currencies were "nothing but an unfounded fad (or perhaps even a pyramid scheme), based on a willingness to ascribe value to something that has little or none beyond what people will pay for it", and compared them to the tulip mania (1637), South Sea Bubble (1720), and dot-com bubble (1999), which all experienced profound price booms and busts.Regulators in several countries have warned against cryptocurrency and some have taken measures to dissuade users. However, research in 2021 by the UK's financial regulator suggests such warnings either went unheard, or were ignored. Fewer than one in 10 potential cryptocurrency buyers were aware of consumer warnings on the FCA website, and 12% of crypto users were not aware that their holdings were not protected by statutory compensation. Of 1,000 respondents between the ages of eighteen and forty, almost 70% falsely assumed cryptocurrencies were regulated, 75% of younger crypto investors claimed to be driven by competition with friends and family, 58% said that social media enticed them to make high risk investments. The FCA recommends making use of its warning list, which flags unauthorized financial firms.Many banks do not offer virtual currency services themselves and can refuse to do business with virtual currency companies. In 2014, Gareth Murphy, a senior banking officer, suggested that the widespread adoption of cryptocurrencies may lead to too much money being obfuscated, blinding economists who would use such information to better steer the economy. While traditional financial products have strong consumer protections in place, there is no intermediary with the power to limit consumer losses if Bitcoins are lost or stolen. One of the features cryptocurrency lacks in comparison to credit cards, for example, is consumer protection against fraud, such as chargebacks. The French regulator Autorité des marchés financiers (AMF) lists 16 websites of companies that solicit investment in cryptocurrency without being authorized to do so in France.An October 2021 paper by the National Bureau of Economic Research found that Bitcoin suffers from systemic risk as the top 10,000 addresses control about one-third of all Bitcoin in circulation. It is even worse for Bitcoin miners, with 0.01% controlling 50% of the capacity. According to researcher Flipside Crypto, less than 2% of anonymous accounts control 95% of all available Bitcoin supply. This is considered risky as a great deal of the market is in the hands of a few entities. A paper by John Griffin, a finance professor at the University of Texas, and Amin Shams, a graduate student found that in 2017 the price of Bitcoin had been substantially inflated using another cryptocurrency, Tether.Roger Lowenstein, author of "Bank of America: The Epic Struggle to Create the Federal Reserve," says in a New York Times story that FTX will face over $8 billion in claims. === Non-fungible tokens === Non-fungible tokens (NFTs) are digital assets that represent art, collectibles, gaming, etc. Like crypto, their data is stored on the blockchain. NFTs are bought and traded using cryptocurrency. The Ethereum blockchain was the first place where NFTs were implemented, but now many other blockchains have created their own versions of NFTs. === Banks === As the first big Wall Street bank to embrace cryptocurrencies, Morgan Stanley announced on 17 March 2021 that they will be offering access to Bitcoin funds for their wealthy clients through three funds which enable Bitcoin ownership for investors with an aggressive risk tolerance. BNY Mellon on 11 February 2021 announced that it would begin offering cryptocurrency services to its clients.On 20 April 2021, Venmo added support to its platform to enable customers to buy, hold and sell cryptocurrencies.In October 2021, financial services company Mastercard announced it is working with digital asset manager Bakkt on a platform that would allow any bank or merchant on the Mastercard network to offer cryptocurrency services. === Environmental effects === Mining for proof-of-work cryptocurrencies requires enormous amounts of electricity and consequently comes with a large carbon footprint due to causing greenhouse gas emissions. Proof-of-work blockchains such as Bitcoin, Ethereum, Litecoin, and Monero were estimated to have added between 3 million and 15 million tons of carbon dioxide (CO2) to the atmosphere in the period from 1 January 2016 to 30 June 2017. By November 2018, Bitcoin was estimated to have an annual energy consumption of 45.8TWh, generating 22.0 to 22.9 million tons of CO2, rivalling nations like Jordan and Sri Lanka. By the end of 2021, Bitcoin was estimated to produce 65.4 million tons of CO2, as much as Greece, and consume between 91 and 177 terawatt-hours annually.Critics have also identified a large electronic waste problem in disposing of mining rigs. Mining hardware is improving at a fast rate, quickly resulting in older generations of hardware.Bitcoin is the least energy-efficient cryptocurrency, using 707.6 kilowatt-hours of electricity per transaction.Before June 2021, China was the primary location for Bitcoin mining. However, due to concerns over power usage and other factors, China forced out Bitcoin operations, at least temporarily. As a result, the United States promptly emerged as the top global leader in the industry. An example of a gross amount of electronic waste associated with Bitcoin mining operations in the US is a facility that located in Dalton, Georgia which is consuming nearly the same amount of electricity as the combined power usage of 97,000 households in its vicinity. Another example is that Riot Platforms operates a Bitcoin mining facility in Rockdale, Texas, which consumes approximately as much electricity as the nearby 300,000 households. This makes it the most energy-intensive Bitcoin mining operation in the United States.The world's second-largest cryptocurrency, Ethereum, uses 62.56 kilowatt-hours of electricity per transaction. XRP is the world's most energy efficient cryptocurrency, using 0.0079 kilowatt-hours of electricity per transaction.Although the biggest PoW blockchains consume energy on the scale of medium-sized countries, the annual power demand from proof-of-stake (PoS) blockchains is on a scale equivalent to a housing estate. The Times identified six "environmentally friendly" cryptocurrencies: Chia, IOTA, Cardano, Nano, Solarcoin and Bitgreen. Academics and researchers have used various methods for estimating the energy use and energy efficiency of blockchains. A study of the six largest proof-of-stake networks in May 2021 concluded: Cardano has the lowest electricity use per node; Polkadot has the lowest electricity use overall; and Solana has the lowest electricity use per transaction.In terms of annual consumption (kWh/yr), the figures were: Polkadot (70,237), Tezos (113,249), Avalanche (489,311), Algorand (512,671), Cardano (598,755) and Solana (1,967,930). This equates to Polkadot consuming 7 times the electricity of an average U.S. home, Cardano 57 homes and Solana 200 times as much. The research concluded that PoS networks consumed 0.001% the electricity of the Bitcoin network. University College London researchers reached a similar conclusion.Variable renewable energy power stations could invest in Bitcoin mining to reduce curtailment, hedge electricity price risk, stabilize the grid, increase the profitability of renewable energy power stations and therefore accelerate transition to sustainable energy. === Technological limitations === There are also purely technical elements to consider. For example, technological advancement in cryptocurrencies such as Bitcoin result in high up-front costs to miners in the form of specialized hardware and software. Cryptocurrency transactions are normally irreversible after a number of blocks confirm the transaction. Additionally, cryptocurrency private keys can be permanently lost from local storage due to malware, data loss or the destruction of the physical media. This precludes the cryptocurrency from being spent, resulting in its effective removal from the markets. === Academic studies === In September 2015, the establishment of the peer-reviewed academic journal Ledger (ISSN 2379-5980) was announced. It covers studies of cryptocurrencies and related technologies, and is published by the University of Pittsburgh.The journal encourages authors to digitally sign a file hash of submitted papers, which will then be timestamped into the Bitcoin blockchain. Authors are also asked to include a personal Bitcoin address in the first page of their papers. === Aid agencies === A number of aid agencies have started accepting donations in cryptocurrencies, including UNICEF. Christopher Fabian, principal adviser at UNICEF Innovation, said the children's fund would uphold donor protocols, meaning that people making donations online would have to pass checks before they were allowed to deposit funds.However, in 2021, there was a backlash against donations in Bitcoin because of the environmental emissions it caused. Some agencies stopped accepting Bitcoin and others turned to "greener" cryptocurrencies. The U.S. arm of Greenpeace stopped accepting bitcoin donations after seven years. It said: "As the amount of energy needed to run Bitcoin became clearer, this policy became no longer tenable."In 2022, the Ukrainian government raised over US$10,000,000 worth of aid through cryptocurrency following the 2022 Russian invasion of Ukraine. === Criticism === Bitcoin has been characterized as a speculative bubble by eight winners of the Nobel Memorial Prize in Economic Sciences: Paul Krugman, Robert J. Shiller, Joseph Stiglitz, Richard Thaler, James Heckman, Thomas Sargent, Angus Deaton, and Oliver Hart; and by central bank officials including Alan Greenspan, Agustín Carstens, Vítor Constâncio, and Nout Wellink.Investors Warren Buffett and George Soros have respectively characterized it as a "mirage" and a "bubble"; while business executives Jack Ma and JP Morgan Chase CEO Jamie Dimon have called it a "bubble" and a "fraud", respectively, although Jamie Dimon later said he regretted dubbing Bitcoin a fraud. BlackRock CEO Laurence D. Fink called Bitcoin an "index of money laundering".In June 2022, business magnate Bill Gates said that cryptocurrencies are "100% based on greater fool theory".Legal scholars criticize the lack of regulation, which hinders conflict resolution when crypto assets are at the center of a legal dispute, for example a divorce or an inheritance. In Switzerland, jurists generally deny that cryptocurrencies are objects that fall under property law, as cryptocurrencies do not belong to any class of legally defined objects (Typenzwang, the legal numerus clausus). Therefore, it is debated whether anybody could even be sued for embezzlement of cryptocurrency if he/she had access to someone's wallet. However, in the law of obligations and contract law, any kind of object would be legally valid, but the object would have to be tied to an identified counterparty. However, as the more popular cryptocurrencies can be freely and quickly exchanged into legal tender, they are financial assets and have to be taxed and accounted for as such.In 2018, an increase in crypto-related suicides was noticed after the cryptocurrency market crashed in August. The situation was particularly critical in Korea as crypto traders were on "suicide watch". A cryptocurrency forum on Reddit even started providing suicide prevention support to affected investors. The May 2022 collapse of the Luna currency operated by Terra also led to reports of suicidal investors in crypto-related subreddits. == See also == == Notes == == References == == Further reading == Chayka, Kyle (2 July 2013). "What Comes After Bitcoin?". Pacific Standard. Retrieved 18 January 2014. Guadamuz, Andres; Marsden, Chris (2015). "Blockchains and Bitcoin: Regulatory responses to cryptocurrencies" (PDF). First Monday. 20 (12). doi:10.5210/fm.v20i12.6198. S2CID 811921. == External links == Media related to Cryptocurrency at Wikimedia Commons Quotations related to Cryptocurrency at Wikiquote Learning materials related to Should cryptocurrencies be banned? at Wikiversity
Bitcoin	Bitcoin (abbreviation: BTC or XBT; sign: ₿) is the first decentralized cryptocurrency. Nodes in the peer-to-peer bitcoin network verify transactions through cryptography and record them in a public distributed ledger, called a blockchain, without central oversight. Consensus between nodes is achieved using a computationally intensive system based on proof-of-work called mining. Bitcoin mining requires increasing quantities of electricity and was responsible for 0.2% of world greenhouse gas emissions as of 2022.Based on a free market ideology, bitcoin was invented in 2008 by Satoshi Nakamoto, an unknown person. Use of bitcoin as a currency began in 2009, with the release of its open-source implementation.: ch. 1 In 2021, El Salvador adopted it as legal tender. Bitcoin is currently used more as a store of value and less as a medium of exchange or unit of account. It is mostly seen as an investment and has been described by many scholars as an economic bubble. As bitcoin is pseudonymous, its use by criminals has attracted the attention of regulators, leading to its ban by several countries as of 2021. == History == === Background === Before bitcoin, several digital cash technologies were released, starting with David Chaum's ecash in the 1980s. The idea that solutions to computational puzzles could have some value was first proposed by cryptographers Cynthia Dwork and Moni Naor in 1992. The concept was independently rediscovered by Adam Back who developed Hashcash, a proof-of-work scheme for spam control in 1997. The first proposals for distributed digital scarcity-based cryptocurrencies came from cypherpunks Wei Dai (b-money) and Nick Szabo (bit gold) in 1998. In 2004, Hal Finney developed the first currency based on reusable proof-of-work. These various attempts were not successful: Chaum's concept required centralized control and no banks wanted to sign on, Hashcash had no protection against double-spending, while b-money and bit gold were not resistant to Sybil attacks. === 2008–2009: Creation === The domain name bitcoin.org was registered on 18 August 2008. On 31 October 2008, a link to a white paper authored by Satoshi Nakamoto titled Bitcoin: A Peer-to-Peer Electronic Cash System was posted to a cryptography mailing list. Nakamoto implemented the bitcoin software as open-source code and released it in January 2009. Nakamoto's identity remains unknown. All individual components of bitcoin originated in earlier academic literature. Nakamoto's innovation was their complex interplay resulting in the first decentralized, Sybil resistant, Byzantine fault tolerant digital cash system, that would eventually be referred to as the first blockchain. Nakamoto's paper was not peer-reviewed and initially ignored by academics, who argued that it could not work, based on theoretical models, even though it was working in practice.On 3 January 2009, the bitcoin network was created when Nakamoto mined the starting block of the chain, known as the genesis block. Embedded in this block was the text "The Times 03/Jan/2009 Chancellor on brink of second bailout for banks", which is the date and headline of an issue of The Times newspaper. Nine days later, Hal Finney received the first bitcoin transaction: ten bitcoins from Nakamoto. Wei Dai and Nick Szabo were also early supporters. In 2010, the first known commercial transaction using bitcoin occurred when programmer Laszlo Hanyecz bought two Papa John's pizzas for ₿10,000. === 2010–2012: Early growth === Blockchain analysts estimate that Nakamoto had mined about one million bitcoins before disappearing in 2010 when he handed the network alert key and control of the code repository over to Gavin Andresen. Andresen later became lead developer at the Bitcoin Foundation, an organization founded in September 2012 to promote bitcoin.After early "proof-of-concept" transactions, the first major users of bitcoin were black markets, such as the dark web Silk Road. During its 30 months of existence, beginning in February 2011, Silk Road exclusively accepted bitcoins as payment, transacting ₿9.9 million, worth about $214 million.: 222 === 2013–2014: First regulatory actions === In March 2013, the US Financial Crimes Enforcement Network (FinCEN) established regulatory guidelines for "decentralized virtual currencies" such as bitcoin, classifying American bitcoin miners who sell their generated bitcoins as money services businesses, subject to registration and other legal obligations. In May 2013, US authorities seized the unregistered exchange Mt. Gox. In June 2013, the US Drug Enforcement Administration seized ₿11.02 from a man attempting to use them to buy illegal substances. This marked the first time a government agency had seized bitcoins. The FBI seized about ₿30,000 in October 2013 from Silk Road, following the arrest of its founder Ross Ulbricht.In December 2013, the People's Bank of China prohibited Chinese financial institutions from using bitcoin. After the announcement, the value of bitcoin dropped, and Baidu no longer accepted bitcoins for certain services. Buying real-world goods with any virtual currency had been illegal in China since at least 2009. === 2015–2019 === Research produced by the University of Cambridge estimated that in 2017, there were 2.9 to 5.8 million unique users using a cryptocurrency wallet, most of them using bitcoin. In August 2017, the SegWit software upgrade was activated. Segwit was intended to support the Lightning Network as well as improve scalability. SegWit opponents, who supported larger blocks as a scalability solution, forked to create Bitcoin Cash, one of many forks of bitcoin.In February 2018, price crashed after China imposed a complete ban on Bitcoin trading. The percentage of bitcoin trading in the Chinese renminbi fell from over 90% in September 2017 to less than 1% in June 2018. During the same year, Bitcoin prices were negatively affected by several hacks or thefts from cryptocurrency exchanges. === 2020–present === In 2020, some major companies and institutions started to acquire bitcoin: MicroStrategy invested $250 million in bitcoin as a treasury reserve asset, Square, Inc., $50 million, and MassMutual, $100 million. In November 2020, PayPal added support for bitcoin in the US.In February 2021, Bitcoin's market capitalization reached $1 trillion for the first time. In November 2021, the Taproot soft-fork upgrade was activated, adding support for Schnorr signatures, improved functionality of smart contracts and Lightning Network. Before, Bitcoin only used a custom elliptic curve with the ECDSA algorithm to produce signatures.: 101 In September 2021, Bitcoin became legal tender in El Salvador, alongside the US dollar.In May and June 2022, the bitcoin price fell following the collapses of TerraUSD, a stablecoin, and the Celsius Network, a decentralized finance loan company.In 2023, ordinals, non-fungible tokens (NFTs) on Bitcoin, went live. == Design == === Units and divisibility === The unit of account of the bitcoin system is the bitcoin. It is represented with the currency codes BTC and XBT as well as the symbol ₿. No uniform capitalization convention exists; some sources use Bitcoin, capitalized, to refer to the technology and network, and bitcoin, lowercase, for the unit of account. The Oxford English Dictionary advocates the use of lowercase bitcoin in all cases.One bitcoin is divisible to eight decimal places.: ch. 5 Units for smaller amounts of bitcoin are the millibitcoin (mBTC), equal to 1⁄1000 bitcoin, and the satoshi (sat), representing 1⁄100000000 (one hundred millionth) bitcoin, the smallest amount possible. 100,000 satoshis are one mBTC. === Blockchain === As a decentralized system, bitcoin operates without a central authority or single administrator, so that anyone can create a new bitcoin address and transact without needing any approval.: ch. 1 This is accomplished through a specialized distributed ledger called a blockchain that records bitcoin transactions.The blockchain is implemented as an ordered list of blocks. Each block contains a SHA-256 hash of the previous block, "chaining" them in chronological order.: ch. 7 The blockchain is maintained by a peer-to-peer network.: 215–219 Individual blocks, public addresses, and transactions within blocks are public information, and can be examined using a blockchain explorer.Nodes validate and broadcast transactions, each maintaining a copy of the blockchain for ownership verification. A new block is created every 10 minutes on average, updating the blockchain across all nodes without central oversight. This process tracks bitcoin spending, ensuring each bitcoin is spent only once. Unlike a traditional ledger that tracks physical currency, bitcoins exist digitally as unspent outputs of transactions.: ch. 5 === Addresses and transactions === In the blockchain, bitcoins are linked to specific addresses that are hashes of a public key. Creating an address involves generating a random private key and then computing the corresponding address. This process is almost instant, but the reverse (finding the private key for a given address) is nearly impossible.: ch. 4 Publishing a bitcoin address does not risk its private key, and it is extremely unlikely to accidentally generate a used key with funds. To use bitcoins, owners need their private key to digitally sign transactions, which are verified by the network using the public key, keeping the private key secret.: ch. 5 Bitcoin transactions use a Forth-like scripting language,: ch. 5 involving one or more inputs and outputs. When sending bitcoins, a user specifies the recipients' addresses and the amount for each output. This allows sending bitcoins to several recipients in a single transaction. To prevent double-spending, each input must refer to a previous unspent output in the blockchain. Using multiple inputs is similar to using multiple coins in a cash transaction. As in a cash transaction, the sum of inputs can exceed the intended sum of payments. In such a case, an additional output can return the change back to the payer. Unallocated input satoshis in the transaction become the transaction fee.Losing a private key means losing access to the bitcoins, with no other proof of ownership accepted by the protocol. For instance, in 2013, a user lost ₿7,500, valued at US$7.5 million, by accidentally discarding a hard drive with the private key. It is estimated that around 20% of all bitcoins are lost. The private key must also be kept secret as its exposure, such as through a data breach, can lead to theft of the associated bitcoins.: ch. 10 As of December 2017, approximately ₿980,000 had been stolen from cryptocurrency exchanges. === Mining === The mining process in Bitcoin involves maintaining the blockchain through computer processing power. Miners group and broadcast new transactions into blocks, which are then verified by the network. Each block must contain a proof-of-work (PoW) to be accepted, involving finding a nonce number that, combined with the block content, produces a hash numerically smaller than the network's difficulty target.: ch. 8 This PoW is simple to verify but hard to generate, requiring many attempts.: ch. 8 PoW forms the basis of Bitcoin's consensus mechanism.The difficulty of generating a block is deterministically adjusted based on the mining power on the network by changing the difficulty target, which is recalibrated every 2,016 blocks (approximately two weeks) to maintain an average time of ten minutes between new blocks. The process requires significant computational power and specialized hardware.: ch. 8 Miners who successfully find a new block can collect transaction fees from the included transactions and a set reward in bitcoins. To claim this reward, a special transaction called a coinbase is included in the block, with the miner as the payee. All bitcoins in existence have been created through this type of transaction.: ch. 8 This reward is halved every 210,000 blocks until ₿21 million, with new bitcoin issuance slated to end around 2140. Afterward, miners will only earn from transaction fees. These fees are determined by the transaction's size and the amount of data stored, measured in satoshis per byte.: ch. 8 The proof-of-work system and the chaining of blocks make blockchain modifications very difficult, as altering one block requires changing all subsequent blocks. As more blocks are added, modifying older blocks becomes increasingly challenging. In case of disagreement, nodes trust the longest chain, which required the greatest amount of effort to produce. To tamper or censor the ledger, one needs to control the majority of the global hashrate. The high cost required to reach this level of computational power guarantees the security of the bitcoin blockchain.Bitcoin mining's environmental impact is significant and has attracted the attention of regulators, leading to restrictions or bans in various jurisdictions. As of 2022, bitcoin mining is estimated to represent 0.4% of global electricity consumption and to be responsible for 0.2% of world greenhouse gas emissions, as about half of the electricity used is generated through fossil fuels. Moreover, mining hardware's short lifespan results in electronic waste. The amount of electrical energy and e-waste generated by bitcoin mining is often compared with countries like Greece or the Netherlands. === Privacy and fungibility === Bitcoin is pseudonymous, with funds linked to addresses, not real-world identities. While the owners of these addresses are not directly identified, all transactions are public on the blockchain. Patterns of use, like spending coins from multiple inputs, can hint at a common owner. Public data can sometimes be matched with known address owners. Bitcoin exchanges might also need to collect personal data as per legal requirements. For enhanced privacy, users can generate a new address for each transaction.In the Bitcoin network, each bitcoin is treated equally, ensuring basic fungibility. However, users and applications can choose to differentiate between bitcoins. While wallets and software treat all bitcoins the same, each bitcoin's transaction history is recorded on the blockchain. This public record allows for chain analysis, where users can identify and potentially reject bitcoins from controversial sources. For example, in 2012, Mt. Gox froze accounts containing bitcoins identified as stolen. === Wallets === Bitcoin wallets were the first cryptocurrency wallets, enabling users to store the information necessary to transact bitcoins.: ch. 1, glossary The first wallet program, simply named Bitcoin, and sometimes referred to as the Satoshi client, was released in 2009 by Nakamoto as open-source software. Bitcoin Core is among the best known clients. Forks of Bitcoin Core exist such as Bitcoin Unlimited. Wallets can be full clients, with a full copy of the blockchain to check the validity of mined blocks,: ch. 1 or lightweight clients, just to send and receive transactions without a local copy of the entire blockchain. Third-party internet services called online wallets store users' credentials on their servers, making them susceptible of hacks. "Cold storage" protects bitcoins from such hacks by keeping private keys offline, either through specialized hardware wallets or paper printouts.: ch. 4 === Scalability and decentralization challenges === Nakamoto limited the block size to one megabyte. The limited block size and frequency can lead to delayed processing of transactions, increased fees and a Bitcoin scalability problem. The Lightning Network, second-layer routing network, is a potential scaling solution.: ch. 8 Research shows a trend towards centralization in bitcoin as miners join pools for stable income.: 215, 219–222 : 3 If a single miner or pool controls more than 50% of the hashing power, it would allow them to censor transactions and double-spend coins. In 2014, mining pool Ghash.io reached 51% mining power, causing safety concerns, but later voluntarily capped its power at 39.99% for the benefit of the whole network. A few entities also dominate other parts of the ecosystem such as the client software, online wallets, and simplified payment verification (SPV) clients. == Economics and usage == === Bitcoin's theoretical roots and ideology === According to the European Central Bank, the decentralization of money offered by bitcoin has its theoretical roots in the Austrian school of economics, especially with Friedrich von Hayek's book The Denationalization of Money, in which he advocates a complete free market in the production, distribution and management of money to end the monopoly of central banks.: 22 Sociologist Nigel Dodd, citing the crypto-anarchist Declaration of Bitcoin's Independence, argues that the essence of the bitcoin ideology is to remove money from social, as well as governmental, control. The Economist describes bitcoin as "a techno-anarchist project to create an online version of cash, a way for people to transact without the possibility of interference from malicious governments or banks". These philosophical ideas initially attracted libertarians and anarchists. Economist Paul Krugman argues that cryptocurrencies like bitcoin are only used by bank skeptics and criminals. === Recognition as a currency and legal status === Money serves three purposes: a store of value, a medium of exchange, and a unit of account. According to The Economist in 2014, bitcoin functions best as a medium of exchange. In 2015, The Economist noted that bitcoins had three qualities useful in a currency: they are "hard to earn, limited in supply and easy to verify". However, a 2018 assessment by The Economist stated that cryptocurrencies met none of these three criteria. Per some researchers, as of 2015, bitcoin functions more as a payment system than as a currency. In 2014, economist Robert J. Shiller wrote that bitcoin has potential as a unit of account for measuring the relative value of goods, as with Chile's Unidad de Fomento, but that "Bitcoin in its present form ... doesn't really solve any sensible economic problem". François R. Velde, Senior Economist at the Chicago Fed, described bitcoin as "an elegant solution to the problem of creating a digital currency". David Andolfatto, Vice President at the Federal Reserve Bank of St. Louis, stated that bitcoin is a threat to the establishment, which he argues is a good thing for the Federal Reserve System and other central banks, because it prompts these institutions to operate sound policies.The legal status of bitcoin varies substantially from one jurisdiction to another. Because of its decentralized nature and its global presence, regulating bitcoin is difficult. However, the use of bitcoin can be criminalized, and shutting down exchanges and the peer-to-peer economy in a given country would constitute a de facto ban. The use of bitcoin by criminals has attracted the attention of financial regulators, legislative bodies, and law enforcement. Nobel-prize winning economist Joseph Stiglitz says that bitcoin's anonymity encourages money laundering and other crimes. This is the main justification behind bitcoin bans. As of November 2021, nine countries applied an absolute ban (Algeria, Bangladesh, China, Egypt, Iraq, Morocco, Nepal, Qatar, and Tunisia) while another 42 countries had an implicit ban. Bitcoin is only legal tender in El Salvador. === Use for payments === As of 2018, Bitcoin is rarely used in transactions with merchants, but it is popular to purchase illegal goods online. Prices are not usually quoted in bitcoin and trades involve conversions into fiat currencies. Commonly cited reasons for not using Bitcoin include high costs, the inability to process chargebacks, high price volatility, long transaction times, transaction fees (especially for small purchases). Bloomberg reported that bitcoin was being used for large-item purchases on the site Overstock.com and for cross-border payments to freelancers. As of 2015, there was little sign of bitcoin use in international remittances despite high fees charged by banks and Western Union who compete in this market.In September 2021, the Bitcoin Law made bitcoin legal tender in El Salvador, alongside the US dollar. The adoption has been criticized both internationally and within El Salvador. In particular, in 2022, the International Monetary Fund (IMF) urged El Salvador to reverse its decision. As of 2022, the use of Bitcoin in El Salvador remains low: 80% of businesses refused to accept it despite being legally required to. In April 2022, the Central African Republic (CAR) adopted Bitcoin as legal tender alongside the CFA franc, but repealed the reform one year later.Bitcoin is also used by some governments. For instance, the Iranian government initially opposed cryptocurrencies, but later saw them as an opportunity to circumvent sanctions. Since 2020, Iran has required local bitcoin miners to sell bitcoin to the Central Bank of Iran, allowing the central bank to use it for imports. Some constituent states also accept tax payments in bitcoin, including Colorado (US) and Zug (Switzerland). === Use for investment and status as an economic bubble === As of 2018, the overwhelming majority of bitcoin transactions took place on cryptocurrency exchanges. Since 2014, regulated bitcoin funds also allow exposure to the asset or to futures as an investment. Individuals and companies such as the Winklevoss twins and Elon Musk's companies SpaceX and Tesla have massively invested in Bitcoin. Bitcoin wealth is highly concentrated, with 0.01% holding 27% of in-circulation currency, as of 2021. As of September 2023, El Salvador had $76.5 million worth of bitcoin in its international reserves.In 2018, research published in the Journal of Monetary Economics concluded that price manipulation occurred during the Mt. Gox bitcoin theft and that the market remained vulnerable to manipulation. Research published in The Journal of Finance also suggested that trading associated with increases in the amount of the Tether cryptocurrency and associated trading at the Bitfinex exchange accounted for about half of the price increase in bitcoin in late 2017.Bitcoin, along with other cryptocurrencies, has been described as an economic bubble by several economists, including Nobel Prize in Economics laureates, such as Joseph Stiglitz, James Heckman, and Paul Krugman. Another recipient of the prize, Robert Shiller, argues that bitcoin is rather a fad that may become an asset class. He describes its price growth as an "epidemic", driven by contagious narratives.According to research published in the International Review of Financial Analysis in 2018, Bitcoin as an asset is highly volatile and does not behave like any other conventional asset. According to one 2022 analysis published in The Journal of Alternative Investments, bitcoin was less volatile than oil, silver, US Treasuries, and 190 stocks in the S&P 500 during and after the 2020 stock market crash. The term "hodl" was created in December 2013 for holding Bitcoin rather than selling it during periods of volatility.Economists, investors, and the central bank of Estonia have described bitcoin as a potential Ponzi scheme. Legal scholar Eric Posner disagrees as "a real Ponzi scheme takes fraud; bitcoin, by contrast, seems more like a collective delusion." A 2014 World Bank report also concluded that bitcoin was not a deliberate Ponzi scheme. == See also == Alternative currency == Notes == == References == == Further reading == Nakamoto, Satoshi (31 October 2008). "Bitcoin: A Peer-to-Peer Electronic Cash System" (PDF). bitcoin.org. Archived (PDF) from the original on 20 March 2014. Retrieved 28 April 2014.
Digital currency	Digital currency (digital money, electronic money or electronic currency) is any currency, money, or money-like asset that is primarily managed, stored or exchanged on digital computer systems, especially over the internet. Types of digital currencies include cryptocurrency, virtual currency and central bank digital currency. Digital currency may be recorded on a distributed database on the internet, a centralized electronic computer database owned by a company or bank, within digital files or even on a stored-value card.Digital currencies exhibit properties similar to traditional currencies, but generally do not have a classical physical form of fiat currency historically that can be held in the hand, like currencies with printed banknotes or minted coins. However, they do have a physical form in an unclassical sense coming from the computer to computer and computer to human interactions and the information and processing power of the servers that store and keep track of money. This unclassical physical form allows nearly instantaneous transactions over the internet and vastly lowers the cost associated with distributing notes and coins: for example, of the types of money in the UK economy, 3% are notes and coins, and 79% as electronic money (in the form of bank deposits). Usually not issued by a governmental body, virtual currencies are not considered a legal tender and they enable ownership transfer across governmental borders.This type of currency may be used to buy physical goods and services, but may also be restricted to certain communities such as for use inside an online game.Digital money can either be centralized, where there is a central point of control over the money supply (for instance, a bank), or decentralized, where the control over the money supply is predetermined or agreed upon democratically. == History == Precursory ideas for digital currencies were presented in electronic payment methods such as the Sabre (travel reservation system). In 1983, a research paper titled "Blind Signatures for Untraceable Payments" by David Chaum introduced the idea of digital cash. In 1989, he founded DigiCash, an electronic cash company, in Amsterdam to commercialize the ideas in his research. It filed for bankruptcy in 1998.e-gold was the first widely used Internet money, introduced in 1996, and grew to several million users before the US Government shut it down in 2008. e-gold has been referenced to as "digital currency" by both US officials and academia. In 1997, Coca-Cola offered buying from vending machines using mobile payments. PayPal launched its USD-denominated service in 1998. In 2009, bitcoin was launched, which marked the start of decentralized blockchain-based digital currencies with no central server, and no tangible assets held in reserve. Also known as cryptocurrencies, blockchain-based digital currencies proved resistant to attempt by government to regulate them, because there was no central organization or person with the power to turn them off.Origins of digital currencies date back to the 1990s Dot-com bubble. Another known digital currency service was Liberty Reserve, founded in 2006; it lets users convert dollars or euros to Liberty Reserve Dollars or Euros, and exchange them freely with one another at a 1% fee. Several digital currency operations were reputed to be used for Ponzi schemes and money laundering, and were prosecuted by the U.S. government for operating without MSB licenses. Q coins or QQ coins, were used as a type of commodity-based digital currency on Tencent QQ's messaging platform and emerged in early 2005. Q coins were so effective in China that they were said to have had a destabilizing effect on the Chinese Yuan currency due to speculation. Recent interest in cryptocurrencies has prompted renewed interest in digital currencies, with bitcoin, introduced in 2008, becoming the most widely used and accepted digital currency. == Sub-types of digital currency and comparisons == === Digital currency as a specific type and as a meta-group name === Digital currency is a term that refers to a specific type of electronic currency with specific properties. Digital currency is also a term used to include the meta-group of sub-types of digital currency, the specific meaning can only be determined within the specific legal or contextual case. Legally and technically, there already are a myriad of legal definitions of digital currency and the many digital currency sub-types. Combining different possible properties, there exists an extensive number of implementations creating many and numerous sub-types of digital currency. Many governmental jurisdictions have implemented their own unique definition for digital currency, virtual currency, cryptocurrency, e-money, network money, e-cash, and other types of digital currency. Within any specific government jurisdiction, different agencies and regulators define different and often conflicting meanings for the different types of digital currency based on the specific properties of a specific currency type or sub-type. === Digital versus virtual currency === A virtual currency has been defined in 2012 by the European Central Bank as "a type of unregulated, digital money, which is issued and usually controlled by its developers, and used and accepted among the members of a specific virtual community". The US Department of Treasury in 2013 defined it more tersely as "a medium of exchange that operates like a currency in some environments, but does not have all the attributes of real currency". The US Department of Treasury also stated that, "Virtual currency does not have legal-tender status in any jurisdiction."According to the European Central Bank's 2015 "Virtual currency schemes – a further analysis" report, virtual currency is a digital representation of value, not issued by a central bank, credit institution or e-money institution, which, in some circumstances, can be used as an alternative to money. In the previous report of October 2012, the virtual currency was defined as a type of unregulated, digital money, which is issued and usually controlled by its developers, and used and accepted among the members of a specific virtual community.According to the Bank for International Settlements' November 2015 "Digital currencies" report, it is an asset represented in digital form and having some monetary characteristics. Digital currency can be denominated to a sovereign currency and issued by the issuer responsible to redeem digital money for cash. In that case, digital currency represents electronic money (e-money). Digital currency denominated in its own units of value or with decentralized or automatic issuance will be considered as a virtual currency. As such, bitcoin is a digital currency but also a type of virtual currency. Bitcoin and its alternatives are based on cryptographic algorithms, so these kinds of virtual currencies are also called cryptocurrencies. === Digital versus cryptocurrency === Cryptocurrency is a sub-type of digital currency and a digital asset that relies on cryptography to chain together digital signatures of asset transfers, peer-to-peer networking and decentralization. In some cases a proof-of-work or proof-of-stake scheme is used to create and manage the currency. Cryptocurrencies can allow electronic money systems to be decentralized. When implemented with a blockchain, the digital ledger system or record keeping system uses cryptography to edit separate shards of database entries that are distributed across many separate servers. The first and most popular system is bitcoin, a peer-to-peer electronic monetary system based on cryptography. === Digital versus traditional currency === Most of the traditional money supply is bank money held on computers. They are considered digital currency in some cases. One could argue that our increasingly cashless society means that all currencies are becoming digital currencies, but they are not presented to us as such. == Types of systems == === Centralized systems === Currency can be exchanged electronically using debit cards and credit cards using electronic funds transfer at point of sale. ==== Mobile digital wallets ==== A number of electronic money systems use contactless payment transfer in order to facilitate easy payment and give the payee more confidence in not letting go of their electronic wallet during the transaction. In 1994 Mondex and National Westminster Bank provided an "electronic purse" to residents of Swindon In about 2005 Telefónica and BBVA Bank launched a payment system in Spain called Mobipay which used simple short message service facilities of feature phones intended for pay-as-you-go services including taxis and pre-pay phone recharges via a BBVA current bank account debit. In January 2010, Venmo launched as a mobile payment system through SMS, which transformed into a social app where friends can pay each other for minor expenses like a cup of coffee, rent and pay a share of the restaurant bill when one has forgotten their wallet. It is popular with college students, but has some security issues. It can be linked to a bank account, credit/debit card or have a loaded value to limit the amount of loss in case of a security breach. Credit cards and non-major debit cards incur a 3% processing fee. On 19 September 2011, Google Wallet released in the United States to make it easy to carry all one's credit/debit cards on a phone. In 2012 Ireland's O2 (owned by Telefónica) launched Easytrip to pay road tolls which were charged to the mobile phone account or prepay credit. The UK's O2 invented O2 Wallet at about the same time. The wallet can be charged with regular bank accounts or cards and discharged by participating retailers using a technique known as 'money messages'. The service closed in 2014. On 9 September 2014, Apple Pay was announced at the iPhone 6 event. In October 2014 it was released as an update to work on iPhone 6 and Apple Watch. It is very similar to Google Wallet, but for Apple devices only. ==== Central bank digital currency ==== A central bank digital currency (CBDC) is a form of universally accessible digital money in a nation and holds the same value as the country's paper currency. Like a cryptocurrency, a CBCD is held in the form of tokens. CBDCs are different from regular digital cash forms like in online bank accounts because CBDCs are established through the central bank within a country, with liabilities held by one's government, rather than from a commercial bank. Approximately nine countries have already established a CBDC, with interest in the system increasing highly throughout the world. In these nations, CBDCs have been used as a form of exchange and a way for governments to try to prevent risks from occurring within their financial systems.A major problem with central bank digital currencies is deciding whether the currency should be easily trackable. If it's traceable, the government has more control than it currently does. Additionally, there's a technical aspect to consider: whether CBDCs should be based on tokens or accounts and how much anonymity users should have. === Decentralized systems === Digital Currency has been implemented in some cases as a decentralized system of any combination of currency issuance, ownership record, ownership transfer authorization and validation, and currency storage. Per the Bank for International Settlements (BIS), "These schemes do not distinguish between users based on location, and therefore allow value to be transferred between users across borders. Moreover, the speed of a transaction is not conditional on the location of the payer and payee." == Law == Since 2001, the European Union has implemented the E-Money Directive "on the taking up, pursuit and prudential supervision of the business of electronic money institutions" last amended in 2009.In the United States, electronic money is governed by Article 4A of the Uniform Commercial Code for wholesale transactions and the Electronic Fund Transfer Act for consumer transactions. Provider's responsibility and consumer's liability are regulated under Regulation E. == Regulation == Virtual currencies pose challenges for central banks, financial regulators, departments or ministries of finance, as well as fiscal authorities and statistical authorities. == Adoption by governments == As of 2016, over 24 countries are investing in distributed ledger technologies (DLT) with $1.4bn in investments. In addition, over 90 central banks are engaged in DLT discussions, including implications of a central bank issued digital currency. Hong Kong's Octopus card system: Launched in 1997 as an electronic purse for public transportation, is the most successful and mature implementation of contactless smart cards used for mass transit payments. After only 5 years, 25 percent of Octopus card transactions are unrelated to transit, and accepted by more than 160 merchants. London Transport's Oyster card system: Oyster is a plastic smartcard that can hold pay-as-you-go credit, Travelcards and Bus & Tram season tickets. An Oyster card can be used to travel on bus, Tube, tram, DLR, London Overground and most National Rail services in London. Japan's FeliCa: A contactless RFID smart card, used in a variety of ways such as in ticketing systems for public transportation, e-money, and residence door keys. The Netherlands' Chipknip: As an electronic cash system used in the Netherlands, all ATM cards issued by the Dutch banks had value that could be loaded via Chipknip loading stations. For people without a bank, pre-paid Chipknip cards could be purchased at various locations in the Netherlands. As of 1 January 2015, payment can no longer be made with Chipknip. Belgium's Proton: An electronic purse application for debit cards in Belgium. Introduced in February 1995, as a means to replace cash for small transactions. The system was retired on 31 December 2014.In March 2018, the Marshall Islands became the first country to issue their own cryptocurrency and certify it as legal tender; the currency is called the "sovereign". === United States of America === ==== US Commodity Futures Trading Commission guidance ==== The US Commodity Futures Trading Commission (CFTC) has determined virtual currencies are properly defined as commodities in 2015. The CFTC warned investors against pump and dump schemes that use virtual currencies. ==== US Internal Revenue Service guidance ==== The US Internal Revenue Service (IRS) ruling Notice 2014-21 defines any virtual currency, cryptocurrency and digital currency as property; gains and losses are taxable within standard property policies. ==== US Treasury guidance ==== On 20 March 2013, the Financial Crimes Enforcement Network issued a guidance to clarify how the U.S. Bank Secrecy Act applied to persons creating, exchanging, and transmitting virtual currencies. ==== US Securities and Exchange Commission guidance ==== In May 2014 the US Securities and Exchange Commission (SEC) "warned about the hazards of bitcoin and other virtual currencies". ==== New York state regulation ==== In July 2014, the New York State Department of Financial Services proposed the most comprehensive regulation of virtual currencies to date, commonly called BitLicense. It has gathered input from bitcoin supporters and the financial industry through public hearings and a comment period until 21 October 2014 to customize the rules. The proposal per NY DFS press release "sought to strike an appropriate balance that helps protect consumers and root out illegal activity". It has been criticized by smaller companies to favor established institutions, and Chinese bitcoin exchanges have complained that the rules are "overly broad in its application outside the United States". === Canada === The Bank of Canada has explored the possibility of creating a version of its currency on the blockchain.The Bank of Canada teamed up with the nation's five largest banks – and the blockchain consulting firm R3 – for what was known as Project Jasper. In a simulation run in 2016, the central bank issued CAD-Coins onto a blockchain similar Ethereum. The banks used the CAD-Coins to exchange money the way they do at the end of each day to settle their master accounts. === China === In 2016, Fan Yifei, a deputy governor of China's central bank, the People's Bank of China (PBOC), wrote that "the conditions are ripe for digital currencies, which can reduce operating costs, increase efficiency and enable a wide range of new applications". According to Fan Yifei, the best way to take advantage of the situation is for central banks to take the lead, both in supervising private digital currencies and in developing digital legal tender of their own.In October 2019, the PBOC announced that a digital renminbi would be released after years of preparation. The version of the currency, known as DCEP (Digital Currency Electronic Payment), is based on cryptocurrency which can be "decoupled" from the banking system. The announcement received a variety of responses: some believe it is more about domestic control and surveillance.In December 2020, the PBOC distributed CN¥20 million worth of digital renminbi to the residents of Suzhou through a lottery program to further promote the government-backed digital currency. Recipients of the currency could make both offline and online purchases, expanding on an earlier trial that did not require internet connection through the inclusion of online stores in the program. Around 20,000 transactions were reported by the e-commerce company JD.com in the first 24 hours of the trial. Contrary to other online payment platforms such as Alipay or WeChat Pay, the digital currency does not have transaction fees. === Denmark === The Danish government proposed getting rid of the obligation for selected retailers to accept payment in cash, moving the country closer to a "cashless" economy. The Danish Chamber of Commerce is backing the move. Nearly a third of the Danish population uses MobilePay, a smartphone application for transferring money. === Ecuador === A law passed by the National Assembly of Ecuador gives the government permission to make payments in electronic currency and proposes the creation of a national digital currency. "Electronic money will stimulate the economy; it will be possible to attract more Ecuadorian citizens, especially those who do not have checking or savings accounts and credit cards alone. The electronic currency will be backed by the assets of the Central Bank of Ecuador", the National Assembly said in a statement. In December 2015, Sistema de Dinero Electrónico ("electronic money system") was launched, making Ecuador the first country with a state-run electronic payment system. === El Salvador === On Jun 9, 2021, the Legislative Assembly of El Salvador has become the first country in the world to officially classify Bitcoin as legal currency. Starting 90 days after approval, every business must accept Bitcoin as legal tender for goods or services, unless it is unable to provide the technology needed to do the transaction. === Netherlands === The Dutch central bank is experimenting with a blockchain-based virtual currency called "DNBCoin". === India === The Unified Payments Interface (UPI) is a real-time payment system for instant money transfers between any two bank accounts held in participating banks in India. The interface has been developed by the National Payments Corporation of India and is regulated by the Reserve Bank of India. This digital payment system is available 24 hours a day, every day of the year. UPI is agnostic to the type of user and is used for person to person, person to business, business to person and business to business transactions. Transactions can be initiated by the payer or the payee. To identify a bank account it uses a unique Virtual Payment Address (VPA) of the type 'accountID@bankID'. The VPA can be assigned by the bank, but can also be self specified just like an email address. The simplest and most common form of VPA is 'mobilenumber@upi'. Money can be transferred from one VPA to another or from one VPA to any bank account in a participating bank using account number and bank branch details. Transfers can be inter-bank or intra-bank. UPI has no intermediate holding pond for money. It withdraws funds directly from the bank account of the sender and deposits them directly into the recipient's bank account whenever a transaction is requested. A sender can initiate and authorise a transfer using a two step secure process: login using a pass code → initiate → verify using a passcode. A receiver can initiate a payment request on the system to send the payer a notification or by presenting a QR code. On receiving the request, the payer can decline or confirm the payment using the same two step process: login → confirm → verify. The system is extraordinarily user friendly to the extent that even technophobes and barely literate users are adopting it in huge numbers. === Russia === Government-controlled Sberbank of Russia owns YooMoney – electronic payment service and digital currency of the same name. === Sweden === Sweden is in the process of replacing all of its physical banknotes, and most of its coins by mid-2017. However, the new banknotes and coins of the Swedish krona will probably be circulating at about half the 2007 peak of 12,494 kronor per capita. The Riksbank is planning to begin discussions of an electronic currency issued by the central bank to which "is not to replace cash, but to act as complement to it". Deputy Governor Cecilia Skingsley states that cash will continue to spiral out of use in Sweden, and while it is currently fairly easy to get cash in Sweden, it is often very difficult to deposit it into bank accounts, especially in rural areas. No decision has been currently made about the decision to create "e-krona". In her speech, Skingsley states: "The first question is whether e-krona should be booked in accounts or whether the ekrona should be some form of a digitally transferable unit that does not need an underlying account structure, roughly like cash." Skingsley also states: "Another important question is whether the Riksbank should issue e-krona directly to the general public or go via the banks, as we do now with banknotes and coins." Other questions will be addressed like interest rates, should they be positive, negative, or zero? === Switzerland === In 2016, a city government first accepted digital currency in payment of city fees. Zug, Switzerland, added bitcoin as a means of paying small amounts, up to SFr 200, in a test and an attempt to advance Zug as a region that is advancing future technologies. In order to reduce risk, Zug immediately converts any bitcoin received into the Swiss currency. Swiss Federal Railways, government-owned railway company of Switzerland, sells bitcoins at its ticket machines. === UK === In 2016, the UK's chief scientific adviser, Sir Mark Walport, advised the government to consider using a blockchain-based digital currency.The chief economist of Bank of England, the central bank of the United Kingdom, proposed the abolition of paper currency. The Bank has also taken an interest in blockchain. In 2016 it has embarked on a multi-year research programme to explore the implications of a central bank issued digital currency. The Bank of England has produced several research papers on the topic. One suggests that the economic benefits of issuing a digital currency on a distributed ledger could add as much as 3 percent to a country's economic output. The Bank said that it wanted the next version of the bank's basic software infrastructure to be compatible with distributed ledgers. == Adoption by financial actors == Government attitude dictates the tendency among established heavy financial actors that both are risk-averse and conservative. None of these offered services around cryptocurrencies and much of the criticism came from them. "The first mover among these has been Fidelity Investments, Boston based Fidelity Digital Assets LLC will provide enterprise-grade custody solutions, a cryptocurrency trading execution platform and institutional advising services 24 hours a day, seven days a week designed to align with blockchain's always-on trading cycle". It will work with Bitcoin and Ethereum with general availability scheduled for 2019. == Hard vs. soft digital currencies == Hard electronic currency does not have the ability to be disputed or reversed when used. It is nearly impossible to reverse a transaction, justified or not. It is very similar to cash. Contrarily, soft electronic currency payments can be reversed. Usually, when a payment is reversed there is a "clearing time." A hard currency can be "softened" with a third-party service. == Criticism == Many existing digital currencies have not yet seen widespread usage, and may not be easily used or exchanged. Banks generally do not accept or offer services for them. There are concerns that cryptocurrencies are extremely risky due to their very high volatility and potential for pump and dump schemes. Regulators in several countries have warned against their use and some have taken concrete regulatory measures to dissuade users. The non-cryptocurrencies are all centralized. As such, they may be shut down or seized by a government at any time. The more anonymous a currency is, the more attractive it is to criminals, regardless of the intentions of its creators. Bitcoin has also been criticised for its energy inefficient SHA-256-based proof of work.According to Barry Eichengreen, an economist known for his work on monetary and financial economics, "cryptocurrencies like Bitcoin are too volatile to possess the essential attributes of money. Stablecoins have fragile currency pegs that diminish their utility in transactions. And central bank digital currencies are a solution in search of a problem." == List == === Non-cryptocurrencies === == See also == Complementary currency Automated clearing house Cashless catering Cashless society Community Exchange System Cryptocurrency exchange Cryptocurrency wallet Central bank digital currency Digital wallet E-commerce payment system Electronic Money Association Electronic funds transfer Local exchange trading system Payment system Private currency Privacy == References ==
Central bank digital currency	A central bank digital currency (CBDC; also called digital fiat currency or digital base money) is a digital currency issued by a central bank, rather than by a commercial bank. It is also a liability of the central bank and denominated in the sovereign currency, as is the case with physical banknotes and coins. There are two general models that CBDCs most commonly described as falling under: retail and wholesale. Retail CBDCs are designed for households and businesses to make payments for everyday transactions, while wholesale CBDCs are designed for financial institutions and operate similarly to central bank reserves. Other CBDC models have emerged as well over time. Most notably, the Federal Reserve proposed an intermediated CBDC in 2022. In this model, the central bank issues a sort of retail CBDC, but financial intermediaries offer customer services. The present concept of CBDCs differs from virtual currency and cryptocurrency in that a CBDC is or would be issued by a state. Most CBDC implementations will likely not use or need any sort of distributed ledger such as a blockchain.In 2023, over 120 different jurisdictions, including major economies like the ECB, UK, and the US, were evaluating national digital currencies. As it currently stands, 9 countries and the 8 islands making up the Eastern Caribbean Currency Union have launched CBDCs; 38 countries and Hong Kong have CBDC pilot programs; and 67 countries and 2 currency unions are researching CBDCs.CBDCs have faced a plethora of criticisms among those being that a "centrally managed, centrally controlled, CBDC is a tool for coercion and control" and that it would "allow the government to spy on" the citizenry. == History == Although the term "CBDC" did not become widely used until after 2019, central banks have researched and launched digital currency projects for decades. For example, Finland's central bank issued the Avant stored value e-money card in the 1990s. In 2014, the Chinese central bank began researching the idea of issuing a CBDC. Elsewhere, the Ecuadorian central bank operated a mobile payment system from 2014 to 2018. == Implementation == A central bank digital currency would likely be implemented using a database run by the central bank, government, or approved private-sector entities. The database would keep a record (with appropriate privacy and cryptographic protections) of the amount of money held by every entity, such as people and corporations.In contrast to cryptocurrency, a central bank digital currency would be centrally controlled (even if it was on a distributed database), and so a blockchain or other distributed ledger would likely not be required or useful - even as they were the original inspiration for the concept.In 2023, the central banks of 114 countries accounting for 95% of the world’s GDP were said to be in various stages of evaluating the launch of a national digital currency. These included the ECB, the UK, and the US. China's digital RMB was the first digital currency to be issued by a major economy. Six central banks have launched a CBDC: the Central Bank of The Bahamas (Sand Dollar), the Eastern Caribbean Central Bank (DCash), the Central Bank of Nigeria (e-Naira), the Bank of Jamaica (JamDex), People's Bank of China (Digital renminbi), the Reserve Bank of India (Digital Rupee), and Bank of Russia (Digital Ruble). The Central Bank of Brazil has been rolling out tests of a digital Brazilian currency (Drex) since March 2023. The ECB/Eurozone decided in October 2023 to move forward to the preparation phase for the potential issuance of a digital euro after a two-year study phase.Some states have also issued, or have considered issuing, cryptocurrencies: these include Venezuela (Petro) and the Marshall Islands (Sovereign). These cryptocurrencies are often considered with the intent of increasing a state's independence from global financial systems, such as by reducing dependence on a foreign currency or by evading international sanctions.Contrasting attitudes towards digital currencies were demonstrated by developments in the UK and Switzerland in February 2023. The UK Treasury and the Bank of England said a state-backed digital pound was likely to be launched some time after 2025. Two weeks later, a Swiss lobby group triggered a national vote on maintaining a "sufficient quantity" of cash in circulation over fears that electronic payments make it easier for the state to monitor its citizens' actions. In a comment on the British government’s plans, the BBC's Faisal Islam said the issue was about access to the data attached to every spending transaction, and whether people might choose to trust a global company more than the state: "The eye here is on maintaining UK monetary sovereignty against upheaval from the likes of Big Tech."A major problem with central bank digital currencies is deciding whether the currency should be easily trackable. If it's traceable, the government has more control than it currently does. Additionally, there's a technical aspect to consider: whether CBDCs should be based on tokens or accounts and how much anonymity users should have. == Characteristics == A CBDC is a high-security digital instrument; like paper banknotes, it is a means of payment, a unit of account, and a store of value. And like paper currency, each unit is uniquely identifiable to prevent counterfeiting. CBDC will have implications for commercial banks, probably in the field of lowering banks' commissions, no big customer data-selling ability, accumulating the deposits and deposit policies and credit policies due to higher funding costs for banks.Digital fiat currency is part of the base money supply, together with other forms of the currency. As such, DFC is a liability of the central bank just as physical currency is. It is a digital bearer instrument that can be stored, transferred and transmitted by all kinds of digital payment systems and services. The validity of the digital fiat currency is independent of the digital payment systems storing and transferring the digital fiat currency.Proposals for CBDC implementation often involve the provision of universal bank accounts at the central banks for all citizens. == Benefits and impacts == Governments and central banks are studying CBDCs and their implications for financial inclusion, economic growth, technology innovation, and the efficiency of bank transactions. Potential advantages include: Technological efficiency: instead of relying on intermediaries such as banks and clearing houses, money transfers and payments could be made in real time, directly from the payer to the payee. Being real time has some advantages: Reduces risk: payment for goods and services often needs to be done in a timely manner and when payment verification is slow, merchants usually accept the risk of some payments not succeeding in exchange for faster service to customers. When these risks are eliminated with instant payment verifications, merchants no longer need to use intermediaries to handle the risk or to absorb the risk cost themselves. Reduces complexity: merchants will not need to separately keep track of transactions that are slow (where the customer claims to have paid but the money has not arrived yet), therefore eliminate the waiting queue, which could simplify the transaction process from payment to rendition of goods/services. Reduces (or eliminates) transaction fees: current payment systems like Visa, Mastercard, American Express etc. have a fee attached to each transaction and lowering or eliminating these fees could lead to widespread price drops and increased adoption of digital payments. Financial inclusion: safe money accounts at the central banks could constitute a strong instrument of financial inclusion, allowing any legal resident or citizen to be provided with a free or low-cost basic bank account. Preventing illicit activity: A CBDC makes it feasible for a central bank to keep track of the exact location of every unit of the currency (assuming the more probable centralized, database form)Tax collection: It makes tax avoidance and tax evasion much more difficult, since it would become impossible to use methods such as offshore banking and unreported employment to hide financial activity from the central bank or government. However, cryptos like Bitcoin risk undermining effort to crack down on corporate tax avoidance. Combating crime: It makes it much easier to spot criminal activity (by observing financial activity), and thus put an end to it. Furthermore, in cases where criminal activity has already occurred, tracking makes it much harder to successfully launder money, and it would often be straightforward to instantly reverse a transaction and return money to the victim of the crime. Proof of transaction: a digital record exists to prove that money changed hands between two parties which avoids problems inherent to cash such as short-changing, cash theft and conflicting testimonies. Protection of money as a public utility: digital currencies issued by central banks would provide a modern alternative to physical cash – whose abolition is currently being envisaged. Safety of payments systems: A secure and standard interoperable digital payment instrument issued and governed by a Central Bank and used as the national digital payment instruments boosts confidence in privately controlled money systems and increases trust in the entire national payment system while also boosting competition in payment systems. Preservation of seigniorage income: public digital currency issuance would avoid a predictable reduction of seigniorage income for governments in the event of a disappearance of physical cash. Banking competition: the provision of free bank accounts at the central bank offering complete safety of money deposits could strengthen competition between banks to attract bank deposits, for example by offering once again remunerated sight deposits. Monetary policy transmission: the issuance of central bank base money through transfers to the public could constitute a new channel for monetary policy transmission (i.e. helicopter money), which would allow more direct control of the money supply than indirect tools such as quantitative easing and interest rates, and possibly lead the way towards a full reserve banking system. In digital Yuan trial in Shenzhen, the CBDC was programmed with an expiration date, which encouraged spending and discouraged money from sitting in a saving account. In the end, 90% of vouchers were spent in shops. Demurrage could be implemented, such as by shaving off fractions of the value on a scheduled basis, as a supplement to traditional inflation targets. Financial safety: CBDC would provide an alternative to fractional reserve banking for daily uses, for those who want to avoid all risk of bank runs, despite the relative safety provided by deposit insurance. == Risks == Despite having potential advantages, CBDCs remain a controversial topic, and there are risks associated with their implementation. Banking system disintermediation: With the ability to provide digital currency directly to its citizens, one concern is that depositors would shift out of the banking system. Customers may deem the safety, liquidity, solvibility, and publicity of CBDCs to be more attractive, weakening the balance sheet position of commercial banks. In the extreme, this could precipitate potential bank runs and thus make banks' funding positions weaker. However, the Bank of England found that if the introduction of CBDC follows a set of core principles, the risk of a system-wide run from bank deposits to CBDC is addressed. A central bank could also limit the demand of CBDCs by setting a ceiling on the amount of holdings.Centralization: Since most central bank digital currencies are centralized, rather than decentralized like most cryptocurrencies, the controllers of the issuance of CBDCs can add or remove money from anyone's account with a flip of a switch. In contrast, cryptocurrencies with a distributed ledger such as Bitcoin prevent this unless a group of users controlling more than 50% of mining power is in agreement. Digital dollarization: A well-run foreign digital currency could become a replacement for a local currency for the same reasons as those described in dollarization. The announcement of Facebook's Libra contributed to the increased attention to CBDCs by central bankers, as well as China's progress with DCEP to that of several Asian economies. Privacy: "Governments have direct visibility of financial transactions", an "eagle-eyed view on the spending of everyone". Digital currency would give a country "broad new powers when it comes to surveillance and controlling its population." Data from tracing money routes could lead to losing financial privacy if the CBDC implementation does not have adequate privacy protections. This could lead to encouraging of self-censorship, deterioration of freedom of expression and association, and ultimately to stalling social developments. Government Social Manipulation: Digital currency "will simply become an extension of the surveillance state" and "it could see citizens fined in a split second for behaviors deemed undesirable. Dissidents and activists could see their wallets emptied or taken offline." Limiting individual freedom: "Digital currencies could also empower the state to make it impossible to donate to a vocal NGO" Limiting or prohibiting purchases of products: Digital currency could prohibit a "purchase alcohol on a weekday. " Digital currency " is also programmable. The government could theoretically give out money that expires within a certain period of time or money that could only be used on certain items, which could be used to induce behaviour that the government is seeking." Direct interaction with individuals: "In times of crisis, they enable governments to send aid and stimulus payments directly to the smartphones of affected citizens, regardless of whether the recipients have a bank account or not." Forcing consumer behavior: "Digital currencies can also be tailored to specific purposes. For example, in the Chinese pilot program, money has an expiration date of a few weeks because authorities are hoping to drive consumption" == See also == ENaira Digital renminbi Digital rupee Digital currency mBridge M-Pesa E-Cedi History of CBDCs by country Central bank == References == == External links == Atlantic Council CBDC Tracker
Litecoin	Litecoin (Abbreviation: LTC; sign: Ł) is a decentralized peer-to-peer cryptocurrency and open-source software project released under the MIT/X11 license. Inspired by Bitcoin, Litecoin was among the earliest altcoins, starting in October 2011. In technical details, the Litecoin main chain shares a slightly modified Bitcoin codebase. The practical effects of those codebase differences are lower transaction fees, faster transaction confirmations, and faster mining difficulty retargeting. Due to its underlying similarities to Bitcoin, Litecoin has historically been referred to as the "silver to Bitcoin's gold." In 2022, Litecoin added optional privacy features via soft fork through the MWEB (MimbleWimble extension block) upgrade. == Design == === Units and divisibility === Currency codes for representing litecoin is LTC. Its Unicode character is Ł. One litecoin is divisible to eight decimal places. Units for smaller amounts of litecoin are: lites, or millilitecoin (mŁ), equal to 1⁄1000 litecoin, photons, or microlitecoin (μŁ), equal to 1⁄1000000, the litoshi, which is the smallest possible division, and named in homage to bitcoin's smallest denomination the satoshi, representing 1⁄100000000 (one hundred millionth) litecoin. == History == === Pre-Litecoin === By 2011, Bitcoin mining was largely performed by GPUs. This raised concern in some users that mining now had a high barrier to entry, and that CPU resources were becoming obsolete and worthless for mining. Using code from Bitcoin, a new alternative currency was created called Tenebrix (TBX). Tenebrix replaced the SHA-256 rounds in Bitcoin's mining algorithm with the scrypt function, which had been specifically designed in 2009 to be expensive to accelerate with FPGA or ASIC chips. This would allow Tenebrix to have been "GPU-resistant", and utilize the available CPU resources from bitcoin miners. Tenebrix itself was a successor project to an earlier cryptocurrency which replaced Bitcoin's issuance schedule with a constant block reward (thus creating an unlimited money supply). However, the developers included a clause in the code that would allow them to claim 7.7 million TBX for themselves at no cost, which was criticized by users.To address this, Charlie Lee, a Google employee who would later become engineering director at Coinbase, created an alternative version of Tenebrix called Fairbrix (FBX). Litecoin inherits the scrypt mining algorithm from Fairbrix, but returns to the limited money supply of Bitcoin, with other changes. === Creation and launch === Lee released Litecoin via an open-source client on GitHub on October 7, 2011. The Litecoin network went live on October 13, 2011. Litecoin was a source code fork of the Bitcoin Core client, originally differing by having a decreased block generation time (2.5 minutes), increased maximum number of coins, different hashing algorithm (scrypt, instead of SHA-256), faster difficulty retarget, and a slightly modified GUI. === 2011–2016 === After launch, the early growth of Litecoin was aided by its increasing exchange availability and liquidity on early exchanges such as BTC-e. During the month of November 2013, the aggregate value of Litecoin experienced massive growth which included a 100% leap within 24 hours.In early 2014, Lee suggested merge mining (auxPOW) Dogecoin with Litecoin to the Dogecoin community at large. In September 2014, Dogecoin began merge-mining with Litecoin, providing increased security for Dogecoin and a permanent block subsidy that previously was not available with Litecoin mining. === 2017–2021 === In 2020, PayPal added the ability for users to purchase a derivative of Litecoin along with Bitcoin, Ethereum and Bitcoin Cash which could not be withdrawn or spent as part of its Crypto feature. In September 2021, a fake press release was published on GlobeNewswire announcing a partnership between Litecoin and Walmart. This caused the price of Litecoin to increase by around 30%, before the press release was revealed as a hoax. === 2022–present === In May 2022, MWEB (Mimblewimble Extension Blocks) upgrade was activated on the Litecoin network as a soft fork. This upgrade provides users with the option of sending confidential Litecoin transactions, in which the amount being sent is only known between the sender and receiver.In June 2022, PayPal added the ability for users to transfer Litecoin along with Bitcoin, Ethereum and Bitcoin Cash between PayPal to other wallets and exchanges. == Differences from Bitcoin == Litecoin is different in some ways from Bitcoin: The targeted block time is every 2.5 minutes for Litecoin, as opposed to Bitcoin's 10 minutes. This allows Litecoin to confirm transactions four times faster than Bitcoin. Scrypt, an alternative proof-of-work algorithm, is used for Litecoin. It differs from Bitcoin's SHA-256 algorithm in part by including a sequential memory-hard function, requiring asymptotically more memory than an algorithm which is not memory-hard. Due to Litecoin's use of the scrypt algorithm, FPGA and ASIC devices made for mining Litecoin are more complicated to create and more expensive to produce than they are for Bitcoin, which uses SHA-256. Litecoin is merge mined with another prominent cryptocurrency (Dogecoin), increasing miner compensation and network security for both blockchains. Litecoin has a maximum circulating supply of Ł84,000,000, which is four times larger than Bitcoin's maximum circulating supply of ₿21,000,000. Both Litecoin and Bitcoin retarget their mining difficulty every 2016 blocks. However, due to the 4x faster block speed for Litecoin, mining difficulty retargets occur approximately every 3.5 days. This compares to approximately every 14 days for Bitcoin. MWEB optional privacy was added to Litecoin's base layer in May 2022 via soft fork. This allows amounts held within wallets and transaction amounts within MWEB to be private.Third party vendors providing point of sale infrastructure for Litecoin include companies such as Verifone, BitPay, and Coingate. BitPay added support for Litecoin in 2021, with Litecoin initially accounting for less than 3% of BitPay transactions. As of June 2023, Litecoin surpassed Bitcoin as the #1 most used method for transactions by payment count with 34.9%. == See also == List of scrypt crypto currencies == Notes == == References == == External links == Litecoin Foundation
Satoshi Nakamoto	Satoshi Nakamoto is the name used by the presumed pseudonymous person or persons who developed Bitcoin, authored the bitcoin white paper, and created and deployed bitcoin's original reference implementation. As part of the implementation, Nakamoto also devised the first blockchain database. Nakamoto was active in the development of bitcoin up until December 2010.There has been widespread speculation about Satoshi Nakamoto's true identity, with various people posited as the person or persons behind the name. Though Nakamoto's name is Japanese, and he stated in 2012 that he was a man living in Japan, most of the speculation has involved software and cryptography experts in the United States or Europe. == Development of bitcoin == Nakamoto stated that work on the writing of the code for Bitcoin began in the spring of 2007. On 18 August 2008, he or a colleague registered the domain name bitcoin.org, and created a web site at that address. On 31 October, Nakamoto published a white paper on the cryptography mailing list at metzdowd.com describing a digital cryptocurrency, titled "Bitcoin: A Peer-to-Peer Electronic Cash System".On 9 January 2009, Nakamoto released version 0.1 of the Bitcoin software on SourceForge and launched the network by defining the genesis block of bitcoin (block number 0), which had a reward of 50 bitcoins. Embedded in the coinbase transaction of this block is the text: "The Times 03/Jan/2009 Chancellor on brink of second bailout for banks", citing a headline in the UK newspaper The Times published on that date. This note has been interpreted as both a timestamp and a derisive comment on the alleged instability caused by fractional-reserve banking.: 18 Nakamoto continued to collaborate with other developers on the Bitcoin software until mid-2010, making all modifications to the source code himself. He then gave control of the source code repository and network alert key to Gavin Andresen, transferred several related domains to various prominent members of the bitcoin community, and stopped his recognized involvement in the project.Nakamoto owns between 750,000 and 1,100,000 bitcoin. In November 2021, when Bitcoin hit its still-highest value of over US$68,000, that would have made his net worth up to US$73 billion, making him the 15th-richest person in the world at the time. == Characteristics and identity == Nakamoto has never revealed personal information when discussing technical matters, though has at times provided commentary on banking and fractional-reserve banking. On his P2P Foundation profile as of 2012, Nakamoto claimed to be a 37-year-old male who lived in Japan; however, some speculated he was unlikely to be Japanese due to his native-level use of English.Some have considered that Nakamoto might be a team of people. Dan Kaminsky, a security researcher who read the bitcoin code, said that Nakamoto could either be a "team of people" or a "genius"; Laszlo Hanyecz, a developer who had emailed Nakamoto, had the feeling the code was too well designed for one person; Gavin Andresen has said of Nakamoto's code: "He was a brilliant coder, but it was quirky."The use of British English in both source code comments and forum postings, such as the expression "bloody hard", terms such as "flat" and "maths", and the spellings "grey" and "colour", led to speculation that Nakamoto, or at least one individual in a consortium claiming to be him, was of Commonwealth origin. The reference to London's Times newspaper in the first bitcoin block mined by Nakamoto suggested to some a particular interest in the British government.Stefan Thomas, a Swiss software engineer and active community member, graphed the timestamps for each of Nakamoto's bitcoin forum posts (more than 500); the chart showed a steep decline to almost no posts between the hours of 5 a.m. and 11 a.m. Greenwich Mean Time (or midnight to 6 a.m. Eastern Standard Time). This was between 2 p.m. and 8 p.m. Japan Standard Time, suggesting an unusual sleep pattern for someone supposedly living in Japan. As this pattern held even on Saturdays and Sundays, it suggested that Nakamoto was consistently asleep at this time. === Possible identities === The identity of Nakamoto is unknown, but speculations have focussed on various cryptography and computer science experts, most of non-Japanese descent. ==== Hal Finney ==== Hal Finney (4 May 1956 – 28 August 2014) was a pre-bitcoin cryptographic pioneer and the first person (other than Nakamoto himself) to use the software, file bug reports, and make improvements. He also lived a few blocks from a man named 'Dorian Satoshi Nakamoto', according to Forbes journalist Andy Greenberg. Greenberg asked the writing analysis consultancy Juola & Associates to compare a sample of Finney's writing to Nakamoto's, and found it to be the closest resemblance they had yet come across, including when compared to candidates suggested by Newsweek, Fast Company, The New Yorker, Ted Nelson, and Skye Grey. Greenberg theorized that Finney may have been a ghostwriter on behalf of Nakamoto, or that he simply used his neighbor Dorian's identity as a "drop" or "patsy whose personal information is used to hide online exploits"; however, after meeting Finney, seeing the emails between him and Nakamoto and his bitcoin wallet's history (including the very first bitcoin transaction from Nakamoto to him, which he forgot to pay back) and hearing his denial, Greenberg concluded that Finney was telling the truth. Juola & Associates also found that Nakamoto's emails to Finney more closely resemble Nakamoto's other writings than Finney's do. Finney's fellow extropian and sometimes co-blogger Robin Hanson assigned a subjective probability of "at least" 15% that "Hal was more involved than he's said", before further evidence suggested that was not the case. ==== Dorian Nakamoto ==== In a high-profile 6 March 2014 article in the magazine Newsweek, journalist Leah McGrath Goodman identified Dorian Prentice Satoshi Nakamoto, a Japanese American man living in California, whose birth name is Satoshi Nakamoto, as the Nakamoto in question. Besides his name, Goodman pointed to a number of facts that circumstantially suggested he was the Bitcoin inventor. Trained as a physicist at California State Polytechnic University, Pomona, Nakamoto worked as a systems engineer on classified defense projects and computer engineer for technology and financial information services companies. Nakamoto was laid off twice in the early 1990s and turned libertarian according to his daughter and encouraged her to start her own business "not under the government's thumb." In the article's seemingly biggest piece of evidence, Goodman wrote that when she asked him about Bitcoin during a brief in-person interview, Nakamoto seemed to confirm his identity as the Bitcoin founder by stating: "I am no longer involved in that and I cannot discuss it. It's been turned over to other people. They are in charge of it now. I no longer have any connection."The article's publication led to a flurry of media interest, including reporters camping out near Dorian Nakamoto's house and subsequently chasing him by car when he drove to do an interview. Later that day, the pseudonymous Nakamoto's P2P Foundation account posted its first message in five years, stating: "I am not Dorian Nakamoto." During the subsequent full-length interview, Dorian Nakamoto denied all connection to Bitcoin, saying he had never heard of the currency before, and that he had misinterpreted Goodman's question as being about his previous work for military contractors, much of which was classified. In a Reddit "ask-me-anything" interview, he claimed he had misinterpreted Goodman's question as being related to his work for Citibank. In September, the P2P Foundation account posted another message saying it had been hacked, raising questions over the authenticity of the message six months earlier. ==== Nick Szabo ==== In December 2013, blogger Skye Grey linked Nick Szabo to the Bitcoin white paper using an approach he described as stylometric analysis. Szabo is a decentralized currency enthusiast and had published a paper on "bit gold", one of the precursors of Bitcoin. He is known to have been interested in using pseudonyms in the 1990s. In a May 2011 article, Szabo stated about the Bitcoin creator: "Myself, Wei Dai, and Hal Finney were the only people I know of who liked the idea (or in Dai's case his related idea) enough to pursue it to any significant extent until Nakamoto (assuming Nakamoto is not really Finney or Dai)."Financial author Dominic Frisby provides much circumstantial evidence but, as he admits, no proof that Nakamoto is Szabo. Szabo has denied being Nakamoto. In a July 2014 email to Frisby, he said: "Thanks for letting me know. I'm afraid you got it wrong doxing me as Satoshi, but I'm used to it." Nathaniel Popper wrote in The New York Times that "the most convincing evidence pointed to a reclusive American man of Hungarian descent named Nick Szabo." ==== Craig Wright ==== On 8 December 2015, Wired wrote that Craig Steven Wright, an Australian academic, "either invented bitcoin or is a brilliant hoaxer who very badly wants us to believe he did". Craig Wright took down his Twitter account and neither he nor his ex-wife responded to press inquiries. The same day, Gizmodo published a story with evidence supposedly obtained by a hacker who broke into Wright's email accounts, claiming that Satoshi Nakamoto was a joint pseudonym for Craig Steven Wright and computer forensics analyst David Kleiman, who died in 2013. Wright's claim was supported by Jon Matonis (former director of the Bitcoin Foundation) and bitcoin developer Gavin Andresen.Wright has stated that he chose the family name "Nakamoto" in honor of Japanese philosopher Tominaga Nakamoto (1715–1746), whom Wright learned about from his Japanese martial arts instructor, and the accompanying given name "Satoshi" after the Pokémon character Satoshi, because his name was anglicized as "Ash", and thus "Satoshi" represents the current financial system that must be burned into ash in order to make way for cryptocurrency.A number of prominent Bitcoin promoters remained unconvinced by the reports. Subsequent reports also raised the possibility that the evidence provided was an elaborate hoax, which Wired acknowledged "cast doubt" on their suggestion that Wright was Nakamoto. Bitcoin developer Peter Todd said that Wright's blog post, which appeared to contain cryptographic proof, actually contained nothing of the sort. Bitcoin developer Jeff Garzik agreed that evidence publicly provided by Wright does not prove anything, and security researcher Dan Kaminsky concluded Wright's claim was "intentional scammery".In May 2019, Wright started using English libel law to sue people who denied he was the inventor of bitcoin, and who called him a fraud. In 2019, Wright registered US copyright for the bitcoin white paper and the code for Bitcoin 0.1. Wright's team claimed this was "government agency recognition of Craig Wright as Satoshi Nakamoto"; the United States Copyright Office issued a press release clarifying that this was not the case (as they primarily determine whether a work is eligible for copyright, and do not investigate legal ownership, which, if disputed, is determined by the courts). ==== Other candidates ==== In a 2011 article in The New Yorker, Joshua Davis claimed to have narrowed down the identity of Nakamoto to a number of possible individuals, including the Finnish economic sociologist Dr. Vili Lehdonvirta and Irish student Michael Clear, who was in 2008 an undergraduate student in cryptography at Trinity College Dublin. Clear strongly denied he was Nakamoto, and so did Lehdonvirta.In October 2011, writing for Fast Company, investigative journalist Adam Penenberg cited circumstantial evidence suggesting Neal King, Vladimir Oksman and Charles Bry could be Nakamoto. They jointly filed a patent application that contained the phrase "computationally impractical to reverse" in 2008, which was also used in the Bitcoin white paper by Nakamoto. The domain name bitcoin.org was registered three days after the patent was filed. All three men denied being Nakamoto when contacted by Penenberg.In May 2013, Ted Nelson speculated that Nakamoto was Japanese mathematician Shinichi Mochizuki. Later, an article was published in The Age newspaper that claimed that Mochizuki denied these speculations, but without attributing a source for the denial.A 2013 article in Vice listed Gavin Andresen, Jed McCaleb, or a government agency as possible candidates to be Nakamoto.In 2013, two Israeli mathematicians, Dorit Ron and Adi Shamir, published a paper claiming a link between Nakamoto and Ross Ulbricht. The two based their suspicion on an analysis of the network of Bitcoin transactions, but later retracted their claim.In 2016, the Financial Times said that Nakamoto might have been a group of people, mentioning Hal Finney, Nick Szabo and Adam Back as potential members. In 2020, the YouTube channel Barely Sociable claimed that Adam Back, inventor of Bitcoin predecessor Hashcash, is Nakamoto. Back subsequently denied this. Charles Hoskinson, founder of Cardano and co-founder of Ethereum, has also opined that Adam Back is the most likely candidate for Nakamoto.Elon Musk denied he was Nakamoto in a tweet on 28 November 2017, responding to speculation the previous week in a Medium post by a former SpaceX intern.In 2019, journalist Evan Ratliff claimed drug dealer Paul Le Roux could be Nakamoto.In 2021, developer Evan Hatch proposed cypherpunk Len Sassaman of COSIC as a possible candidate. Sassaman had been mentioned on bitcointalk on 15 March 2013 when a user suggested Sassaman was Satoshi. == In popular culture == A bust of Satoshi Nakamoto was installed in Hungary in 2021. == References ==
Blockchain	A blockchain is a distributed ledger with growing lists of records (blocks) that are securely linked together via cryptographic hashes. Each block contains a cryptographic hash of the previous block, a timestamp, and transaction data (generally represented as a Merkle tree, where data nodes are represented by leaves). Since each block contains information about the previous block, they effectively form a chain (compare linked list data structure), with each additional block linking to the ones before it. Consequently, blockchain transactions are irreversible in that, once they are recorded, the data in any given block cannot be altered retroactively without altering all subsequent blocks. Blockchains are typically managed by a peer-to-peer (P2P) computer network for use as a public distributed ledger, where nodes collectively adhere to a consensus algorithm protocol to add and validate new transaction blocks. Although blockchain records are not unalterable, since blockchain forks are possible, blockchains may be considered secure by design and exemplify a distributed computing system with high Byzantine fault tolerance.A blockchain was created by a person (or group of people) using the name (or pseudonym) Satoshi Nakamoto in 2008 to serve as the public distributed ledger for bitcoin cryptocurrency transactions, based on previous work by Stuart Haber, W. Scott Stornetta, and Dave Bayer. The implementation of the blockchain within bitcoin made it the first digital currency to solve the double-spending problem without the need for a trusted authority or central server. The bitcoin design has inspired other applications and blockchains that are readable by the public and are widely used by cryptocurrencies. The blockchain may be considered a type of payment rail.Private blockchains have been proposed for business use. Computerworld called the marketing of such privatized blockchains without a proper security model "snake oil"; however, others have argued that permissioned blockchains, if carefully designed, may be more decentralized and therefore more secure in practice than permissionless ones. == History == Cryptographer David Chaum first proposed a blockchain-like protocol in his 1982 dissertation "Computer Systems Established, Maintained, and Trusted by Mutually Suspicious Groups." Further work on a cryptographically secured chain of blocks was described in 1991 by Stuart Haber and W. Scott Stornetta. They wanted to implement a system wherein document timestamps could not be tampered with. In 1992, Haber, Stornetta, and Dave Bayer incorporated Merkle trees into the design, which improved its efficiency by allowing several document certificates to be collected into one block. Under their company Surety, their document certificate hashes have been published in The New York Times every week since 1995.The first decentralized blockchain was conceptualized by a person (or group of people) known as Satoshi Nakamoto in 2008. Nakamoto improved the design in an important way using a Hashcash-like method to timestamp blocks without requiring them to be signed by a trusted party and introducing a difficulty parameter to stabilize the rate at which blocks are added to the chain. The design was implemented the following year by Nakamoto as a core component of the cryptocurrency bitcoin, where it serves as the public ledger for all transactions on the network.In August 2014, the bitcoin blockchain file size, containing records of all transactions that have occurred on the network, reached 20 GB (gigabytes). In January 2015, the size had grown to almost 30 GB, and from January 2016 to January 2017, the bitcoin blockchain grew from 50 GB to 100 GB in size. The ledger size had exceeded 200 GB by early 2020.The words block and chain were used separately in Satoshi Nakamoto's original paper, but were eventually popularized as a single word, blockchain, by 2016.According to Accenture, an application of the diffusion of innovations theory suggests that blockchains attained a 13.5% adoption rate within financial services in 2016, therefore reaching the early adopters' phase. Industry trade groups joined to create the Global Blockchain Forum in 2016, an initiative of the Chamber of Digital Commerce. In May 2018, Gartner found that only 1% of CIOs indicated any kind of blockchain adoption within their organisations, and only 8% of CIOs were in the short-term "planning or [looking at] active experimentation with blockchain". For the year 2019 Gartner reported 5% of CIOs believed blockchain technology was a 'game-changer' for their business. == Structure and design == A blockchain is a decentralized, distributed, and often public, digital ledger consisting of records called blocks that are used to record transactions across many computers so that any involved block cannot be altered retroactively, without the alteration of all subsequent blocks. This allows the participants to verify and audit transactions independently and relatively inexpensively. A blockchain database is managed autonomously using a peer-to-peer network and a distributed timestamping server. They are authenticated by mass collaboration powered by collective self-interests. Such a design facilitates robust workflow where participants' uncertainty regarding data security is marginal. The use of a blockchain removes the characteristic of infinite reproducibility from a digital asset. It confirms that each unit of value was transferred only once, solving the long-standing problem of double-spending. A blockchain has been described as a value-exchange protocol. A blockchain can maintain title rights because, when properly set up to detail the exchange agreement, it provides a record that compels offer and acceptance.Logically, a blockchain can be seen as consisting of several layers: infrastructure (hardware) networking (node discovery, information propagation and verification) consensus (proof of work, proof of stake) data (blocks, transactions) application (smart contracts/decentralized applications, if applicable) === Blocks === Blocks hold batches of valid transactions that are hashed and encoded into a Merkle tree. Each block includes the cryptographic hash of the prior block in the blockchain, linking the two. The linked blocks form a chain. This iterative process confirms the integrity of the previous block, all the way back to the initial block, which is known as the genesis block (Block 0). To assure the integrity of a block and the data contained in it, the block is usually digitally signed.Sometimes separate blocks can be produced concurrently, creating a temporary fork. In addition to a secure hash-based history, any blockchain has a specified algorithm for scoring different versions of the history so that one with a higher score can be selected over others. Blocks not selected for inclusion in the chain are called orphan blocks. Peers supporting the database have different versions of the history from time to time. They keep only the highest-scoring version of the database known to them. Whenever a peer receives a higher-scoring version (usually the old version with a single new block added) they extend or overwrite their own database and retransmit the improvement to their peers. There is never an absolute guarantee that any particular entry will remain in the best version of history forever. Blockchains are typically built to add the score of new blocks onto old blocks and are given incentives to extend with new blocks rather than overwrite old blocks. Therefore, the probability of an entry becoming superseded decreases exponentially as more blocks are built on top of it, eventually becoming very low.: ch. 08 For example, bitcoin uses a proof-of-work system, where the chain with the most cumulative proof-of-work is considered the valid one by the network. There are a number of methods that can be used to demonstrate a sufficient level of computation. Within a blockchain the computation is carried out redundantly rather than in the traditional segregated and parallel manner. ==== Block time ==== The block time is the average time it takes for the network to generate one extra block in the blockchain. By the time of block completion, the included data becomes verifiable. In cryptocurrency, this is practically when the transaction takes place, so a shorter block time means faster transactions. The block time for Ethereum is set to between 14 and 15 seconds, while for bitcoin it is on average 10 minutes. ==== Hard forks ==== === Decentralization === By storing data across its peer-to-peer network, the blockchain eliminates some risks that come with data being held centrally. The decentralized blockchain may use ad hoc message passing and distributed networking.In a so-called "51% attack" a central entity gains control of more than half of a network and can then manipulate that specific blockchain record at will, allowing double-spending.Blockchain security methods include the use of public-key cryptography.: 5 A public key (a long, random-looking string of numbers) is an address on the blockchain. Value tokens sent across the network are recorded as belonging to that address. A private key is like a password that gives its owner access to their digital assets or the means to otherwise interact with the various capabilities that blockchains now support. Data stored on the blockchain is generally considered incorruptible.Every node in a decentralized system has a copy of the blockchain. Data quality is maintained by massive database replication and computational trust. No centralized "official" copy exists and no user is "trusted" more than any other. Transactions are broadcast to the network using the software. Messages are delivered on a best-effort basis. Early blockchains rely on energy-intensive mining nodes to validate transactions, add them to the block they are building, and then broadcast the completed block to other nodes.: ch. 08 Blockchains use various time-stamping schemes, such as proof-of-work, to serialize changes. Later consensus methods include proof of stake. The growth of a decentralized blockchain is accompanied by the risk of centralization because the computer resources required to process larger amounts of data become more expensive. ==== Finality ==== Finality is the level of confidence that the well-formed block recently appended to the blockchain will not be revoked in the future (is "finalized") and thus can be trusted. Most distributed blockchain protocols, whether proof of work or proof of stake, cannot guarantee the finality of a freshly committed block, and instead rely on "probabilistic finality": as the block goes deeper into a blockchain, it is less likely to be altered or reverted by a newly found consensus.Byzantine fault tolerance-based proof-of-stake protocols purport to provide so called "absolute finality": a randomly chosen validator proposes a block, the rest of validators vote on it, and, if a supermajority decision approves it, the block is irreversibly committed into the blockchain. A modification of this method, an "economic finality", is used in practical protocols, like the Casper protocol used in Ethereum: validators which sign two different blocks at the same position in the blockchain are subject to "slashing", where their leveraged stake is forfeited. === Openness === Open blockchains are more user-friendly than some traditional ownership records, which, while open to the public, still require physical access to view. Because all early blockchains were permissionless, controversy has arisen over the blockchain definition. An issue in this ongoing debate is whether a private system with verifiers tasked and authorized (permissioned) by a central authority should be considered a blockchain. Proponents of permissioned or private chains argue that the term "blockchain" may be applied to any data structure that batches data into time-stamped blocks. These blockchains serve as a distributed version of multiversion concurrency control (MVCC) in databases. Just as MVCC prevents two transactions from concurrently modifying a single object in a database, blockchains prevent two transactions from spending the same single output in a blockchain.: 30–31 Opponents say that permissioned systems resemble traditional corporate databases, not supporting decentralized data verification, and that such systems are not hardened against operator tampering and revision. Nikolai Hampton of Computerworld said that "many in-house blockchain solutions will be nothing more than cumbersome databases," and "without a clear security model, proprietary blockchains should be eyed with suspicion." ==== Permissionless (public) blockchain ==== An advantage to an open, permissionless, or public, blockchain network is that guarding against bad actors is not required and no access control is needed. This means that applications can be added to the network without the approval or trust of others, using the blockchain as a transport layer.Bitcoin and other cryptocurrencies currently secure their blockchain by requiring new entries to include proof of work. To prolong the blockchain, bitcoin uses Hashcash puzzles. While Hashcash was designed in 1997 by Adam Back, the original idea was first proposed by Cynthia Dwork and Moni Naor and Eli Ponyatovski in their 1992 paper "Pricing via Processing or Combatting Junk Mail". In 2016, venture capital investment for blockchain-related projects was weakening in the USA but increasing in China. Bitcoin and many other cryptocurrencies use open (public) blockchains. As of April 2018, bitcoin has the highest market capitalization. ==== Permissioned (private) blockchain ==== Permissioned blockchains use an access control layer to govern who has access to the network. It has been argued that permissioned blockchains can guarantee a certain level of decentralization, if carefully designed, as opposed to permissionless blockchains, which are often centralized in practice. ===== Disadvantages of permissioned blockchain ===== Nikolai Hampton argued in Computerworld that "There is also no need for a '51 percent' attack on a private blockchain, as the private blockchain (most likely) already controls 100 percent of all block creation resources. If you could attack or damage the blockchain creation tools on a private corporate server, you could effectively control 100 percent of their network and alter transactions however you wished." This has a set of particularly profound adverse implications during a financial crisis or debt crisis like the financial crisis of 2007–08, where politically powerful actors may make decisions that favor some groups at the expense of others, and "the bitcoin blockchain is protected by the massive group mining effort. It's unlikely that any private blockchain will try to protect records using gigawatts of computing power — it's time-consuming and expensive." He also said, "Within a private blockchain there is also no 'race'; there's no incentive to use more power or discover blocks faster than competitors. This means that many in-house blockchain solutions will be nothing more than cumbersome databases." ==== Blockchain analysis ==== The analysis of public blockchains has become increasingly important with the popularity of bitcoin, Ethereum, litecoin and other cryptocurrencies. A blockchain, if it is public, provides anyone who wants access to observe and analyse the chain data, given one has the know-how. The process of understanding and accessing the flow of crypto has been an issue for many cryptocurrencies, crypto exchanges and banks. The reason for this is accusations of blockchain-enabled cryptocurrencies enabling illicit dark market trade of drugs, weapons, money laundering, etc. A common belief has been that cryptocurrency is private and untraceable, thus leading many actors to use it for illegal purposes. This is changing and now specialised tech companies provide blockchain tracking services, making crypto exchanges, law-enforcement and banks more aware of what is happening with crypto funds and fiat-crypto exchanges. The development, some argue, has led criminals to prioritise the use of new cryptos such as Monero. === Standardisation === In April 2016, Standards Australia submitted a proposal to the International Organization for Standardization to consider developing standards to support blockchain technology. This proposal resulted in the creation of ISO Technical Committee 307, Blockchain and Distributed Ledger Technologies. The technical committee has working groups relating to blockchain terminology, reference architecture, security and privacy, identity, smart contracts, governance and interoperability for blockchain and DLT, as well as standards specific to industry sectors and generic government requirements. More than 50 countries are participating in the standardization process together with external liaisons such as the Society for Worldwide Interbank Financial Telecommunication (SWIFT), the European Commission, the International Federation of Surveyors, the International Telecommunication Union (ITU) and the United Nations Economic Commission for Europe (UNECE).Many other national standards bodies and open standards bodies are also working on blockchain standards. These include the National Institute of Standards and Technology (NIST), the European Committee for Electrotechnical Standardization (CENELEC), the Institute of Electrical and Electronics Engineers (IEEE), the Organization for the Advancement of Structured Information Standards (OASIS), and some individual participants in the Internet Engineering Task Force (IETF). === Centralized blockchain === Although most of blockchain implementation are decentralized and distributed, Oracle launched a centralized blockchain table feature in Oracle 21c database. The Blockchain Table in Oracle 21c database is a centralized blockchain which provide immutable feature. Compared to decentralized blockchains, centralized blockchains normally can provide a higher throughput and lower latency of transactions than consensus-based distributed blockchains. == Types == Currently, there are at least four types of blockchain networks — public blockchains, private blockchains, consortium blockchains and hybrid blockchains. === Public blockchains === A public blockchain has absolutely no access restrictions. Anyone with an Internet connection can send transactions to it as well as become a validator (i.e., participate in the execution of a consensus protocol). Usually, such networks offer economic incentives for those who secure them and utilize some type of a proof-of-stake or proof-of-work algorithm. Some of the largest, most known public blockchains are the bitcoin blockchain and the Ethereum blockchain. === Private blockchains === A private blockchain is permissioned. One cannot join it unless invited by the network administrators. Participant and validator access is restricted. To distinguish between open blockchains and other peer-to-peer decentralized database applications that are not open ad-hoc compute clusters, the terminology Distributed Ledger (DLT) is normally used for private blockchains. === Hybrid blockchains === A hybrid blockchain has a combination of centralized and decentralized features. The exact workings of the chain can vary based on which portions of centralization and decentralization are used. === Sidechains === A sidechain is a designation for a blockchain ledger that runs in parallel to a primary blockchain. Entries from the primary blockchain (where said entries typically represent digital assets) can be linked to and from the sidechain; this allows the sidechain to otherwise operate independently of the primary blockchain (e.g., by using an alternate means of record keeping, alternate consensus algorithm, etc.). === Consortium blockchain === A consortium blockchain is a type of blockchain that combines elements of both public and private blockchains. In a consortium blockchain, a group of organizations come together to create and operate the blockchain, rather than a single entity. The consortium members jointly manage the blockchain network and are responsible for validating transactions. Consortium blockchains are permissioned, meaning that only certain individuals or organizations are allowed to participate in the network. This allows for greater control over who can access the blockchain and helps to ensure that sensitive information is kept confidential. Consortium blockchains are commonly used in industries where multiple organizations need to collaborate on a common goal, such as supply chain management or financial services. One advantage of consortium blockchains is that they can be more efficient and scalable than public blockchains, as the number of nodes required to validate transactions is typically smaller. Additionally, consortium blockchains can provide greater security and reliability than private blockchains, as the consortium members work together to maintain the network. Some examples of consortium blockchains include Quorum and Hyperledger. == Uses == Blockchain technology can be integrated into multiple areas. The primary use of blockchains is as a distributed ledger for cryptocurrencies such as bitcoin; there were also a few other operational products that had matured from proof of concept by late 2016. As of 2016, some businesses have been testing the technology and conducting low-level implementation to gauge blockchain's effects on organizational efficiency in their back office.In 2019, it was estimated that around $2.9 billion were invested in blockchain technology, which represents an 89% increase from the year prior. Additionally, the International Data Corp has estimated that corporate investment into blockchain technology will reach $12.4 billion by 2022. Furthermore, According to PricewaterhouseCoopers (PwC), the second-largest professional services network in the world, blockchain technology has the potential to generate an annual business value of more than $3 trillion by 2030. PwC's estimate is further augmented by a 2018 study that they have conducted, in which PwC surveyed 600 business executives and determined that 84% have at least some exposure to utilizing blockchain technology, which indicates a significant demand and interest in blockchain technology.In 2019, the BBC World Service radio and podcast series Fifty Things That Made the Modern Economy identified blockchain as a technology that would have far-reaching consequences for economics and society. The economist and Financial Times journalist and broadcaster Tim Harford discussed why the underlying technology might have much wider applications and the challenges that needed to be overcome. His first broadcast was on June 29, 2019. The number of blockchain wallets quadrupled to 40 million between 2016 and 2020.A paper published in 2022 discussed the potential use of blockchain technology in sustainable management. === Cryptocurrencies === Most cryptocurrencies use blockchain technology to record transactions. For example, the bitcoin network and Ethereum network are both based on blockchain. The criminal enterprise Silk Road, which operated on Tor, utilized cryptocurrency for payments, some of which the US federal government has seized through research on the blockchain and forfeiture.Governments have mixed policies on the legality of their citizens or banks owning cryptocurrencies. China implements blockchain technology in several industries including a national digital currency which launched in 2020. To strengthen their respective currencies, Western governments including the European Union and the United States have initiated similar projects. === Smart contracts === Blockchain-based smart contracts are proposed contracts that can be partially or fully executed or enforced without human interaction. One of the main objectives of a smart contract is automated escrow. A key feature of smart contracts is that they do not need a trusted third party (such as a trustee) to act as an intermediary between contracting entities — the blockchain network executes the contract on its own. This may reduce friction between entities when transferring value and could subsequently open the door to a higher level of transaction automation. An IMF staff discussion from 2018 reported that smart contracts based on blockchain technology might reduce moral hazards and optimize the use of contracts in general. But "no viable smart contract systems have yet emerged." Due to the lack of widespread use, their legal status was unclear. === Financial services === According to Reason, many banks have expressed interest in implementing distributed ledgers for use in banking and are cooperating with companies creating private blockchains, and according to a September 2016 IBM study, this is occurring faster than expected.Banks are interested in this technology not least because it has the potential to speed up back office settlement systems. Moreover, as the blockchain industry has reached early maturity institutional appreciation has grown that it is, practically speaking, the infrastructure of a whole new financial industry, with all the implications which that entails.Banks such as UBS are opening new research labs dedicated to blockchain technology in order to explore how blockchain can be used in financial services to increase efficiency and reduce costs.Berenberg, a German bank, believes that blockchain is an "overhyped technology" that has had a large number of "proofs of concept", but still has major challenges, and very few success stories.The blockchain has also given rise to initial coin offerings (ICOs) as well as a new category of digital asset called security token offerings (STOs), also sometimes referred to as digital security offerings (DSOs). STO/DSOs may be conducted privately or on public, regulated stock exchange and are used to tokenize traditional assets such as company shares as well as more innovative ones like intellectual property, real estate, art, or individual products. A number of companies are active in this space providing services for compliant tokenization, private STOs, and public STOs. === Games === Blockchain technology, such as cryptocurrencies and non-fungible tokens (NFTs), has been used in video games for monetization. Many live-service games offer in-game customization options, such as character skins or other in-game items, which the players can earn and trade with other players using in-game currency. Some games also allow for trading of virtual items using real-world currency, but this may be illegal in some countries where video games are seen as akin to gambling, and has led to gray market issues such as skin gambling, and thus publishers typically have shied away from allowing players to earn real-world funds from games. Blockchain games typically allow players to trade these in-game items for cryptocurrency, which can then be exchanged for money.The first known game to use blockchain technologies was CryptoKitties, launched in November 2017, where the player would purchase NFTs with Ethereum cryptocurrency, each NFT consisting of a virtual pet that the player could breed with others to create offspring with combined traits as new NFTs. The game made headlines in December 2017 when one virtual pet sold for more than US$100,000. CryptoKitties also illustrated scalability problems for games on Ethereum when it created significant congestion on the Ethereum network in early 2018 with approximately 30% of all Ethereum transactions being for the game.By the early 2020s, there had not been a breakout success in video games using blockchain, as these games tend to focus on using blockchain for speculation instead of more traditional forms of gameplay, which offers limited appeal to most players. Such games also represent a high risk to investors as their revenues can be difficult to predict. However, limited successes of some games, such as Axie Infinity during the COVID-19 pandemic, and corporate plans towards metaverse content, refueled interest in the area of GameFi, a term describing the intersection of video games and financing typically backed by blockchain currency, in the second half of 2021. Several major publishers, including Ubisoft, Electronic Arts, and Take Two Interactive, have stated that blockchain and NFT-based games are under serious consideration for their companies in the future.In October 2021, Valve Corporation banned blockchain games, including those using cryptocurrency and NFTs, from being hosted on its Steam digital storefront service, which is widely used for personal computer gaming, claiming that this was an extension of their policy banning games that offered in-game items with real-world value. Valve's prior history with gambling, specifically skin gambling, was speculated to be a factor in the decision to ban blockchain games. Journalists and players responded positively to Valve's decision as blockchain and NFT games have a reputation for scams and fraud among most PC gamers, and Epic Games, which runs the Epic Games Store in competition to Steam, said that they would be open to accepted blockchain games in the wake of Valve's refusal. === Supply chain === There have been several different efforts to employ blockchains in supply chain management. Precious commodities mining — Blockchain technology has been used for tracking the origins of gemstones and other precious commodities. In 2016, The Wall Street Journal reported that the blockchain technology company Everledger was partnering with IBM's blockchain-based tracking service to trace the origin of diamonds to ensure that they were ethically mined. As of 2019, the Diamond Trading Company (DTC) has been involved in building a diamond trading supply chain product called Tracer. Food supply — As of 2018, Walmart and IBM were running a trial to use a blockchain-backed system for supply chain monitoring for lettuce and spinach — all nodes of the blockchain were administered by Walmart and were located on the IBM cloud. Fashion industry — There is an opaque relationship between brands, distributors, and customers in the fashion industry, which will prevent the sustainable and stable development of the fashion industry. Blockchain makes up for this shortcoming and makes information transparent, solving the difficulty of sustainable development of the industry. Motor vehicles — Mercedes-Benz and partner Icertis developed a blockchain prototype used to facilitate consistent documentation of contracts along the supply chain so that the ethical standards and contractual obligations required of its direct suppliers can be passed on to second tier suppliers and beyond. In another project, the company uses blockchain technology to track the emissions of climate-relevant gases and the amount of secondary material along the supply chain for its battery cell manufacturers. === Domain names === There are several different efforts to offer domain name services via the blockchain. These domain names can be controlled by the use of a private key, which purports to allow for uncensorable websites. This would also bypass a registrar's ability to suppress domains used for fraud, abuse, or illegal content.Namecoin is a cryptocurrency that supports the ".bit" top-level domain (TLD). Namecoin was forked from bitcoin in 2011. The .bit TLD is not sanctioned by ICANN, instead requiring an alternative DNS root. As of 2015, .bit was used by 28 websites, out of 120,000 registered names. Namecoin was dropped by OpenNIC in 2019, due to malware and potential other legal issues. Other blockchain alternatives to ICANN include The Handshake Network, EmerDNS, and Unstoppable Domains.Specific TLDs include ".eth", ".luxe", and ".kred", which are associated with the Ethereum blockchain through the Ethereum Name Service (ENS). The .kred TLD also acts as an alternative to conventional cryptocurrency wallet addresses as a convenience for transferring cryptocurrency. === Other uses === Blockchain technology can be used to create a permanent, public, transparent ledger system for compiling data on sales, tracking digital use and payments to content creators, such as wireless users or musicians. The Gartner 2019 CIO Survey reported 2% of higher education respondents had launched blockchain projects and another 18% were planning academic projects in the next 24 months. In 2017, IBM partnered with ASCAP and PRS for Music to adopt blockchain technology in music distribution. Imogen Heap's Mycelia service has also been proposed as a blockchain-based alternative "that gives artists more control over how their songs and associated data circulate among fans and other musicians."New distribution methods are available for the insurance industry such as peer-to-peer insurance, parametric insurance and microinsurance following the adoption of blockchain. The sharing economy and IoT are also set to benefit from blockchains because they involve many collaborating peers. The use of blockchain in libraries is being studied with a grant from the U.S. Institute of Museum and Library Services.Other blockchain designs include Hyperledger, a collaborative effort from the Linux Foundation to support blockchain-based distributed ledgers, with projects under this initiative including Hyperledger Burrow (by Monax) and Hyperledger Fabric (spearheaded by IBM). Another is Quorum, a permissioned private blockchain by JPMorgan Chase with private storage, used for contract applications.Oracle introduced a blockchain table feature in its Oracle 21c database.Blockchain is also being used in peer-to-peer energy trading.Lightweight blockchains, or simplified blockchains, are more suitable for internet of things (IoT) applications than conventional blockchains. One experiment suggested that a lightweight blockchain-based network could accommodate up to 1.34 million authentication processes every second, which could be sufficient for resource-constrained IoT networks.Blockchain could be used in detecting counterfeits by associating unique identifiers to products, documents and shipments, and storing records associated with transactions that cannot be forged or altered. It is however argued that blockchain technology needs to be supplemented with technologies that provide a strong binding between physical objects and blockchain systems, as well as provisions for content creator verification ala KYC standards. The EUIPO established an Anti-Counterfeiting Blockathon Forum, with the objective of "defining, piloting and implementing" an anti-counterfeiting infrastructure at the European level. The Dutch Standardisation organisation NEN uses blockchain together with QR Codes to authenticate certificates.Beijing and Shanghai are among the cities designated by China to trial blockchain applications as January 30, 2022. In Chinese legal proceedings, blockchain technology was first accepted as a method for authenticating internet evidence by the Hangzhou Internet Court in 2019 and has since been accepted by other Chinese courts.: 123–125 == Blockchain interoperability == With the increasing number of blockchain systems appearing, even only those that support cryptocurrencies, blockchain interoperability is becoming a topic of major importance. The objective is to support transferring assets from one blockchain system to another blockchain system. Wegner stated that "interoperability is the ability of two or more software components to cooperate despite differences in language, interface, and execution platform". The objective of blockchain interoperability is therefore to support such cooperation among blockchain systems, despite those kinds of differences. There are already several blockchain interoperability solutions available. They can be classified into three categories: cryptocurrency interoperability approaches, blockchain engines, and blockchain connectors. Several individual IETF participants produced the draft of a blockchain interoperability architecture. == Energy consumption concerns == Some cryptocurrencies use blockchain mining — the peer-to-peer computer computations by which transactions are validated and verified. This requires a large amount of energy. In June 2018, the Bank for International Settlements criticized the use of public proof-of-work blockchains for their high energy consumption.Early concern over the high energy consumption was a factor in later blockchains such as Cardano (2017), Solana (2020) and Polkadot (2020) adopting the less energy-intensive proof-of-stake model. Researchers have estimated that Bitcoin consumes 100,000 times as much energy as proof-of-stake networks.In 2021, a study by Cambridge University determined that Bitcoin (at 121 terawatt-hours per year) used more electricity than Argentina (at 121TWh) and the Netherlands (109TWh). According to Digiconomist, one bitcoin transaction required 708 kilowatt-hours of electrical energy, the amount an average U.S. household consumed in 24 days.In February 2021, U.S. Treasury secretary Janet Yellen called Bitcoin "an extremely inefficient way to conduct transactions", saying "the amount of energy consumed in processing those transactions is staggering". In March 2021, Bill Gates stated that "Bitcoin uses more electricity per transaction than any other method known to mankind", adding "It's not a great climate thing."Nicholas Weaver, of the International Computer Science Institute at the University of California, Berkeley, examined blockchain's online security, and the energy efficiency of proof-of-work public blockchains, and in both cases found it grossly inadequate. The 31TWh-45TWh of electricity used for bitcoin in 2018 produced 17-23 million tonnes of CO2. By 2022, the University of Cambridge and Digiconomist estimated that the two largest proof-of-work blockchains, Bitcoin and Ethereum, together used twice as much electricity in one year as the whole of Sweden, leading to the release of up to 120 million tonnes of CO2 each year.Some cryptocurrency developers are considering moving from the proof-of-work model to the proof-of-stake model. == Academic research == In October 2014, the MIT Bitcoin Club, with funding from MIT alumni, provided undergraduate students at the Massachusetts Institute of Technology access to $100 of bitcoin. The adoption rates, as studied by Catalini and Tucker (2016), revealed that when people who typically adopt technologies early are given delayed access, they tend to reject the technology. Many universities have founded departments focusing on crypto and blockchain, including MIT, in 2017. In the same year, Edinburgh became "one of the first big European universities to launch a blockchain course", according to the Financial Times. === Adoption decision === Motivations for adopting blockchain technology (an aspect of innovation adoptation) have been investigated by researchers. For example, Janssen, et al. provided a framework for analysis, and Koens & Poll pointed out that adoption could be heavily driven by non-technical factors. Based on behavioral models, Li has discussed the differences between adoption at the individual level and organizational levels. === Collaboration === Scholars in business and management have started studying the role of blockchains to support collaboration. It has been argued that blockchains can foster both cooperation (i.e., prevention of opportunistic behavior) and coordination (i.e., communication and information sharing). Thanks to reliability, transparency, traceability of records, and information immutability, blockchains facilitate collaboration in a way that differs both from the traditional use of contracts and from relational norms. Contrary to contracts, blockchains do not directly rely on the legal system to enforce agreements. In addition, contrary to the use of relational norms, blockchains do not require a trust or direct connections between collaborators. === Blockchain and internal audit === The need for internal audits to provide effective oversight of organizational efficiency will require a change in the way that information is accessed in new formats. Blockchain adoption requires a framework to identify the risk of exposure associated with transactions using blockchain. The Institute of Internal Auditors has identified the need for internal auditors to address this transformational technology. New methods are required to develop audit plans that identify threats and risks. The Internal Audit Foundation study, Blockchain and Internal Audit, assesses these factors. The American Institute of Certified Public Accountants has outlined new roles for auditors as a result of blockchain. === Journals === In September 2015, the first peer-reviewed academic journal dedicated to cryptocurrency and blockchain technology research, Ledger, was announced. The inaugural issue was published in December 2016. The journal covers aspects of mathematics, computer science, engineering, law, economics and philosophy that relate to cryptocurrencies. The journal encourages authors to digitally sign a file hash of submitted papers, which are then timestamped into the bitcoin blockchain. Authors are also asked to include a personal bitcoin address on the first page of their papers for non-repudiation purposes. == See also == Changelog – a record of all notable changes made to a project Checklist – an informational aid used to reduce failure Economics of digitization List of blockchains Privacy and blockchain Version control – a record of all changes (mostly of software project) in a form of a graph == References == == Further reading == == External links == Media related to Blockchain at Wikimedia Commons
Ethereum	Ethereum is a decentralized blockchain with smart contract functionality. Ether (Abbreviation: ETH; sign: Ξ) is the native cryptocurrency of the platform. Among cryptocurrencies, ether is second only to bitcoin in market capitalization. It is open-source software. Ethereum was conceived in 2013 by programmer Vitalik Buterin. Additional founders of Ethereum included Gavin Wood, Charles Hoskinson, Anthony Di Iorio, and Joseph Lubin. In 2014, development work began and was crowdfunded, and the network went live on 30 July 2015. Ethereum allows anyone to deploy permanent and immutable decentralized applications onto it, with which users can interact. Decentralized finance (DeFi) applications provide financial instruments that do not directly rely on financial intermediaries like brokerages, exchanges, or banks. This facilitates borrowing against cryptocurrency holdings or lending them out for interest. Ethereum also allows users to create and exchange non-fungible tokens (NFTs), which are tokens that can be tied to unique digital assets, such as images. Additionally, many other cryptocurrencies utilize the ERC-20 token standard on top of the Ethereum blockchain and have utilized the platform for initial coin offerings. On 15 September 2022, Ethereum transitioned its consensus mechanism from proof-of-work (PoW) to proof-of-stake (PoS) in an upgrade process known as "the Merge". This has cut Ethereum's energy usage by 99%. == History == === Founding (2013–2014) === Ethereum was initially described in late 2013 in a white paper by Vitalik Buterin, a programmer and co-founder of Bitcoin Magazine, that described a way to build decentralized applications. Buterin argued to the Bitcoin Core developers that Bitcoin and blockchain technology could benefit from other applications besides money and that it needed a more robust language for application development: 88 that could lead to attaching real-world assets, such as stocks and property, to the blockchain. In 2013, Buterin briefly worked with eToro CEO Yoni Assia on the Colored Coins project and drafted its white paper outlining additional use cases for blockchain technology. However, after failing to gain agreement on how the project should proceed, he proposed the development of a new platform with a more robust scripting language—a Turing-complete programming language—that would eventually become Ethereum.Ethereum was announced at the North American Bitcoin Conference in Miami, in January 2014. During the conference, Gavin Wood, Charles Hoskinson, and Anthony Di Iorio (who financed the project) rented a house in Miami with Buterin at which they could develop a fuller sense of what Ethereum might become. Di Iorio invited friend Joseph Lubin, who invited reporter Morgen Peck, to bear witness. Peck subsequently wrote about the experience in Wired. Six months later the founders met again in Zug, Switzerland, where Buterin told the founders that the project would proceed as a non-profit. Hoskinson left the project at that time and soon after founded IOHK, a blockchain company responsible for Cardano.Ethereum has an unusually long list of founders. Anthony Di Iorio wrote: "Ethereum was founded by Vitalik Buterin, Myself, Charles Hoskinson, Mihai Alisie & Amir Chetrit (the initial 5) in December 2013. Joseph Lubin, Gavin Wood, & Jeffrey Wilcke were added in early 2014 as founders." Buterin chose the name Ethereum after browsing a list of elements from science fiction on Wikipedia. He stated, "I immediately realized that I liked it better than all of the other alternatives that I had seen; I suppose it was that [it] sounded nice and it had the word 'ether', referring to the hypothetical invisible medium that permeates the universe and allows light to travel." Buterin wanted his platform to be the underlying and imperceptible medium for the applications running on top of it. === Development (2014) === Formal development of the software underlying Ethereum began in early 2014 through a Swiss company, Ethereum Switzerland GmbH (EthSuisse). The idea of putting executable smart contracts in the blockchain needed to be specified before it could be implemented in software. This work was done by Gavin Wood, then the chief technology officer, in the Ethereum Yellow Paper that specified the Ethereum Virtual Machine. Subsequently, a Swiss non-profit foundation, the Ethereum Foundation (Stiftung Ethereum), was founded. Development was funded by an online public crowd sale from July to August 2014, in which participants bought the Ethereum value token (ether) with another digital currency, bitcoin. While there was early praise for the technical innovations of Ethereum, questions were also raised about its security and scalability. === Launch and the DAO event (2014–2016) === Several codenamed prototypes of Ethereum were developed over 18 months in 2014 and 2015 by the Ethereum Foundation as part of their proof-of-concept series. "Olympic" was the last prototype and public beta pre-release. The Olympic network gave users a bug bounty of 25,000 ether for stress-testing the Ethereum blockchain. On 30 July 2015, "Frontier" marked the official launch of the Ethereum platform, and Ethereum created its "genesis block". The genesis block contained 8,893 transactions allocating various amounts of ether to different addresses, and a block reward of 5 ETH.Since the initial launch, Ethereum has undergone a number of planned protocol upgrades, which are important changes affecting the underlying functionality and/or incentive structures of the platform. Protocol upgrades are accomplished by means of a hard fork.In 2016, a decentralized autonomous organization called The DAO—a set of smart contracts developed on the platform—raised a record US$150 million in a crowd sale to fund the project. The DAO was exploited in June 2016 when US$50 million of DAO tokens were stolen by an unknown hacker. The event sparked a debate in the crypto-community about whether Ethereum should perform a contentious "hard fork" to reappropriate the affected funds. The fork resulted in the network splitting into two blockchains: Ethereum with the theft reversed, and Ethereum Classic which continued on the original chain. === Continued development and milestones (2017–present) === In March 2017, various blockchain startups, research groups, and Fortune 500 companies announced the creation of the Enterprise Ethereum Alliance (EEA) with 30 founding members. By May 2017, the nonprofit organization had 116 enterprise members, including ConsenSys, CME Group, Cornell University's research group, Toyota Research Institute, Samsung SDS, Microsoft, Intel, J. P. Morgan, Cooley LLP, Merck KGaA, DTCC, Deloitte, Accenture, Banco Santander, BNY Mellon, ING, and National Bank of Canada. By July 2017, there were over 150 members in the alliance, including MasterCard, Cisco Systems, Sberbank, and Scotiabank. ==== CryptoKitties and the ERC-721 NFT standard ==== In 2017, CryptoKitties, the blockchain game and decentralized application (dApp) featuring digital cat artwork as NFTs, was launched on the Ethereum network. In cultivating popularity with users and collectors, it gained notable mainstream media attention providing significant exposure to Ethereum in the process. It was considered the most popular smart contract in use on the network but it also highlighted concerns over Ethereum's scalability due to the game's substantial consumption of network capacity at the time.In January 2018, a community-driven paper (an EIP, "Ethereum Improvement Proposal") under the leadership of civic hacker and lead author William Entriken was published, called ERC-721: Non-Fungible Token Standard. It introduced ERC-721, the first official NFT standard on Ethereum. This standardization was a milestone for Ethereum in pioneering the foundation of the multi-billion dollar digital collectibles eco-system. ==== Continued developments ==== By January 2018, ether was the second-largest cryptocurrency in terms of market capitalization, behind bitcoin. As of 2021, it maintained that relative position.In 2019, Ethereum Foundation employee Virgil Griffith was arrested by the US government for presenting at a blockchain conference in North Korea. He would later plead guilty to one count of conspiring to violate the International Emergency Economic Powers Act in 2021.In March 2021, Visa Inc. announced that it began settling stablecoin transactions using Ethereum. In April 2021, JP Morgan Chase, UBS, and MasterCard announced that they were investing US$65 million into ConsenSys, a software development firm that builds Ethereum-related infrastructure.There were two network upgrades in 2021. The first was "Berlin", implemented on 14 April 2021. The second was "London", which took effect on 5 August. The London upgrade included Ethereum Improvement Proposal ("EIP") 1559, a mechanism for reducing transaction fee volatility. The mechanism causes a portion of the ether paid in transaction fees for each block to be destroyed rather than given to the block proposer, reducing the inflation rate of ether and potentially resulting in periods of deflation.On 27 August 2021, the blockchain experienced a brief fork that was the result of clients running different incompatible software versions. === Ethereum 2.0 === Ethereum 2.0 (Eth2) was a set of three or more upgrades, also known as "phases", meant to transition the network's consensus mechanism to proof-of-stake, and to scale the network's transaction throughput with execution sharding and an improved EVM architecture.The switch from proof-of-work to proof-of-stake on 15 September 2022 has cut Ethereum's energy usage by 99%. However, the impact this has on global energy consumption and climate change may be limited since the computers previously used for mining ether may be used to mine other cryptocurrencies that are energy-intensive.As of April 2023, 18.2 million ETH ($34.6 billion) was locked in the Ethereum 2.0 staking deposit contract. == Design == === Ether === Ether (ETH) is the cryptocurrency generated in accordance with the Ethereum protocol as a reward to validators in a proof-of-stake system for adding blocks to the blockchain. Ether is represented in the state as an unsigned integer associated with each account, this being the account's ETH balance denominated in wei (1018 wei = 1 ether). At the end of each epoch, new ETH is generated by the addition of protocol-specified amounts to the balances of all validators for that epoch, with the block proposers receiving the largest portion. Additionally, ether is the only currency accepted by the protocol as payment for the transaction fee. The transaction fee is composed of two parts: the base fee and the tip. The base fee is "burned" (deleted from existence) and the tip goes to the block proposer. The validator reward together with the tips provide the incentive to validators to keep the blockchain growing (i.e. to keep processing new transactions). Therefore, ETH is fundamental to the operation of the network. Ether may be "sent" from one account to another via a transaction, which simply entails subtracting the amount to be sent from the sender's balance and adding the same amount to the recipient's balance.Ether is often erroneously referred to as "Ethereum". === Accounts === There are two types of accounts on Ethereum: user accounts (also known as externally-owned accounts), and contract accounts. Both types have an ETH balance, may transfer ETH to any account, may execute the code of another contract, or create a new contract, and are identified on the blockchain and in the state by an account address.Contracts are the only type of account that has associated bytecode and storage (to store contract specific state). The code of a contract is evaluated when a transaction is sent to it. The code of the contract may read user specified data from the transaction, and may have a return value. In addition to control flow statements, the bytecode may include instructions to send ETH, read from and write to the contract's storage, create temporary storage (memory) that vanishes at the end of code evaluation, perform arithmetic and hashing operations, send transactions to other contracts (thus executing their code), create new contracts, and query information about the current transaction or the blockchain. ==== Addresses ==== Ethereum addresses are composed of the prefix "0x" (a common identifier for hexadecimal) concatenated with the rightmost 20 bytes of the Keccak-256 hash of the ECDSA public key (the curve used is the so-called secp256k1). In hexadecimal, two digits represent a byte, and so addresses contain 40 hexadecimal digits after the "0x", e.g. 0xb794f5ea0ba39494ce839613fffba74279579268. Contract addresses are in the same format, however, they are determined by sender and creation transaction nonce. === Virtual machine === The Ethereum Virtual Machine (EVM) is the runtime environment for transaction execution in Ethereum. The EVM is a stack based virtual machine with an instruction set specifically designed for Ethereum. The instruction set includes, among other things, stack operations, memory operations, and operations to inspect the current execution context, such as remaining gas, information about the current block, and the current transaction. The EVM is designed to be deterministic on a wide variety of hardware and operating systems, so that given a pre-transaction state and a transaction, each node produces the same post-transaction state, thereby enabling network consensus. The formal definition of the EVM is specified in the Ethereum Yellow Paper. EVMs have been implemented in C++, C#, Go, Haskell, Java, JavaScript, Python, Ruby, Rust, Elixir, Erlang, and soon WebAssembly. === Gas === Gas is a unit of account within the EVM used in the calculation of the transaction fee, which is the amount of ETH a transaction's sender must pay to the network to have the transaction included in the blockchain. Each type of operation which may be performed by the EVM is hardcoded with a certain gas cost, which is intended to be roughly proportional to the monetary value of the resources (e.g. computation and storage) a node must expend or dedicate to perform that operation.When a sender is creating a transaction, the sender must specify a gas limit and gas price. The gas limit is the maximum amount of gas the sender is willing to use in the transaction, and the gas price is the amount of ETH the sender wishes to pay to the network per unit of gas used. A transaction may only be included in the blockchain at a block slot that has a base gas price less than or equal to the transaction's gas price. The portion of the gas price that is in excess of the base gas price is known as the tip and goes to the block proposer; the higher the tip, the more incentive a block proposer has to include the transaction in their block, and thus the quicker the transaction will be included in the blockchain. The sender buys the full amount of gas (i.e. their ETH balance is debited the amount: gas limit × gas price) up-front, at the start of the execution of the transaction, and is refunded at the end for any unused gas. If at any point the transaction does not have enough gas to perform the next operation, the transaction is reverted but the sender is still only refunded for the unused gas. In user interfaces, gas prices are typically denominated in gigawei (Gwei), a subunit of ETH equal to 10−9 ETH. == Applications == The EVM's instruction set is Turing-complete. Popular uses of Ethereum have included the creation of fungible (ERC-20) and non-fungible (ERC-721) tokens with a variety of properties, crowdfunding (e.g. initial coin offerings), decentralized finance, decentralized exchanges, decentralized autonomous organizations (DAOs), games, prediction markets, and gambling. === Contract source code === Ethereum's smart contracts are written in high-level programming languages and then compiled down to EVM bytecode and deployed to the Ethereum blockchain. They can be written in Solidity (a language library with similarities to C and JavaScript), Serpent (similar to Python, but deprecated), Yul (an intermediate language that can compile to various different backends—EVM 1.0, EVM 1.5, and eWASM are planned), LLL (a low-level Lisp-like language), and Mutan (Go-based, but deprecated), and Vyper (a strongly-typed Python-derived decidable language). Source code and compiler information are usually published along with the launch of the contract so that users can see the code and verify that it compiles to the bytecode that is on-chain.One issue related to using smart contracts on a public blockchain is that bugs, including security holes, are visible to all but cannot be fixed quickly. One example of this is the 2016 attack on The DAO, which could not be quickly stopped or reversed. === ERC-20 tokens === The ERC-20 (Ethereum Request-for-Comments #20) Token Standard allows for fungible tokens on the Ethereum blockchain. The standard, proposed by Fabian Vogelsteller in November 2015, implements an API for tokens within smart contracts. The standard provides functions that include the transfer of tokens from one account to another, getting the current token balance of an account, and getting the total supply of the token available on the network. Smart contracts that correctly implement ERC-20 processes are called ERC-20 Token Contracts, and they keep track of created tokens on Ethereum. Numerous cryptocurrencies have launched as ERC-20 tokens and have been distributed through initial coin offerings. === Non-fungible tokens (NFTs) === Ethereum also allows for the creation of unique and indivisible tokens, called non-fungible tokens (NFTs). Since tokens of this type are unique, they have been used to represent such things as collectibles, digital art, sports memorabilia, virtual real estate, and items within games. ERC-721 is the first official NFT standard for Ethereum and was followed up by ERC-1155 which introduced semi-fungibility, both are widely used, though some fully fungible tokens using ERC-20 have been used for NFTs such as CryptoPunks.The first NFT project, Etheria, a 3D map of tradable and customizable hexagonal tiles, was deployed to the network in October 2015 and demonstrated live at DEVCON1 in November of that year. In 2021, Christie's sold a digital image with an NFT by Beeple for US$69.3 million, making him the third-most-valuable living artist in terms of auction prices at the time, although observers have noted that both the buyer and seller had a vested interest in driving demand for the artist's work. === Decentralized finance === Decentralized finance (DeFi) offers traditional financial instruments in a decentralized architecture, outside of companies' and governments' control, such as money market funds which let users earn interest. DeFi applications are typically accessed through a Web3-enabled browser extension or application, such as MetaMask, which allows users to directly interact with the Ethereum blockchain through a website. Many of these DApps can connect and work together to create complex financial services.Examples of DeFi platforms include MakerDAO and Compound. Uniswap, a decentralized exchange for tokens on Ethereum grew from US$20 million in liquidity to US$2.9 billion in 2020. As of October 2020, over US$11 billion was invested in various DeFi protocols. Additionally, through a process called "wrapping", certain DeFi protocols allow synthetic versions of various assets (such as bitcoin, gold, and oil) to be tradeable on Ethereum and also compatible with all of Ethereum's major wallets and applications. === Enterprise software === Ethereum-based software and networks, independent from the public Ethereum chain, are being tested by enterprise software companies. Interested parties include Microsoft, IBM, JPMorgan Chase, Deloitte, R3, and Innovate UK (cross-border payments prototype). Barclays, UBS, Credit Suisse, Amazon, Visa, and other companies are also experimenting with Ethereum. === Permissioned ledgers === Ethereum-based permissioned blockchain variants are used and being investigated for various projects: In 2017, JPMorgan Chase proposed developing JPM Coin on a permissioned-variant of Ethereum blockchain dubbed "Quorum". It is "designed to toe the line between private and public in the realm of shuffling derivatives and payments. The idea is to satisfy regulators who need seamless access to financial goings-on while protecting the privacy of parties that don't wish to reveal their identities nor the details of their transactions to the general public." === Performance === As of January 2016, the Ethereum protocol could process about 25 transactions per second; this did not change after the move to proof-of-stake. In comparison, the Visa payment platform processes 45,000 payments per second. This has led some to question the scalability of Ethereum.A proposal to partition global state and computation into shard chains was presented at Ethereum's Devcon 3 in November 2017. If implemented, each node in the network would only have to store and validate a subset of the network. Ethereum's blockchain uses a Merkle-Patricia Trie to store account state in each block. The trie allows for storage savings, set membership proofs (called "Merkle proofs"), and light client synchronization. The network has faced congestion problems, such as in 2017 in relation to CryptoKitties. == Regulation == In the United States, the proposed Digital Commodities Consumer Protection Act would treat Ethereum and other cryptocurrencies as commodities, which could then be regulated by the Commodity Futures Trading Commission (CFTC). == Notes == == References == == External links == Official website
Charlie Lee (computer scientist)	Charlie Lee is a computer scientist, best known as the creator of Litecoin. He serves as the managing director of the Litecoin Foundation. == Early life == Lee was born in Ivory Coast, moved to the United States at the age of 13, and graduated from high school in 1995. He graduated from the Massachusetts Institute of Technology with bachelor's and master's degrees in computer science in 2000.Lee's brother, Bobby C. Lee, is the founder and CEO of cryptocurrency exchange BTC China. == Career == For a decade in the 2000s, Lee worked for Google. His work for the company included writing code for ChromeOS. In 2011, Lee became interested in Bitcoin. In October 2011, he released Litecoin on Bitcointalk. He had written the blockchain technology based on the Bitcoin in his spare time while employed at Google. He released Litecoin to the public after mining only 150 coins. Lee has stated that he did not intend to compete with Bitcoin but meant Litecoin to be used for smaller transactions.In July 2013, Lee left Google and began working at Coinbase, before the cryptocurrency exchange adopted the coin he had created. Lee held the position of Engineering Director until 2017.In December 2017, Lee announced on Reddit that he sold almost all of his Litecoin holdings due to a perceived conflict of interest. He had been criticized for his tweets, which had a possible effect on the price of the coin. Lee sold or donated all of his coins except for a few minted in physical form, which he kept as collectibles.Lee is currently working full-time with the Litecoin Foundation on fostering Litecoin adoption. == References ==
Namecoin	Namecoin (Abbreviation: NMC; sign: N {\displaystyle \mathbb {N} } ) is a cryptocurrency originally forked from bitcoin software. It uses proof-of-work algorithm. Like bitcoin, it is limited to N {\displaystyle \mathbb {N} } 21 million.Namecoin can store data within its own blockchain transaction database. The original proposal for Namecoin called for Namecoin to insert data into bitcoin's blockchain directly. Anticipating scaling difficulties with this approach, a shared proof-of-work system was proposed to secure new cryptocurrencies with different use cases. Namecoin's flagship use case is the censorship-resistant top level domain .bit, which is functionally similar to .com or .net domains but is independent of the Internet Corporation for Assigned Names and Numbers, the main governing body for domain names. In practice, the top level domain is used by a handful of functional websites. As of 2019, OpenNIC no longer supports the .bit domain. == Transactions == A peer-to-peer network similar to handles Namecoin's transactions, balances and issuance through a based proof-of-work scheme (they are issued when a small enough hash value is found, at which point a block is created). === Records === Each Namecoin record consists of a name and a value. Each name is actually a path, with the namespace preceding the name of the record. The key d/example signifies a record stored in the DNS namespace d with the name example and corresponds to the record for the example.bit website. The content of d/example is expected to conform to the DNS namespace specification.As of 2015, the fee for a record was 0.01 NMC and records expired after 36000 blocks (~200 days) unless updated or renewed. == Uses == .bit is a top-level domain, created outside the commonly used Domain Name System, and is not sanctioned by ICANN. The .bit domain is served via Namecoin infrastructure, which acts as a decentralized domain name system.Proposed potential uses for Namecoin besides domain name registration include notary/timestamp systems. == History == In September 2010, a discussion was started in the BitcoinTalk forum about a hypothetical system called BitDNS and generalizing bitcoin. Gavin Andresen and Satoshi Nakamoto joined the discussion in the BitcoinTalk forum and supported the idea of BitDNS, and a reward for implementing BitDNS was announced on the forum in December 2010.On block 19200 Namecoin activated the merged mining upgrade to allow mining of Bitcoin and Namecoin simultaneously, instead of having to choose between one or the other; this fixed the issue of miners jumping from one blockchain to another when the profitability becomes favorable in the former.Two years later, in June 2013, NameID was launched. NameID allows to associate profile information with identities on the Namecoin blockchain, and an OpenID provider to allow logging into existing websites with Namecoin identities. The main site itself is accompanied by an open protocol for password-less authentication with Namecoin identities, a corresponding free-software implementation and a supporting extension for Firefox.In October 2013, Michael Gronager, main developer of libcoin, found a security issue in the Namecoin protocol, which allowed modifying foreign names. It was successfully fixed in a short timeframe and was never exploited, except for bitcoin.bit as a proof-of-concept.Namecoin was also mentioned by ICANN in a public report as the most well-known example of distributing control and privacy in DNS.A 2015 study found that of the 120,000 domain names registered on Namecoin, only 28 were in use.In December 2018, a proposal was tabled on the OpenNIC mailing list to drop support for Namecoin .bit domains., citing Spamhaus' (and by extension other antivirus software) blocking of several of their servers owing to spread of malware from some .bit domains, as well as concerns about potential child pornography. The vote did not reach a consensus.In the same month, OpenNIC was advised to drop support for .bit namespace owing to security concerns of Namecoin and PRISM Break developers.In July 2019, OpenNIC again voted on dropping the .bit namespace, citing "numerous problems with support of NameCoin domains" and recent animosity between the two projects. The vote passed. Namecoin developer Jeremy Rand welcomed the move, thanking OpenNIC and describing it as the "right decision". == See also == Alternative DNS root Zooko's triangle Non-fungible token (a concept which Namecoin is sometimes considered a precursor of) == References == == Further reading == Judmayer, Aljosha; Stifter, Nicholas; Krombholz, Katharina; Weippl, Edgar (2022) [2017]. Blocks and Chains: Introduction to Bitcoin, Cryptocurrencies, and Their Consensus Mechanisms. Cham: Springer Nature. pp. 47–49. doi:10.1007/978-3-031-02352-1. ISBN 978-3-031-01224-2. ISSN 1945-9742. S2CID 249533342. Retrieved 2022-06-25 – via Google Books. Haferkorn, Martin; Quintana Diaz, Josué Manual (2015). "Seasonality and Interconnectivity Within Cryptocurrencies – An Analysis on the Basis of Bitcoin, Litecoin and Namecoin". In Lugmayr, Artur (ed.). Enterprise Applications and Services in the Finance Industry: 7th International Workshop, FinanceCom 2014, Sydney, Australia, December 2014, Revised Papers. Cham: Springer Nature. p. 110. doi:10.1007/978-3-319-28151-3. ISBN 978-3-319-28150-6. ISSN 1865-1348. S2CID 37289572. Retrieved 2022-06-25 – via Google Books. Karame, Ghassan; Androulaki, Elli (2016). Bitcoin and Blockchain Security. Boston: Artech House. p. 165. ISBN 978-1-63081-013-9. Retrieved 2022-06-25 – via Google Books. Bheemaiah, Kariappa (2017). The Blockchain Alternative: Rethinking Macroeconomic Policy and Economic Theory. New York: Apress. p. 77. ISBN 978-1-4842-2673-5. Retrieved 2022-06-25 – via Google Books. Franco, Pedro (2015). Understanding Bitcoin: Cryptography, Engineering and Economics. West Sussex: Wiley. p. 174. ISBN 978-1-119-01914-5. Retrieved 2022-06-25 – via Google Books. Kirillova, Elena Anatolyevna; Pavlyuk, Albert Valentinovich; Mikhaylova, Irina Aleksandrovna; Zulfugarzade, Teymur E.; Zenin, Sergey S. (2018). "Bitcoin, Lifecoin, Namecoin: The Legal Nature of Virtual Currency". Journal of Advanced Research in Law and Economics. 9 (31): 119. doi:10.14505//jarle.v9.1(31).16. S2CID 169842085. Archived from the original on 2022-06-25. Retrieved 2022-06-25 – via Central and Eastern European Online Library. Chang, Tao-Hung; Svetinovic, Davor (2016). "Data Analysis of Digital Currency Networks: Namecoin Case Study". 2016 21st International Conference on Engineering of Complex Computer Systems (ICECCS). Institute of Electrical and Electronics Engineers. pp. 122–125. doi:10.1109/ICECCS.2016.023. ISBN 978-1-5090-5526-5. S2CID 9397221. Archived from the original on 2022-06-25. Retrieved 2022-06-25. == External links == Official website
Peercoin	Peercoin, also known as Peer-to-Peer Coin, PP Coin, or PPC, is a cryptocurrency utilizing both proof-of-stake and proof-of-work systems. == History == Peercoin is based on an August 2012 paper that listed the authors as Scott Nadal and Sunny King. King, who also created Primecoin, is a pseudonym. Peercoin was the first implementation of a proof-of-stake–based cryptocurrency.The Peercoin source code is distributed under the MIT/X11 software license. == Economics == Peercoin uses both the proof-of-work and proof-of-stake algorithms. Both are used to spread the distribution of new coins. During its primary years, Peercoin relied heavily on PoW, although there has now been a transition to PoS. Proof-of-stake is used to secure the network: The chain with longest PoS coin age wins in case of a blockchain split-up. A transaction fee prevents spam and is burned (instead of being collected by a miner), benefiting the overall network.To recover from lost coins and to discourage hoarding, the currency supply targets growth at 1% per year in the long run. == References == == External links == Official website Media related to PPCoin at Wikimedia Commons
Dogecoin	Dogecoin ( DOHJ-koyn or DOHZH-koyn, Abbreviation: DOGE; sign: Ð) is a cryptocurrency created by software engineers Billy Markus and Jackson Palmer, who decided to create a payment system as a "joke", making fun of the wild speculation in cryptocurrencies at the time. It is considered both the first "meme coin", and more specifically the first "dog coin". Despite its satirical nature, some consider it a legitimate investment prospect. Dogecoin features the face of the Shiba Inu dog from the "doge" meme as its logo and namesake. It was introduced on December 6, 2013, and quickly developed its own online community, reaching a peak market capitalization of over US$85 billion on May 5, 2021. As of 2021, it is the sleeve sponsor of Watford Football Club.Dogecoin.com promotes the currency as the "fun and friendly Internet currency", referencing its origins as a "joke". Software engineers Billy Markus and Jackson Palmer launched the satirical cryptocurrency as a way to make fun of Bitcoin and the many other cryptocurrencies boasting grand plans to take over the world. With the help of Reddit, the site became an instant hit. Within two weeks, Dogecoin had established a dedicated blog and forum, and its market value reached $8 million, once jumping to become the seventh largest electronic currency in the world. Dogecoin is based on Scrypt algorithm. == History == Originally formed as a "joke", Dogecoin was created by IBM software engineer Billy Markus and Adobe software engineer Jackson Palmer. They wanted to create a peer-to-peer digital currency that could reach a broader demographic than Bitcoin. In addition, they wanted to distance it from the controversial history of other coins. Dogecoin was officially launched on December 6, 2013, and within the first 30 days, there were over a million visitors to Dogecoin.com.Palmer is credited with making the idea a reality. At the time, he was a member of the Adobe marketing department in Sydney, Australia. Palmer had purchased the domain Dogecoin.com and added a splash screen, which featured the coin's logo and scattered Comic Sans text. Markus reached out to Palmer after seeing the site, and started efforts to develop the currency. Markus designed Dogecoin's protocol based on existing cryptocurrencies Luckycoin and Litecoin, which use scrypt technology in their proof-of-work algorithm. The use of scrypt means that miners cannot use SHA-256 bitcoin mining equipment, and instead must use dedicated field-programmable gate array and application-specific integrated circuit devices for mining which are known to be more complex to produce.On December 19, 2013, Dogecoin jumped nearly 300% in value in 72 hours, rising from $0.00026 to $0.00095, with a volume of billions of Dogecoins traded per day. This growth occurred during a time when Bitcoin and many other cryptocurrencies were reeling from China's decision to forbid Chinese banks from investing in the Bitcoin economy. Three days later, Dogecoin experienced its first major crash when its price dropped by 80% due to this event and to large mining pools exploiting the small amount of computing power required at the time to mine Dogecoin.On December 25, 2013, the first major theft of Dogecoin occurred when millions of coins were stolen during a hack on the online cryptocurrency wallet platform Dogewallet. The hacker gained access to the platform's filesystem and modified its send/receive page to send any and all coins to a static internet protocol address. This hacking incident spiked tweets about Dogecoin, making it the most mentioned altcoin on Twitter at the time, although it was in reference to a negative event. To help those who lost funds on Dogewallet after its breach, the Dogecoin community started an initiative named "SaveDogemas" to help donate coins to those who had them stolen. Approximately one month later, enough money was donated to cover all of the coins that were stolen.In January 2014, the trading volume of Dogecoin briefly surpassed that of all other cryptocurrencies combined. However, its market capitalization remained substantially behind that of Bitcoin. Initially, Dogecoin featured a randomized reward that is received for each mining block. However, in March 2014, this behaviour was updated to a static block reward. Co-founder Jackson Palmer left the cryptocurrency community in 2015 and has no plans to return, having come to the belief that cryptocurrency, originally conceived as a libertarian alternative to money, is fundamentally exploitative and built to enrich its top proponents. His co-founder, Billy Markus, agreed that Palmer's position was generally valid.During the 2017 to early 2018 cryptocurrency bubble, Dogecoin briefly reached a peak of $0.017 on January 7, 2018, putting its total market capitalization near $2 billion. In July 2020, the price of Dogecoin spiked following a TikTok trend aimed at getting Dogecoin to $1.On May 9, 2021, SpaceX announced a rideshare mission to the Moon completely funded by Dogecoin, thus becoming the first space mission funded by a cryptocurrency. Elon Musk confirmed this news via Twitter. DOGE-1 was planned to be a minor 40 kg rideshare payload on Intuitive Machines' IM-1 mission in Q1 2022.On August 14, 2021, the Dogecoin Foundation announced the "re-establishment of the Dogecoin Foundation (est 2014), with a renewed focus on supporting the Dogecoin Ecosystem, Community and promoting the future of the Dogecoin Blockchain." The Foundation was reinvigorated by the addition to its Board of notable advisors such as Vitalik Buterin (Ethereum co-founder and inventor) and Jared Birchall (representing Elon Musk). === 2021 boom and subsequent fall === In January 2021, Dogecoin went up over 800% in 24 hours, reaching $0.07, as a result of attention from Reddit users, partially encouraged by Elon Musk and the GameStop short squeeze. In February 2021, Dogecoin hit a new high price of $0.08 following Twitter encouragement from Musk, Snoop Dogg and Gene Simmons. In March 2021, Dallas Mavericks owner Mark Cuban announced his NBA team would allow purchasing tickets and products with Dogecoin; within two days, Cuban had declared his franchise had become the top Dogecoin merchant, having carried out 20,000 transactions.In April 2021, Dogecoin and other cryptocurrencies surged, stimulated in part by the direct listing for cryptocurrency exchange Coinbase on April 14, although that platform did not provide trading of Dogecoin. Dogecoin first reached $0.10 on April 14, before hitting a new high of $0.45 on April 16 (up 400% that week), with a volume of nearly $70 billion traded in the preceding 24 hours. At the time, Dogecoin's market capitalization approached $50 billion, making it the fifth-highest-valued cryptocurrency; its value had increased more than 7,000% year-to-date. Interest in Dogecoin contributed to an outage in electronic trading platform Robinhood's cryptocurrency system on April 15, caused by "unprecedented demand", and prompted concerns from experts of a nearing speculative bubble in the cryptocurrency market.On May 4, 2021, the value of Dogecoin first surpassed the symbolic hurdle of $0.50.In April 2023, a Dogecoin increase was attributed to Elon Musk temporarily changing the logo on the Twitter app to a Doge logo. In June 2023, Musk was accused of insider trading by investors based on a series of stunts including the change of logo. == Use and exchanges == Dogecoin is an altcoin with a large userbase, and is traded against both fiat currencies and other cryptocurrencies on several reputable cryptocurrency exchanges and retail investment platforms. Trading physical, tangible items in exchange for Dogecoin takes place on online communities such as Reddit and Twitter, where users in such circles frequently share cryptocurrency-related information.Several cases of people using their employers' or universities' computers to mine Dogecoin have been discovered.Dogecoin has been used in an attempted property sale, and it has been used in the pornography and gambling industries. === Online tipping === One major mainstream commercial application of the cryptocurrency has been Internet-based tipping systems, in which social media users tip other users for providing interesting or noteworthy content. ==== Dogetipbot ==== Dogetipbot was a cryptocurrency transaction service used on popular sites like Reddit and Twitch. It allowed users to send Dogecoins to other users through commands via Reddit comments. In May 2017, Dogetipbot was discontinued and taken offline after its creator declared bankruptcy; this left many Dogetipbot users losing their coins stored in the Dogetipbot system. == Technology and DeFi == DeFi (decentralized finance) is a form of finance that does not rely on middlemen such as brokerages, exchanges, or banks to offer financial instruments. This is accomplished using "smart contracts" which are automated enforceable agreements that use online blockchain technology. While Dogecoin cannot interact with smart contracts directly given that it operates on its own blockchain, the coins can be "wrapped" so that they can be locked into a state that is interoperable with a contract until they are later unwrapped. The Ren Project has enabled Dogecoin (renDOGE) to be used on the Ethereum blockchain and access the DeFi network. (Most DeFi coins use the Ethereum blockchain network.) DeFi-linked coins use decentralized applications ("dApps") to transact and trade on decentralized exchanges (DExs), such as Uniswap. These DExs are entirely peer-to-peer exchanges, without any company or other institution providing the platform. == Currency supply == Dogecoin started with a supply limit of Ð100 billion, which would have been far more coins than the top digital currencies were then allowing. By mid-2015, the 100 billionth Dogecoin had been mined, with an additional Ð5 billion put into circulation every year thereafter. Although there is no theoretical supply limit, at this rate, the number of Dogecoins put into circulation will only double in 20 years (the next doubling will occur in the year 2075). There is no implemented hard cap on the total supply of Dogecoins. Nonetheless, in February 2014, Dogecoin founder Jackson Palmer announced that the limit would be removed in an effort to create a consistent reduction of its inflation rate over time. In other words, the inflation rate improves over time starting at 5% in 2015 to less than 4% by 2019, 3% by 2027, and 2% by 2035. == Mining parameters == Dogecoin's implementation differs from its predecessors: It was originally forked from Litecoin, then refactored to Bitcoin. Dogecoin's target block time is 1 minute, as opposed to Litecoin's 2.5 minutes and Bitcoin's 10 minutes. == Fundraising == === 2014 Winter Olympics === The Dogecoin community and foundation have encouraged fundraising for charities and other notable causes. On January 19, 2014, a fundraiser was established by the Dogecoin community to raise $50,000 for the Jamaican Bobsled Team, which had qualified for, but could not afford to go to, the Sochi Winter Olympics. By the second day, $36,000 worth of Dogecoin was donated and the Dogecoin to Bitcoin exchange rate rose by 50%. The Dogecoin community also raised funds for a second Sochi athlete, Shiva Keshavan. === Doge4Water === Inspired by the Winter Olympics fundraiser and smaller charity fundraising successes, the Dogecoin Foundation, led by Eric Nakagawa, began collecting donations to build a well in the Tana river basin in Kenya in cooperation with Charity: Water. They set out to raise a total of Ð40,000,000 (US$30,000 at the time) Dogecoin before World Water Day (March 22) in 2014. The campaign succeeded, collecting donations from more than 4,000 donors, including one anonymous benefactor who donated Ð14,000,000 (worth approximately $11,000 at the time, or $2.8 million in 2021). === NASCAR === On March 25, 2014, the Dogecoin community successfully raised Ð67.8 million (around US$55,000 at the time) in an effort to sponsor NASCAR Sprint Cup Series driver Josh Wise. Nicknamed the "Moonrocket", the No. 98 car featured a Dogecoin/Reddit-sponsored paint scheme and was driven by Wise at the Aaron's 499 at Talladega Superspeedway. Wise and the car were featured for nearly a minute, during which the race commentators discussed Dogecoin and the crowdfunding effort, while finishing twentieth and narrowly avoiding multiple wrecks.On May 16, 2014 Wise won a spot at the Sprint All-Star Race through an online fan vote beating Danica Patrick, largely due to the efforts of the Dogecoin Reddit community. He finished the race in fifteenth, the last car running. In the following race in 2014 Coca-Cola 600, Wise debuted a Dogecoin/Reddit.com helmet. Wise later announced he would run the car again at the Toyota/Save Mart 350 and the GEICO 500 as a thank-you gift to the community. He finished twenty-eighth in the race due in part to a refueling issue; he was in twelfth place after a gas-and-go pit stop, but the gas can did not engage long enough, resulting in a second pit stop that took him towards the back of the pack. Eutechnyx, the developer of the NASCAR '14 video game, added the Dogecoin car as a drivable car in a DLC pack.On March 2, 2021, NASCAR Xfinity Series team B. J. McLeod Motorsports announced that Dogecoin would be sponsoring the № 99 car in the Alsco Uniforms 300 at Las Vegas alongside Springrates; Stefan Parsons drove the car to a 36th-place finish as fuel line issues prevented him from completing the race. His father Phil was the owner of the team that fielded the original Dogecoin-sponsored car in 2014. == Criticism == Dogecoin's origin as a "joke", which makes it the first meme coin, has made it difficult to be taken seriously by mainstream media and financial experts. The cryptocurrency has had a long and problematic history of scams. Similar to many other cryptocurrencies, Dogecoin has been described by some commentators as a form of Ponzi scheme. Critics allege that Dogecoin investors who purchased Dogecoins early on, have a large financial incentive to draw others into purchasing more Dogecoins in order to drive the price up, therefore benefitting the early investors financially at the direct expense of later purchasers. This is primarily because Dogecoin does not have a supply cap like other cryptocurrencies such as Bitcoin, which has a capped supply of 21 million coins. Dogecoin has instead a deliberately stable, "deterministic inflation" rate of Ð10,000 per block, with a block time of one minute. Exactly Ð5 billion in new Dogecoins will be created and enter circulation every year. == Positives == While the price of Dogecoin is volatile, this volatility has its benefits. It allows investors to use strategies such as cryptocurrency day trading or scalping to profit from fast, short-lived price swings. Additionally, while the cryptocurrency may have begun as a "joke", it was the 10th-largest cryptocurrency in the world in September 2021, with a market capitalisation of US$26 billion. (Cryptocurrencies with larger market capitalizations at the time were Bitcoin, Ethereum, Cardano, Binance Coin, Tether, and XRP.) Mark Cuban has stated of Dogecoin that, "Doge has 'deterministic inflation' meaning the amount of inflation is defined. There is no uncertainty as to the amount of created and it's [sic] inflation percentage. Which could allow it to grow as a valid payment mechanism. The unknown is whether enough people will use it this way." == Elon Musk and Dogecoin == Elon Musk frequently uses his Twitter platform to express his views on Dogecoin, which has led some to claim that his actions amount to market manipulation because the price of Dogecoin frequently experiences price movements shortly after his tweets. Nevertheless, because cryptocurrencies are not regulated like stocks, these actions are not illegal. Musk and his promotion of Dogecoin have been criticized by Dogecoin co-founder Jackson Palmer, who called Musk a "self-absorbed grifter".Musk's first Dogecoin-related tweet occurred on December 20, 2020. Musk tweeted "One Word: Doge". Shortly after, the value of Dogecoin rose by 20%. This was followed by a series of Dogecoin-related tweets by Musk in early February 2021 captioned "Dogecoin is the people's crypto" and "no highs, no lows, only Doge". Following these tweets, the value of Dogecoin rose by roughly 40%.On April 15, 2021, the price of Dogecoin rose by more than 100% after Musk tweeted an image of Joan Miró's Dog Barking at the Moon painting captioned "Doge Barking at the Moon", a message which was taken by some as a reference to the industry slang term "to the moon", meaning a hoped-for increase in a cryptocurrency's value.On May 8, 2021, Dogecoin fell as much as 29.5%, dropping to US$0.49 during Musk’s Saturday Night Live appearance. It then rose by 11% on May 20, 2021, shortly after Musk tweeted a Doge-related meme. In the same month, the price of Dogecoin was up 10% in the hours after Musk tweeted a Reddit link for users to submit proposals to improve the cryptocurrency.On December 14, 2021, Dogecoin spiked more than 20% after Musk said that Tesla will accept the currency as a means of payment for Tesla merchandise.On June 16, 2022, Elon Musk was named in a complaint seeking damages of $258 billion. The complaint was filed in federal court in Manhattan by plaintiff Keith Johnson. Johnson cited Musk's repeated use of his massive social influence to promote the altcoin, which he claims artificially inflated the price.It was reported in 2013 that Musk thinks Dogecoin could be used for Twitter transactions. On October 27, 2022, Elon Musk completed a deal to take Twitter private. This led to a sustained rise in Dogecoin from October 25 to October 29, with Dogecoin increasing as much as 46%.Between April 3 and April 7, 2023, Twitter's bird logo was replaced with an image of the Doge meme for desktop users, leading to a rise in Dogecoin prices. No reason was given for the icon change, with some speculating that it was a late April Fool's joke, or an attempt to troll investors over the Dogecoin lawsuit that Musk was seeking to end that week. == See also == Shiba Inu (cryptocurrency) == References == == Notes == == External links == Official website
Gridcoin	Gridcoin (abbreviation: GRC) is an open source cryptocurrency which securely rewards volunteer computing performed on the BOINC network. Originally developed to support SETI@home, it became the platform for many other applications in areas as diverse as medicine, molecular biology, mathematics, linguistics, climatology, environmental science, and astrophysics.Gridcoin requires a significant level of skill in order to begin "crunching". Despite this, Gridcoin's ability to monetise idle computing time towards "crunching" can modestly help with reducing digital divide and incentivise the public to donate their CPU time towards scientific research.It was created on October 16, 2013, by Rob Halförd. Gridcoin, initially using the energy-intensive proof of work - as used by Bitcoin, before migrating to a proof of stake protocol in 2014, similar to Peercoin, in an attempt to address the environmental impact of cryptocurrency mining.An exploit was demonstrated in August 2017 that revealed the emails of Gridcoin users and allowed the theft of other users work. The research team disclosed the vulnerability to the developers in September 2016, and the patch for the vulnerability was released in March 2017 with version 3.5.8.7, however the implementation of the fix introduced other issues.The implementation Gridcoin-Research was created as a fork of Bitcoin and Peercoin and is licensed under the MIT License. It uses Qt 5 for its user interface and prebuilt executables of the wallet are distributed for Windows, macOS, and Debian. == References == == External links == Official website
Primecoin	Primecoin (Abbreviation: XPM; sign: Ψ) is a cryptocurrency that implements a proof-of-work system that searches for chains of prime numbers. == History == Primecoin was launched in 2013 by Sunny King, who also founded Peercoin.Unlike other cryptocurrencies, which are mined using algorithms that solved mathematical problems with no extrinsic value, mining Primecoin involves producing chains of prime numbers (Cunningham and bi-twin chains). These are useful to scientists and mathematicians and meet the requirements for a proof of work system of being hard to compute but easy to verify and having an adjustable difficulty.Shortly after its launch, some trade journals reported that the rush of over 18,000 new users seeking to mine Primecoin overwhelmed providers of dedicated servers.Primecoin has a block time of one minute, changes difficulty every block, and has a block reward that is a function of the difficulty. == References == == Further reading == Orrell, David; Chlupatý, Roman (2016). The Evolution of Money. New York: Columbia University Press. pp. 200–201. ISBN 978-0-231-17372-8. Retrieved 13 November 2018. Antonopoulos, Andreas M. (2014). Mastering Bitcoin: Unlocking Digital Cryptocurrencies. Sebastopol, California: O'Reilly Media. ISBN 978-1-4919-2198-2. Retrieved 13 November 2018. Fanning, Kurt; Centers, David P. (13 June 2016). "Blockchain and Its Coming Impact on Financial Services". Journal of Corporate Accounting & Finance. 27 (5): 54–55. doi:10.1002/jcaf.22179. == External links == Official website
Nxt	NXT is an open source cryptocurrency and payment network launched in 2013 by anonymous software developer BCNext. It uses proof-of-stake to reach consensus for transactions—as such, there is a static money supply. Unlike Bitcoin, there is no mining. NXT was specifically conceived as a flexible platform around build applications and financial services, and serves as basis for ARDR (Ardor), a blockchain-as-a-service multichain platform developed by Jelurida, and IoTeX (cryptocurrency) the current steward of NXT as of 2021. NXT has been covered extensively in the "Call for Evidence" report by ESMA. == History == NXT was created with a total of one billion coins. On 28 September 2013, BCNext created a forum thread announcing the proposed launch of NXT as a second generation cryptocurrency and asked for small bitcoin donations to determine how to distribute the initial stake. On 18 November 2013, fundraising for NXT was closed. The initial coin offering collected 21 bitcoins that were worth US$17,000.In July 2016, NXT launched Smart Transaction templates, which were meant to serve as building blocks for businesses to construct Blockchain solutions for particular problems. == Features == The core infrastructure of NXT is complex, which, compared to the leaner and simpler Bitcoin, creates more potential for flaws or mistakes. However, this allows third parties to contribute to the blockchain with ease. NXT's Asset Exchange is a peer-to-peer exchange allowing trading of shares and crypto assets. Since the blockchain is an unalterable public ledger of transactions, it can provide a trading record for items other than NXT. To do this, NXT allows the designation or "coloring" of a particular coin, which builds a bridge from the virtual cryptocurrency world to the physical world. The "colored coin" can represent property, stocks/bonds, commodities, or even concepts. NXT has Arbitrary Messages which can be used to send encrypted or plain text as well as data (up to 1000 bytes of data permanently or 42 kilobytes of data for a limited amount of time). As a result, it can be used to build file-sharing services, decentralized applications, and higher-level NXT services. NXT allows the holders of the currency or NXT-Assets to vote in a cryptographically proven and externally verifiable way. This can be used for deciding on future development decisions or for shareholder voting, and it can also be applied to public elections and community-based decision-making. NXT Plugins allow external developers to add features or usability enhancements. The plug-ins are not contained in a sandbox. == See also == Peer-to-peer computing == References == == External links == Official website
Auroracoin	Auroracoin (Abbreviation: AUR; sign: ᚠ) is a peer-to-peer cryptocurrency launched in February 2014 as an Icelandic alternative to bitcoin and the Icelandic króna. The unknown creator or creators use the pseudonym Baldur Friggjar Óðinsson (or Odinsson). They stated that they planned to distribute half of auroracoins that would ever be created to all 330,000 people listed in Iceland's national ID database beginning on March 25, 2014, free of charge, coming out to ᚠ31.8 per person.Auroracoin was created as an alternative currency to address the government restrictions on Iceland's króna, in place since 2008, which severely restricts movement of the currency outside the country. == History == It has been suggested that 'in many ways, Iceland could be seen as an ideal place for a virtual currency' on account of the limited use of cash, extensive familiarity with electronic finance, and extensive interest in Bitcoin in Icelandic society, coupled with the long-term instability of the króna. === Airdrop === The developers used the Kennitala national identification system to give away 50% of the total issuance of Auroracoins to the population of Iceland, a process known as an airdrop, hoping to bootstrap a network effect and introduce cryptocurrency to a national audience. == Controversy == As of 2015, the legal status of cryptocurrencies in Iceland was unclear, though the Auroracoin airdrop involved government approval of Odinsson's use of the national database of citizens, Íslykill. Some Icelandic politicians have taken a negative view of Auroracoin. During a parliamentary debate on March 14, 2014, MP Pétur Blöndal, vice-chair of the Parliament's Economic Affairs and Trade Committee (EATC), emphasized that potential tax evasion through the use of Auroracoin could impact Iceland's economy. He also said that the public should realize that Auroracoin "is not a recognized currency since no-one backs the medium".MP Frosti Sigurjónsson, a member of the ruling Progressive Party and Chairman of the EATC, suggested in a blog post on his website that there is evidence that Auroracoin is an illegal financial "scam". == References == == External links == Auroracoin Foundation official website
Dash	The dash is a punctuation mark consisting of a long horizontal line. It is similar in appearance to the hyphen but is longer and sometimes higher from the baseline. The most common versions are the en dash –, generally longer than the hyphen but shorter than the minus sign; the em dash —, longer than either the en dash or the minus sign; and the horizontal bar ―, whose length varies across typefaces but tends to be between those of the en and em dashes.Typical uses of dashes are to mark a break in a sentence, or to set off an explanatory remark (similar to parenthesis), or to show spans of time or ranges of values. The em dash is sometimes used as a leading character to identify the source of a quoted text. == History == In the early 17th century, in Okes-printed plays of William Shakespeare, dashes are attested that indicate a thinking pause, interruption, mid-speech realization, or change of subject. The dashes are variously longer ⸺ (as in King Lear reprinted 1619) or composed of hyphens --- (as in Othello printed 1622); moreover, the dashes are often, but not always, prefixed by a comma, colon, or semicolon.In 1733, in Jonathan Swift's On Poetry, the terms break and dash are attested for ⸺ and — marks: == Types of dash == Usage varies both within English and within other languages, but the usual conventions for the most common dashes in printed English text are these: An (unspaced) em dash or a spaced en dash can be used to mark a break in a sentence, and a pair can be used to set off a parenthetical statement. For example:Glitter, felt, yarn, and buttons—his kitchen looked as if a clown had exploded.A flock of sparrows—some of them juveniles—alighted and sang. Glitter, felt, yarn, and buttons – his kitchen looked as if a clown had exploded.A flock of sparrows – some of them juveniles – alighted and sang. An en dash, but not an em dash, indicates spans or differentiation, where it may replace "and", "to", or "through". For example:The French and Indian War (1754–1763) was fought in western Pennsylvania and along the present US–Canada border An em dash or horizontal bar, but not an en dash, is used to set off the source of a direct quotation. For example:Seven social sins: politics without principles, wealth without work, pleasure without conscience, knowledge without character, commerce without morality, science without humanity, and worship without sacrifice. A horizontal bar (also called quotation dash) or the em dash, but not the en dash, introduces quoted text. In informal contexts, a hyphen-minus (-) is often used as a substitute for an en dash, as is a pair of hyphen-minuses (--) for an em dash, because the hyphen-minus symbol is readily available on most keyboards. The autocorrection facility of word-processing software often corrects these to the typographically correct form of dash. == Figure dash == The figure dash ‒ (U+2012 ‒ FIGURE DASH) has the same width as a numerical digit. (Most fonts have digits of equal width.) It is used within numbers such as the phone number 555‒0199, especially in columns so as to maintain alignment. In contrast, the en dash – (U+2013 – EN DASH) is generally used for a range of values.The minus sign − (U+2212 − MINUS SIGN) glyph is generally set a little higher, so as to be level with the horizontal bar of the plus sign. In informal usage, the hyphen-minus - (U+002D - HYPHEN-MINUS), provided as standard on most keyboards, is often used instead of the figure dash. In TeX, the standard fonts have no figure dash; however, the digits normally all have the same width as the en dash, so an en dash can be a substitution for the figure dash. In XeLaTeX, one can use \char"2012. The Linux Libertine font also has the figure dash glyph. == En dash == The en dash, en rule, or nut dash – is traditionally half the width of an em dash. In modern fonts, the length of the en dash is not standardized, and the en dash is often more than half the width of the em dash. The widths of en and em dashes have also been specified as being equal to those of the upper-case letters N and M, respectively, and at other times to the widths of the lower-case letters. === Usage === The three main uses of the en dash are to connect symmetric items, such as the two ends of a range or two competitors or alternatives to contrast values or illustrate a relationship between two things to compound attributes, where one of the connected items is itself a compound ==== Ranges of values ==== The en dash is commonly used to indicate a closed range of values – a range with clearly defined and finite upper and lower boundaries – roughly signifying what might otherwise be communicated by the word "through" in American English, or "to" in International English. This may include ranges such as those between dates, times, or numbers. Various style guides restrict this range indication style to only parenthetical or tabular matter, requiring "to" or "through" in running text. Preference for hyphen vs. en dash in ranges varies. For example, the APA style (named after the American Psychological Association) uses an en dash in ranges, but the AMA style (named after the American Medical Association) uses a hyphen: Some style guides (including the Guide for the Use of the International System of Units (SI) and the AMA Manual of Style) recommend that, when a number range might be misconstrued as subtraction, the word "to" should be used instead of an en dash. For example, "a voltage of 50 V to 100 V" is preferable to using "a voltage of 50–100 V". Relatedly, in ranges that include negative numbers, "to" is used to avoid ambiguity or awkwardness (for example, "temperatures ranged from −18 °C to −34 °C"). It is also considered poor style (best avoided) to use the en dash in place of the words "to" or "and" in phrases that follow the forms from X to Y and between X and Y. ==== Relationships and connections ==== The en dash is used to contrast values or illustrate a relationship between two things. Examples of this usage include: Australia beat American Samoa 31–0. Radical–Unionist coalition Boston–Hartford route New York–London flight (however, it may be argued that New York–to-London flight is more appropriate because New York is a single name composed of two valid words; with a single en dash, the phrase is ambiguous and could mean either Flight from New York to London or New flight from York to London; such ambiguity is assuaged when used mid-sentence, though, because of the capital N in "New" indicating it is a special noun). If dash–hyphen use becomes too unwieldy or difficult to understand, the sentence can be rephrased for clarity and readability; for example, "The flight from New York to London was a pleasant experience". Mother–daughter relationship The Supreme Court voted 5–4 to uphold the decision.A distinction is often made between "simple" attributive compounds (written with a hyphen) and other subtypes (written with an en dash); at least one authority considers name pairs, where the paired elements carry equal weight, as in the Taft–Hartley Act to be "simple", while others consider an en dash appropriate in instances such as these to represent the parallel relationship, as in the McCain–Feingold bill or Bose–Einstein statistics. When an act of the U.S. Congress is named using the surnames of the senator and representative who sponsored it, the hyphen-minus is used in the short title; thus, the short title of Public Law 111–203 is "The Dodd-Frank Wall Street Reform and Consumer Protection Act", with a hyphen-minus rather than an en dash between "Dodd" and "Frank". However, there is a difference between something named for a parallel/coordinate relationship between two people – for example, Satyendra Nath Bose and Albert Einstein – and something named for a single person who had a compound surname, which may be written with a hyphen or a space but not an en dash – for example, the Lennard-Jones potential [hyphen] is named after one person (John Lennard-Jones), as are Bence Jones proteins and Hughlings Jackson syndrome. Copyeditors use dictionaries (general, medical, biographical, and geographical) to confirm the eponymity (and thus the styling) for specific terms, given that no one can know them all offhand. Preference for an en dash instead of a hyphen in these coordinate/relationship/connection types of terms is a matter of style, not inherent orthographic "correctness"; both are equally "correct", and each is the preferred style in some style guides. For example, the American Heritage Dictionary of the English Language, the AMA Manual of Style, and Dorland's medical reference works use hyphens, not en dashes, in coordinate terms (such as "blood-brain barrier"), in eponyms (such as "Cheyne-Stokes respiration", "Kaplan-Meier method"), and so on. ==== Attributive compounds ==== In English, the en dash is usually used instead of a hyphen in compound (phrasal) attributives in which one or both elements is itself a compound, especially when the compound element is an open compound, meaning it is not itself hyphenated. This manner of usage may include such examples as: The hospital–nursing home connection (the connection between the hospital and the nursing home, not a home connection between the hospital and nursing) A nursing home–home care policy (a policy about the nursing home and home care) Pre–Civil War era Pulitzer Prize–winning novel New York–style pizza The non–San Francisco part of the world The post–World War II era (Compare post-war era, which, if not fully compounded (postwar), takes a hyphen, not an en dash. The difference is that war is not an open compound, whereas World War II is.) Trans–New Guinea languages The ex–prime minister a long–focal length camera water ice–based bedrock The pro-conscription–anti-conscription debate Public-school–private-school rivalriesThe disambiguating value of the en dash in these patterns was illustrated by Strunk and White in The Elements of Style with the following example: When Chattanooga News and Chattanooga Free Press merged, the joint company was inaptly named Chattanooga News-Free Press (using a hyphen), which could be interpreted as meaning that their newspapers were news-free.An exception to the use of en dashes is usually made when prefixing an already-hyphenated compound; an en dash is generally avoided as a distraction in this case. Examples of this include: non-English-speaking air traffic controllers semi-labor-intensive industries Proto-Indo-European language The post-MS-DOS era non-government-owned corporationsAn en dash can be retained to avoid ambiguity, but whether any ambiguity is plausible is a judgment call. AMA style retains the en dashes in the following examples: non–self-governing non–English-language journals non–group-specific blood non–Q-wave myocardial infarction non–brain-injured subjects ==== Differing recommendations ==== As discussed above, the en dash is sometimes recommended instead of a hyphen in compound adjectives where neither part of the adjective modifies the other—that is, when each modifies the noun, as in love–hate relationship. The Chicago Manual of Style (CMOS), however, limits the use of the en dash to two main purposes: First, use it to indicate ranges of time, money, or other amounts, or in certain other cases where it replaces the word "to". Second, use it in place of a hyphen in a compound adjective when one of the elements of the adjective is an open compound, or when two or more of its elements are compounds, open or hyphenated.That is, the CMOS favors hyphens in instances where some other guides suggest en dashes, with the 16th edition explaining that "Chicago's sense of the en dash does not extend to between", to rule out its use in "US–Canadian relations".In these two uses, en dashes normally do not have spaces around them. Some make an exception when they believe avoiding spaces may cause confusion or look odd. For example, compare "12 June – 3 July" with "12 June–3 July". However, other authorities disagree and state there should be no space between an en dash and adjacent text. These authorities would not use a space in, for example, "11:00 a.m.⁠–⁠1:00 p.m." or "July 9–August 17". ==== Parenthetic and other uses at the sentence level ==== En dashes can be used instead of pairs of commas that mark off a nested clause or phrase. They can also be used around parenthetical expressions – such as this one – rather than the em dashes preferred by some publishers.The en dash can also signify a rhetorical pause. For example, an opinion piece from The Guardian is entitled: Who is to blame for the sweltering weather? My kids say it's boomers – and meIn these situations, en dashes must have a single space on each side. ===== Itemization mark ===== Either the en dash or the em dash may be used as a bullet at the start of each item in a bulleted list. (This is a matter of graphic design rather than orthography.) === Typography === ==== Spacing ==== In most uses of en dashes, such as when used in indicating ranges, they are closed up to the joined words. It is only when en dashes are used in setting off parenthetical expressions – such as this one – that they take spaces around them. For more on the choice of em versus en in this context, see En dash versus em dash. ==== Encoding and substitution ==== When an en dash is unavailable in a particular character encoding environment—as in the ASCII character set—there are some conventional substitutions. Often two consecutive hyphens are the substitute. The en dash is encoded in Unicode as U+2013 (decimal 8211) and represented in HTML by the named character entity –. The en dash is sometimes used as a substitute for the minus sign, when the minus sign character is not available since the en dash is usually the same width as a plus sign and is often available when the minus sign is not; see below. For example, the original 8-bit Macintosh Character Set had an en dash, useful for the minus sign, years before Unicode with a dedicated minus sign was available. The hyphen-minus is usually too narrow to make a typographically acceptable minus sign. However, the en dash cannot be used for a minus sign in programming languages because the syntax usually requires a hyphen-minus. == Em dash == The em dash, em rule, or mutton dash — is longer than an en dash. The character is called an em dash because it is one em wide, a length that varies depending on the font size. One em is the same length as the font's height (which is typically measured in points). So in 9-point type, an em dash is nine points wide, while in 24-point type the em dash is 24 points wide. By comparison, the en dash, with its 1 en width, is in most fonts either a half-em wide or the width of an upper-case "N".The em dash is encoded in Unicode as U+2014 (decimal 8212) and represented in HTML by the named character entity —. === Usage === The em dash is used in several ways. It is primarily used in places where a set of parentheses or a colon might otherwise be used, and it can also show an abrupt change in thought (or an interruption in speech) or be used where a full stop (period) is too strong and a comma is too weak. Em dashes are also used to set off summaries or definitions. Common uses and definitions are cited below with examples. ==== Colon-like use ==== ===== Simple equivalence (or near-equivalence) of colon and em dash ===== Three alkali metals are the usual substituents: sodium, potassium, and lithium. Three alkali metals are the usual substituents—sodium, potassium, and lithium. ===== Inversion of the function of a colon ===== These are the colors of the flag: red, white, and blue. Red, white, and blue—these are the colors of the flag. ==== Parenthesis-like use ==== ===== Simple equivalence (or near-equivalence) of paired parenthetical marks ===== Compare parentheses with em dashes: Three alkali metals (sodium, potassium, and lithium) are the usual substituents. Three alkali metals—sodium, potassium, and lithium—are the usual substituents. Compare commas, em dashes and parentheses (respectively) when no internal commas intervene: The food, which was delicious, reminded me of home. The food—which was delicious—reminded me of home. The food (which was delicious) reminded me of home. ===== Subtle differences in punctuation ===== It may indicate an interpolation stronger than that demarcated by parentheses, as in the following from Nicholson Baker's The Mezzanine (the degree of difference is subjective). "At that age I once stabbed my best friend, Fred, with a pair of pinking shears in the base of the neck, enraged because he had been given the comprehensive sixty-four-crayon Crayola box—including the gold and silver crayons—and would not let me look closely at the box to see how Crayola had stabilized the built-in crayon sharpener under the tiers of crayons." ==== Interruption of a speaker ==== ===== Interruption by someone else ===== "But I'm trying to explain that I—" "I'm aware of your mitigating circumstances, but your negative attitude was excessive."In a related use, it may visually indicate the shift between speakers when they overlap in speech. For example, the em dash is used this way in Joseph Heller's Catch-22: He was Cain, Ulysses, the Flying Dutchman; he was Lot in Sodom, Deirdre of the Sorrows, Sweeney in the nightingales among trees. He was the miracle ingredient Z-147. He was— "Crazy!" Clevinger interrupted, shrieking. "That's what you are! Crazy!""—immense. I'm a real, slam-bang, honest-to-goodness, three-fisted humdinger. I'm a bona fide supraman." ===== Self-interruption ===== Simple revision of a statement as one's thoughts evolve on the fly: "I believe I shall—no, I'm going to do it." Contemplative or emotional trailing off (usually in dialogue or in first person narrative): "I sense something; a presence I've not felt since—" in Star Wars Episode IV: A New Hope. "Get out or else—"Either an ellipsis or an em dash can indicate aposiopesis, the rhetorical device by which a sentence is stopped short not because of interruption, but because the speaker is too emotional or pensive to continue. Because the ellipsis is the more common choice, an em dash for this purpose may be ambiguous in expository text, as many readers would assume interruption, although it may be used to indicate great emotion in dramatic monologue.Long pause: In Early Modern English texts and afterward, em dashes have been used to add long pauses (as noted in Joseph Robertson's 1785 An Essay On Punctuation):Lord Cardinal! if thou think'st on heaven's bliss, Hold up thy hand, make signal of that hope.— He dies, and makes no sign! ==== Quotation ==== ===== Quotation mark–like use ===== This is a quotation dash. It may be distinct from an em dash in its coding (see horizontal bar). It may be used to indicate turns in a dialogue, in which case each dash starts a paragraph. It replaces other quotation marks and was preferred by authors such as James Joyce: ―O saints above! miss Douce said, sighed above her jumping rose. I wished I hadn't laughed so much. I feel all wet. ―O, miss Douce! miss Kennedy protested. You horrid thing! ===== Attribution of quote source ===== Inline quotes: A penny saved is a penny earned. — Benjamin Franklin Block quotes: ==== Redaction ==== An em dash may be used to indicate omitted letters in a word redacted to an initial or single letter or to fillet a word, by leaving the start and end letters whilst replacing the middle letters with a dash or dashes (for censorship or simply data anonymization). It may also censor the end letter. In this use, it is sometimes doubled. It was alleged that D⸺ had been threatened with blackmail.Three em dashes might be used to indicate a completely missing word. ==== Itemization mark ==== Either the en dash or the em dash may be used as a bullet at the start of each item in a bulleted list, but a plain hyphen is more commonly used. ==== Repetition ==== Three em dashes one after another can be used in a footnote, endnote, or another form of bibliographic entry to indicate repetition of the same author's name as that of the previous work, which is similar to the use of id. === Typographic details === ==== Spacing and substitution ==== According to most American sources (such as The Chicago Manual of Style) and some British sources (such as The Oxford Guide to Style), an em dash should always be set closed, meaning it should not be surrounded by spaces. But the practice in some parts of the English-speaking world, including the style recommended by The New York Times Manual of Style and Usage for printed newspapers and the AP Stylebook, sets it open, separating it from its surrounding words by using spaces or hair spaces (U+200A) when it is being used parenthetically. The AP Stylebook rejects the use of the open em dash to set off introductory items in lists. However, the "space, en dash, space" sequence is the predominant style in German and French typography. (See En dash versus em dash below.) In Canada, The Canadian Style: A Guide to Writing and Editing, The Oxford Canadian A to Z of Grammar, Spelling & Punctuation: Guide to Canadian English Usage (2nd ed.), Editing Canadian English, and the Canadian Oxford Dictionary all specify that an em dash should be set closed when used between words, a word and numeral, or two numerals. The Australian government's Style Manual for Authors, Editors and Printers (6th ed.), also specifies that em dashes inserted between words, a word and numeral, or two numerals, should be set closed. A section on the 2-em rule (⸺) also explains that the 2-em can be used to mark an abrupt break in direct or reported speech, but a space is used before the 2-em if a complete word is missing, while no space is used if part of a word exists before the sudden break. Two examples of this are as follows: I distinctly heard him say, "Go away or I'll ⸺". It was alleged that D⸺ had been threatened with blackmail. ==== Approximating the em dash with two or three hyphens ==== When an em dash is unavailable in a particular character encoding environment—as in the ASCII character set—it has usually been approximated as consecutive double (--) or triple (---) hyphen-minuses. The two-hyphen em dash proxy is perhaps more common, being a widespread convention in the typewriting era. (It is still described for hard copy manuscript preparation in the Chicago Manual of Style as of the 16th edition, although the manual conveys that typewritten manuscript and copyediting on paper are now dated practices.) The three-hyphen em dash proxy was popular with various publishers because the sequence of one, two, or three hyphens could then correspond to the hyphen, en dash, and em dash, respectively. Because early comic book letterers were not aware of the typographic convention of replacing a typewritten double hyphen with an em dash, the double hyphen became traditional in American comics. This practice has continued despite the development of computer lettering. == En dash versus em dash == The en dash is wider than the hyphen but not as wide as the em dash. An em width is defined as the point size of the currently used font, since the M character is not always the width of the point size. In running text, various dash conventions are employed: an em dash—like so—or a spaced em dash — like so — or a spaced en dash – like so – can be seen in contemporary publications. Various style guides and national varieties of languages prescribe different guidance on dashes. Dashes have been cited as being treated differently in the US and the UK, with the former preferring the use of an em dash with no additional spacing and the latter preferring a spaced en dash. As examples of the US style, The Chicago Manual of Style and The Publication Manual of the American Psychological Association recommend unspaced em dashes. Style guides outside the US are more variable. For example, The Elements of Typographic Style by Canadian typographer Robert Bringhurst recommends the spaced en dash – like so – and argues that the length and visual magnitude of an em dash "belongs to the padded and corseted aesthetic of Victorian typography". In the United Kingdom, the spaced en dash is the house style for certain major publishers, including the Penguin Group, the Cambridge University Press, and Routledge. However, this convention is not universal. The Oxford Guide to Style (2002, section 5.10.10) acknowledges that the spaced en dash is used by "other British publishers" but states that the Oxford University Press, like "most US publishers", uses the unspaced em dash. The en dash – always with spaces in running text when, as discussed in this section, indicating a parenthesis or pause – and the spaced em dash both have a certain technical advantage over the unspaced em dash. Most typesetting and word processing expects word spacing to vary to support full justification. Alone among punctuation that marks pauses or logical relations in text, the unspaced em dash disables this for the words it falls between. This can cause uneven spacing in the text, but can be mitigated by the use of thin spaces, hair spaces, or even zero-width spaces on the sides of the em dash. This provides the appearance of an unspaced em dash, but allows the words and dashes to break between lines. The spaced em dash risks introducing excessive separation of words. In full justification, the adjacent spaces may be stretched, and the separation of words further exaggerated. En dashes may also be preferred to em dashes when text is set in narrow columns, such as in newspapers and similar publications, since the en dash is smaller. In such cases, its use is based purely on space considerations and is not necessarily related to other typographical concerns. On the other hand, a spaced en dash may be ambiguous when it is also used for ranges, for example, in dates or between geographical locations with internal spaces. == Horizontal bar == The horizontal bar (U+2015 ― ), also known as a quotation dash, is used to introduce quoted text. This is the standard method of printing dialogue in some languages. The em dash is equally suitable if the quotation dash is unavailable or is contrary to the house style being used. There is no support in the standard TeX fonts, but one can use \hbox{---}\kern-.5em--- or an em dash. == Swung dash == The swung dash (U+2053 ⁓ ) resembles a lengthened tilde and is used to separate alternatives or approximates. In dictionaries, it is frequently used to stand in for the term being defined. A dictionary entry providing an example for the term henceforth might employ the swung dash as follows: henceforth (adv.) from this time forth; from now on; "⁓ she will be known as Mrs. Wales" == Typing the characters == Typewriters and computers often have no key that produces a dash. In consequence, it became common to use the hyphen. It is common for a single hyphen surrounded by spaces to represent an en dash, and for two hyphens to represent an em dash. (A hyphen surrounded by other characters is a hyphen, with a space before it or with digits it is a minus sign.) Modern word-processing software typically has support for many more characters and is usually capable of rendering both the en and em dashes correctly—albeit sometimes with an inconvenient input method. Techniques for generating em and en dashes in various operating systems, word processors and markup languages are provided in the following table: == Unicode == == In other languages == In many languages, such as Polish, the em dash is used as an opening quotation mark. There is no matching closing quotation mark; typically a new paragraph will be started, introduced by a dash, for each turn in the dialogue.Corpus studies indicate that em dashes are more commonly used in Russian than in English. In Russian, the em dash is used for the present copula (meaning 'am/is/are'), which is unpronounced in spoken Russian. In French, em or en dashes can be used as parentheses (brackets), but the use of a second dash as a closing parenthesis is optional. When a closing dash is not used, the sentence is ended with a period (full-stop) as usual. Dashes are, however, much less common than parentheses.In Spanish, em dashes can be used to mark off parenthetical phrases. Unlike in English, the em dashes are spaced like brackets, i.e., there is a space between main sentence and dash, but not between parenthetical phrase and dash. For example: "Llevaba la fidelidad a su maestro —un buen profesor— hasta extremos insospechados." ('He took his loyalty to his teacher —a good teacher— to unsuspected extremes.') == See also == Leiden Conventions – rules to indicate conditions in texts (usage of "[— — —]") Signature dashes – signature delimiter in emails (usage of "-- " in a single line) Whitespace characters – spaces of equivalent sizes to dashes == Explanatory notes == == References == == External links == Wiktionary list of English phrases with em dash Dashes and Hyphens Commonly confused characters
MazaCoin	MazaCoin (Maza, MZC) is a cryptocurrency launched in 2014. == History == MazaCoin was developed by Payu Harris in 2014. MazaCoin was specifically designed for the Oglala Lakota tribe in South Dakota. Some Native Americans adopted the use of MazaCoin to battle the US Government.In October 2017, a Mashable article on the Oglala Lakota included a video about Harris's efforts to get MazaCoin accepted. == Recognition and use == The currency was adopted by the Lakota Nation in 2014, with half of its supply reserved by the tribe to minimize the price volatility common in cryptocurrencies.In 2017, The Lakota leadership formally recognized MazaCoin as their national currency, yet this decision encountered skepticism within the community. The concept of digital currencies, heavily reliant on technology such as apps and smartphones, was less accessible to older generations and those without consistent internet access. To counteract this, a system of paper wallets was developed, allowing MazaCoin to be stored and used in a more traditional, physical format. This system allowed tribal members to use MazaCoin in physical form for transactions within the community, converting it back to digital format at the centralized facility. == References == == Further reading == Indigenous cryptocurrency: Affective capitalism and rhetorics of sovereignty in First Monday (3 October 2016, Volume 21, Number 10) by Cindy Tekobbe and John Carter McKnight Decolonization in a Digital Age: Cryptocurrencies and Indigenous Self-Determination in Canada in Canadian Journal of Law and Society (1 April 2017, Volume 32, Issue 1, pp. 19-35) by Christopher Alcantara and Caroline Dick == External links == Official website
Monero	Monero (; Abbreviation: XMR) is a cryptocurrency which uses a blockchain with privacy-enhancing technologies to obfuscate transactions to achieve anonymity and fungibility. Observers cannot decipher addresses trading Monero, transaction amounts, address balances, or transaction histories.The protocol is open source and based on CryptoNote, a concept described in a 2013 white paper authored by Nicolas van Saberhagen. Developers used this concept to design Monero, and deployed its mainnet in 2014. The Monero protocol includes various methods to obfuscate transaction details, though users can optionally share view keys for third-party auditing. Transactions are validated through a miner network running RandomX, a proof-of-work algorithm. The algorithm issues new coins to miners and was designed to be resistant to application-specific integrated circuit (ASIC) mining. Monero's privacy features have attracted cypherpunks and users desiring privacy measures not provided in other cryptocurrencies. It is used in illicit activities such as money laundering, darknet markets, ransomware, cryptojacking, and other organized crime. The United States Internal Revenue Service (IRS) has posted bounties for contractors that can develop Monero-tracing technologies. == Background == Monero's roots can be traced back to CryptoNote, a cryptocurrency protocol first described in a white paper published by Nicolas van Saberhagen (presumed pseudonymous) in October 2013. The author described privacy and anonymity as "the most important aspects of electronic cash" and called bitcoin's traceability a "critical flaw". A Bitcointalk forum user "thankful_for_today" coded these ideas into a coin they dubbed BitMonero. Other forum users disagreed with thankful_for_today's direction for BitMonero, so forked it in 2014 to create Monero. Monero translates to coin in Esperanto. Both van Saberhagen and thankful_for_today remain anonymous.Monero has the third-largest community of developers, behind bitcoin and Ethereum. The protocol's lead maintainer was previously South African developer Riccardo Spagni. Much of the core development team chooses to remain anonymous.Improvements to Monero's protocol and features are, in part, the task of the Monero Research Lab (MRL), some of whom are anonymous. == Privacy == Monero's key features are those around privacy and anonymity. Even though it is a public and decentralized ledger, all transaction details are obfuscated. This contrasts to bitcoin, where all transaction details, user addresses, and wallet balances are public and transparent. These features have given Monero a loyal following among crypto anarchists, cypherpunks, and privacy advocates.The transaction outputs, or notes, of users sending Monero are obfuscated through ring signatures, which groups a sender's outputs with other decoy outputs. Encryption of transaction amounts began in 2017 with the implementation of ring confidential transactions (RingCTs). Developers also implemented a zero-knowledge proof method, "Bulletproofs", which guarantee a transaction occurred without revealing its value. Monero recipients are protected through "stealth addresses", addresses generated by users to receive funds, but untraceable to an owner by a network observer. These privacy features are enforced on the network by default.Monero uses Dandelion++, a protocol which obscures the IP address of devices producing transactions. This is done through a method of transaction broadcast propagation; new transactions are initially passed to one node on Monero's peer-to-peer network, and a repeated probabilistic method is used to determine when the transaction should be sent to just one node or broadcast to many nodes in a process called flooding. === Efforts to trace transactions === In April 2017, researchers highlighted three major threats to Monero users' privacy. The first relies on leveraging the ring signature size of zero, and ability to see the output amounts. The second, "Leveraging Output Merging", involves tracking transactions where two outputs belong to the same user, such as when they send funds to themselves ("churning"). Finally, "Temporal Analysis", shows that predicting the right output in a ring signature could potentially be easier than previously thought. According to a blog post from Monero developers, they had already addressed the first concern with the introduction of RingCTs in January 2017, as well as mandating a minimum size of ring signatures in March 2016. In 2018, researchers presented possible vulnerabilities in a paper titled "An Empirical Analysis of Traceability in the Monero Blockchain".In September 2020, the United States Internal Revenue Service's criminal investigation division (IRS-CI), posted a $625,000 bounty for contractors who could develop tools to help trace Monero, other privacy-enhanced cryptocurrencies, the Bitcoin Lightning Network, or other "layer 2" protocols. The contract was awarded to blockchain analysis groups Chainalysis and Integra FEC. == Mining == Monero uses a proof-of-work algorithm, RandomX, to validate transactions. The method was introduced in November 2019 to replace the former algorithm CryptoNightR. Both algorithms were designed to be resistant to ASIC mining, which is commonly used to mine other cryptocurrencies such as Bitcoin. Monero can be mined somewhat efficiently on consumer-grade hardware such as x86, x86-64, ARM and GPUs, a design decision which was based on Monero project's opposition to mining centralisation which ASIC mining creates, but has also resulted in Monero's popularity among malware-based non-consensual miners. == Illicit use == Monero's privacy features have made it popular for illicit purposes. === Darknet markets === Monero is a common medium of exchange on darknet markets. In August 2016, dark market AlphaBay permitted its vendors to start accepting Monero as an alternative to bitcoin. The site was taken offline by law enforcement in 2017, but it was relaunched in 2021 with Monero as the sole permitted currency. Reuters reported in 2019 that three of the five largest darknet markets accepted Monero, though bitcoin was still the most widely used form of payment in those markets. === Mining malware === Hackers have embedded malware into websites and applications that hijack victim CPUs to mine Monero (sometimes called cryptojacking). In late 2017, malware and antivirus service providers blocked Coinhive, a JavaScript implementation of a Monero miner that was embedded in websites and apps, in some cases by hackers. Coinhive generated the script as an alternative to advertisements; a website or app could embed it, and use website visitor's CPU to mine the cryptocurrency while the visitor is consuming the content of the webpage, with the site or app owner getting a percentage of the mined coins. Some websites and apps did this without informing visitors, or in some cases using all possible system resources. As a result, the script was blocked by companies offering ad blocking subscription lists, antivirus services, and antimalware services. Coinhive had been previously found hidden in Showtime-owned streaming platforms and Starbucks Wi-Fi hotspots in Argentina. Researchers in 2018 found similar malware that mined Monero and sent it to Kim Il-sung University in North Korea. === Ransomware === Monero is sometimes used by ransomware groups. According to CNBC, in the first half of 2018, Monero was used in 44% of cryptocurrency ransomware attacks.The perpetrators of the 2017 WannaCry ransomware attack, which was attributed by the US government to North Korean threat actors, attempted to exchange the ransom they collected in Bitcoin to Monero. Ars Technica and Fast Company reported that the exchange was successful, but BBC News reported that the service the criminals attempted to use, ShapeShift, denied any such transfer. The Shadow Brokers, who leaked the exploits which were subsequently used in WannaCry but are unlikely to have been involved in the attack, began accepting Monero as payment later in 2017.In 2021, CNBC, the Financial Times, and Newsweek reported that demand for Monero was increasing following the recovery of a bitcoin ransom paid in the Colonial Pipeline cyber attack. The May 2021 hack forced the pipeline to pay a $4.4M ransom in bitcoin, though a large portion was recovered by the United States federal government the following month. The group behind the attack, DarkSide, normally requests payment in either bitcoin or Monero, but charge a 10–20% premium for payments made in bitcoin due to its increased traceability risk. Ransomware group REvil removed the option of paying ransom in bitcoin in 2021, demanding only Monero. Ransomware negotiators, groups that help victims pay ransoms, have contacted Monero developers to understand the technology. Despite this, CNBC reported that bitcoin was still the currency of choice demanded in most ransomware attacks, as insurers refuse to pay Monero ransom payments because of traceability concerns. === Regulatory responses === The attribution of Monero to illicit markets has influenced some exchanges to forgo listing it. This has made it more difficult for users to exchange Monero for fiat currencies or other cryptocurrencies. Exchanges in South Korea and Australia have delisted Monero and other privacy coins due to regulatory pressure.In 2018, Europol and its director Rob Wainwright wrote that the year would see criminals shift from using bitcoin to using Monero, as well as Ethereum, Dash, and Zcash. Bloomberg and CNN reported that this demand for Monero was because authorities were becoming better at monitoring the Bitcoin blockchain. == Publicity == After many online payment platforms shut down access for white nationalists following the Unite the Right rally in 2017, some of them, including Christopher Cantwell and Andrew Auernheimer ("weev"), started using and promoting Monero. In December 2017, the Monero team announced a partnership with 35 musicians for Monero to be used as a form of payment for their online stores. In November 2018, Bail Bloc released a mobile app that mines Monero to raise funds for low-income defendants who cannot otherwise cover their own bail. In April 2020, the Monero Film Workgroup released Monero Means Money: Cryptocurrency 101, Live from Leipzig, a documentary feature film that was the second highest grossing film in the United States for the weekend of April 10, 2020 according to The Numbers (when theaters were shutdown due to the COVID-19 pandemic). Proceeds of the film went to independent theaters. == See also == CryptoNote == References == == External links == Official website Github repository
Titcoin	Titcoin (Ticker Symbol: TIT) is a cryptocurrency launched in 2014. Titcoin's blockchain is derived from the Bitcoin source code, with modifications to improve transaction speed and efficiency. Titcoin is intended for the adult entertainment industry to allow users to pay for adult products and services without the fear of incriminating payment histories appearing on their credit cards.In 2015, Titcoin received two nominations at the 2015 XBIZ Awards. == History == Titcoin was founded by Edward Mansfield, Richard Allen, and a third anonymous individual. The founders developed Titcoin for the adult entertainment industry as a cash alternative payment system for performing anonymous transactions.On June 21, 2014, the Titcoin cryptocurrency wallet and source code was released with an initial soft launch for the cryptocurrency community followed by a hard launch for the public.In September 2014, Patrick McDonnell joined the Titcoin development team as a business development advisor.On May 29, 2017, Titcoin and its properties were acquired by the adult game development studio Joy-Toilet.On September 5, 2018, Titcoin and its assets were acquired by the TittieCoin Developers. == References == == External links == Official Website
Verge	Verge, Le Verge, Vergé or The Verge may refer to: == People == David Vergé Jack Verge (died 1915), Australian rugby union player John Verge (1782–1861), English architect, builder and pioneer settler of New South Wales, Australia Lynn Verge (born c. 1951), Canadian lawyer and politician Marianne Le Verge (born 1979), French former swimmer who competed in the 1996 Summer Olympics Roger Vergé (1930–2015), French chef and restaurateur Wade Verge, 21st century Canadian politician William E. Verge (1901–1973), United States Navy rear admiral == Music == Verge (album), musical compilation album by I've Sound The Verge (album), a 2011 album by the band There for Tomorrow "Verge" (song), a 2015 song by Owl City Verge music festival == Media == The Verge (XM), a Canadian satellite radio station The Verge, a technology news network The Verge, a live videogame news and review TV programme on Vuzu in South Africa == Other uses == Verge (cryptocurrency), a secure and anonymous cryptocurrency Verge, the jurisdiction of the Marshalsea Court Verge or virge, a ceremonial rod Road verge, a strip of grass or other vegetation beside a road The Verge, Singapore, a shopping mall in Singapore Verge Rocks, Graham Land, Antarctica Verge escapement, a clock escapement mechanism Verge3D, a 3D web authoring software Verge (royal court) an area of special legal jurisdiction around the English royal court == See also == On the Verge (disambiguation) Verges (disambiguation)
Stellar	Stellar means anything related to one or more stars (stella). The term may also refer to: == Arts, entertainment, and media == Stellar (magazine), an Irish lifestyle and fashion magazine Stellar Loussier, a character from Mobile Suit Gundam SEED Destiny Dr. Stellar, a Big Bang Comics superhero Stellar 7, a game for the Apple II computer system Stellar (film), a Canadian film === Music === Stellar (group), a South Korean girl group Stellar (New Zealand band), a New Zealand-based rock band Stellar (musical artist), an American singer, songwriter, and producer "Stellar" (song), a 2000 song by Incubus Stellar Awards, awards for the gospel music industry == Brands and enterprises == Stellar (payment network), a system for sending money through the internet Stellar Group (construction company), a construction company in Florida, United States Hasselblad Stellar, a compact digital camera Hyundai Stellar, an automobile model O2 XDA Stellar, an HTC mobile phone == Other uses == Stellar Airpark, an airport near Chandler, Arizona, United States Stellar Charter School, a school in Redding, California, United States Eliot Stellar (1919–1993), American psychologist == See also == List of stellar properties, links to astrophysics pages with the word stellar All pages with titles beginning with Stellar All pages with titles containing Stellar Star or stellum Stella (disambiguation) Stellar II (disambiguation) Stellaris (disambiguation)
Vertcoin	Vertcoin (Abbreviation: VTC) is an open-source cryptocurrency created in early 2014, that focuses on decentralization. Vertcoin uses an ASIC resistant proof-of-work mechanism to issue new coins and incentivize miners to secure the network and validate transactions. Vertcoin's blockchain is maintained by a decentralized coalition of individuals collectively mining using modern graphics cards. == History == Vertcoin aims to be decentralized by being difficult to mine using dedicated processors, known as ASICs. Vertcoin is open source and has a 2.5-minute block time.TechRadar's Jonas Muro wrote in 2018, that two reasons, among others, made Vertcoin "popula[r]". One reason is that there is little friction for new users who can use "one-click software" to mine. Another reason is that people are very involved in Vertcoin on social media. NBC News's Ben Popken noted in 2018, that Vertcoin has received significant attention on Reddit and that its "soaring popularity over the last year" is owing to its being impervious to the specialized machines known as ASICs which are similarly being used to have heavy influence over Bitcoin. Though a December 2018 paper published in The Transactions of the Korean Institute of Electrical Engineers said that "because [Vertcoin] is not a very popular blockchain, the difficulty adjustment algorithm is very sensitive to hash rate change, making it an easy target to timestamp spoofing and cherry-picking attack."From October through December 2018, Vertcoin suffered from 51% attacks.In response, Vertcoin changed its proof-of-work algorithm to Lyra2REv3 before suffering from another 51% attack on December 1, 2019. == References == == External links == Official website
Jed McCaleb	Jed McCaleb is an American programmer, entrepreneur, and philanthropist. He is the founder and CEO of aerospace startup Vast and a co-founder and the CTO of Stellar. Prior to co-founding Stellar, McCaleb founded and served as the CTO of the company Ripple until 2013. McCaleb is also known for creating the Mt. Gox bitcoin exchange, and the peer-to-peer eDonkey and Overnet networks as well as the eDonkey2000 application. As of March 2023, McCaleb is worth US$2.4 billion according to Forbes' Billionaires List. == Early life and education == McCaleb was born in Fayetteville, Arkansas, and attended the University of California, Berkeley. He eventually dropped out and moved to New York City. == Career == In 2000, McCaleb founded MetaMachine Inc. and released his eDonkey2000 application. Sam Yagan joined him in 2001 and served as CEO of the company. McCaleb served as the CTO of the company and continued to develop the peer-to-peer eDonkey network as well as the Overnet network and the eDonkey2000 application. At its height, the network grew to have over 4 million active users at any given time. In September 2006, the company reached a settlement with the RIAA and agreed that the company and its top executives would "immediately cease distributing eDonkey, eDonkey2000, Overnet and other software versions" and the company would pay $30 million to the RIAA to avoid copyright infringement lawsuits.In 2007, he purchased the domain Mtgox.com with the intent to create a trading site for Magic: The Gathering cards. After moving on from his original idea, McCaleb repurposed the site in late 2010 as a bitcoin exchange that could process bitcoin-to-dollar trades. The website grew in popularity within months. McCaleb sold the company to Mark Karpelès in February 2011 and remained a minority owner in the company until its collapse in 2014.In 2011, McCaleb began developing a digital currency in which transactions were verified by consensus among network members which became known as the Ripple protocol, which differs from the mining technique used in bitcoin. He recruited David Schwartz and secured an investment from Jesse Powell before adding Arthur Britto as the chief strategist. McCaleb recruited Chris Larsen to be CEO of the new company, which became known as Opencoin. He continued development of the Ripple protocol and its currency while securing investments before McCaleb left his active role with the company in July 2013.In 2014, he co-founded the non-profit organization the Stellar Development Foundation with Joyce Kim to develop the Stellar open source protocol to allow cross-border monetary transactions including fiat and digital currencies. The organization debuted on July 31, 2014, and received $3 million loan from the technology company, Stripe. The organization originally based its payment network on the Ripple protocol McCaleb previously developed, but in 2015 adopted the Stellar Consensus Protocol. McCaleb serves as chief technology officer of Stellar.In May 2017, McCaleb also launched Lightyear.io, a commercial endeavor building on the Stellar network. Lightyear facilitates Stellar, becoming a global payment and currency exchange initially directed at the developing world. In October 2017, Lightyear partnered with IBM to launch blockchain banking in the South Pacific using Stellar's lumen currency. In September 2018, McCaleb negotiated the merger of Lightyear and Chain.com, creating the new merged entity named InterStellar.The New York Times named McCaleb one of the top 10 people leading the blockchain revolution in 2018.In 2021, McCaleb founded aerospace company Vast. Vast's announced mission is to develop artificial gravity space stations. As of 2023, McCaleb is Vast's CEO and sole funder. == Philanthropy == McCaleb donated US$500,000 worth of XRP (at the time of donation) to the Machine Intelligence Research Institute (MIRI), and remains one of its largest donors, as well as joining its advisory board. In February 2018, McCaleb was announced as a new donor to the artificial intelligence research group OpenAI. == References == == External links == Quotations related to Jed McCaleb at Wikiquote
Vitalik Buterin	Vitaly Dmitrievich Buterin (Russian: Вита́лий Дми́триевич Буте́рин), better known as Vitalik Buterin (Russian: Вита́лик Буте́рин, born 31 January 1994), is a Russian-Canadian computer programmer, and co-founder of Ethereum. Buterin became involved with cryptocurrency early in its inception, co-founding Bitcoin Magazine in 2011. In 2014, Buterin deployed the Ethereum blockchain with Gavin Wood, Charles Hoskinson, Anthony Di Iorio, and Joseph Lubin. == Early life and education == Buterin was born on 31 January 1994 in Russia, Kolomna, to a Russian family. His father Dmitry was a computer scientist. He and his parents lived in the area until the age of six, when his parents emigrated to Canada in search of better employment opportunities. While in grade three of elementary school in Canada, Buterin was placed into a class for gifted children and was drawn to mathematics, programming, and economics. Buterin then attended The Abelard School, a private high school in Toronto. Buterin learned about Bitcoin from his father, Dimitry Buterin, at the age of 17.After high school, Buterin attended the University of Waterloo. There, he took advanced courses and was a research assistant for cryptographer Ian Goldberg, who co-created Off-the-Record Messaging and was the former board of directors' chairman of the Tor Project. In 2012, Buterin won a bronze medal in the International Olympiad in Informatics in Italy.In 2013, he visited developers in other countries who shared his enthusiasm for code. He returned to Toronto later that year and published a white paper proposing Ethereum. He dropped out of university in 2014 when he was awarded with a grant of $100,000 from the Thiel Fellowship, a scholarship created by venture capitalist Peter Thiel and went to work on Ethereum full-time.On 30 November 2018, Buterin received an honorary doctorate from the Faculty of Business and Economics of the University of Basel. == Career == === Bitcoin Magazine === In 2011, Buterin began writing for a publication called Bitcoin Weekly after meeting a person on a bitcoin forum with the aim of earning bitcoin. The owner offered five bitcoin (about $3.50 at the time) to anyone who would write an article for him. Buterin wrote for the site until it shut down soon thereafter due to insufficient revenue. In September 2011, Mihai Alisie reached out to Buterin about starting a new print publication called Bitcoin Magazine, a position which Buterin would accept as the first co-founder and contribute to as a leading writer.Bitcoin Magazine in 2012 later began publishing a print edition and has been referred to as the first serious publication dedicated to cryptocurrencies. While working for Bitcoin Magazine, Buterin reached out to Jed McCaleb for a job at Ripple who accepted. However, their proposed employment fell apart after Ripple was unable to support a U.S. visa for Buterin.In addition, he held a position on the editorial board of Ledger in 2016, a peer-reviewed scholarly journal that publishes full-length original research articles on the subjects of cryptocurrency and blockchain technology. === Ethereum === Buterin is the inventor of Ethereum, described as a "decentralised mining network and software development platform rolled into one" that facilitates the creation of new cryptocurrencies and programs that share a single blockchain (a cryptographic transaction ledger).Buterin first described Ethereum in a white paper in November 2013. Buterin had argued that bitcoin needed a scripting language for application development. But when he failed to gain agreement, he proposed development of a new platform with a more general scripting language.: 88 The Ethereum white paper was circulated, and interest grew in the new protocol in late 2013 and early 2014. Buterin announced Ethereum more publicly at the North American Bitcoin Conference in Miami on 26 January. Buterin delivered a 25-minute speech, describing the general-purpose global computer operating on a decentralized permissionless network, ending with potential uses for Ethereum that ranged from crop insurance to decentralized exchanges to DAOs.: 92, 110–130 About the Ethereum Project, Buterin said in 2020: "I am truly grateful to have the opportunity to work in such an interesting and interdisciplinary area of industry, where I have the chance to interact with cryptographers, mathematicians and economists prominent in their fields, to help build software and tools that already affect tens of thousands of people around the world, and to work on advanced problems in computer science, economics and philosophy every week." However, in a 2018 New Yorker article, his father suggests that Buterin is trying to avoid the focus on him as the philosopher king of the blockchain world, stating "He is trying to focus his time on research. He's not too excited that the community assigns so much importance to him. He wants the community to be more resilient." Buterin has stated that he was driven to create decentralized money because his World of Warcraft character was nerfed, specifically by patch 3.1.0. He went on to say in his about.me bio:I happily played World of Warcraft during 2007–2010, but one day Blizzard removed the damage component from my beloved warlock's Siphon Life spell. I cried myself to sleep, and on that day I realized what horrors centralized services can bring. I soon decided to quit. === Open-source software === Buterin has contributed as a developer to other open-source software projects. He also contributed to DarkWallet by Cody Wilson, Bitcoin Python libraries, and the cryptocurrency marketplace site Egora. === Ethereum Russia === As Buterin was recognizing the economic and political relevance of the Ethereum enterprise for his native Russia, he met with President Vladimir Putin on 2 June 2017, at the St. Petersburg International Economic Forum (SPIEF). Putin stated that he "supported the idea of establishing ties with possible Russian partners". === Work with Glen Weyl === Buterin came into contact with economist Glen Weyl after tweeting about Weyl's proposal for a new wealth tax. The two then wrote a manifesto Liberation Through Radical Decentralization, where they highlighted the common ground between Buterin's work on cryptocurrencies and Weyl's work on market-based solutions to social problems. Collaborating with Zoe Hitzig, a PhD student at Harvard, they published a paper in 2019 entitled A Flexible Design for Funding Public Goods. The paper sets out a method for optimal provision of public goods, using a version of quadratic voting. As of August 2022, quadratic funding had been used to allocate over $20 million to open-source software projects, primarily through Gitcoin Grants. == Awards and recognition == Thiel Fellowship, 2014 World Technology Award in the IT Software category, 2014 Fortune 40 under 40 list, 2016 Forbes 30 under 30 list, 2018 Fortune the ledger 40 under 40 list, 2018 University of Basel Honorary doctorate, 2018 Time 100, 2021 == Philanthropy == Donation of $763,970 of Ether to the Machine Intelligence Research Institute in 2017.Donation of $2.4 million of Ether to the SENS Research Foundation in 2018, for the research on rejuvenation biotechnologies and human life extension.Donation of $50,000 to the SENS Research Foundation in 2020. Together with Sam Bankman-Fried and Haseeb Qureshi, a total of $150,000 was donated the SENS Research Foundation to combat aging and aging-related diseases at the choice of users of Twitter through open voting.Buterin donated $1.14 billion USD worth of SHIBA coins, which had previously been gifted to him, to India's Crypto Covid relief fund in 2021. This donation was 5% of the coin in circulation and caused a 50% crash in the price at the time.Donation of $336 million worth of Dogelon Mars ($ELON), which had previously been gifted to him, to the Methuselah Foundation, which focuses on extending human lifespan, on 12 May 2021. Buterin's donation of the memecoin caused a 70% drop in its value. === Philanthropic efforts against the 2022 Russian invasion of Ukraine === Since the 2022 Russian invasion of Ukraine, Buterin has spoken out against the incursion and supported Ukraine. On the first day of the invasion Buterin tweeted that "Ethereum is neutral, but I am not", and that the attack was a crime against both the Ukrainian and the Russian peoples. This was followed by a "go fuck yourself" ("иди на хуй") a few days later in response to a tweet by RT's editor-in-chief Margarita Simonyan. She claimed that people who said they were ashamed to be Russians because of Moscow's actions against Ukraine were, in fact, not Russians at all ("Если вам сейчас стыдно, что вы русские, не волнуйтесь, вы - не русские.").Buterin has donated crypto to projects supporting the country and endorsed projects helping Ukraine through "cryptophilanthropy". These include Ukraine DAO, in which his father Dmitry is one of the key-holders on its multi-signature crypto safe. == Books == Vitalik Buterin. Proof of Stake: The Making of Ethereum and the Philosophy of Blockchains. — Seven Stories Press, 2022. — С. 384. — ISBN 978-1644212486. == See also == List of University of Waterloo people List of people in blockchain technology List of transhumanists List of philanthropists == References == === Citations === === Works cited === Leising, Matthew (2020). Out of the Ether: the amazing story of Ethereum and the $55 million heist that almost destroyed it all. Wiley. ISBN 978-1-119-60293-4. Russo, Camila (14 July 2020). The infinite machine: how an army of crypto-hackers is building the next internet with Ethereum (First ed.). New York, NY. ISBN 978-0-06-288614-9.{{cite book}}: CS1 maint: location missing publisher (link) == External links == Official website
Ethereum Classic	Ethereum Classic is a blockchain-based distributed computing platform that offers smart contract (scripting) functionality. It is open source and supports a modified version of Nakamoto consensus via transaction-based state transitions executed on a public Ethereum Virtual Machine (EVM). Ethereum Classic maintains the original, unaltered history of the Ethereum network. The Ethereum project's mainnet was initially released via Frontier on 30 July 2015. However, due to a hack of a third-party project, The DAO, the Ethereum Foundation created a new version of the Ethereum mainnet on 20 July 2016 with an irregular state change implemented that erased the DAO theft from the Ethereum blockchain history. The Ethereum Foundation applied their trademark to the new, altered version of the Ethereum blockchain (code: ETH). The older, unaltered version of Ethereum was renamed and continued on as Ethereum Classic (code: ETC).Ethereum Classic's native Ether token is a cryptocurrency traded on digital currency exchanges under the currency code ETC. Ether is created as a reward to network nodes for a process known as "mining", which validates computations performed on Ethereum Classic's EVM. Implemented on 11 December 2017, the current ETC monetary policy seeks the same goals as bitcoin: being mechanical, algorithmic, and capped. ETC can be exchanged for network transaction fees or other assets, commodities, currencies, products, and services. Ethereum Classic provides a decentralized Turing-complete virtual machine, the Ethereum Virtual Machine (EVM), which can execute scripts using an international network of public nodes. The virtual machine's instruction set is Turing-complete, in contrast to others like Bitcoin Script. Gas, an internal transaction pricing mechanism, is used to mitigate spam and allocate resources on the network. == Milestones == === Frontier === Several codenamed prototypes of the Ethereum platform were developed by the Ethereum Foundation, as part of their proof-of-concept series, prior to the official launch of the Frontier network. Ethereum Classic followed this codebase after the DAO incident. === The DAO bailout === On 20 July 2016, as a result of the exploitation of a flaw in The DAO project's smart contract software, and subsequent theft of $50 million worth of Ether, the Ethereum network split into two separate blockchains – the altered history was named Ethereum (ETH) and the unaltered history was named Ethereum Classic (ETC). The new chain with the altered history was branded as Ethereum (code: ETH) with the BIP-44 Coin Index 60 and EVM Chain ID 1 attributed to it by the trademark-owning Ethereum Foundation. On this new chain, the history of the theft was erased from the Ethereum blockchain. Some members of the Ethereum community ignored the change and continued to participate on the original Ethereum network. The non-fork chain with an unaltered history continued on as Ethereum Classic (code: ETC) with the BIP-44 Coin Index 61 and EVM Chain ID 61. ==== Security vulnerabilities disclosed ==== On 28 May 2016, a paper was released detailing security vulnerabilities with the DAO that could allow Ether to be stolen. On 9 June 2016, Peter Vessenes publicly disclosed the existence of a critical security vulnerability overlooked in many Solidity contracts, a recursive call bug. On 12 June 2016, Stephan Tual publicly claimed that the DAO funds were safe despite the newly-discovered critical security flaw. ==== Carbon vote ==== On 15 July 2016, a short notice on-chain vote was held on the DAO hard fork. Of the 82,054,716 ETH in existence, only 4,542,416 voted, for a total voter turn out of 5.5% of the total supply on 16 July 2016; 3,964,516 ETH (87%) voted in favor, 1/4 of which came from a single address, and 577,899 ETH (13%) opposed the DAO fork. The expedited process of the carbon vote drew criticism from opponents of the DAO fork. Proponents of the fork were quick to market the vote as an effective consensus mechanism, pushing forward with the DAO fork four days later. ==== Block 1,920,000 ==== The first Ethereum Classic block that was not included in the forked Ethereum chain was block number 1,920,000, which was generated by Ethereum Classic miners on 20 July 2016. === Defuse Difficulty Bomb === A mechanism called the "Difficulty Bomb" was designed to push the Ethereum chain from proof-of-work consensus mechanism to proof-of-stake in the future by exponentially increasing the difficulty of mining. This Difficulty Bomb was added to the network on block 200,000 in an upgrade named "Ice Age". While Ethereum Classic participants debated the merits of the Difficulty Bomb, a network upgrade called "Die Hard" at block 3,000,000 delayed the effects of the mechanism. Once the network participants came to consensus on the issue, Ethereum Classic upgraded its network on block 5,900,000 to permanently defuse the Difficulty Bomb. This abandoned a future with proof-of-stake and committed the network to the proof-of-work consensus mechanism. === Protocol parity === In an attempt to modernize the Ethereum Classic protocol, several protocol upgrades were scheduled to activate features that the Ethereum network already enabled over the past years. Atlantis, activated in September 2019, enabled the Agharta upgrade, which included the outstanding Byzantium changes. Agharta was followed by the incorporation of the Constantinople patches through the January 2020 upgrade. Finally, with the Phoenix upgrade, Ethereum Classic achieved protocol parity with Ethereum, allowing for fully cross-compatible applications between the two networks. === Mining algorithm === After a series of 51% attacks on the Ethereum Classic network in 2020, a change to the underlying Ethash mining algorithm was considered by the community to prevent being a minority proof-of-work chain in the Ethash mining algorithm where Ethereum is dominating the hashrate. After evaluating various options such as Monero's RandomX or the standardized SHA-3-256, it was eventually decided to double the Ethash epoch duration from 30,000 to 60,000 in order to reduce the DAG size and prevent Ethash miners to easily switch to Ethereum Classic. This modified Ethash is also referred to as ETChash or Thanos upgrade. == Characteristics == As with other cryptocurrencies, the validity of each ether is provided by a blockchain, which is a continuously growing list of records, called "blocks", which are linked and secured using cryptography. By design, the blockchain is inherently resistant to modification of the data. It is an open, distributed ledger that records transactions between two parties efficiently and in a verifiable and permanent way. Unlike Bitcoin, Ethereum Classic operates using accounts and balances in a manner called state transitions. This does not rely upon unspent transaction outputs (UTXOs). The state denotes the current balances of all accounts and extra data. The state is not stored on the blockchain, it is stored in a separate Merkle Patricia tree. A cryptocurrency wallet stores the public and private "keys" or "addresses" which can be used to receive or spend Ether. These can be generated through BIP 39 style mnemonics for a BIP 32 "HD wallet". In the Ethereum tech stack, this is unnecessary as it does not operate in a UTXO scheme. With the private key, it is possible to write in the blockchain, effectively making an ether transaction. To send Ether to an account, the Keccak-256 hash of the public key of that account is needed. Ether accounts are pseudonymous in that they are not linked to individual persons, but rather to one or more specific addresses. === Ether === ETC is a fundamental token for operation of Ethereum Classic, which thereby provides a public distributed ledger for transactions. It is used to pay for Gas, a unit of computation used in transactions and other state transitions. Within the context of Ethereum Classic it might be called ether, but it should not be confused with ETH, which is also called ether. It is listed under the currency code ETC and traded on cryptocurrency exchanges, and the Greek uppercase Xi character (Ξ) is generally used for its currency symbol. It is also used to pay for transaction fees and computational services on the Ethereum Classic network. === Addresses === Ethereum Classic addresses are composed of the prefix "0x", a common identifier for hexadecimal, concatenated with the rightmost 20 bytes of the Keccak-256 hash (big endian) of the ECDSA public key (the curve used is the so-called secp256k1, the same as bitcoin). In hexadecimal, two digits represent a byte, meaning addresses contain 40 hexadecimal digits. An example of an Ethereum Classic address is 0xb794f5ea0ba39494ce839613fffba74279579268. Contract addresses are in the same format, however, they are determined by sender and creation transaction nonce. User accounts are indistinguishable from contract accounts given only an address for each and no blockchain data. Any valid Keccak-256 hash put into the described format is valid, even if it does not correspond to an account with a private key or a contract. This is unlike bitcoin, which uses base58check to ensure that addresses are properly typed. === Monetary policy === On 11 December 2017, the total supply of Ether on Ethereum Classic was hard capped at ETC 210,700,000 via the Gotham hard fork upgrade. This added a bitcoin-inspired deflationary emission schedule that is documented in Ethereum Classic Improvement Proposal (ECIP) 1017. The emission schedule, also known as "5M20", reduces the block reward by 20% every 5,000,000 blocks. Socially, this block reward reduction event has taken the moniker of "the fifthening." === Ethereum Classic Improvement Proposal === The Ethereum Classic Improvement Proposal (ECIP) process enables engineers and computer scientists to propose modifications, upgrades, or fixes. Any software developer who is a GitHub user is allowed to make contributions to the ECIP process. There is a number of ECIP types, each listed in the table below. == Code is law == The people who continued with Ethereum Classic advocate for blockchain immutability, and the concept that "code is law" against the pro-fork side (Ethereum) which largely argued for extra-protocol intentionality, decentralized decision-making, and conflict resolution. Code is law refers to the idea that the code is above all else including law from outside forces such as a government. The law is written into the code, therefore, anything the code allows is legal. == Attacks == === The DAO fork replay attacks === On 20 July 2016, due to reliance on the same clients, the DAO fork created a replay attack where a transaction was broadcast on both the ETC and ETH networks. On 13 January 2017, the Ethereum Classic network was updated to resolve transaction replay attacks. The networks are now officially operating separately. === RHG sells stolen ETC === On 10 August 2016, the ETH proponent Robin Hood Group transferred 2.9 million stolen ETC to Poloniex in an attempt to sell ETC for ETH on the advice of Bitly SA; 14% was successfully converted to ETH and other currencies, 86% was frozen by Poloniex. On 30 August 2016, Poloniex returned the ETC funds to the RHG. They set up a refund contract on the ETC network. === Classic Ether Wallet website attack === On 29 June 2017, the Ethereum Classic Twitter account made a public statement indicating reason to believe that the website for Classic Ether Wallet had been compromised. The Ethereum Classic Twitter account confirmed the details released via Threatpost. The Ethereum Classic team worked with Cloudflare to place a warning on the compromised domain warning users of the phishing attack. === 51% double spend attacks === ETC has experienced multiple 51% double-spending attacks throughout its history. These attacks exploit the decentralized nature of the network by amassing more than 50% of its mining power, enabling attackers to manipulate transactions and double-spend digital assets. The first significant attack occurred in January 2019, when Ethereum Classic was subject to double-spending attacks and an estimated $1.1 million worth of ETC was double-spent. In response, the Ethereum Classic team initiated several network upgrades, including the adoption of a modified version of the Proof of Work (PoW) consensus algorithm called "ECIP-1049 Keccak256." Despite these efforts, an additional 51% of attacks were carried out in August and October of 2020, with estimated losses of $5.6 million and $1.68 million, respectively. == References == == External links == EthereumClassic.org Ethereum Classic (ETC) Mining Calculator
Nano	Nano, Nano-, NANO or NaNo may refer to: == People == Nano (singer) (born 1988), Japanese-American J-pop singer Nano Omar (born 1986), Swedish singer Nano Riantiarno (born 1949), Indonesian director Agnese Nano (born 1965), Italian actress Fatos Nano (born 1952), former Prime Minister of Albania Lourdes Flores Nano (born 1959), Peruvian politician Nano Macedo (born 1982), Spanish football winger, full name Fernando Macedo da Silva Rodilla Nano Mesa (born 1995), Spanish football forward, full name Alexander Mesa Travieso Nano Rivas (born 1980), Spanish football defender, full name Victoriano Rivas Álvaro Nano (Egyptian footballer) (born 1985), Egyptian football defender/midfielder, full name Mohamed Mahmoud Nano (footballer, born 1982), Spanish football winger, full name Fernando Macedo da Silva Rodilla Nano (footballer, born 1984), Spanish football defender, full name Mariano González Maroto == Science and technology == GNU nano, a text editor for Unix-like systems iPod Nano, a digital media player nano-, a metric prefix denoting a factor of 10−9 Nano (cryptocurrency) NANO (journal),an international peer-reviewed scientific journal Nano, an Arduino model (single-board microcontroller) Nano receiver, a type of wireless computer mouse technology Nanotechnology, a field of study dealing with nano-scale objects Radeon R9 Nano, a graphics card Silver Nano, an antibacterial technology VIA Nano, a central processing unit (CPU) Microsoft Nano Server, an installation option for Windows Server 2016 == Transport == Tata Nano, a car FlyNano Nano, a Finnish ultralight aircraft == Fiction == Nano Shinonome, a character in the Japanese comedy manga series Nichijou Cartoon Network Universe: FusionFall The New Adventures of Nanoboy, an animated TV series Nano (comics), a member of the Fearsome Five from DC Comics Nano Eiai from the manga Kimi no koto ga Dai Dai Dai Dai Daisuki na 100-nin no Kanojo == Other == Beretta Nano, a micro compact pistol Magnetic nano, (often nicknamed 'nano'), a tiny container used in geocaching NaNo, National Novel, related to the National Novel Writing Month == See also == Nanos (disambiguation)
Tether	A tether is a cord, fixture, or flexible attachment that characteristically anchors something movable to something fixed; it also may be used to connect two movable objects, such as an item being towed by its tow. Applications for tethers include: fall arrest systems, lanyards, balloons, kites, airborne wind-power systems, anchors, floating water power systems, towing, animal constraint, space walks, power kiteing, and anti-theft devices. == Failure == Failure modes for tethers are considered in their design. A cord or rope tether may reach its breaking strength and fail. Outcomes can include an injury or fatal fall, and damage or loss of life to personnel or bystanders caused by backlash of the ruptured segments. Failure-prevention may be designed into a tethering system. Some safety harnesses are used in combination with a shock-absorbing lanyard, which has break-away stitching designed into it to prevent material failure and regulate deceleration, thereby preventing a serious G-force injury to the user when the end of the rope is reached. Designed-to-fail safety links are sometimes used to prevent excessive tension in a tether involved in towing objects, such as sailplanes. A signal tether is a system in which a constant signal designates a positive condition, and its interruption, whether by discontinuation or jamming, conveys a failure. The signal may be electrically generated, or a physical device such as flying a flag. == See also == Umbilical cable Safety lanyard == References ==
Firo (cryptocurrency)	Firo, formerly known as Zcoin, is a cryptocurrency aimed at using cryptography to provide better privacy for its users compared to other cryptocurrencies such as Bitcoin. == History == === Zcoin === ==== Creation ==== In late 2014, Poramin Insom, a student in Masters in Security Informatics from Johns Hopkins University, wrote a paper on implementing the zerocoin protocol into a cryptocurrency with Matthew Green as a faculty member. The project to create a standalone cryptocurrency implementing the Zerocoin protocol was named "Moneta".On 28 September 2016, Zcoin, the first cryptocurrency to implement the zerocoin protocol, was launched by Poramin Insom and team. Roger Ver was the initial investor. Reuben Yap, a former lawyer and founder of virtual private network BolehVPN joined the team as co-founder shortly after the launch of Zcoin. ==== 2017–2018 ==== On 20 February 2017, a malicious coding attack on the Zerocoin protocol created 370,000 fake tokens which perpetrators sold for over 400 Bitcoins ($440,000). Zcoin team announced that a single-symbol error in a piece of code "allowed an attacker to create Zerocoin spend transactions without a corresponding mint". Unlike Ethereum during the DAO event, developers have opted not to destroy any coins or attempt to reverse what happened with the newly generated ones.In September 2017, Poramin set up an exchange named "Satang Pro" that can convert Thai Baht to Zcoin directly.In April 2018, a cryptographic flaw was found in the Zerocoin protocol which allowed attackers to steal, destroy, and create Zcoins. The Zcoin cryptocurrency team, while acknowledging the flaw, stated the high difficulty in performing such attacks and the low probability of giving economic benefit to the attacker.In August 2018, Boozeat, a liquor delivery service in Malaysia accepted Zcoin as a payment method.In September 2018, Zcoin introduced the Dandelion protocol that hides the origin IP address of a sender without using The Onion Router (Tor) or Virtual Private Network (VPN).In November 2018, Zcoin conducted the world's first large-scale party elections for Thailand Democrat Party using blockchain instead of relying upon the election commission to count the votes. In the same month, a video named "Rap Against Dictatorship" was uploaded to Zcoin blockchain after Thailand government's threat of arresting the people involved in the video for speaking against government policies.In December 2018, Zcoin implemented Merkle tree proof, a mining algorithm that deters the usage of Application-specific integrated circuit (ASIC) in mining coins by being more memory intensive for the miners. This allows ordinary users to use a central processing unit (CPU) and graphics card for mining, so as to enable egalitarianism in coin mining. ==== 2019–2020 ==== In February 2019, Zcoin was added to wallet supported by Binance cryptocurrency exchange. In the same month, Zcoin partnered with Binance Charity Foundation to raise funds for "Lunch for Children" program in Africa. The charity used blockchain to track and verify the progress of funds from donor to receiver. On 25 April 2019, Zcoin was listed on the Indonesian digital exchange KoinX.On 30 July 2019, Zcoin formally departed from the zerocoin protocol by adopting a new protocol called "Sigma" that prevents counterfeit privacy coins from inflating coin supply. This is achieved by removing a feature called "trusted setup" from the zerocoin protocol. In August 2019, Zcoin was added to an African cryptocurrency exchange named OVEX. In December 2019, Zcoin introduced a decentralised crowdfunding and decision-making system to fund ancillary tasks for the project. In July 2020, using the crowdfunding system, Zcoin raised US$22,500 from 89 contributors to fund the first phase of its third-party audit of Lelantus protocol.In May 2020, Zcoin announced that all founder rewards will be ceased, while at the same time increase development funding to 15% of the block reward, and allocated 35% of the block reward to masternodes. Besides, a US$100,000 reserve fund was set up to protect against price volatility. In September 2020, Zcoin completed first halving of block rewards. In the same month, Zcoin was added to Stakehound for easy accessibility to Decentralized finance (DeFi) while earning staking rewards. === Firo === In October 2020, Zcoin announced rebranding to new name called "Firo" which signifies a unique way of burn (destroy) and redeem coins. Firo suffered 51% attack in January 2021. In June 2021, Firo was added to NOBI trading platform based in Indonesia. Firo implemented Receiver Address Privacy (RAP) in June 2021. In August 2021, Firo announced the Lelantus Spark protocol. This protocol offers additional privacy features, including generating new one-time addresses for receiving payments, efficient multisignature operations, and the availability of view keys for authorised third parties to view a transaction. == Design == === Zero-knowledge proofs === Firo initially implemented the Zerocoin protocol. Unlike bitcoin, money does not travel from one block to another. Instead, it is traded as Zerocoin and redeem for a new coin without any history of transaction. However, the disadvantage of this system is that the transaction amount cannot be hidden. There had been little research interest into Zerocoin protocol because of its similarity to Zerocash protocol.There are three phases of a Lelantus transaction. Since trusted setup is not needed, it makes the algorithm faster. In the first phase, a block with transaction history is deleted, while generating a new block with no previous history (minting). A serial number is added to the minted coin to prevent double spending. In the second phase, all previous minted coins are parsed and the serial number are published to the blockchain (spending). In the third phase, the participants can verify the block without any actual inputs. === Dandelion++ protocol === Firo implemented the Dandelion++ protocol in 2018. It is a protocol that helps to increase the anonymity of a sender during the dissemination of a transaction. There are two phases in the Dandelion protocol: stem phase and fluff phase. In the stem phase, a message is forwarded to a single, randomly chosen neighbour. Then, in the fluff phase, the message is broadcast to all the neighbours except forwarder of the message. Dandelion ++ is an improved version of the Dandelion protocol where the problem of transactions lost due to defective or malicious nodes is avoided by broadcasting the message if a node does not receive the message after a certain period of time in the fluff phase. These steps shuffles the IP addresses of the nodes to help to protect users' anonymity. === Receiver Address Privacy (RAP) === In June 2021, Firo introduced Receiver Address Privacy (RAP) addresses, an adaptation of BIP47. RAP allows users to be able to publicly post their wallet addresses without having to worry about privacy. In the past, wallet users had to create and share freshly generated addresses to attempt to maintain their privacy. === Mining === Firo implemented the MTP algorithm in December 2018. Using video cards, mining Firo can be more profitable than mining ethereum. Nvidia GeForce RTX 3080 Ti is able to churn out 6 to 6.5 Mhash/s of hash rate, earning about US$5 per day. Meanwhile, GeForce RTX 3080 is only able to churn out 5. 3 Mhash/s on this cryptocurrency. The algorithm has been changed to FiroPoW on October 26, 2021. == Regulatory responses == In February 2021, Thailand Securities and Exchange Commission (SEC) mooted an idea of banning privacy coins from exchanges. Poramin Insom argued that such ban lacks rationale and clarity because all cryptocurrencies including bitcoin have some privacy features in it. Besides, exchanges can easily track customers' details by using Know-Your-Customer (KYC) and Anti-money laundering (AML) procedures. In September 2022, Seychelles-based cryptocurrency exchange Huobi delisted Firo because of financial regulations. == Price and volatility == In October 2018, Firo was ranked top 25, with fully diluted market capitalisation of US$194,506,940. Firo had an all-time high price of US$170 per coin in 2017–2018. In February 2020, Firo price dropped to US$3 to US$5 per coin. Firo was priced at US$7.5 in September 2021. == Analysis == According to researchers from Technical University of Denmark, Sigma and Lelantus protocols both contributed to the area of specialised trustless zero-knowledge proofs but seldom offered strong anonymity guarantees when compared to zk-SNARKS because of performance limitations. However, ZK-SNArK-like proof is complicated and research into simpler zero-knowledge protocols can provide practical and anonymous payments in the future. A cryptographic audit was done in September 2020. According to the audit, Lelantus protocol offers good privacy without trusted setup and reasonable proving time within 2 seconds and anonymity set size of 216. According to R.E Shibai et al., Lelantus was described as "promising" in ensuring privacy and anonymity in cryptocurrency transactions. However, according to a master thesis written by Bontekoe, T.H from University of Twente, he would prefer zk-SNARKS for digital payments because as "the used primitives in Zcoin (Lelantus) do currently not allow for the extensive statements that we most likely require to make our scheme anonymous and auditable."Lelantus was also implemented into the Mimble Wimble protocol to produce a new protocol named Oscausi. == See also == Legality of bitcoin by country == References ==
Zcash	Zcash is a privacy-focused cryptocurrency which is based on Bitcoin's codebase. It shares many similarities, such as a fixed total supply of 21 million units.Transactions can be transparent, similar to bitcoin transactions, or they can be shielded transactions which use a type of zero-knowledge proof to provide anonymity in transactions. Zcash coins are either in a transparent pool or a shielded pool. Zcash offers private transactors the option of "selective disclosure", allowing a user to prove payment for auditing purposes. One such reason is to make it easier for private transactors to comply with anti-money laundering laws and tax regulations. == Use == Zcash transactions can be transparent, similar to bitcoin transactions, in which case they are controlled by a "t-addr", or they can be shielded and are controlled by a "z-addr". A shielded transaction uses a type of zero-knowledge proof, specifically a non-interactive zero-knowledge proof, called "zk-SNARK", which provides anonymity to the coin holders in the transaction. Zcash coins are either in a transparent pool or a shielded pool. As of December 2017 only around 4% of Zcash coins were in the shielded pool and at that time most cryptocurrency wallet programs did not support z-addrs and no web-based wallets supported them. The shielded pool of Zcash coins were further analyzed for security and it was found that the anonymity set can be shrunk considerably by heuristics-based identifiable patterns of usage.While miners receive 80% of a block reward, 20% is given to the "Zcash development fund": 8% to Zcash Open Major Grants, 7% to Electric Coin Co., and 5% to The Zcash Foundation. == History == Development work on Zcash began in 2013 by Johns Hopkins professor Matthew Green and some of his graduate students. The development was completed by the for-profit Zcash Company, led by Zooko Wilcox, a Colorado-based computer security specialist and cypherpunk. In October 2016, The Zcash Company raised over $3 million from Silicon Valley venture capitalists to complete the development of Zcash.Zcash was first mined in late October 2016. The initial demand was high, and within a week Zcash coins were trading for five thousand dollars a piece. Ten percent of all coins mined for the first four years were to be allotted to the Zcash Company, its employees, the investors, and the non-profit Zcash Foundation.The setup of Zcash required the careful execution of a trusted setup procedure — something that subsequently became known as "The Ceremony" — to create the Zcash private key. In order to ensure the privacy a truly random enormous number needed to be generated to be used as the private key, while also ensuring that no person or computer retains a copy of the key, or could subsequently regenerate the key. If the private key were available counterfeit Zcash coins could be generated. The Ceremony was a two-day process, executed simultaneously during a short-window of time in six different locations globally, by persons who did not know in advance who else was going to be participating in the event. The private key was generated, and used to instantiate Zcash, and the computers used in the process were reportedly destroyed. In 2022, Edward Snowden claimed to have participated in The Ceremony under a pseudonym.On February 21, 2019, the "Zcash Company" announced a re-branding as the Electric Coin Company (ECC).On May 19, 2020, a paper titled "Alt-Coin Traceability" investigated the privacy of both Zcash and Monero. This paper concluded that "more academic research is needed in Zcash overall" and that the privacy guarantees of Zcash are "questionable". The paper claimed that since the current heuristics from a 2018 Usenix Security Symposium paper entitled "An Empirical Analysis of Anonymity in Zcash" still continue today that the result is making Zcash less anonymous and more traceable. On June 8, 2020, Chainalysis added support for Zcash to their Chainalysis Reactor and "Know Your Transaction" (KYT) technologies. This permits Chainalysis to trace and provide transaction values and at least the sender or receiver address for over 99% of Zcash activity. According to Chainalysis it is able to accomplish this since most Zcash users do not use privacy-enhancing features. Chainalysis also cites a research report by the RAND corporation which revealed that less than 0.2% of the cryptocurrency addresses on the dark web were Zcash addresses.On October 12, 2020, the ECC announced a new non-profit 501(c)3 organization called the Bootstrap Project (Bootstrap) in a company blog post titled "ECC’s owners to donate ECC". A majority of the investors and owners of Zerocoin Electric Coin Company LLC (ECC) have agreed to donate the ECC company as the wholly owned property of Bootstrap. ECC's blog post claims that nothing will change within the company other than the ownership including the Board of Directors. On October 27, 2020, ECC announced that its shareholders have officially voted in favor of donating 100 percent of the company's shares to Bootstrap. On March 30, 2021, the company's transparency report said that it is "now a wholly owned entity of the 501(c)3 Bootstrap".In September 2023, a mining pool named ViaBTC had seized control of over half the hashing power on Zcash. This 51% dominance, raised worries about an attack where they could potentially manipulate transactions and harm the network. To shield users from the potential fallout, Coinbase swiftly enacted a series of defensive measures, including placing Zcash markets into "limit-only" mode, effectively quelling significant price swings while the situation unfolded. == See also == Legality of bitcoin by country Zerocoin protocol SNARK == References == == External links == Official website
Bitcoin Cash	Bitcoin Cash is a cryptocurrency that is a fork of Bitcoin. Bitcoin Cash is a spin-off or altcoin that was created in 2017.In November 2018, Bitcoin Cash split further into two cryptocurrencies: Bitcoin Cash and Bitcoin SV. == History == Since its inception, Bitcoin users had maintained a common set of rules for the cryptocurrency. On 21 July 2017, bitcoin miners locked-in a software upgrade referred to as Bitcoin Improvement Proposal (BIP) 91, which meant that the Segregated Witness upgrade would activate at block 477,120. Segwit controversially would enable second layer solutions on Bitcoin such as the Lightning Network. A key difference of opinion between Bitcoin users was over the running of nodes. Bitcoin supporters wanted to keep blocks small so that nodes could be operated with fewer resources, while some large block supporters find it acceptable that (due to large block sizes), nodes might only be run by universities, private companies and nonprofits.A group of Bitcoin activists, developers, and China-based miners were unhappy with Bitcoin's proposed SegWit improvement plans meant to increase Bitcoin's capacity; these stakeholders pushed forward alternative plans which would increase the block size limit to eight megabytes through a hard fork. Supporters of a block size increase were more committed to an on-chain medium of exchange function.In June 2017, hardware manufacturer Bitmain, described the would-be hard fork with the increased block size as a "contingency plan", should the Bitcoin community decide to fork implementing SegWit. The first implementation of the software was proposed under the name Bitcoin ABC at a conference that month. In July 2017, mining pool ViaBTC proposed the name Bitcoin Cash. In July 2017 Roger Ver and others stated they felt that adopting BIP 91 (that would later activate SegWit) favored people who wanted to treat Bitcoin as a digital investment rather than as a transactional currency. The fork that created Bitcoin Cash took effect on 1 August 2017. In relation to Bitcoin it is characterized variously as a spin-off, a strand, a product of a hard fork, an offshoot, a clone, a second version or an altcoin. A Hong Kong newspaper likened this to a new version of word processing software saying: Bitcoin cash is like a new version of Microsoft Word, which generates documents that can no longer be opened via the older versions. At the time of the fork anyone owning bitcoin came into possession of the same number of Bitcoin Cash units. The technical difference between Bitcoin Cash and Bitcoin is that Bitcoin Cash allows larger blocks in its blockchain than Bitcoin which, in theory, allows it to process more transactions per second. Bitcoin Cash was the first of the Bitcoin forks, in which software-development teams modified the original Bitcoin computer code and released coins with “Bitcoin" in their names, with "the goal of creating money out of thin air". On 1 August 2017 Bitcoin Cash began trading at about $240, while bitcoin traded at about $2,700. On 20 December 2017 it reached an intraday high of $4,355.62 and then fell 88% to $519.12 on 23 August 2018.In 2018 Bitcoin Core developer Cory Fields found a bug in the Bitcoin ABC software that would have allowed an attacker to create a block causing a chain split. Fields notified the development team about it, and the bug was fixed.In November 2020, there was a second contested hard fork where the leading node implementation, BitcoinABC, created BCHA. == Controversy == In 2017 there were two factions of Bitcoin supporters: those that supported large blocks and those who preferred small blocks. The Bitcoin Cash faction favors the use of its currency as a medium of exchange for commerce, while the Bitcoin-supporting faction view Bitcoin's primary use as that of a store of value. Bitcoin Cash is sometimes also referred to as Bcash. Bitcoin Cash detractors call the cryptocurrency "Bcash", "Btrash", or "a scam", while its supporters maintain that "it is the pure form of Bitcoin".Bryan Kelly, a stock analyst likened it to a software upgrade: Bitcoin cash is doing a “hard fork” or “effectively a software upgrade”, Kelly said on “Fast Money”. “When you do a software upgrade, everybody usually agrees. But in this particular case, everybody is not agreeing.” Samson Mow of Blockstream pointed to Bitcoin Cash's use of the "Bitcoin" name as a source of animosity between the Bitcoin and Bitcoin Cash camps. Emin Gün Sirer, a professor at Cornell stated that Bitcoin Cash was focused on use and Bitcoin was "enormously" focused on store of value. == Trading and usage == Bitcoin Cash trades on digital currency exchanges using the Bitcoin Cash name and the BCH currency code for the cryptocurrency. On 26 March 2018, OKEx removed all Bitcoin Cash trading pairs except for BCH/BTC, BCH/ETH and BCH/USDT due to "inadequate liquidity". As of May 2018, daily transaction numbers for Bitcoin Cash are about one-tenth of those of bitcoin. Coinbase listed Bitcoin Cash on 19 December 2017 and the Coinbase platform experienced price abnormalities that led to an insider trading investigation. As of August 2018, Bitcoin Cash payments are supported by payment service providers such as BitPay, Coinify and GoCoin. == Difficulty adjustment algorithm == Bitcoin and Bitcoin Cash both use a proof-of-work algorithm to timestamp every new block. The proof of work algorithm used is the same in both cases. It can be described as a partial inversion of a hash function. Additionally, both Bitcoin and Bitcoin Cash target a new block to be generated every ten minutes on average. The time needed to calculate a new block is influenced by a parameter called the mining difficulty. If the total amount of mining power increases, an increase of the mining difficulty can keep the block time roughly constant. Vice versa, if the mining power decreases, a decrease of the mining difficulty can keep the block time roughly constant.To keep the block generation time equal to ten minutes on average, both Bitcoin and Bitcoin Cash use an algorithm adjusting the mining difficulty parameter. This algorithm is called the difficulty adjustment algorithm (DAA). Originally, both Bitcoin and Bitcoin Cash used the same difficulty adjustment algorithm, adjusting the mining difficulty parameter every 2016 blocks. Since 1 August 2017, Bitcoin Cash also used an addition to the DAA, called an Emergency Difficulty Adjustment (EDA) algorithm. EDA was used alongside the original DAA and it was designed to decrease the mining difficulty of Bitcoin Cash by 20%, if the time difference between 6 successive blocks was greater than 12 hours.EDA adjustments caused instabilities in mining difficulty of the Bitcoin Cash system, resulting in Bitcoin Cash being thousands of blocks ahead of Bitcoin. To address the problem with stability, a change of the Bitcoin Cash DAA was implemented and the EDA canceled. The change took effect on 13 November 2017. After the change, the Bitcoin Cash DAA adjusts the mining difficulty after each block. To calculate the difficulty for a new block, the Bitcoin Cash DAA uses a moving window of last 144 blocks.A group of researchers demonstrated that, as of June 2019, Bitcoin DAA fails to generate new blocks at a constant rate as long as the hash supply is elastic. In contrast to that, the group demonstrated that Bitcoin Cash DAA is stable even when the cryptocurrency price is volatile and the supply of hash power is highly elastic. == 2018 split to create Bitcoin SV == On 15 November 2018, a hard fork chain split of Bitcoin Cash occurred between two rival factions called Bitcoin Cash and Bitcoin SV. On 15 November 2018 Bitcoin Cash traded at about $289, and Bitcoin SV traded at about $96.50, down from $425.01 on 14 November for the un-split Bitcoin Cash.The split originated from what was described as a "civil war" in two competing Bitcoin Cash camps. The first camp, supported by entrepreneur Roger Ver and Jihan Wu of Bitmain, promoted the software entitled Bitcoin ABC (short for Adjustable Blocksize Cap), which would maintain the block size at 32 MB. The second camp led by Craig Steven Wright and billionaire Calvin Ayre put forth a competing software version Bitcoin SV, short for "Bitcoin Satoshi Vision", which would increase the block size limit to 128 MB. The Bitcoin SV blockchain is the largest of all Bitcoin forks, exceeding 2.5 terabytes in size. == See also == Bitcoin scalability problem List of bitcoin forks List of cryptocurrencies == Notes == == References == == External links == Official website
EOS.IO	EOS.IO is a blockchain protocol based on the cryptocurrency EOS. The smart contract platform claims to eliminate transaction fees and also conduct millions of transactions per second. It was developed by the private company Block.one and launched in 2017. The platform was later released as open-source software. == History == Based on a white paper published in 2017, the EOSIO platform was developed by the private company Block.one and released as open-source software on June 1, 2018. At the launch of the blockchain, one billion tokens were distributed as ERC-20 tokens by Block.one. The CEO of Block.one, Brendan Blumer, announced that the company would support the EOSIO blockchain with over one billion USD in funding from the token sale and ultimately Block.one raised over four billion USD to support the blockchain during the Initial Coin Offering (ICO) period.The original test net, Dawn 1.0, was released on September 3, 2017, with test net versions Dawn 2.0 released on December 4, 2017, Dawn 3.0 on January 25, 2018, and Dawn 4.0 on May 7, 2018. The name of the cryptocurrency EOS comes from Ancient Greek Ἠώς, "dawn".EOSIO's Dawn 1.0 was launched on the EOSIO mainnet on June 1, 2018, and is currently operating under version 2.1.0.In September 2019, Block.one agreed to settle U.S. Securities and Exchange Commission charges related to the $4 billion unregistered ICO for a $24 million penalty. The settlement did not require a restitution offer, registration of tokens, or any disqualifications. == EOS Network Foundation == In August 2021, Yves La Rose founded the organization EOS Network Foundation (ENF). La Rose is an EOS enthusiast who disputes the way Block.one has managed to blockchain and its tokens. The organization has attempted to pressure Block.one into reinvesting its profits into development of the blockchain, and to support new development. == Block.one, EOSIO ecosystem and Everipedia == Block.one is a company registered in the Cayman Islands, which began offering EOS tokens in June 2017 to the public, raising over $4 billion (a record for an ICO). Daniel Larimer was the Chief Technology Officer of Block.one. Larimer had previously worked on the decentralized exchange Bitshares from 2013 to 2016. After that, he worked on Steemit, a blockchain-based social media platform. On January 10, 2021, Larimer announced his resignation from Block.one.On December 6, 2017, Everipedia, a for-profit, wiki-based online encyclopedia, announced plans using EOS blockchain technology and work on an airdrop of a cryptocurrency called IQ to encourage generating information. The IQ tokens are intended to be exchangeable for Bitcoin. One of the goals of the company is to stop certain countries from blocking the content, by the integration of the blockchain model. The goal is that once Everipedia is decentralized and hosted on the EOSIO platform, countries such as Turkey and Iran that block Wikipedia will no longer be able to block it, via Everipedia's fork. Mike Novogratz, CEO of Galaxy Investment LP, a cryptocurrency investment firm, and Block.one led a group of institutions that invested $30 million in Everipedia on February 8, 2018. Novogratz also funds EOSIO Ecosystem, a $325-million joint venture between his Galaxy Digital LP and Block.one. == References == == External links == Official website
Cardano	Cardano may refer to: Gerolamo Cardano (1501–1576), Italian mathematician and physician Fazio Cardano (1444–1524), Italian jurist and mathematician, father of Gerolamo Cardano al Campo, town in Lombardy 11421 Cardano, minor planet Cardano (blockchain platform) == See also == Cardano's method of solving a cubic equation Baguenaudier, aka Cardano's rings, mechanical puzzle Cardanus (crater), lunar crater Cardona (disambiguation)
Charles Hoskinson	Charles Hoskinson (born 1987 or 1988) is an American entrepreneur who is a co-founder of the blockchain engineering company Input Output Global, Inc. (formerly IOHK), and the Cardano blockchain platform, and was a co-founder of the Ethereum blockchain platform. == Early life and education == Hoskinson attended Metropolitan State University of Denver and the University of Colorado Boulder "to study analytic number theory before moving into cryptography through industry exposure".Hoskinson has claimed that he had entered a PhD program but had dropped out. However, Denver did not have a graduate program in mathematics. Colorado Boulder verified that he had attended as a half-time undergraduate math major, but did not earn a degree. He also claimed repeatedly to have worked for the Defense Advanced Research Projects Agency (DARPA), though DARPA confirmed he had not. == Career == In 2013, Hoskinson quit a consulting job to begin a project called the Bitcoin Education Project. According to Hoskinson, the limited supply makes Bitcoin like a digital form of gold. He joined the Ethereum team as one of five original founders with Vitalik Buterin in late 2013 and held the position of chief executive. Buterin and the Ethereum team removed Hoskinson in 2014 after a dispute over whether the project should be commercial (Hoskinson's view) or a nonprofit (Buterin's view).In late 2014, Hoskinson and former Ethereum colleague Jeremy Wood formed IOHK (Input Output Hong Kong), an engineering and research company, to build cryptocurrencies and blockchains. IOHK's key project is Cardano, a public blockchain and smart contract platform that hosts the ADA cryptocurrency. Hoskinson did not pursue venture capital for Cardano, saying that it ran counter to the blockchain's principles. Hoskinson has also said that venture capital involvement might lead to an outsized control of a project.IOHK has sponsored research focused on blockchain technology at the University of Edinburgh, Tokyo Institute of Technology, Stanford University, and the University of Wyoming.Forbes estimated Hoskinson's wealth as $500m–$600m in 2018.In 2020, Hoskinson spoke at the World Economic Forum in Davos, where he said that blockchain may eventually cause social change. In 2022, he appeared as a witness before the commodity exchanges, energy, and credit subcommittee of the U.S. House of Representatives Committee on Agriculture, where he advocated for decentralization and balanced regulation. == Philanthropy == In September 2021, Hoskinson donated $20 million to Carnegie Mellon University to establish and run the Hoskinson Center for Formal Mathematics as part of the university's philosophy department.In late 2022 Hoskinson and his family assisted in creating the Hoskinson Health and Wellness Clinic in Gilette, Wyoming.Hoskinson contributed $1.5 million to fund a 2023 Galileo Project expedition led by astronomer and "alien hunter" Avi Loeb to explore debris from the meteorite CNEOS 2014-01-08 (also called IM1) that crashed into the Pacific Ocean in 2014. Loeb argued that this object could have been created by alien life, a claim which lacks widespread support from the scientific community. The expedition reported finding tiny metallic spheres from the object on the ocean floor. Loeb said analysis of these "spherules" did not match any known alloy, though it was unclear whether they were artificial or natural in origin. Hoskinson said, "This is a historic discovery, marking the first time that humans hold materials from a large interstellar object" and that he was "pleased with the results". == Personal life == As of 2022, Hoskinson purchased a ranch near Wheatland, Wyoming, donated equipment to the Platte County Sheriff's Office, and purchased a restaurant in Wheatland.In 2023, Wyoming Public Radio said Hoskinson, along with his father, Dr. Mark Hoskinson, and brother, Dr. William Hoskinson, had opened a clinic focusing on anti-ageing and regenerative medicine in Gillette, a town in Campbell County, Wyoming. Mark and William Hoskinson had both formerly worked for Campbell County Health. The director of the Hoskinson Health and Wellness Clinic said it had cost $18 million. Charles Hoskinson said cryptocurrency would be accepted in the future.Hoskinson was criticised after his private jet was ranked among the top 15 biggest polluters in the US on the Climate Jets website. Commentators contrasted the "green" reputation of Cardano with his personal travel. He defended his jet use, saying the plane had been used for charters for the band Metallica and film industry workers. == External links == Input Output Global Hoskinson Center for Formal Mathematics == References == == External links == IOHK Page
Justin Sun	Justin Sun (Chinese: 孙宇晨; pinyin: Sūn Yǔchén; born July 30, 1990) is a Chinese-born Grenadian cryptocurrency entrepreneur and business executive. He is the founder of TRON, a blockchain DAO ecosystem. He also works as an advisor to HTX.Sun once served as Permanent Representative of Grenada to the World Trade Organization (WTO) in Geneva. == Early life and education == Sun was born in 1990. He holds a Bachelor of Arts degree with a major in history from Peking University and a Master of Arts degree in East Asian studies from the University of Pennsylvania.At University of Pennsylvania Sun became interested in cryptocurrency and invested early in bitcoin. He studied at Jack Ma's Zhejiang Hupan Entrepreneurship Research Center. He became the cover figure of Yazhou Zhoukan in 2011 and a Davos Global Shaper in 2014. == Career == === Blockchain and technology === In late 2013, Sun joined Ripple Labs as chief representative and adviser. In 2014, he founded Peiwo, a Chinese voice-based social networking app. He was named CNTV's most noteworthy new entrepreneur in 2015, and was included in Forbes 30 Under 30 Asia list from 2015 to 2017. Sun founded the blockchain-based operating platform Tron and launched the TRX token in 2017. In September 2017 his company Tron held an initial coin offering (ICO) for the TRX token, a few days before the Chinese government banned ICOs. According to The Verge, Sun was aware of the impending ban, and pushed for the sale to occur before the ban could be announced. Shortly afterwards, Sun left China for the United States. Tron raised about $70 million at its ICO.In June 2018, Sun acquired the company BitTorrent, Inc (later renamed Rainberry Inc.) for $140 million. The company is best known for developing the BitTorrent protocol. During his tenure leading BitTorrent as CEO, the BitTorrent network launched its own utility token, BTT.Sun later acquired the crypto exchange Poloniex. The Verge alleged in 2021 that Sun demanded that he should be given personal ownership of misplaced Poloniex customer funds that users accidentally sent to wrong wallet addresses, totalling about 300 bitcoin, despite the objections of Poloniex employees. In November 2023 Poloniex had $120 million stolen by hackers. Sun offered to let the hackers keep $6.5 million if they returned the rest of the money within 7 days.Sometime between 2018 and 2020, Sun acquired a Maltese residency card as a result of investing in the country.In October 2021, Sun participated in a $65 million funding round in Hong Kong-based Animoca, a maker of crypto and blockchain video games such as The Sandbox.On behalf of non-fungible token (NFT) related projects and funds, he has spent more than $100 million at auction for artworks from Pablo Picasso, Andy Warhol, Alberto Giacometti, and Pak. === Diplomacy === Sun was appointed Ambassador and Permanent Representative of Grenada to the World Trade Organization (WTO) in 2021. As a result, Sun phased out of his daily roles at his crypto-related projects such as Tron in order to focus on his diplomatic role at the WTO in Geneva. Sun told Bloomberg he would use his role to advocate cryptocurrency and blockchain technology to countries and promote technology development in Grenada. Sun said the Caribbean has "become a very good place for entrepreneurship" because of its close proximity to the U.S., with less strict regulations regarding cryptocurrency.In December 2021, Justin Sun retired as a CEO of TRON to become a diplomat for Grenada.In March 2023, Sun stepped down from his position as Permanent Representative of Grenada to the World Trade Organization. === Pending Civil Cases === In March 2023, Sun was sued by the U.S. Securities and Exchange Commission for selling unregistered securities related to the sale and promotion of Tron (TRX) and BitTorrent (BTT) tokens, alleging that Sun had engaged in wash trading in the secondary market for TRX in order to raise its price. Eight celebrities, including Akon, Ne-Yo, Austin Mahone, Soulja Boy, Lindsay Lohan, Jake Paul and Lil Yachty were charged with promoting these cryptocurrencies without disclosing that they were sponsored. All defendants excluding Soulja Boy and Austin Mahone settled with payments in excess of $400,000 without admitting liability. Prior reporting by The Verge also alleged that Tron, at the direction of Sun, had engaged in market manipulation by buying/selling TRX tokens based on non-public internal information.These are allegations and have not been proven in a court of law. == Personal life == Sun placed the winning $4.6 million bid to have a private meal with Berkshire Hathaway CEO Warren Buffett in June 2019, before canceling it to widespread surprise. The dinner with Buffett eventually occurred in early 2020. Sun met with Buffett, a critic of cryptocurrency, at the Happy Hollow Club in Omaha, Nebraska, on January 23, 2020. Sun was joined by other cryptocurrency executives, including leaders of Litecoin, eToro, Huobi, and Binance Charity Foundation. At the dinner, Sun gifted Buffett a phone with bitcoin and other cryptocurrencies. The money from the charity auction benefited the Glide Foundation, which Buffett's late wife Susan introduced to Buffett after volunteering there.In December 2021, Sun won an auction with a bid of $28 million to be the first paying passenger to fly on Blue Origin's New Shepard vehicle in July 2021, but he was not able to fly on the mission due to a scheduling conflict. == Bibliography == Brave New World (2017) == References == == External links == Official website Justin Sun on Twitter
Tron	Tron (stylized as TRON) is a 1982 American science fiction action adventure film written and directed by Steven Lisberger from a story by Lisberger and Bonnie MacBird. The film stars Jeff Bridges as Kevin Flynn, a computer programmer and video game developer who is transported inside the software world of a mainframe computer where he interacts with programs in his attempt to escape; it also stars Bruce Boxleitner, David Warner, Cindy Morgan, and Barnard Hughes. Tron, along with The Last Starfighter, has the distinction of being one of cinema's earliest films to use extensive computer-generated imagery (CGI). The inspiration for Tron dates back to 1976, when Lisberger became intrigued with video games after seeing Pong. He and producer Donald Kushner set up an animation studio to develop Tron with the intention of making it an animated film. To promote the studio itself, Lisberger and his team created a 30-second animation featuring the first appearance of the title character. Eventually, Lisberger decided to include live-action elements with both backlit and computer animation for the actual feature-length film. Various studios had rejected the storyboards for the film before Walt Disney Productions agreed to finance and distribute Tron. There, backlit animation was finally combined with the 2D computer animation and the live action. Tron was released on July 9, 1982. The film was a moderate success at the box office, and received positive reviews from critics, who praised its groundbreaking visuals and acting but criticized its storyline as being incoherent. Tron received nominations for Best Costume Design and Best Sound at the 55th Academy Awards, but was not nominated in the Best Visual Effects category. Tron spawned multiple video games (including an arcade tie-in released shortly after the film), and as it became a cult film, a multimedia franchise including comic books. A sequel titled Tron: Legacy, directed by Joseph Kosinski, was released in 2010, with Bridges and Boxleitner reprising their roles and Lisberger acting as producer. This was followed by the XD animated series Tron: Uprising in 2012, set between the two films. == Plot == Kevin Flynn is a leading software engineer, formerly employed by large technology corporation ENCOM. He now runs a video game arcade, and attempts to hack into ENCOM's mainframe system; however, ENCOM's Master Control Program (MCP) halts his progress. Within ENCOM, programmer Alan Bradley and his girlfriend, engineer Lora Baines, discover that the MCP has closed off their access to projects. When Alan confronts the senior executive vice president, Ed Dillinger, Dillinger says the security measures are an effort to stop outside hacking attempts. However, when Dillinger privately questions the MCP through his computerized desk, he realizes the MCP has expanded into a powerful virtual intelligence and has been illegally appropriating personal, business, and government programs to increase its own capabilities. As Dillinger rose to the top of ENCOM by presenting Flynn's games as his own, the MCP blackmails Dillinger by threatening to expose his plagiarism if he does not comply with its directives. Lora deduces that Flynn is the hacker, and she and Alan go to his arcade to warn him. Flynn reveals that he has been trying to locate evidence proving Dillinger's plagiarism. Together, the three form a plan to break into ENCOM and unlock Alan's "Tron" program, a self-governing security measure designed to protect the system and counter the functions of the MCP. Once inside ENCOM, the three split up, and Flynn comes into direct conflict with the MCP through a laboratory terminal. Before Flynn can get the information he needs, the MCP uses an experimental laser to digitize and upload him into the ENCOM mainframe cyberspace. There, computer programs are living entities appearing in the likeness of the human "Users" (programmers) who created them. The space is ruled by the MCP and its second-in-command, Sark, who coerce programs to renounce their belief in the Users and force those who resist to compete in deadly games. Flynn is put into the games and plays well; between matches, he befriends two other captured programs, Ram and Tron. The three escape into the mainframe during a round of Light Cycle (an arcade game Flynn created and is skilled at), but Flynn and Ram become separated from Tron by an MCP pursuit party. While attempting to help a badly injured Ram, Flynn learns that he can manipulate portions of the mainframe by accessing his programmer knowledge. Just before Ram "derezzes" (dies), he recognizes Flynn as a User, and encourages him to find Tron and free the system. Using his newfound ability, Flynn rebuilds a broken vehicle and disguises himself as one of Sark's soldiers. Tron enlists help from Yori, a sympathetic program, and at an I/O tower receives information from Alan necessary to destroy the MCP. Flynn rejoins them, and the three board a hijacked solar sailer to reach the MCP's core. However, Sark's command ship destroys the sailer, capturing Flynn and Yori and presumably killing Tron. Sark leaves the command ship and orders its deresolution, but Flynn keeps it intact by manipulating the mainframe again. Sark reaches the MCP's core on a shuttle carrying captured programs deemed powerful or useful. While the MCP attempts to absorb these programs, Tron, who is still alive, confronts Sark and critically injures him, prompting the MCP to give Sark all its functions. Realizing that his ability to manipulate the mainframe might give Tron an opening, Flynn leaps into the beam of the MCP, distracting it. Seeing a break in the MCP's shield, Tron attacks through the gap and destroys the MCP and Sark, ending the MCP's control over the mainframe and allowing the captured programs to communicate with users again. Flynn reappears in the real world, rematerialized at the terminal. Tron's victory in the mainframe has released all lockouts on computer access, and a nearby printer produces the evidence that Dillinger had plagiarized Flynn's creations. The next morning, Dillinger enters his office to find the MCP deactivated and the proof of his theft publicized. Flynn is subsequently promoted to CEO of ENCOM and is happily greeted by Alan and Lora as their new boss. == Cast == Jeff Bridges as Kevin Flynn, a video arcade proprietor, and former programmer and video game developer at ENCOM, who is beamed into the ENCOM mainframe via a digitizing laser by the Master Control Program (MCP). Bridges also portrays Clu (Codified Likeness Utility), a hacking program developed by Flynn to find evidence of Dillinger's theft in the mainframe. Bruce Boxleitner as Alan Bradley, Flynn's work partner and fellow programmer at ENCOM Boxleitner also portrays Tron, a security program developed by Bradley to self-monitor communications between the MCP and the real world. David Warner as Ed Dillinger, the Senior Executive Vice President of ENCOM and former coworker of Flynn's who used the MCP to steal Flynn's work and pass it off as his own, earning himself a series of undeserved promotions Warner also portrays Sark, a command program developed by Dillinger to serve as the MCP's second-in-command. Warner also provides the uncredited voice of the Master Control Program (MCP), a rogue artificial intelligence operating system (originally a chess program created by Dr. Gibbs and "improved" by Dillinger) which monitors and controls ENCOM's mainframe. Cindy Morgan as Dr. Lora Baines, Bradley's co-worker and girlfriend, as well as assistant to Dr. Gibbs on the digitization experiment. Morgan also portrays Yori, an input/output program developed by Dr. Baines and an ally of Tron. Barnard Hughes as Dr. Walter Gibbs, a co-founder of ENCOM running the company's science division, who creates the SHV 20905 digitizing laser with Dr. Baines's assistance. Hughes also portrays Dumont, a "guardian" program developed by Dr. Gibbs to protect input/output junctions in the mainframe. Hughes also provides the uncredited voice of the Master Control Program's original incarnation. Dan Shor as Roy Kleinberg, an ENCOM employee Shor also portrays Ram, an actuarial program possibly developed by Kleinberg to sort out connections between ENCOM and an unnamed insurance company, who is a close ally of Tron and Flynn. Peter Jurasik as Crom, a compound interest program matched against Flynn on the Game Grid Tony Stephano as Peter, Ed Dillinger's assistant. Stephano also portrays Sark's Lieutenant. == Production == === Origins === The inspiration for Tron occurred in 1976 when Steven Lisberger, then an animator of drawings with his own studio, looked at a sample reel from a computer firm called MAGI and saw Pong for the first time. He was immediately fascinated by video games and wanted to do a film incorporating them. According to Lisberger, "I realized that there were these techniques that would be very suitable for bringing video games and computer visuals to the screen. And that was the moment that the whole concept flashed across my mind". The film's concept of entering a parallel game world was also inspired by the classic tale Alice in Wonderland.Lisberger had already created an early version of the character 'Tron' for a 30 second long animation which was used to promote both Lisberger Studios and a series of various rock radio stations. This backlit cel animation depicted Tron as a character who glowed yellow; the same shade that Lisberger had originally intended for all the heroic characters developed for the feature-length Tron. This was later changed to blue for the finished film (see Pre-production below). The prototype Tron was bearded and resembled the Cylon Centurions from the 1978 TV series Battlestar Galactica. Also, Tron was armed with two "exploding discs", as Lisberger described them on the 2-Disc DVD edition (see Rinzler). Lisberger elaborates: "Everybody was doing backlit animation in the 70s, you know. It was that disco look. And we thought, what if we had this character that was a neon line, and that was our Tron warrior – Tron for electronic. And what happened was, I saw Pong, and I said, well, that's the arena for him. And at the same time I was interested in the early phases of computer generated animation, which I got into at MIT in Boston, and when I got into that I met a bunch of programmers who were into all that. And they really inspired me, by how much they believed in this new realm."He was frustrated by the clique-like nature of computers and video games and wanted to create a film that would open this world up to everyone. Lisberger and his business partner Donald Kushner moved to the West Coast in 1977 and set up an animation studio to develop Tron. They borrowed against the anticipated profits of their 90-minute animated television special Animalympics to develop storyboards for Tron with the notion of making an animated film. But after Variety mentioned the project briefly during its early phase, it caught the attention of computer scientist Alan Kay. He contacted Lisberger and convinced him to use him as an adviser on the movie, then persuaded him to use real CGI instead of just hand-animation.Bonnie MacBird wrote the first drafts of Tron with extensive input from Lisberger, basing the original personality of Alan on Alan Kay. As a result of working together, Kay and MacBird became close and later married. She also created Tron as a character (rather than a visual demo) and Flynn. Originally, MacBird envisioned Flynn more comedically, suggesting the then 30-year-old Robin Williams for the role. Besides many story changes after the script went to Disney, including giving it "a more serious tone with quasi religious overtones", and removing most of the scientific elements, none of her dialogue remains in the final film, and there was a "rather bitter credits dispute."The film was eventually conceived as an animated film bracketed with live-action sequences. The rest involved a combination of computer-generated visuals and back-lit animation. Lisberger planned to finance the movie independently by approaching several computer companies but had little success. However, one company, Information International Inc., was receptive. He met with Richard Taylor, a representative, and they began talking about using live-action photography with back-lit animation in such a way that it could be integrated with computer graphics. At this point, there was a script and the film was entirely storyboarded, with some computer animation tests completed. He had spent approximately $300,000 developing Tron and had also secured $4–5 million in private backing before reaching a standstill. Lisberger and Kushner took their storyboards and samples of computer-generated films to Warner Bros., Metro-Goldwyn-Mayer, and Columbia Pictures – all of which turned them down.In 1980, they decided to take the idea to Walt Disney Productions, which was interested in producing more daring productions at the time. Tom Wilhite, Disney's vice president for creative development, watched Lisberger's test footage and convinced Ron Miller to give the movie a chance. However, Disney executives were uncertain about giving $10–12 million to a first-time producer and director using techniques which, in most cases, had never been attempted. The studio agreed to finance a test reel which involved a flying disc champion throwing a rough prototype of the discs used in the film. It was a chance to mix live-action footage with back-lit animation and computer-generated visuals. It impressed the executives at Disney and they agreed to back the film. MacBird and Lisberger's script was subsequently re-written and re-storyboarded with the studio's input. At the time, Disney rarely hired outsiders to make films for them, and Kushner found that he and his group were given a chilly reception because they "tackled the nerve center – the animation department. They saw us as the germ from outside. We tried to enlist several Disney animators, but none came. Disney is a closed group." As a result, they hired Wang Film Productions for the animation. === Production === Because of the many special effects, Disney decided in 1981 to film Tron completely in 65-mm Super Panavision (except for the computer-generated layers, which were shot in VistaVision and both anamorphic 35mm and Super 35 which were used for some scenes in the "real" world and subsequently "blown up" to 65 mm). Three designers were brought in to create the look of the computer world. French comic book artist Jean Giraud (also known as Moebius) was the main set and costume designer for the film. Most of the vehicle designs (including Sark's aircraft carrier, the light cycles, the tank, and the solar sailer) were created by industrial designer Syd Mead. Peter Lloyd, a high-tech commercial artist, designed the environments. Nevertheless, these jobs often overlapped, leaving Giraud working on the solar sailer and Mead designing terrain, sets and the film's logo. The original 'Program' character design was inspired by Lisberger Studios' logo of a glowing bodybuilder hurling two discs.To create the computer animation sequences of Tron, Disney turned to the four leading computer graphics firms of the day: Information International, Inc. of Culver City, California, who owned the Super Foonly F-1 (the fastest PDP-10 ever made and the only one of its kind); MAGI of Elmsford, New York; Robert Abel and Associates of California; and Digital Effects of New York City. Bill Kovacs worked on the film while working for Robert Abel before going on to found Wavefront Technologies. The work was not a collaboration, resulting in very different styles used by the firms. Tron was one of the first films to make extensive use of any form of computer animation, and it is celebrated as a milestone in the industry though only fifteen to twenty minutes of such animation were used, mostly scenes that show digital "terrain" or patterns, or include vehicles such as light-cycles, tanks and ships. Because the technology to combine computer animation and live action did not exist at the time, these sequences were interspersed with the filmed characters. One of the computers used had only 2 MB of memory and no more than 330 MB of storage. This put a limit on detail of background; and at a certain distance, they had a procedure of mixing in black to fade things out, a process called "depth cueing". The film's Computer Effects Supervisor Richard Taylor told them "When in doubt, black it out!", which became their motto. Originally the film was meant to use white backgrounds like in THX 1138 inside the Grid, but it would require such huge amounts of lights that it was decided to use black backgrounds instead.The computers at the time could not do animation, so the frames had to be produced one by one. In some of the more complex sequences, like the Solar Sailer moving through metal canyons, each frame could take up to six hours to produce. There was no way to digitally print them on film, either; rather, a motion picture camera was placed in front of a computer screen to capture each individual frame.Most of the scenes, backgrounds, and visual effects in the film were created using more traditional techniques and a unique process known as "backlit animation". In this process, live-action scenes inside the computer world were filmed in black-and-white on an entirely black set, placed in an enlarger for blow-ups and transferred to large format Kodalith high-contrast film. These negatives were then used to make Kodalith sheets with a reverse (positive) image. Clear cels were laid over each sheet and all portions of the figure except the areas that were exposed for the later camera passes were manually blacked out. Next the Kodalith sheets and cel overlays were placed over a light box while a VistaVision camera mounted above it made separate passes and different color filters. A typical shot normally required 12 passes, but some sequences, like the interior of the electronic tank, could need as many as 50 passes. About 300 matte paintings were made for the film, each photographed onto a large piece of Ektachrome film before colors were added by gelatin filters in a similar procedure as in the Kodaliths. The mattes, rotoscopic and CGI were then combined and composed together to give them a "technological" appearance. With multiple layers of high-contrast, large format positives and negatives, this process required truckloads of sheet film and a workload even greater than that of a conventional cel-animated feature. The Kodalith was specially produced as large sheets by Kodak for the film and came in numbered boxes so that each batch of the film could be used in order of manufacture for a consistent image. However, this was not understood by the filmmakers and, as a result, glowing outlines and circuit traces occasionally flicker as the film speed varied between batches. After the reason was discovered, this was no longer a problem as the batches were used in order and "zinger" sounds were used during the flickering parts to represent the computer world malfunctioning as Lisberger described it. Lisberger later had these flickers and sounds digitally corrected for the 2011 restored Blu-ray release as they were not included in his original vision of the film. Due to its difficulty and cost, this process of back-lit animation was not repeated for another feature film. Sound design and creation for the film was assigned to Frank Serafine, who was responsible for the sound design on Star Trek: The Motion Picture in 1979. At one point in the film, a small entity called "Bit" advises Flynn with only the words "yes" and "no" created by a Votrax speech synthesizer. BYTE wrote: "Although this film is very much the personal expression of Steven Lisberger's vision, nevertheless [it] has certainly been a group effort". More than 569 people were involved in the post-production work, including 200 inkers and hand-painters, 85 of them from Taiwan's Cuckoo's Nest Studio. Unusual for an English-language production, in the end credits the Taiwanese personnel were listed with their names written in Chinese characters.This film features parts of the Lawrence Livermore National Laboratory; the multi-story ENCOM laser bay was the target area for the SHIVA solid-state multi-beamed laser. Also, the stairway that Alan, Lora, and Flynn use to reach Alan's office is the stairway in Building 451 near the entrance to the main machine room. The cubicle scenes were shot in another room of the lab. At the time, Tron was the only film to have scenes filmed inside this lab.The original script called for "good" programs to be colored yellow and "evil" programs (those loyal to Sark and the MCP) to be colored blue. Partway into production, this coloring scheme was changed to blue for good and red for evil, but some scenes were produced using the original coloring scheme: Clu, who drives a tank, has yellow circuit lines, and all of Sark's tank commanders are blue (but appear green in some presentations). Also, the light-cycle sequence shows the heroes driving yellow (Flynn), orange (Tron), and red (Ram) cycles, while Sark's troops drive blue cycles; similarly, Clu's tank is red, while tanks driven by crews loyal to Sark are blue. Because of all the personal information about citizens which exist inside computer networks, such as social security number and driver's license, the idea was that each real world person has a digital counterpart inside the Grid based on information about them, which is why it was decided to use some of the same actors in both worlds.Budgeting the production was difficult by reason of breaking new ground in response to additional challenges, including an impending Directors Guild of America strike and a fixed release date. Disney predicted at least $400 million in domestic sales of merchandise, including an arcade game by Bally Midway and three Mattel Intellivision home video games.The producers also added Easter eggs: during the scene where Tron and Ram escape from the Light Cycle arena into the system, Pac-Man can be seen behind Sark (with the corresponding sounds from the Pac-Man arcade game being heard in the background), while a "Hidden Mickey" outline (located at time 01:12:29 on the re-release Blu-ray) can be seen below the solar sailer during the protagonists' journey. The film set also included the arcade games Space Invaders (1978), Asteroids (1979) and Pac-Man (1980).Tron was originally meant to be released during the Christmas season of 1982, but when chairman of the Disney board Card Walker found out the release date of Don Bluth's film The Secret of NIMH was in early July, he rushed it into a summer release to be able to compete with Bluth, and it ended up competing with films like E.T. the Extra-Terrestrial, Star Trek II: The Wrath of Khan, Blade Runner and Poltergeist. === Music === The soundtrack for Tron was written by pioneer electronic musician Wendy Carlos, who is best known for her album Switched-On Bach and for the soundtracks to many films, including the Stanley Kubrick-directed films A Clockwork Orange and The Shining. The music, which was the first collaboration between Carlos and her partner Annemarie Franklin, featured a mix of an analog Moog synthesizer and Crumar's GDS digital synthesizer (complex additive and phase modulation synthesis), along with non-electronic pieces performed by the London Philharmonic Orchestra (hired at the insistence of Disney, which was concerned that Carlos might not be able to complete her score on time). Two additional musical tracks ("1990's Theme" and "Only Solutions") were provided by the American band Journey after British band Supertramp pulled out of the project. An album featuring dialogue, music and sound effects from the film was also released on LP by Disneyland Records in 1982. == Reception and legacy == === Box office === Tron was released on July 9, 1982, in 1,091 theaters in the United States and Canada grossing USD $4 million on its opening weekend. It went on to gross $33 million in the United States and Canada and $17 million overseas, for a worldwide gross of approximately $50 million, which was Disney's highest-grossing live action film for 5 years.In addition, the film had $70 million in wholesale merchandise sales.Despite the gross and merchandise sales, it was seen as a financial disappointment, and the studio wrote off some of its $17 million budget. === Critical response === The film was well received by critics. Roger Ebert of the Chicago Sun-Times gave the film four out of four stars and described it as "a dazzling movie from Disney in which computers have been used to make themselves romantic and glamorous. Here's a technological sound-and-light show that is sensational and brainy, stylish and fun". However, near the end of his review, he noted (in a positive tone), "This is an almost wholly technological movie. Although it's populated by actors who are engaging (Bridges, Cindy Morgan) or sinister (Warner), it's not really a movie about human nature. Like Star Wars or The Empire Strikes Back but much more so, this movie is a machine to dazzle and delight us". Ebert closed his first annual Overlooked Film Festival with a showing of Tron. Gene Siskel of the Chicago Tribune also awarded four out of four stars, calling it "a trip, and a terrifically entertaining one at that...It's a dazzler that opens up our minds to our new tools, all in a traditional film narrative." Each gave the film two thumbs up. Tron was also featured in Siskel and Ebert's video pick of the week in 1993.InfoWorld's Deborah Wise was impressed, writing that "it's hard to believe the characters acted out the scenes on a darkened soundstage... We see characters throwing illuminated Frisbees, driving 'lightcycles' on a video-game grid, playing a dangerous version of jai alai and zapping numerous fluorescent tanks in arcade-game-type mazes. It's exciting, it's fun, and it's just what video-game fans and anyone with a spirit of adventure will love—despite plot weaknesses."On the other hand, Variety disliked the film and said in its review, "Tron is loaded with visual delights but falls way short of the mark in story and viewer involvement. Screenwriter-director Steven Lisberger has adequately marshalled a huge force of technicians to deliver the dazzle, but even kids (and specifically computer game geeks) will have a difficult time getting hooked on the situations". In her review for The New York Times, Janet Maslin criticized the film's visual effects: "They're loud, bright and empty, and they're all this movie has to offer". The Washington Post's Gary Arnold wrote, "Fascinating as they are as discrete sequences, the computer-animated episodes don't build dramatically. They remain a miscellaneous form of abstract spectacle". In his review for The Globe and Mail, Jay Scott wrote, "It's got momentum and it's got marvels, but it's without heart; it's a visionary technological achievement without vision".Colin Greenland reviewed the home video release of Tron for Imagine magazine, and stated that "three plucky young programmers descend into the micro-world to battle the Master Control Program with a sacred frisbee. Loses much of its excitement on the little screen."On review aggregation website Rotten Tomatoes, the film holds a 72% rating based on the reviews of 67 critics, with an average rating of 6.4/10. The website's consensus states: "Though perhaps not as strong dramatically as it is technologically, TRON is an original and visually stunning piece of science fiction that represents a landmark work in the history of computer animation." Metacritic gave the film a score of 58 based on 13 reviews, indicating "mixed or average reviews".In the year it was released, the Motion Picture Academy refused to nominate Tron for a special-effects award because, as director Steven Lisberger puts it, "The Academy thought we cheated by using computers". The film did, however, earn Oscar nominations in the categories of Best Costume Design (Elois Jenssen and Rosanna Norton) and Best Sound (Michael Minkler, Bob Minkler, Lee Minkler, and James LaRue). === Cultural effect === In 1997, Ken Perlin of the Mathematical Applications Group, Inc. won an Academy Award for Technical Achievement for his invention of Perlin noise for Tron.The film, considered groundbreaking, has inspired several individuals in numerous ways. John Lasseter, head of Pixar and Disney's animation group, described how the film helped him see the potential of computer-generated imagery in the production of animated films, stating "without Tron, there would be no Toy Story."The two members of the French house music group Daft Punk, who scored the sequel, have held a joint, lifelong fascination with the film. Also, in Gorillaz' music video for the song "Feel Good Inc.", Russel, the fictional drummer of the band, can be seen wearing an Encom hat.Tron developed into a cult film and was ranked as 13th in a 2010 list of the top 20 cult films published by The Boston Globe.The film heavily inspired the music video for Danish pop/dance group Infernal's 2006 hit single "From Paris to Berlin". The music video for Australian rock band Regurgitator's 1997 song "Everyday Formula" was also heavily inspired by the film and recreates several scenes.In 2008, the American Film Institute nominated this film for its Top 10 Science Fiction Films list. == Books == A novelization of Tron was released in 1982, written by American science fiction novelist Brian Daley. It included eight pages of color photographs from the movie. In the same year, Disney Senior Staff Publicist Michael Bonifer authored a book entitled The Art of Tron which covered aspects of the pre-production and post-production aspects of Tron. A nonfiction book about the making of the original film, The Making of Tron: How Tron Changed Visual Effects and Disney Forever, was written by William Kallay and published in 2011. == Television == Tron made its television debut as part of the Disney Channel's first day of programming, on April 18, 1983, at 7:00PM (ET). == Home media == Tron was originally released on VHS, Betamax, LaserDisc, and CED Videodisc in 1983. As with most video releases from the 1980s, the film was cropped to the 4:3 pan and scan format. The film saw multiple re-releases throughout the 1990s, most notably an "Archive Collection" LaserDisc box set, which featured the first release of the film in its original widescreen 2.20:1 format. By 1993, Tron had grossed $17 million in video rentals.Tron saw its first DVD release on December 12, 2000. This bare-bones release utilized the same non-anamorphic video transfer used in the Archive Collection LaserDisc set, and it did not include any of the LD's special features. On January 15, 2002, the film received a 20th Anniversary Collector's Edition release in the forms of a VHS and a special 2-Disc DVD set. This set featured a new THX mastered anamorphic video transfer and included all of the special features from the LD Archive Collection release, plus an all-new 90 minute "Making of Tron" documentary. To tie in with the home video release of Tron: Legacy, the movie was finally re-released by Walt Disney Studios Home Entertainment on Special Edition DVD and for the first time on Blu-ray Disc on April 5, 2011, with the subtitle "The Original Classic" to distinguish it from its sequel. Tron was also featured in a 5-Disc Blu-ray Combo with the 3D copy of Tron: Legacy. The film was re-released on Blu-ray and DVD in the UK on June 27, 2011. == Sequels == === Tron: Legacy === On January 12, 2005, Disney announced it had hired screenwriters Brian Klugman and Lee Sternthal to write a sequel to Tron. In 2008, director Joseph Kosinski negotiated to develop and direct TRON, described as "the next chapter" of the 1982 film and based on a preliminary teaser trailer shown at that year's San Diego Comic-Con, with Lisberger co-producing. Filming began in Vancouver, British Columbia in April 2009. During the 2009 Comic-Con, the title of the sequel was revealed to be changed to Tron: Legacy. The second trailer (also with the Tron: Legacy logo) was released in 3D with Alice In Wonderland. A third trailer premiered at Comic-Con 2010 on July 22. At Disney's D23 Expo on September 10–13, 2009, they also debuted teaser trailers for Tron: Legacy as well as having a light cycle and other props from the film there. The film was released on December 17, 2010, with Daft Punk composing the score. === Tron: Uprising (TV series) === Tron: Uprising takes place during the time period between the events of Tron and Tron: Legacy. In the series, young program Beck becomes the leader of a revolution inside the computer world of the Grid, tasked with the mission of freeing his home and friends from the reign of Clu and his henchman, Gen. Tesler. To prepare for the challenge, Beck is trained by Tron – the greatest warrior The Grid has ever known – who mentors Beck as he grows beyond his youthful nature into a courageous and powerful leader. Destined to become the system's new protector, Beck adopts Tron's persona to battle the forces of evil. == Further reading == == See also == Tron (franchise) Tron (hacker) Demoscene Isekai Golden age of arcade video games Automan - Early eighties TV series inspired by the film. Superhuman Samurai Syber-Squad Digimon Adventure Code Lyoko Zixx ReBoot ReBoot: The Guardian Code == References == == External links == Official website Tron at the American Film Institute Catalog Tron at Disney A to Z Tron at IMDb Tron at AllMovie Tron at Box Office Mojo Tron at Rotten Tomatoes Tron at the TCM Movie Database
AmbaCoin	AmbaCoin is the official cryptocurrency of Ambazonia. It is said to be backed by the "rich natural resources" of the breakaway region. The AmbaCoin was launched on in 2018, and the ICO was from December 2018 to 2019. The Ambazonian Government claims that all profits go towards their independence struggle and humanitarian aid. == Proposal == In 2018, AmbaCoin was created with the intention of being the official currency of Ambazonia. Despite the AmbaCoin being a crypto currency, it cannot be used as an official currency due to many Ambazonians not having access to the internet, low internet literacy and lack of proper electricity infrastructure, as not everyone has access to electricity. Hence a new currency will be introduce, if independence is attained, for day-to-day transactions and business matters. Several names have been tossed around but nothing has been decided. Examples include: the Amba (AMB/A), the Ambazonian Shilling (AMS/AmS), the Amba-Dollar (AMD/Am$), Southern Cameroonian Pound (SCP/SC£), Ambazonian Cowry (AMC/Am𐤀) (the historical currency that circulated along the coast of West Africa, mostly by traders and merchants, before the colonization of Africa), Njangi (Nj), Ambazonian Dinar (AMD/AmƉ), Ambazonian Qwid (AMQ/AmΦ) and the West African Eco (provided it joins the ECOWAS along with the WAMZ if or once independence is attained). == References ==
Nervos Network	Nervos Network is a blockchain platform which consists of multiple blockchain layers that are designed for different functions. The foundational layer is known as the Common Knowledge Base, whilst the native cryptocurrency of this layer is called CKB. This foundational layer uses a proof-of-work consensus model. Smart contracts and decentralized applications can be deployed on any layer. Nervos Network was founded in 2018 by Jan Xie, Terry Tai, Kevin Wang, Daniel Lv, and Cipher Wang. == Architecture == Nervos Network utilizes multiple blockchain layers to for different functions. The base layer prioritizes security and decentralization, and is optimized to verify transactions. It can settle transactions submitted from upper layers and resolves disputes. Layer 2 and above are able to favor greater throughput demands of software applications. === NC MAX === Layer 1 achieves cryptographic consensus through proof of work, using a modified version of Bitcoin's Nakamoto consensus algorithm: NC-MAX. NC-MAX was presented at the Internet Society's Network and Distributed System Security (NDSS) Symposium in 2022. The consensus process uses a novel hash function called "Eaglesong." Several manufacturers produce ASIC (Application Specific Integrated Circuit) machines to utilize the Eaglesong protocol to mine CKB token, including Bitmain Goldshell, and iBeLink. === Cell Model === The accounting method on layer 1 is an expansion of Bitcoin's UTXO model, and is dubbed the "Cell model". This model is programmable, thereby supporting smart contracts. Additionally, a cell is able to store data on-chain, such as non-fungible tokens (NFTs), compiled code, or serialized data like JSON strings. === CKB-VM === The CKB virtual machine (CKB-VM) is a software-based emulated computer that executes smart contracts on Nervos Network's base layer. Like the Ethereum virtual machine, CKB is a Turing-complete development environment, but also integrates the RISC-V instruction set. === Layer 2 === Two layer 2 blockchainsexist on Nervos Network: Godwoken and Axon. Godwoken is a blockchain protocol that can be configured to run virtual machines or consensus models. With this framework, larger numbers of transactions are processed and are then submitted in batches to layer 1 for subsequent verification. Godwoken runs the Ethereum virtual machine (EVM), allowing developers to use of tools and software developed for Ethereum while directly interfacing with Nervos and utilizing CKB. Axon is an EVM-compatible sidechain protocol optimized for higher transaction throughput. == References == == Further reading == Bu, Hao; Sun, Meng (March 2020). "Towards Modeling and Verification of the CKB Block Synchronization Protocol in Coq". Formal Methods and Software Engineering. Lecture Notes in Computer Science. Vol. 12531. pp. 287–296. doi:10.1007/978-3-030-63406-3_17. ISBN 978-3-030-63405-6. S2CID 229344990. {{cite book}}: \|journal= ignored (help) Szepieniec, Alan; Ashur, Tomer (2020). "Eaglesong: An ARX hash with fast diffusion" (PDF). Proceedings of the Romanian Academy, Series A. Romanian Academy. 21 (1): 69–76. Retrieved 2022-10-05. Zhang, Ren; Zhang, Dingwei; Wang, Quake; Wu, Sichen; Xie, Jan; Preneel, Bart (2019-04-01). "NC-Max: Breaking the Security-Performance Tradeoff in Nakamoto Consensus" (PDF). Network and Distributed Systems Security (NDSS) Symposium 2022. ISBN 978-1-891562-74-7. == External links == Official website
Algorand	Algorand is a cryptocurrency protocol providing proof-of-stake on a blockchain. Algorand's native cryptocurrency is called ALGO. == History == Algorand was founded in 2017 by Silvio Micali, a professor at MIT.The Algorand test network was launched to the public in April 2019, and the main network was launched in June 2019.Algorand has a negligible energy consumption per transaction. == Governance == Algorand is composed of the company Algorand, a private corporation based in Boston, and the nonprofit Algorand Foundation Ltd., incorporated in Singapore. Algorand Foundation Ltd. manages award funding, cryptographic research, on-chain governance, and decentralization of the Algorand network including nodes. The core development of the Algorand protocol is overseen by Algorand Inc..Algorand Foundation Ltd. is led by CEO Staci Warden.Algorand Foundation Ltd. issues quarterly votes for the stakes of ALGO to vote on. These proposals often revolve around the implementation of DeFi within the Algorand community. == Design == Algorand is intended to solve the "blockchain trilemma": the claim that any blockchain system can have at most two of three desirable properties: decentralization, scalability, and security. A system with all three could run on nodes that each have only moderate consumer-grade resources (i.e., does not need a data center or large cluster of virtual machines), has transaction processing which scales with the total network resources (rather than the resources available per-node), and could not be subverted by attackers who individually possess a large fraction of the network's total resources. === Consensus algorithm === Algorand uses a Byzantine agreement protocol that leverages proof of stake. As long as a supermajority of the stake is in non-malicious hands, the protocol can tolerate malicious users, achieving consensus without a central authority. Consensus on Algorand requires three steps to propose, confirm, and write the block to the blockchain. The steps are proposed soft vote and certified vote. The first phase (the block proposal phase) uses proof of stake principles. During this phase, a committee of users in the system is selected randomly, though in a manner that is weighted, to propose the new block. The selection of the committee is made via a process called "cryptographic sortition", where each user determines whether they are on the committee by locally executing a Verifiable random function (VRF). If the VRF indicates that the user is chosen, the VRF returns a cryptographic proof that can be used to verify that the user is on the committee. The likelihood that a given user will be on the committee is influenced by the number of ALGO tokens held by that user (the stake).After determining a user is on the block selection committee, that user can build a proposed block and disseminate it to the network for review/analysis during the second phase. The user includes the cryptographic proof from the VRF in their proposed block to demonstrate committee membership.In the second phase (the block finalization phase), a Byzantine Agreement protocol (called "BA*") is used to vote on the proposed blocks. In this second phase, a new committee is formed via cryptographic sortition. When users have determined that they are in this second-phase voting committee, they analyze the proposed blocks they have received (including verification of first-phase committee membership) and vote on whether any of the blocks should be adopted. If the voting committee achieves consensus on a new block, then the new block is disseminated across the network.Within the Algorand consensus algorithm, membership in both committees changes every time the phase is run. This protects users against targeted attacks, as an attacker will not know in advance which users are going to be on a committee. Two different Algorand blocks must reach consensus in a different round. According to an external security audit, the model also accounts for timing issues and adversary actions, e.g., when the adversary has control over message delivery. == References ==
Silvio Micali	Silvio Micali (born October 13, 1954) is an Italian computer scientist, professor at the Massachusetts Institute of Technology and the founder of Algorand, a proof-of-stake blockchain cryptocurrency protocol. Micali's research at the MIT Computer Science and Artificial Intelligence Laboratory centers on cryptography and information security.In 2012, he received the Turing Award for his work in cryptography. == Personal life == Micali graduated in mathematics at La Sapienza University of Rome in 1978 and earned a PhD degree in computer science from the University of California, Berkeley in 1982; for research supervised by Manuel Blum. Micali has been on the faculty at MIT, Electrical Engineering and Computer Science Department, since 1983. He's also served on the faculty of the University of Pennsylvania, University of Toronto, and Tsinghua University. His research interests are cryptography, zero knowledge, pseudorandom generation, secure protocols, and mechanism design. == Career == Micali is best known for some of his fundamental early work on public-key cryptosystems, pseudorandom functions, digital signatures, oblivious transfer, secure multiparty computation, and is one of the co-inventors of zero-knowledge proofs. His former doctoral students include Mihir Bellare, Bonnie Berger, Shai Halevi, Rafail Ostrovsky, Jing Chen, Rafael Pass, Chris Peikert, and Phillip Rogaway.In 2001 Micali co-founded CoreStreet Ltd, a software company originally based in Cambridge, Massachusetts which implemented Micali's patents involving checking the status of digital certificates (mainly applicable to large enterprise and government-sized digital and physical identity projects). Micali served as Chief Scientist at CoreStreet. CoreStreet was bought by ActivIdentity in 2009.In the early 2000s Micali also founded Peppercoin, a micro-payments system which was acquired in 2007. In 2017, Micali founded Algorand. === Awards and honors === Micali won the Gödel Prize in 1993. He received the RSA Award for Excellence in Mathematics in 2004. In 2007, he was selected to be a member of the National Academy of Sciences and a Fellow of the International Association for Cryptologic Research (IACR). He is also a member of the National Academy of Engineering and the American Academy of Arts and Sciences. He received the Turing Award for the year 2012 along with Shafi Goldwasser for their work in the field of cryptography. In 2015 the University of Salerno acknowledged his studies by giving him an honoris causa degree in Computer Science. He was elected as an ACM Fellow in 2017. == References ==
Avalanche	An avalanche is a rapid flow of snow down a slope, such as a hill or mountain.Avalanches can be set off spontaneously, by factors such as increased precipitation or snowpack weakening, or by external means such as humans, other animals, and earthquakes. Primarily composed of flowing snow and air, large avalanches have the capability to capture and move ice, rocks, and trees. Avalanches occur in two general forms, or combinations thereof: slab avalanches made of tightly packed snow, triggered by a collapse of an underlying weak snow layer, and loose snow avalanches made of looser snow. After being set off, avalanches usually accelerate rapidly and grow in mass and volume as they capture more snow. If an avalanche moves fast enough, some of the snow may mix with the air, forming a powder snow avalanche. Though they appear to share similarities, avalanches are distinct from slush flows, mudslides, rock slides, and serac collapses. They are also different from large scale movements of ice. Avalanches can happen in any mountain range that has an enduring snowpack. They are most frequent in winter or spring, but may occur at any time of the year. In mountainous areas, avalanches are among the most serious natural hazards to life and property, so great efforts are made in avalanche control. There are many classification systems for the different forms of avalanches, which vary according to their users' needs. Avalanches can be described by their size, destructive potential, initiation mechanism, composition, and dynamics. == Formation == Most avalanches occur spontaneously during storms under increased load due to snowfall and/or erosion. The second largest cause of natural avalanches is metamorphic changes in the snowpack such as melting due to solar radiation. Other natural causes include rain, earthquakes, rockfall and icefall. Artificial triggers of avalanches include skiers, snowmobiles, and controlled explosive work. Contrary to popular belief, avalanches are not triggered by loud sound; the pressure from sound is orders of magnitude too small to trigger an avalanche.Avalanche initiation can start at a point with only a small amount of snow moving initially; this is typical of wet snow avalanches or avalanches in dry unconsolidated snow. However, if the snow has sintered into a stiff slab overlying a weak layer then fractures can propagate very rapidly, so that a large volume of snow, that may be thousands of cubic metres, can start moving almost simultaneously. A snowpack will fail when the load exceeds the strength. The load is straightforward; it is the weight of the snow. However, the strength of the snowpack is much more difficult to determine and is extremely heterogeneous. It varies in detail with properties of the snow grains, size, density, morphology, temperature, water content; and the properties of the bonds between the grains. These properties may all metamorphose in time according to the local humidity, water vapour flux, temperature and heat flux. The top of the snowpack is also extensively influenced by incoming radiation and the local air flow. One of the aims of avalanche research is to develop and validate computer models that can describe the evolution of the seasonal snowpack over time. A complicating factor is the complex interaction of terrain and weather, which causes significant spatial and temporal variability of the depths, crystal forms, and layering of the seasonal snowpack. === Slab avalanches === Slab avalanches form frequently in snow that has been deposited, or redeposited by wind. They have the characteristic appearance of a block (slab) of snow cut out from its surroundings by fractures. Elements of slab avalanches include the following: a crown fracture at the top of the start zone, flank fractures on the sides of the start zones, and a fracture at the bottom called the stauchwall. The crown and flank fractures are vertical walls in the snow delineating the snow that was entrained in the avalanche from the snow that remained on the slope. Slabs can vary in thickness from a few centimetres to three metres. Slab avalanches account for around 90% of avalanche-related fatalities in backcountry users. === Powder snow avalanches === The largest avalanches form turbulent suspension currents known as powder snow avalanches or mixed avalanches, a kind of gravity current. These consist of a powder cloud, which overlies a dense avalanche. They can form from any type of snow or initiation mechanism, but usually occur with fresh dry powder. They can exceed speeds of 300 km/h (190 mph), and masses of 10,000,000 tonnes; their flows can travel long distances along flat valley bottoms and even uphill for short distances. === Wet snow avalanches === In contrast to powder snow avalanches, wet snow avalanches are a low velocity suspension of snow and water, with the flow confined to the track surface (McClung, 1999, p. 108). The low speed of travel is due to the friction between the sliding surface of the track and the water saturated flow. Despite the low speed of travel (≈10–40 km/h), wet snow avalanches are capable of generating powerful destructive forces, due to the large mass and density. The body of the flow of a wet snow avalanche can plough through soft snow, and can scour boulders, earth, trees, and other vegetation; leaving exposed and often scored ground in the avalanche track. Wet snow avalanches can be initiated from either loose snow releases, or slab releases, and only occur in snowpacks that are water saturated and isothermally equilibrated to the melting point of water. The isothermal characteristic of wet snow avalanches has led to the secondary term of isothermal slides found in the literature (for example in Daffern, 1999, p. 93). At temperate latitudes wet snow avalanches are frequently associated with climatic avalanche cycles at the end of the winter season, when there is significant daytime warming. === Ice avalanche === An ice avalanche occurs when a large piece of ice, such as from a serac or calving glacier, falls onto ice (such as the Khumbu Icefall), triggering a movement of broken ice chunks. The resulting movement is more analogous to a rockfall or a landslide than a snow avalanche. They are typically very difficult to predict and almost impossible to mitigate. === Avalanche pathway === As an avalanche moves down a slope it follows a certain pathway that is dependent on the slope's degree of steepness and the volume of snow/ice involved in the mass movement. The origin of an avalanche is called the Starting Point and typically occurs on a 30–45 degree slope. The body of the pathway is called the Track of the avalanche and usually occurs on a 20–30 degree slope. When the avalanche loses its momentum and eventually stops it reaches the Runout Zone. This usually occurs when the slope has reached a steepness that is less than 20 degrees. These degrees are not consistently true due to the fact that each avalanche is unique depending on the stability of the snowpack that it was derived from as well as the environmental or human influences that triggered the mass movement. == Injuries and deaths == People caught in avalanches can die from suffocation, trauma, or hypothermia. From "1950–1951 to 2020–2021" there were 1,169 people who died in avalanches in the United States. For the 11-year period ending April 2006 445 people died in avalanches throughout North America. On average, 28 people die in avalanches every winter in the United States.In 2001 it was reported that globally an average of 150 people die each year from avalanches. Three of the deadliest recorded avalanches have killed over a thousand people each. == Terrain, snowpack, weather == Doug Fesler and Jill Fredston developed a conceptual model of the three primary elements of avalanches: terrain, weather, and snowpack. Terrain describes the places where avalanches occur, weather describes the meteorological conditions that create the snowpack, and snowpack describes the structural characteristics of snow that make avalanche formation possible. === Terrain === Avalanche formation requires a slope shallow enough for snow to accumulate but steep enough for the snow to accelerate once set in motion by the combination of mechanical failure (of the snowpack) and gravity. The angle of the slope that can hold snow, called the angle of repose, depends on a variety of factors such as crystal form and moisture content. Some forms of drier and colder snow will only stick to shallower slopes, while wet and warm snow can bond to very steep surfaces. In particular, in coastal mountains, such as the Cordillera del Paine region of Patagonia, deep snowpacks collect on vertical and even overhanging rock faces. The slope angle that can allow moving snow to accelerate depends on a variety of factors such as the snow's shear strength (which is itself dependent upon crystal form) and the configuration of layers and inter-layer interfaces. The snowpack on slopes with sunny exposures is strongly influenced by sunshine. Diurnal cycles of thawing and refreezing can stabilize the snowpack by promoting settlement. Strong freeze-thaw cycles result in the formation of surface crusts during the night and of unstable surface snow during the day. Slopes in the lee of a ridge or of another wind obstacle accumulate more snow and are more likely to include pockets of deep snow, wind slabs, and cornices, all of which, when disturbed, may result in avalanche formation. Conversely, the snowpack on a windward slope is often much shallower than on a lee slope. Avalanches and avalanche paths share common elements: a start zone where the avalanche originates, a track along which the avalanche flows, and a runout zone where the avalanche comes to rest. The debris deposit is the accumulated mass of the avalanched snow once it has come to rest in the run-out zone. For the image at left, many small avalanches form in this avalanche path every year, but most of these avalanches do not run the full vertical or horizontal length of the path. The frequency with which avalanches form in a given area is known as the return period. The start zone of an avalanche must be steep enough to allow snow to accelerate once set in motion, additionally convex slopes are less stable than concave slopes, because of the disparity between the tensile strength of snow layers and their compressive strength. The composition and structure of the ground surface beneath the snowpack influences the stability of the snowpack, either being a source of strength or weakness. Avalanches are unlikely to form in very thick forests, but boulders and sparsely distributed vegetation can create weak areas deep within the snowpack through the formation of strong temperature gradients. Full-depth avalanches (avalanches that sweep a slope virtually clean of snow cover) are more common on slopes with smooth ground, such as grass or rock slabs. Generally speaking, avalanches follow drainages down-slope, frequently sharing drainage features with summertime watersheds. At and below tree line, avalanche paths through drainages are well defined by vegetation boundaries called trim lines, which occur where avalanches have removed trees and prevented regrowth of large vegetation. Engineered drainages, such as the avalanche dam on Mount Stephen in Kicking Horse Pass, have been constructed to protect people and property by redirecting the flow of avalanches. Deep debris deposits from avalanches will collect in catchments at the terminus of a run out, such as gullies and river beds. Slopes flatter than 25 degrees or steeper than 60 degrees typically have a lower incidence of avalanches. Human-triggered avalanches have the greatest incidence when the snow's angle of repose is between 35 and 45 degrees; the critical angle, the angle at which human-triggered avalanches are most frequent, is 38 degrees. When the incidence of human triggered avalanches is normalized by the rates of recreational use, however, hazard increases uniformly with slope angle, and no significant difference in hazard for a given exposure direction can be found. The rule of thumb is: A slope that is flat enough to hold snow but steep enough to ski has the potential to generate an avalanche, regardless of the angle. === Snowpack structure and characteristics === The snowpack is composed of ground-parallel layers that accumulate over the winter. Each layer contains ice grains that are representative of the distinct meteorological conditions during which the snow formed and was deposited. Once deposited, a snow layer continues to evolve under the influence of the meteorological conditions that prevail after deposition. For an avalanche to occur, it is necessary that a snowpack have a weak layer (or instability) below a slab of cohesive snow. In practice the formal mechanical and structural factors related to snowpack instability are not directly observable outside of laboratories, thus the more easily observed properties of the snow layers (e.g. penetration resistance, grain size, grain type, temperature) are used as index measurements of the mechanical properties of the snow (e.g. tensile strength, friction coefficients, shear strength, and ductile strength). This results in two principal sources of uncertainty in determining snowpack stability based on snow structure: First, both the factors influencing snow stability and the specific characteristics of the snowpack vary widely within small areas and time scales, resulting in significant difficulty extrapolating point observations of snow layers across different scales of space and time. Second, the relationship between readily observable snowpack characteristics and the snowpack's critical mechanical properties has not been completely developed. While the deterministic relationship between snowpack characteristics and snowpack stability is still a matter of ongoing scientific study, there is a growing empirical understanding of the snow composition and deposition characteristics that influence the likelihood of an avalanche. Observation and experience has shown that newly fallen snow requires time to bond with the snow layers beneath it, especially if the new snow falls during very cold and dry conditions. If ambient air temperatures are cold enough, shallow snow above or around boulders, plants, and other discontinuities in the slope, weakens from rapid crystal growth that occurs in the presence of a critical temperature gradient. Large, angular snow crystals are indicators of weak snow, because such crystals have fewer bonds per unit volume than small, rounded crystals that pack tightly together. Consolidated snow is less likely to slough than loose powdery layers or wet isothermal snow; however, consolidated snow is a necessary condition for the occurrence of slab avalanches, and persistent instabilities within the snowpack can hide below well-consolidated surface layers. Uncertainty associated with the empirical understanding of the factors influencing snow stability leads most professional avalanche workers to recommend conservative use of avalanche terrain relative to current snowpack instability. === Weather === Avalanches only occur in a standing snowpack. Typically winter seasons at high latitudes, high altitudes, or both have weather that is sufficiently unsettled and cold enough for precipitated snow to accumulate into a seasonal snowpack. Continentality, through its potentiating influence on the meteorological extremes experienced by snowpacks, is an important factor in the evolution of instabilities, and consequential occurrence of avalanches faster stabilization of the snowpack after storm cycles. The evolution of the snowpack is critically sensitive to small variations within the narrow range of meteorological conditions that allow for the accumulation of snow into a snowpack. Among the critical factors controlling snowpack evolution are: heating by the sun, radiational cooling, vertical temperature gradients in standing snow, snowfall amounts, and snow types. Generally, mild winter weather will promote the settlement and stabilization of the snowpack; conversely, very cold, windy, or hot weather will weaken the snowpack. At temperatures close to the freezing point of water, or during times of moderate solar radiation, a gentle freeze-thaw cycle will take place. The melting and refreezing of water in the snow strengthens the snowpack during the freezing phase and weakens it during the thawing phase. A rapid rise in temperature, to a point significantly above the freezing point of water, may cause avalanche formation at any time of year. Persistent cold temperatures can either prevent new snow from stabilizing or destabilize the existing snowpack. Cold air temperatures on the snow surface produce a temperature gradient in the snow, because the ground temperature at the base of the snowpack is usually around 0 °C, and the ambient air temperature can be much colder. When a temperature gradient greater than 10 °C change per vertical meter of snow is sustained for more than a day, angular crystals called depth hoar or facets begin forming in the snowpack because of rapid moisture transport along the temperature gradient. These angular crystals, which bond poorly to one another and the surrounding snow, often become a persistent weakness in the snowpack. When a slab lying on top of a persistent weakness is loaded by a force greater than the strength of the slab and persistent weak layer, the persistent weak layer can fail and generate an avalanche. Any wind stronger than a light breeze can contribute to a rapid accumulation of snow on sheltered slopes downwind. Wind slabs form quickly and, if present, weaker snow below the slab may not have time to adjust to the new load. Even on a clear day, wind can quickly load a slope with snow by blowing snow from one place to another. Top-loading occurs when wind deposits snow from the top of a slope; cross-loading occurs when wind deposits snow parallel to the slope. When a wind blows over the top of a mountain, the leeward, or downwind, side of the mountain experiences top-loading, from the top to the bottom of that lee slope. When the wind blows across a ridge that leads up the mountain, the leeward side of the ridge is subject to cross-loading. Cross-loaded wind-slabs are usually difficult to identify visually. Snowstorms and rainstorms are important contributors to avalanche danger. Heavy snowfall will cause instability in the existing snowpack, both because of the additional weight and because the new snow has insufficient time to bond to underlying snow layers. Rain has a similar effect. In the short-term, rain causes instability because, like a heavy snowfall, it imposes an additional load on the snowpack; and, once rainwater seeps down through the snow, it acts as a lubricant, reducing the natural friction between snow layers that holds the snowpack together. Most avalanches happen during or soon after a storm. Daytime exposure to sunlight will rapidly destabilize the upper layers of the snowpack if the sunlight is strong enough to melt the snow, thereby reducing its hardness. During clear nights, the snowpack can re-freeze when ambient air temperatures fall below freezing, through the process of long-wave radiative cooling, or both. Radiative heat loss occurs when the night air is significantly cooler than the snowpack, and the heat stored in the snow is re-radiated into the atmosphere. == Dynamics == When a slab avalanche forms, the slab disintegrates into increasingly smaller fragments as the snow travels downhill. If the fragments become small enough the outer layer of the avalanche, called a saltation layer, takes on the characteristics of a fluid. When sufficiently fine particles are present they can become airborne and, given a sufficient quantity of airborne snow, this portion of the avalanche can become separated from the bulk of the avalanche and travel a greater distance as a powder snow avalanche. Scientific studies using radar, following the 1999 Galtür avalanche disaster, confirmed the hypothesis that a saltation layer forms between the surface and the airborne components of an avalanche, which can also separate from the bulk of the avalanche.Driving an avalanche is the component of the avalanche's weight parallel to the slope; as the avalanche progresses any unstable snow in its path will tend to become incorporated, so increasing the overall weight. This force will increase as the steepness of the slope increases, and diminish as the slope flattens. Resisting this are a number of components that are thought to interact with each other: the friction between the avalanche and the surface beneath; friction between the air and snow within the fluid; fluid-dynamic drag at the leading edge of the avalanche; shear resistance between the avalanche and the air through which it is passing, and shear resistance between the fragments within the avalanche itself. An avalanche will continue to accelerate until the resistance exceeds the forward force. === Modelling === Attempts to model avalanche behaviour date from the early 20th century, notably the work of Professor Lagotala in preparation for the 1924 Winter Olympics in Chamonix. His method was developed by A. Voellmy and popularised following the publication in 1955 of his Ueber die Zerstoerungskraft von Lawinen (On the Destructive Force of Avalanches).Voellmy used a simple empirical formula, treating an avalanche as a sliding block of snow moving with a drag force that was proportional to the square of the speed of its flow: Pref = 1 2 ρ v 2 {\displaystyle {\textrm {Pref}}={\frac {1}{2}}\,{\rho }\,{v^{2}}\,\!} He and others subsequently derived other formulae that take other factors into account, with the Voellmy-Salm-Gubler and the Perla-Cheng-McClung models becoming most widely used as simple tools to model flowing (as opposed to powder snow) avalanches.Since the 1990s many more sophisticated models have been developed. In Europe much of the recent work was carried out as part of the SATSIE (Avalanche Studies and Model Validation in Europe) research project supported by the European Commission which produced the leading-edge MN2L model, now in use with the Service Restauration des Terrains en Montagne (Mountain Rescue Service) in France, and D2FRAM (Dynamical Two-Flow-Regime Avalanche Model), which was still undergoing validation as of 2007. Other known models are the SAMOS-AT avalanche simulation software and the RAMMS software. == Human involvement == === Prevention === Preventative measures are employed in areas where avalanches pose a significant threat to people, such as ski resorts, mountain towns, roads, and railways. There are several ways to prevent avalanches and lessen their power and develop preventative measures to reduce the likelihood and size of avalanches by disrupting the structure of the snowpack, while passive measures reinforce and stabilize the snowpack in situ. The simplest active measure is repeatedly traveling on a snowpack as snow accumulates; this can be by means of boot-packing, ski-cutting, or machine grooming. Explosives are used extensively to prevent avalanches, by triggering smaller avalanches that break down instabilities in the snowpack, and removing overburden that can result in larger avalanches. Explosive charges are delivered by a number of methods including hand-tossed charges, helicopter-dropped bombs, Gazex concussion lines, and ballistic projectiles launched by air cannons and artillery. Passive preventive systems such as snow fences and light walls can be used to direct the placement of snow. Snow builds up around the fence, especially the side that faces the prevailing winds. Downwind of the fence, snow build-up is lessened. This is caused by the loss of snow at the fence that would have been deposited and the pickup of the snow that is already there by the wind, which was depleted of snow at the fence. When there is a sufficient density of trees, they can greatly reduce the strength of avalanches. They hold snow in place and when there is an avalanche, the impact of the snow against the trees slows it down. Trees can either be planted or they can be conserved, such as in the building of a ski resort, to reduce the strength of avalanches. In turn, socio-environmental changes can influence the occurrence of damaging avalanches: some studies linking changes in land-use/land-cover patterns and the evolution of snow avalanche damage in mid latitude mountains show the importance of the role played by vegetation cover, that is at the root of the increase of damage when the protective forest is deforested (because of demographic growth, intensive grazing and industrial or legal causes), and at the root of the decrease of damage because of the transformation of a traditional land-management system based on overexploitation into a system based on land marginalization and reforestation, something that has happened mainly since the mid-20th century in mountain environments of developed countries === Mitigation === In many areas, regular avalanche tracks can be identified and precautions can be taken to minimize damage, such as the prevention of development in these areas. To mitigate the effect of avalanches the construction of artificial barriers can be very effective in reducing avalanche damage. There are several types: One kind of barrier (snow net) uses a net strung between poles that are anchored by guy wires in addition to their foundations. These barriers are similar to those used for rockslides. Another type of barrier is a rigid fence-like structure (snow fence) and may be constructed of steel, wood or pre-stressed concrete. They usually have gaps between the beams and are built perpendicular to the slope, with reinforcing beams on the downhill side. Rigid barriers are often considered unsightly, especially when many rows must be built. They are also expensive and vulnerable to damage from falling rocks in the warmer months. In addition to industrially manufactured barriers, landscaped barriers, called avalanche dams stop or deflect avalanches with their weight and strength. These barriers are made out of concrete, rocks, or earth. They are usually placed right above the structure, road, or railway that they are trying to protect, although they can also be used to channel avalanches into other barriers. Occasionally, earth mounds are placed in the avalanche's path to slow it down. Finally, along transportation corridors, large shelters, called snow sheds, can be built directly in the slide path of an avalanche to protect traffic from avalanches. === Early warning systems === Warning systems can detect avalanches which develop slowly, such as ice avalanches caused by icefalls from glaciers. Interferometric radars, high-resolution cameras, or motion sensors can monitor instable areas over a long term, lasting from days to years. Experts interpret the recorded data and are able to recognize upcoming ruptures in order to initiate appropriate measures. Such systems (e.g. the monitoring of the Weissmies glacier in Switzerland) can recognize events several days in advance. === Alarm systems === Modern radar technology enables the monitoring of large areas and the localization of avalanches at any weather condition, by day and by night. Complex alarm systems are able to detect avalanches within a short time in order to close (e.g. roads and rails) or evacuate (e.g. construction sites) endangered areas. An example of such a system is installed on the only access road of Zermatt in Switzerland. Two radars monitor the slope of a mountain above the road. The system automatically closes the road by activating several barriers and traffic lights within seconds such that no people are harmed. === Survival, rescue, and recovery === Avalanche accidents are broadly differentiated into 2 categories: accidents in recreational settings, and accidents in residential, industrial, and transportation settings. This distinction is motivated by the observed difference in the causes of avalanche accidents in the two settings. In the recreational setting most accidents are caused by the people involved in the avalanche. In a 1996 study, Jamieson et al. (pages 7–20) found that 83% of all avalanches in the recreational setting were caused by those who were involved in the accident. In contrast, all of the accidents in the residential, industrial, and transportation settings were due to spontaneous natural avalanches. Because of the difference in the causes of avalanche accidents, and the activities pursued in the two settings, avalanche and disaster management professionals have developed two related preparedness, rescue, and recovery strategies for each of the settings. == Notable avalanches == Two avalanches occurred in March 1910 in the Cascade and Selkirk Mountain ranges; on 1 March the Wellington avalanche killed 96 in Washington state, United States. Three days later 62 railroad workers were killed in the Rogers Pass avalanche in British Columbia, Canada. During World War I, an estimated 40,000 to 80,000 soldiers died as a result of avalanches during the mountain campaign in the Alps at the Austrian-Italian front, many of which were caused by artillery fire. Some 10,000 men, from both sides, died in avalanches in December 1916.In the northern hemisphere winter of 1950–1951 approximately 649 avalanches were recorded in a three-month period throughout the Alps in Austria, France, Switzerland, Italy and Germany. This series of avalanches killed around 265 people and was termed the Winter of Terror. A mountain climbing camp on Lenin Peak, in what is now Kyrgyzstan, was wiped out in 1990 when an earthquake triggered a large avalanche that overran the camp. Forty-three climbers were killed.In 1993, the Bayburt Üzengili avalanche killed 60 individuals in Üzengili in the province of Bayburt, Turkey. A large avalanche in Montroc, France, in 1999, 300,000 cubic metres of snow slid on a 30° slope, achieving a speed in the region of 100 km/h (62 mph). It killed 12 people in their chalets under 100,000 tons of snow, 5 meters (16 feet) deep. The mayor of Chamonix was convicted of second-degree murder for not evacuating the area, but received a suspended sentence.The small Austrian village of Galtür was hit by the Galtür avalanche in 1999. The village was thought to be in a safe zone but the avalanche was exceptionally large and flowed into the village. Thirty-one people died. On 1 December 2000, the Glory Bowl Avalanche formed on Mt. Glory which is located within the Teton Mountain Range in Wyoming, United States. Joel Roof was snowboarding recreationally in this backcountry, bowl-shaped run and triggered the avalanche. He was carried nearly 2,000 feet to the base of the mountain and was not successfully rescued.On 3 July 2022 a serac collapsed on the Marmolada Glacier, Italy, causing an avalanche that killed 11 alpinists and injured 8. == Classification of avalanches == === European avalanche risk === In Europe, the avalanche risk is widely rated on the following scale, which was adopted in April 1993 to replace the earlier non-standard national schemes. Descriptions were last updated in May 2003 to enhance uniformity.In France, most avalanche deaths occur at risk levels 3 and 4. In Switzerland most occur at levels 2 and 3. It is thought that this may be due to national differences of interpretation when assessing the risks. [1] Stability: Generally described in more detail in the avalanche bulletin (regarding the altitude, aspect, type of terrain etc.)[2] additional load: heavy: two or more skiers or boarders without spacing between them, a single hiker or climber, a grooming machine, avalanche blasting light: a single skier or snowboarder smoothly linking turns and without falling, a group of skiers or snowboarders with a minimum 10 m gap between each person, a single person on snowshoesGradient: gentle slopes: with an incline below about 30° steep slopes: with an incline over 30° very steep slopes: with an incline over 35° extremely steep slopes: extreme in terms of the incline (over 40°), the terrain profile, proximity of the ridge, smoothness of underlying ground === European avalanche size table === Avalanche size: === North American Avalanche Danger Scale === In the United States and Canada, the following avalanche danger scale is used. Descriptors vary depending on country. === Avalanche Problems === There are nine different types of avalanche problems: Storm slab Wind slab Wet slab avalanches Persistent slab Deep persistent slab Loose dry avalanches Loose wet avalanches Glide avalanches Cornice fall === Canadian classification for avalanche size === The Canadian classification for avalanche size is based upon the consequences of the avalanche. Half sizes are commonly used. === United States classification for avalanche size === The size of avalanches are classified using two scales; size relative to destructive force or D-scale and size relative to the avalanche path or R-scale. Both size scales range from 1 to 5 with the D size scale half sizes can be used. === Rutschblock Test === Slab avalanche hazard analysis can be done using the Rutschblock Test. A 2 m wide block of snow is isolated from the rest of the slope and progressively loaded. The result is a rating of slope stability on a seven step scale. (Rutsch means slide in German). == Avalanches and climate change == Avalanche formation and frequency is highly affected by weather patterns and the local climate. Snowpack layers will form differently depending on whether snow is falling in very cold or very warm conditions, and very dry or very humid conditions. Thus, climate change may affect when, where, and how often avalanches occur, and may also change the type of avalanches that are occurring. === Impacts on avalanche type and frequency === Overall, a rising seasonal snow line and a decrease in the number of days with snow cover are predicted. Climate change-caused temperature increases and changes in precipitation patterns will likely differ between the different mountain regions, and the impacts of these changes on avalanches will change at different elevations. In the long term, avalanche frequency at lower elevations is expected to decline corresponding to a decrease in snow cover and depth, and a short-term increase in the number of wet avalanches are predicted.Precipitation is expected to increase, meaning more snow or rain depending on the elevation. Higher elevations predicted to remain above the seasonal snow line will likely see an increase in avalanche activity due to the increases in precipitation during the winter season. Storm precipitation intensity is also expected to increase, which is likely to lead to more days with enough snowfall to cause the snowpack to become unstable. Moderate and high elevations may see an increase in volatile swings from one weather extreme to the other. Predictions also show an increase in the number of rain on snow events, and wet avalanche cycles occurring earlier in the spring during the remainder of this century. === Impacts on burial survival rate === The warm, wet snowpacks that are likely to increase in frequency due to climate change may also make avalanche burials more deadly. Warm snow has a higher moisture content and is therefore denser than colder snow. Denser avalanche debris decreases the ability for a buried person to breath and the amount of time they have before they run out of oxygen. This increases the likelihood of death by asphyxia in the event of a burial. Additionally, the predicted thinner snowpacks may increase the frequency of injuries due to trauma, such as a buried skier striking a rock or tree. == Avalanches on Mars == == See also == === Related flows === === Avalanche disasters === 1999 Galtür avalanche Montroc 2012 Gayari Sector avalanche == References == === Bibliography === McClung, David. Snow Avalanches as a Non-critical, Punctuated Equilibrium System: Chapter 24 in Nonlinear Dynamics in Geosciences, A.A. Tsonsis and J.B. Elsner (Eds.), Springer, 2007 Daffern, Tony: Avalanche Safety for Skiers, Climbers and Snowboarders, Rocky Mountain Books, 1999, ISBN 0-921102-72-0 Billman, John: Mike Elggren on Surviving an Avalanche. Skiing magazine February 2007: 26. McClung, David and Shaerer, Peter: The Avalanche Handbook, The Mountaineers: 2006. ISBN 978-0-89886-809-8 Tremper, Bruce: Staying Alive in Avalanche Terrain, The Mountaineers: 2001. ISBN 0-89886-834-3 Munter, Werner: Drei mal drei (3x3) Lawinen. Risikomanagement im Wintersport, Bergverlag Rother, 2002. ISBN 3-7633-2060-1 (in German) (partial English translation included in PowderGuide: Managing Avalanche Risk ISBN 0-9724827-3-3) Michael Falser: Historische Lawinenschutzlandschaften: eine Aufgabe für die Kulturlandschafts- und Denkmalpflege In: kunsttexte 3/2010, unter: Historische Lawinenschutzlandschaften: eine Aufgabe für die Kulturlandschafts- und Denkmalpflege === Notes === == External links == The Avalanche Education Project Surviving an Avalanche – A guide for children and youth Archived 26 April 2021 at the Wayback Machine Avalanche Defense Photographs Avalanche Canada Canadian Avalanche Association Archived 21 October 2020 at the Wayback Machine Colorado Avalanche Information Center Center for Snow and Avalanche Studies EAWS – European Avalanche Warning Services Directory of European avalanche services Avalanches collected news and commentary at The New York Times Swiss Federal Institute for Snow and Avalanche Research Scottish Avalanche Information Service Chisholm, Hugh, ed. (1911). "Avalanche" . Encyclopædia Britannica (11th ed.). Cambridge University Press. But note the myths cited above Utah Avalanche Center New Zealand Avalanche Advisory Gulmarg Avalanche Center US Avalanche.org Sierra Avalanche Center (Tahoe National Forest)
Emin Gün Sirer	Emin Gün Sirer is a Turkish-American computer scientist. Sirer developed the Avalanche Consensus protocol underlying the Avalanche blockchain platform, and is currently the CEO and co-founder of Ava Labs. He was an associate professor of computer science at Cornell University, and is the former co-director of The Initiative for Cryptocurrencies and Smart Contracts (IC3). He is known for his contributions to peer-to-peer systems, operating systems and computer networking. == Education == Emin Gün Sirer attended high school at Robert College, received his undergraduate degree in computer science at Princeton University, and finished his graduate studies at the University of Washington. He received his Ph.D. in Computer Science and Engineering in 2002 under the supervision of Brian N. Bershad. == Career == Prior to his appointment as a professor at Cornell University, Sirer worked at AT&T Bell Labs on Plan 9, at DEC SRC, and at NEC. Sirer is known for his contributions to operating systems, distributed systems, and fundamental cryptocurrency research. He co-developed the SPIN (operating system), where the implementation and interface of an operating system could be modified at run-time by type-safe extension code. He also led the Nexus OS effort, where he developed new techniques for attesting to and reasoning about the semantic properties of remote programs.In March 2023, Sirer was appointed to the Commodity Futures Trading Commission’s Technical Advisory Committee. In June 2023, Sirer was an expert witness before the United States House Committee on Financial Services for a hearing on blockchain and digital assets. === Cryptocurrency === Introduced by Sirer and co-authors in 2003, five years before Satoshi Nakamoto’s Bitcoin whitepaper, Karma is a virtual currency for peer-to-peer systems, introduced by Sirer and co-authors in 2003. It is designed to eliminate the free-loader problem, i.e. preventing malicious users from consuming resources without giving anything in return. It is the first peer-to-peer currency with a distributed mint.Sirer and Ittay Eyal wrote and published the paper "Majority is not Enough, Bitcoin Mining is Vulnerable" which describes the selfish mining attack, an attack on Bitcoin which is profitable even for an attacker with only 33% of total hash power, which is less than the 50% required by the original security analysis in Satoshi Nakamoto's Bitcoin whitepaper. Sirer, Eyal, and other co-authors developed Bitcoin-NG, a bitcoin scaling solution, and Bitcoin Covenants, a security solution.Sirer is also co-founder of bloXroute, a company offering a solution to the scalability bottleneck of the Layer-0 network layer. In 2020, he was the co-director of IC3, the Initiative for Cryptocurrency And Contracts. === Avalanche protocol === Sirer led development of the Avalanche Consensus protocol, and its native token, AVAX. The Avalanche project was incubated at Cornell University, where Emin Gün Sirer was assisted by PhD candidates Maofan Yin and Kevin Sekniqi. Ava Labs is a technology company founded by Sirer in 2019, with the express purpose of developing an alternative blockchain technology for the financial sector.In August 2022, whistleblower "Crypto Leaks" published a report accusing Ava Labs and CEO Emin Gün Sirer of secret deals with a law firm, Roche Freedman, aimed at attacking Avalanche's competitors. Sirer denied any sort of illegal or unethical deal but the alleged partner Kyle Roche was subsequently forced out of his law firm. == Awards == Brilliant-10 by Popular Science National Science Foundation CAREER Award == Patents == "A Process for Rewriting Executable Content on a Network Server or Desktop Machine in Order to Enforce Site-Specific Properties." Emin Gun Sirer and Brian N. Bershad. US Patent #6865735, issued February 3, 2005. == See also == List of people in blockchain technology == References == == External links == Emin Gün Sirer publications indexed by Google Scholar Official Blog
Shiba Inu	The Shiba Inu (柴犬, Japanese: [ɕiba inɯ]) is a breed of hunting dog from Japan. A small-to-medium breed, it is the smallest of the six original breed of dogs native to Japan. Its name literally translates to "brushwood dog", as it is used to flush game. A small, alert, and agile dog that copes very well with mountainous terrain and hiking trails, the Shiba Inu was originally bred for hunting. It looks similar to other Japanese dog breeds such as the Akita Inu or Hokkaido, but the Shiba Inu is a different breed with a distinct bloodline, temperament, and smaller size than other Japanese dog breeds. == Appearance == The Shiba's frame is compact with well-developed muscles.The Shiba Inu is double coated, with the outer coat being stiff and straight and the undercoat soft and thick. Fur is short and even on the foxlike face, ears, and legs. Guard hairs stand off the body and are about 4 to 5 cm (1+1⁄2 to 2 in) long at the withers. The purpose of the guard hairs is to protect their underlying skin and to repel rain or snow. Tail hair is slightly longer and stands open in a brush. Their tails are a defining characteristic and make them stand apart from other dog breeds. The cream color is considered a "major fault" by both the Japan Kennel Club and American Kennel Club. It should never be intentionally bred in a show dog, as the required markings known as "urajiro" (裏白) are not visible; "Urajiro" literally translates to "underside white". Conversely, a white (cream) coat is perfectly acceptable according to the British Kennel Club breed standard.The urajiro (cream to white ventral color) is required in the following areas on all coat colors: on the sides of the muzzle, on the cheeks, inside the ears, on the underjaw and upper throat inside of legs, on the abdomen, around the vent and the ventral side of the tail. On reds: commonly on the throat, fore chest, and chest. On blacks and sesames: commonly as a triangular mark on both sides of the fore chest. == Temperament == Shibas tend to exhibit an independent nature. From the Japanese breed standard: The dog has a spirited boldness and is fiercely proud with a good nature and a feeling of artlessness. The Shiba is able to move quickly with nimble, elastic steps. The terms "spirited boldness" (悍威, kan'i), "good nature" (良性, ryōsei), and "artlessness" (素朴, soboku) have subtle interpretations that have been the subject of much commentary.The Shiba is a relatively fastidious breed and feels the need to maintain itself in a clean state. They can often be seen licking their paws and legs, much as cats do. They generally go out of their way to keep their coats clean. Because of their fastidious and proud nature, Shiba puppies are easy to housetrain and in many cases will housebreak themselves. Having their owner simply place them outside after meal times and naps is generally enough to teach the Shiba the appropriate method of toileting.They are not known to be friendly and are prone to attack other dogs when not trained properly. Shiba is not suitable for first time dog owners. A distinguishing characteristic of the breed is the so-called "shiba scream". When sufficiently provoked or unhappy, the dog will produce a loud, high-pitched scream. This can occur when attempting to handle the dog in a way that it deems unacceptable. == History == The Shiba Inu has been identified as a basal breed that predates the emergence of the modern breeds in the 19th century. Dogs with a similar appearance to the Shiba Inu were represented in dogū made during the prehistoric Jōmon period of Japanese history.The Shiba Inu was bred to hunt and flush small game, such as birds and rabbits. Shiba lived in the mountainous areas of the Chūbu region. During the Meiji Restoration, western dog breeds were imported and crosses between these and native Japanese breeds became popular. From 1912 to 1926, almost no pure Shiba remained. From around 1928, hunters and intellectuals began to show interest in the protection of the remaining pure Shiba.Despite efforts to preserve the breed, the Shiba nearly became extinct during World War II due to a combination of food shortage and a post-war distemper epidemic. All subsequent dogs were bred from the only three surviving bloodlines. These bloodlines were the Shinshu Shiba from Nagano Prefecture, the Mino Shiba from the former Mino Province in the south of present-day Gifu Prefecture, and the San'in Shiba from Tottori and Shimane Prefectures.The Shinshu Shibas possessed a solid undercoat, with a dense layer of guard-hairs, and were small and red in color. The Mino Shibas tended to have thick, prick ears, and possessed a sickle tail, rather than the common curled tail found on most modern Shibas. The San'in Shibas were larger than most modern shibas, and tended to be black, without the common tan and white accents found on modern black-and-tan shibas.When the study of Japanese dogs was formalized in the early and mid-20th century, these three strains were combined into one overall breed, the Shiba Inu. The first Japanese breed standard for the Shiba, the Nippo Standard, was published in 1934. In December 1936, the Shiba Inu was recognized as a Natural Monument of Japan through the Cultural Properties Act, largely due to the efforts of Nippo (Nihon Ken Hozonkai), the Association for the Preservation of the Japanese Dog.In 1954, an armed service family brought the first Shiba Inu to the United States. In 1979, the first recorded litter was born in the United States. The Shiba was recognized by the American Kennel Club in 1992 and added to the AKC Non-Sporting Group in 1993. It is now primarily kept as a pet both in Japan and abroad. According to the American Kennel Club, the Shiba Inu is the number one companion dog in Japan. In the United States, the growing popularity of the Shiba Inu is evident as the American Kennel Club Registration Statistics ranked the breed in 44th place in 2016, a rise from 50th place in 2012. == Health == Overall, the Shiba Inu is a healthy dog breed. Health conditions known to affect this breed are allergies, glaucoma, cataracts, hip dysplasia, entropion, and luxating patella. Periodic joint examinations are recommended throughout the dog's life. Eye tests should be performed yearly as eye problems can develop over time. By two years of age, Shiba Inus may be considered fully free from joint problems if none have previously been discovered, since at this age the skeleton is fully developed.As with most dog breeds, Shibas should be walked or otherwise exercised daily. === Life span === Their average life expectancy is from 12 to 15 years. Exercise, especially daily walks, is preferred for this breed to live a long and healthy life. The oldest known Shiba, Pusuke, died at age 26 in early December 2011. Pusuke was the oldest known dog alive at the time and lived 5 years less than the world record for the longest living dog. === Grooming === Shiba Inus are very clean, so grooming needs will likely be minimal. They naturally tend to hate to be wet or bathed, thus, it is very important to get them accustomed when they are young. A Shiba Inu's coat is coarse (short to medium length), with the outer coat being 2.5 to 3.2 cm (1 to 1+1⁄4 in) long, and is naturally waterproof so there is little need for regular bathing. They have a thick undercoat that can protect them from temperatures well below freezing.Shedding, also known as blowing coat, can be a nuisance. Shedding is heaviest during the seasonal change and particularly during the summer season, but daily brushing can temper this problem. It is recommended that owners never shave or cut the coat of a Shiba Inu, as the coat is needed to protect them from both cold and hot temperatures. == In popular culture == Despite not being a popular dog breed outside of Japan, the Shiba Inu has become popular on the Internet. Doge is an Internet meme from 2013 including a Shiba Inu and broken English. A popular cryptocurrency, Dogecoin, is named after this meme and its logo bears an image of the Shiba Inu. The race is often referred to as Shibe in memes. According to Jamie Cohen, an assistant professor of media studies at Queens College of the City University of New York, the Shiba Inu breed has had a significant presence in online culture since at least 2010.Another Shiba Inu dog that went viral was a dog known as 'Cheems'. He had gone viral during the COVID-19 pandemic and had gained worldwide attention. Cheems died during cancer surgery on August 18, 2023 at the age of 12½ years. == See also == List of dog breeds Japan Kennel Club Mameshiba Nihon Ken Hozonkai Shiba Inu Puppy Cam Cheems == References == == External links == Shiba Inu at Curlie
Polkadot (cryptocurrency)	Polkadot is a blockchain platform and cryptocurrency. The native cryptocurrency for the Polkadot blockchain is the DOT. It is designed to allow blockchains to exchange messages and perform transactions with each other without a trusted third-party. This allows for cross-chain transfers of data or assets, between different blockchains, and for decentralized applications (DApps) to be built using the Polkadot Network. == History == The protocol was created by the Ethereum co-founder Gavin Wood, Robert Habermeier and Peter Czaban, raising over $144.3 million in its Initial coin offering in October 2017. Another private sale in 2019 raised an additional $43 million. The white paper for Polkadot was published by Wood in 2016.Polkadot's initial block (the "genesis block") was released in May 2020. The DOT is its native token, and DOTs were released with the launch of the genesis block. == Technical details == The Polkadot network has a primary blockchain named the "relay chain" and many user-created parallel chains called "parachains". The relay chain acts as the governance layer of the network, while parachains are auctioned, enabling users to create and operate their own blockchains that use Polkadot's infrastructure. The relay chain is responsible for validating data, achieving consensus and executing transactions. It is estimated that 1,000 transactions per second can be processed by the network. === Proof of stake === The network uses a nominated proof-of-stake consensus algorithm. The protocol used, Blind Assignment for Blockchain Extension (BABE), is derived from Ouroboros, a protocol created by Aggelos Kiayias. === Bridges and Parathreads === The Polkadot network contains bridges, which connect blockchains and allow data transfer. Bridges provide interoperability with other blockchain networks. Parathreads operate in a similar manner to parachains but follow a "pay as you go" model, not requiring continuous connectivity to the Polkadot network. == See also == Sybil attack Proof of stake List of cryptocurrencies List of blockchains == References == == External links == Official website
Gavin Wood	Gavin James Wood is an English computer scientist, a co-founder of Ethereum and creator of Polkadot and Kusama. == Early life == Wood was born in Lancaster, England, United Kingdom. He attended the Lancaster Royal Grammar School. He graduated from the University of York with a Master of Engineering (MEng) in Computer Systems and Software Engineering in 2002 and completed his PhD entitled "Content-based visualisation to aid common navigation of musical audio" in 2005. == Career == Before working on Ethereum, Wood was a research scientist at Microsoft. He was one of the founders of the Ethereum blockchain, which he has described as "one computer for the entire planet," with Vitalik Buterin, Charles Hoskinson, Anthony Di Iorio and Joseph Lubin during 2013–2014. Wood proposed and helped develop Solidity, a programming language for writing smart contracts. He also released the paper defining the Ethereum Virtual Machine, the runtime system for smart contracts in Ethereum, in 2014. He also served as the Ethereum Foundation's first chief technology officer. Wood left the Ethereum Foundation in January 2016.Wood founded Parity Technologies (formerly Ethcore), which developed a client for the Ethereum network and creates software for companies using blockchain technology, with Jutta Steiner, who also previously worked at the Ethereum Foundation. The company released the Parity Ethereum software client, written in Rust, in early 2016. He held the title of chief web officer at Parity in 2018. He founded the Web3 Foundation, a nonprofit organization focusing on decentralised internet infrastructure and technology, starting with the Polkadot network. In comparison to Bitcoin's proof of work mechanism, Polkadot relies on proof of stake mechanism and allows developers to create their own blockchain that can talk to other ledgers, forming a system of parachains. Developers can decide what kind of transaction fees to charge and how fast to confirm blocks of transactions across the digital ledgers. In 2019, he founded Kusama, an early stage experimental development environment for Polkadot. == Charity == Amid 2022 Russian invasion of Ukraine Wood donated $5.8 million in cryptocurrency to support Ukraine. == Publications == Ethereum: A Secure Decentralised Generalised Transaction Ledger Polkadot: Vision for a Heterogenous Multi-Chain Framework == References ==
BitClout	BitClout is an open source blockchain-based social media platform. On the platform, users can post short-form writings and photos, award money to posts they particularly like by clicking a diamond icon, as well as buy and sell "creator coins" (personalized tokens whose value depends on people's reputations). BitClout runs on a custom proof of work blockchain, and is a prototype of what can be built on DeSo (short for "Decentralized Social"). BitClout's founder and primary leader is known pseudonymously as "diamondhands"; his real name is Nader al-Naji. Under development since 2019, BitClout's blockchain created its first block in January 2021, and BitClout itself launched publicly in March 2021. The platform launched with 15,000 "reserved" accounts - a move intended to prevent impersonation, but which backfired as some people with reserved accounts tried to actively distance themselves. Later, in September 2021, BitClout was revealed to be the flagship product of the DeSo blockchain. == History == === Origins (2019 - March 2021) === In early 2019, Nader al-Naji became interested in "mixing investing and social media". He started creating a custom blockchain in May 2019, but didn't tell anyone else until November 2020. However, in the fall of 2020, al-Naji pitched BitClout's own investors under his real name and began posting job listings for a "new operation".Although BitClout was not originally intended to launch until mid-2021, its development was sped up due to "zeitgeist about decentralized social media" in January 2021.BitClout's first block was mined on 18 January 2021. Its next block was mined on 1 March 2021. === As BitClout (March - September 2021) === In early March 2021, about fifty investors received links to a password-protected website with the BitClout white paper. They were encouraged to explore the site and send the same link to "two or three other 'trusted contacts'". Within weeks users were spending millions of dollars per day on the platform. The platform's founders said they were "completely unprepared", having planned to have a "soft-launch". The leader went by the name "diamondhands" on the platform.On 24 March 2021, BitClout launched out of private beta. Investors include Sequoia Capital, Andreessen Horowitz, the venture capital firm Social Capital, Coinbase Ventures, Winklevoss Capital Management, Alexis Ohanian, Polychain, Pantera, and Digital Currency Group (CoinDesk's parent company). During its initial launch, BitClout's currency could be bought with bitcoin, but not sold except on Discord servers or Twitter threads. A single bitcoin wallet related to BitClout received more than $165M worth of deposits.In March 2021, law firm Anderson Kill P.C. sent Nader al-Naji, the presumed leader of the BitClout platform, a cease-and-desist letter, demanding the removal of Brandon Curtis's account and alleging that BitClout violated sections 1798 and 3344 of the California Civil Code by using Curtis's name and likeness without his consent. Curtis also tweeted, "Adopting Bitcoin's aesthetic to raise VC funding to carry out unethical and blatantly illegal schemes like BitClout: not cool". (However, Curtis's coin, despite not being listed on the official website, can still be bought by users searching for the original username.) Additionally, in April 2021, Lee Hsien Loong asked for his name and photograph to be removed from the site, stating that he has "nothing to do with the platform" and that "it is misleading and done without [his] permission".On 18 May 2021, diamondhands announced that 100% of the BitClout code went public.On 12 June 2021, the supply of BitClout was capped at around 11 million coins.On 18 July 2021, BitClout added the ability for users to mint and purchase NFTs within the platform. === As part of DeSo (September 2021 - present) === On 21 September 2021, it was revealed that BitClout was a prototype built on DeSo, short for "Decentralized Social". As a part of this revelation, diamondhands confirmed his identity as Nader al-Naji. (As early as April 2021, it had been believed that diamondhands indeed that person.)The Bitclout project raised $200M in funding, which went to setting up the DeSo Foundation. == Design == BitClout is a social media platform. Its users can post short-form writings and photos (similarly to Twitter). They can award money to posts they particularly like by clicking a diamond icon (similarly to Twitch Bits). The prices of each account's "creator coin" goes up and down with the popularity of the celebrity behind it. For example, if someone says something negative, the value of their corresponding account may go down. This price is computed automatically according to the formula p r i c e _ i n _ b i t c l o u t = .003 ∗ c r e a t o r _ c o i n s _ i n _ c i r c u l a t i o n 2 {\displaystyle price\_in\_bitclout=.003*creator\_coins\_in\_circulation^{2}} .At launch time, BitClout scraped 15,000 profiles of celebrities from Twitter to create "reserved" accounts in their names. To claim a reserved account, the account holder would need to tweet about it (which also serves as a marketing strategy). At least 80 such reserved profiles have been claimed.BitClout uses proof of work, but is planning to switch to proof of stake. == References == == External links == BitClout official website
SafeMoon	SafeMoon LLC was a cryptocurrency and blockchain company created in March 2021. The company also has a SafeMoon token (SFM) which trades on the BNB Chain blockchain. The token charges a 10% fee on transactions, with 5% redistributed (or reflected) to token holders and 5% directed to wallets in a different currency, Binance Coin (BNB), controlled by the coin's authors. The token reached its all time high market cap in April 2021 of $17b. As of December 2022, it has since dropped 98.7% in value to $223m.The SafeMoon company has released a minimal-function cryptocurrency wallet and has announced plans to release other cryptocurrency products. The company and the token have been the subject of several controversies since conception; by being compared to a ponzi-scheme, not delivering on products, having multiple class-action lawsuits filed against them, and facing serious fraud allegations. In November 2023, the SEC and the DoJ charged SafeMoon and its executive team with fraud, the unregistered offering of securities, and money laundering. == History == === 2021: SafeMoon version 1 === SafeMoon was released in March 2021. A compound of "Safe" and "Moon". The token was released with the slogan of landing "Safely to the moon", derived from the slang phrase used in the cryptocurrency community; "To the moon" which is used to describe a crypto token "to quickly rise in price". The token had no utility and team when it was launched. Upon release, Vice reported that between March 14 and April 21 of 2021, SafeMoon increased in value by 23,225% following celebrity endorsements from musicians Lil' Yachty and Nick Carter, YouTuber Logan Paul, social media hype, new exchange listings, and retail investors. At that time, Vice said that "cryptocurrencies like SafeMoon still have no real-world use." These celebrities were later sued by many SafeMoon investors as part of a class-action lawsuit branding SafeMoon to be a part of a pump and dump scheme. After the substantial rise in price, the unknown developers of the token appointed Braden John Karony as the CEO of Safemoon and registered as a Limited liability company with aims of providing utility to the token. Before this appointment, Karony served as a former analyst for the United States Department of Defense from January 2015 to January 2021.In May 2021, SafeMoon announced making a presentation to The Gambia to provide "technology for innovation and learning purposes". The project was dubbed "Project Pheonix" (the misspelling of Phoenix being intentional), SafeMoon released a familiar crypto pitch of serving the "unbanked" and claimed to be working with local governments to adopt the token as a local currency. A company run by John Karony's mother ECG LC, was set up in May 2021 to deliver this project. On August 27, 2022, John stated that his reasons for discontinuing his work in West Africa were due to supply chain problems, which is disputed by his mother in the ongoing Project Pheonix lawsuit.In June 2021, the project began beta testing of the SafeMoon wallet. The app was officially released on Google Play in September 2021 and the App Store in October 2021. Critics dubbed the wallet to be a copy of the Trust Wallet owned by Binance. Thomas Smith, who was the CTO for Safemoon, left the company in December 2021 for a role as a blockchain advisor for StrikeX, however, was dismissed by the company after the fraud allegations uncovered by Stephen Findeisen. === 2022: Migration to SafeMoon V2 === In December 2021, SafeMoon developed Version 2 of their token (SafeMoon V2), an updated version of the SafeMoon contract. As part of consolidating to V2, the SafeMoon team implemented a deadline to migrate their tokens, or else investors would be faced with a 100% tax. The team also released a decentralised exchange titled "Safemoon Swap" as the only place where this migration could happen. In April 2022, Safemoon announced a new product, the Safemoon card. The Safemoon card was promoted as a debit card that can be used to pay for goods using SafeMoon (and other cryptocurrencies) for a 2.5% fee. Some experts criticized paying an additional fee to pay for goods, contrasting it to Crypto.com's card which instead rewards users with a percentage return in crypto depending on how much of their native token they are holding. Although the card was supposed to be released in July 2022, as of December 2022 its release has been delayed. Since the appointment of Karony in 2021, SafeMoon has announced plans to launch its own cryptocurrency exchange by October 2021, however, this was pushed to December 2022 and has again been pushed back to the end of 2023. The company also has plans to launch a blockchain, hardware wallet, and to become a macro Internet of things infrastructure on its own blockchain. === 2023: LP hack and Fraud Indictment === On March 29 2023, hackers exploited a security flaw in the smart contract of SafeMoon’s liquidity pool which saw USD 9 million worth of SFM tokens depleted from SafeMoon's liquidity pool causing a drop in the token’s price. After negotiations with the SafeMoon team, the hacker agreed to return only 80% ($7 million) of the stolen liquidity and kept $2 million of the stolen tokens.On November 1, 2023, a Federal indictment was unsealed, charging SafeMoon’s CEO Braden John Karony, Token Founder Kyle Nagy, and former SafeMoon employee Thomas Smith with conspiracies involving securities fraud, wire fraud, and money laundering in connection with SafeMoon. The United States District Court for the Eastern District of New York alleged that the defendants misled SafeMoon investors about the accessibility of 'locked' liquidity and engaged in personal trading. The charges reported that as SafeMoon's market capitalization exceeded $8 billion, they fraudulently diverted millions of dollars from the 'locked' liquidity for personal gain. Karony and Smith were arrested, while Nagy remained at large. The charges were brought by the SEC and the Department of Justice with FBI assistance.In December 2023, SafeMoon declared Chapter 7 bankruptcy and shut down. == Criticisms and legal issues == === Parallels to a meme coin === The token has been described pejoratively in May 2021 as a "meme coin" alongside Dogecoin and Shiba Inu, with much of its value attributed to the result of the 2021 crypto market frenzy.The developers of SafeMoon have been described as having "little proof of previous success", with the token having been described by some financial experts as "the furthest thing from safe" and that it "doesn't do anything". === Security issues === In May 2021, the V1 version of the token was audited by security auditing firm CertiK, which identified a "major issue" that the project's owners have "control over tokens funded by SafeMoon's seller fee". An owner address acquire's the liquidity pool tokens generated by the Safemoon-BNB pool. This gives the owner control over tokens funded by Safemoon's seller fee. This feature was later the subject of the 2022 Safemoon fraud allegations. London Capital's head of research Jasper Lawler also noted that the Manual Burn aspect of Safemoon paired with the controlling companies' large stake in the coins opens the project up to manipulation by the project controllers. === Ponzi-scheme comparisons === After the price of a SafeMoon token multiplied by 12x during a single week in April 2021, opinion columnists in various financial magazines likened SafeMoon to a ponzi scheme or pyramid scheme, where gains to early investors were paid only by incoming investors who expected a similar rate of return, with some citing the fact that each transaction sends a portion of the transacted value to existing holders of the token, as well as a portion of the transacted value to a wallet controlled by the coin's authors. Furthermore, Safemoon's token economics utilises a 10% sell tax. This means that for every $1000 sale, an investor would be charged $100. Many critics argue that this discourages investors to sell as they are at a loss as soon as they invest. The tax from the new investors is used for many things including distributing a small percentage of it to existing investors. === 2022 fraud allegations === In April 2022, Stephen "Coffeezilla" Findeisen, a prominent independent researcher who investigates crypto scams, accused the SafeMoon team of misappropriating millions of dollars. According to Findeisen, Safemoon CEO Karony had been removing funds from the liquidity pool which is the primary explanation of the crypto's price pattern (Figure 1). Findeisen found evidence of transactions which showed Safemoon's liquidity wallet moving funds to a wallet dubbed the "Gabe (6abe) wallet" which withdrew funds to a separate company run by John Karony. Former SafeMoon CTO; Thomas "Papa" Smith was the only person who responded to Findeisen's claims stating that funds were taken from the “locked liquidity pool” before Karony’s appointment. He sent Smith evidence of this in the form of a blockchain transaction showing an outflow of 36.7 trillion tokens from the liquidity pool, dated March 5, 2021. === Class-action lawsuits === On February 18, 2022, in a class-action lawsuit filed against SafeMoon it was alleged that the company was a pump and dump scheme. Paul was named as a defendant along with musician Nick Carter, rappers Soulja Boy and Lil Yachty, and social media personality Ben Phillips for promoting the SafeMoon token on their social media accounts with misleading information. On the same day, the U.S. 11th Circuit Court of Appeals ruled in a lawsuit against Bitconnect that the Securities Act of 1933 extends to targeted solicitation using social media. Findeisen, who had just shone a light on the 2022 SafeMoon fraud allegations supported the claims that Paul and Phillips were pumping and dumping Safemoon tokens during this time which saw a decline of 96% in token price. On August 22, 2022, it was documented that David Portnoy, who was also a defendant in this case, was dismissed from the lawsuit after it was revealed that he never received any compensation from Safemoon for promoting the token and that he also lost his investment from buying SFM.In May 2022, multiple SafeMoon investors filed another class action lawsuit against SafeMoon for security fraud. The lawsuit which is represented by Scott+Scott, was voluntarily terminated by the plaintiff without prejudice per notice in November 2022. This means the case can be retried if the plaintiff wishes to in the future. === Project Pheonix lawsuit === As part of Project Pheonix, a separate company Emanations Communications Group LC (ECG) was set up and led by SafeMoon CEO John Karony's mother, Jennifer, to provide antenna technology to The Gambia. The company has since been seized by Lex Vest Ltd. As part of this venture, John invested $5 million into the project in June 2021. It was claimed that Karony funded this investment from SafeMoon's liquidity pool which was supposedly locked up. As part of this capital investment John agreed 33.34% stake in the company & future profits, as well as his own personal bills, to come out of the company. ECG determined that John Karony created too many regulatory risks and that due to multiple lawsuits filed against him and his company (SafeMoon), were uncomfortable accepting any more capital investments from him. As a result, John Karony filed a lawsuit against ECG for breach of contract and accused his mother of legal trickery to remove him from ECG.ECG developed technology relating to Project Pheonix which was presented to John in December 2021. According to court documents, John had been disclosing information about developing technology for the benefit of SafeMoon to make claims on SafeMoon’s website and social media accounts about the technology. He was counselled not to do so by ECG (particularly his mother) because of potential adverse effects on pending patents and other intellectual property. In March 2022, John and his counsel met with Project Pheonix partners Sankung Jawara and Pa Alieu Jawara, and offered them an upfront payment of $350,000 to cut Jennifer Karony out of the transaction, which they refused. John then negotiated an offer to pay them of up to $4.5 million, to be paid out over time, with the understanding that Jennifer was again removed from consideration. Sankung and Pa Alieu once more refused, due to the proposed circumvention of the business partnership and John's assertion that there was a way to circumvent the legal and parliamentary procedures required for John's desired bank project.Karony's mother stated that John had not provided a plan for Project Pheonix and was not interested in the content of the financial documents, but was looking for "opportunities to take pictures of the lab to substantiate his published claims of owning ECG labs which he called 'Area 32' or 'DarkMoon'". Due to the lawsuit, Project Pheonix has since been abandoned. On August 27, 2022, John stated that his reasons for discontinuing his work in West Africa were due to supply chain problems, which is disputed by his mother. === Liquidity pool hack === On March 29 2023, it was reported that almost $9 million USD worth of SafeMoon tokens were depleted from SafeMoon's liquidity pool after hackers exploited a security flaw in its smart contracts. As a result, the price of the token fell further in value. The hacker agreed to return only 80% ($7 million) of the stolen liquidity after striking a deal with the team to keep $2 million of the stolen tokens. === Fraud indictment === On November 1, 2023, a Federal indictment was unsealed charging Braden John Karony, Kyle Nagy, and Thomas Smith with conspiracies to commit securities fraud, wire fraud, and money laundering through SafeMoon. According to the US District Court for the Eastern District of New York, "As alleged, the defendants lied to SFM investors concerning whether SFM's use of 'locked' liquidity was inaccessible to the defendants, as well as their personal holding and trading of SFM. As SFM's market capitalization grew to more than $8 billion, the defendants fraudulently diverted and misappropriated millions of dollars' worth of purportedly 'locked' SFM liquidity for their personal benefit." At the time Karony and Smith had been arrested while Nagy remained at large. The charges were brought in parallel by the SEC and the Department of Justice with assistance from the FBI. == See also == Decentralized finance Meme coin Binance Smart Chain == References == == External links == Official website
Coinye	Coinye, formerly Coinye West, is a scrypt-based cryptocurrency. Cease and desist letters were issued against it for its use of the American hip hop artist Kanye West, as its mascot despite West having no affiliation with the project. The project was abandoned by the original developers following West's filing of a trademark infringement lawsuit against them. == History == === Release === Coinye was originally slated for release on January 11, 2014, but legal pressure prompted David P. McEnery Jr. and his development team to release the source code and mining software on January 7, a few days ahead of schedule. Early press materials promised a proper and fair release, with no pre-allocation of coins. However, later statements from the developers confirmed that approximately 0.37% of the maximum money supply of Coinye had been reserved for the creators of the coin before launch. The developers claimed that this was to cover unexpected legal and development costs. === Trademark infringement lawsuit === On January 6, 2014, Kanye West's lawyers sent the development team a cease and desist order on the basis that the then-unreleased currency constituted trademark infringement, unfair competition, cyberpiracy and dilution. In response to the legal threats, the development team changed the name of the currency from "Coinye West" to "Coinye" and moved to a new domain name. By January 10, 2014, the development team stated that they had removed all references to West but instead "to a half-man-half-fish hybrid," a nod to a South Park episode in which West fails to realize why people are jokingly calling him a "gay fish." These actions were not sufficient to appease West's legal team, and a lawsuit was filed against the creators of the coin, prompting them to sell their Coinye holdings and leave the project. === Developer departure and community takeover === On January 14, 2014, a representative of Coinye announced on Reddit that "the developers basically dumped all their coins on the one exchange and left the scene." Coinye's official site was replaced with text reading "Coinye is dead. You win, Kanye." and the original website is now down. === Decline (2014-2020) === Coinye has been called "defunct" by numerous publications. Coinye's global block difficulty fell from 78 to 1.012 between January 18, 2014, and May 7, 2014, indicating that the network's total processing power fell by roughly 99% during that time. Had West not sued Coinye, some predictions put the hypothetical value at approximately twenty times its original worth, as of 2017. By 2017, few were trading or mining Coinye. == See also == Meme coin == References == == External links == Archived website
OneCoin	OneCoin is a fraudulent cryptocurrency scheme conducted by offshore companies OneCoin Ltd, based in Bulgaria and registered in Dubai, and OneLife Network Ltd (registered in Belize), both founded by Ruja Ignatova in concert with Sebastian Greenwood. OneCoin is considered a Ponzi scheme due to its organisational structure of paying early investors using money obtained from newer ones. It was also a pyramid scheme due to the recruiting of investors without providing any actual product. The company secretly conducted database entry scam simulating transactions not registered by an actual blockchain, and with no mining behind the apparent cryptocurrency release and circulation. Many of those characters central to OneCoin had been previously involved in similar and different other schemes and business malpractices separate from each other. OneCoin was described by The Times as "one of the biggest scams in history".US prosecutors have alleged the scheme brought in approximately $4 billion worldwide. In China, law enforcement recovered 1.7 billion yuan (US$267.5 million) while prosecuting 98 people. Ignatova disappeared in 2017 near the time a secret US warrant was filed for her arrest and her brother, Konstantin Ignatov, took her position. Most of the leaders have now disappeared or been arrested, though Ignatova has escaped arrest. Greenwood was arrested in 2018, as was Konstantin Ignatov in March 2019. In November 2019, Ignatov pleaded guilty to charges of money laundering and fraud. The total maximum sentence for the charges is 90 years in prison. In 2022 Greenwood pleaded guilty, and in 2023 was sentenced to 20 years for wire fraud and money laundering. == Concept == OneCoin was launched in late 2014. It was not a decentralized cryptocurrency but rather a centralized pyramid scheme hosted on OneCoin Ltd's servers which was marketed as a cryptocurrency. The scheme was set up by Ruja Ignatova with Sebastian Greenwood acting as the lead distributor in the pyramid.According to OneCoin, its main business was selling educational material for cryptocurrency trading: investors could buy "educational packages" costing anywhere from 100 euros to 118,000 euros, or—according to one industry blog—225,500 euros. According to a suit filed by former investors, much of the content in those packages was plagiarized from various free sources, including Wikipedia. Investors also received "tokens" that could be assigned to mine OneCoins. Mining was said to be taking place at two sites in Bulgaria and one in Hong Kong.In typical OneCoin recruiting meetings, recruiters would focus on cryptocurrency investment, and the "educational material" was barely mentioned.The only way to exchange OneCoins for other currencies was the OneCoin Exchange ("xcoinx"), an internal marketplace for members who had invested more than a set amount. OneCoins could be exchanged for euros, which were placed in a "virtual wallet", from which they could request a wire transfer. The marketplace had daily selling limits based on which package the seller had invested in, greatly limiting the amount of OneCoins which could be exchanged by the scam's victims. As lead distributor, 5% of all OneCoin sales went to Greenwood, who made over US$300 million.On 1 March 2016, without notice, OneCoin issued an internal notice that the marketplace would be closed for two weeks for maintenance, explaining that this was necessary due to the "high number of miners" and for "better integration with blockchain". On 15 March 2016, the market re-opened. It was shut down again without notice in January 2017, though individuals affiliated with the company continued to accept funds. == Legal issues and criticism == === 2015 === On 30 September 2015, Bulgaria's Financial Supervision Commission (FSC) issued a warning of potential risks in new cryptocurrencies, citing OneCoin as an example. After the warning, OneCoin ceased all activity in Bulgaria and started to use banks in foreign countries to handle wire transfers from participants. === 2016 === In February 2016, the British newspaper Daily Mirror wrote that OneCoin / OneLife is a get-rich-quick scheme scam and a cult, calling it "virtually worthless". The company and the scheme is on the observation lists of many authorities; among them are authorities in Bulgaria, Finland, Sweden, Norway and Latvia. Authorities in many countries have warned of potential risks involved in businesses like OneCoin and undertaken prosecutions against persons linked to OneCoin, including CEO Ruja Ignatova and her brother Konstantin Ignatov.In March 2016, the Direct Selling Association in Norway warned against OneCoin, comparing it to a pyramid scheme.In December 2016, the Italian Antitrust Authority (Autorità Garante della Concorrenza e del Mercato) "adopted an interim injunction against the company One Network Services Ltd., active in the promotion and dissemination of cryptocurrency OneCoin", and its representatives in Italy, describing their activities as an "illegal pyramid sales system" ("sistema di vendita piramidale vietato dalla legge"), and ordering them to cease promoting and selling OneCoin in Italy On 27 February 2017, after concluding their investigation, AGCM banned all activity on OneCoin until further notice.In December 2016, the Hungarian Central Bank issued a warning that OneCoin is a pyramid scheme, and in China that same year several members and investors of OneCoin were arrested and US$30.8 million worth of assets seized. === 2017 === In March 2017, the Croatian National Bank (HNB) advised the public to "exercise a high degree of caution" in decisions involving OneCoin, noted that OneCoin operations are not supervised by the HNB, and warned that possible losses will be fully borne by the investors.On 23 April 2017, Indian police arrested 18 people in Navi Mumbai for organizing a OneCoin recruitment event. The police attended the event undercover to judge the accusations before they decided to act. Further investigation was begun with the intent of revealing the higher levels of the pyramid. In May, the investigation recovered Rs 24.57 crores ($3.32 million USD) in nine bank accounts. A further Rs 75 crores ($10.12 million USD) were transferred out before authorities were able to seize it. Early in the month of May, two more people were arrested and a further Rs 24 crores ($3.24 million USD) were seized from bank accounts. A special investigation team of 15 individuals including 4 assistant police inspectors was formed under Senior Police Inspector Shivaji Awate with the stated goal of following the money trail and possibly lead to further arrests.On 27 April 2017, Germany's Federal Financial Supervisory Authority (BaFin) issued cease and desist orders to Onecoin Ltd, Dubai, and OneLife Network Ltd, Belize. The Authority concluded that trading in OneCoins was fraudulent "own funds" trading.On 28 April 2017, Bank of Thailand issued a warning against OneCoin, stating it was an illegal digital currency and that it should not be used in trade.On 29 May 2017, International Financial Services Commission of Belize (IFSC) issued a warning about OneLife Network Ltd conducting trading business without license or permission from IFSC or any other authority. OneLife Network Ltd was directed to cease and desist from carrying on with the illegal trading business.On 16 June 2017, the CEO of OneCoin Ltd. claimed OneCoin was licensed by the Vietnamese government, that it was legally permissible to use them as a digital currency and that it was the first cryptocurrency in Asia officially licensed by any government. On 20 June 2017, Vietnam's Ministry of Planning and Investment (MPI) issued a statement that the document which OneCoin used as proof was forged. They stated that the document was against the MPI regulations and that the person who supposedly signed the document was not in the position claimed by the document at the time when the document was created. MPI warned individuals and enterprises to be vigilant if they encounter the document during business.On 10 July 2017, Ruja Ignatova, the CEO, was charged in India with duping investors as a part of the Indian investigation. === 2018 === On 17 and 18 January 2018, Bulgarian police raided OneCoin's office in Sofia at the request of the prosecutor's office in Bielefeld, Germany. German police and Europol took part in the bust and the investigation. Also 14 other companies, tied to OneCoin, were investigated and 50 witnesses were questioned. OneCoin's servers and other material evidence were seized.On 3 May 2018, the Central Bank of Samoa (CBS) banned all foreign exchange transactions related to OneCoin and OneLife. The bank had earlier in March issued a warning about OneCoin. CBS describes OneCoin as a very-high-risk pyramid scheme. Ruja Ignatova's collaborator and OneCoin's co-founder Sebastian Karl Greenwood (age 46–47) was arrested in Thailand in July 2018. He was imprisoned in Thailand pending extradition to the United States. Greenwood is a father of four and a citizen of Sweden and the UK. Greenwood used money from Onecoin to buy international real estate, expensive clothing and watches, and to make a SKr 6,500,000 down-payment on a Sunseeker yacht. === 2019 === Ruja Ignatova's brother Konstantin Ignatov was arrested in March 2019. In a plea deal made on 4 October (made public 12 November), he pleaded guilty to fraud and money laundering in connection with the scheme.On 21 November 2019 the New York Federal Court found lawyer Mark Scott guilty of money laundering and bank fraud for his role in routing US$400m out of the US.On 24 November 2019 the BBC published a detailed investigation of OneCoin and Ignatova titled "Cryptoqueen: How this woman scammed the world, then vanished". The reporters believe that Ignatova resides in Frankfurt under a false identity. === 2020 === In 2020 the FinCEN Files showed that BNY Mellon flagged to FinCEN $137m of transactions related to OneCoin. === 2021 === The company OneCoin, Ruja Ignatova and Gilbert Armenta have been found in default at an ongoing trial in the US. === 2022 === In May 2022, Europol added Ignatova to their "Europe's Most Wanted" list, offering a €5,000 reward for information leading to her arrest. On June 30, the Federal Bureau of Investigation added Ignatova to the FBI Ten Most Wanted Fugitives list, offering a reward of up to $100,000 for information leading to her arrest.In December, Greenwood pleaded guilty to wire fraud and money laundering in the a US federal court. === 2023 === In March 2023, OneCoin's former legal and compliance officer Irina Dilkinska was caught and extradited from Bulgaria to the United States.Frank Schneider, former intelligence officer of Luxembourg and advisor to Ignatova, has absconded. Journalists speculate that Ignatova might have been murdered.In September 2023, Greenwood was sentenced to a 20-year federal prison term (minus 5-years already served) by a New York Federal court. == See also == Bitconnect PlusToken USI Tech == References == == Further reading == The Missing Cryptoqueen. Podcast, BBC, since 2019. Bovermann, Philipp (25 September 2020). "Die verschwundene Königin". Süddeutsche Zeitung (in German). == External links == Media related to OneCoin at Wikimedia Commons
Bitconnect	Bitconnect (also spelled BitConnect and KimConnect; stylized bitconnect, ticker code BCC) was an open-source cryptocurrency in 2016–2018 that was connected with a high-yield investment program, a type of Ponzi scheme. After the platform administrators closed the earning platform on January 16, 2018, and refunded the users' investments in BCC following a 92% coin value crash, confidence was lost and the value of the coin plummeted to below $1 from a previous high of nearly $525. == History == Bitconnect was released in 2016 to allow users to lend the value of Bitconnect Coin in return for interest payments. The marquee program was the so-called lending platform where users traded Bitcoin for Bitconnect Coin and could lock in the instantaneous value of the coin for a set period of time while earning interest calculated daily. The interest payouts were determined by a so-called "trading bot". The trading bot was the most controversial piece of the Bitconnect.co system. The liquidity of the BCC cryptocurrency funded users' ability to exchange their earnings for Bitcoin. On November 7, 2017, the government of the United Kingdom issued Bitconnect a notice with two months to prove its legitimacy.On January 3, 2018, Texas State Securities Board issued a cease and desist to the company, calling it a Ponzi scheme, and citing failings in user earnings transparency, and misleading statements. Texas State Security Board and North Carolina Secretary of State Securities Division warned that Bitconnect was not registered to sell securities in their respective states.On January 17, 2018, Bitconnect shut down, and BCC prices crashed by 92% immediately after. Bitconnect announced it would refund its loans.On January 31, 2018, a temporary restraining order froze Bitconnect's assets, expiring on February 13. However, Bitconnect as an entity never actually existed, so it is unclear what assets Bitconnect has (or ever had). An alleged India-region leader (one level below the founder) of Bitconnect, Divyesh Darji, was arrested in Delhi, India, on August 18, 2018. It is suspected that Darji is connected to well-known criminal entities involved in laundering so-called "Black Money" after the Indian government's demonetization of the rupee. In 2019, Darji was arrested and released on bail in connection with a similar scam called Regal Coin. == Criticism and collapse == Bitconnect was suspected of being a Ponzi scheme because of its multilevel marketing structure and impossibly high payouts (1% daily compounded interest). Bitconnect interest fluctuated greatly with the volatility of Bitcoin, which its value was tied to. The Bitconnect Coin was among the world's top 20 most successful cryptocurrency tokens until its price collapsed after traders began losing confidence. BCC rose from a post-ICO price of $0.17 to an all-time high of US$463 in December 2017; it declined to US$0.40 as of March 11, 2019. Bitconnect released outstanding loans at US$363.62 to the Bitconnect Wallet in the form of BCC. However, soon after that news the internal exchange price and liquidity collapsed resulting in a nearly complete loss of value. == Legal issues == On January 16, 2018, Bitconnect announced it would shut down its cryptocurrency exchange and lending operation after regulators from Texas and North Carolina issued a cease and desist order against it. On January 31, 2018, a U.S. District Court, Western District of Kentucky, granted a temporary restraining order freezing Bitconnect's assets and "to disclose cryptocurrency wallet and trading account addresses, as well as the identities of anyone to whom Bitconnect has sent digital currencies within the last 90 days".In September 2021, the U.S. Securities and Exchange Commission sued Bitconnect, alongside its founder Indian Satish Kumbhani, American Glenn Arcaro who served as Bitconnect's lead national promoter in the United States from August 2017 to January 2018, and Future Money LTD, a company Arcaro created to lure into Bitconnect's lending program. The SEC alleged that Bitconnect defrauded U.S. investors a total of $2 billion.Parallel to SEC civil charges, the United States Department of Justice had initiated criminal charges against Arcaro. On September 1, 2021, Arcaro pleaded guilty of criminal charges pressed by DOJ which includes conspiracy to commit wire fraud and criminal forfeiture. The DOJ also indicted Kumbhani on various federal charges in February 2022, including money laundering and fraud.On January 12, 2023, a federal district court in San Diego ordered that Arcaro pay $17 million in restitution to be distributed to approximately 800 victims. He also agreed to forfeit more than $24 million, which could also be used in the future to repay victims. == Internet meme == On October 28, 2017, Bitconnect held its first (and only) annual ceremony in Pattaya, Thailand. During the event, an investor named Carlos Matos from New York City gave an exuberant presentation and testimonial about the website, which included him intensely screaming "Bitconnect!" several times in a variety of registers; the scene quickly became an Internet meme. Both Matos' meme and the questionable practices of Bitconnect were profiled by John Oliver and Keegan-Michael Key on the program Last Week Tonight. == See also == List of cryptocurrencies OneCoin PlusToken USI Tech == References == == External links == Official website (last archived version, 28 November 2018)
KodakCoin	KodakCoin (stylized KODAKCoin) was a photographer-oriented blockchain cryptocurrency that was planned for payments for licensing photographs; however, the project has failed and been shut down. The cryptocurrency was being developed under a brand licensee agreement between Kodak and RYDE Holding Inc. (formerly WENN digital), with the relationship and project canceled. The initial coin offering (ICO) was initially scheduled for January 31, 2018, but was indefinitely delayed due to questions about its vetting process. A simple agreement for future tokens (SAFT) was then scheduled for May 2018, which limited purchases to accredited investors.The website and project has been shut down, with all mention of the KodakCoin and KodakOne removed from Kodak's website. == Background == KodakCoin SAFTs were made available on May 21, 2018, to accredited investors in the United States, United Kingdom, and some other countries. Working in conjunction with the KodakOne digital rights management platform, KodakCoin was intended to serve as the currency for an encrypted ledger of intellectual property rights ownership. KodakCoin would have used the Ethereum blockchain platform. KodakCoin was created by WENN Digital, using the Kodak trademark under license. KodakCoin may be a rebranding of an abandoned initial coin offering (ICO) known as RYDE, a cryptocurrency developed by WENN Digital. WENN Digital is a company formed by investments from Wenn Media Group and Ryde GmbH, a German company. === WENN Digital === In the initial press release about the KodakOne project published by Kodak on January 9, 2018 WENN Digital is described as having a "live operational copyright infringement management system" that "is delivering revenues to photographers worldwide today" and leveraging "the market position of its 30-year old subsidiary WENN Media, which works with approximately 2,500 professional photographers". German media reported on March 21, after a conversation with WENN Digital CEO Jan Denecke, that his Berlin-based startup RYDE GmbH, which according to the White Paper released by WENN Digital (dated April 24, 2018) builds a technological core of the KodakOne platform, was "meanwhile majority-owned by WENN Digital". == KodakOne == KodakCoin was designed to work with Kodak's KodakOne platform, to facilitate image licensing for photographers. The KodakOne platform uses web crawlers to identify intellectual property licensed to the KodakOne platform, with payments for licensed photographs to be made using KodakCoin cryptocurrency.The website and project has been shutdown, with all mention of the KodakCoin and KodakOne removed from Kodak's website. == Reception == Following the January 9 announcement of the new platform at the 2018 CES in Las Vegas, Kodak's stock price tripled in two days, as its market valuation increased to US$565 million, an increase of more than 300 percent. By the end of January, one third of Kodak's shares were trading short.BBC News "Tech Tent" declared KodakCoin/KodakOne and the (unrelated) Kodak KashMiner "Worst Idea" at CES 2018. == References == == External links == Official website
Petro (token)	The petro (₽), or petromoneda, launched in February 2018, is a crypto token issued by the government of Venezuela.Announced in December 2017, it is supposed to be backed by the country's oil and mineral reserves, and is intended to supplement Venezuela's plummeting hard bolívar currency, as a means of circumventing U.S. sanctions and accessing international financing. On 20 August 2018, the sovereign bolívar was introduced, with the government stating it would be linked to the petro coin value.As of January, 2020, Venezuelan president Nicolás Maduro decreed it mandatory to pay with petro for government document services and airplane fuel for planes flying international flights. == History == Venezuelan president Nicolás Maduro announced the petro in a televised address on 3 December 2017, stating that it would be backed by Venezuela's reserves of oil, gasoline, gold, and diamonds.Maduro stated that the petro would allow Venezuela to "advance in issues of monetary sovereignty", and that it would make "new forms of international financing" available to the country. Opposition leaders, however, expressed doubt due to Venezuela's economic turmoil, pointing to the falling value of the Venezuelan bolívar, its fiat currency, and $140 billion in foreign debt.On 5 January 2018, Maduro announced that Venezuela would issue 100 million tokens of the petro, which would put the value of the entire issuance at just over $6 billion. It also established a cryptocurrency government advisory group called VIBE to act as "an institutional, political and legal base" from which to launch the petro. Carlos Vargas is the "Superintendent of Cryptocurrencies". Also in January, as a response to the petro, Venezuela's National Assembly, headed by the opposition Democratic Unity Roundtable, declared the petro to be an illegal debt issuance by a government desperate for cash, and has said it will not recognize it.In a document leaked to and reviewed by Reuters, VIBE recommended that the government sell $2.3 billion worth of petros in a private offering at a discount of up to 60%, indicating that "Maduro's valuation of the nascent petro faces significant market skepticism", followed by $2.7 billion worth of petros offered to the public a month later, with the remainder "shared between the government and VIBE". It also suggested that the government accept tax payments in petros as well as allow PDVSA, the country's state-owned oil company, to incorporate cryptocurrencies in its dealings with foreign companies. === Launch === The petro's pre-sale started on 20 February 2018 and ended on 19 March 2018 where 38.4 million tokens were made available. The government stated the pre-sale raised US$3.3 billion, though according to Steve Hanke no independent audits were made to verify this claim.The technological identity of petro was perplexing during its genesis. Initially, the white paper stated that the currency would be on the Ethereum platform, but the white paper was changed at launch and the platform was to be NEM. However, even after the launch, white papers in various languages still shared conflicting information as to which platform the petro was part of. In October 2018, the white paper was changed once again, and a core developer of Ethereum, Joey Zhou, stated that the new petro white paper blatantly plagiarized from the GitHub repository of Dash. The newest version of the white paper revealed that petro was a clone, effectively a fork, of the cryptocurrency Dash. Due to the unorganized launch by the Venezuelan government, scammers were able to establish their own "petro" currencies on various cryptocurrency platforms, though these schemes did not garner much success.The second phase of the petro launch involves a public sale of 44 million tokens. === Petro gold === On 21 February 2018, petro gold, a gold-backed cryptocurrency, was announced in a televised speech given by Venezuelan President Nicolás Maduro. It was not clear whether the gold backing the tokens would be actual gold reserves or some kind of share of the country's untapped mineral wealth. === Currency reform === In August 2018, the Maduro government carried out a currency reform, centered around replacing the old hard bolívar currency with the sovereign bolívar. One sovereign bolívar is worth a hundred thousand hard bolívares. Under the country's fixed exchange rate to the US dollar the new currency is devalued by roughly 95% compared to the old hard bolívar. Additionally, the sovereign bolívar has a fixed exchange rate to the petro, with a rate of 3,600 bolívares soberanos to one petro. The petro's fixed exchange to barrels of oil is one to one (the market value was approximately US$60 at the time of the reforms). As part of the reforms Venezuelans will be paid at least 0.5 petros a month.Following the reform, Reuters investigated the petro six months after its ICO. When visiting the Venezuelan Ministry of Finance headquarters in Caracas, the Superintendent of Cryptocurrencies did not have an office there and their promoted website did not exist. The Atapirire parish, where President Maduro specifically decreed the petro's value would be linked to oil reserves in the area, has seen no petroleum-related activities and the oil rigs in the area appeared small, old and abandoned. Experts in economics stated that it was impossible to link the petro to the sovereign bolívar because no one knows its legitimate value. Though "reservations" were sold by the Venezuelan government to obtain petros, no petros had been released by the Venezuelan government. == Design == The design of the petro by the Venezuelan government has been controversial, with white paper changing by the day even after the petro's pre-sale. Petros were 100% "pre-mined" by the Venezuelan government, meaning that new tokens cannot be created after the issuance. Members of the Venezuelan Ministry of University Education, Science and Technology allegedly under advisory of the Russian government designed the petro to circumvent United States sanctions, with Russian president Vladimir Putin denying official involvement. On 1 October 2018, the cryptocurrency switched to an X11 algorithm-based design, which was copied from Dash. === Transactions === During the ICO petros could only be purchased from the Venezuelan government with Russian rubles, Bitcoin, NEM and Ethereum. The minimum required investment to acquire the crypto-asset in 2018 was 50 euros (or its equivalent) per digital wallet or 1000 euros (or its equivalent) per bank deposits.As of 2018 Venezuela legally allowed the use of petro for virtually any payment including oil trade, taxes, fees, real estate, gasoline, flights and more. === Price and volatility === Weiss Cryptocurrency Ratings states that the white paper shows no method as to how the Venezuelan government will base the petro on oil prices, concluding that the currency "is a worthless token". But according to the white paper, the base price of the petro is equivalent to the price of a single Venezuelan oil barrel: 1 petro = 1 oil barrel. The official Venezuelan oil price is defined by the Venezuelan Ministry of Oil and Mining and the current price of the petro (during the ICO) is referenced on its web page.According to the official white paper, national and international licensed exchanges will be able to sell and exchange the petro, allowing the market to define its price. While there is no mechanism to exchange petros for any other currency yet, the government is expected to back each petro with the value of one oil barrel obtained specifically from the Atapirire parish of Anzoátegui to be exchanged into bolivares or other currencies. However, President Maduro has made contradictory statements saying that the petro's worth may be determined solely by market value. == Reception == === United States === The United States Department of the Treasury warned that participating in Venezuela's proposed initial coin offering for the petro cryptocurrency could violate U.S. sanctions against Venezuela, because it "would appear to be an extension of credit to the Venezuelan government". President Donald Trump signed an executive order prohibiting transactions in any Venezuelan government-issued cryptocurrency by a United States person or within the United States, effective 19 March 2018, after claiming it was designed to obfuscate US sanctions and access international financing. ==== Others ==== The Brookings Institution stated that "it is relatively unsurprising that a dictatorship with little reserve currency ... has resorted to a deceitful means like introducing the petro ... the petro ... exists to create foreign currency reserves from thin air", further explaining that the creation of the petro has tarnished the reputation of cryptocurrencies and that sanctioned countries "might pursue the same fraudulent strategy as Venezuela: create a cryptocurrency tied to a government-controlled asset, raise money in violation of sanctions, and proceed to manipulate that cryptocurrency's value to maximize profit". === Financial === The cryptocurrency community's response was generally negative. Economist Jean Paul Leidenz expressed concerns that the creation of the petro would encourage further hyperinflation. Supply-side economist Steve Hanke, who studies hyperinflation in Venezuela, stated that the petro was likely to wind up "in the graveyard", later saying of the petro, "It doesn't exist. The whole thing is a sham, a fraud. It was rolled out in January, and it doesn't trade. It is not considered by those who rate cryptocurrencies as even a cryptocurrency." Other analysts point to its government control or centralisation as its greatest weakness. Financial journalist Max Keiser expressed his support in light of the country's hyperinflation. According to Bloomberg, the organizations that rank cryptocurrencies have described the petro as a "scam", with sites like ICOindex, ICObench, Cryptorated and ICOreview giving negative reviews or not even rating the petro due to its status. Initially, from its white paper which was released in January 2018, the petro was missing some important information regarding its mechanism to its technology. After a couple of weeks, a new version of the white paper was released which announced a different blockchain platform on which the petro would be built. ==== Investment ==== The Washington Post economic reporter Matt O'Brien said that "The petro might be the most obviously horrible investment ever... The petro is about creating something useless – that's why only foreigners can buy them, but only Venezuelans can spend them". == See also == Petrocurrency Hyperinflation in Venezuela Venezuelan bolívar CBDC == References == == Further reading == Nathaniel Popper; Ana Vanessa Herrero (20 March 2020). "The Coder and the Dictator". The New York Times. Gabriel Jiménez hated the Venezuelan strongman Nicolás Maduro. But he loved cryptocurrency. When he built the regime a digital coin, he nearly paid with his life. == External links == Official website
PlusToken	PlusToken was a ponzi scheme that operated worldwide but mainly had investors in China and South Korea. == History == PlusToken started in April 2018. It offered monthly payments to users of its cryptocurrency wallet. There was also a token called Plus associated with it. The total amount of cryptocurrency taken by PlusToken was estimated to be worth (based on 2019 prices) between $2 and US$2.9 billion. The selling of cryptocurrencies from PlusToken was speculated to have been the cause of price drops in bitcoin.In June 2019, six Chinese nationals associated with the scheme were arrested in Vanuatu and deported so they could face trial in China.In July 2020, China's Ministry of Public Security announced that 27 "major criminal suspects" and 82 "key" members of PlusToken have been arrested.In November 2020, a court in Jiangsu sentenced ringleaders behind the scheme to between two and eleven years in prison. == See also == Bitconnect OneCoin USI Tech == References ==
Ripple	Ripple may refer to: == Science and technology == Capillary wave, commonly known as ripple, a wave traveling along the phase boundary of a fluid Ripple, more generally a disturbance, for example of spacetime in gravitational waves Ripple (electrical), residual periodic variation in DC voltage during ac to dc conversion Ripple current, pulsed current draw caused by some non-linear devices and circuits Frequency-domain ripple Ringing (signal), oscillation of a signal, particularly in the step response Polarization ripples, appearing after irradiation of a solid by energy flux (laser, ions, etc.) Ripple marks, as identified in sediments and sedimentary rocks Ripple (payment protocol), a real-time payment system by Ripple Labs Ripple control, a form of electrical load management Various brainwave patterns, including those which follow sharp waves in the hippocampus Ripple I and Ripple II, 1962 US nuclear bomb tests in Operation Dominic == Organizations == Ripple (charitable organisation), a non-profit click-to-donate internet site and search engine Ripple Labs, the firm that created the Ripple payment protocol Ripple Foods, a brand of pea-protein dairy alternative products == Arts and entertainment == Ripple (My Little Pony) "Ripple" (Naruto episode), an episode in an anime series Ripple, a phenomenon in JoJo's Bizarre Adventure The Ripple (newspaper), the student newspaper at the University of Leicester Ripples, a Japanese film directed by Naoko Ogigami Ripples (musical), a musical comedy theatrical production Ripples (TV series) === Music === Ripple (band), an American soul/funk band "Ripples", a 2019 album by Ian Brown "Ripple" (song), a 1970 song by the Grateful Dead from their album American Beauty "Ripple", a song from the album Priest=Aura by The Church "Ripples...", a song from the album A Trick of the Tail by Genesis == Places == Ripple, Kent, a village in England Ripple, Worcestershire, a village in England Ripples, New Brunswick, Canada Ripple River, US == Other uses == Ripple effect, the socio-educational phenomenon USS Ripple, several US Navy ships Ripple, a former brand of flavored fortified wine == People with the surname == Jimmy Ripple (1909–1959), baseball player Kenneth Francis Ripple (born 1943), Senior United States Circuit Judge Mark Ripple (born 1967), businessperson and author Richard E. Ripple (1931–2010), American educational psychologist Charlie Ripple (1920–1979), pitcher in Major League Baseball Ezra H. Ripple (1842–1909), Pennsylvania businessman, politician and soldier John Ripple (1897–1965), college football player William J. Ripple (born 1952), professor of ecology === Fictional character === Wade Ripple, character from the 2023 Pixar animated film Elemental == See also == Ripple tank, a glass tank of water demonstrating the basic properties of waves Raspberry Ripple, a flavour of ice-cream Ripple Island (disambiguation) All pages with titles beginning with Ripple
Binance	Binance Holdings Ltd., branded Binance, is a global company that operates the largest cryptocurrency exchange in terms of daily trading volume of cryptocurrencies. Binance was founded in 2017 by Changpeng Zhao, a developer who had previously created high-frequency trading software. Binance was initially based in China, then moved to Japan shortly before the Chinese government restricted cryptocurrency companies. Binance subsequently left Japan for Malta and currently has no official company headquarters. In 2021, Binance was put under investigation by both the United States Department of Justice and Internal Revenue Service on allegations of money laundering and tax offenses. The UK's Financial Conduct Authority ordered Binance to stop all regulated activity in the United Kingdom in June 2021. That same year, Binance shared client data, including names and addresses, with the Russian government.On November 21, 2023, Binance pleaded guilty to federal charges, admitting that it engaged in money laundering, unlicensed money transmitting, and sanctions violations; and has agreed to pay over $4 billion in fines. == History == === 2013–2017: company beginnings and move out of China === CEO Changpeng Zhao founded Fusion Systems in 2005 in Shanghai; the company built high-frequency trading systems for stockbrokers. In 2013, he joined Blockchain.info as the third member of the cryptocurrency wallet's team. He also worked at OKCoin as CTO for less than a year, a platform for spot trading between fiat and digital assets. He was hired at this position in 2014 by Yi He, with whom he co-founded Binance several years later.The company was founded in 2017 in China but moved its servers and headquarters out of the country in advance of the Chinese government's ban on cryptocurrency trading in September 2017. Zhao asked He to join Binance, and she helped rewrite parts of the white paper for Binance's $15 million initial coin offering. === 2018–2019: launch of stablecoin and security breach === In January 2018 it was the largest cryptocurrency exchange with a market capitalization of $1.3 billion, a title it had retained as late as April 2021, despite competition from Coinbase, among others.In March 2018, Binance announced its intentions to open an office in Malta after stricter regulations in Japan and China. In April 2018, Binance signed a memorandum of understanding with the government of Bermuda. Months later, a similar memorandum was signed with the Malta Stock Exchange to develop a platform for trading security tokens. In 2019, the company announced Binance Jersey, an independent entity from its parent Binance.com exchange, with the aim to expand its European influence. Jersey-based exchange offers fiat-to-cryptocurrency pairs, including the Euro and the British pound.In April 2018, Binance launched the Binance Charity Foundation. The charity's goal is to support the advancement of blockchain-enabled philanthropy with a focus on third-world countries.In June 2018, Binance and three other firms raised $65 million for sports blockchain company Chiliz.In July 2018, Binance acquired Trust Wallet, a decentralized cryptocurrency wallet for an undisclosed sum. However, Binance, confirmed that the compensation is a mixture of cash, Binance stock, and a portion of its BNB token.In August 2018, Binance along with three other big exchanges raised $32 million for a "stablecoin" project. The idea of stablecoins is to provide a cryptocurrency without the notorious volatility of Bitcoin and other popular digital assets.In January 2019, Binance announced that it had partnered with Israel-based payment processor Simplex to enable cryptocurrency purchases with debit and credit cards, including Visa and Mastercard. The purchases are subject to Simplex's local bank policies and are limited to Bitcoin, Ethereum, Litecoin and Ripple's XRP.On 7 May 2019, Binance revealed that it had been the victim of a "large scale security breach" in which hackers had stolen 7,000 Bitcoin worth around $40 million at the time. Binance CEO Changpeng Zhao said the hackers "used a variety of techniques, including phishing, viruses and other attacks" and structured their transaction "in a way that passed our existing security checks." Binance halted further withdrawals and deposits but allowed trading to continue. The site pledged to reimburse customers through its "Secure Asset Fund for Users (SAFU)". Withdrawals resumed by 19 May.In June 2019 the company announced it would prohibit US passport holders as well as anyone residing in the US, and would set up a new entity binance.us to support those customers. Later in 2023 Forbes leaked a document allegedly from Binance titled "TaiChi" that proposed this regulatory solution to reduce US regulatory risk. Binance subsequently denied the document, sued Forbes for defamation, and subsequently dropped the lawsuit.In September 2019, the exchange began offering perpetual futures contracts, allowing leverage as high as 125 times the value of the contracts. In November 2019, Binance announced it was acquiring Indian bitcoin exchange WazirX, which became disputed in August 2022 when Binance founder Zhao claimed the deal was never signed. === 2020–2023: acquisitions and investments === On 21 February 2020, the Malta Financial Services Authority (MFSA) issued a public statement responding to media reports referring to Binance as a 'Malta-based' cryptocurrency company. The statement noted that Binance "is not authorized by the MFSA to operate in the cryptocurrency sphere and is therefore not subject to regulatory oversight by the MFSA." The MFSA added that it was "assessing if Binance has any activities in Malta which may not fall within the realm of regulatory oversight."In July 2020, Binance announced a "strategic partnership" with a Chinese state-owned enterprise under the State-owned Assets Supervision and Administration Commission of the State Council and that Binance had joined a group "aiming to facilitate" the Belt and Road Initiative.On 28 October 2020, Forbes staff released leaked documents showing that Binance and Changpeng Zhao created an elaborate corporate structure designed to intentionally deceive United States regulators and secretly profit from cryptocurrency investors located in the country. Binance officially blocks access from IP addresses located in the United States, but "potential customers would be taught how to evade geographic restrictions", Forbes claimed.In May 2021 it was reported that Binance was under investigation by both the Internal Revenue Service and the United States Department of Justice on allegations of money laundering and tax offenses.In February 2022, Binance took a $200 million stake in Forbes. It's unclear if this investment was ever completed. In May 2022, Forbes Global Media Holdings halted plans to go public via a merger with Magnum Opus Acquisition Ltd, a Hong Kong-based special-purpose acquisition company. Zhao said the plan had "changed a little bit, but I believe that's still in discussions." In February 2023, Zhao tweeted his disappointment that Forbes "continues to write baseless articles" about Binance.In March 2022, amidst the 2022 Russian invasion of Ukraine, Binance's CEO Changpeng Zhao, refused to ban users from Russia, citing "financial freedom". Binance later softened the tone of their opposition but not their policy, and also pointed to their donation of $10 million for humanitarian needs in Ukraine.In April 2022, Reuters reported that, in 2021, Binance shared information with Rosfinmonitoring about funds raised by jailed Russian opposition leader Alexei Navalny's network.However, in March 2023, the exchange banned Russian residents from buying euros and dollars through its p2p service. European users, in turn, lost the opportunity to buy rubles.In September 2023, Binance announced it was leaving Russia and selling its business to the CommEX platform. Accounts of Russian users will be transferred to the new platform within a year.On 27 May 2022, Binance announced the registration of its legal entity in Italy, and has plans of opening offices and expanding the local team in the area. CEO Changpeng Zhao also shared information regarding Binance's registration with France's market regulator. The company is also seeking registration in more European countries, such as Switzerland, Sweden, Spain, Netherlands, Portugal and Austria.On 13 June 2022 Binance announced that users would, for an unspecified period of time, be unable to withdraw their funds held in Bitcoin, as the value of cryptocurrencies suffered serious declines. Two hours after that announcement, Bitcoin withdrawals were allowed to resume.Binance has a strong brand presence in Africa. Binance sponsored the Africa Cup of Nations in 2021. It is also taking crypto education to many countries on the continent.Binance invested US$500 million towards the acquisition of Twitter by Elon Musk that completed in October 2022. Following the investment, the company announced the creation of a team to work on how blockchain and cryptocurrencies could be helpful to Twitter.On 8 November 2022, Binance offered to buy rival cryptocurrency exchange FTX's non-US operations (FTX.com) to help cover the latter's liquidity crunch. Binance backed out of the deal the next day citing concerns about FTX's business practices and investigations by US financial regulators.On 30 November 2022, Binance purchased Sakura Exchange. The acquisition allowed Binance to re-enter the Japanese cryptocurrency market.In July 2023, several senior executives resigned from the company. The Wall Street Journal reported that Binance had cut its global workforce by as many as 1,000 staff. CNBC reported that the number of staff cuts could total 3,000 by the end of 2023. Zhao didn't deny layoffs were occurring but claimed both the reported numbers and the reasons for the senior executive departures weren't accurate. In June 2023 Binance had 790 million US dollars in outflows after the SEC announced its lawsuit and Forbes reported that the company had 120 million users globally. On November 21, 2023, US authorities convicted Binance on multiple charges -- including violations of the Bank Secrecy Act and vast money laundering schemes. As part of the plea deal, Changpeng Zhao stepped down as CEO with a $50 million fine. The position is succeeded by Richard Teng and will pay $4 billion in fines. == Binance coin (BNB) == The company has launched two cryptocurrencies which it developed itself: Binance Coin (BNB), and BinanceUSD (BUSD). BNB launched July 2017, which started as an Ethereum token and later moved to Binance Smart Chain (BSC), launched September 2020. BSC later merged with the older Binance Chain and was rebranded into BNB chain. BNB Chain operates using "Proof of Staked Authority", a combination of proof of stake and proof of authority. It has 21 approved validators. As of 2021, Binance Coin was the cryptocurrency with the third highest market capitalization. Binance allows its users to pay fees on its exchange with BNB.BNB Chain supports smart contracts and is compatible with the Ethereum virtual machine (EVM).There have been multiple criticisms of Binance Smart Chain concerning its level of centralisation, which had led to several exploits on the network. == BUSD == BUSD, or Binance USD, is a US Dollar pegged stablecoin issued by Binance. According to Binance it is backed 1:1 by a reserve of US Dollars and was founded by them in partnership with Paxos who is the issuer of the token. Paxos holds the reserves only partially in cash deposited in their US bank accounts with the other part held in U.S. Treasuries. BUSD is natively issued on the Ethereum blockchain by Paxos. Binance creates Binance-Peg BUSD by locking the natively ERC-20 BUSD in a smart contract on the Ethereum Blockchain and issuing Binance-Peg BUSD equivalent to the amount held in reserve in the smart contract. Binance-Peg BUSD is native to BNB chain.In January 2023, Bloomberg reported that Binance-Peg BUSD "was often undercollateralized between 2020 and 2021. On three separate occasions, the gap between reserves and supply surpassed $1 billion." A Binance spokesperson said the "process of maintaining the backing … has not always been flawless" but "has been much improved with enhanced discrepancy checks."BUSD is a widely used stablecoin being, as of 2022, the third largest stablecoin by market capitalisation following Tether (USDT) and USD Coin (USDC).According to reports, the New York Department of Financial Services issued an order to Paxos to stop minting new BUSD tokens in February 2023. == Legal status == === United States === In 2019, Binance was banned in the United States on regulatory grounds. In response, Binance and other investors opened Binance.US, a separate exchange designed to comply with all applicable US federal laws, which nonetheless is banned in six states: Hawaii, Idaho, Louisiana, New York, Texas, and Vermont. In May 2021, Bloomberg News reported that Binance was under investigation by the United States Department of Justice and Internal Revenue Service for money laundering and tax evasion. In June 2022, the U.S. Securities and Exchange Commission launched an enquiry into Binance to determine if the company's 2017 ICO of BNB tokens amounted to an illegal sale of a security. In December 2022, Binance's American entity Binance.US announced that it would acquire Voyager Digital's assets in a $1.02 billion deal. This deal was called off in April 2023 due to what Binance.US called a "hostile and uncertain regulatory climate."In February 2023, Reuters reported that over the first three months of 2021, Binance transferred over $404 million from a Binance.US account at Silvergate Bank to Merit Peak Ltd, a company managed by Zhao. Catherine Coley, then-CEO of Binance US, was quoted in messages to another Binance executive saying that "no one mentioned" the "unexpected" transfers. Coley left Binance.US shortly thereafter. Reuters said the transfers called into question the purported independence of Binance.US from Binance.com. A Binance.US spokesperson said the Reuters report used "outdated information" without further elaboration.On 1 March 2023, US Senators Elizabeth Warren, Chris Van Hollen, and Roger Marshall wrote a letter to Binance describing the exchange as "a hotbed of illegal financial activity that has facilitated over $10 billion in payments to criminals and sanctions evaders." The letter formally requested documents related to Binance's compliance with regulations. On 27 March 2023, the Commodity Futures Trading Commission (CFTC) filed a lawsuit against Binance and Zhao in the United States District Court for the Northern District of Illinois, claiming willful evasion of US law and allegedly breaching derivatives rules. The agency accused Binance of breaking rules intended to thwart money laundering operations, pointing to internal communications describing transactions by Palestinian militant organization Hamas, and suspected criminals, with the company's money laundering reporting officer allegedly remarking "we see the bad, but we close 2 eyes". In April 2023, three unidentified trading firms cited as "VIP" clients of Binance were revealed to be Radix Trading, Jane Street Capital and Tower Research Capital.In June 2023, the U.S. Securities and Exchange Commission (SEC) said it was suing Binance and Zhao on 13 charges for alleged violations of US securities rules.On September 12, 2023, Binance.US announced the resignation of CEO Brian Shroder and a reduction of the exchange’s workforce by around 100 positions, roughly one-third of its total staff. Binance.US cited the SEC’s civil suit as “an unfortunate example” of the agency’s “aggressive attempts to cripple our industry.”In October 2023, coinciding with the outbreak of the 2023 Israel–Hamas war, Binance and Tether were described as a source of terrorist funding by US senator Cynthia Lummis and US Representative French Hill, with a letter calling for the Department of Justice to crack down on the exchange.In November 2023, Binance agreed to plea guilty and pay a $4.3 billion fine. Zhao agreed to pay a $50 million fine and step down as CEO of the company, but was allowed to maintain his ownership as part of the deal. === United Kingdom === In January 2021, the UK's Financial Conduct Authority began requiring firms dealing with cryptoassets to register in order to comply with anti-money laundering rules. In June 2021, Binance was ordered by the FCA to stop all regulated activity in the United Kingdom. In June 2023, the FCA canceled unused permissions granted to Binance Markets Limited, meaning the company “can no longer provide regulated activities and products” in the UK. === Japan === On 25 June 2021, Japan's Financial Services Agency warned Binance that it was not registered to do business in Japan. This was the second notice Binance received from the FSA. Previously, a similar warning was issued on 23 March 2018. === Italy === In July 2021, Italy's Commissione Nazionale per le Società e la Borsa ordered Binance to be blocked from operating. In May 2022, Binance gained regulatory approval in Italy, allowing the company to provide digital asset services in the country. === France === In May 2022, Binance gained regulatory approval in France, allowing the company to provide digital asset services in the country. France is the first European country to give Binance regulatory approval. In June 2023, the Paris prosecutor's office announced that Binance was under preliminary investigation for illegal canvassing of clients and money-laundering. === Germany === In April 2021, the Federal Financial Supervisory Authority in Germany warned that the company risked fines for not releasing an investor prospectus for the stock tokens it has issued. === Thailand === Thailand's Securities and Exchange Commission filed a criminal complaint against Binance on 2 July 2021, "for commission of offence under the Emergency Decree on Digital Asset Business B.E. 2561 (2018)". Additionally, Thailand's SEC cited Binance for operating without a license, a violation of Section 26 of the Digital Asset Businesses Emergency Decree.In May 2023, Thailand's Ministry of Finance issued a cryptocurrency exchange license to Gulf Binance, the joint venture of Binance and Gulf Innova, a subsidiary of Thai billionaire Sarath Ratanavadi's Gulf Energy Development. The exchange will reportedly launch later this year. === Canada === On 17 March 2022, Binance has confirmed in an undertaking to the Ontario Securities Commission that it would stop opening new accounts and halting trading in existing accounts for users in Ontario.In May 2023, Binance announced it would withdraw from the Canadian market due to the introduction of stricter rules in the country.On May 30, 2023, it was reported that the Ontario Securities Commission had issued an investigation order into whether Binance may have taken steps to circumvent Ontario securities law and compliance controls prior to its withdrawal from the Canadian market. === Netherlands === In April 2022, the Dutch central bank announced a €3.3m fine for Binance due to offering services within the Netherlands without being registered in the country. The fine was issued to the company after an official warning was issued to the company during August 2021. In June 2023, Binance announced that it was leaving the Netherlands after failing to obtain regulatory approval. === India === In August 2022, India's Enforcement Directorate froze the assets of WazirX, an exchange owned by Binance, as part of a money laundering investigation. Following the event, CEO Zhao claimed that they never owned WazirX or owned any equity in Zanmai Labs—the operating entity of WazirX—citing "a few issues" that prevented the completion of the acquisition. The co-founder of WazirX, Nischal Shetty, disputed Zhao's claims asserting that Binance had indeed acquired them. On December 28, Financial Intelligence Unit (India) recommended blocking the URLs of nine crypto entities, including Binance on the grounds of non compliance to the provisions of the Prevention of Money Laundering Act, 2002 (PMLA). === Australia === On 6 April 2023, the Australian Securities & Investments Commission cancelled the Australian financial services licence held by Oztures Trading Pty Ltd trading as Binance Australia Derivatives (Binance).On 18 May 2023, Binance Australia announced that it had lost access to Australia's PayID payment system "due to a decision made by our third party payment service provider." The same day, Westpac bank banned Australian customers transacting with Binance. === Nigeria === In June 2023, Nigeria's Securities and Exchange Commission recently deemed Binance's activities in the country as “illegal.” It issued a declaration stating that Binance Nigeria Limited, a subsidiary of Binance, was operating unlawfully in the country. The regulator specifically instructed Binance to cease all its activities within Nigeria. === Belgium === On June 23, 2023, Belgium's Financial Services and Markets Authority ordered Binance to “cease, with immediate effect, offering or providing any and all” virtual currency services in the country. The regulator said Binance had been offering such services “from countries that are not members of the European Economic Area.” == See also == Bitfinex BTCC (company) Coinbase Kraken List of bitcoin companies == References == == External links == Media related to Binance at Wikimedia Commons Official website
Kraken (company)	Kraken (legally named Payward, Inc.) is a United States–based cryptocurrency exchange, founded in 2011. It was one of the first bitcoin exchanges to be listed on Bloomberg Terminal and was valued at US$10.8 billion in mid-2022. The company has been the subject of several regulatory investigations since 2018, and has agreed to cumulative fines of over $30 million. == History == Kraken was co-founded in 2011 by Jesse Powell, an alumnus of California State University, Sacramento with Thanh Luu and Michael Gronager. Powell was a consultant for Mt. Gox in resolving a security issue, and began working on Kraken as a replacement anticipating its death; Gox would indeed collapse in 2014, failing security audits. In September 2013, Kraken was launched, offering Bitcoin, Litecoin, and euro trades initially before going on to add additional currencies and margin trading.In March 2014, Kraken received a $5 million Series A investment from Hummingbird Ventures and Bitcoin Opportunity Fund. A month later, Kraken became one of the first bitcoin exchanges to be listed on Bloomberg Terminal. The same year, Kraken was chosen to assist with the investigation of lost bitcoins of Mt. Gox; the bankruptcy trustees relied upon Kraken due to its proven operating history without being breached by hackers. In June 2015, Kraken opened the first dark pool for bitcoins.In January 2016, Kraken purchased Coinsetter (and by extension, Cavirtex), an exchange based out of New York City. A month later, Kraken announced the completion of its Series B round of investment led by the SBI Group and acquired Dutch exchange CleverCoin, and Glidera, a cryptocurrency wallet service. In March 2017, Kraken acquired Cryptowatch, a charting and trading platform. By December 2017, Kraken claimed to be registering up to 50,000 new users a day.In April 2018, Kraken announced closure of its services in Japan due to the rising costs of doing business. The company would later return to the Japanese market in 2020. In February 2019, Kraken acquired Crypto Facilities, a British derivatives trading firm. In June 2019, Kraken received $13.5 million from 2,263 individual investors via a special-purpose vehicle.In September 2020, Kraken was granted a special purpose depository institution (SPDI) charter in Wyoming, becoming the first cryptocurrency exchange to hold such a charter in the United States. In early 2021, Kraken sought additional funding from investors at a valuation of over $20 billion, with Tribe Capital becoming the company's second largest institutional investor behind Hummingbird Ventures and Arjun Sethi being appointed to the board of directors.In January 2021, Kraken released a mobile app for international users, which became available in the US in June 2021. In September 2022, Dave Ripley – then chief operating officer – replaced Powell who became chairman of Kraken's board of directors. In November 2022, the company launched a beta version of its non-fungible token (NFT) marketplace.In February 2023, Kraken shut down its operations in Japan, for the second time, and in the United Arab Emirates, less than a year after securing a license in the region.In 2023 Bloomberg reported that Kraken planned to trade outside cryptocurrency for the first time, by offering trading in US-listed stocks and exchange-traded funds. == Controversies == === Government regulator investigations === In April 2018, Kraken refused compliance with an investigation by the New York Attorney General's Office regarding the measures taken by cryptocurrency exchanges to protect their customers from market manipulation and money laundering, finding the associated expenditure to be bad for business. The report went on to warn that the Kraken might be breaking the law, suggested that customers stay away from it, and referred the platform to New York State Department of Financial Services for potential violation of local virtual currency regulations.In March 2019, the exchange came to be investigated by the Office of Foreign Assets Control for potential violation of sanction-regimes by allowing trade with customers based in Iran; a settlement was reached in November 2022 with Kraken paying a fine of $362,000 in addition to agreeing to "invest an additional $100,000 in certain sanctions compliance controls." In late September 2021, Kraken was ordered to pay a fine of $1.25 million to the Commodity Futures Trading Commission for offering unregistered margin trading.In February 2023, the Securities and Exchange Commission (SEC) categorized Kraken's staking service as an illegal sale of securities. The company agreed to a $30 million settlement with the SEC in response to allegations that its crypto-asset staking products broke the regulator’s rules; Kraken also agreed to cease selling its staking service in the U.S.In the case SEC v Payward Inc et al, U.S. District Court, Northern District of California, No. 23-06003, in November 2023, the SEC sued Kraken alleging it operated as an unregistered securities business. The SEC also accused Kraken of mixing its own funds with its customers'. Kraken replied that they do not list securities and disagree with the complaint. === Identifying Glassdoor reviewers === In May 2019, Kraken filed a motion in California's Marin County Superior Court attempting to identify ten anonymous reviewers on Glassdoor. Kraken sued them for allegedly breaching their severance contract. The Electronic Frontier Foundation, saying it represented the anonymous reviewers, claimed in 2020 that identifying the reviewers would harm their First Amendment free-speech rights and have a chilling effect on the expression of others. In 2022, the court ordered Glassdoor to disclose the real identity of some reviewers. === Work culture and layoffs === In 2019, Powell suggested that parenting was a distraction to being productive and critiqued the economic viability of parental leaves; he went on to question whether choosing to not abide by relevant governmental regulations was a risk worth taking. In June 2022, Powell urged employees in a work meeting to reject the usage of preferred gender pronouns; he then opened a Slack channel to debate whether people should be allowed to choose their gender but not their race or ethnicity. The next day, Kraken released a "culture document" which outlined the libertarian values that it asserted were to be obeyed at work. Among other things, employees were prohibited from labelling others' comments as "toxic, hateful, racist", etc., and particular emphasis was assigned on how "offensiveness" was not forbidden. Powell and his fellow executives encouraged employees who disagreed with the policy to quit, and offered four months' severance for those who opted to do so.In November 2022, Kraken laid off about 1,100 employees – approximately 30 percent of its workforce. == See also == Binance Bitfinex Coinbase Gemini Mt. Gox == References == == External links == Official website
Coinbase	Coinbase Global, Inc., branded Coinbase, is an American publicly traded company that operates a cryptocurrency exchange platform. Coinbase is a distributed company; all employees operate via remote work. It is the largest cryptocurrency exchange in the United States in terms of trading volume. The company was founded in 2012 by Brian Armstrong and Fred Ehrsam. In May 2020, Coinbase announced it would shut its San Francisco, California, headquarters and change operations to remote-first, part of a wave of several major tech companies closing headquarters in San Francisco in the wake of the COVID-19 pandemic.Although cryptocurrencies can assure anonymous trade in principle, Coinbase trades are not anonymous: registered users are required to provide their taxpayer identification, and the transactions are reported to the IRS. Also, although Coinbase offers more than 250 different cryptocurrencies to U.S. customers in 2023, it does not trade Monero and other cryptocurrencies with enhanced anonymity protection due to KYC requirements in accordance with anti-money laundering regulations. == History == === 2012–2019: founding and early years === Coinbase was founded in June 2012 by Brian Armstrong, a former Airbnb engineer. Armstrong enrolled in the Y Combinator startup incubator program and received a US$150,000 cash infusion. Fred Ehrsam, a former Goldman Sachs trader, later joined as a co-founder after noticing Armstrong's posts on Reddit. British programmer and Blockchain.info co-founder Ben Reeves was originally supposed to be part of the Coinbase founding team but parted ways with Armstrong just before the Y Combinator funding event, due to their different stands on how the Coinbase wallet should operate. The company is named after coinbase transactions, which are special transactions that introduce cryptocurrency into circulation in proof of work cryptocurrencies.: ch. 8 In October 2012, the company launched the services to buy and sell bitcoins through bank transfers.In May 2013, the company received a US$5 million Series A investment led by Fred Wilson from the venture capital firm Union Square Ventures. In December, the company received a US$25 million investment from the venture capital firm Andreessen Horowitz, Union Square Ventures (USV), and Ribbit Capital. Olaf Carlson-Wee, a graduate from Vassar College, was hired as the first employee in the same year.In 2014, the company grew to one million users, acquired the blockchain explorer service Blockr and the web bookmarking company Kippt, secured insurance covering the value of bitcoin stored on their servers and launched the vault system for secure bitcoin storage. Throughout 2014, the company also partnered with Overstock, Dell, Expedia, Dish Network, and Time Inc. allowing those firms to accept bitcoin payments. In the same year, the company also added bitcoin payment processing capabilities to the traditional payment companies Stripe, Braintree, and PayPal. In January 2014, Coinbase Global, Inc. was incorporated in Delaware as a holding company for Coinbase and its subsidiaries. The corporate reorganization that saw Coinbase become a subsidiary of Coinbase Global was completed in April of that year.In January 2015, the company received a US$75 million investment, led by Draper Fisher Jurvetson, the New York Stock Exchange, USAA, and several banks. Later in January, the company launched a U.S.-based bitcoin exchange for professional traders called Coinbase Exchange. In September, Coinbase began to offer services in Canada and Singapore.In May 2016, the company rebranded the Coinbase Exchange, changing the name to Global Digital Asset Exchange (GDAX). In July, they added retail support for Ether. Also, in July, they announced they would halt services in August after the closure of Canadian online payments service provider Vogogo.In January and then March 2017, Coinbase obtained BitLicense and was licensed to trade in Ethereum and Litecoin from the New York State Department of Financial Services (DFS). In November, Coinbase was ordered by the U.S. Internal Revenue Service to report any users who had at least US$20,000 in transactions in a year. On December 19, Coinbase listed Bitcoin Cash, and the Coinbase platform experienced price abnormalities that led to an insider trading investigation.On February 23, 2018, Coinbase told approximately 13,000 affected customers that the company would be providing their taxpayer ID, name, birth date, address, and historical transaction records from 2013 to 2015 to the IRS within 21 days. In March, Coinbase appointed Emilie Choi, a former LinkedIn executive, as Vice President of Corporate and Business Development. She was promoted to the role of president and chief operating officer in May 2019. On March 26, 2018, Coinbase announced their intention to add support for ERC-20 tokens. On April 5, 2018, Coinbase announced that it had formed an early-stage venture fund, Coinbase Ventures, focusing on investment into blockchain- and cryptocurrency-related companies. On May 16, Coinbase Ventures announced its first investment in Compound Labs, a start-up building Ethereum smart contracts similar to money markets. On May 23, GDAX was rebranded as Coinbase Pro. Also in May, Coinbase launched Prime, a platform dedicated to institutional customers. In August, Amazon cloud executive Tim Wagner joined Coinbase as vice president of engineering. In September, Coinbase, along with Circle and Bitcoin miner company Bitmain, was part of a consortium called Centre that launched a digital coin called USD Coin, pegged to the U.S. dollar.In January 2019, Coinbase stopped all trading on Ethereum Classic due to a suspicion of an attack on the network. In February, Coinbase announced that it had acquired "blockchain intelligence platform" Neutrino, an Italy-based startup, for an undisclosed price. The acquisition raised concern among some Coinbase users based on Neutrino founders' connection to the Hacking Team, which has been accused of providing internet surveillance technology to governments with poor human rights records. On March 4, Coinbase CEO Brian Armstrong said his company "did not properly evaluate" the deal from a due diligence perspective and thus any Neutrino staff who previously worked at Hacking Team "will transition out of Coinbase." In April, a U.K. corporate filing stated that Coinbase's non-U.S. revenue grew 20 percent to €153 million (US$173 million) in 2018 resulting in a net profit of €6.6 million. Coinbase U.K. CEO Zeeshan Feroz said the company's non-U.S. operations accounted for nearly one-third of the company's overall revenue and Reuters estimated that the company's global revenue totalled "around $520 million" in 2018. In August, Coinbase announced that it was targeted by a hacking attack attempt in mid-June. This reported attack used spear-phishing and social engineering tactics (including sending fake e-mails from compromised email accounts and creating a landing page at the University of Cambridge) and two Firefox browser zero-day vulnerabilities. One of the Firefox vulnerabilities could allow an attacker to escalate privileges from JavaScript on a browser page (CVE-2019–11707) and the other, could allow the attacker to escape the browser sandbox and execute code on the host computer (CVE-2019–11708). Coinbase's security team detected and blocked the attack, the network was not compromised, and no cryptocurrency was stolen. === 2020–2021: remote-first model and IPO === In May 2020, during the COVID-19 pandemic, the company announced it was shifting completely to remote work and would no longer recognize a formal headquarters. Also in May, the company announced the acquisition of New York-based digital asset trading firm Tagomi for a price between US$75 and $100 million. In June, Coinbase received internal backlash after CEO Brian Armstrong initially refused to make a statement about Black Lives Matter, citing the company's apolitical culture, but Armstrong later reversed his course on Twitter. In September, Armstrong published a blog post emphasizing that Coinbase would not engage in social activism, citing that such activism had hurt other technology firms such as Google and Facebook, and offered a severance package for those who disagreed with this direction. The company also faced complaints by employees saying they were treated unfairly due to their race or gender.In October, Coinbase announced the launch of a Visa debit card program. In December, The New York Times reported that based upon data up to 2018 (already two years old as of the date of publication) women at Coinbase were paid an average of eight percent less than men at comparable jobs and ranks within the company, and Black employees were paid seven percent less than those in similar roles.In March 2021, the company fell under review by the Office of Foreign Assets Control, with concerns that the company may have provided their blockchain service to blacklisted individuals or companies, noting that the nature of blockchain technology makes it "technically infeasible" to prevent specific users from making transactions.Later, In March 2021, the company agreed to pay US$6.5 million to settle regulatory claims that it had reported misleading information about its trading volumes. Also in March, Coinbase announced that it was establishing a business presence in India and hiring employees for IT services, including engineering, software development and customer support operations. The company also announced plans to open a physical office in Hyderabad.In April 2021, with its final earnings release before its April 14 direct listing, the company reported a nine-fold increase in first-quarter revenue, to US$1.8 billion, up from US$190.6 million the previous year. The jump was attributed to the increase in the price of Bitcoin over that period.On April 14, 2021, Coinbase became a public company on the Nasdaq exchange via a direct stock listing. Before the listing, Nasdaq set a reference price of US$250 a share, giving the company an estimated value of US$47 billion. At the end of its first day of trading, Coinbase closed at US$328.28 per share.In May, the company's chief people officer published a blog post announcing that Coinbase was eliminating salary and equity negotiations during recruiting, citing salary disparities with women and minorities. The announcement said that "all employees in the same position, in the same location, receive the same salary and equity offer."In June, Coinbase added Dogecoin to its tradable assets for Coinbase Pro users. In September, the U.S. Securities and Exchange Commission reportedly threatened to sue Coinbase if the company decided to launch a cryptocurrency lending product called Lend. The company initially responded in a blog post that it was confused for being singled out by the SEC, but later announced it had cancelled the planned launch. Technology publication TechCrunch covered the story and noted the existence of similar cryptocurrency lending products already on the market.In November, Coinbase made its first acquisition in India by purchasing AI-powered support platform Agara for an estimated US$40–50 million. The company stated that it would utilize Agara's technology to automate its customer experience tools. On December 15 a display glitch vastly inflated balances such that numerous users were, albeit briefly, trillionaires. === 2022–present === ==== Super Bowl advertisement ==== Coinbase's 60-second commercial during Super Bowl LVI achieved viral status and was considered to be the most effective of any commercial during the game. The ad, credited to Accenture Interactive, cost US$13 million and featured only a black, screensaver-like screen with a bouncing color changing QR code. The code directed users to a web page advertising US$15 in free Bitcoin for new accounts plus entry into a promotion for a sweepstakes to win three US$1 million prizes for Bitcoin. The low-tech image evoked the retro look of the old DVD screensaver logo bouncing around the screen.The advertisement had no narration and only music. The influx of users caused Coinbase's website to crash. Coinbase's landing page received 20 million hits in one minute. Its iOS app jumped from No. 186 to No. 2 in overall downloads after the advertisement. The ad was parodied later in the night by Meta (which posted its own, similar ad on social media to advertise a streaming Foo Fighters concert after the game). Meta quipped "Hopefully this doesn't break." The Super Bowl which has been nicknamed the "Crypto Bowl" also featured commercials by Crypto.com, eToro, and FTX on the American telecast. ==== Russian invasion of Ukraine, failure of India expansion, layoffs, and partnerships ==== In response to the 2022 Russian invasion of Ukraine, Coinbase blocked 25,000 cryptocurrency wallet addresses related to Russia.Coinbase began operations in India in April 2022. The company initially relied on Unified Payments Interface to allow users to convert rupees to cryptocurrencies, but ceased using UPI after a statement released by the National Payments Corporation of India indicating it was "not aware of any crypto exchange using UPI". This statement forced Coinbase to suspend most of its business in India. Users in India cannot convert rupees into cryptocurrency but can trade between different cryptocurrencies.In May 2022, Coinbase-backed Mara raised $23 Million to build an African crypto Exchange.On June 14, 2022, the company announced it would be laying off approximately 18 percent of its workforce, about 1,100 full-time jobs, amid the global downturn in cryptocurrencies and services.In August 2022, Coinbase announced a partnership with BlackRock, a venture which allows BlackRock clients to use their Aladdin investment management system to oversee their exposure to Bitcoin along with other portfolio assets, and to facilitate trading on Coinbase's exchange.Coinbase reported a net loss of US$1.1 billion in the second quarter of 2022, a record for the company. In October 2022, Coinbase entered into a partnership with Google Cloud Platform that would allow the latter's customers to pay for cloud services with cryptocurrencies supported by Coinbase Commerce. Coinbase also agreed to transfer its data-related applications from Amazon Web Services to Google Cloud.On January 10, 2023, Coinbase announced it would be laying off around 950 employees, incurring restructuring expenses of up to US$163 million. Citing the possibility of "further contagion" following the collapse of the FTX exchange, Brian Armstrong said Coinbase would be "shutting down several projects where we have a lower probability of success." ==== SEC enforcement and lawsuit ==== On 22 March 2023, Coinbase received a Wells notice from the U.S. Securities and Exchange Commission signalling that the SEC intended to begin an enforcement action over Coinbase's staking products. Coinbase responded by calling the investigation "cursory", and stated that it would continue to operate as usual. The next month, Coinbase sued the SEC asking a federal court to force the regulator to respond to a rulemaking petition the company submitted last year asking it to make clear regulations pertaining cryptocurrencies.In June 2023, the SEC said it was suing Coinbase, alleging that the company had been acting as an unregistered broker, exchange and clearing agency since 2019, requesting that the company be "permanently restrained and enjoined" from doing so. The SEC also alleged that Coinbase never registered its staking service as required by US securities laws.In April 2023, the company announced that its Coinbase Bermuda division had been licensed to operate cryptocurrencies in Bermuda. The next month, the company launched the Bermuda-based crypto derivatives exchange, named Coinbase International Exchange, allowing non-U.S. customers to trade Bitcoin and Ethereum futures. In July 2023, CEO Brian Armstrong stated that the SEC demand Coinbase stop trading all assets excluding Bitcoin and the firm refused, stating “It kind of made it an easy choice . . . let’s go to court and find out what the court says.” == Products == Coinbase offers products for both retail and institutional cryptocurrency investors, as well as other related cryptocurrency products. The company's products for retail traders include: Coinbase, an app used to buy, store and trade different cryptocurrencies Coinbase Pro, a professional asset trading platform for trading digital assets Coinbase Wallet, an app that allows customers to access decentralized crypto apps (dapps) using a dapp browserProducts for institutional traders include Coinbase Prime (a trading platform for institutional customers) and Coinbase Custody (a custody solution).Other cryptocurrency-related products include: USD Coin, a digital stablecoin that lets customers put up U.S. dollars in exchange for a cryptocurrency that has the same value but can be traded more quickly Coinbase Card, a debit Visa card that allows customers to spend cryptocurrency Coinbase Earn, a cryptocurrency learning platform that rewards users with small amounts of altcoins for watching videos and taking quizzes to learn about themThe company develops an application programming interface (API) for developers and merchants to build applications and accept payments in digital currencies. == Operations == Coinbase operates as a remote-first company and has no physical headquarters. As part of its SEC filing to go public, the company reported 43 million verified users, 7,000 institutions, and 115,000 ecosystem partners in over 100 countries. It also reported net revenue of US$1.14 billion in 2020, up from US$483 million the previous year. The company also reported a net income of US$322 million after posting a loss in 2019. Out of the US$782 billion worth of assets on the crypto market, some $90 billion worth is held on the Coinbase platform. == Custody of client assets == In a May 2022 Form 10-Q filing, Coinbase stated that "because custodially held crypto assets may be considered to be the property of a bankruptcy estate, in the event of a bankruptcy, the crypto assets we hold in custody on behalf of our customers could be subject to bankruptcy proceedings and such customers could be treated as our general unsecured creditors". == Complaints == On February 16, 2018, Coinbase admitted that some customers were overcharged in error for credit and debit purchases of cryptocurrencies. The problem was initiated when banks and card issuers changed the merchant category code (MCC) for cryptocurrency purchases earlier that month. This meant that cryptocurrency payments would now be processed as "cash advances", meaning that banks and credit card issuers could begin charging customers cash advance fees for cryptocurrency purchases. Customers who purchased cryptocurrency on their exchange between January 22 and February 11, 2018, could have been affected. At first, Visa blamed Coinbase, telling the Financial Times on February 16 that it had "not made any systems changes that would result in the duplicate transactions cardholders are reporting." However, the latest statement from Visa and Worldpay on the Coinbase blog clarifies: "This issue was not caused by Coinbase."In March 2018, the Quartz news website reported that the number of monthly customer complaints against Coinbase jumped more than 100 percent in January of that year, to 889, citing official Consumer Financial Protection Bureau data, with more than 400 of those categorized as "money was not available when promised". The article also noted that the company was subsequently increasing its customer service staff to reduce wait times.In December 2021, CNBC reported that Coinbase froze the cryptocurrency GYEN due to a sudden price spike, resulting in many traders losing money. == Insider trading == On July 22, 2022, a former Coinbase product manager, Ishan Wahi, along with Nikhil Wahi (Ishan's brother) and Sameer Ramani (a friend), was charged in the first-ever insider trading case in cryptocurrency by prosecutors for the Southern District of New York and the Securities and Exchange Commission. According to the complaint filed in SEC v. Wahi, Ishan Wahi allegedly shared information that certain tokens were about to be listed by Coinbase with Nikhil Wahi and Ramani, who then allegedly acted upon that information to make trades for an alleged illicit profit over US$1.5 million. According to federal prosecutors, Ishan Wahi purchased a one-way ticket to India upon being summoned by Coinbase to the company's Seattle office for a meeting. Wahi was subsequently intercepted by law enforcement from boarding a May 16 flight to India. Coinbase's chief security officer, Philip Martin, noted that the company provided prosecutors with information from an internal investigation.On January 10, 2023, Nikhil Wahi was sentenced to ten months in prison after he admitted to making trades based on confidential information from Coinbase. U.S. District Judge Loretta Preska said Wahi's crime was "not an isolated error in judgment." Ishan Wahi originally pleaded not guilty but entered a guilty plea on February 7, 2023. On May 9, 2023, Ishan Wahi was sentenced to two years in prison and ordered to forfeit various crypto assets that he received in connection with the scheme. Ramani remains at large. == See also == List of bitcoin companies == References == == External links == Official website Business data for Coinbase Global, Inc.:
Bitfinex	Bitfinex is a cryptocurrency exchange owned and operated by iFinex Inc, and is registered in the British Virgin Islands. Bitfinex was founded in 2012. It was originally a peer-to-peer Bitcoin exchange, and later added support for other cryptocurrencies. Bitfinex was one of the first professional platforms built for cryptocurrency trading. It offers high-volume trading and both spot and derivatives products, including exchange trading, margin trading, margin funding (P2P lending), over-the-counter markets, and derivatives trading. == History == === 2012: Early history === Bitfinex was founded in December 2012 as a peer-to-peer Bitcoin exchange offering digital asset trading services to users worldwide. Bitfinex initially started as a P2P margin lending platform for Bitcoin and later added support for more cryptocurrencies. It was one of the first professional platforms built for cryptocurrency trading.Raphael Nicolle, an IT technician from Paris, launched Bitfinex following a previous project called Bitcoinica. He continued to work as a developer for the platform until the beginning of 2017.Bitfinex was designed to offer high-volume trading and both spot and derivatives products, including exchange trading, margin trading, margin funding (P2P lending), over-the-counter markets, and derivatives trading. === 2015–2016: New partnership and security breach === In 2015, Bitfinex partnered with Palo Alto company BitGo to offer highly-secured "wallets" that allow people to store their digital currencies online. BitGo has insurance against Bitcoin theft.In May 2015, the exchange was hacked, which resulted in the loss of 1,500 Bitcoins or about $400,000 USD of their customers' assets.In June 2016, the U.S. Commodity Futures Trading Commission ordered Bitfinex to pay a $75,000 fine for offering illegal off-exchanged financed commodity transactions. The order also found that Bitfinex violated the Commodity Exchange Act by not registering as a Futures Commission Merchant. === 2016 hack === In August 2016, Bitfinex announced it had suffered a major security breach. Immediately thereafter, Bitcoin's trading price plunged by 20%. After learning of the breach, Bitfinex halted all Bitcoin withdrawals and trading. In that hack, the second-biggest breach of a Bitcoin exchange platform, 119,756 units of Bitcoin, worth about $72 million at the time, were stolen. The Bitcoin was taken from users' segregated wallets and Bitfinex said it was tracking down the perpetrators of the hack. Exchange customers, even those whose accounts were not broken into, had their account balance reduced by 36% and received BFX tokens in proportion to their losses. All users who kept their BFX tokens were reimbursed in full within eight months of the hack, in April 2017. The exchange's access to U.S. dollar payments and withdrawals was then curtailed. The hack happened even though Bitfinex was securing the funds with BitGo, which uses multiple-signature security.The United States Department of Justice recovered the stolen Bitcoin, and a New York couple, Ilya Lichtenstein and his wife, Heather R. Morgan, was federally charged in February 2022 with conspiring to launder the Bitcoin, which was then worth $3.6 billion. According to Justice officials, Lichtenstein and Morgan are charged with conspiracy to launder money and conspiracy to defraud the United States. On 10 February 2022, it was reported that Heather Morgan was detained in Manhattan on 8 February 2022 with her husband, Ilya Lichtenstein. Lichtenstein and Morgan appeared for a plea hearing on 3 August 2023 in Washington, according to court records. They were charged in the case with a document known as an information, which is a type of charging document that federal prosecutors typically use when defendants have agreed to plead guilty.Since Lichtenstein and Morgan's arrests, the government seized another $475 million tied to the attack.In August 2023, Ilya Lichtenstein pleaded guilty to a conspiracy to launder stolen cryptocurrency in Washington, D.C. His wife, Heather Morgan, also pleaded guilty to two charges, money laundering conspiracy and conspiracy to defraud the United States government. The value of the stolen Bitcoin ended up being worth $4.5 billion.Lichtenstein also admitted to being the original hacker of bitcoin in the 2016 cyberattack on Bitfinex.Referring to the 2016 hack, IRS Commissioner Charles Rettig said, "This was also the largest single financial seizure recorded by the federal government."Separately, Bitfinex worked with the U.S. Department of Homeland Security to recover about $315,000 in cash and cryptocurrencies stolen in the 2016 breach. The funds will be redistributed to holders of Bitfinex's Recovery Right Tokens, digital coins issued to people who suffered financial losses due to the hack.There was concern their customers' money had been lost in several incidents, but the missing funds were not lost but seized and safeguarded. During this same period, Bitfinex found that obtaining banking services was more and more difficult. Research suggests that price manipulation of bitcoin on Bitfinex accounted for about half of bitcoin's price increase in late 2017.iFinex issued the cryptocurrency Unus Sed Leo in 2019. Once the U.S. announced that most of the stolen funds were recovered, Leo's value surged more than 50%. Bitfinex promised to repurchase and burn outstanding LEO tokens within 18 months of the funds’ recovery. === 2017–2018: Banking changes === In April 2017, Bitfinex announced it was experiencing delays in processing USD withdrawals after Wells Fargo cut off its wire transfers. Shortly after the Wells Fargo cutoff, Bitfinex stated all international wires had been cut off by its Taiwanese bank. Since then, Bitfinex has moved between a series of banks in other countries without disclosing to customers where the money is kept.Noble Bank International of San Juan, Puerto Rico reportedly handled some dollar banking for the exchange in 2017 or 2018. The banking relationship was reportedly terminated in September 2018 as Noble Bank encountered financial difficulties.In March 2018, British Virgin Islands-based Bitfinex confirmed the exchange’s plans to relocate its primary server infrastructure to Zug, Switzerland. In May 2018, Bitfinex emailed some of its users asking for some tax details, which the company indicated it would share with the government of the British Virgin Islands, which might, in turn, pass it on to the governments of the users' countries of residence.Phil Potter, Chief Strategy Officer of Bitfinex, left the exchange on June 22, 2018.On October 15, 2018, Bitfinex said that a few days earlier it temporarily paused fiat deposits for certain customers amid processing complications. On October 7, the company also said that "Bitfinex is not insolvent." === 2019: Launch of Tether investigation === Tether is a cryptocurrency stablecoin pegged to the U.S. dollar. It is owned by iFinex, which also owns Bitfinex. It was launched as RealCoin in July 2014 and was rebranded as Tether in November 2014. As of January 2023, Tether was the third-largest cryptocurrency after Bitcoin and Ethereum with a market cap of $68 billion. Tether and Bitfinex funded the development of HolePunch, an encrypted, peer-to-peer communication platform and made its code open-source in December 2022. Paolo Ardoino, the chief technology officer of Bitfinex and Tether, said that this technology is the "Bitcoin of communications."In April 2019, New York Attorney General Letitia James launched an investigation accusing Bitfinex of using the reserves of Tether, an affiliated company, to cover up a loss of $850 million to a Panamanian payment processor known as Crypto Capital Corp. Reggie Fowler, who is alleged to have connections with Crypto Capital, was indicted on April 30, 2019, for running an unlicensed money-transmitting business for cryptocurrency traders. He is believed to have failed to return about $850 million to an unnamed client. Investigators also seized $14,000 in counterfeit currency from his office. Bitfinex had been unable to obtain a normal banking relationship, according to the lawsuit, so it deposited over $1 billion with a Panamanian payment processor known as Crypto Capital Corp. No contract was ever signed with Crypto Capital. James alleged that in 2018 Bitfinex knew or suspected that Crypto Capital had absconded with the money, but that their investors were never informed of the loss.Bitfinex's reported figures for 2017 were $333.5 million in gross profits, $6.8 million in expenses, $326 million in net profit, and $246 million in dividends. === 2020–2023: Acquisitions and investments === On October 15, 2021, it was announced that Bitfinex would pay a $1.5 million fine to the Commodity Futures Trading Commission for illegal, off-exchange retail commodity transactions in digital assets with Americans.Bitfinex launched a new payment technology that would allow online merchants to receive contactless and borderless cryptocurrency payments in 2021, called Bitfinex Pay.Bitfinex, Kraken, and KuCoin began exploring ways to enter the Indian cryptocurrency market in 2021.In September 2022, Bitfinex, alongside several other leading exchanges, temporarily paused all deposits and withdrawals of Ethereum-based tokens during the Ethereum software upgrade known as the Merge.In December 2022, Bitfinex released its "Freedom Manifesto," a document that highlights the advancement of distributed, open-source software that aligns with the libertarian ideas of Austrian School economists and cypherpunks' approach to writing code.As of January 2023, Bitfinex plans to open an office in El Salvador. El Salvador plans to issue its "volcano" token this year, which will be issued using blockchain technology, and which will trade on Bitfinex's exchange. In April 2023, Bitfinex was granted a license by El Salvador’s National Digital Asset Commission to operate in the country. This was the first license for digital service providers in El Salvador. The license permits Bitfinex Securities El Salvador to facilitate tokenized assets.On May 24, 2023, Bitfinex announced it would invest in the Chilean cryptocurrency exchange Orionx. Bitfinex stated that it aims to expand its presence in Chile and Latin America.Bitfinex launched its peer-to-peer trading platform in Venezuela, Argentina, and Colombia in June 2023. The platform, Bitfinex P2P, gives people in these countries the ability to directly buy and sell popular cryptocurrencies like Bitcoin, Tether's EURT stablecoin, Tether Gold, and Ethereum. == Tether == Tether is a cryptocurrency (a so-called stablecoin) which Tether Limited had claimed to be pegged to the US dollar. Tether is closely associated with Bitfinex, with whom, as of 2018, they shared common shareholders and management.In 2017, critics raised questions about the relationship between Bitfinex and Tether.In February 2021, Bitfinex agreed to pay $18.5 million in a settlement with the New York Attorney General's office regarding allegations over Bitfinex parent iFinex making false statements about the backing of Tether and the movement of hundreds of millions of dollars between the two companies to cover up massive losses by Bitfinex in 2017 and 2018. As part of the agreement, Bitfinex will maintain its prohibition on trading activity with New Yorkers.In 2021, Bitfinex repaid their remaining loan balance to Tether in full.On August 4, 2023, the class action lawsuit against Tether and Bitfinex was dismissed by Chief Judge Laura Taylor Swain of the U.S. District Court for the Southern District of New York. The court found that the plaintiff lacked "plausible allegations of injury" because there was no evidence showing "USDT had a diminished actual value." == See also == Bitcoin Cryptocurrency exchange == References == == External links == Official website
Bitstamp	Bitstamp is a European cryptocurrency exchange founded in 2011. It is the world’s longest-running cryptocurrency exchange. It allows trading between fiat currency, Bitcoin and other cryptocurrencies, such as USD, EUR, GBP, Ethereum, Litecoin, Ripple, Bitcoin Cash, Algorand, Stellar, and USD Coin. Business operations are conducted from its registered headquarters in Luxembourg City, with a satellite office in Ljubljana. == History == The company was founded as a European-focused alternative to then-dominant bitcoin exchange Mt. Gox. While the company trades in US dollars, it accepts fiat money deposits for free only via the European Union's Single Euro Payments Area, a mechanism for transferring money between European bank accounts.Nejc Kodrič, a widely known member of the bitcoin community, co-founded the company in August 2011 with Damijan Merlak in his native Slovenia, but later moved its registration to the UK in April 2013, then to Luxembourg in 2016. Bitstamp outsourced certain operations to the UK due to the lack of adequate financial and legal services in Slovenia.When incorporating in the United Kingdom, the company approached the UK's Financial Conduct Authority for guidance, but was told that bitcoin was not classed as a currency, so the exchange was not subject to regulation. Bitstamp says that it instead regulates itself, following a set of best practices to authenticate customers and deter money laundering. In September 2013, the company began requiring account holders to verify their identity with copies of their passports and official records of their home address.In April 2016, the Luxembourgish government granted a license to Bitstamp to be fully regulated in the EU as a payment institution, allowing it to do business in all 28 EU member states.In April 2018, Nexon was rumored to be in talks to purchase Bitstamp. == Service disruptions == In February 2014, the company suspended withdrawals for several days in the face of a distributed denial-of-service. Bitcoin Magazine reported that people behind the attack sent a ransom demand of 75 bitcoins to Kodrič, who refused due to a company policy against negotiating with “terrorists”.In January 2015, Bitstamp suspended its service after a hack during which less than 19,000 bitcoins were stolen, reopening nearly a week later. == Compliance == In September 2018 the New York Attorney General office produced a 42-page "Virtual Markets Integrity Initiative Report", after requesting fourteen virtual currency exchanges to participate in a survey. The report aimed to create greater transparency regarding security, anti-hacking measures and business practices. Bitstamp was among ten platforms that responded; it is noted that of these ten, Bitstamp was among the seven that confirmed that they had sought approval, directly or through a subsidiary, from the New York State Department of Financial Services (“DFS”) to operate a virtual currency business in New York State. The report goes on to say that such approval implies an agreement to actively protect deposited funds, prevent money laundering and illegal activity, and respond to other risks. Bitstamp was one of two exchanges that claimed to block access to their exchange by VPNs. In addition to providing fee policies, Bitstamp also claimed to conduct audits of their virtual currency holdings. == Notes == == References ==
Coinmarketcap	Coinmarketcap is a website that provides information and data such as prices, trade volumes, market capitalization on cryptocurrencies. It was founded in 2013 in New York City by Brandon Chez. == Overview == Coinmarketcap was founded in 2013 by IT programmer Brandon Chez in New York City. By 2018, the website had become one of the most popular in the world, according to The Wall Street Journal.In January 2018, Coinmarketcap took out South Korean exchanges from its calculation for prices because the prices there were consistently higher than in other regions. That caused a significant decline in XRP's market capitalization and created chaos on the markets.According to Bloomberg, in November 2019, Coinmarketcap introduced a Liquidity metric designed to combat fake trading volume.In April 2020, Binance, a cryptocurrency exchange, acquired Coinmarketcap for an undisclosed amount. Forbes suggested that the deal could be worth $400 million.In November 2021, Coinmarketcap was cited by Vice, The New York Times and some other media for warning users of the "Squid" coin fraud scheme, which falsely claimed to be affiliated with the Squid Game TV show. The website is also a source for crypto exchanges rankings.In a letter to The Wall Street Journal, Chez explained that the Coinmarketcap delisted Korean exchanges because many users complained about the inaccurate prices; however, he didn’t expect the effect of the Korean exchange exclusion to be so big. == References ==
CryptoKitties	CryptoKitties is a blockchain game developed by Canadian studio Dapper Labs. The game allows players to buy, sell, and create NFTs using on Ethereum. These NFTs represent virtual cats. The game's popularity in December 2017, congested the Ethereum network, causing it to reach an all-time high in the number of transactions and slowing it down significantly.Dapper Labs was spun-off from Axiom Zen. Both companies are based in Vancouver, Canada. CryptoKitties is the first major game to use blockchains, and one of the earliest examples of a blockchain project designed for recreation. == Gameplay == Players purchase, breed and trade virtual cats that have different visual features of varying levels of rarity. Players must purchase Ether cryptocurrency to join the game, and spend it to perform each breeding and trade action within the game.The virtual cats are breedable and carry a unique number and 256-bit distinct genome with DNA and different attributes (known as "cattributes") that can be passed to offspring. Several traits can be passed down from the parents to the offspring. There are a total of 12 cattributes for any cat, including pattern, mouth shape, fur, eye shape, base color, accent color, highlight color, eye color, and optional wild, environment, 'purrstige' and 'secret'. Other features like cool downtimes are not passed down, but are instead a function of the 'generation' of the offspring, which is one more than the 'generation' of the highest 'generation' attribute.A CryptoKitty does not have a permanently assigned gender. While they can only engage in one breeding session at one time, each cat is able to act as either matron or sire. There is a 'cooldown' time that indicates how soon the cat can breed again, which goes up with the number of breeds, capped at one week.The virtual cats are static images that can only be purchased, bred and sold. The game has no goal. == Technology == CryptoKitties operates on Ethereum's underlying blockchain network. Each CryptoKitty is a non-fungible token (NFT). Each is unique and owned by the user, validated through the blockchain, and its value can appreciate or depreciate based on the market. CryptoKitties cannot be replicated and cannot be transferred without the user's permission, even by the game developers. Users can interact with their CryptoKitties, having the ability to buy, sell, and sire (breed) them. However, the CryptoKitty art is not on the blockchain and is instead owned by Axiom Zen. The company released some of the art under a new 'Nifty' license that lets players use the image of their CryptoKitty in a limited way. == History == A test version of CryptoKitties was unveiled at ETH Waterloo on October 19, 2017, an Ethereum hackathon. The game launched on 28 November 2017 following a five-day closed beta.Genesis, the first high selling cat, was sold for ETH246.9255 (~US$117,712) in December 2017.On March 20, 2018, it was announced that CryptoKitties would be spun off into its own company, Dapper Labs, and raised $12 million from several top venture capital firms and angel investors. The investment round was led by New York based Union Square Ventures and San Francisco based Andreessen Horowitz.On May 12, 2018, a CryptoKitty was sold for $140,000. In May 2018, CryptoKitties launched their first celebrity-branded CryptoKitty with Stephen Curry, an American professional basketball player. As part of the partnership, Curry was given three CryptoKitties with special imagery, the first of which he put up for auction. The company later suspended the auction, claiming that Stephen Curry was not as involved as they initially thought. The company was later sued for trade secret theft over the Stephen Curry collectibles. The court ruled in the company's favour, stating that "[t]he evidence demonstrates that Defendant, not Plaintiff, developed the idea to license digital collectibles using the likeness of celebrities first…".In October 2018, CryptoKitties reached the milestone of 1 million cats being bred with a volume of 3.2 million transactions on its smart contracts. In November 2018, Dapper Labs, which was spun out of Axiom Zen as the developer of CryptoKitties, raised an additional $15 million in a venture round led by Venrock. The company doubled its valuation in this round.In 2018, CryptoKitties was used by the German museum ZKM Center for Art and Media Karlsruhe to showcase blockchain technology.By 2022 the game had fallen to generally fewer than 100 sales a day, for a total value of less than $10,000 USD. == Technology == A CryptoKitty's ownership is tracked via a smart contract on the Ethereum blockchain. Each CryptoKitty is represented as a non-fungible token using the ERC-721 token standard on Ethereum. Generation 0 CryptoKitties were sold to players in an auction at the rate of one every 15 minutes (672 per week) for one year. New CryptoKitties are created by breeding existing CryptoKitties.Based on the limited number of cats going into circulation and their limited genomes, there is a limit of around 4 billion total cats that can be bred. Each cat has a distinct visual appearance ("phenotype") determined by its immutable genes ("genotype") stored in the smart contract. Because cats are tokens on a blockchain, they can be bought, sold, or transferred digitally, with strong guarantees of ownership.Axiom Zen developed the game. Until November 2018, Axiom Zen intended to continually release a new CryptoKitty every 15 minutes, with the rest of supply determined by breeding of CryptoKitties. CryptoKitty owners may put them up for sale via an auction for a price set in Ether (ETH). They could also put them up for sire, where another player can pay to breed with a specific CryptoKitty. == Reception == Shortly after launch, there were concerns that CryptoKitties was crowding out other businesses that use the Ethereum platform. The game caused an increase in pending transactions on Ethereum, and at one point accounted for about 25% of network traffic on Ethereum. Ethereum miners increased the gas limit in response to CryptoKitties, which allowed for more data per block and increasing transactions per second. A variety of similar websites, such as Etheremon, Ethertulips, and CryptoBots, were also created. Marketplace sites such as OpenSea and RareBits were created as a response. In March 2021 CryptoKitties announced plans to switch to the Flow blockchain in the "near future". == See also == Decentralized application Crypto art == References == == External links == Official website
Tezos	Tezos is an open-source blockchain that can execute peer-to-peer transactions and serve as a platform for deploying smart contracts. The native cryptocurrency for the Tezos blockchain is the tez (ISO 4217: XTZ; sign: ꜩ). The Tezos network achieves consensus using proof-of-stake. Tezos uses an on-chain governance model that enables the protocol to be amended when upgrade proposals receive a favorable vote from the community. Its testnet was launched in June 2018, and its mainnet went live in September 2018. == History == Tezos, first proposed in 2014, was created by husband-and-wife team Arthur and Kathleen Breitman. While working at Morgan Stanley in 2014, Arthur Breitman released two papers proposing a new type of blockchain under the pseudonym "L. M Goodman", referencing a journalist at Newsweek who had misidentified the creator of Bitcoin. He chose the name "Tezos" after writing a program to list unclaimed websites that could be pronounced in English. In 2015, with the goal of developing Tezos, Arthur Breitman registered a company called Dynamic Ledger Solutions Inc (DLS) in Delaware, with himself as chief executive. He contracted French firm OCamlPro to help develop the software. Arthur worked at Morgan Stanley at the time, but he did not provide them with notice of his work on Tezos as required by the Financial Industry Regulatory Authority (FINRA), and he was eventually fined $20,000. He sought to raise $5 to $10 million from banks but was unable to find backers. By 2016, he left Morgan Stanley; Tezos received $612,000 from 10 backers while the Breitmans planned for an initial coin offering (ICO).They received a $1.5 million investment from Tim Draper and hired public relations firm Strange Brew to promote their project. The firm was alleged to have falsely claimed that large American financial firms were using Tezos. === Tezos Foundation and initial coin offering === In 2011, Arthur Breitman first met South African cryptocurrency entrepreneur Johann Gevers through his friend Patri Friedman, the founder of The Seasteading Institute, who had hired Gevers for a project which Breitman had followed closely. In 2016, the Tezos Foundation was established in Zug Switzerland by Arthur and Kathleen Breitman, Swiss law firm MME and Gevers, to support an initial coin offering (ICO) for the Tezos platform. They planned for the foundation to become a non-profit that would raise money through the ICO and acquire DLS, which owned the group's technology.In addition to Switzerland's relatively lax financial oversight and effectively zero corporate tax rate, the benefits for Tezos of being in a foundation under the Swiss Civil Code included the ability to treat fundraising transactions as donations, and acting as an additional layer of institutional security to protect donations. Gevers became the foundation's first president.On July 1, 2017, the Tezos Foundation raised $232 million in Bitcoin and Ethereum in one of the biggest initial coin offerings (ICOs) at the time. The contributions were termed “non-refundable donations”, which Kathleen Breitman likened to a pledge drive where people would receive tote bags, though some participants considered them to be an investment. If considered an investment rather than a donation, it would fall under the purview of the Securities and Exchange Commission (SEC). After the ICO, it was planned that the Tezos Foundation would pay to acquire DLS, and if the Tezos blockchain functioned for at least three months, the Breitmans would receive 8.5% of the ICO and 10% of the tokens.By October, the Breitmans and Gevers were in a dispute over control of the project, with the Breitmans alleging Gevers pressured the foundation council into signing a contract giving him a bonus of $1.5 million. Gevers controlled the assets held by the foundation which stood at $820 million by December, including the Breitmans' share. The disagreements led to delays in the deployment of Tezos, which caused investors to bring lawsuits alleging fraud during the fundraiser and unauthorized sales of securities.In 2018, Gevers resigned and received $400,000, and the foundation board was replaced; Tezos went live that September.In 2020, the Tezos founders settled the lawsuits, with the Tezos Foundation paying $25 million, before federal courts ruled on whether the ICO was a sale of unregistered securities. Arthur Breitman joined the foundation's council in 2021.In 2022, The Tezos Foundation launched a £1 million fund to collect NFTs by African and Asian artists, to create a digital art gallery to house the collection, curated by British photographer Misan Harriman. == Design == The primary protocol of Tezos utilizes liquid proof of stake (LPoS) and supports Turing-complete smart contracts in a domain-specific language called Michelson. Michelson is a purely functional stack-based language with a reduced instruction set and no side effects, designed with formal verification in mind.The Tezos protocol allows itself to be amended by a staged process performed by committing operations to the stored blockchain to submit proposals (intended code changes) and to vote on those changes. If a proposal receives enough votes the protocol updates itself to incorporate the code changes.The Tezos blockchain has been used for NFTs as an alternative to more energy-intensive projects such as Ethereum. == Founders == Tezos co-founder Arthur Breitman studied applied mathematics, computer science, and physics in France and financial mathematics at New York University under Nassim Nicholas Taleb before working in quantitative finance. Kathleen Breitman (née McCaffrey) studied at Cornell University and worked at a hedge fund and as a consultant. Arthur was the leader of an anarcho-capitalist group in New York, and Kathleen was a libertarian Republican; the two of them met at a crypto-anarchist lunch in 2010 and married in 2013. == Sponsorship == In mid-2021, Tezos had signed a sponsorship deal with Red Bull Racing, which ended as of December 2022.In October 2021, Tezos became a sponsor of the New York Mets.In February 2022, Tezos sponsored Manchester United in a multi-year deal reportedly worth over £20 million per year. In November 2022, Manchester United issued NFT digital collectibles on the Tezos blockchain. == References == == External links == Official website Tezos Foundation website Tezos Commons website
IOTA (technology)	IOTA is an open-source distributed ledger and cryptocurrency designed for the Internet of things (IoT). It uses a directed acyclic graph to store transactions on its ledger, motivated by a potentially higher scalability over blockchain based distributed ledgers. IOTA does not use miners to validate transactions, instead, nodes that issue a new transaction on the network must approve two previous transactions. Transactions can therefore be issued without fees, facilitating microtransactions. The network currently achieves consensus through a coordinator node, operated by the IOTA Foundation. As the coordinator is a single point of failure, the network is currently centralized.IOTA has been criticized due to its unusual design, of which it is unclear whether it will work in practice. As a result, IOTA was rewritten from the ground up for a network update called Chrysalis, or IOTA 1.5, which launched on 28 April 2021. In this update, controversial decisions such as ternary encoding and quantum proof cryptography were left behind and replaced with established standards. A testnet for a follow-up update called Coordicide, or IOTA 2.0, was deployed in late 2020, with the aim of releasing a distributed network that no longer relies on the coordinator for consensus in 2021. == History == The value transfer protocol IOTA, named after the smallest letter of the Greek alphabet, was created in 2015 by David Sønstebø, Dominik Schiener, Sergey Ivancheglo, and Serguei Popov. Initial development was funded by an online public crowdsale, with the participants buying the IOTA value token with other digital currencies. Approximately 1300 BTC were raised, corresponding to approximately US$500,000 at that time, and the total token supply was distributed pro-rata over the initial investors. The IOTA network went live in 2016. === IOTA foundation === In 2017, early IOTA token investors donated 5% of the total token supply for continued development and to endow what became later became the IOTA Foundation. In 2018, the IOTA Foundation was chartered as a Stiftung in Berlin, with the goal to assist in the research and development, education and standardisation of IOTA technology. The IOTA Foundation is a board member of International Association for Trusted Blockchain Applications (INATBA), and founding member of the Trusted IoT Alliance and Mobility Open Blockchain Initiative (MOBI), to promote blockchain and distributed ledgers in regulatory approaches, the IoT ecosystem and mobility. Following a dispute between IOTA founders David Sønstebø and Sergey Ivancheglo, Ivancheglo resigned from the board of directors on 23 June 2019. On 10 December 2020 the IOTA Foundation Board of Directors and supervisory board announced that the Foundation officially parted ways with David Sønstebø. === DCI vulnerability disclosure === On 8 September 2017, researchers Ethan Heilman from Boston University and Neha Nerula et al. from MIT's Digital Currency Initiative (DCI) reported on potential security flaws with IOTA's former Curl-P-27 hash function. The IOTA Foundation received considerable backlash in their handling of the incident. FT Alphaville reported legal posturing by an IOTA Founder against a security researcher for his involvement in the DCI report, as well as instances of aggressive language levelled against a Forbes contributor and other unnamed journalists covering the DCI report. The Center for Blockchain Technologies at the University College London severed ties with the IOTA Foundation due to legal threats against security researchers involved in the report. === Attacks === As a speculative blockchain and cryptocurrency-related technology, IOTA has been the target of phishing, scamming, and hacking attempts, which have resulted in the thefts of user tokens and extended periods of downtime. In January 2018, more than US$10 million worth of IOTA tokens were stolen from users that used a malicious online seed-creator, a password that protects their ownership of IOTA tokens. The seed-generator scam was the largest fraud in IOTA history to date, with over 85 victims. In January 2019, the UK and German law enforcement agencies arrested a 36-year-old man from Oxford, England believed to be behind the theft.On 26 November 2019 a hacker discovered a vulnerability in a third-party payment service, provided by MoonPay, integrated in the mobile and desktop wallet managed by the IOTA Foundation. The attacker compromised over 50 IOTA seeds, resulting in the theft of approximately US$2 Million worth in IOTA tokens. After receiving reports that hackers were stealing funds from user wallets, the IOTA Foundation shut down the coordinator on 12 February 2020. This had the side-effect of effectively shutting down the entire IOTA cryptocurrency. Users at-risk were given seven days to migrate their potentially compromised seed to a new seed, until 7 March 2020. The coordinator was restarted on 10 March 2020. === IOTA 1.5 (Chrysalis) and IOTA 2.0 (Coordicide) === The IOTA network is currently centralized, a transaction on the network is considered valid if and only if it is referenced by a milestone issued by a node operated by the IOTA foundation called the coordinator. In 2019 the IOTA Foundation announced that it would like to operate the network without a coordinator in the future, using a two-stage network update, termed Chrysalis for IOTA 1.5 and Coordicide for IOTA 2.0. The Chrysalis update went live on 28 April 2021, and removed its controversial design choices such as ternary encoding and Winternitz one-time signatures, to create an enterprise-ready blockchain solution. In parallel Coordicide is currently developed, to create a distributed network that no longer relies on the coordinator for consensus. A testnet of Coordicide was deployed late 2020, with the aim of releasing a final version in 2021. == Characteristics == === The Tangle === The Tangle is the moniker used to describe IOTAs directed acyclic graph (DAG) transaction settlement and data integrity layer. It is structured as a string of individual transactions that are interlinked to each other and stored through a network of node participants. The Tangle does not have miners validating transactions, rather, network participants are jointly responsible for transaction validation, and must confirm two transactions already submitted to the network for every one transaction they issue. Transactions can therefore be issued to the network at no cost, facilitating micropayments. To avoid spam, every transaction requires computational resources based on Proof of Work (PoW) algorithms, to find the answer to a simple cryptographic puzzle.IOTA supports both value and data transfers. A second layer protocol provides encryption and authentication of messages, or data streams, transmitted and stored on the Tangle as zero-value transactions. Each message holds a reference to the address of a follow-up message, connecting the messages in a data stream, and providing forward secrecy. Authorised parties with the correct decryption key can therefore only follow a datastream from their point of entry. When the owner of the data stream wants to revoke access, it can change the decryption key when publishing a new message. This provides the owner granular controls over the way in which data is exchanged to authorised parties. === IOTA token === The IOTA token is a unit of value in the IOTA network. There is a fixed supply of 2,779,530,283,277,761 IOTA tokens in circulation on the IOTA network. IOTA tokens are stored in IOTA wallets protected by an 81-character seed, similar to a password. To access and spend the tokens, IOTA provides a cryptocurrency wallet. A hardware wallet can be used to keep credentials offline while facilitating transactions. === Coordinator node === IOTA currently requires a majority of honest actors to prevent network attacks. However, as the concept of mining does not exist on the IOTA network, it is unlikely that this requirement will always be met. Therefore, consensus is currently obtained through referencing of transactions issued by a special node operated by the IOTA foundation, called the coordinator. The coordinator issues zero value transactions at given time intervals, called milestones. Any transaction, directly or indirectly, referenced by such a milestone is considered valid by the nodes in the network. The coordinator is an authority operated by the IOTA foundation and as such single point of failure for the IOTA network, which makes the network centralized. === Markets === IOTA is traded in megaIOTA units (1,000,000 IOTA) on digital currency exchanges such as Bitfinex, and listed under the MIOTA ticker symbol. Like other digital currencies, IOTA's token value has soared and fallen. === Fast Probabilistic Consensus (FPC) === The crux of cryptocurrencies is to stop double spends, the ability to spend the same money twice in two simultaneous transactions. Bitcoin's solution has been to use Proof of Work (PoW) making it a significant financial burden to have a minted block be rejected for a double spend. IOTA has designed a voting algorithm called Fast Probabilistic Consensus to form a consensus on double spends. Instead of starting from scratch, the IOTA Foundation started with Simple Majority Consensus where the first opinion update is defined by, s i ( 1 ) = { 1 μ i ( 1 ) ≥ τ 0 otherwise {\displaystyle s_{i}(1)={\begin{cases}1&\mu _{i}(1)\geq \tau \\0&{\text{otherwise}}\end{cases}}} Where s i ( ⋅ ) {\displaystyle s_{i}(\cdot )} is the opinion of node i {\displaystyle i} at time 1 {\displaystyle 1} . The function μ i ( 1 ) {\displaystyle \mu _{i}(1)} is the percent of all the nodes that have the opinion 1 {\displaystyle 1} and τ ∈ ( 0.5 , 1 ] {\displaystyle \tau \in (0.5,1]} is the threshold for majority, set by the implementation. After the first round, the successive opinions change at time t {\displaystyle t} to the function, s i ( t + 1 ) = { 1 μ i ( t + 1 ) > 0.5 0 μ i ( t + 1 ) < 0.5 s i ( t ) otherwise {\displaystyle s_{i}(t+1)={\begin{cases}1&\mu _{i}(t+1)>0.5\\0&\mu _{i}(t+1)<0.5\\s_{i}(t)&{\text{otherwise}}\end{cases}}} Although, this model is fragile against malicious attackers which is why the IOTA Foundation decided not to use it. Instead the IOTA Foundation decided to augment the leaderless consensus mechanism called, Random neighbors majority consensus (RMC) which is similar to SMC although, the nodes in which their opinions are queries is randomized. They took RMC then augmented it to create FPC by having the threshold of majority be a random number generated from a Decentralized Random Number Generator (dRNG). For FPC, the first sound is the same, s i ( 1 ) = { 1 μ i ( 1 ) ≥ τ 0 otherwise {\displaystyle s_{i}(1)={\begin{cases}1&\mu _{i}(1)\geq \tau \\0&{\text{otherwise}}\end{cases}}} For success rounds though, s i ( t + 1 ) = { 1 μ i ( t + 1 ) > U t 0 μ i ( t + 1 ) < U t s i ( t ) otherwise {\displaystyle s_{i}(t+1)={\begin{cases}1&\mu _{i}(t+1)>U_{t}\\0&\mu _{i}(t+1)<U_{t}\\s_{i}(t)&{\text{otherwise}}\end{cases}}} Where U t ∼ U ( β , 1 − β ) {\displaystyle U_{t}\sim {\textbf {U}}(\beta ,1-\beta )} where β ∈ [ 0 , 1 / 2 ] {\displaystyle \beta \in [0,1/2]} , is a randomized threshold for majority. Randomizing the threshold for majority makes it extremely difficult for adversaries to manipulate the consensus by either making it converge to a specific value or prolonging consensus. Note that FPC is only utilized to form consensus on a transaction during a double spend.Ultimately, IOTA uses Fast Probabilistic Consensus for consensus and uses Proof of Work as a rate controller. Because IOTA does not use PoW for consensus, its overall network and energy per transaction is extremely small. == Applications and testbeds == Proof-of-concepts building on IOTA technology are being developed in the automotive and IoT industry by corporates as Jaguar Land Rover, STMicroelectronics and Bosch. IOTA is a participant in smart city testbeds, to establish digital identity, waste management and local trade of energy. In project Alvarium, formed under the Linux Foundation, IOTA is used as an immutable storage and validation mechanism. The privacy centered search engine Xayn uses IOTA as a trust anchor for its aggregated AI model.On 11 February 2020, the Eclipse Foundation and IOTA Foundation jointly launched the Tangle EE (Enterprise Edition) Working Group. Tangle EE is aimed at enterprise users that can take IOTA technology and enable larger organizations to build applications on top of the project, where the Eclipse Foundation will provide a vendor-neutral governance framework .Announcements of partners were critically received. In 2017, IOTA released the data marketplace, a pilot for a market where connected sensors or devices can store, sell or purchase data. The data marketplace was received critically by the cryptocurrency community over the extent of the involvement of the participants of the data marketplace, suggesting that "the IOTA Foundation was actively asking publications to use Microsoft’s name following the data marketplace announcement.". Izabelle Kaminska criticized a Jaguar press release: "our interpretation is that it's very unlikely Jaguar will be bringing a smart-wallet-enabled marketplace any time soon." == Criticism == IOTA promises to achieve the same benefits that blockchain-based DLTs bring — decentralization, distribution, immutability and trust — but remove the downsides of wasted resources associated with mining as well as transaction costs. However, several of the design features of IOTA are unusual, and it is unclear whether they work in practice.The security of IOTA's consensus mechanism against double-spending attacks is unclear, as long as the network is immature. Essentially, in the IoT, with heterogeneous devices having varying levels of low computational power, sufficiently strong computational resources will render the tangle insecure. This is a problem in traditional proof-of-work blockchains as well, however, they provide a much greater degree of security through higher fault tolerance and transaction fees. At the beginning, when there is a lower number of participants and incoming transactions, a central coordinator is needed to prevent an attack on the IOTA tangle.Critics have opposed role of the coordinator for being the single source of consensus in the IOTA network. Polychain Capital founder Olaf Carlson-Wee, says "IOTA is not decentralized, even though IOTA makes that claim, because it has a central "coordinator node" that the network needs to operate. If a regulator or a hacker shut down the coordinator node, the network would go down." This was demonstrated during the Trinity attack incident, when the IOTA foundation shutdown the coordinator to prevent further thefts. Following a discovered vulnerability in October 2017, the IOTA foundation transferred potentially compromised funds to addresses under its control, providing a process for users to later apply to the IOTA Foundation in order to reclaim their funds.Additionally, IOTA has seen several network outages as a result of bugs in the coordinator as well as DDoS attacks. Early in the seed generator scam, a DDoS network attack distracted IOTA admins, leaving initial thefts undetected. In 2020, the IOTA Foundation announced that it would like to operate the network without a coordinator in the future, but implementation of this is still in an early development phase. == See also == Nano (cryptocurrency) == References == == External links == Official website
Chainlink (blockchain)	Chainlink is a decentralized blockchain oracle network built on Ethereum. The network is intended to be used to facilitate the transfer of tamper-proof data from off-chain sources to on-chain smart contracts. Its creators claim it can be used to verify whether the parameters of a smart contract are met in a manner independent from any of the contract's stakeholders by connecting the contract directly to real-world data, events, payments, and other inputs. == History == Chainlink was created in 2017 by Sergey Nazarov and Steve Ellis, who co-authored a white paper introducing the Chainlink protocol and network with Cornell University professor Ari Juels the same year. Chainlink acts as a "bridge" between a blockchain and off-chain environments. The network, which services smart contracts, was formally launched in 2019.In 2018, Chainlink integrated Town Crier, a trusted execution environment-based blockchain oracle that Juels also worked on. Town Crier connects the Ethereum blockchain with web sources that use HTTPS.Chainlink's trademark was registered in the Cayman Islands on 2019-03-12, the corporation created being Smartcontract Chainlink Sezc, Ltd.In 2020, Chainlink integrated DECO, a Cornell project co-created by Juels. DECO is described by its authors as a protocol that uses zero-knowledge proofs to allow users to prove information is true to a blockchain oracle without revealing sensitive information, such as birth dates. Chainlink published a second white paper in April 2021. That paper, Chainlink 2.0: Next Steps in the Evolution of Decentralized Oracle Networks, detailed a vision for expanding the role and capabilities of decentralized oracle networks to include hybrid smart contracts, which utilize on-chain code and off-chain services provided by oracle networks. == Technology == Chainlink's decentralized oracle network is an open-source technology infrastructure that allows any blockchain to securely connect to off-chain data and computation resources. The network nodes fetch, validate, and deliver data from multiple sources onto blockchains to execute smart contracts.In addition to the transfer of external information to a blockchain, Chainlink can also be used for several different off-chain computation functions, including a verifiable random function (VRF) and data feeds. The data feeds have been used to bring election data on-chain.Chainlink's VRF can be used for random number generation which can be used in decentralized gaming. ZDNet reported the verifiability of the random number generation ensures the in-game results are tamper-proof. == Link token == Node operators are compensated with the network's native cryptocurrency, LINK. Chainlink's LINK token is an ERC677 token, an extension of ERC-20. All LINK tokens have been premined and largely withheld by the central issuer. A fraction of the pre-mined token supply was offered for sale to retail buyers in a controversial and legally murky initial coin offering (ICO). Tokens act as data payloads, feeding the required data from off-chain sources to smart contracts, which then act accordingly in response to the data provided by the token. According to Chainlink, the trade value derived from these tokens is used to pay node operators for retrieving data from smart contracts, and also for deposits placed by node operators as required by contract creators. Tokens can be stored in any ERC-20 wallet, as the ERC677 token retains all the functionality of an ERC-20 token. == References ==
Filecoin	Filecoin (⨎) is an open-source, public cryptocurrency and digital payment system intended to be a blockchain-based cooperative digital storage and data retrieval method. It is made by Protocol Labs and shares some ideas from InterPlanetary File System allowing users to rent unused hard drive space. A blockchain mechanism is used to register the deals. Filecoin is an open protocol and backed by a blockchain that records commitments made by the network’s participants, with transactions made using FIL, the blockchain's native currency. The blockchain is based on both proof-of-replication and proof-of-spacetime. == History == The project was launched in August 2017, and raised over $200 million within 30 minutes. == Philanthropy == In April 2021, the Filecoin Foundation donated 50,000 filecoins worth $10,000,000 to the Internet Archive. In addition, Internet Archive's founder Brewster Kahle and director of partnerships Wendy Hanamura joined the boards of advisors of Filecoin and the Filecoin Foundation for the Decentralized Web. == Network total storage power == As of November 2023, the total storage capacity was 25 EiB, and total data stored was 2.0 EiB. == See also == Distributed data store == References == == External links == Official website
Bakkt	Bakkt Holdings, Inc., headquartered in Alpharetta, Georgia, provides a software as a service (SaaS) and API platform for owning and trading cryptocurrency and redeeming loyalty points. Bakkt was founded by and is 65.7% owned by Intercontinental Exchange (ICE), which also owns the New York Stock Exchange. Bakkt earns revenue from commissions for payments and purchases and sales of cryptocurrency.The company also owns the naming rights to the Bakkt Theater at Planet Hollywood Las Vegas. == History == === 2018–2020: Under ICE ownership === In August 2018, Intercontinental Exchange announced it was forming a new company Bakkt, which was intended to leverage Microsoft online servers to manage digital assets. Bakkt was said to be working with Boston Consulting Group (BCG), Microsoft, Starbucks, and others to create a software platform. The Bakkt ecosystem is expected to include federally regulated markets and warehousing along with merchant and consumer applications. Its first use cases was for trading and conversion of Bitcoin (BTC) versus fiat currencies. Kelly Loeffler served as Bakkt's CEO until her appointment to the United States Senate.As an initial component of the Bakkt offering, Intercontinental Exchange's U.S.-based futures exchange and clearing house plan to launch a one-day physically delivered BTC contract along with physical warehousing in 2019, subject to CFTC review and approval, which was delayed. These regulated venues will establish new protocols for managing the specific security and settlement requirements of digital currencies. In addition, the clearing house plans to create a separate guarantee fund that will be funded by Bakkt. In January 2019, Bakkt announced that it had entered into an agreement to acquire certain assets of Rosenthal Collins Group (RCG), to close in February. In April 2019, Bakkt announced that it had acquired Digital Asset Custody Company (DACC). Terms of the transaction have not been disclosed. In September 2019 the exchange began trading of bitcoin futures. In February 2020, Intercontinental Exchange announced that it agreed to acquire Bridge2 Solutions, a loyalty rewards provider, which was then contributed to Bakkt.In September 2020, Bakkt announced a new all-time high for trade volume in physically delivered Bitcoin futures contracts. During the September 15th session, this figure amounted to 15,955 BTC (more than $200 million at the time of announcement). === 2021–present: Publicly listed company === In October 2021, Bakkt completed a merger with VPC Impact Acquisition Holdings, a special-purpose acquisition company sponsored by Victory Park Capital and was listed on the New York Stock Exchange.In November 2022, it was announced Bakkt would be acquiring the Chicago-based integrated crypto trading platform, Apex Crypto, LLC from Apex Fintech Solutions, Inc. == References == == External links == Official website Business data for Bakkt Holdings, Inc.:
Circle (company)	Circle began as a peer-to-peer payments technology company that now manages stablecoin USDC, a cryptocurrency the value of which is pegged to the U.S. dollar. It was founded by Jeremy Allaire and Sean Neville in October 2013. Circle is headquartered in Boston, Massachusetts. USDC, the second largest stablecoin worldwide, is designed to hold at or near a stable price of $1. The majority of its stablecoin collateral is held in short-term U.S. government securities. == Funding == The company has received over US$135 million in venture capital from 4 rounds of investments from 2013 to 2016, including US$50 million led by Goldman Sachs. In April 2015 The New York Times reporter Nathaniel Popper wrote that the Goldman Sachs investment "should help solidify Bitcoin’s reputation as a technology that serious financial firms can work with." In June 2016, Circle raised US$60 million in Series D funding backed by new and existing partners. On May 15, 2018, Circle raised US$110 million in venture capital to create USD Coin, an Ethereum coin they claim is backed by USD. Today, each USDC token is backed by USD.In April 2022, Circle Internet Financial announced an agreement for a US$400M funding round with investments from BlackRock, Fidelity Investments, Marshall Wace LLP, Fin Capital and Jet Prive Gestora de Fundos Ltda expected to close in the second quarter. == History == In September 2015, Circle received the first BitLicense issued from the New York State Department of Financial Services. In April 2016, the British government approved the first virtual currency licensure to Circle.Circle's mobile payment platform, Circle Pay, allowed users to hold, send, and receive traditional fiat currencies, until being slated for discontinuation in 2019. Up until December 2016, Circle Pay also operated as a Bitcoin wallet service to buy and sell Bitcoins. It has since ceased to provide such service, claiming the company "is now more than ever not a consumer bitcoin exchange, and will continue to focus resources on global social payments and future next-generation blockchain technology".In September 2018, Circle, along with Coinbase Global, released a consortium called Centre, which launched digital USDC pegged to the dollar. Centre was intended to serve as a platform for users to make deposits from traditional bank accounts and convert fiat currency into tokens. Centre would also provide the ability to shift back to banknotes. In August 2023, Coinbase and Circle closed the Centre Consortium, giving Circle sole governance of USDC.In June 2019 it was announced that the Circle Pay mobile and web apps would be discontinued on September 30.In February 2020, Circle sold its digital asset trading platform to Voyager Digital.In July 2021, Circle announced a plan to merge with a special-purpose acquisition company called Concord Acquisition Corp in a $4.5 billion deal that would make Circle a public company. However, in December 2022 this deal was terminated.In 2023, at the World Economic Forum's annual meeting in Davos, Switzerland, Allaire said the United States needs new statutory definitions of digital assets to provide regulatory clarity. He also said he hoped Circle will be regulated by the U.S. Federal Reserve and become an established financial player in order to distinguish the company from recent implosions in the crypto industry.On March 10, 2023, USDC Stablecoin announced that $3.3 billion of its US$40 billion Coin reserves were held at Silicon Valley Bank when it collapsed. All of the cash held as reserve has since been parked with The Bank of New York Mellon Corporation. In late 2023, the company announced it had a $1 billion cash cushion.In the same month, the company announced that it has chosen Paris to develop its commercial activities in Europe.In 2023, CEO Jeremy Allaire began lobbying the U.S. Congress to provide clear rules for stablecoins. Analysts have suggested that well-regulated stablecoins would invite competition from mainstream banks and have the potential to disrupt the current remittance, payments, and peer-to-peer transfer system. In late, 2023, Coinbase took an equity stake in the company which also announced that USDC will be available on six additional blockchains. Visa also announced it was expanding a pilot program that uses USDC on the Solana blockchain to help pay some merchants in cryptocurrency. == Services and features == As of 2015, a Circle account could be funded in USD via "US-issued Visa and MasterCard credit and debit cards" and US bank accounts. As of 2016, European customers can also use Circle in EUR and GBP. Circle plans to peg the conversion rate to the US Dollar. Britain's Financial Conduct Authority granted Circle an electronic money license in April 2016, expanding the use of Circle's services to the United Kingdom and broadening Circle's relationship with UK bank Barclays. In June 2016, Circle announced it will begin expanding its services to China, where CEO Jeremy Allaire believes "there’s an opportunity for Chinese consumers that want to share value globally with friends in other parts of the world."In December 2016 the Circle app stopped supporting the exchange of bitcoin but still allows money transfers. In October 2017, Circle launched a new service for group payments and cash transfers to US accounts.In 2023, the company released a protocol that enables users to move USDC between blockchains. It also unveiled a programmable Web3 wallet platform that will enable applications to store, send, and receive cryptocurrencies. == Acquisitions == On February 26, 2018, Circle announced that they purchased the Poloniex cryptocurrency exchange for $400 million. Amid the developments around the acquisition, one of Circle's leaked documents detailing its plans on operating Poloniex revealed the company's moves to become "The US's First Regulated Crypto Exchange" supported by its mutual understanding with the SEC. While Circle announced the exchange would "spin out" in October 2019, it was revealed one month later that Justin Sun, the founder of Tron, led the acquisition of Poloniex. In October 2018 SeedInvest announced they entered an agreement to sell to Circle, subject to FINRA (Financial Industry Regulatory Authority) approval. == Investments == In November 2021 Circle led a US$13.5 million funding round in crowdfunding platform Crowdcube. == Licenses == The company has licenses in 49 U.S. states as well as Puerto Rico and the District of Columbia and does most of its banking with regulated U.S. institutions. in 2023, the company received a Major Payment Institution license from the Monetary Authority of Singapore. == Criticism == On July 9, 2022, author Matt Taibbi released an extremely critical overview of Circle's business practices in his article titled "The Financial Bubble Era Comes Full Circle". == References == == External links == Official website
Gemini (company)	Gemini Trust Company, LLC (Gemini) is an American cryptocurrency exchange and custodian bank. It was founded in 2014 by Cameron and Tyler Winklevoss.In 2023, the company, along with two others, was sued by New York attorney general Letitia James under allegations that it had "defrauded" investors. == History == Tyler and Cameron Winklevoss announced Gemini in June 2013 and the company went live on October 25, 2015. Gemini began in order to facilitate the purchase and storage of Bitcoin through a complex system of private keys and password protected environments. Gemini holds a Limited Purpose Trust Charter from the New York Department of Financial Services that was granted in October 2015. Gemini began adding to the financial services it offers thereafter, some of which include FIX and API support. On May 5, 2016, Governor Andrew Cuomo of New York State announced the approval of Gemini as the first licensed Ethereum exchange based in the United States. Additionally, in 2016, Gemini announced it would allow users to withdraw Ethereum Classic (ETC) from the exchange, following a hard fork in Ethereum's code.In October 2017, Gemini announced that it was allowing registered users to withdraw Bitcoin Cash from the exchange provided they had a balance available on the exchange prior to the Bitcoin hard fork in August 2017.In December 2017, the Chicago Board Options Exchange (CBOE) began to use Gemini to settle its Bitcoin futures contracts. CBOE partnered with Gemini so as to use Gemini's dollar denominated auction price for these contracts. In March 2019, CBOE announced they would stop listing Bitcoin futures.In April 2018, Gemini began offering "Block Trading". Block Trading enables Gemini users to buy and sell large quantities of digital assets outside of Gemini's continuous order books, creating an additional liquidity mechanism when trading in greater size. Also in April, Gemini began to utilize NASDAQ's SMARTS technology to monitor trades and combat fraudulent activity and price manipulation on its exchange. On May 14, 2018, the New York Department of Financial Services announced it had approved Gemini to offer Zcash (ZEC) on their platform, becoming the first licensed exchange to offer trading and custody services for it. On September 10, 2018, Gemini had received regulatory approval for a new product, the Gemini dollar (GUSD) from the NYDFS and would launch trading of the coin that same day. Gemini described the product as a stablecoin which maintains a 1-to-1 peg with the American dollar. On October 3, 2018, it was announced that Gemini had obtained digital asset insurance covering tokens and coins held on its exchange. The insurance had been brokered by Aon, a London based public risk consulting company, and underwritten by a consortium of global underwriters.In November 2019, the Gemini Trust Co. bought Nifty Gateway for an undisclosed sum. Nifty Gateway is a marketplace for NFTs. The goal of the NFT marketplace is to be a custodian for various assets, including property deeds, passports, commodities, collectibles, videogame characters, movies, music and event tickets.In May 2020, a partnership was announced with Samsung whereby Samsung smartphone users could link their Samsung Blockchain Wallets to their Gemini accounts to view balances and transfer crypto.In February 2021, Gemini announced Gemini Earn, in partnership with cryptocurrency brokerage Genesis, to offer 7.4% return on customer deposits.In November 2021 Gemini raised $400 million investment that values the New York parent company, Gemini Space Station, LLC, at $7.1 billion.On June 2, 2022, the Commodity Futures Trading Commission (CFTC) filed a suit against Gemini based on alleged misrepresentation of the company's exchange and futures contracts during 2017 meetings with the CFTC. The suit is seeking to block Gemini, as well as its affiliates, from trading commodities and getting further investments, in addition to monetary fines. Also on June 2 Cameron and Tyler Winklevoss announced they would be laying off 10% of the company staff, citing a "contraction phase" known as "crypto winter" in the cryptocurrency industry.On January 12, 2023, the Securities and Exchange Commission charged Gemini Trust Company with the unregistered offer and sale of securities to retail investors through the Gemini Earn crypto asset lending program. As part of the same action, the SEC also charged Genesis Global Capital, a subsidiary of Digital Currency Group, which held approximately $900 million in investor assets from 340,000 Gemini Earn customers. Gemini Earn was shut down in January 2023, following Genesis suspending withdrawals in November 2022. The SEC is seeking permanent injunctive relief, disgorgement of ill-gotten gains plus prejudgment interest, and civil penalties against both Gemini and Genesis.On February 6, 2023, Genesis Global Holdco announced an agreement in principle with Digital Currency Group and creditors of Genesis Global Capital, including Gemini. Gemini will contribute “up to $100 million in cash” as part of the restructuring and recovery agreement.On March, 2023, rumors about American multinational financial services company, JPMorgan (JPM) ending its banking relationship with Gemini were raised. However, shortly after, Gemini denied such rumors and shared via Twitter that the "banking relationship remains intact with JPMorgan.” == 2023 New York lawsuit == On October 19, 2023, New York Attorney General Letitia James filed a lawsuit against Gemini and digital asset companies Digital Currency Group and Genesis Global Capital. The lawsuit stated that Gemini had deceived investors about the risks of a lending service it ran in joint with Genesis. James stated that 230,000 investors lost their money due to the program. == Service disruptions == The site's primary challenge has been remaining online at times of excessively high volumes, a relatively common occurrence for any website receiving an unusual amount of traffic. On November 28, 2017, for example, both Gemini and Coinbase crashed for several hours. Gemini was showing a "504 gateway time-out" message, and the status page showed "Systems are currently experiencing degraded performance." Subsequently, the Gemini Blog offered this comment. "This is not the first scaling challenge we've encountered, and it won’t be the last. We’re continuing to improve our performance and infrastructure monitoring so we can anticipate potential problems more quickly in the future." == References == == External links == Gemini website
LocalBitcoins	LocalBitcoins was a peer-to-peer bitcoin exchange platform based in Helsinki, Finland.Its service facilitated over-the-counter trading of local currency for bitcoins. Users posted advertisements on the website, where they stated exchange rates and payment methods for buying or selling bitcoins. Other users replied to these advertisements and make the payment in their specified payment method. As of December 2020, LocalBitcoins had over 1,000,000 active traders with a trade volume of 612 million US dollars between October and December 2020. LocalBitcoins shut down in February 2023. == History == LocalBitcoins was founded in June 2012 by Jeremias Kangas. He implemented an escrow system for the marketplace by the end of 2012. The website started generating revenue by the beginning of 2013, now as of 2020 there are an average of 29,566 successful trades per day.In 2018, LocalBitcoins headed the list of best financially performing companies in Finland arranged by the local specialized publication Kauppalehti.In 2014, 2016, and 2018 people who used the site were arrested for money laundering and related crimes.In January 2019, hackers stole bitcoin worth $28,200 from users' LocalBitcoins accounts. LocalBitcoins was able to identify and solve the case immediately, announcing so to its users. On the same day, LocalBitcoins shared that LocalBitcoins accounts were safe to use and emphasized the importance of two-factor authentication. In November 2019, LocalBitcoins.com got registered as a Virtual Currency Provider by the Finnish Financial Supervisory Authority.On 9 February 2023, LocalBitcoins announced it will cease operations later in February. == Services == The website offered a service to facilitate the locating of Bitcoin users, who can meet for person to person trading of bitcoin.: 23 The site is suggested for casual traders seeking more privacy.: 207 The site uses an escrow system, and the transfer of bitcoin is made after funds are received in the sellers account.: 221 LocalBitcoins has a reputation system for users and an escrow and conflict resolution service. == References == == External links == Official website
Blockchain.com	Blockchain.com (formerly Blockchain.info) is a cryptocurrency financial services company. The company began as the first Bitcoin blockchain explorer in 2011 and later created a cryptocurrency wallet that accounted for 28% of bitcoin transactions between 2012 and 2020. It also operates a cryptocurrency exchange and provides institutional markets lending business and data, charts, and analytics. == Corporate affairs == Blockchain.com is a private company. The company is led by CEO Peter Smith, one of its three founders. The company's board members include: Smith; co-founder Nicolas Cary; Antony Jenkins; Jim Messina, the former deputy chief of staff for Barack Obama; and Jeremy Liew, a partner at Lightspeed Venture Partners.Between 2012 and February 2021, the company raised a total of $190 million in venture capital funding. In March 2021, it raised an additional $300 million investment. Investors in the company include partners of DST Global, Lightspeed Venture Partners, VY Capital, GV, Baillie Gifford, Lakestar, Eldridge, Kyle Bass, Access Industries, Moore Strategic Ventures and Rovida Advisors. == History == Blockchain.info was established by Ben Reeves in 2011. He launched a website which could be used to track bitcoin transactions. The website was a block explorer, a website that allowed bitcoin users to see the details of public cryptocurrency transactions if they have the identifying hash code for the transaction.In early 2012, Reeves and Brian Armstrong, the co-founder of crypto-currency exchange Coinbase, applied to Y Combinator's summer class. They proposed a payment platform for bitcoin where users could keep a digital wallet, exchange other currencies for bitcoins for a percentage fee, and make payments in bitcoin. Due to different opinions they parted ways prior to attending Y Combinator. Reeves wanted to create a platform where users controlled access to their bitcoin information, while Armstrong felt that the platform should retain custody of the users wallets. After parting ways with Armstrong, Reeves continued to work on Blockchain.info.From 2013 to 2014, Blockchain's user base grew from 100,000 wallet users in early 2013 to 1.5 million in April 2014. By 2014, Blockchain.com was the most popular bitcoin wallet and was led by Nicolas Cary as CEO. It had acquired two companies, ZeroBlock in 2013, and RTBTC in early 2014, through which it added data analytics services, and brought these services together under one umbrella. In December 2013, Blockchain.com acquired ZeroBlock, an app for bitcoin pricing. The following year, it acquired the data analytics platform RTBTC. It integrated RTBTC's technology with its existing services, establishing one platform offering cryptocurrency wallet, pricing and analytics, and the cryptocurrency explorer.In February 2014, Apple Inc. removed the Blockchain.com app from the iOS App Store, prompting a public outcry in the bitcoin community, most notably within the Reddit community. At the time, it was the only bitcoin wallet app available for Apple users, as Apple had removed or denied other apps. In July 2014, Apple reinstated the Blockchain.com app.In 2014, Peter Smith joined the founding team as its CEO. The three founders, Reeves, Cary and Smith, worked from Reeves' flat in York and formally established the company when bitcoin investor Roger Ver provided initial funding. By October 2014, it had 2.3 million consumer wallets and raised $30.5 million in its first external fundraising round, with investors including Lightspeed Venture Partners and Mosaic Ventures. This was the biggest round of financing in the digital currency sector at that time. The World Economic Forum named the company as one of 2016's "Technology Pioneers". In 2017, the company carried out a second round of fundraising. It closed $40 million in funding that June and the company was valued at $280 million.In 2018, Blockchain started selling services for institutional cryptocurrency. In July 2019, Blockchain.com launched its cryptocurrency exchange and promoted it as faster than others. In September 2020, the company joined the Coalition for App Fairness which aims to negotiate for better conditions for the inclusion of apps in app stores. In mid-2018, the company acquired Tsukemen, an app-development startup company based in San Francisco.In 2020 the company had 31 million users and as of 2021, there were 65 million Blockchain.com wallets and 28% of bitcoin transactions since 2012 were initiated or received by a Blockchain.com wallet. In February 2021, Blockchain.com raised a $120 million funding round from investors including Moore Strategic Ventures, Kyle Bass, Access Industries, Rovida Advisors, Lightspeed Venture Partners, GV, Lakestar, and Eldridge. Including previous venture capital funding rounds, the company had raised $190 million altogether. One month later, the company announced a further $300 million fundraising round. One-third of the amount raised was funded by investment firm Baillie Gifford which invested $100 million. Based on the fundraising round, the company was valued at $5.2 billion. In 2022, Blockchain.com's CEO wrote to shareholders informing them that Three Arrows Capital rapidly becoming insolvent meant a default impact of approximately $270 million worth of cryptocurrency and US dollar loans to Blockchain.com. The firm laid off 25% of its staff, about 150 people, on July 21. == Products and services == As a cryptocurrency company, Blockchain.com provides a platform for holding, using, managing crypto assets, and exploring cryptocurrency transactions. It also develops financial services standards and infrastructure for cryptocurrencies. The company's platform provides market data and analytics. It follows cryptocurrency's aims of being decentralized and anonymous; some of its cryptocurrency products are managed by the end user and not accessible by Blockchain.com itself.Its main products are its cryptocurrency wallet, exchange, block explorer, and institutional markets offering. === Wallet === The company offers a hosted cryptocurrency wallet which is a method to store cryptocurrency in a digital file that can be accessed online. The wallet can be used with different cryptocurrencies and stablecoins. Its wallets can be used to send and receive digital currency transactions, as well as swap between different cryptocurrencies. Blockchain.com has a non-custodial wallet, meaning that it is controlled completely by the user and the company has no access to the wallet's data. Users access their wallet with a private key, a recovery phrase known only to the user. === Exchange === A cryptocurrency exchange helps to convert your digital assets in money and money into the digital assets. They work like a stockbroker. The company has an exchange to allow its users to buy, sell, and trade cryptocurrencies. Additionally, the exchange's user interface can be customized by traders to show them relevant information depending on their level of experience. === Institutional markets business === In addition to its services for individuals, Blockchain.com also provides institutional investors with cryptocurrency-based financial services. The company's institutional markets business provides cryptocurrency lending, borrowing, trading and custody of financial assets. It also carries out over-the-counter transactions for large traders, acting as a broker to keep trades private and prevent price swings occurring based on market knowledge of the trades. === Explorer === The company operates a blockchain explorer that allows the user to see public cryptocurrency transactions and related information. This allows anyone who has a transaction's hash code to see the addresses of the wallets the transaction was sent from and received to, the amount of the transaction, and any fees. The tool can be used for analysis of transaction activity, cryptocurrency data, and analytics. The company sells advertising on the otherwise free service. == See also == List of bitcoin companies == References == == External links ==
Changpeng Zhao	Changpeng Zhao (Chinese: 赵长鹏; pinyin: Zhào Chángpéng), commonly known as CZ, is a Chinese-born Canadian businessman. Zhao is the co-founder and former CEO of Binance, the world's largest cryptocurrency exchange by trading volume as of November 2023. He resigned as the CEO in November 2023 after pleading guilty to a money laundering charge in the United States.According to Bloomberg Billionaires Index, Zhao was ranked the 69th-richest person in the world, with a net worth estimated at $23 billion as of November 2023. == Early life and education == Zhao was born in Lianyungang in China's Jiangsu province. In the late 1980s, when he was 12 years old, he immigrated with his family to Canada, settling down in Vancouver, British Columbia. His parents were both schoolteachers in China. His father worked as a university instructor before he was branded a "pro-bourgeois intellect" and exiled to rural areas shortly after Zhao's birth. During his teenage years in Canada, Zhao helped to support his family by holding down a number of service jobs, including working as a fast-food clerk at a McDonald's restaurant and a gas station.Zhao attended McGill University in Montreal, Quebec, where he majored in computer science. == Early career == After graduating from McGill, Zhao was selected for an internship in Tokyo working for a subcontractor of the Tokyo Stock Exchange, developing software for matching trade orders. He later went to work full-time for four years at Bloomberg Tradebook where he was a developer of futures trading software. == Business career == In 2005, Zhao moved to Shanghai to launch his business career, where he established his first technology startup company called Fusion Systems, which was known for "some of the fastest automated high-frequency trading platforms and systems for stockbrokers." Zhao first heard of Bitcoin in 2013 when playing poker with Bobby Lee (brother of Charlie Lee) who would later go on to found BTCC (company). Lee advised Zhao to put 10% of his money into bitcoin. Zhao instead "went all in" and sold his apartment in Shanghai and invested all of his wealth in Bitcoin, much to his family's dismay.In 2013, Zhao was a member of the team that developed Blockchain.info and he also served as Chief Technology Officer of OKCoin. === Binance === After its launch in July 2017, the Binance cryptocurrency exchange was able to raise $15 million in an initial coin offering, and trading began on the exchange eleven days later. In less than eight months, Zhao grew Binance into the world's largest cryptocurrency exchange by trading volume (as of April 2018). Zhao also launched Binance Coin in 2017; this is a utility token that gives its owners various benefits, such as discounts on trading fees. In April 2019, Binance launched Binance Smart Chain, which has smart contract functionality and is an Ethereum competitor. In February 2018, Forbes placed him third on their list of "The Richest People In Cryptocurrency," with an estimated net worth of $1.1-2 billion.In 2019, Zhao launched Binance's U.S. affiliate, Binance.US. Binance withdrew its application to run a Singapore-based crypto exchange in 2021. ==== Legal troubles ==== ===== Civil lawsuits ===== On 27 March 2023, the Commodity Futures Trading Commission (CFTC) filed a lawsuit against Binance and Zhao in the United States District Court for the Northern District of Illinois, claiming willful evasion of US law and allegedly breaching derivatives rules. The agency accused Binance of breaking rules intended to thwart money laundering operations, pointing to internal communications describing transactions by Palestinian militant organization Hamas, and suspected criminals.In June 2023, the U.S. Securities and Exchange Commission (SEC) said it was suing Zhao and Binance on 13 charges for alleged violations of US securities rules. ===== Criminal prosecution ===== In November 2023, Zhao agreed to resign from Binance and pay a $50 million fine as part of a guilty plea to U.S. federal charges. Binance also agreed to plead guilty, and to pay $4.3 billion in fines. Zhao was replaced as CEO by Richard Teng.Zhao personally pled guilty to violating the American Bank Secrecy Act by prioritizing Binance's growth over compliance with FinCEN anti-money laundering requirements. Although Zhao only personally pled guilty to a single criminal charge, as part of plea bargain negotiations, Zhao agreed for Binance to also admit to operating an unlicensed money transmitting business and to violating the International Emergency Economic Powers Act. === Views on cryptocurrency === In an interview with The New York Times, Zhao said people are getting into crypto as they see it grow, "trade it and make money off it as opposed to using it," but that the market will always self-correct. On April 6, 2021, Zhao told Bloomberg Markets that nearly 100% of his liquid net worth was in the form of cryptocurrency.In 2022, Zhao invested $500 million through Binance to finance the acquisition of Twitter by Elon Musk. == Personal life == Of Chinese descent, Zhao is a Canadian and UAE citizen. Born in China in 1977, Zhao acquired a Canadian visa in 1989 and left China that same year after the events of Tiananmen Square. In 2022, Zhao said that he had acquired Canadian citizenship some 30 years before, around 1992. In 2005, he moved back to China, eventually owning an apartment in Shanghai. In 2015, he sold his Shanghai apartment and used the funds to purchase Bitcoin. Zhao stayed in China until the Chinese government banned crypto exchanges in late 2017. He is currently based in Dubai, United Arab Emirates.Zhao has said he plans to donate up to 99% of his wealth, following the philanthropic examples of other global business magnates and investors such as Bill Gates and Warren Buffett. "I intend to donate most of my wealth, as many other entrepreneurs or founders have done, from Peabody to today. I intend to donate 90%, 95%, or 99% of my wealth."According to a Reuters investigative story about Binance, Zhao had a romantic relationship with former Chinese travel television show host and Binance co-founder Yi He for "several years." They have two children, including a son born in the United States. Reuters reported that Zhao has a total of 3 children. === Political views === With regards to his political beliefs, Zhao stated in 2021 in Singapore: "I am not a complete libertarian, I'm not an anarchist... I don't believe human civilization is advanced enough to live in a world with no rules." == References ==
Digital Currency Group	Digital Currency Group (DCG) is a venture capital company focusing on the digital currency market. It is located in Stamford, Connecticut. The company has the subsidiaries Foundry, Genesis, Grayscale Investments, and Luno. It also formerly owned CoinDesk. == History == === Founding and growth: 2015-2021 === Digital Currency Group was launched in 2015 by Barry Silbert, the former CEO of SecondMarket, Inc. He began investing in blockchain technology companies in 2013. Shortly after SecondMarket’s sale, Silbert formed Digital Currency Group, with Genesis and Grayscale becoming the first of the company’s subsidiaries.In November 2021, the firm relocated its Manhattan headquarters to Stamford, Connecticut. The governor of Connecticut at the time, Ned Lamont, had provided financial incentives for the company to move to Stamford, including a $5 million grant if Digital Currency Group created at least 300 full-time jobs in the state.As of November 2021, Digital Currency Group made over 200 investments in other cryptocurrency companies. === Repercussions of FTX bankruptcy: 2022 === On November 1, 2022, it was reported that Mark Murphy had been promoted from DCG's COO to president, with 10% of staff leaving the company.On November 10, 2022, DCG subsidiary Genesis tweeted that they had about $175 million locked in the cryptocurrency exchange FTX, which had just stopped processing withdrawals. The company stated that this situation "does not impact our market-making activities." The following day, FTX filed for bankruptcy. On November 16, Genesis suddenly halted all Bitcoin withdrawals and loan applications for their customers. The Wall Street Journal reported that it had obtained confidential documents stating that Genesis was undergoing an "ongoing run on deposits" and was seeking a $1 billion emergency loan by the following Monday, November 21. === Genesis and sales: 2023 === By early 2023, DCG had over 160 companies in its portfolio, of which it had acquired 28. Subsidiaries included the crypto exchange Luno, and the firm Foundry for crypto mining. It was also an investor in Coinbase and Kraken, the firm Circle behind the stablecoin USDC, and the analytics companies Chainalysis, Dune Analytics, Elliptic, and Etherscan. In early January 2023, DCG laid off 30% of its staff. In response to growing dispute with shareholders, Barry Silbert in early 2023 argued against debtor Cameron Winklevoss' push to replace him as CEO.In January 2023, the Financial Times reported that DCG was considering selling parts of its venture capital holdings to raise funds.On January 19, 2023, Genesis Global Capital filed for Chapter 11 bankruptcy protection, citing over 100,000 creditors and liabilities of between $1 billion and $10 billion. In February 2023, DCG struck a deal with creditors to either sell its Genesis unit or turn its equity over to creditors. Specifically, on February 6, 2023, Genesis Global Holdco announced a possible agreement with its creditors and DCG, wherein DCG would give its equity interest in Genesis Global Trading (GGT) to Genesis Global Holdco. DCG would also refinance its loans from Genesis and exchange its existing $1.1 billion promissory note for convertible preferred stock issued by DCG. However in April, some creditors walked away from the restructuring agreement.In May 2022, it was reported that DCG had missed a $630 million payment to Genesis, while owing the unit $1.65 billion.The firm stated that "due to the state of the broader economy and prolonged crypto winter, along with the challenging regulatory environment for digital assets in the U.S," it shut down TradeBlock on May 31, 2023. At that time, Luno remained owned by DCG. In July 2023, it was reported that DCG would sell CoinDesk for $125 million. At the time, DCG had closed HQ, its wealth management unit. With Barry Silbert remaining CEO, in July 2023, DCG appointed Mark Shifke as its CFO.In July 2023, DCG's crypto lending arm Genesis Global was still undergoing bankruptcy proceedings. In July 2023, Gemini sued DCG in New York citing fraud, with the intent of reclaiming funds. In August 2023 DCG reportedly faced an unannounced probe by the New York Attorney General, who was seeking information related to the financial dealings of DCG's subsidiary Genesis.A new Chapter 11 deal was agreed on with DCG and lender Genesis Global as well as a major creditor group in late August 2023. The agreement involved paying out up to 90% of the amount owed to Genesis customers using new loans.In October 2023, the New York attorney general filed a lawsuit against DCG, Gemini Trust, and Genesis Capital for allegedly defrauding more than 230,000 investors of more than $1.1bn. The companies allegedly lied to the investors over the expected returns of their investments and in regards to their safety, while also concealing losses from them and the public. DCG replied that they would fight the claims, and that they were “shocked by the baseless allegations.” == Subsidiaries == === Genesis Global Capital === Launched in 2013 by DCG, Genesis is a cryptocurrency trading, lending, and asset custody platform, targeting institutional clients and high net worth individuals. They claim to have been the first Bitcoin cryptocurrency desk.Genesis acquired the London-based cryptocurrency custodial company Volt in early 2020. Genesis' sister company Grayscale Investments had been holding its cryptocurrency assets with the company Xapo, which had been acquired by Genesis' rival Bitcoin trading company Coinbase in 2019. News media speculated that Genesis' cryptocurrency custody would be transferred away from Coinbase and made internal to Greyscale after completion of the Volt acquisition.In late June and early July 2022, Genesis publicly disclosed that it was exposed to hundreds of millions of dollars in losses from loans to both the Hong Kong based cryptocurrency lender Babel Finance and the bankrupt cryptocurrency hedge fund Three Arrows Capital (3AC), and that its parent company DCG had taken on some of Genesis' debts in order to keep the company afloat. On August 17, 2022, Genesis CEO Michael Moro resigned to serve in an advisory position, while COO Derar Islim became interim CEO. On January 19, 2023, Genesis Global Capital filed for Chapter 11 bankruptcy protection, with the unit still undergoing proceedings that summer. === Grayscale Investments === Established in 2013, Grayscale Investments is a digital currency asset manager. It offers funds privately for institutional and accredited investors and publicly-traded products.Grayscale was the world’s largest asset manager for digital currency, as of December 2021, with more than $50 billion in assets under management. Grayscale also manages the Grayscale Bitcoin Investment Trust (OTCQX: GBTC), which was the first publicly quoted security solely invested in the price of bitcoin upon its launch in 2013.As of April 2021, six of Grayscale’s funds were traded publicly on the OTCQX market: Bitcoin Cash, Grayscale Bitcoin Trust, Grayscale Ethereum Trust, Grayscale Ethereum Classic Trust, Grayscale Digital Large Cap Fund, and the Grayscale Litecoin Trust.Grayscale Bitcoin Trust was approved for public trading by the U.S. Financial Industry Regulatory Authority (FINRA) in 2015. On January 21, 2020, Grayscale Bitcoin Trust became the first digital currency financial product to become a Securities and Exchange Commission reporting company.In 2018, Grayscale launched the Grayscale Digital Large Cap Fund which allows a customer to invest in a group of prominent digital currencies. The fund was approved to trade on public markets by the FINRA in October 2019. In May 2022, it was reported that Grayscale would list an exchange-traded fund (ETF) for the first time in Europe. The ETF was said to be made up of companies representing the "Future of Finance", and would begin trading on May 17. === CoinDesk === CoinDesk is a global media, research, and events platform that was acquired by Digital Currency Group in 2016. It reports on bitcoin blockchain daily news, provides a bitcoin price index and publishes a quarterly State of Bitcoin report. CoinDesk also hosts a conference on digital currencies and blockchain technologies named Consensus. === Foundry === Foundry, established in 2019, sets up and manages bitcoin mining operations in the United States and Canada. In addition to setting up and operating its own cryptocurrency mining equipment, Foundry also provides financing, specialized digital mining equipment, and expertise to other digital currency startups.In the summer of 2021, Foundry helped to relocate over $300 million worth of equipment from China to North America following the Chinese government shutdown of many cryptocurrency mining operations.Bloomberg reported in April 2023 that Foundry would stop offering free Bitcoin mining services, and between April 19 and April 22, would instead levy a pool fee on members. The services had been free since 2019. === Luno === In September 2020, Digital Currency Group acquired Luno, a cryptocurrency exchange based in London, with other operations in Cape Town and Singapore. At the time of the acquisition, Luno had more than 5 million customers. == See also == List of bitcoin companies == References == == External links == Official website
Brad Garlinghouse	Bradley Kent Garlinghouse (born February 4, 1971) is the CEO of financial technology company Ripple Labs. He previously was the CEO and chairman of Hightail (formerly YouSendIt). Before Hightail, he worked at AOL and Yahoo! He was born February 6, 1971, in Topeka, Kansas. Garlinghouse has a BA in economics from the University of Kansas and an MBA from Harvard Business School. == Career == Garlinghouse had early stints at @Home Network and as a GP at @Ventures before joining Dialpad as CEO from 2000 to 2001. From 2003 to 2008, he served as Senior Vice President at Yahoo! where he ran its Homepage, Flickr, Yahoo! Mail, and Yahoo! Messenger divisions. While at Yahoo! he penned an internal memo known as the "Peanut Butter Manifesto," calling for the company to focus on its core business, rather than spreading itself too thin, like peanut butter.After Yahoo!, he served as a Senior Advisor at Silver Lake Partners, and then went on to be President of Consumer Applications at AOL from 2009 to 2011. In April 2012, Garlinghouse joined the board of video startup Animoto. He joined Hightail and served as its CEO until September 2014, leaving after a disagreement with the board regarding company direction.Garlinghouse joined Ripple as COO in April 2015, reporting to then CEO and co-founder Chris Larsen. He was promoted to CEO in December 2016. In December 2019, Garlinghouse announced that Ripple had raised a $200M series C funding round from Tetragon, SBI Ventures and Route 66 Ventures. In 2020 Garlinghouse admitted that Ripple Labs would be losing money if it did not have the revenue generated from the sales of the XRP cryptocurrency.In 2018 and 2019, Garlinghouse claimed on multiple occasions that the published error rate for SWIFT messaging was at least 6%. This was shown to be untrue by research published by the London School of Economics Business Review that showed Garlinghouse's claims were based on misreading of a paper published by SWIFT that did not refer to error rates in messaging.The whitewashing of unflattering details from Garlinghouse's Wikipedia page was a subject of discussion by Financial Times in August 2020.On December 23, 2020, the U.S. Securities and Exchange Commission (SEC) issued a complaint alleging that Garlinghouse, Ripple Labs and Ripple Chairman Chris Larsen had committed multiple breaches of securities laws. While the case was pending, Garlinghouse criticized the SEC's lack of clarity on the status of Ripple's products, referring to SEC chairman Gary Gensler as an autocrat and tweeting, that "without clear jurisdiction, ambiguity masquerades as power". In July 2023, presiding judge Analisa Torres of the United States District Court for the Southern District of New York, held that the company's crypto token offering was "not a security", enabling the token to be relisted on exchanges. In November 2023, the SEC dropped all claims against Garlinghouse and Larsen. == References == == External links == Brad Garlinghouse - AOL Corp Garlinghouse new CEO of YouSendIt Why Brad Garlinghouse left Hightail
Roger Ver	Roger Keith Ver (born 27 January 1979) is an early investor in Bitcoin, Bitcoin-related startups and an early promoter of Bitcoin. Ver has sometimes been referred to as "Bitcoin Jesus". He now primarily promotes Bitcoin Cash as Ver sees it as fulfilling the intended and original purpose of the "Bitcoin White Paper", first published in 2009 by Satoshi Nakamoto, in which Nakamoto referred to Bitcoin as a peer-to-peer electronic cash system.Born and raised in Silicon Valley, he sold fireworks on eBay and later pleaded guilty to a related felony charge. He served 10 months in prison then moved to Japan in 2005. He renounced his United States citizenship in 2014 after obtaining a Saint Kitts and Nevis passport. He previously served as CEO of Bitcoin.com. == Personal life == Ver was born in San Jose, California. He attended Valley Christian High School. He then attended De Anza College for one year, before dropping out to pursue his business interests. He identifies as a libertarian, anarcho-capitalist, voluntaryist, a peace advocate, and an advocate for individualism. Ver attempted a run for California state assembly in the Libertarian party. During a debate in the run-up to this election, he claimed that the Drug Enforcement Agency was criminal in its practice. He moved to Japan in 2005, where he still maintains his residence as of 2021. Ver renounced his United States citizenship in 2014 after he became a citizen of Saint Kitts and Nevis. In 2015, he was denied a visa to reenter the United States by the U.S. Embassy in Barbados, which claimed that he had not sufficiently proven ties outside of the United States that would motivate him to leave at the end of his visit, causing fears he might become an illegal immigrant. Ver's name was published in the 2018 Q1 Quarterly Publication of Individuals Who Have Chosen to Expatriate. In 2019, Ver was denied a visa to travel to Australia.According to an interview he gave in 2016, Ver describes Brazilian jiu-jitsu as one of his major passions in life. Ver can be seen in videos competing in BJJ world championships and has achieved the rank of brown belt.In 2018, he was ranked number 36 in Fortune's "The Ledger 40 under 40" for transforming business at the leading edge of finance and technology. == Career == === MemoryDealers.com === Ver was the CEO of MemoryDealers.com from 1999 until 2012. In 2000, he attempted to enter politics by running for California State Assembly as a candidate for the Libertarian Party. === Explosives charges === In 2002, Ver pleaded guilty to selling explosive materials without a license, as well as illegally storing and mailing them. Ver sold at least 14 pounds of a brand called "Pest Control Report 2000" fireworks as large firecrackers on eBay, stored them in a residential apartment building, and mailed them to customers via the U.S. Postal Service. He was sentenced to 10 months in federal prison. The manufacturer was later forced to stop making and selling the product, which contained gunpowder far above the legal limit for consumer firecrackers.In 2018, Ver made a video that he posted to YouTube speaking on his experiences in federal prison. Ver labeled the video as, "My Story of Being Tortured in Prison". Ver claims in the video that he was arrested for "... selling firecrackers on eBay back when eBay had a 'guns and ammo' section, and it wasn't a big deal to do that at all." === Cryptocurrency === Ver began investing in bitcoin in early 2011 when "...the price was still under one U.S. Dollar each". The first investment he made was for Charlie Shrem’s Bitinstant. Ver's investment allowed the company to hire a designer and another programmer. He invested over a million dollars into new Bitcoin-related startups, including Ripple, Blockchain.com, BitPay, and Kraken. In 2011, Ver's company Memorydealers was the first to accept Bitcoin as payment. He has been a prominent supporter of Bitcoin adoption and saw Bitcoin as a means to promote economic freedom. In 2012, Ver was organizing Bitcoin meetups in Sunnyvale, California. He is one of five founders of the Bitcoin Foundation. Ver wants Bitcoin to rival major fiat currencies. He is one of the main proponents of a larger block size for the Bitcoin blockchain. He supported the development of Bitcoin XT as a hard fork method towards an increase. Ver and his high school friend Jesse Powell attempted to re-establish the Mt Gox exchange during the June 2011 Bitcoin price crash.Ver served as CEO of Bitcoin.com until 1 August 2019, at which point he transitioned to Executive Chairman. Fortune Magazine in early 2020 mistakenly referred to Roger Ver as the co-creator of Bitcoin Cash. ==== CoinFlex ==== As of June 2022, he is a shareholder in CoinFLEX, a centralized yield crypto exchange and is rumoured to be in a large amount of debt which is causing problems for the site. On 23 June 2022, CoinFlex paused withdrawals after a counterparty, which it later named as Ver, experienced liquidity issues and failed to repay a $47 million stablecoin margin call. == See also == List of former United States citizens who relinquished their nationality == References == == External links == "Episode 687: Buy This Passport". Planet Money. 10 March 2016.
Nick Szabo	Nicholas Szabo is a computer scientist, legal scholar, and cryptographer known for his research in digital contracts and digital currency. He graduated from the University of Washington in 1989 with a degree in computer science and received a Juris Doctor degree from George Washington University Law School. He holds an honorary professorship at the Universidad Francisco Marroquín.The phrase and concept of "smart contracts" was developed by Szabo with the goal of bringing what he calls the "highly evolved" practices of contract law and practice to the design of electronic commerce protocols between strangers on the Internet. In 1994, he wrote an introduction to the concept and, in 1996, an exploration of what smart contracts could do. Nick Szabo proposed a digital marketplace built on these automatic, cryptographically secure processes. Szabo argued that a minimum granularity of micropayments is set by mental transaction costs. At one time Szabo was a proponent of "extropian" life extension techniques. == Bit gold == In 1998, Szabo designed a mechanism for a decentralized digital currency he called "bit gold". Bit gold was never implemented, but has been called "a direct precursor to the Bitcoin architecture."In Szabo's bit gold structure, a participant would dedicate computer power to solving cryptographic puzzles. In a bit gold network, solved puzzles would be sent to the Byzantine fault-tolerant public registry and assigned to the public key of the solver. Each solution would become part of the next challenge, creating a growing chain of new property. This aspect of the system provided a way for the network to verify and time-stamp new coins, because unless a majority of the parties agreed to accept new solutions, they couldn't start on the next puzzle.When attempting to design transactions with a digital coin, you run into the "double-spending problem." Once data has been created, reproducing it is a simple matter of copying and pasting. Most digital currencies solve the problem by relinquishing some control to a central authority, which keeps track of each account's balance. This was an unacceptable solution for Szabo. "I was trying to mimic as closely as possible in cyberspace the security and trust characteristics of gold, and chief among those is that it doesn't depend on a trusted central authority," he said. == Satoshi Nakamoto speculation == Szabo was active in pre-Bitcoin "bit gold" technologies and is viewed as a potential Satoshi Nakamoto, the creator of Bitcoin. Although Szabo has repeatedly denied it, people have speculated that he is Nakamoto. Research by financial author Dominic Frisby provided circumstantial evidence but, as he admits, no proof exists that Satoshi is Szabo. In a July 2014 email to Frisby, Szabo said "I'm afraid you got it wrong doxing me as Satoshi, but I'm used to it."Nathaniel Popper wrote in The New York Times that "the most convincing evidence pointed to a reclusive American man of Hungarian descent named Nick Szabo." In 2008, prior to the release of bitcoin, Szabo wrote a comment on his blog about the intent of creating a live version of his hypothetical currency. == References == == External links == Nick Szabo's Essays, Papers, and Concise Tutorials at archive.today (archived 16 July 2015) Who is Nick Szabo, The Mysterious Blockchain Titan - unblock.net DEVCON1: History of the Blockchain - Nick Szabo on YouTube
Hal Finney (computer scientist)	Harold Thomas Finney II (May 4, 1956 – August 28, 2014) was an American software developer. In his early career, he was credited as lead developer on several console games. Finney later worked for PGP Corporation. He also was an early bitcoin contributor and received the first bitcoin transaction from bitcoin's creator Satoshi Nakamoto. == Early life and education == Finney was born in Coalinga, California, on May 4, 1956, to Virginia and Harold Thomas Finney. His father was a petroleum engineer. Harold Finney II attended the California Institute of Technology, graduating with a BS in engineering in 1979. == Career == After graduation from Caltech, he went to work in the computer gaming field for a company that developed video games such as Adventures of Tron, Armor Ambush, Astrosmash and Space Attack. He later went to work for the PGP Corporation with whom he remained until his retirement in 2011.Finney was a noted cryptographic activist. During the early 1990s, in addition to being a regular poster on the cypherpunks listserv, Finney ran two anonymous remailers. Further cryptographic activism included running a (successful) contest to break the export-grade encryption Netscape used.Finney was involved in the development of the first anonymous remailer, a tool for sending emails with the sender's identity concealed. He was one of the early contributors to this privacy-enhancing technology, which played a significant role in the cypherpunk movement and the broader field of online privacy. This work further demonstrated Finney's commitment to privacy and his significant contributions to the development of privacy-enhancing technologies. In 2004, Finney created the first reusable proof-of-work system before Bitcoin. In January 2009, Finney was the Bitcoin network's first transaction recipient. == Bitcoin == Finney was a cypherpunk and said: It seemed so obvious to me: "Here we are faced with the problems of loss of privacy, creeping computerization, massive databases, more centralization - and [David] Chaum offers a completely different direction to go in, one which puts power into the hands of individuals rather than governments and corporations. The computer can be used as a tool to liberate and protect people, rather than to control them." He was one of the first Bitcoin users and on January 12, 2009, he received the first bitcoin transaction from Bitcoin's creator Satoshi Nakamoto. Finney lived in the same town for 10 years that Dorian Satoshi Nakamoto lived in (Temple City, California), adding to speculation that he may have been Bitcoin's creator. Finney denied that he was Satoshi Nakamoto.In March 2013, Finney posted on a Bitcoin forum, BitcoinTalk, a publication called "Bitcoin and Me (Hal Finney)" where he states he was essentially paralyzed. He recalls finding out that Bitcoin had gained monetary value in late 2010 and mentions that despite amyotrophic lateral sclerosis (ALS) disease was causing his ability to code to be slower, he still loved programming and that it gave him goals. He continued to program until his death; he was working on experimental software called bcflick, which uses Trusted Computing to strengthen Bitcoin wallets. During the last year of his life, the Finneys received anonymous calls demanding an extortion fee of 1,000 bitcoin. They became victims of swatting – a hoax "where the perpetrator calls up emergency dispatch using a spoofed telephone number and pretends to have committed a heinous crime in the hopes of provoking an armed police response to the victim's home". Extortionists demanded fees of more bitcoins than Finney had left after using most of them to cover medical expenses in 2013. == Personal life == In October 2009, Finney announced in an essay on the blog Less Wrong that he had been diagnosed with amyotrophic lateral sclerosis (ALS) in August 2009, and wrote: "I hope to be able to read, browse the net, and even participate in conversations by email and messaging (...) I may even still be able to write code, and my dream is to contribute to open source software projects even from within an immobile body. That will be a life very much worth living." Prior to his illness, Finney had been an active runner. Finney and his wife raised money for ALS research with the Santa Barbara International Marathon. == Death == Finney died in Phoenix, Arizona, on August 28, 2014, as a result of complications of ALS and was cryopreserved by the Alcor Life Extension Foundation. == References == == External links == Media related to Hal Finney (computer scientist) at Wikimedia Commons "Hal Finney home page". Archived from the original on 2014-04-03. Review: Vernor Vinge’s ‘Fast Times’ (review by Finney in Extropy) Hal Finney's profile in Forbes Magazine
Brian Armstrong (businessman)	Brian Armstrong (born January 25, 1983) is an American business executive, billionaire, and investor who is CEO of cryptocurrency platform Coinbase. He received media attention for his policy of keeping the workplace free of political activism. == Early life and education == Armstrong was born on January 25, 1983, near San Jose, California; both of his parents were engineers. During his years in high school, he attended Bellarmine College Preparatory, a Catholic, all-male, private secondary school. Armstrong attended Rice University in Texas, and earned a dual bachelor's degree in economics and computer science in 2005, followed by a master's in computer science in 2006. While at Rice, he started a business matching tutors to students, and after graduating, spent a year in Buenos Aires while working for an education company. == Career == Armstrong's early career included working as a developer for IBM and a consultant at Deloitte. In 2010, he came across the Bitcoin white paper published under the alias Satoshi Nakamoto. In 2011, he joined Airbnb as a software engineer and was exposed to payment systems in the 190 countries Airbnb operated in at the time. While at Airbnb, he saw the difficulties of sending money to South America. He began working weekends and nights to write code in Ruby and JavaScript to buy and store cryptocoins. In 2012, he entered the Y Combinator startup accelerator and received a $150,000 investment, which he used to fund Coinbase.His post on Hacker News looking for a co-founder to get into the Y Combinator program later became a viral post in Hacker News. He eventually met his co-founder Fred Ehrsam on a Reddit subgroup and is quoted to have done over fifty meetings to find a perfect co-founder. === Coinbase === In 2012, Armstrong and Fred Ehrsam co-founded Coinbase, as a way for cryptocurrency enthusiasts to trade bitcoins and other digital currencies. Armstrong was its first CEO. A 2018 funding round valued the company at $8.1 billion, and in December 2020, the company filed with the SEC to go public through a direct listing. Following a direct listing in April 2021, Coinbase's market capitalization rose to $85B, and according to Forbes, as of May 2022, Armstrong has a net worth of $2.4 billion. === Book/Documentary === Armstrong appeared in the 2014 American documentary The Rise and Rise of Bitcoin.He was featured in the 2020 nonfiction book Kings of Crypto: One Startup's Quest to Take Cryptocurrency Out of Silicon Valley and Onto Wall Street.Armstrong and Coinbase were the subject of the documentary COIN: A Founder's Story, directed by Emmy-winner Greg Kohs. === ResearchHub === Armstrong self-funded and founded the scientific research site ResearchHub, modeled on the GitHub code repository, as a way of making research papers available to the public. === NewLimit === Armstrong co-founded NewLimit to increase human health span by targeting the biology of aging. NewLimit's primary research focus is epigenetic reprogramming. In May 2023, the company raised $40 million in a Series A investment round. == Political views == Armstrong wrote a blog post in September 2020 calling Coinbase a "Mission Focused Company", discouraging employee activism and discussion of political and social issues at work. He offered severance packages for Coinbase employees uncomfortable with this policy; as a result, sixty employees (amounting to 5% of the company) left Coinbase. Prior to this, Armstrong supported the Black Lives Matter movement and tweeted when George Floyd was murdered: "I've decided to speak up. It's a shame that this even needs to be said in this day and age, but racism, police brutality, and unequal justice are unequivocally wrong, and we need to all work to eliminate them from society."In July 2023 he met with House Democrats, specifically the New Democrat Coalition, in a closed-door session that reportedly focused on digital-asset legislation. Armstrong according to Bloomberg had "led a campaign in Washington to create clearer rules around digital assets." == Recognition == In 2017, at age 34, Armstrong was ranked #10 on Fortune's 40 under 40 list.In 2019, Armstrong was named to Time magazine's 100 Next list.In 2021, Forbes named Armstrong #1 on its Crypto Rich List, with an estimated net worth of $6.5 billion as of February 2021. He was also listed 60th on the Forbes 400 list of the richest people in America. == Philanthropy == In 2018, Armstrong was the first cryptocurrency executive to sign the Giving Pledge, when he pledged to give away the bulk of his wealth to philanthropic causes. He also set up a philanthropic effort called GiveCrypto.org, to allow people to make public or anonymous donations to help others living in poverty. == References == == External links == Official website
Cryptographic hash function	A cryptographic hash function (CHF) is a hash algorithm (a map of an arbitrary binary string to a binary string with a fixed size of n {\displaystyle n} bits) that has special properties desirable for a cryptographic application: the probability of a particular n {\displaystyle n} -bit output result (hash value) for a random input string ("message") is 2 − n {\displaystyle 2^{-n}} (as for any good hash), so the hash value can be used as a representative of the message; finding an input string that matches a given hash value (a pre-image) is unfeasible, assuming all input strings are equally likely. The resistance to such search is quantified as security strength, a cryptographic hash with n {\displaystyle n} bits of hash value is expected to have a preimage resistance strength of n {\displaystyle n} bits, unless the space of possible input values is significantly smaller than 2 n {\displaystyle 2^{n}} (see, for example, #Attacks on hashed passwords); A second preimage resistance strength, with the same expectations, refers to a similar problem of finding a second message that matches the given hash value when one message is already known; finding any pair of different messages that yield the same hash value (a collision) is also unfeasible, a cryptographic hash is expected to have a collision resistance strength of n / 2 {\displaystyle n/2} bits (lower due to the birthday paradox).Cryptographic hash functions have many information-security applications, notably in digital signatures, message authentication codes (MACs), and other forms of authentication. They can also be used as ordinary hash functions, to index data in hash tables, for fingerprinting, to detect duplicate data or uniquely identify files, and as checksums to detect accidental data corruption. Indeed, in information-security contexts, cryptographic hash values are sometimes called (digital) fingerprints, checksums, or just hash values, even though all these terms stand for more general functions with rather different properties and purposes.Non-cryptographic hash functions are used in hash tables and to detect accidental errors, their construction frequently provides no resistance to a deliberate attack. For example, a denial-of-service attack on hash tables is possible if the collisions are easy to find, like in the case of linear cyclic redundancy check (CRC) functions. == Properties == Most cryptographic hash functions are designed to take a string of any length as input and produce a fixed-length hash value. A cryptographic hash function must be able to withstand all known types of cryptanalytic attack. In theoretical cryptography, the security level of a cryptographic hash function has been defined using the following properties: Pre-image resistance Given a hash value h, it should be difficult to find any message m such that h = hash(m). This concept is related to that of a one-way function. Functions that lack this property are vulnerable to preimage attacks. Second pre-image resistance Given an input m1, it should be difficult to find a different input m2 such that hash(m1) = hash(m2). This property is sometimes referred to as weak collision resistance. Functions that lack this property are vulnerable to second-preimage attacks. Collision resistance It should be difficult to find two different messages m1 and m2 such that hash(m1) = hash(m2). Such a pair is called a cryptographic hash collision. This property is sometimes referred to as strong collision resistance. It requires a hash value at least twice as long as that required for pre-image resistance; otherwise collisions may be found by a birthday attack.Collision resistance implies second pre-image resistance but does not imply pre-image resistance. The weaker assumption is always preferred in theoretical cryptography, but in practice, a hash-function which is only second pre-image resistant is considered insecure and is therefore not recommended for real applications. Informally, these properties mean that a malicious adversary cannot replace or modify the input data without changing its digest. Thus, if two strings have the same digest, one can be very confident that they are identical. Second pre-image resistance prevents an attacker from crafting a document with the same hash as a document the attacker cannot control. Collision resistance prevents an attacker from creating two distinct documents with the same hash. A function meeting these criteria may still have undesirable properties. Currently, popular cryptographic hash functions are vulnerable to length-extension attacks: given hash(m) and len(m) but not m, by choosing a suitable m′ an attacker can calculate hash(m ∥ m′), where ∥ denotes concatenation. This property can be used to break naive authentication schemes based on hash functions. The HMAC construction works around these problems. In practice, collision resistance is insufficient for many practical uses. In addition to collision resistance, it should be impossible for an adversary to find two messages with substantially similar digests; or to infer any useful information about the data, given only its digest. In particular, a hash function should behave as much as possible like a random function (often called a random oracle in proofs of security) while still being deterministic and efficiently computable. This rules out functions like the SWIFFT function, which can be rigorously proven to be collision-resistant assuming that certain problems on ideal lattices are computationally difficult, but, as a linear function, does not satisfy these additional properties.Checksum algorithms, such as CRC32 and other cyclic redundancy checks, are designed to meet much weaker requirements and are generally unsuitable as cryptographic hash functions. For example, a CRC was used for message integrity in the WEP encryption standard, but an attack was readily discovered, which exploited the linearity of the checksum. === Degree of difficulty === In cryptographic practice, "difficult" generally means "almost certainly beyond the reach of any adversary who must be prevented from breaking the system for as long as the security of the system is deemed important". The meaning of the term is therefore somewhat dependent on the application since the effort that a malicious agent may put into the task is usually proportional to their expected gain. However, since the needed effort usually multiplies with the digest length, even a thousand-fold advantage in processing power can be neutralized by adding a dozen bits to the latter. For messages selected from a limited set of messages, for example passwords or other short messages, it can be feasible to invert a hash by trying all possible messages in the set. Because cryptographic hash functions are typically designed to be computed quickly, special key derivation functions that require greater computing resources have been developed that make such brute-force attacks more difficult. In some theoretical analyses "difficult" has a specific mathematical meaning, such as "not solvable in asymptotic polynomial time". Such interpretations of difficulty are important in the study of provably secure cryptographic hash functions but do not usually have a strong connection to practical security. For example, an exponential-time algorithm can sometimes still be fast enough to make a feasible attack. Conversely, a polynomial-time algorithm (e.g., one that requires n20 steps for n-digit keys) may be too slow for any practical use. == Illustration == An illustration of the potential use of a cryptographic hash is as follows: Alice poses a tough math problem to Bob and claims that she has solved it. Bob would like to try it himself, but would yet like to be sure that Alice is not bluffing. Therefore, Alice writes down her solution, computes its hash, and tells Bob the hash value (whilst keeping the solution secret). Then, when Bob comes up with the solution himself a few days later, Alice can prove that she had the solution earlier by revealing it and having Bob hash it and check that it matches the hash value given to him before. (This is an example of a simple commitment scheme; in actual practice, Alice and Bob will often be computer programs, and the secret would be something less easily spoofed than a claimed puzzle solution.) == Applications == === Verifying the integrity of messages and files === An important application of secure hashes is the verification of message integrity. Comparing message digests (hash digests over the message) calculated before, and after, transmission can determine whether any changes have been made to the message or file. MD5, SHA-1, or SHA-2 hash digests are sometimes published on websites or forums to allow verification of integrity for downloaded files, including files retrieved using file sharing such as mirroring. This practice establishes a chain of trust as long as the hashes are posted on a trusted site – usually the originating site – authenticated by HTTPS. Using a cryptographic hash and a chain of trust detects malicious changes to the file. Non-cryptographic error-detecting codes such as cyclic redundancy checks only prevent against non-malicious alterations of the file, since an intentional spoof can readily be crafted to have the colliding code value. === Signature generation and verification === Almost all digital signature schemes require a cryptographic hash to be calculated over the message. This allows the signature calculation to be performed on the relatively small, statically sized hash digest. The message is considered authentic if the signature verification succeeds given the signature and recalculated hash digest over the message. So the message integrity property of the cryptographic hash is used to create secure and efficient digital signature schemes. === Password verification === Password verification commonly relies on cryptographic hashes. Storing all user passwords as cleartext can result in a massive security breach if the password file is compromised. One way to reduce this danger is to only store the hash digest of each password. To authenticate a user, the password presented by the user is hashed and compared with the stored hash. A password reset method is required when password hashing is performed; original passwords cannot be recalculated from the stored hash value. However, use of standard cryptographic hash functions, such as the SHA series, is no longer considered safe for password storage.: 5.1.1.2 These algorithms are designed to be computed quickly, so if the hashed values are compromised, it is possible to try guessed passwords at high rates. Common graphics processing units can try billions of possible passwords each second. Password hash functions that perform key stretching – such as PBKDF2, scrypt or Argon2 – commonly use repeated invocations of a cryptographic hash to increase the time (and in some cases computer memory) required to perform brute-force attacks on stored password hash digests. See #Attacks on hashed passwords A password hash also requires the use of a large random, non-secret salt value which can be stored with the password hash. The salt is hashed with the password, altering the password hash mapping for each password, thereby making it infeasible for an adversary to store tables of precomputed hash values to which the password hash digest can be compared or to test a large number of purloined hash values in parallel. === Proof-of-work === A proof-of-work system (or protocol, or function) is an economic measure to deter denial-of-service attacks and other service abuses such as spam on a network by requiring some work from the service requester, usually meaning processing time by a computer. A key feature of these schemes is their asymmetry: the work must be moderately hard (but feasible) on the requester side but easy to check for the service provider. One popular system – used in Bitcoin mining and Hashcash – uses partial hash inversions to prove that work was done, to unlock a mining reward in Bitcoin, and as a good-will token to send an e-mail in Hashcash. The sender is required to find a message whose hash value begins with a number of zero bits. The average work that the sender needs to perform in order to find a valid message is exponential in the number of zero bits required in the hash value, while the recipient can verify the validity of the message by executing a single hash function. For instance, in Hashcash, a sender is asked to generate a header whose 160-bit SHA-1 hash value has the first 20 bits as zeros. The sender will, on average, have to try 219 times to find a valid header. === File or data identifier === A message digest can also serve as a means of reliably identifying a file; several source code management systems, including Git, Mercurial and Monotone, use the sha1sum of various types of content (file content, directory trees, ancestry information, etc.) to uniquely identify them. Hashes are used to identify files on peer-to-peer filesharing networks. For example, in an ed2k link, an MD4-variant hash is combined with the file size, providing sufficient information for locating file sources, downloading the file, and verifying its contents. Magnet links are another example. Such file hashes are often the top hash of a hash list or a hash tree which allows for additional benefits. One of the main applications of a hash function is to allow the fast look-up of data in a hash table. Being hash functions of a particular kind, cryptographic hash functions lend themselves well to this application too. However, compared with standard hash functions, cryptographic hash functions tend to be much more expensive computationally. For this reason, they tend to be used in contexts where it is necessary for users to protect themselves against the possibility of forgery (the creation of data with the same digest as the expected data) by potentially malicious participants. ==== Content-addressable storage ==== == Hash functions based on block ciphers == There are several methods to use a block cipher to build a cryptographic hash function, specifically a one-way compression function. The methods resemble the block cipher modes of operation usually used for encryption. Many well-known hash functions, including MD4, MD5, SHA-1 and SHA-2, are built from block-cipher-like components designed for the purpose, with feedback to ensure that the resulting function is not invertible. SHA-3 finalists included functions with block-cipher-like components (e.g., Skein, BLAKE) though the function finally selected, Keccak, was built on a cryptographic sponge instead. A standard block cipher such as AES can be used in place of these custom block ciphers; that might be useful when an embedded system needs to implement both encryption and hashing with minimal code size or hardware area. However, that approach can have costs in efficiency and security. The ciphers in hash functions are built for hashing: they use large keys and blocks, can efficiently change keys every block, and have been designed and vetted for resistance to related-key attacks. General-purpose ciphers tend to have different design goals. In particular, AES has key and block sizes that make it nontrivial to use to generate long hash values; AES encryption becomes less efficient when the key changes each block; and related-key attacks make it potentially less secure for use in a hash function than for encryption. == Hash function design == === Merkle–Damgård construction === A hash function must be able to process an arbitrary-length message into a fixed-length output. This can be achieved by breaking the input up into a series of equally sized blocks, and operating on them in sequence using a one-way compression function. The compression function can either be specially designed for hashing or be built from a block cipher. A hash function built with the Merkle–Damgård construction is as resistant to collisions as is its compression function; any collision for the full hash function can be traced back to a collision in the compression function. The last block processed should also be unambiguously length padded; this is crucial to the security of this construction. This construction is called the Merkle–Damgård construction. Most common classical hash functions, including SHA-1 and MD5, take this form. === Wide pipe versus narrow pipe === A straightforward application of the Merkle–Damgård construction, where the size of hash output is equal to the internal state size (between each compression step), results in a narrow-pipe hash design. This design causes many inherent flaws, including length-extension, multicollisions, long message attacks, generate-and-paste attacks, and also cannot be parallelized. As a result, modern hash functions are built on wide-pipe constructions that have a larger internal state size – which range from tweaks of the Merkle–Damgård construction to new constructions such as the sponge construction and HAIFA construction. None of the entrants in the NIST hash function competition use a classical Merkle–Damgård construction.Meanwhile, truncating the output of a longer hash, such as used in SHA-512/256, also defeats many of these attacks. == Use in building other cryptographic primitives == Hash functions can be used to build other cryptographic primitives. For these other primitives to be cryptographically secure, care must be taken to build them correctly. Message authentication codes (MACs) (also called keyed hash functions) are often built from hash functions. HMAC is such a MAC. Just as block ciphers can be used to build hash functions, hash functions can be used to build block ciphers. Luby-Rackoff constructions using hash functions can be provably secure if the underlying hash function is secure. Also, many hash functions (including SHA-1 and SHA-2) are built by using a special-purpose block cipher in a Davies–Meyer or other construction. That cipher can also be used in a conventional mode of operation, without the same security guarantees; for example, SHACAL, BEAR and LION. Pseudorandom number generators (PRNGs) can be built using hash functions. This is done by combining a (secret) random seed with a counter and hashing it. Some hash functions, such as Skein, Keccak, and RadioGatún, output an arbitrarily long stream and can be used as a stream cipher, and stream ciphers can also be built from fixed-length digest hash functions. Often this is done by first building a cryptographically secure pseudorandom number generator and then using its stream of random bytes as keystream. SEAL is a stream cipher that uses SHA-1 to generate internal tables, which are then used in a keystream generator more or less unrelated to the hash algorithm. SEAL is not guaranteed to be as strong (or weak) as SHA-1. Similarly, the key expansion of the HC-128 and HC-256 stream ciphers makes heavy use of the SHA-256 hash function. == Concatenation == Concatenating outputs from multiple hash functions provide collision resistance as good as the strongest of the algorithms included in the concatenated result. For example, older versions of Transport Layer Security (TLS) and Secure Sockets Layer (SSL) used concatenated MD5 and SHA-1 sums. This ensures that a method to find collisions in one of the hash functions does not defeat data protected by both hash functions.For Merkle–Damgård construction hash functions, the concatenated function is as collision-resistant as its strongest component, but not more collision-resistant. Antoine Joux observed that 2-collisions lead to n-collisions: if it is feasible for an attacker to find two messages with the same MD5 hash, then they can find as many additional messages with that same MD5 hash as they desire, with no greater difficulty. Among those n messages with the same MD5 hash, there is likely to be a collision in SHA-1. The additional work needed to find the SHA-1 collision (beyond the exponential birthday search) requires only polynomial time. == Cryptographic hash algorithms == There are many cryptographic hash algorithms; this section lists a few algorithms that are referenced relatively often. A more extensive list can be found on the page containing a comparison of cryptographic hash functions. === MD5 === MD5 was designed by Ronald Rivest in 1991 to replace an earlier hash function, MD4, and was specified in 1992 as RFC 1321. Collisions against MD5 can be calculated within seconds which makes the algorithm unsuitable for most use cases where a cryptographic hash is required. MD5 produces a digest of 128 bits (16 bytes). === SHA-1 === SHA-1 was developed as part of the U.S. Government's Capstone project. The original specification – now commonly called SHA-0 – of the algorithm was published in 1993 under the title Secure Hash Standard, FIPS PUB 180, by U.S. government standards agency NIST (National Institute of Standards and Technology). It was withdrawn by the NSA shortly after publication and was superseded by the revised version, published in 1995 in FIPS PUB 180-1 and commonly designated SHA-1. Collisions against the full SHA-1 algorithm can be produced using the shattered attack and the hash function should be considered broken. SHA-1 produces a hash digest of 160 bits (20 bytes). Documents may refer to SHA-1 as just "SHA", even though this may conflict with the other Secure Hash Algorithms such as SHA-0, SHA-2, and SHA-3. === RIPEMD-160 === RIPEMD (RACE Integrity Primitives Evaluation Message Digest) is a family of cryptographic hash functions developed in Leuven, Belgium, by Hans Dobbertin, Antoon Bosselaers, and Bart Preneel at the COSIC research group at the Katholieke Universiteit Leuven, and first published in 1996. RIPEMD was based upon the design principles used in MD4 and is similar in performance to the more popular SHA-1. RIPEMD-160 has, however, not been broken. As the name implies, RIPEMD-160 produces a hash digest of 160 bits (20 bytes). === Whirlpool === Whirlpool is a cryptographic hash function designed by Vincent Rijmen and Paulo S. L. M. Barreto, who first described it in 2000. Whirlpool is based on a substantially modified version of the Advanced Encryption Standard (AES). Whirlpool produces a hash digest of 512 bits (64 bytes). === SHA-2 === SHA-2 (Secure Hash Algorithm 2) is a set of cryptographic hash functions designed by the United States National Security Agency (NSA), first published in 2001. They are built using the Merkle–Damgård structure, from a one-way compression function itself built using the Davies–Meyer structure from a (classified) specialized block cipher. SHA-2 basically consists of two hash algorithms: SHA-256 and SHA-512. SHA-224 is a variant of SHA-256 with different starting values and truncated output. SHA-384 and the lesser-known SHA-512/224 and SHA-512/256 are all variants of SHA-512. SHA-512 is more secure than SHA-256 and is commonly faster than SHA-256 on 64-bit machines such as AMD64. The output size in bits is given by the extension to the "SHA" name, so SHA-224 has an output size of 224 bits (28 bytes); SHA-256, 32 bytes; SHA-384, 48 bytes; and SHA-512, 64 bytes. === SHA-3 === SHA-3 (Secure Hash Algorithm 3) was released by NIST on August 5, 2015. SHA-3 is a subset of the broader cryptographic primitive family Keccak. The Keccak algorithm is the work of Guido Bertoni, Joan Daemen, Michael Peeters, and Gilles Van Assche. Keccak is based on a sponge construction which can also be used to build other cryptographic primitives such as a stream cipher. SHA-3 provides the same output sizes as SHA-2: 224, 256, 384, and 512 bits. Configurable output sizes can also be obtained using the SHAKE-128 and SHAKE-256 functions. Here the -128 and -256 extensions to the name imply the security strength of the function rather than the output size in bits. === BLAKE2 === BLAKE2, an improved version of BLAKE, was announced on December 21, 2012. It was created by Jean-Philippe Aumasson, Samuel Neves, Zooko Wilcox-O'Hearn, and Christian Winnerlein with the goal of replacing the widely used but broken MD5 and SHA-1 algorithms. When run on 64-bit x64 and ARM architectures, BLAKE2b is faster than SHA-3, SHA-2, SHA-1, and MD5. Although BLAKE and BLAKE2 have not been standardized as SHA-3 has, BLAKE2 has been used in many protocols including the Argon2 password hash, for the high efficiency that it offers on modern CPUs. As BLAKE was a candidate for SHA-3, BLAKE and BLAKE2 both offer the same output sizes as SHA-3 – including a configurable output size. === BLAKE3 === BLAKE3, an improved version of BLAKE2, was announced on January 9, 2020. It was created by Jack O'Connor, Jean-Philippe Aumasson, Samuel Neves, and Zooko Wilcox-O'Hearn. BLAKE3 is a single algorithm, in contrast to BLAKE and BLAKE2, which are algorithm families with multiple variants. The BLAKE3 compression function is closely based on that of BLAKE2s, with the biggest difference being that the number of rounds is reduced from 10 to 7. Internally, BLAKE3 is a Merkle tree, and it supports higher degrees of parallelism than BLAKE2. == Attacks on cryptographic hash algorithms == There is a long list of cryptographic hash functions but many have been found to be vulnerable and should not be used. For instance, NIST selected 51 hash functions as candidates for round 1 of the SHA-3 hash competition, of which 10 were considered broken and 16 showed significant weaknesses and therefore did not make it to the next round; more information can be found on the main article about the NIST hash function competitions. Even if a hash function has never been broken, a successful attack against a weakened variant may undermine the experts' confidence. For instance, in August 2004 collisions were found in several then-popular hash functions, including MD5. These weaknesses called into question the security of stronger algorithms derived from the weak hash functions – in particular, SHA-1 (a strengthened version of SHA-0), RIPEMD-128, and RIPEMD-160 (both strengthened versions of RIPEMD).On August 12, 2004, Joux, Carribault, Lemuel, and Jalby announced a collision for the full SHA-0 algorithm. Joux et al. accomplished this using a generalization of the Chabaud and Joux attack. They found that the collision had complexity 251 and took about 80,000 CPU hours on a supercomputer with 256 Itanium 2 processors – equivalent to 13 days of full-time use of the supercomputer.In February 2005, an attack on SHA-1 was reported that would find collision in about 269 hashing operations, rather than the 280 expected for a 160-bit hash function. In August 2005, another attack on SHA-1 was reported that would find collisions in 263 operations. Other theoretical weaknesses of SHA-1 have been known: and in February 2017 Google announced a collision in SHA-1. Security researchers recommend that new applications can avoid these problems by using later members of the SHA family, such as SHA-2, or using techniques such as randomized hashing that do not require collision resistance. A successful, practical attack broke MD5 used within certificates for Transport Layer Security in 2008.Many cryptographic hashes are based on the Merkle–Damgård construction. All cryptographic hashes that directly use the full output of a Merkle–Damgård construction are vulnerable to length extension attacks. This makes the MD5, SHA-1, RIPEMD-160, Whirlpool, and the SHA-256 / SHA-512 hash algorithms all vulnerable to this specific attack. SHA-3, BLAKE2, BLAKE3, and the truncated SHA-2 variants are not vulnerable to this type of attack. == Attacks on hashed passwords == Rather than store plain user passwords, controlled access system frequently store the hash of each user's password in a file or database. When someone requests access, the password they submit is hashed and compared with the stored value. If the database is stolen (an all too frequent occurrence), the thief will only have the hash values, not the passwords. Passwords may still be retrieved by an attacker from the hashes, because most people choose passwords in predictable ways. Lists of common passwords are widely circulated and many passwords are short enough that even all possible combinations may be tested if calculation of the hash does not take too much time.The use of cryptographic salt prevents some attacks, such as building files of precomputing hash values, e.g. rainbow tables. But searches on the order of 100 billion tests per second are possible with high-end graphics processors, making direct attacks possible even with salt. The United States National Institute of Standards and Technology recommends storing passwords using special hashes called key derivation functions (KDFs) that have been created to slow brute force searches.: 5.1.1.2 Slow hashes include pbkdf2, bcrypt, scrypt, argon2, Balloon and some recent modes of Unix crypt. For KDFs that perform multiple hashes to slow execution, NIST recommends an iteration count of 10,000 or more.: 5.1.1.2 == See also == == References == === Citations === === Sources === Menezes, Alfred J.; van Oorschot, Paul C.; Vanstone, Scott A. (7 December 2018). "Hash functions". Handbook of Applied Cryptography. CRC Press. pp. 33–. ISBN 978-0-429-88132-9. Aumasson, Jean-Philippe (6 November 2017). Serious Cryptography: A Practical Introduction to Modern Encryption. No Starch Press. ISBN 978-1-59327-826-7. OCLC 1012843116. == External links == Paar, Christof; Pelzl, Jan (2009). "11: Hash Functions". Understanding Cryptography, A Textbook for Students and Practitioners. Springer. Archived from the original on 2012-12-08. (companion web site contains online cryptography course that covers hash functions) "The ECRYPT Hash Function Website". Buldas, A. (2011). "Series of mini-lectures about cryptographic hash functions". Archived from the original on 2012-12-06. Open source python based application with GUI used to verify downloads.
Decentralized finance	Decentralized finance (often stylized as DeFi) offers financial instruments without relying on intermediaries such as brokerages, exchanges, or banks by using smart contracts on a blockchain, mainly Ethereum. DeFi platforms allow people to lend or borrow funds from others, speculate on price movements on assets using derivatives, trade cryptocurrencies, insure against risks, and earn interest in savings-like accounts. DeFi uses a layered architecture and highly composable building blocks. Some applications promote high-interest rates but are subject to high risk. Coding errors and hacks have been common in DeFi. == History == Decentralized exchanges (abbreviated DEXs) are alternative payment ecosystems with new protocols for financial transactions that emerged within the framework of decentralized finance, which is part of blockchain technology and fintech.CEXs (centralized exchanges), DEXs and DEX aggregators are all built on the multi-layered DeFi architecture or components, where each layer serves a well-defined purpose. (See Figure: Multi-layered Architecture of the DeFi Stack). While they share common components of the first four layers, such as the Settlement layer, Asset layer, Protocol layer and Application layer, DEX aggregators have an additional component or Aggregator layer, which allows them to connect and interact with other DEXs via smart contracts. The Ethereum blockchain popularized smart contracts, which are the basis of DeFi, in 2017. Other blockchains have since implemented smart contracts. MakerDAO is a prominent lending DeFi platform based on a stablecoin that was established in 2017. It allows users to borrow DAI, a token pegged to the US dollar. Through a set of smart contracts that govern the loan, repayment, and liquidation processes, MakerDAO aims to maintain the stable value of DAI in a decentralized and autonomous manner.In June 2020, Compound Finance, a decentralized finance protocol enabling users to lend or borrow cryptocurrency assets and which provides typical interest payments to lenders, started rewarding lenders and borrowers with a cryptocurrency called Comp. This token, which is used for running Compound, can also be traded on cryptocurrency exchanges. Other platforms followed suit, leading to stacked investment opportunities known as "yield farming" or "liquidity mining", where speculators shift cryptocurrency assets between pools in a platform and between platforms to maximize their total yield, which includes not only interest and fees but also the value of additional tokens received as rewards.In July 2020, The Washington Post described decentralized finance techniques and the risks involved. In September 2020, Bloomberg said that DeFi made up two-thirds of the cryptocurrency market in terms of price changes and that DeFi collateral levels had reached $9 billion. Ethereum saw a rise in developers during 2020 due to the increased interest in DeFi.DeFi has attracted venture capitalists such as Andreessen Horowitz and Michael Novogratz.The Economist regarded the future of digital finance in 2022 as a "three-way fight" between: Big Tech, such as Facebook with its digital wallet; "big rich countries" that have been testing their own digital currencies; and software developers "building all sorts of applications" to decentralize finance. Handling the risks presented by crypto-assets already valued at $2.5 trillion was a particular challenge for US regulators. == Key characteristics == DeFi revolves around decentralized applications, also known as DApps, that perform financial functions on distributed ledgers called blockchains, a technology that was made popular by Bitcoin and has since been adapted more broadly. Rather than transactions being made through a centralized intermediary such as a cryptocurrency exchange or a traditional securities exchange, transactions are directly made between participants, mediated by smart contract programs. These smart contracts, or DeFi protocols, typically run using open-source software that is built and maintained by a community of developers.DApps are typically accessed through a browser extension or application. For example, MetaMask allows users to directly interact with Ethereum through a digital wallet. Many of these DApps can be linked to create complex financial services. For example, stablecoin holders can lend assets like USD Coin or DAI to a liquidity pool in a borrow/lending protocol like Aave, and allow others to borrow those digital assets by depositing their own collateral. The protocol automatically adjusts interest rates based on the demand for the asset. Some DApps source external (off-chain) data, such as the price of an asset, through blockchain oracles.Additionally, Aave introduced "flash loans", which are uncollateralized loans of an arbitrary amount that are taken out and paid back within a single blockchain transaction. Many exploits of DeFi platforms have used flash loans to manipulate cryptocurrency spot prices.Another DeFi protocol is Uniswap, which is a decentralized exchange (DEX) set up to trade tokens issued on Ethereum. Rather than using a centralized exchange to fill orders, Uniswap pays users to form liquidity pools in exchange for a percentage of the fees collected from traders swapping tokens in and out of the liquidity pools. Because no centralized party runs Uniswap (the platform is governed by its users), and any development team can use the open-source software, there is no entity to check the identities of the people using the platform and meet KYC/AML regulations. As of 2020, it is not clear what position regulators will take on the legality of such platforms. == Decentralized exchanges == Decentralized exchanges (DEX) are a type of cryptocurrency exchange which allows for direct peer-to-peer cryptocurrency transactions to take place without the need for an intermediary, so they are fundamentally differerent from centralized exchanges (CEX).In transactions made through decentralized exchanges, the typical third party entities which would normally oversee the security and transfer of assets (e.g. banks, stockbrokers, online payment gateways, government institutions, etc.) are substituted by a blockchain or distributed ledger. Some common methods of operation include the use of smart contracts or order book relaying – although many other variations are possible, with differing degrees of decentralization.Because traders on a decentralized exchange often do not need to transfer their assets to the exchange before executing a trade, decentralized exchanges reduce the risk of theft from hacking of exchanges, but liquidity providers do need to transfer tokens to the decentralized exchange. Decentralized exchanges are also more anonymous than exchanges that implement know your customer (KYC) requirements.There are some signs that decentralized exchanges have been suffering from low trading volumes and reduced market liquidity. The 0x project, a protocol for building decentralized exchanges with interchangeable liquidity, attempts to solve this issue. === Disadvantages === Due to a lack of KYC processes, and no way to revert a transaction, users are at a loss if they are ever hacked for their passwords or private keys. Additionally, liquidity providers staking in DeFi protocols can suffer what is called an impermanent loss if, when withdrawn, the token pairs they have invested have altered in value ratio significantly.Although liquidity pool DEX are the most widely used, they may have some drawbacks. The most common problems of liquidity pool DEXes are market price impact, slippage, and front running. Price impact occurs because of the AMM (Automated Market Makers) nature itself — the larger the deal, the stronger impact it has on the price. For example, if the constant product AMM is in use, every deal must keep the product xy = k constant, where x and y are quantities of two cryptocurrencies (or tokens) in the pool. Price impact is non-linear, so the larger is the input amount Δx, the lower is the final ratio y / x that gives an exchange price. The problem is mostly significant for relatively large deals versus the liquidity pool size.Front running is a special type of attack in public blockchains when some participant (usually a miner) seeing an upcoming trading transaction puts his own transaction ahead (playing with a transaction fee for example), making the initial transaction less profitable or even reverted. To provide some protection against front running attacks, many DeFi exchanges offer a slippage tolerance option for end-users. This option serves as a safeguard, allowing users to set a limit on the worst acceptable price they are willing to accept from the time of transaction signing. === Degrees of decentralization === A decentralized exchange can still have centralized components, whereby some control of the exchange is still in the hands of a central authority. The governance of a DeFi platform, typically as part of a Decentralized Autonomous Organization, is done through tokens that grant voting rights and are distributed amongst participants. However, the majority of these tokens are often held by few individuals and are rarely used to vote.In July 2018, the decentralized exchange Bancor was reportedly hacked and suffered a loss of $13.5M in assets before freezing funds. In a Tweet, Charlie Lee, the creator of Litecoin spoke out and claimed an exchange cannot be decentralized if it can lose or freeze customer funds.Operators of decentralized exchanges can face legal consequences from government regulators. One example is the founder of EtherDelta, who in November 2018 settled charges with the U.S. Securities and Exchange Commission over operating an unregistered securities exchange. == Errors and hacking == Coding errors and hacks are common in DeFi. Blockchain transactions are irreversible, which means that an incorrect or fraudulent DeFi transaction cannot be corrected easily. The person or entity behind a DeFi protocol may be unknown and may disappear with investors' money. Investor Michael Novogratz has described some DeFi protocols as "Ponzi-like".DeFi has been compared to the initial coin offering craze of 2017, part of a cryptocurrency bubble. Inexperienced investors are at particular risk of losing money because of the sophistication required to interact with DeFi platforms and the lack of any intermediary with customer support. On the other hand, as the code for DeFi smart contracts is generally open-source software that can be copied to set up competing platforms, experienced users and user-created bots might create instabilities as funds shift between platforms which share the same code. In addition, DeFi platforms might inadvertently provide incentives for cryptocurrency miners to destabilize the system. In 2021, half of cryptocurrency crime was related to DeFi. This rise has been attributed to a combination of developer incompetence and non-existent or poorly enforced regulations. Theft from DeFi can come from either external hackers stealing from vulnerable projects, or "rug pulls", where the developers and influencers promote a project and then take the money, as a form of pump-and-dump. == Regulation == In October 2021, the FATF included DeFi in the guidance for crypto service providers, making the authority's aim to regulate this type of asset. They are expecting each individual country to determine if individuals involved in DeFi can be considered a virtual asset provider and be subjected to the FATF's guidelines. == See also == Global financial system Cryptocurrency wallet == References ==
Smart contract	A smart contract is a computer program or a transaction protocol that is intended to automatically execute, control or document events and actions according to the terms of a contract or an agreement. The objectives of smart contracts are the reduction of need for trusted intermediators, arbitration costs, and fraud losses, as well as the reduction of malicious and accidental exceptions. Smart contracts are commonly associated with cryptocurrencies, and the smart contracts introduced by Ethereum are generally considered a fundamental building block for decentralized finance (DeFi) and NFT applications.Vending machines are mentioned as the oldest piece of technology equivalent to smart contract implementation. The original Ethereum white paper by Vitalik Buterin in 2014 describes the Bitcoin protocol as a weak version of the smart contract concept as originally defined by Nick Szabo, and proposed a stronger version based on the Solidity language, which is Turing complete. Since Bitcoin, various cryptocurrencies have supported programming languages which allow for more advanced smart contracts between untrusted parties.A smart contract should not be confused with a smart legal contract, which refers to a traditional, natural-language, legally-binding agreement that has selected terms expressed and implemented in machine-readable code. == Etymology == Smart contracts were first proposed in the early 1990s by Nick Szabo, who coined the term, using it to refer to "a set of promises, specified in digital form, including protocols within which the parties perform on these promises". In 1998, the term was used to describe objects in rights management service layer of the system The Stanford Infobus, which was a part of Stanford Digital Library Project. == Legal status of smart contracts == A smart contract does not typically constitute a valid binding agreement at law, although a smart legal contract is intended to be both executable by a machine and legally enforceable. Smart contracts are not legal agreements, but rather means of performing obligations deriving from agreements that can be executed automatically by a computer program or a transaction protocol, such as technological means for the automation of payment obligations or obligations consisting in the transfer of tokens or cryptocurrencies. Some scholars have argued that the imperative or declarative nature of programming languages would impact the legal validity of smart contracts.Since the 2015 launch of the Ethereum blockchain, the term "smart contract" has been more specifically applied toward the notion of general purpose computation that takes place on a blockchain or distributed ledger. The US National Institute of Standards and Technology describes a "smart contract" as a "collection of code and data (sometimes referred to as functions and state) that is deployed using cryptographically signed transactions on the blockchain network". In this interpretation, used for example by the Ethereum Foundation or IBM, a smart contract is not necessarily related to the classical concept of a contract, but can be any kind of computer program. A smart contract also can be regarded as a secured stored procedure, as its execution and codified effects (like the transfer of value between parties) are strictly enforced and cannot be manipulated; after a transaction with specific contract details is stored into a blockchain or distributed ledger, it cannot be changed. That is because the actual execution of contracts is controlled and audited by the platform, not by arbitrary server-side programs connecting to the platform.In 2017, by implementing the Decree on Development of Digital Economy, Belarus has become the first-ever country to legalize smart contracts. Belarusian lawyer Denis Aleinikov is considered to be the author of a smart contract legal concept introduced by the decree.In 2018, a US Senate report said: "While smart contracts might sound new, the concept is rooted in basic contract law. Usually, the judicial system adjudicates contractual disputes and enforces terms, but it is also common to have another arbitration method, especially for international transactions. With smart contracts, a program enforces the contract built into the code." A number of states in the US have passed legislation on the use of smart contracts, such as Arizona, Nevada, Tennessee, and Wyoming. And in April 2020, Iowa's House of Representatives passed a bill legally recognizing smart contracts in the state.In April 2021, the UK Jurisdiction Taskforce (UKJT) published the Digital Dispute Resolution Rules (the Digital DR Rules) to help enable the rapid resolution of blockchain and crypto legal disputes in Britain. == Workings == Similar to a transfer of value on a blockchain, deployment of a smart contract on a blockchain occurs by sending a transaction from a wallet for the blockchain. The transaction includes the compiled code for the smart contract as well as a special receiver address. That transaction must then be included in a block that is added to the blockchain, at which point the smart contract's code will execute to establish the initial state of the smart contract. Byzantine fault-tolerant algorithms secure the smart contract in a decentralized way from attempts to tamper with it. Once a smart contract is deployed, it cannot be updated. Smart contracts on a blockchain can store arbitrary state and execute arbitrary computations. End clients interact with a smart contract through transactions. Such transactions with a smart contract can invoke other smart contracts. These transactions might result in changing the state and sending coins from one smart contract to another or from one account to another.The most popular blockchain for running smart contracts is Ethereum. On Ethereum, smart contracts are typically written in a Turing-complete programming language called Solidity, and compiled into low-level bytecode to be executed by the Ethereum Virtual Machine. Due to the halting problem and other security problems, Turing-completeness is considered to be a risk and is deliberately avoided by languages like Vyper. Some of the other smart contract programming languages missing Turing-completeness are Simplicity, Scilla, Ivy and Bitcoin Script. However, measurements in 2020 using regular expressions showed that only 35.3% of 53,757 Ethereum smart contracts at that time included recursions and loops — constructs connected to the halting problem.Several languages are designed to enable formal verification: Bamboo, IELE, Simplicity, Michelson (can be verified with Coq), Liquidity (compiles to Michelson), Scilla, DAML and Pact. Processes on a blockchain are generally deterministic in order to ensure Byzantine fault-tolerance. Nevertheless, real world application of smart contracts, such as lotteries and casinos, require secure randomness. In fact, blockchain technology reduces the costs for conducting of a lottery and is therefore beneficial for the participants. Randomness on blockchain can be implemented by using block hashes or timestamps, oracles, commitment schemes, special smart contracts like RANDAO and Quanta, as well as sequences from mixed strategy Nash equilibria. == Applications == In 1998, Szabo proposed that smart contract infrastructure can be implemented by replicated asset registries and contract execution using cryptographic hash chains and Byzantine fault-tolerant replication. Askemos implemented this approach in 2002 using Scheme (later adding SQLite) as the contract script language.One proposal for using bitcoin for replicated asset registration and contract execution is called "colored coins". Replicated titles for potentially arbitrary forms of property, along with replicated contract execution, are implemented in different projects. As of 2015, UBS was experimenting with "smart bonds" that use the bitcoin blockchain in which payment streams could hypothetically be fully automated, creating a self-paying instrument.Inheritance wishes could hypothetically be implemented automatically upon registration of a death certificate by means of smart contracts. Birth certificates can also work together with smart contracts.Chris Snook of Inc.com suggests smart contracts could also be used to handle real estate transactions and could be used in the field of title records and in the public register.Seth Oranburg and Liya Palagashvili argue that smart contracts could also be used in employment contracts, especially temporary employment contracts, which according to them would benefit the employer.Smart contract on block chain technology for smart villages == Security issues == The transactions data from a blockchain-based smart contract is visible to all users in the blockchain. The data provides cryptographic view of the transactions, however, this leads to a situation where bugs, including security holes, are visible to all yet may not be quickly fixed. Such an attack, difficult to fix quickly, was successfully executed on The DAO in June 2016, draining approximately US$50 million worth of Ether at the time, while developers attempted to come to a solution that would gain consensus. The DAO program had a time delay in place before the hacker could remove the funds; a hard fork of the Ethereum software was done to claw back the funds from the attacker before the time limit expired. Other high-profile attacks include the Parity multisignature wallet attacks, and an integer underflow/overflow attack (2018), totaling over US$184 million.Issues in Ethereum smart contracts, in particular, include ambiguities and easy-but-insecure constructs in its contract language Solidity, compiler bugs, Ethereum Virtual Machine bugs, attacks on the blockchain network, the immutability of bugs and that there is no central source documenting known vulnerabilities, attacks and problematic constructs. == Difference from smart legal contracts == Smart legal contracts are distinct from smart contracts. As mentioned above, a smart contract is not necessarily legally enforceable as a contract. On the other hand, a smart legal contract has all the elements of a legally enforceable contract in the jurisdiction in which it can be enforced and it can be enforced by a court or tribunal. Therefore, while every smart legal contract will contain some elements of a smart contract, not every smart contract will be a smart legal contract.There is no formal definition of a smart legal contract in the legal industry.A Ricardian contract is a type of smart legal contract. == See also == Code and Other Laws of Cyberspace Decentralized application Ethereum Regulation by algorithms Regulation of algorithms Ricardian contract (a design pattern to capture the intent of the agreement of parties) Loan Secure multiparty computation Transparency == References ==
Initial coin offering	An initial coin offering (ICO) or initial currency offering is a type of funding using cryptocurrencies. It is often a form of crowdfunding, although a private ICO which does not seek public investment is also possible. In an ICO, a quantity of cryptocurrency is sold in the form of "tokens" ("coins") to speculators or investors, in exchange for legal tender or other (generally established and more stable) cryptocurrencies such as Bitcoin or Ether. The tokens are promoted as future functional units of currency if or when the ICO's funding goal is met and the project successfully launches. An ICO can be a source of capital for startup companies. ICOs can allow startups to avoid regulations that prevent them from seeking investment directly from the public, and intermediaries such as venture capitalists, banks, and stock exchanges, which may demand greater scrutiny and some percentage of future profits or joint ownership. ICOs may fall outside existing regulations, depending on the nature of the project, or be banned altogether in some jurisdictions, such as China and South Korea. Due to the lack of regulation and enforcement of securities law, ICOs have been the vehicle for scams and fraud. Fewer than half of all ICOs survive four months after the offering, while almost half of ICOs sold in 2017 failed by February 2018. Despite their record of failure and the falling prices of cryptocurrencies, a record $7 billion was raised via ICO from January–June 2018. == History == The first token sale (also known as an ICO) was held by Mastercoin in July 2013. Ethereum raised money with a token sale in 2014, raising around 31,000 BTC in July, equal to approximately $18.3 million at the time.ICOs and token sales became popular in 2017. There were at least 18 websites tracking ICOs before mid-year. In May, the ICO for a new web browser called Brave generated about $35 million in under 30 seconds. Messaging app developer Kik's September 2017 ICO raised nearly $100 million. At the start of October 2017, ICO coin sales worth $2.3 billion had been conducted during the year, more than ten times as much as in all of 2016. As of November 2017, there were around 50 offerings a month, with the highest-grossing ICO as of January 2018, being Filecoin raising $257 million (and $200 million of that within the first hour of their token sale).By the end of 2017, ICOs had raised almost 40 times as much capital as they had raised in 2016, although still amounting to less than two percent of the capital raised by IPOs. ICOs are sometimes called "token sales". Amy Wan, a crowdfunding and syndication lawyer, described the coin in an ICO as "a symbol of ownership interest in an enterprise—a digital stock certificate" stating that they are likely subject to regulation as securities in the U.S. under the Howey test.Ethereum is (as of February 2018) the leading blockchain platform for ICOs with more than 80% market share. Tokens are generally based on the Ethereum ERC-20 standard.On January 30, 2018, Facebook banned advertisements for ICOs as well as for cryptocurrencies and binary options. By April 2018, ICO advertising has been banned not only by Facebook, but by Twitter, Google, and MailChimp. Facebook changed their mind and June 26, 2018 announced to reopen for approved advertisers.Efforts are under way to deploy ICO technology to represent regulated securities, referred to as Security Token Offerings (STOs), Digital Security Offerings (DSOs), and when listed on a regulated stock exchange, tokenized IPOs.An initial stake-pool offering (ISPO), also known as an ISO, is a novel variation of an ICO for funding cryptocurrency projects. In an ISPO, users stake their cryptocurrency holdings (mostly notably ADA) through a stake-pool operated by the cryptocurrency project.The first formal ISPO, and so far most successful, was launched on July, 1st, 2021. By October 2021 more than 35,000 participants across the world contributed more than 600 million ADA (worth more than $1 billion USD in October 2021). Participants received 0.065 $MELD / $ADA staked / epoch while keeping full ownership of their ADA. == Criticisms == === As a mechanism for scams === Although ICOs can be used for fraud, they are also used for legal activities such as corporate finance and charitable fundraising. The Securities and Exchange Commission (SEC) has warned investors to beware of scammers using ICOs to execute "pump and dump" schemes, in which the scammer talks up the value of an ICO in order to generate interest and drive up the value of the coins, and then quickly "dumps" the coins for a profit.Snapchat, LinkedIn and MailChimp all have limited companies from marketing ICOs via their platforms. Jimmy Wales, founder of Wikipedia, stated in 2017 that "there are a lot of these initial coin offerings which in my opinion are absolute scams and people should be very wary of things that are going on in that area."Chinese internet platforms Baidu, Tencent, and Weibo have also prohibited ICO advertisements. The Japanese platform Line and the Russian platform Yandex have similar prohibitions.The UK Financial Conduct Authority has warned that ICOs are very high risk and speculative investments, are scams in some cases, and often offer no protections for investors. Even in cases of legitimate ICOs, funded projects are typically in an early and therefore high-risk stage of development. The European Securities and Markets Authority (ESMA) notes high risks associated with ICOs and the risk that investors may lose all of their cash. === As a bubble === A 2017 Wired article predicted in 2017 that the bubble was about to burst. In 2017, some investors flooded into ICOs in hopes of participating in the financial gains of similar size to those enjoyed by early Bitcoin or Ethereum speculators. == Regulation == Following a speculative boom in cryptocurrency prices that peaked in December 2017, regulation of cryptocurrencies has been rapidly changing. The pace of change has been driven in part by incidents of cybertheft, trading halts, and possible market manipulation.Cryptocurrencies are based on distributed ledger technologies which enable anyone to purchase or transfer their cryptocurrency holdings to any other person without the need for an intermediary (such as an exchange) or to update a central record of ownership. Cryptocurrencies can be transferred easily across national and jurisdictional boundaries. This makes it difficult for central authorities to control and monitor the ownership and movement of holdings of cryptocurrencies. Countries have different approaches to how they regulate cryptocurrencies. This can depend on the nature of the cryptocurrency itself. There are two main types of cryptocurrencies from a regulatory perspective: utility tokens and asset-backed tokens. Utility tokens may have value because they enable the holder to exchange the token for a good or service in the future, such as Bitcoin. Asset-backed tokens may have value because there is an underlying asset which the holder of the token can attribute value to. In many countries it is uncertain whether utility tokens require regulation, while it is more likely that asset-backed tokens do require regulation. This makes it complex for the issuers of cryptocurrencies to analyze which countries their tokens (or coins) can be sold into, and for the prospective purchasers of cryptocurrencies to understand which regulations, if any, should apply. The Gibraltar British Overseas Territory Financial Services Commission announced in early February 2018 that regulations are being developed to qualify "authorized sponsors" of ICOs, who are supposed to be "responsible for assuring compliance with disclosure" and compliance with "financial crimes rules". == See also == Alternative currency Airdrop Digital asset Private currency == References ==
Non-fungible token	A non-fungible token (NFT) is a unique digital identifier that is recorded on a blockchain, and is used to certify ownership and authenticity. It cannot be copied, substituted, or subdivided. The ownership of an NFT is recorded in the blockchain and can be transferred by the owner, allowing NFTs to be sold and traded. NFTs can be created by anybody, and require few or no coding skills to create. NFTs typically contain references to digital files such as artworks, photos, videos, and audio. Because NFTs are uniquely identifiable, they differ from cryptocurrencies, which are fungible. Proponents claim that NFTs provide a public certificate of authenticity or proof of ownership, but the legal rights conveyed by an NFT can be uncertain. The ownership of an NFT as defined by the blockchain has no inherent legal meaning and does not necessarily grant copyright, intellectual property rights, or other legal rights over its associated digital file. An NFT does not restrict the sharing or copying of its associated digital file and does not prevent the creation of NFTs that reference identical files. The trading of NFTs in 2021 increased to $17 billion over just $82 million in the previous year. NFTs have been used as speculative investments and they have drawn criticism for the energy cost and carbon footprint associated with some types of blockchain, as well as their use in art scams. The NFT market has also been compared to an economic bubble or a Ponzi scheme. During their peak, the three biggest NFT platforms were Ethereum, Solana, and Cardano. In 2022, the NFT market collapsed; a May 2022 estimate was that the number of sales was down over 90% compared to 2021. By September 2023, one report claimed that over 95% of NFT collections had zero monetary value. == Characteristics == An NFT is a data file, stored on a type of digital ledger called a blockchain, which can be sold and traded. The NFT can be associated with a particular asset – digital or physical – such as an image, art, music, or recording of a sports event. It may confer licensing rights to use the asset for a specified purpose. An NFT (and, if applicable, the associated license to use, copy, or display the underlying asset) can be traded and sold on digital markets. However, the extralegal nature of NFT trading usually results in an informal exchange of ownership over the asset that has no legal basis for enforcement, and so often confers little more than use as a status symbol.NFTs function like cryptographic tokens, but unlike cryptocurrencies, NFTs are not usually mutually interchangeable, so they are not fungible. A non-fungible token contains data links, for example which point to details about where the associated art is stored, that can be affected by link rot. === Copyright === An NFT solely represents a proof of ownership of a blockchain record and does not necessarily imply that the owner possesses intellectual property rights to the digital asset the NFT purports to represent. Someone may sell an NFT that represents their work, but the buyer will not necessarily receive copyright to that work, and the seller may not be prohibited from creating additional NFT copies of the same work. According to legal scholar Rebecca Tushnet, "In one sense, the purchaser acquires whatever the art world thinks they have acquired. They definitely do not own the copyright to the underlying work unless it is explicitly transferred."Certain NFT projects, such as Bored Apes, explicitly assign intellectual property rights of individual images to their respective owners. The NFT collection CryptoPunks was a project that initially prohibited owners of its NFTs from using the associated digital artwork for commercial use, but later allowed such use upon acquisition by the collection's parent company. == History == === Early projects === The first known "NFT", Quantum, was created by Kevin McCoy and Anil Dash in May 2014. It consists of a video clip made by McCoy's wife, Jennifer. McCoy registered the video on the Namecoin blockchain and sold it to Dash for $4, during a live presentation for the Seven on Seven conferences at the New Museum in New York City. McCoy and Dash referred to the technology as "monetized graphics". This explicitly linked a non-fungible, tradable blockchain marker to a work of art, via on-chain metadata (enabled by Namecoin).In October 2015, the first NFT project, Etheria, was launched and demonstrated at DEVCON 1 in London, Ethereum's first developer conference, three months after the launch of the Ethereum blockchain. Most of Etheria's 457 purchasable and tradable hexagonal tiles went unsold for more than five years until March 13, 2021, when renewed interest in NFTs sparked a buying frenzy. Within 24 hours, all tiles of the current version and a prior version, each hardcoded to 1 ETH (US$0.43 at the time of launch), were sold for a total of US$1.4 million.In 2016, Rare Pepes a "semi-fungible" NFT project centered around the Pepe the Frog meme involving a collective of artists contributing their works into a curated directory, emerged on Bitcoin through a protocol known as Counterparty (which had been created in 2014 and used to create other assets).In 2017, several NFT projects emerged on Ethereum that utilized a "fungible" token standard known as ERC-20. Curio Cards in May of that year is credited with being Ethereum's first art NFT project using the fungible standard and features artwork in the shape of a card among a variety of image types including satirized corporate logos The generative art project of 10,000 pixelated characters known as CryptoPunks emerged soon after in June and would later establish itself as one of the most commercially successful NFT projects. In December, a clipart based collection featuring images of rocks called EtherRock emerged.in November of 2017, the widely acclaimed blockchain game on Ethereum known as CryptoKitties launched and is credited with pioneering what is considered to be the very first bona fide non-fungible token standard, known as ERC-721. === ERC-721: Non-Fungible Token Standard === While experiments around non-fungibility have existed on blockchains since as early as 2012 with Colored Coins on Bitcoin, a community-driven paper called ERC-721: Non-Fungible Token Standard was published in 2018 under the initiative of civic hacker and lead author William Entriken and is recognized as pioneering the foundation for NFTs and enabling the growth of the wider eco-system. It introduced the formalization and defining of the term Non-Fungible Token "NFT" in blockchain nomenclature by establishing a standard for smart contracts known as "ERC-721" whose tokens would have unique attributes and ownership details, ensuring no two tokens are alike. The creation of derivative standards followed from its influence on Ethereum (like ERC-1155 enabling semi-fungibility) and other blockchains. Its versatility enabled the pioneering of numerous use cases, including digital artwork, deeds to physical items, real estate (including virtual), access passes, and game assets. Ultimately, the emergence of ERC-721 is recognized for having fundamentally changed the landscape of digital verification, authentication, and ownership. ==== Origins of the term "NFT" and its adoption ==== The term NFT, prior to the blockchain game CryptoKitties' adoption of ERC-721, is not known to have been used for earlier projects. Through discussion among stakeholders for the ERC-721 draft, the word deed was given consideration among other alternatives including distinguishable asset, title, token, asset, equity, ticket. Ultimately, a vote was held during the paper's drafting phase for which word would be used in the published version and "NFT" was chosen by the stakeholders.The term "NFT" and the awareness of the ERC-721 standard received significant exposure and adopted use through the popularity of CryptoKitties in 2017. While using the standard, CryptoKitties earned the recognition of being the first mainstream NFT dApp; the game's usage was significant enough to have overwhelmed Ethereum's processing power at the time. ==== Influence ==== During the height of the breakout success of CryptoKitties and the emergence of ERC-721 tokens in 2017, an NFT marketplace called OpenSea emerged to capitalize off of the new non-fungible token standard. It positioned itself early in the NFT market landscape and grew to a $1.4 billion market cap in 2021 during the NFT boom in 2021.in 2021, ArtReview's Power 100 ranked ERC-721 at the #1 spot, praising it as "the most powerful art entity in the world" for creating a new kind of market for artworks that deviated from traditional gatekeeping norms and ushered in a different kind of collector. Artist Beeple sold an ERC-721 NFT of his composite artwork known as Everydays: The First 5000 Days at Christie's for $69 million and was the first instance of a legacy arthouse dealing in NFTs. === General NFT market === The NFT market experienced rapid growth during 2020, with its value tripling to US$250 million. In the first three months of 2021, more than US$200 million were spent on NFTs.In the early months of 2021, interest in NFTs increased after a number of high-profile sales and art auctions.In May 2022, The Wall Street Journal reported that the NFT market was "collapsing". Daily sales of NFT tokens had declined 92% from September 2021, and the number of active wallets in the NFT market fell 88% from November 2021. While rising interest rates had impacted risky bets across the financial markets, the Journal said "NFTs are among the most speculative."A September 2023 report from cryptocurrency gambling website dappGambl claimed 95% of NFTs had fallen to zero monetary value. == Uses == === Commonly associated files === NFTs have been used to exchange digital tokens that link to a digital file asset. Ownership of an NFT is often associated with a license to use such a linked digital asset but generally does not confer the copyright to the buyer. Some agreements only grant a license for personal, non-commercial use, while other licenses also allow commercial use of the underlying digital asset. This kind of decentralized intellectual copyright poses an alternative to established forms of safeguarding copyright controlled by state institutions and middlemen within the respective industry. ==== Digital art ==== Digital art is a common use case for NFTs. High-profile auctions of NFTs linked to digital art have received considerable public attention; the first such major house auction took place at Christie's in 2021. The work entitled Merge by artist Pak was the most expensive NFT, with an auction price of US$91.8 million and Everydays: the First 5000 Days, by artist Mike Winkelmann (known professionally as Beeple) the second most expensive at US$69.3 million in 2021. Some NFT collections, including Bored Apes, EtherRocks, and CryptoPunks, are examples of generative art, where many different images are created by assembling a selection of simple picture components in different combinations.In March 2021, the blockchain company Injective Protocol bought a $95,000 original screen print entitled Morons (White) from English graffiti artist Banksy, and filmed somebody burning it with a cigarette lighter. They uploaded (known as "minting" in the NFT scene) and sold the video as an NFT. The person who destroyed the artwork, who called themselves "Burnt Banksy", described the act as a way to transfer a physical work of art to the NFT space.American curator and art historian Tina Rivers Ryan, who specializes in digital works, said that art museums are widely not convinced that NFTs have "lasting cultural relevance." Ryan compares NFTs to the net art fad before the dot-com bubble. In July 2022, after the controversial sale of Michelangelo's Doni Tondo in Italy, the sale of NFT reproductions of famous artworks was prohibited in Italy. Given the complexity and lack of regulation of the matter, the Ministry of Culture of Italy temporarily requested that its institutions refrain from signing contracts involving NFTs.No centralized means of authentication exists to prevent stolen and counterfeit digital works from being sold as NFTs, although auction houses like Sotheby's, Christie's, and various museums and galleries worldwide started collaborations and partnerships with digital artists such as Refik Anadol, Dangiuz and Sarah Zucker. NFTs associated with digital artworks could be sold and bought via NFT platforms. OpenSea, launched in 2017, was one of the first marketplaces to host various types of NFTs. In July 2019, the National Basketball Association, the NBA Players Association and Dapper Labs, the creator of CryptoKitties, started a joint venture NBA Top Shot for basketball fans that let users buy NFTs of historic moments in basketball. In 2020, Rarible was found, allowing multiple assets. In 2021, Rarible and Adobe formed a partnership to simplify the verification and security of metadata for digital content, including NFTs. In 2021, a cryptocurrency exchange Binance, launched its NFT marketplace. In 2022, eToro Art by eToro was founded, focusing on supporting NFT collections and emerging creators.Sotheby's and Christie's auction houses showcase artworks associated with the respective NFTs both in virtual galleries and physical screens, monitors, and TVs.Mars House, an architectural NFT created in May 2020 by artist Krista Kim, sold in 2021 for 288 Ether (ETH) — at that time equivalent to US$524,558. ==== Games ==== NFTs can represent in-game assets. Some commentators describe these as being controlled "by the user" instead of the game developer if they can be traded on third-party marketplaces without permission from the game developer. Their reception from game developers, though, has been generally mixed, with some like Ubisoft embracing the technology but Valve and Microsoft formally prohibiting them. CryptoKitties was an early successful blockchain online game in which players adopt and trade virtual cats. The monetization of NFTs within the game raised a $12.5 million investment, with some kitties selling for over $100,000 each. Following its success, CryptoKitties was added to the ERC-721 standard, which was created in January 2018 (and finalized in June). In October 2021, Valve Corporation banned applications from their Steam platform if those applications use blockchain technology or NFTs to exchange value or game artifacts. In December 2021, Ubisoft announced Ubisoft Quartz, "an NFT initiative which allows people to buy artificially scarce digital items using cryptocurrency". The announcement was heavily criticized by audiences, with the Quartz announcement video attaining a dislike ratio of 96% on YouTube. Ubisoft subsequently unlisted the video from YouTube. The announcement was also criticized internally by Ubisoft developers. The Game Developers Conference's 2022 annual report stated that 70 percent of developers surveyed said their studios had no interest in integrating NFTs or cryptocurrency into their games. Some luxury brands minted NFTs for online video game cosmetics. In November 2021, investment firm Morgan Stanley published a note claiming that this could become a US$56 billion market by 2030. In July 2022, Mojang Studios announced that NFTs would not be permitted in Minecraft, saying that they went against the game's "values of creative inclusion and playing together". ==== Music and film ==== NFTs have been proposed for use within the film-industry as a way to tokenize movie-scenes and sell them as collectibles in the form of NFTs. Artists involved in the entertainment-industry can seek royalties through NFTs. So far, NFTs have often been used in both the music- as well as the film-industry. In May 2018, 20th Century Fox partnered with Atom Tickets and released limited-edition Deadpool 2 digital posters to promote the film. They were available from OpenSea and the GFT exchange. In March 2021, Adam Benzine's 2015 documentary Claude Lanzmann: Spectres of the Shoah became the first motion picture and documentary film to be auctioned as an NFT. Other examples of NFTs being used in the film-industry include a collection of NFT-artworks for Godzilla vs. Kong, the release of both Kevin Smith's horror-movie KillRoy Was Here , and the 2021 film Zero Contact as NFTs in 2021. In April 2021, an NFT was released for the score of the movie Triumph, composed by Gregg Leonard. In November 2021, film director Quentin Tarantino released seven NFTs based on uncut scenes of Pulp Fiction. Miramax subsequently filed a lawsuit claiming that their film rights were violated and that the original 1993 contract with Tarantino gave them the right to mint NFTs in relation to Pulp Fiction. In August 2022, Muse released album Will of the People as 1,000 NFTs; it became the first album for which NFT sales would qualify for the UK and Australian charts.By February 2021, NFTs accounted for US$25 million of revenue generated through the sale of artwork and songs as NFTs. On February 28, 2021, electronic dance musician 3LAU sold a collection of 33 NFTs for a total of US$11.7 million to commemorate the three-year anniversary of his Ultraviolet album. On March 3, 2021, an NFT was made to promote the Kings of Leon album When You See Yourself. Other musicians who have used NFTs include American rapper Lil Pump, Grimes, visual artist Shepard Fairey in collaboration with record producer Mike Dean, and rapper Eminem.A paper presented at the 40th International Conference on Information Systems in Munich in 2019 suggested using NFTs as tickets for different types of events. This would enable organizers of the respective events or artists performing there to receive royalties on the resale of each ticket. ==== Other associated files ==== A number of internet memes have been associated with NFTs, which were minted and sold by their creators or by their subjects. Examples include Doge, an image of a Shiba Inu dog, as well as Charlie Bit My Finger, Nyan Cat and Disaster Girl. Some virtual worlds, often marketed as metaverses, have incorporated NFTs as a means of trading virtual items and virtual real estate. Some pornographic works have been sold as NFTs, though hostility from NFT marketplaces towards pornographic material has presented significant drawbacks for creators. By using NFTs people engaged in this area of the entertainment-industry are able to publish their works without third-party platforms being able to delete them. The first credited political protest NFT ("Destruction of Nazi Monument Symbolizing Contemporary Lithuania") was a video filmed by Professor Stanislovas Tomas on April 8, 2019, and minted on March 29, 2021. In the video, Tomas uses a sledgehammer to destroy a state-sponsored Lithuanian plaque located on the Lithuanian Academy of Sciences honoring Nazi war criminal Jonas Noreika. In 2020, CryptoKitties developer Dapper Labs released the NBA TopShot project, which allowed the purchase of NFTs linked to basketball highlights. The project was built on top of the Flow blockchain. In March 2021 an NFT of Twitter founder Jack Dorsey's first-ever tweet sold for $2.9 million. The same NFT was listed for sale in 2022 at $48 million, but only achieved a top bid of $280. On December 15, 2022, Donald Trump, former president of the United States, announced a line of NFTs featuring images of himself for $99 each. It was reported that he made between $100,001 and $1 million from the scheme. === Use cases of NFTs in science and medicine === NFTs have been proposed for purposes related to scientific and medical purposes. Suggestions include turning patient data into NFTs, tracking supply chains and minting patents as NFTs.The monetary aspect of the sale of NFTs has been used by academic institutions to finance research projects. The University of California, Berkeley announced in May 2021 its intention to auction NFTs of two patents of inventions for which the creators had received a Nobel Prize: the patents for CRISPR gene editing and cancer immunotherapy. The university would, however, retain ownership of the patents. 85% of funds gathered through the sale of the collection were to be used to finance research. The collection included handwritten notices and faxes by James Allison and was named The Fourth Pillar. It sold in June 2022 for 22 Ether, about US$54,000 at the time. George Church, a US geneticist, announced his intention to sell his DNA via NFTs and use the profits to finance research conducted by Nebula Genomics. In June 2022, 20 NFTs with his likeness were published instead of the originally planned NFTs of his DNA due to the market conditions at the time. Despite mixed reactions, the project is considered to be part of an effort to use the genetic data of 15,000 individuals to support genetic research. By using NFTs the project wants to ensure that the users submitting their genetic data are able to receive direct payment for their contributions. Several other companies have been involved in similar and often criticized efforts to use blockchain-based genetic data in order to guarantee users more control over their data and enable them to receive direct financial compensation whenever their data is being sold. Molecule Protocol, a project based in Switzerland, is trying to use NFTs to digitize the intellectual copyright of individual scientists and research teams to finance research. The project's whitepaper explains the aim is to represent the copyright of scientific papers as NFTs and enable their trade between researchers and investors on a future marketplace. The project was able to raise US$12 million in seed money in July 2022. A similar approach has been announced by RMDS Lab. === Speculation === NFTs representing digital collectables and artworks are a speculative asset. The NFT buying surge was called an economic bubble by experts, who also compared it to the Dot-com bubble. In March 2021 Mike Winkelmann called NFTs an "irrational exuberance bubble". By mid-April 2021, demand subsided, causing prices to fall significantly. Financial theorist William J. Bernstein compared the NFT market to 17th-century tulip mania, saying any speculative bubble requires a technological advance for people to "get excited about", with part of that enthusiasm coming from the extreme predictions being made about the product. For regulatory policymakers, NFTs have exacerbated challenges such as speculation, fraud, and high volatility. === Money laundering === NFTs, as with other blockchain securities and with traditional art sales, can potentially be used for money laundering. NFTs can be used for wash trading by creating several wallets for one individual, generating several fictitious sales and consequently selling the respective NFT to a third party. According to a report by Chainalysis these types of wash trades are becoming popular among money launderers because of the largely anonymous nature of transactions on NFT marketplaces. Looksrare, created in early 2022, came to be known for the large sums generated through the sale of NFTs in its earliest days, amounting to US$400,000,000 a day. These large sums were generated in large part through wash trading. The Royal United Services Institute said that any risks in relation to money laundering through NFTs could be mitigated through the use of "KYC best practices, strong cyber security measures and a stolen art registry (...) without restricting the growth of this new market".Auction platforms for NFTs may face regulatory pressure to comply with anti-money laundering legislation. Gou Wenjun, the director of a monitoring centre for the People's Bank of China, said that NFTs could "easily become money-laundering tools". He pointed to unlawful exploitation of cryptographic technologies and said that illicit actors often presented themselves as innovators in financial technology.A 2022 study from the United States Treasury assessed that there was "some evidence of money laundering risk in the high-value art market", including through "the emerging digital art market, such as the use of non-fungible tokens (NFTs)". The study considered how NFT transactions may be a simpler option for laundering money through art by avoiding the transportation or insurance complications in trading physical art. Several NFT exchanges were labeled as virtual asset service providers that may be subject to Financial Crimes Enforcement Network regulations. In March 2022, two people were charged for the execution of a million-dollar NFT scheme through wire fraud.The European Commission announced in July 2022 that it was planning to draw up regulations to combat money laundering by 2024. === Other uses === In 2019, Nike patented a system called CryptoKicks that would use NFTs to verify the authenticity of its physical products and would give a virtual version of the shoe to the customer. Certain NFT releases have also added exclusivity to the NFT utility, including access to private online clubs. == Standards in blockchains == Several blockchains have added support for NFTs since Ethereum created its ERC-721 standard.ERC-721 is an "inheritable" smart contract standard, which means that developers can create contracts by copying from a reference implementation. ERC-721 provides core methods that allow tracking the owner of a unique identifier, as well as a way for the owner to transfer the asset to others. Another standard, ERC-1155, offers "semi-fungibility" whereby a token represents a class of interchangeable assets. == Issues and criticisms == === Unenforceability of copyright === Because the contents of NFTs are publicly accessible, anybody can easily copy a file referenced by an NFT. Furthermore, the ownership of an NFT on the blockchain does not inherently convey legally enforceable intellectual property rights to the file. It has become well known that an NFT image can be copied or saved from a web browser by using a right click menu to download the referenced image. NFT supporters disparage this duplication of NFT artwork as a "right-clicker mentality". One collector quoted by Vice compared the value of a purchased NFT (in contrast to an unpurchased copy of the underlying asset) to that of a status symbol "to show off that they can afford to pay that much".The "right-clicker mentality" phrase spread virally after its introduction, particularly among those who were critical of the NFT marketplace and who appropriated the term to flaunt their ability to capture digital art backed by NFT with ease. This criticism was promoted by Australian programmer Geoffrey Huntley who created "The NFT Bay", modeled after The Pirate Bay. The NFT Bay advertised a torrent file purported to contain 19 terabytes of digital art NFT images. Huntley compared his work to an art project from Pauline Pantsdown and hoped the site would help educate users on what NFTs are and are not. === Storage off-chain === NFTs that represent digital art generally do not store the associated artwork file on the blockchain due to the large size of such a file, and the limited processing speed of blockchains. Such a token functions like a certificate of ownership, with a web address that points to the piece of art in question; this however makes the art itself vulnerable to link rot. === Environmental concerns === NFT purchases and sales are enabled by the high energy usage, and consequent greenhouse gas emissions, associated with blockchain transactions. Though all forms of Ethereum transactions have an impact on the environment, the direct impact of the transaction is also dependent upon the size of the Ethereum transaction. The proof-of-work protocol required to regulate and verify blockchain transactions on networks such as Ethereum consumes a large amount of electricity. To estimate the carbon footprint of a given NFT transaction requires a variety of assumptions or estimations about the manner in which that transaction is set up on the blockchain, the economic behavior of blockchain miners (and the energy demands of their mining equipment), and the amount of renewable energy being used on these networks. There are also conceptual questions, such as whether the carbon footprint estimate for an NFT purchase should incorporate some portion of the ongoing energy demand of the underlying network, or just the marginal impact of that particular purchase. An analogy might be the carbon footprint associated with an additional passenger on a given airline flight.Some NFT technologies use validation protocols, such as proof of stake, that use much less energy per validation cycle. Other approaches to reducing electricity include the use of off-chain transactions as part of minting an NFT. A number of NFT art sites hope to address these concerns, and some are moving to technologies and protocols with lower associated footprints. Others now allow the option of buying carbon offsets when making NFT purchases, although the environmental benefits of this have been questioned. In some instances, NFT artists have decided against selling some of their own work to limit carbon emission contributions. === Artist and buyer fees === Sales platforms charge artists and buyers fees for minting, listing, claiming, and secondary sales. Analysis of NFT markets in March 2021, in the immediate aftermath of Beeple's "Everydays: the First 5000 Days" selling for US$69.3 million, found that most NFT artworks were selling for less than US$200, with a third selling for less than US$100. Those selling NFTs below $100 were paying platform fees between 72.5% and 157.5% of that amount. On average the fees make up 100.5% of the price, meaning that such artists were on average paying more money in fees than they were making in sales. === Plagiarism and fraud === There have been cases of artists and creators having their work sold by others as an NFT without permission. After the artist Qing Han died in 2020, her identity was assumed by a fraudster and a number of her works became available for purchase as NFTs. Similarly, a seller posing as Banksy succeeded in selling an NFT supposedly made by the artist for $336,000 in 2021; the seller refunded the money after the case drew media attention. In 2022, it was discovered that as part of their NFT marketing campaign, an NFT company that voice actor Troy Baker announced his partnership with had plagiarized voice lines generated from 15.ai, a free AI text-to-speech project.The anonymity associated with NFTs and the ease with which they can be forged make it difficult to pursue legal action against NFT plagiarists.In February 2023, artist Mason Rothschild was ordered to pay $133,000 in damages to Hermès by a New York court, after a jury sided with the copyright holder, for his 2021 digital depictions of the brand's Birkin handbag.Some NFT marketplaces responded to cases of plagiarism by creating "takedown teams" to respond to artist complaints. The NFT marketplace OpenSea has rules against plagiarism and deepfakes (non-consensual intimate imagery). Some artists criticized OpenSea's efforts, saying they are slow to respond to takedown requests and that artists are subject to support scams from users who claim to be representatives of the platform. Others argue that there is no market incentive for NFT marketplaces to crack down on plagiarism. A process known as "sleepminting" allows a fraudster to mint an NFT in an artist's wallet and transfer it back to their own account without the artist becoming aware. This allowed a white hat hacker to mint a fraudulent NFT that had seemingly originated from the wallet of the artist Beeple. Plagiarism concerns led the art website DeviantArt to create an algorithm that compares user art posted on the DeviantArt website against art on popular NFT marketplaces. If the algorithm identifies art that is similar, it notifies and instructs the author how they can contact NFT marketplaces to request that they take down their plagiarized work. The BBC reported a case of insider trading when an employee of the NFT marketplace OpenSea bought specific NFTs before they were launched, with prior knowledge those NFTs would be promoted on the company's home page. NFT trading is an unregulated market in which there is no legal recourse for such abuses. When Adobe announced they were adding NFT support to their graphics editor Photoshop, the company proposed creating an InterPlanetary File System database as an alternative means of establishing authenticity for digital works. The price paid for specific NFTs and the sales volume of a particular NFT author may be artificially inflated by wash trading, which is prevalent due to a lack of government regulation on NFTs. === Security === In January 2022, it was reported that some NFTs were being exploited by sellers to unknowingly gather users' IP addresses. The "exploit" works via the off-chain nature of NFT, as the user's computer automatically follows a web address in the NFT to display the content. The server at the address can then log the IP address and, in some cases, dynamically alter the returned content to show the result. OpenSea has a particular vulnerability to this loophole because it allows HTML files to be linked. === Pyramid/Ponzi scheme claims === Critics compare the structure of the NFT market to a pyramid or Ponzi scheme, in which early adopters profit at the expense of those buying in later. In June 2022, Bill Gates stated his belief that NFTs are "100% based on greater fool theory". === "Rug pull" exit scams === A "rug pull" is a scam, similar to an exit scam or a pump and dump scheme, in which the developers of an NFT or other blockchain project hype the value of a project to pump up the price and then suddenly sell all their tokens to lock in massive profits or otherwise abandon the project while removing liquidity, permanently destroying the value of the project. == See also == Decentralized autonomous organization Web3 William Entriken (Lead author of ERC-721) Deed Certificate of Authenticity Title (Property) == Notes == == References == == External links == Media related to Non-fungible token at Wikimedia Commons
Winklevoss twins	Winklevoss twins refers collectively to: Cameron Winklevoss (born 1981), American investor, rower, and entrepreneur Tyler Winklevoss (born 1981), American investor, rower, and entrepreneur
Mt. Gox	Mt. Gox was a bitcoin exchange based in Shibuya, Tokyo, Japan. Launched in 2010, it was handling over 70% of all bitcoin (BTC) buys/sells worldwide by early 2014, when it abruptly ceased operations amid revelations of its involvement in the loss/theft of hundreds of thousands of bitcoins, then worth hundreds of millions in US dollars.In February 2014, Mt. Gox suspended trading, closed its website and exchange service, and filed for bankruptcy protection from creditors. In April 2014, the company began liquidation proceedings. Although 200,000 bitcoins have since been "found", the reasons for the disappearance—theft, fraud, mismanagement, or a combination of these—were initially unclear. New evidence presented in April 2015 by Tokyo security company WizSec led them to conclude that "most or all of the missing bitcoins were stolen straight out of the Mt. Gox hot cryptocurrency wallet over time, beginning in late 2011." == Founding (2006–2010) == In late 2006, programmer Jed McCaleb thought of building a website for users of the Magic: The Gathering Online tradable card game service, to let them trade "Magic: The Gathering Online" cards like stocks. In January 2007, he purchased the domain name mtgox.com, short for "Magic: The Gathering Online eXchange". Initially in beta release, sometime around late 2007, the service went live for approximately three months before McCaleb moved on to other projects, having decided it was not worth his time. In 2009, he reused the domain name to advertise his card game The Far Wilds.In July 2010, McCaleb read about bitcoin on Slashdot, and decided that the bitcoin community needed an exchange for trading bitcoin and regular currencies. On 18 July, Mt. Gox launched its exchange and price quoting service deploying it on the spare mtgox.com domain name. == Security breach, user DB leak, and invalid addresses (2011) == In March 2011, McCaleb sold the site to French developer Mark Karpelès, who was living in Japan, stating that "to really make mtgox what it has the potential to be would require more time than I have right now. So I've decided to pass the torch to someone better able to take the site to the next level."On 13 June 2011, the Mt. Gox bitcoin exchange reported some BTC 25,000 (US$400,000 at the time) had been stolen from 478 accounts. Then on Friday 17 June, Mt. Gox's user database leaked for sale to pastebin, signed by ~cRazIeStinGeR~ and tied to [email protected]. The theft of Bitcoins from Mt. Gox accounts continued, reportedly, throughout that day. On 19 June, a stream of fraudulent trades caused the nominal price of a bitcoin to fraudulently drop to one cent on the Mt. Gox exchange, after a hacker allegedly used credentials from a Mt. Gox auditor's compromised computer to transfer a large number of bitcoins illegally to himself. He used the exchange's software to sell them all nominally, creating a massive "ask" order at any price. Within minutes the price corrected to its correct user-traded value. Accounts with the equivalent of more than $8,750,000 were affected. To prove that Mt. Gox still had control of the coins, the move of 424,242 bitcoins from "cold storage" to a Mt. Gox address was announced beforehand, and executed in Block 132749.In October 2011, about two dozen transactions appeared in the block chain (Block 150951) that sent a total of BTC 2,609 to invalid addresses. As no private key could ever be assigned to them, these bitcoins were effectively lost. While the standard client would check for such an error and reject the transactions, nodes on the network would not, exposing a weakness in the protocol. == Processor of most of world's bitcoin trades; issues (2013) == On 22 February 2013, following the introduction of new anti-money laundering requirements by e-commerce/online payment system company Dwolla, some Dwolla accounts became temporarily restricted. As a result, transactions from Mt. Gox to those accounts were cancelled by Dwolla. The funds never made it back to Mt. Gox accounts. The Mt. Gox help desk issued the following comment: "Please be advised that you are actually not allowed to cancel any withdrawals received from Mt. Gox as we have never had this case before and we are working with Dwolla to locate your returned funds." The funds were finally returned on 3 May, nearly three months later, with a note: "Please be advised never to cancel any Dwolla withdrawals from us again".In March 2013, the bitcoin transaction log or "blockchain" temporarily forked into two independent logs, with differing rules on how transactions could be accepted. The Mt. Gox bitcoin exchange briefly halted bitcoin deposits. Bitcoin prices briefly dipped by 23%, to $37, as the event occurred, before recovering to their previous level (approximately $48) in the following hours.By April 2013 and into 2014 the site had grown to the point where it was handling over 70% of the world's bitcoin trades, as the largest bitcoin intermediary and the world's leading bitcoin exchange. With prices increasing rapidly, Mt. Gox suspended trading from 11 to 12 April for a "market cooldown". The value of a single bitcoin fell to a low of $55.59 after the resumption of trading, before stabilizing above $100. Around mid-May 2013, Mt. Gox traded 150,000 bitcoins per day, per Bitcoin Charts.On 2 May 2013 CoinLab filed a $75 million lawsuit against Mt. Gox, alleging a breach of contract. The companies had formed a partnership in February 2013 under which CoinLab was to handle all of Mt. Gox's North American services. CoinLab's lawsuit contended that Mt. Gox failed to allow it to move existing U.S. and Canadian customers from Mt. Gox to CoinLab.On 15 May 2013 the US Department of Homeland Security (DHS) issued a warrant to seize money from Mt. Gox's U.S. subsidiary's account with payment processor Dwolla. The warrant suggested the US Immigration and Customs Enforcement, an investigative branch of the DHS, asserted that the subsidiary, which was not licensed by the US Financial Crimes Enforcement Network (FinCEN), was operating as an unregistered money transmitter in the US. Between May and July the DHS seized more than $5 million from the subsidiary. On 29 June 2013, Mt. Gox received its money services business (MSB) license from FinCEN.Mt. Gox suspended withdrawals in US dollars on 20 June 2013. The Mizuho Bank branch in Tokyo that handled Mt. Gox transactions pressured Mt. Gox from then on to close its account. On 4 July 2013, Mt. Gox announced that it had "fully resumed" withdrawals, but as of 5 September 2013, few US dollar withdrawals had been successfully completed.On 5 August 2013, Mt. Gox announced that it incurred "significant losses" due to crediting deposits which had not fully cleared, and that new deposits would no longer be credited until the funds transfer was fully completed.Wired Magazine reported in November 2013 that customers were experiencing delays of weeks to months in withdrawing cash from their accounts. The article said that the company had "effectively been frozen out of the U.S. banking system because of its regulatory problems". == Withdrawals halted; trading suspended; bitcoin missing (2014) == Customer complaints about long delays were mounting as of February 2014, with more than 3,300 posts in a thread about the topic on the Bitcoin Talk online forum.On 7 February 2014, Mt. Gox halted all bitcoin withdrawals. The company said it was pausing withdrawal requests "to obtain a clear technical view of the currency processes". The company issued a press release on 10 February 2014, stating that the issue was due to transaction malleability: "A bug in the bitcoin software makes it possible for someone to use the bitcoin network to alter transaction details to make it seem like a sending of bitcoins to a bitcoin wallet did not occur when in fact it did occur. Since the transaction appears as if it has not proceeded correctly, the bitcoins may be resent. Mt Gox is working with the bitcoin core development team and others to mitigate this issue."On 17 February 2014, with all Mt. Gox withdrawals still halted and competing exchanges back in full operation, the company published another press release indicating the steps it claimed it was taking to address security issues. In an email interview with the Wall Street Journal, CEO Mark Karpelès refused to comment on increasing concerns among customers about the financial status of the exchange, did not give a definite date on which withdrawals would be resumed, and wrote that the exchange would impose "new daily and monthly limits" on withdrawals if and when they were resumed. A poll of 3,000 Mt. Gox customers by CoinDesk indicated that 68% of polled customers were still awaiting funds from Mt. Gox. The median waiting time was between one and three months, and 21% of poll respondents had been waiting for three months or more.On 20 February 2014, with all withdrawals still halted, Mt. Gox issued yet another statement, not giving any date for the resumption of withdrawals. A protest by two bitcoin enthusiasts outside the building that houses the Mt. Gox headquarters in Tokyo continued. Citing "security concerns", Mt. Gox moved its offices to a different location in Shibuya. Bitcoin prices quoted by Mt. Gox dropped to below 20% of the prices on other exchanges, reflecting the market's estimate of the unlikelihood of Mt. Gox paying its customers.On 23 February 2014, Mt. Gox CEO Mark Karpelès resigned from the board of the Bitcoin Foundation. The same day, all posts on the company's Twitter account were removed.On 24 February 2014, Mt. Gox suspended all trading, and hours later its website went offline, returning a blank page. A leaked alleged internal crisis management document claimed that the company was insolvent, after having lost 744,408 bitcoins in a theft which went undetected for years.Six other major bitcoin exchanges released a joint statement distancing themselves from Mt. Gox, shortly before Mt. Gox's website went offline.On 25 February 2014, Mt. Gox reported on its website that a "decision was taken to close all transactions for the time being", citing "recent news reports and the potential repercussions on Mt Gox's operations". Chief executive Mark Karpelès told Reuters that Mt. Gox was "at a turning point".From 1 February 2014 until the end of March, during the period of Mt. Gox problems, the value of bitcoin declined by 36%.The United States Department of Justice identified Alexander Vinnik, owner of the BTC-e bitcoin exchange, as an alleged key figure in the laundering of Mt. Gox's stolen bitcoins. == Bankruptcy; stolen bitcoin (2014–present) == On 28 February 2014, Mt. Gox filed in Tokyo for a form of bankruptcy protection from creditors called minji saisei (or civil rehabilitation) to allow courts to seek a buyer, reporting that it had liabilities of about 6.5 billion yen ($65 million, at the time), and 3.84 billion yen in assets.The company said it had lost almost 750,000 of its customers' bitcoins, and around 100,000 of its own bitcoins, totaling around 7% of all bitcoins, and worth around $473 million near the time of the filing. Mt. Gox released a statement saying, "The company believes there is a high possibility that the bitcoins were stolen," blamed hackers, and began a search for the missing bitcoins. Chief Executive Karpelès said technical issues opened up the way for fraudulent withdrawals. Mt. Gox also faced lawsuits from its customers.On 9 March 2014, Mt. Gox filed for bankruptcy protection in the US, to halt U.S. legal action temporarily by traders who alleged the bitcoin exchange operation was a fraud.On 20 March 2014, Mt. Gox reported on its website that it found 199999.99 bitcoins—worth around $116 million—in an old digital wallet used prior to June 2011. That brought the total number of bitcoins the firm lost down to 650,000, from 850,000.New evidence presented in April 2015 by Tokyo security company WizSec led them to conclude that "most or all of the missing bitcoins were stolen straight out of the Mt. Gox hot wallet over time, beginning in late 2011."On 14 April, Mt. Gox lawyers said that Karpelès would not appear for a deposition in a Dallas court, or heed a subpoena by FinCEN. On 16 April 2014, Mt. Gox gave up its plan to rebuild under bankruptcy protection, and asked a Tokyo court to allow it to be liquidated.In a 6 January 2015 interview, Kraken bitcoin exchange CEO Jesse Powell discussed being appointed by the bankruptcy trustee to assist in processing claims by the 127,000 creditors of Mt. Gox.CEO Karpelès was arrested in August 2015 by Japanese police and charged with fraud and embezzlement, and manipulating the Mt. Gox computer system to increase the balance in an account—this charge was not related to the missing 650,000 bitcoins. After he was interrogated, Japanese prosecutors accused him of misappropriating ¥315M ($2.6M) in bitcoin deposited into their trading accounts by investors at Mt. Gox, and moving it into an account he controlled, approximately six months before Mt. Gox failed in early 2014.By May 2016, creditors of Mt. Gox had claimed they lost $2.4 trillion when Mt. Gox went bankrupt, which they asked be paid to them. The Japanese trustee overseeing the bankruptcy said that only $91 million in assets had been tracked down to distribute to claimants, despite Mt. Gox having asserted in the weeks before it went bankrupt that it had more than $500 million in assets. The trustee's interim legal and accounting costs through that date, to be paid ultimately by creditors, were $5.5 million.In March 2018, the trustee Kobayashi said that enough BTC has been sold to cover the claims of creditors.On 14 March 2019, the Tokyo District Court found Karpelès guilty of falsifying data to inflate Mt. Gox's holdings by $33.5 million, for which he was sentenced to 30 months in prison, suspended for four years, meaning he will serve no time unless he commits additional offenses over the next four years. The Court acquitted Karpelès on a number of other charges, including embezzlement and aggravated breach of trust, based on its belief that Karpelès had acted without ill intent. Nonetheless, the verdict said Karpelès had inflicted "massive harm to the trust of his users" and there was "no excuse" for him to "abuse his status and authority to perform clever criminal acts." Karpelès issued a statement saying he was "happy to be judged not guilty" on the more serious charges and was discussing how to proceed with his lawyers regarding his conviction on the falsifying data charge.On 15 January 2021 Bloomberg News reported CoinLab Inc. had made an agreement with Nobuaki Kobayashi, the trustee to the Mt. Gox bankruptcy, and the Mt. Gox Investment Fund LP (MGIFLP), a unit of Fortress Investment Group. As much as 90% of the remaining Bitcoin tied up in bankruptcy proceedings would be offered to creditors.At the creditors meeting on 20 October 2021 it was announced that the Civil Rehabilitation Plan was accepted by 99% of the creditors (representing 83% of the total amount of voting rights) and that billions of dollars in Bitcoin would be provided as compensation. The plan was officially approved on 16 November 2021.On April 6, 2023, MtGox announced that the deadline for filing claims for damages had expired. Payments are promised to begin before October 31, 2023.On September 21, 2023, MtGox announced that the deadline for payments to be finalized had been pushed back one year, and that the new promised end date is October 31, 2024, although they may begin before the end of 2023 for creditors who have provided all necessary information in good order.As of 6 July 2022, a Japanese trustee of Mt. Gox is holding close to 142,000 Bitcoins. == See also == 2016 Bitfinex hack == References == == External links == Official website MtGox Co., Ltd. bankruptcy docket from the United States Courts Archive, Court Listener from Free Law Project
The DAO	The DAO was a digital decentralized autonomous organization and a form of investor-directed venture capital fund. After launching in April 2016 via a token sale, it became one of the largest crowdfunding campaigns in history, but it ceased activity after much of its funds were taken in a hack in June 2016. The DAO had an objective to provide a new decentralized business model for organizing both commercial and non-profit enterprises. It was instantiated on the Ethereum blockchain and had no conventional management structure or board of directors. The code of the DAO is open-source. In June 2016, users exploited a vulnerability in The DAO code to enable them to siphon off one-third of The DAO's funds to a subsidiary account. The Ethereum community controversially decided to hard-fork the Ethereum blockchain to restore approximately all funds to the original contract. This split the Ethereum blockchain into two branches, each with its own cryptocurrency, where the original unforked blockchain continued as Ethereum Classic.By September 2016, the value token of The DAO, known by the moniker DAO, was delisted from major cryptocurrency exchanges (such as Poloniex and Kraken). The DAO and had in effect become defunct. == History == The open source computer code behind the organization was written principally by Christoph Jentzsch, and released publicly on GitHub, where other contributors added to and modified the code. Simon Jentzsch, Christoph Jentzsch's brother, was also involved in the venture.The DAO was launched on 30 April 2016 with a website and a 28-day crowdsale to fund the organization.The token sale had raised more than US$34 million by 10 May 2016, and more than US$50 million-worth of Ether (ETH)—the digital value token of the Ethereum network—by 12 May, and over US$100 million by 15 May 2016. On 17 May 2016, the largest investor in the DAO held less than 4% of all DAO tokens and the top 100 holders held just over 46% of all DAO tokens. The fund's Ether value as of 21 May 2016 was more than US$150 million, from more than 11,000 investors.As of May 2016, The DAO had attracted nearly 14% of all Ether tokens issued to date.On 28 May 2016 the DAO tokens became tradable on various cryptocurrency exchanges.A paper published in May 2016 noted a number of security vulnerabilities associated with The DAO and recommended that investors in The DAO hold off from directing The DAO to invest in projects until the problems had been resolved. An Ethereum developer on GitHub pointed out a flaw relating to "recursive calls". On June 9 it was blogged about by Peter Vessenes, founder of the Blockchain Foundation. By June 14, fixes had been proposed and were awaiting approval by members of The DAO. On June 16, further attention was called to recursive call vulnerabilities by bloggers affiliated with the Initiative for CryptoCurrencies & Contracts (IC3).On June 17, 2016, the DAO was subjected to an attack exploiting a combination of vulnerabilities, including the one concerning recursive calls, that resulted in the transfer of 3.6 million Ether - around a third of the 11.5 million Ether that had been committed to The DAO - valued at the time at around $50M. The funds were moved into an account subject to a 28-day holding period under the terms of the Ethereum smart contract so were not actually gone. Members of The DAO and the Ethereum community debated what to do next, with some calling the attack unethical but valid, since it did not violate DAO rules as coded, while others called for the Ether to be re-appropriated and/or The DAO to be shut down. The DAO community manager, Griff Green, organized a volunteer group of coders known as The White Hat Group to recoup the funds in the other 500 wallets before they could also be hacked. Eventually on July 20, 2016, the Ethereum network was hard forked to move the funds in The DAO to a recovery address where they could be exchanged back to Ethereum by their original owners. However, some continued to use the original unforked Ethereum blockchain, now called Ethereum Classic. In September 2016, Poloniex de-listed DAO trading pairs, followed by Kraken in December 2016. == Operation == The DAO was a decentralized autonomous organization that exists as a set of contracts on the Ethereum blockchain, with no physical address or officials with formal authority. The theory underlying the DAO was that keeping operational power directly in the hands of owners, not delegated to managers, would ensure that invested funds would be used in the owners' best interests, thus solving the principal–agent problem.As an on-chain organization, The DAO claimed to be completely transparent, since everything was done by the code which anyone could see and audit. However, the complexity of the code base and the rapid deployment of the DAO meant that neither the coders, the auditors, nor the owners could ensure the intended behavior of the organization, with the eventual attacker finding an unexpected loophole.The DAO was intended to operate as "a hub that disperses funds (currently in Ether, the Ethereum value token) to projects". Investors receive voting rights by means of a digital share token; they vote on proposals submitted by contractors, and a group of curator volunteer make sure the projects are legal and the contractors properly identified before whitelisting them. The profits from an investment will flow back to their stakeholders as specified in an on-chain smart contract.The DAO did not hold the money of investors; instead, the investors owned DAO tokens that gave them rights to vote on potential projects. Anyone could pull out their funds by the time they first voted.The DAO's reliance on Ether allowed people to send their money to it from anywhere in the world without providing any identifying information.In order to provide an interface with real-world legal structures, the founders of The DAO established a Swiss-based company, "DAO.Link", registered in Switzerland as a limited liablity corporation (Société à responsabilité limitée, SARL), apparently co-founded by Slock.it and Neuchâtel-based digital currency exchange Bity SA. According to Jentzsch, DAO.Link was incorporated in Switzerland because local law allowed it to "take money from an unknown source as long as you know where it's going." == Marketing == In May 2016, TechCrunch described The DAO as "a paradigm shift in the very idea of economic organization. ... It offers complete transparency, total shareholder control, unprecedented flexibility, and autonomous governance."The group's logo featured a capital letter Đ. == Risks == In May 2016, the plan called for The DAO to invest Ether into ventures. It would back contractors and receive in return "clear payment terms" from contractors. The organizers promoted the DAO as providing investors with a return on their investment via those "clear payment terms" and they warned investors that there was a "significant risk" that the ventures funded by them may fail. The risks included unknown attack vectors and programming errors. Additional risks included the lack of legal precedents: it was unknown how governments and their regulatory agencies would treat The DAO's ventures and contracts. For example, legal systems might not acknowledge a corporate veil protecting investors from individual legal and financial liability for actions taken by The DAO and its contractors. It was unclear if the DAO was selling securities, which are highly regulated, and if so, what type of securities.DAO has a democratized organizational structure so that control can be spread among members, with no official leadership or regulation. Normally, there is no way to recover funds if a member mistakenly transfers cryptocurrency to the wrong wallet, including in case of fraud.Additionally, to function in the real world, contractors would likely need to convert the invested Ether into national currencies. In May 2016, attorney Andrew Hinkes said that those sales of Ether would likely depress its market value.The code behind The DAO had several safeguards against anyone capturing the voting rights of shareholders to win investments. However, this would not prevent fraudulent or over-optimistic proposals. A paper cited a "number of security vulnerabilities". == Proposals == Slock.it (a German Blockchain venture), and Mobotiq (a French electric vehicle start-up) were listed as seeking potential funding on the daohub.org website during the May "creation period". Both Jentzsch brothers were involved in Slock.it as well. == Regulation == On 25 July 2017, the U.S. Securities and Exchange Commission published a report on initial coin offerings (ICOs) and The DAO, examining "whether The DAO and associated entities and individuals violated federal securities laws with unregistered offers and sales of DAO Tokens in exchange for 'Ether,' a virtual currency." The SEC concluded that DAO tokens sold on the Ethereum blockchain were securities and therefore possible violations of U.S. securities laws. == References == == Further reading == Vessenes, Peter (18 June 2016). "Deconstructing The DAO Attack: A Brief Code Tour". DuPont, Quinn (2017). “Experiments in Algorithmic Governance: An ethnography of "The DAO," a failed Decentralized Autonomous Organization” (archive link). In Bitcoin and Beyond: The Challenges and Opportunities of Blockchains for Global Governance, edited by Malcolm Campbell-Verduyn. Routledge (in press).
Uniswap	Uniswap is a decentralized cryptocurrency exchange that uses a set of smart contracts (liquidity pools) to execute trades. It is an open source project and falls into the category of a DeFi product (Decentralized finance) because it uses smart contracts to facilitate trades. The protocol facilitates automated transactions between cryptocurrency tokens on the Ethereum blockchain through the use of smart contracts. As of October 2020, Uniswap was estimated to be the largest decentralized exchange and the fourth-largest cryptocurrency exchange overall by daily trading volume. == History == Uniswap was created on November 2, 2018 by Hayden Adams, a former mechanical engineer at Siemens.The Uniswap company received investments from business angel Ric Burton and venture capital firms, including Andreessen Horowitz, Paradigm Venture Capital, Union Square Ventures LLC and ParaFi. Uniswap’s average daily trading volume was US$220 million in October 2020. Traders and investors have utilized Uniswap because of its usage in decentralized finance (DeFi). == Overview == Uniswap is a decentralized finance protocol that is used to exchange cryptocurrencies and tokens; it is provided on blockchain networks that run open-source software. This is in contrast to cryptocurrency exchanges that are run by centralized companies. Changes to the protocol are voted on by the owners of a native cryptocurrency and governance token called UNI, and then implemented by a team of developers. Uniswap launched without the UNI token, and the token is not needed to trade on the exchange. Tokens were initially distributed to early users of the protocol. Each Ethereum address that had interacted with Uniswap before September 1, 2020 received the ability to claim 400 UNI tokens (worth approximately $1,400 at the time). The market capitalization for the UNI token is over US$6.6 billion as of February 2022. == Protocol == Uniswap acts as an automated market maker and uses liquidity pools to fulfill orders, instead of relying on a traditional market maker, with an aim to create more efficient markets. Individuals and bots—termed "liquidity providers"—provide liquidity to the exchange by adding a pair of tokens to a smart contract which can be bought and sold by other users according to the constant-product rule ϕ ( x , y ) = x y {\displaystyle \phi (x,y)=xy} . In return, liquidity providers are given a percentage of the trading fees earned for that trading pair. For each trade, a certain amount of tokens is removed from the pool for an amount of the other token, thereby changing the price. No fees are required to list tokens which allow a large amount of Ethereum tokens to be accessible and no registration is required for users. As open-source software, Uniswap's code can also be forked to create new exchanges. == References ==
Michael Saylor	null
Sam Bankman-Fried	Samuel Benjamin Bankman-Fried (born March 5, 1992), or SBF, is an American entrepreneur who was convicted of fraud and related crimes in November 2023. Bankman-Fried founded the FTX cryptocurrency exchange and was celebrated as "a kind of poster boy for crypto". At the peak of his success, he was ranked the 41st-richest American in the Forbes 400.The public persona of Bankman-Fried masked significant problems at FTX, and in November 2022 when evidence of potential fraud began to surface, depositors quickly withdrew their assets, forcing the company into bankruptcy. On December 12, 2022, Bankman-Fried was arrested in the Bahamas and extradited to the United States, where he was indicted on seven criminal charges including wire fraud, commodities fraud, securities fraud, money laundering, and campaign finance law violations.On November 2, 2023, in the case of United States v. Bankman-Fried, he was convicted of all seven counts of fraud, conspiracy, and money laundering. His sentencing, where experts say he faces decades in prison, is scheduled for March 28, 2024. == Early life and education == Bankman-Fried was born on March 5, 1992, in Stanford, California. He is the son of Barbara Fried and Joseph Bankman, both professors at Stanford Law School. His aunt Linda P. Fried is the dean of Columbia University Mailman School of Public Health. His younger brother, Gabriel Bankman-Fried (b. c. 1995), previously worked as a legislative assistant, Wall Street trader, and director of the non-profit Guarding Against Pandemics and its associated political action committee, which came under scrutiny by Federal investigators after it was discovered that much of the $35 million on its books had been stolen by his older brother, Sam, from Alameda Research accounts. Bankman-Fried attended Canada/USA Mathcamp, a summer program for mathematically talented high-school students. He attended high school at Crystal Springs Uplands School in Hillsborough, California. He graduated from the Massachusetts Institute of Technology in 2014 with a bachelor's degree in physics and a minor in mathematics. As an MIT student he lived in a coeducational group house called Epsilon Theta. == Career == In the summer of 2013, Bankman-Fried worked as an intern at Jane Street Capital, a proprietary trading firm, trading international ETFs. He returned there to work full-time after graduating from MIT.In September 2017, Bankman-Fried left Jane Street and moved to Berkeley, California, where he worked briefly at the Centre for Effective Altruism (CEA) as director of development from October to November 2017. In November 2017, following fund injections from billionaire computer programmer Jaan Tallinn and investor Luke Ding, Bankman-Fried and CEA's Tara Hedley (née Mac Aulay) co-founded the quantitative trading firm Alameda Research. As of 2021, Bankman-Fried owned approximately 90 percent of Alameda Research. In January 2018, Bankman-Fried organized an arbitrage trade, moving up to $25 million per day to take advantage of the higher price of bitcoin in Japan compared to the United States. After attending a cryptocurrency conference in Macau in late 2018, he moved to Hong Kong.Bankman-Fried founded the FTX cryptocurrency derivatives exchange in April 2019; it opened for business the following month. In September 2021, Bankman-Fried and the entire senior staff of FTX moved from Hong Kong to the Bahamas.Bankman-Fried was included on the 2021 list Forbes 30 Under 30, but was also included on Forbes 2023 Hall of Shame list, featuring ten picks the publication wishes it could take back.On December 8, 2021, Bankman-Fried, along with other industry executives, testified before the Committee on Financial Services about regulating the cryptocurrency industry. On May 12, 2022, it was disclosed that Emergent Fidelity Technologies Ltd., which was majority owned by Bankman-Fried, had bought 7.6 percent of Robinhood Markets stock. In a November 2022 affidavit before the Eastern Caribbean Supreme Court, and prior to his arrest, Bankman-Fried said he and FTX co-founder Gary Wang together borrowed over $546 million from Alameda Research in order to finance Emergent Fidelity Technologies' purchase of Robinhood Markets stock.In September 2022, it was reported that Bankman-Fried's advisors had offered on his behalf to help fund Elon Musk's purchase of Twitter. According to messages released as part of the lawsuit between Twitter and Musk during the latter's acquisition of Twitter, on April 25, 2022, investment banker Michael Grimes wrote that Bankman-Fried would be willing to commit up to $5 billion. No investment actually took place when Musk finalized the acquisition. Bankman-Fried invested $500 million in Anthropic and more than $500 million in venture capital firms, including $200 million in Sequoia Capital, itself an investor in FTX. Sequoia published a "glowing" profile of Bankman-Fried, which it subsequently removed after the solvency crisis at FTX.In July 2023, allegations emerged that Bankman-Fried had considered "purchasing" the island country of Nauru to use as a bunker in the event of an apocalyptic event, in what has been described as a "misguided and sometimes dystopian" project. === Views on charity and market regulation === Bankman-Fried has publicly stated he supports effective altruism, contending that he was pursuing "earning to give" as an "altruistic career." He claimed to make donations "not based on personal interest but on the projects that are proven by data to be the most effective at helping people," such as those that reduced existential risks like nuclear war, pandemics, artificial intelligence, and threats to American democracy.He was a member of Giving What We Can and donated around half of his Jane Street salary to charity. In June 2022, he signed the Giving Pledge; his name was removed from the list in December 2022 following his arrest.Bankman-Fried is the founder of Future Fund, whose team included Scottish philosopher and author William MacAskill, one of the founders of the effective altruism movement. After the collapse of FTX, all members of Future Fund simultaneously resigned. As of September 1, 2022, Future Fund stated it had committed around $160 million to 110 non-profits.The stated reason for FTX's relocation to the Bahamas was the friendly regulatory environment, and Bankman-Fried openly discussed paying off the country's $9 billion national debt. In November 2022, Bankman-Fried participated in an interview with Vox writer Kelsey Piper over Twitter private messages. He said that his and his company's advocacy for crypto regulation was not sincere and was "just PR", adding that regulators "make everything worse" and "don't protect customers at all". On his "ethics stuff", he agreed it was "mostly a front" and described ethics as a "dumb game we woke Westerners play where we say all the right shibboleths and so everyone likes us". He later claimed to have been referring to ESG, CSR, and greenwashing, as opposed to effective altruism, bed nets, and pandemic prevention. === Bankruptcy of FTX === In November 2022, Binance CEO Changpeng Zhao revealed on Twitter that his firm intended to sell its holdings of FTT, FTX's token. Binance received $529 million worth of FTT as part of a sale of its equity in FTX in 2021. Zhao published his tweet soon after a report from CoinDesk stating that the bulk of the holdings of Alameda, Bankman-Fried's trading firm, were in FTT. Bloomberg and TechCrunch reported that any sale by Binance would likely have an outsized impact on FTT's price because of the token's low trading volume. The announcement by Zhao of the pending sale and disputes between Zhao and Bankman-Fried on Twitter led to a decline in the price of FTT and other cryptocurrencies. Shortly before, Zhao had criticized Bankman-Fried's lobbying efforts.On November 8, Zhao announced that Binance had entered into a non-binding agreement to purchase FTX due to a liquidity crisis at FTX. Zhao stated that Binance would complete due diligence soon and that all crypto exchanges should avoid using tokens as collateral. He also wrote that he expected FTT to be "highly volatile in the coming days as things develop". On the day of the announcement, FTT lost 80 percent of its value. On November 9, The Wall Street Journal reported that Binance had decided not to acquire FTX. Binance cited reports of FTX's mishandling of customer funds and pending investigations of FTX as the reasons the firm would not pursue the deal. Amid the crisis, Bankman-Fried was no longer a billionaire, according to the Bloomberg Billionaires Index. The very next day, Bloomberg reported that the Securities and Exchange Commission and Commodity Futures Trading Commission were investigating FTX and the nature of its connections to Bankman-Fried's other holdings.On November 11, 2022, FTX, Alameda Research, and more than 130 associated legal entities declared bankruptcy.Anonymous sources cited by Reuters stated that, earlier in 2022, Bankman-Fried had transferred at least $4 billion from FTX to Alameda Research without any disclosure to the companies' insiders or the public. The sources said that the money transferred included customer funds and that it was ostensibly backed by FTT and shares in Robinhood. An anonymous source cited by The Wall Street Journal stated that Bankman-Fried had disclosed that Alameda owed FTX about $10 billion, which was secured through customer funds held by FTX when FTX had, at the time, $16 billion in customer assets. According to anonymous sources cited by The Wall Street Journal, the Chief Executive of Alameda Research, Caroline Ellison, told employees that Bankman-Fried was aware that FTX had lent its customers' money to Alameda to help it meet its liabilities.Bankman-Fried resigned as CEO of FTX on November 11, 2022, and was immediately replaced by John J. Ray III, who from 2004 to 2009 had chaired the effort to recover Enron assets for creditors through litigation against numerous banks in the Enron bankruptcy case. FTX and related entities filed for bankruptcy in Delaware on the same day.One day after FTX declared bankruptcy, on November 12, Bankman-Fried was interviewed by the Royal Bahamas Police Force. On November 17, Ray stated in a sworn declaration submitted in bankruptcy court that according to the firm's records, Alameda Research had lent $1 billion to Bankman-Fried, adding, "Never in my career have I seen such a complete failure of corporate controls and such a complete absence of trustworthy financial information."In the testimony Bankman-Fried had prepared to present in December 2022 to the House Financial Services Committee, he maintained that "[FTX] is solvent" but he was "pressured" by FTX general counsel and former partner at the Sullivan & Cromwell law firm, Ryne Miller, to declare bankruptcy. He also implied that the managing team and the law firms managing the bankruptcy were using the Enron precedent in an effort to reap inordinately large amounts of fees from the process. After his arrest and imprisonment, he did not testify in Congress; John J. Ray III testified instead. == Arrest and charges == On December 12, 2022, Bankman-Fried was arrested shortly after 6:00 p.m. in his apartment complex in New Providence, Bahamas by the Royal Bahamas Police Force, with the expectation that he would be extradited to the United States to face trial. The arrest took place the day before Bankman-Fried was scheduled to appear before the U.S. House Committee on Financial Services, but Forbes obtained and published his prepared testimony.Earlier that day, the Southern District of New York had charged Bankman-Fried with "wire fraud, wire fraud conspiracy, securities fraud, securities fraud conspiracy, and money laundering". Philip Davis, the Prime Minister of the Bahamas, commented on the arrest that "the Bahamas and the United States have a shared interest in holding accountable all individuals associated with FTX who may have betrayed the public trust and broken the law ... [W]hile the United States is pursuing criminal charges against SBF individually, the Bahamas will continue its own regulatory and criminal investigations into the collapse of FTX". Braden Perry, a former senior trial lawyer at the Commodity Futures Trading Commission, opined that a conviction on any of the charges might result in a prison sentence of years or decades.After being held at Fox Hill Prison in Nassau for ten days, Bankman-Fried consented to his extradition from the Bahamas to the United States to face charges. He was allowed to remain free on a $250 million bond, the largest such bond ever set in an American criminal proceeding. Among the conditions was that he would stay at his parents' home in California.On January 3, 2023, Bankman-Fried pled "not guilty" to fraud and the other charges.On February 1, 2023, the judge presiding over his case, Judge Lewis Kaplan, tightened the bail conditions and forbade Bankman-Fried from contacting current or former employees of FTX without attorneys present. The restriction was imposed as Judge Kaplan considered his contact with a potential witness as a "material threat of inappropriate contact with prospective witnesses", and intimated Bankman-Fried might deserve to be jailed pending trial.Four additional criminal charges levied against Bankman-Fried were announced on February 23, 2023, primarily focused on his making "more than 300 illegal political donations." A March 2023 indictment accused Bankman-Fried and others that they had "directed and caused the transfer" of at least $40 million in cryptocurrency to Chinese government officials, in order to unfreeze accounts of Alameda Research. In July, prosecutors dropped a campaign finance charge filed against him due to treaty obligations to the Bahamas created by his extradition.In a separate illegal campaign finance indictment in August, Bankman-Fried was accused of using $100 million in stolen funds of FTX customers towards 2022 U.S. elections campaign contributions. === Pre-sentencing incarceration === Prior to August 11, 2023, Bankman-Fried was out on bail and living with his parents under court ordered restrictions. On July 26, 2023, prosecutors alleged witness tampering after Bankman-Fried gave a reporter personal writings of former Alameda Research CEO Caroline Ellison. Three weeks later, on August 11, after Judge Kaplan concluded that witness tampering had likely occurred, he revoked Bankman-Fried's bail; Bankman-Fried was led from the courtroom in handcuffs and remanded into custody at the Metropolitan Detention Center, Brooklyn.On August 22, 2023, Bankman-Fried's counsel averred that his client was not being provided a vegan diet and that his medications for ADHD and depression were running low. He added that Bankman-Fried could not prepare for the trial subsisting on bread, water, and peanut butter. By November it was reported he had access to a vegetarian diet, had access to prescription drugs, and that he was participating in the "mack" economy by buying packets of mackerel from the prison commissary and exchanging them for services from other prisoners, such as a hair-cut. == First trial == The trial began on October 3, 2023, at the Manhattan federal court, presided over by Judge Lewis Kaplan. Bankman-Fried faced seven counts of fraud and conspiracy.The Guardian summarized the trial as a question of "whether Bankman-Fried is a crypto criminal mastermind or just an unlucky 'math nerd'". Bankman-Fried was accused of having "stole[n] billions from thousands of people" by funnelling customers' money from FTX into Alameda to fund investments, loan repayments, real estate, and political donations. The defense, on the other hand, told the story of a young but earnest entrepreneur critically out of his depth. Bankman-Fried, they said, worked 12 to 22 hours a day, "didn't drink or party", and wanted to fund more work on pandemic prevention. A series of mistakes from him and his inexperienced executive team, a devastating market crash, and adversarial action from external parties caused his companies to spiral into bankruptcy. But at no point, they insisted, was there any intention to commit fraud.Over a dozen witnesses testified for the prosecution, including three FTX executives as part of plea deals. Nearly all the testimony for the defense was provided by the defendant, with small contributions from a risk management expert and a Bahamian lawyer.The case revolved largely around two ways that Alameda was able to access the funds of other FTX customers. The first was the line of credit Alameda had on the exchange. A credit line is a relatively common facility that enables an entity to function more efficiently as a liquidity provider, and margin traders on FTX were generally allowed to borrow from one another and do as they pleased with the borrowed funds. However, Alameda's credit line was "essentially unlimited", and it was exempt from posting collateral on the exchange to formally secure the borrows. Senior engineers testified that they had added these features at the direction of their CEO. Bankman-Fried contended that he had merely requested something that would prevent erroneous liquidation. He was not aware of the specific solution implemented, he said, although he was aware that Alameda ultimately borrowed "around $2 billion" this way.Bankman-Fried also denied knowledge of a crucial part of the second way that Alameda accessed customer funds. Before FTX had a bank account, it had used Alameda and other payment processors to receive fiat deposits from customers. "What I believed is that either the funds were just being held in a bank account and not used or moved, or that they were being sent to FTX in one way or another," Bankman-Fried testified. He assumed that if Alameda had been spending the funds, that would have been reflected as a borrow on Alameda's main account on FTX. It wasn't until October or November 2022, he claimed, that he finally confirmed otherwise. The main Alameda account was not tracking those borrows. And Alameda had taken $8 billion. Other FTX executives conceded that "it seemed like he might not know" exactly how these funds were being processed and that while FTX's systems were tracking this liability, it was not displayed on the admin user's dashboard. But they also emphasized that ultimately at both businesses, Bankman-Fried called the shots.Much attention was given to the contrast between Bankman-Fried's public statements about his companies and the private realities. For example, on November 8, 2022, he had tweeted, "FTX is fine. Assets are fine." One FTX executive said these statements were false after first describing them to prosecutors as true but "misleading" because Bankman-Fried had been careful to talk solvency rather than liquidity. Misleading but technically true statements were a common theme. Bankman-Fried maintained, for instance, that he had never said Alameda was treated the same as other customers in all respects, only that Alameda was not front-running other customers. He also claimed to have only skimmed the "dishonest" balance sheets that Alameda's CEO sent to lenders and the defense made a great effort to demonstrate her autonomy in the role, the prime example being her refusal to follow Bankman-Fried's advice to hedge against a market downturn. === End of first trial === The trial ended on November 2, 2023, with the jury pronouncing Bankman-Fried guilty on all seven counts. The sentencing hearing is scheduled for March 28, 2024. Federal criminal court sentencing experts speculated on the potential amount of prison time likely to be meted. == Second trial == A second trial, on five charges including bank fraud and bribery, was originally scheduled for early March 2024. These charges were brought by federal prosecutors after Bankman-Fried was extradited from the Bahamas in December 2022. Bankman-Fried had asked for these charges to be dismissed because they were not part of the extradition agreement with Bahamanian authorities, or alternatively he requested that they be resolved under a separate trial. Prosecutors subsequently decided not to proceed in the interest of the victims, who wanted a quicker resolution to the first trial's sentencing phase. Furthermore, a second trial would not affect how much time Bankman-Fried could face in prison under recommended federal guidelines. == Donations == === Politics === ==== 2020 and earlier ==== Bankman-Fried's only campaign finance activity prior to 2019 was a $1,000 contribution in 2010 to Michael Bennet. For the 2020 U.S. elections, he contributed $5.2 million to two super PACs that supported the Joe Biden 2020 presidential campaign. Bankman-Fried was the second-largest individual donor to Biden in the 2020 election cycle, after Michael Bloomberg. ==== 2021–2022 ==== Contributions were made to members of both U.S. political parties. In 2022, Bankman-Fried provided initial financial support for Protect Our Future PAC. Protect Our Future was launched as a political action committee of the Democratic Party with $10 million in initial funding aiming to support "lawmakers who play the long game on policymaking in areas like pandemic preparedness and planning", according to Politico. Bankman-Fried donated $27 million in total to this PAC.Donations to Republican Party campaigns in the 2021–22 cycle have been estimated at $262,200, including donations to senators Susan Collins of Maine, Mitt Romney of Utah, Lisa Murkowski of Alaska, and Ben Sasse of Nebraska. Journalist Matthew Kassel says that Bankman-Fried had often donated to politicians who cultivate good Israel–United States relations but concluded "it is unclear if his backing of pro-Israel candidates was coincidental or motivated by any personal interest in Middle East policy."Bankman-Fried has claimed that he also donated large amounts of money to Republicans through dark money channels. ==== 2022 U.S. midterm elections ==== Bankman-Fried was the second-largest individual donor to Democratic causes for the 2022 U.S. elections, with total donations of $39.8 million, only behind George Soros, of which $27 million was given to the Protect Our Future PAC. Additional recipients included The Next 50 PAC, Guarding Against Pandemics PAC, and the leadership PAC for Brendan Boyle. Bankman-Fried said in February 2022 that his political contributions were not aimed at influencing his policy goals for the cryptocurrency ecosystem; however, FTX was circulating a list of suggestions to policymakers at the time. He said in an interview that he would prefer the Commodity Futures Trading Commission take a larger role in regulating and guiding the crypto industry. According to The New York Times, the CFTC has a reputation for favoring relatively relaxed regulations for the industry when contrasted with other regulators like the Securities and Exchange Commission.Bankman-Fried pushed for regulations via the proposed Digital Commodities Consumer Protection Act (DCCPA) by extensively lobbying Congress, which was perceived as being favorable to FTX but harmful to the broader industry, especially its decentralized finance competitors. In May 2022, Bankman-Fried stated that he planned to spend "north of $100 million" in the 2024 presidential election with a "soft ceiling" of $1 billion. In October 2022, he walked back his pledged spending, calling it a "dumb quote on my part". However, in Going Infinite, Michael Lewis revealed that Bankman-Fried had begun to investigate the legality of directly paying Donald Trump not to run for president in 2024, with Trump's team allegedly giving a potential figure of $5 billion.In the aftermath of the FTX scandal, recipients of Bankman-Fried's and other FTX executives' political campaign contributions have been donating equal amounts to charitable organizations. Elected officials doing so include Senator Kirsten Gillibrand, as well as Representatives Chuy García and Kevin Hern. A spokesperson for former Texas gubernatorial candidate Beto O'Rourke said that his campaign had received a $1 million donation from Bankman-Fried in October 2022, but returned the funds in early November, prior to the election. === Pandemic prevention contributions and related controversy === Bankman-Fried and his younger brother, Gabriel, contributed toward pandemic prevention initiatives, according to an investigative report by The Washington Post. One funding recipient was the Guarding Against Pandemics PAC, founded by Gabriel.On May 15, 2022, FTX announced it had donated $18 million to support "TOGETHER Trial," a private, international, research consortium conducting clinical trials to test existing drugs as treatments for various conditions, including COVID-19.On July 20, 2023, an Insiders Avoidance Complaint was filed against Bankman-Fried and three former FTX/Alameda senior executives seeking to recover "hundreds of millions of dollars that Defendants misappropriated." The plaintiffs were FTX Trading Ltd., Alameda Research LLC, Alameda Research Ltd., North Dimension Inc., Cottonwood Grove Ltd., and Realm Shires, Inc. Their complaint stated that Guarding Against Pandemics—which received $35 million from Bankman-Fried between October 2021 and May 2022—and its associated political action committee "needless to say, did nothing to prevent pandemics." === Attempts to recoup donations === In December 2022, FTX's new management commenced efforts to "claw back" donations that had been made to politicians, celebrities, and charities as part of its bankruptcy proceedings. The company announced that it "intends to...require the return of such payments, with interest accruing from the date any action is commenced." Reports on this development included the assessment that "clawing back payments made to politicians and charities is likely to be one of the easier parts of the bankruptcy process," on the basis of U.S. legislation that presumes "payments or transfers made within 90 days of bankruptcy to be preferential if they result in a creditor getting more than it would have been entitled to at the end of the bankruptcy process," with the caveat that a "clawback can attempt to recover the difference in the payments."As of April 2023, $7.3 billion of the original $8 billion in missing funds had been recuperated in liquid assets. While an anonymous bidder reportedly valued the remaining portfolio at "at least $2 billion", Bloomberg's Matt Levine noted that "'We lucked into enough money to pay everyone back' is not a legal defense to fraud".In October 2023, FTX and its affiliated debtors revealed a proposed settlement of customer-property disputes, set to be presented for approval to the competent bankruptcy court. Accounting for both priority and non-priority claims against FTX, the settlement's parties offered their estimate that customers of FTX.com and FTX US would receive, collectively, over 90% of distributable value worldwide. == Personal life == Bankman-Fried is vegan. He was raised in a Jewish family. As of mid-2021, it was reported that he lived with approximately ten roommates in a five-bedroom Bahamian penthouse bought by co-CEO of FTX Ryan Salame. After FTX's collapse, the penthouse was put up for sale for close to $40 million.Alameda Research CEO Caroline Ellison was romantically involved with Bankman-Fried until their final split on April 15, 2022. While testifying against him in court in October 2023, she claimed that his hairstyle and clothes were part of a "well calculated" image that he tried to project. She stated that Bankman-Fried believed he had received higher bonuses while working at Jane Street because of his hair and used his appearance as "an important part" of FTX's "narrative and image." In court, Bankman-Fried appeared wearing a gray suit with hair trimmed down.Bankman-Fried once played the video game League of Legends while on a call attempting to secure an investment from Sequoia Capital. An article in the Financial Times characterized Bankman-Fried's "win ratios" in League of Legends as "average-to-bad".Τhroughout the recent developments, Bankman-Fried's parents have stood by him, writing in a December 2022 letter, around the time of the arrest, "You are innocent." In an e-mail to The New Yorker, his mother, Barbara Fried, denounced the actions of the prosecution and the bankruptcy team as "McCarthyite" and a "relentless pursuit of total destruction," which is enabled by "a credulous public." After being jailed, Bankman-Fried's parents have taken turns traveling every Tuesday from California to be with him at the Brooklyn jail. == Notes == == References == == External links == Appearances on C-SPAN
USI Tech	USI Tech Limited (also known as United Software Intelligence, or stylised as USI-TECH) was a Dubai-based cryptocurrency and forex platform trading provider, suspected to be a high-yield investment program and a Ponzi scheme. Prior to going offline with its users' funds, USI-Tech moved its website from a .com top-level domain, to a .io domain, while also appearing on a number of mirror domains. Joseph Rotunda, Director of the Enforcement Division at the Texas State Securities Board, estimates that the scammers were able to extract hundreds of millions of dollars from all over the world. == Promoters == Based on reports from Engadget, USI was initially promoted by Lee Oakey, Kerry Stockton, Rodney Burton, and Michael Faust. Oakey and Stockton are British, and currently live in Australia. Burton (49, in 2018), also known as "Bitcoin Rodney", was known for purchasing a $350,000 Lamborghini Huracan from Lamborghini Newport Beach in Costa Mesa, California, using Bitcoin. Burton was released from jail in 2010 after serving five years for drug dealing.Dan Putnam, who identifies as the CEO of R&D Global, a suspected USI parent company, was also seen boasting that a mere $40 investment can grow to US$10 million in just 18 months at Eyeline Trading. Eyeline's homepage was redirected to USI Tech for a brief period, before also going offline. R&D Global is registered as a limited liability company in Putnam's home state of Utah under the name of Richard Theodore Putnam. == Related companies == === Eyeline Trading === As of March 2019, a domain belonging to USI Tech was redirected to Eyeline Trading, another company claiming to be a cryptocurrency and forex platform trading provider. The redirect suggests that the owners of the original website have relaunched the ponzi scheme through Eyeline Trading, following USI Tech's exposure to law enforcement. === Wealthboss === Eyeline Trading collapsed following non-payment, and was subsequently rebranded to WealthBoss after British Columbia Securities Commission issued a cautionary notice against dealing with Eyeline. === R&D Global === According to Engadget, both Eyeline and WealthBoss listed R&D Global as a parent company. == History == On 20 December 2017, the Texas State Securities Board issued an emergency cease and desist order as neither USI-Tech nor the sales agents, Clifford Thomas and Michael Rivera, were registered to sell securities in Texas. On 21 December 2017, the Government of New Brunswick issued a consumer alert against investing at USI-Tech, and advised consumers to contact the Commission if approached about investing in the company. On 12 January 2018, the Attorney General of Guam issued a statement advising people to exercise caution when investing at USI Tech. On 26 January 2018, the Government of Saskatchewan issued a Cease Trade Order, and requested anyone contacted by USI-TECH to inform the Financial and Consumer Affairs Authority of Saskatchewan. On 9 April 2018, the Spanish financial regulator Comisión Nacional del Mercado de Valores added USI-Tech to its warning list of unauthorised firms and entities. On 16 August 2018, the Financial Markets Authority of New Zealand updated its warning list to include USI Tech on basis that it is offering financial services and products to residents of New Zealand without authorization, while also warning that the operators have the characteristics of a scam. == See also == Bitconnect OneCoin PlusToken == References == == External links == Official website
History of bitcoin	Bitcoin is a cryptocurrency, a digital asset that uses cryptography to control its creation and management rather than relying on central authorities. Originally designed as a medium of exchange, Bitcoin is now primarily regarded as a store of value. The history of bitcoin started with its invention and implementation by Satoshi Nakamoto, who integrated many existing ideas from the cryptography community. Over the course of bitcoin's history, it has undergone rapid growth to become a significant store of value both on- and offline. From the mid-2010s, some businesses began accepting bitcoin in addition to traditional currencies. == Background == Prior to the release of bitcoin, there were a number of digital cash technologies, starting with the issuer-based ecash protocols of David Chaum and Stefan Brands. The idea that solutions to computational puzzles could have some value was first proposed by cryptographers Cynthia Dwork and Moni Naor in 1992. The idea was independently rediscovered by Adam Back who developed hashcash, a proof-of-work scheme for spam control in 1997. The first proposals for distributed digital scarcity-based cryptocurrencies were Wei Dai's b-money and Nick Szabo's bit gold. Hal Finney developed reusable proof of work (RPOW) using hashcash as its proof of work algorithm.In the bit gold proposal which proposed a collectible market-based mechanism for inflation control, Nick Szabo also investigated some additional aspects including a Byzantine fault-tolerant agreement protocol based on quorum addresses to store and transfer the chained proof-of-work solutions, which was vulnerable to Sybil attacks, though. == Creation == On the 18th of August 2008, the domain name bitcoin.org was registered. Later that year, on 31 October, a link to a paper authored by Satoshi Nakamoto titled Bitcoin: A Peer-to-Peer Electronic Cash System was posted to a cryptography mailing list. This paper detailed methods of using a peer-to-peer network to generate what was described as "a system for electronic transactions without relying on trust". On 3 January 2009, the bitcoin network came into existence with Satoshi Nakamoto mining the genesis block of bitcoin (block number 0), which had a reward of 50 bitcoins. Embedded in the genesis block was the text: The Times 03/Jan/2009 Chancellor on brink of second bailout for banks The text refers to a headline in The Times published on 3 January 2009. This note has been interpreted as both a timestamp of the genesis date and a derisive comment on the instability caused by fractional-reserve banking.: 18 The first open source bitcoin client was released on 9 January 2009, hosted at SourceForge.One of the first supporters, adopters, contributors to bitcoin and receiver of the first bitcoin transaction was programmer Hal Finney. Finney downloaded the bitcoin software the day it was released, and received 10 bitcoins from Nakamoto in the world's first bitcoin transaction on 12 January 2009 (bloc 170). Other early supporters were Wei Dai, creator of bitcoin predecessor b-money, and Nick Szabo, creator of bitcoin predecessor bit gold.In the early days, Nakamoto is estimated to have mined 1 million bitcoins. Before disappearing from any involvement in bitcoin, Nakamoto in a sense handed over the reins to developer Gavin Andresen, who then became the bitcoin lead developer at the Bitcoin Foundation, the 'anarchic' bitcoin community's closest thing to an official public face. === Satoshi Nakamoto === "Satoshi Nakamoto" is presumed to be a pseudonym for the person or people who designed the original bitcoin protocol in 2008 and launched the network in 2009. Nakamoto was responsible for creating the majority of the official bitcoin software and was active in making modifications and posting technical information on the bitcoin forum. There has been much speculation as to the identity of Satoshi Nakamoto with suspects including Dai, Szabo, and Finney – and accompanying denials. The possibility that Satoshi Nakamoto was a computer collective in the European financial sector has also been discussed.Investigations into the real identity of Satoshi Nakamoto were attempted by The New Yorker and Fast Company. The New Yorker's investigation brought up at least two possible candidates: Michael Clear and Vili Lehdonvirta. Fast Company's investigation brought up circumstantial evidence linking an encryption patent application filed by Neal King, Vladimir Oksman and Charles Bry on 15 August 2008, and the bitcoin.org domain name which was registered 72 hours later. The patent application (#20100042841) contained networking and encryption technologies similar to bitcoin's, and textual analysis revealed that the phrase "... computationally impractical to reverse" appeared in both the patent application and bitcoin's whitepaper. All three inventors explicitly denied being Satoshi Nakamoto.In May 2013, Ted Nelson speculated that Japanese mathematician Shinichi Mochizuki is Satoshi Nakamoto. Later in 2013 the Israeli researchers Dorit Ron and Adi Shamir pointed to Silk Road-linked Ross William Ulbricht as the possible person behind the cover. The two researchers based their suspicion on an analysis of the network of bitcoin transactions. These allegations were contested and Ron and Shamir later retracted their claim.Nakamoto's involvement with bitcoin does not appear to extend past mid-2010. In April 2011, Nakamoto communicated with a bitcoin contributor, saying that he had "moved on to other things".Stefan Thomas, a Swiss coder and active community member, graphed the time stamps for each of Nakamoto's 500-plus bitcoin forum posts; the resulting chart showed a steep decline to almost no posts between the hours of 5 a.m. and 11 a.m. Greenwich Mean Time. Because this pattern held true even on Saturdays and Sundays, it suggested that Nakamoto was asleep at this time, and the hours of 5 a.m. to 11 a.m. GMT are midnight to 6 a.m. Eastern Standard Time (North American Eastern Standard Time). Other clues suggested that Nakamoto was British: A newspaper headline he had encoded in the genesis block came from the UK-published newspaper The Times, and both his forum posts and his comments in the bitcoin source code used British English spellings, such as "optimise" and "colour".An Internet search by an anonymous blogger of texts similar in writing to the bitcoin whitepaper suggests Nick Szabo's "bit gold" articles as having a similar author. Nick denied being Satoshi, and stated his official opinion on Satoshi and bitcoin in a May 2011 article.In a March 2014 article in Newsweek, journalist Leah McGrath Goodman doxed Dorian S. Nakamoto of Temple City, California, saying that Satoshi Nakamoto is the man's birth name. Her methods and conclusion drew widespread criticism.In June 2016, the London Review of Books published a piece by Andrew O'Hagan about Nakamoto.After a May 2020 YouTube documentary pointed to Adam Back as the creator of bitcoin, widespread discussion ensued. The real identity of Satoshi Nakamoto still remains a matter of dispute. == Growth == === 2010 === The first notable retail transaction involving physical goods was paid on May 22, 2010, by exchanging 10,000 mined BTC for two pizzas delivered from a local pizza restaurant in Florida, marking May 22 as the Bitcoin Pizza Day for crypto-fans. At the time, a transaction's value was typically negotiated on the Bitcoin forum.On 6 August 2010, a major vulnerability in the bitcoin protocol was spotted. While the protocol did verify that a transaction's outputs never exceeded its inputs, a transaction whose outputs summed to more than 2 64 {\displaystyle 2^{64}} would overflow, permitting the transaction author to create arbitrary amounts of bitcoin. On 15 August, the vulnerability was exploited; a single transaction spent 0.5 bitcoin to send just over 92 billion bitcoins ( 2 63 {\displaystyle 2^{63}} satoshis) to each of two different addresses on the network. Within hours, the transaction was spotted, the bug was fixed, and the blockchain was forked by miners using an updated version of the bitcoin protocol. Since the blockchain was forked below the problematic transaction, the transaction no longer appears in the blockchain used by the Bitcoin network today. This was the only major security flaw found and exploited in bitcoin's history. === 2011 === Based on bitcoin's open-source code, other cryptocurrencies started to emerge.The Electronic Frontier Foundation, a non-profit group, started accepting bitcoins in January 2011, then stopped accepting them in June 2011, citing concerns about a lack of legal precedent about new currency systems. The EFF's decision was reversed on 17 May 2013 when they resumed accepting bitcoin.In May 2011, bitcoin payment processor, BitPay was founded to provide mobile checkout services to companies wanting to accept bitcoins as a form of payment. In June 2011, WikiLeaks and other organizations began to accept bitcoins for donations. === 2012 === In January 2012, bitcoin was featured as the main subject within a fictionalized trial on the CBS legal drama The Good Wife in the third-season episode "Bitcoin for Dummies". The host of CNBC's Mad Money, Jim Cramer, played himself in a courtroom scene where he testifies that he does not consider bitcoin a true currency, saying, "There's no central bank to regulate it; it's digital and functions completely peer to peer".In September 2012, the Bitcoin Foundation was launched to "accelerate the global growth of bitcoin through standardization, protection, and promotion of the open source protocol". The founders were Gavin Andresen, Jon Matonis, Mark Karpelès, Charlie Shrem, and Peter Vessenes.In October 2012, BitPay reported having over 1,000 merchants accepting bitcoin under its payment processing service. In November 2012, WordPress started accepting bitcoins. === 2013 === In February 2013, the exchange Coinbase reported selling US$1 million worth of bitcoins in a single month at over $22 per bitcoin. The Internet Archive announced that it was ready to accept donations as bitcoins and that it intends to give employees the option to receive portions of their salaries in bitcoin currency.In Charles Stross's 2013 science fiction novel Neptune's Brood, the universal interstellar payment system is known as "bitcoin" and operates using cryptography. Stross later blogged that the reference was intentional, saying "I wrote Neptune's Brood in 2011. Bitcoin was obscure back then, and I figured had just enough name recognition to be a useful term for an interstellar currency: it'd clue people in that it was a networked digital currency."In March, the bitcoin transaction log, called the blockchain, temporarily split into two independent chains with differing rules on how transactions were accepted. For six hours two bitcoin networks operated at the same time, each with its own version of the transaction history. The core developers called for a temporary halt to transactions, sparking a sharp sell-off. Normal operation was restored when the majority of the network downgraded to version 0.7 of the bitcoin software. The Mt. Gox exchange briefly halted bitcoin deposits and the exchange rate briefly dipped by 23% to $37 as the event occurred before recovering to previous level of approximately $48 in the following hours. In the US, the Financial Crimes Enforcement Network (FinCEN) established regulatory guidelines for "decentralized virtual currencies" such as bitcoin, classifying American bitcoin miners who sell their generated bitcoins as Money Service Businesses (or MSBs), that may be subject to registration and other legal obligations.In April, payment processors BitInstant and Mt. Gox experienced processing delays due to insufficient capacity resulting in the bitcoin exchange rate dropping from $266 to $76 before returning to $160 within six hours. Bitcoin gained greater recognition when services such as OkCupid and Foodler began accepting it for payment. In April 2013, Eric Posner, a law professor at the University of Chicago, stated that "a real Ponzi scheme takes fraud; bitcoin, by contrast, seems more like a collective delusion."On 15 May 2013, the US authorities seized accounts associated with Mt. Gox after discovering that it had not registered as a money transmitter with FinCEN in the US.On 17 May 2013, it was reported that BitInstant processed approximately 30 percent of the money going into and out of bitcoin, and in April alone facilitated 30,000 transactions,On 23 June 2013, it was reported that the US Drug Enforcement Administration listed 11.02 bitcoins as a seized asset in a United States Department of Justice seizure notice pursuant to 21 U.S.C. § 881. This was the first time a government agency was reported to have seized bitcoin.In July 2013, a project began in Kenya linking bitcoin with M-Pesa, a popular mobile payments system, in an experiment designed to spur innovative payments in Africa. During the same month the Foreign Exchange Administration and Policy Department in Thailand stated that bitcoin lacks any legal framework and would therefore be illegal, which effectively banned trading on bitcoin exchanges in the country.On 6 August 2013, Federal Judge Amos Mazzant of the Eastern District of Texas of the Fifth Circuit ruled that bitcoins are "a currency or a form of money" (specifically securities as defined by Federal Securities Laws), and as such were subject to the court's jurisdiction, and Germany's Finance Ministry subsumed bitcoins under the term "unit of account" – a financial instrument – though not as e-money or a functional currency, a classification nonetheless having legal and tax implications.In September 2013, Chinese Govt. banned financial institution from trading in Bitcoin fearing a risk of money laundering.In October 2013, the FBI seized roughly 26,000 BTC from website Silk Road during the arrest of alleged owner Ross William Ulbricht. Two companies, Robocoin and Bitcoiniacs launched the world's first bitcoin ATM on 29 October 2013 in Vancouver, BC, Canada, allowing clients to sell or purchase bitcoin currency at a downtown coffee shop. Chinese internet giant Baidu had allowed clients of website security services to pay with bitcoins.In November 2013, the University of Nicosia announced that it would be accepting bitcoin as payment for tuition fees, with the university's chief financial officer calling it the "gold of tomorrow". During November 2013, the China-based bitcoin exchange BTC China overtook the Japan-based Mt. Gox and the Europe-based Bitstamp to become the largest bitcoin trading exchange by trade volume.In December 2013, Overstock.com announced plans to accept bitcoin in the second half of 2014. On 5 December 2013, the People's Bank of China prohibited Chinese financial institutions from using bitcoins. After the announcement, the value of bitcoins dropped, and Baidu no longer accepted bitcoins for certain services. Buying real-world goods with any virtual currency had been illegal in China since at least 2009.On 4 December 2013, Alan Greenspan referred to it as a "bubble". === 2014 === In January 2014, Zynga announced it was testing bitcoin for purchasing in-game assets in seven of its games. That same month, The D Las Vegas Casino Hotel and Golden Gate Hotel & Casino properties in downtown Las Vegas announced they would also begin accepting bitcoin, according to an article by USA Today. The article also stated the currency would be accepted in five locations, including the front desk and certain restaurants. The network rate exceeded 10 petahash/sec. TigerDirect and Overstock.com started accepting bitcoin. The same month, an operator of a U.S. bitcoin exchange, Robert Faiella better known as Charlie Shrem, was arrested for money laundering.In early February 2014, one of the largest bitcoin exchanges, Mt. Gox, suspended withdrawals citing technical issues. By the end of the month, Mt. Gox had filed for bankruptcy protection in Japan amid reports that 744,000 bitcoins had been stolen. Months before the filing, the popularity of Mt. Gox had waned as users experienced difficulties withdrawing funds.In June 2014, the network exceeded 100 petahash/sec. On 18 June 2014, it was announced that bitcoin payment service provider BitPay would become the new sponsor of St. Petersburg Bowl under a two-year deal, renamed the Bitcoin St. Petersburg Bowl. Bitcoin was to be accepted for ticket and concession sales at the game as part of the sponsorship, and the sponsorship itself was also paid for using bitcoin.In July 2014, Newegg and Dell started accepting bitcoin. In September 2014, TeraExchange, LLC, received approval from the U.S.Commodity Futures Trading Commission "CFTC" to begin listing an over-the-counter swap product based on the price of a bitcoin. The CFTC swap product approval marks the first time a U.S. regulatory agency approved a bitcoin financial product.In December 2014, Microsoft began to accept bitcoin to buy Xbox games and Windows software.In 2014, several light-hearted songs celebrating bitcoin such as the "Ode to Satoshi" were released.A documentary film, The Rise and Rise of Bitcoin, was released in 2014, featuring interviews with bitcoin users such as a computer programmer and a drug dealer.On 13 March 2014, Warren Buffett called bitcoin a "mirage". === 2015 === In January 2015, Coinbase raised US$75 million as part of a Series C funding round, smashing the previous record for a bitcoin company. Less than one year after the collapse of Mt. Gox, United Kingdom-based exchange Bitstamp announced that their exchange would be taken offline while they investigate a hack which resulted in about 19,000 bitcoins (equivalent to roughly US$5 million at that time) being stolen from their hot wallet. The exchange remained offline for several days amid speculation that customers had lost their funds. Bitstamp resumed trading on 9 January after increasing security measures and assuring customers that their account balances would not be impacted.In February 2015, the number of merchants accepting bitcoin exceeded 100,000.In 2015, the MAK (Museum of Applied Arts, Vienna) became the first museum to acquire art using bitcoin, when it purchased the screensaver "Event listeners" of van den Dorpel.In September 2015, the establishment of the peer-reviewed academic journal Ledger (ISSN 2379-5980) was announced. It covers studies of cryptocurrencies and related technologies, and is published by the University of Pittsburgh. The journal encourages authors to digitally sign a file hash of submitted papers, which will then be timestamped into the bitcoin blockchain. Authors are also asked to include a personal bitcoin address in the first page of their papers.In October 2015, a proposal was submitted to the Unicode Consortium to add a code point for the bitcoin symbol. === 2016 === In January 2016, the network rate exceeded 1 exahash/sec.In March 2016, the Cabinet of Japan recognized virtual currencies like bitcoin as having a function similar to real money. Bidorbuy, the largest South African online marketplace, launched bitcoin payments for both buyers and sellers.In July 2016, researchers published a paper showing that by November 2013 bitcoin commerce was no longer driven by "sin" activities but instead by legitimate enterprises.In July 2016, the CheckSequenceVerify soft fork activated.In August 2016, a major bitcoin exchange, Bitfinex, was hacked and nearly 120,000 BTC (around $60m) was stolen.In November 2016, the Swiss Railway operator SBB (CFF) upgraded all their automated ticket machines so that bitcoin could be bought from them using the scanner on the ticket machine to scan the bitcoin address on a phone app.Bitcoin generates more academic interest year after year; the number of Google Scholar articles published mentioning bitcoin grew from 83 in 2009, to 424 in 2012, and 3580 in 2016. Also, the academic journal Ledger published its first issue. It is edited by Peter Rizun. === 2017 === The number of businesses accepting bitcoin continued to increase. In January 2017, NHK reported the number of online stores accepting bitcoin in Japan had increased 4.6 times over the past year. BitPay CEO Stephen Pair declared the company's transaction rate grew 3× from January 2016 to February 2017, and explained usage of bitcoin is growing in B2B supply chain payments.Bitcoin gains more legitimacy among lawmakers and legacy financial companies. For example, Japan passed a law to accept bitcoin as a legal payment method, and Russia has announced that it will legalize the use of cryptocurrencies such as bitcoin.Exchange trading volumes continue to increase. For the 6-month period ending March 2017, Mexican exchange Bitso saw trading volume increase 1500%. Between January and May 2017 Poloniex saw an increase of more than 600% active traders online and regularly processed 640% more transactions.In June 2017, the bitcoin symbol was encoded in Unicode version 10.0 at position U+20BF (₿) in the Currency Symbols block.Up until July 2017, bitcoin users maintained a common set of rules for the cryptocurrency. On 1 August 2017 bitcoin split into two derivative digital currencies, the bitcoin (BTC) chain with 1 MB blocksize limit and the Bitcoin Cash (BCH) chain with 8 MB blocksize limit. The split has been called the Bitcoin Cash hard fork.On 6 December 2017 the software marketplace Steam announced that it would no longer accept bitcoin as payment for its products, citing slow transactions speeds, price volatility, and high fees for transactions. === 2018 === On 22 January 2018, South Korea brought in a regulation that requires all the bitcoin traders to reveal their identity, thus putting a ban on anonymous trading of bitcoins.On 24 January 2018, the online payment firm Stripe announced that it would phase out its support for bitcoin payments by late April 2018, citing declining demand, rising fees and longer transaction times as the reasons.On 25 January 2018, George Soros referred to bitcoin as a bubble.In October 2018, Nelson Saiers installed a 9-foot inflatable rat covered with bitcoin references and code in front of the Federal Reserve as a homage to Satoshi Nakamoto and protests in New York City.In May 2018, the United States Department of Justice investigated bitcoin traders for possible price manipulation, focusing on practices like spoofing and wash trades. The investigation, which involved key exchanges like Bitstamp, Coinbase, and Kraken, led to subpoenas from the Commodity Futures Trading Commission after these exchanges failed to comply with information requests. === 2019 === The dawn of 2019 found Bitcoin trading below the $4000 mark after a difficult year for the global crypto market. It climbed to just over $12,000 in July before. === 2020 === On 2 July 2020, the Indian company 69 Shares started to quote a set of bitcoin exchange-traded products (ETP) on the Xetra trading system of the Deutsche Boerse.On 1 September 2020, the Wiener Börse listed its first 21 titles denominated in cryptocurrencies like bitcoin, including the services of real-time quotation and securities settlement.On 3 September 2020, the Frankfurt Stock Exchange admitted in its Regulated Market the quotation of the first bitcoin exchange-traded note (ETN), centrally cleared via Eurex Clearing.In October 2020, PayPal announced that it would allow its users to buy and sell bitcoin on its platform, although not to deposit or withdraw bitcoins. === 2021 === On 19 January 2021, Elon Musk placed the handle #Bitcoin in his Twitter profile, tweeting "In retrospect, it was inevitable", which caused the price to briefly rise about $5,000 in an hour to $37,299. On 25 January 2021, Microstrategy announced that it continued to buy bitcoin and as of the same date it had holdings of ₿70,784 worth $2.38 billion. On 8 February 2021 Tesla's announcement of a bitcoin purchase of US$1.5 billion and the plan to start accepting bitcoin as payment for vehicles, pushed the bitcoin price to $44,141. On 18 February 2021, Elon Musk stated that "owning bitcoin was only a little better than holding conventional cash, but that the slight difference made it a better asset to hold". After 49 days of accepting the digital currency, Tesla reversed course on 12 May 2021, saying they would no longer take bitcoin due to concerns that "mining" the cryptocurrency was contributing to the consumption of fossil fuels and climate change. The decision resulted in the price of bitcoin dropping around 12% on 13 May. During a July bitcoin conference, Musk suggested Tesla could possibly help bitcoin miners switch to renewable energy in the future and also stated at the same conference that if bitcoin mining reaches, and trends above 50 percent renewable energy usage, that "Tesla would resume accepting bitcoin." The price for bitcoin rose after this announcement.From February 2021, the Swiss canton of Zug allows for tax payments in bitcoin and other cryptocurrencies.On 1 June 2021, El Salvador President Nayib Bukele announced his plans to adopt bitcoin as legal tender; this would render El Salvador the world's first country to do so.On June 7, 2021, United States Justice Department recovered $2.3 million worth of bitcoin paid by Colonial Pipeline to a criminal cyber group in cyber-security ransom.On 8 June 2021, at the initiative of the president, pro-government deputies in the Legislative Assembly of El Salvador voted legislation—Ley Bitcoin or the Bitcoin Law—to make Bitcoin legal tender in the country alongside the US Dollar. === 2022 === Global economic factors that stemmed from Russia's War in Ukraine negatively affected the price of Bitcoin.On April 22, 2022, its price fell back down below $40,000. It further dropped to as low as $26,970 in May after the collapse of Terra-Luna and its sister stablecoin, UST, in addition to a shedding of tech stocks. On 18 June, Bitcoin dropped below $18,000, to trade at levels beneath its 2017 highs.In May 2022, following a vote by Wikipedia editors the previous month, the Wikimedia Foundation announced it would stop accepting donations in bitcoin or other cryptocurrencies—eight years after it had first started taking contributions in bitcoin. === 2023 === In 2023, ordinals, non-fungible tokens (NFTs) on Bitcoin, went live. == Prices and value history == Among the factors which may have contributed to this rise were the European sovereign-debt crisis – particularly the 2012–2013 Cypriot financial crisis – statements by FinCEN improving the currency's legal standing, and rising media and Internet interest.Until 2013, almost all market with bitcoins were in United States dollars (US$).As the market valuation of the total stock of bitcoins approached US$1 billion, some commentators called bitcoin prices a bubble. In early April 2013, the price per bitcoin dropped from $266 to around $50 and then rose to around $100. Over two weeks starting late June 2013 the price dropped steadily to $70. The price began to recover, peaking once again on 1 October at $140. On 2 October, The Silk Road was seized by the FBI. This seizure caused a flash crash to $110. The price quickly rebounded, returning to $200 several weeks later. The latest run went from $200 on 3 November to $900 on 18 November. Bitcoin passed US$1,000 on 28 November 2013 at Mt. Gox. == Forks == A fork, referring to a blockchain, is defined variously as a blockchain split into two paths forward, or as a change of protocol rules. Accidental forks on the bitcoin network regularly occur as part of the mining process. They happen when two miners find a block at a similar point in time. As a result, the network briefly forks. This fork is subsequently resolved by the software which automatically chooses the longest chain, thereby orphaning the extra blocks added to the shorter chain (that were dropped by the longer chain). === March 2013 === On 12 March 2013, a bitcoin miner running version 0.8.0 of the bitcoin software created a large block that was considered invalid in version 0.7 (due to an undiscovered inconsistency between the two versions). This created a split or "fork" in the blockchain since computers with the recent version of the software accepted the invalid block and continued to build on the diverging chain, whereas older versions of the software rejected it and continued extending the blockchain without the offending block. This split resulted in two separate transaction logs being formed without clear consensus, which allowed for the same funds to be spent differently on each chain. In response, the Mt. Gox exchange temporarily halted bitcoin deposits. The exchange rate fell 23% to $37 on the Mt. Gox exchange but rose most of the way back to its prior level of $48.Miners resolved the split by downgrading to version 0.7, putting them back on track with the canonical blockchain. User funds largely remained unaffected and were available when network consensus was restored. The network reached consensus and continued to operate as normal a few hours after the split. === August 2017 === Two significant forks took place in August. One, Bitcoin Cash, is a hard fork off the main chain in opposition to the other, which is a soft fork to implement Segregated Witness. == Regulatory issues == On 18 March 2013, the Financial Crimes Enforcement Network (or FinCEN), a bureau of the United States Department of the Treasury, issued a report regarding centralized and decentralized "virtual currencies" and their legal status within "money services business" (MSB) and Bank Secrecy Act regulations. It classified digital currencies and other digital payment systems such as bitcoin as "virtual currencies" because they are not legal tender under any sovereign jurisdiction. FinCEN cleared American users of bitcoin of legal obligations by saying, "A user of virtual currency is not an MSB under FinCEN's regulations and therefore is not subject to MSB registration, reporting, and recordkeeping regulations." However, it held that American entities who generate "virtual currency" such as bitcoins are money transmitters or MSBs if they sell their generated currency for national currency: "...a person that creates units of convertible virtual currency and sells those units to another person for real currency or its equivalent is engaged in transmission to another location and is a money transmitter." This specifically extends to "miners" of the bitcoin currency who may have to register as MSBs and abide by the legal requirements of being a money transmitter if they sell their generated bitcoins for national currency and are within the United States. Since FinCEN issued this guidance, dozens of virtual currency exchangers and administrators have registered with FinCEN, and FinCEN is receiving an increasing number of suspicious activity reports (SARs) from these entities.Additionally, FinCEN claimed regulation over American entities that manage bitcoins in a payment processor setting or as an exchanger: "In addition, a person is an exchanger and a money transmitter if the person accepts such de-centralized convertible virtual currency from one person and transmits it to another person as part of the acceptance and transfer of currency, funds, or other value that substitutes for currency."In summary, FinCEN's decision would require bitcoin exchanges where bitcoins are traded for traditional currencies to disclose large transactions and suspicious activity, comply with money laundering regulations, and collect information about their customers as traditional financial institutions are required to do.Jennifer Shasky Calvery, the director of FinCEN said, "Virtual currencies are subject to the same rules as other currencies. ... Basic money-services business rules apply here."In its October 2012 study, Virtual currency schemes, the European Central Bank concluded that the growth of virtual currencies will continue, and, given the currencies' inherent price instability, lack of close regulation, and risk of illegal uses by anonymous users, the Bank warned that periodic examination of developments would be necessary to reassess risks.In 2013, the U.S. Treasury extended its anti-money laundering regulations to processors of bitcoin transactions.In June 2013, Bitcoin Foundation board member Jon Matonis wrote in Forbes that he received a warning letter from the California Department of Financial Institutions accusing the foundation of unlicensed money transmission. Matonis denied that the foundation is engaged in money transmission and said he viewed the case as "an opportunity to educate state regulators."In late July 2013, the industry group Committee for the Establishment of the Digital Asset Transfer Authority began to form to set best practices and standards, to work with regulators and policymakers to adapt existing currency requirements to digital currency technology and business models and develop risk management standards.In 2014, the U.S. Securities and Exchange Commission filed an administrative action against Erik T. Voorhees, for violating Securities Act Section 5 for publicly offering unregistered interests in two bitcoin websites in exchange for bitcoins.By December 2017, bitcoin futures contracts began to be offered, and the US Chicago Board Options Exchange (CBOE) was formally settling the futures daily. By 2019, multiple trading companies were offering services around bitcoin futures. == Bitcoin faucets == A bitcoin faucet is a reward system, in the form of a website or software app, that dispenses rewards in the form of a satoshi, which is worth a hundredth of a millionth BTC, for visitors to claim in exchange for completing a captcha or task as described by the website. There are also faucets that dispense alternative cryptocurrencies. The first bitcoin faucet was called "The Bitcoin Faucet" and was developed by Gavin Andresen in 2010. It originally gave out five bitcoins per person. The rewards are dispensed at various predetermined intervals of time as rewards for completing simple tasks such as captcha completion and as prizes from simple games. Faucets usually give fractions of a bitcoin, but the amount will typically fluctuate according to the value of bitcoin. Some faucets also have random larger rewards. To reduce mining fees, faucets normally save up these small individual payments in their own ledgers, which then add up to make a larger payment that is sent to a user's bitcoin address.Because bitcoin transactions are irreversible and there are many faucets, they have become targets for hackers interested in stealing bitcoins. Advertisements are the main income source of bitcoin faucets. Faucets try to get traffic from users by offering free bitcoin as an incentive. Some ad networks also pay directly in bitcoin. This means that faucets often have a low profit margin. Some faucets also make money by mining altcoins in the background, using the user's CPU. == Theft and exchange shutdowns == Bitcoins can be stored in a bitcoin cryptocurrency wallet. Theft of bitcoin has been documented on numerous occasions. At other times, bitcoin exchanges have shut down, taking their clients' bitcoins with them. A Wired study published April 2013 showed that 45 percent of bitcoin exchanges end up closing.On 19 June 2011, a security breach of the Mt. Gox bitcoin exchange caused the nominal price of a bitcoin to fraudulently drop to one cent on the Mt. Gox exchange, after a hacker used credentials from a Mt. Gox auditor's compromised computer illegally to transfer a large number of bitcoins to himself. They used the exchange's software to sell them all nominally, creating a massive "ask" order at any price. Within minutes, the price reverted to its correct user-traded value. Accounts with the equivalent of more than US$8,750,000 were affected.In July 2011, the operator of Bitomat, the third-largest bitcoin exchange, announced that he had lost access to his wallet.dat file with about 17,000 bitcoins (roughly equivalent to US$220,000 at that time). He announced that he would sell the service for the missing amount, aiming to use funds from the sale to refund his customers.In August 2011, MyBitcoin, a now defunct bitcoin transaction processor, declared that it was hacked, which caused it to be shut down, paying 49% on customer deposits, leaving more than 78,000 bitcoins (equivalent to roughly US$800,000 at that time) unaccounted for.In early August 2012, a lawsuit was filed in San Francisco court against Bitcoinica – a bitcoin trading venue – claiming about US$460,000 from the company. Bitcoinica was hacked twice in 2012, which led to allegations that the venue neglected the safety of customers' money and cheated them out of withdrawal requests.In late August 2012, an operation titled Bitcoin Savings and Trust was shut down by the owner, leaving around US$5.6 million in bitcoin-based debts; this led to allegations that the operation was a Ponzi scheme. In September 2012, the U.S. Securities and Exchange Commission had reportedly started an investigation on the case.In September 2012, Bitfloor, a bitcoin exchange, also reported being hacked, with 24,000 bitcoins (worth about US$250,000) stolen. As a result, Bitfloor suspended operations. The same month, Bitfloor resumed operations; its founder said that he reported the theft to FBI, and that he plans to repay the victims, though the time frame for repayment is unclear.On 3 April 2013, Instawallet, a web-based wallet provider, was hacked, resulting in the theft of over 35,000 bitcoins which were valued at US$129.90 per bitcoin at the time, or nearly $4.6 million in total. As a result, Instawallet suspended operations.On 11 August 2013, the Bitcoin Foundation announced that a bug in a pseudorandom number generator within the Android operating system had been exploited to steal from wallets generated by Android apps; fixes were provided 13 August 2013.In October 2013, Inputs.io, an Australian-based bitcoin wallet provider was hacked with a loss of 4100 bitcoins, worth over A$1 million at time of theft. The service was run by the operator TradeFortress. Coinchat, the associated bitcoin chat room, was taken over by a new admin.On 26 October 2013, a Hong Kong–based bitcoin trading platform owned by Global Bond Limited (GBL) vanished with 30 million yuan (US$5 million) from 500 investors.Mt. Gox, the Japan-based exchange that in 2013 handled 70% of all worldwide bitcoin traffic, declared bankruptcy in February 2014, with bitcoins worth about $390 million missing, for unclear reasons. The CEO was eventually arrested and charged with embezzlement.On 3 March 2014, Flexcoin announced it was closing its doors because of a hack attack that took place the day before. In a statement that once occupied their homepage they announced on 3 March 2014 that "As Flexcoin does not have the resources, assets, or otherwise to come back from this loss [the hack], we are closing our doors immediately." Users can no longer log into the site. Chinese cryptocurrency exchange Bter lost $2.1 million in BTC in February 2015. The Slovenian exchange Bitstamp lost bitcoin worth $5.1 million to a hack in January 2015. The US-based exchange Cryptsy declared bankruptcy in January 2016, ostensibly because of a 2014 hacking incident; the court-appointed receiver later alleged that Cryptsy's CEO had stolen $3.3 million. In August 2016, hackers stole some $72 million in customer bitcoin from the Hong Kong–based exchange Bitfinex.In December 2017, hackers stole 4,700 bitcoins from NiceHash, a platform that allowed users to sell hashing power. The value of the stolen bitcoins totaled about $80 million at the time.On 19 December 2017, Yapian, a company that owns the Youbit cryptocurrency exchange in South Korea, filed for bankruptcy following a hack, the second in eight months.On 11 November 2022 FTX filed for bankruptcy with an estimated $8 billion missing in customer funds. == Taxation and regulation == In 2012, the Cryptocurrency Legal Advocacy Group (CLAG) stressed the importance for taxpayers to determine whether taxes are due on a bitcoin-related transaction based on whether one has experienced a "realization event": when a taxpayer has provided a service in exchange for bitcoins, a realization event has probably occurred and any gain or loss would likely be calculated using fair market values for the service provided."In August 2013, the German Finance Ministry characterized bitcoin as a unit of account, usable in multilateral clearing circles and subject to capital gains tax if held less than one year.On 5 December 2013, the People's Bank of China announced in a press release regarding bitcoin regulation that whilst individuals in China are permitted to freely trade and exchange bitcoins as a commodity, it is prohibited for Chinese financial banks to operate using bitcoins or for bitcoins to be used as legal tender currency, and that entities dealing with bitcoins must track and report suspicious activity to prevent money laundering. The value of bitcoin dropped on various exchanges between 11 and 20 percent following the regulation announcement, before rebounding upward again. == Arbitrary blockchain content == Bitcoin's blockchain can be loaded with arbitrary data. In 2018 researchers from RWTH Aachen University and Goethe University identified 1,600 files added to the blockchain, 59 of which included links to unlawful images of child exploitation, politically sensitive content, or privacy violations. "Our analysis shows that certain content, e.g. illegal pornography, can render the mere possession of a blockchain illegal."Interpol also sent out an alert in 2015 saying that "the design of the blockchain means there is the possibility of malware being injected and permanently hosted with no methods currently available to wipe this data". == References == == External links == Interactive bitcoin history
Bitcoin scalability problem	The Bitcoin scalability problem refers to the limited capability of the Bitcoin network to handle large amounts of transaction data on its platform in a short span of time. It is related to the fact that records (known as blocks) in the Bitcoin blockchain are limited in size and frequency.Bitcoin's blocks contain the transactions on the bitcoin network.: ch. 2 The on-chain transaction processing capacity of the bitcoin network is limited by the average block creation time of 10 minutes and the original block size limit of 1 megabyte. These jointly constrain the network's throughput. The transaction processing capacity maximum estimated using an average or median transaction size is between 3.3 and 7 transactions per second. There are various proposed and activated solutions to address this issue. == Background == The block size limit, in concert with the proof-of-work difficulty adjustment settings of bitcoin's consensus protocol, constitutes a bottleneck in bitcoin's transaction processing capacity. This can result in increasing transaction fees and delayed processing of transactions that cannot be fit into a block. Various proposals have come forth on how to scale bitcoin, and a contentious debate has resulted. Business Insider in 2017 characterized this debate as an "ideological battle over bitcoin's future." == Forks == Increasing the network's transaction processing limit requires making changes to the technical workings of bitcoin, in a process known as a fork. Forks can be grouped into two types: === Hard fork === A hard fork is a change to the blockchain protocol that is not backward compatible and requires all users to upgrade their software in order to continue participating in the network. In a hard fork, the network splits into two separate versions: one that follows the new rules and one that follows the old rules. For example, Ethereum was hard forked in 2016 to "make whole" the investors in The DAO, which had been hacked by exploiting a vulnerability in its code. In this case, the fork resulted in a split creating Ethereum and Ethereum Classic chains. In 2014 the Nxt community was asked to consider a hard fork that would have led to a rollback of the blockchain records to mitigate the effects of a theft of 50 million NXT from a major cryptocurrency exchange. The hard fork proposal was rejected, and some of the funds were recovered after negotiations and ransom payment. Alternatively, to prevent a permanent split, a majority of nodes using the new software may return to the old rules, as was the case of bitcoin split on 12 March 2013.A more recent hard-fork example is of Bitcoin in 2017, which resulted in a split creating Bitcoin Cash. The network split was mainly due to a disagreement in how to increase the transactions per second to accommodate for demand.Bitcoin Cash ("BCH") is a hard fork of bitcoin increasing the maximum block size. Bitcoin XT, Bitcoin Classic and Bitcoin Unlimited each supported an increase to the maximum block size. On 1 August 2017, the day when BTC forked, the BTC blockchain split into two separate blockchains: one maintained in accordance with the rules currently valid for Bitcoin, and the other maintained in accordance with the rules currently valid for Bitcoin Cash. If one had coins on the Bitcoin chain prior to the fork and has not yet moved them, one could move them on one or the other or both chains. Thus, all holders of Bitcoin also became holders of Bitcoin Cash at the time of the split. Henceforth Bitcoin and Bitcoin Cash are separate and trade at entirely independent valuations relative to each other, fiat currencies, and other assets. Bitcoin SV ("BSV") is a hard fork of Bitcoin Cash and offers a competing implementation of the Bitcoin protocol that aims to solve the Bitcoin scalability problem by implementing an unbounded block cap size, enabling the network to produce blocks of unlimited size. === Soft fork === A soft fork is a backward-compatible change to the blockchain protocol that allows new rules to be introduced without requiring all users to upgrade their software. In a soft fork, a majority of the network’s miners implement the new rules and begin following the updated version of the blockchain. The rest of the network can continue to follow the blockchain, but they will be unable to validate that new blocks follow the updated rules. Because a soft fork is backward-compatible, it does not result in the creation of a new blockchain or the splitting of the network. Instead, it allows the network to gradually transition to the new rules while still maintaining compatibility with the old rules. Segregated Witness is an example of a soft fork. In case of a soft fork, all mining nodes meant to work in accordance with the new rules need to upgrade their software. == Efficiency improvements == Technical optimizations may decrease the amount of computing resources required to receive, process and record bitcoin transactions, allowing increased throughput without placing extra demand on the bitcoin network. These modifications can be to either the network, in which case a fork is required, or to individual node software (such as Bitcoin Core). Schnorr signatures have been proposed as a scaling solution by long-time developer and Blockstream co-founder Pieter Wuille. Merkelized Abstract Syntax Trees (MAST) is a proposal by Johnson Lau which reduces the size of smart contracts (complex scripts), and increases their privacy. A 2006 paper by Mihir Bellare enables signature aggregation in O(1) size, which means that it will not take more space to have multiple signers. Bellare-Neven reduces to Schnorr for a single key. Bellare-Neven has been implemented. == "Layer 2" systems == The Lightning Network (LN) is a protocol that aims to improve bitcoin's scalability and speed without sacrificing trustless operation. The Lightning Network requires putting a funding transaction on the blockchain to open a payment channel. Once a channel is opened, connected participants are able to make rapid payments within the channel or may route payments by "hopping" between channels at intermediate nodes for little to no fee. In January 2018 Blockstream launched a payment processing system for web retailers called "Lightning Charge", noted that lightning was live on mainnet with 200 nodes operating as of 27 January 2018 and advised it should still be considered "in testing". On 15 March 2018, Lightning Labs released the beta version of its lnd Lightning Network implementation for bitcoin mainnet, and on 28 March 2018, ACINQ released a mainnet beta of its eclair implementation and desktop application. In January 2019 the online retailer Bitrefill announced that it receives more payments in Bitcoin via the lightning network than any other cryptocurrency they accept. In June 2021, the Legislative Assembly of El Salvador voted legislation to make Bitcoin legal tender in El Salvador. The decision was based on the success of the Bitcoin Beach ecosystem in El Zonte that used a LN based wallet. The government will be introducing a wallet utilising the Lightning Network protocol while giving the freedom for citizens to use other Bitcoin Lightning wallets. == Block size increases == Bitcoin's transaction throughput is limited by two parameters: the block time determines how often a new block is added to the chain, the block size determines the amount of data that can be added with every block.Bitcoin has a block time of 10 minutes and a block size of 1 MB. Various increases to this limit, and proposals to remove it completely, have been proposed over bitcoin's history. Litecoin produces blocks four times faster than Bitcoin which leads to a 4x improvement in throughput. Dogecoin has even more throughput with a block time of 1 minute. Bitcoin Cash has a block size of 32 MB and hence 32x more throughput than Bitcoin. Bitcoin SV removed the block size limit altogether. === Proposed === In 2015, BIP100 by Jeff Garzik and BIP101 by Gavin Andresen were introduced. Bitcoin XT was proposed in 2015 to increase the transaction processing capacity of bitcoin by increasing the block size limit. Bitcoin Classic was proposed in 2016 to increase the transaction processing capacity of bitcoin by increasing the block size limit. "The Hong Kong Agreement" was a 2016 agreement of some miners and developers that contained a timetable that would see both the activation of the Segregated Witness (SegWit) proposal established in December 2015 by Bitcoin Core developers, and the development of a block size limit increased to 2 MB. However, both timelines were missed. SegWit2x was a proposed hard fork of the cryptocurrency bitcoin. The implementation of Segregated Witness in August 2017 was only the first half of the so-called "New York Agreement" by which those who wanted to increase effective block size by SegWit compromised with those who wanted to increase block size by a hard fork to a larger block size. The second half of SegWit2x involved a hard fork in November 2017 to increase the blocksize to 2 megabytes. On 8 November 2017 the developers of SegWit2x announced that the hard fork planned for around 16 November 2017 was canceled for the time being due to a lack of consensus. Bitcoin Unlimited advocated for miner flexibility to increase the block size limit and is supported by mining pools ViaBTC, AntPool and investor Roger Ver.Bitcoin Unlimited's proposal is different from Bitcoin Core in that the block size parameter is not hard-coded, and rather the nodes and miners flag support for the size that they want, using an idea they refer to as 'emergent consensus'. Those behind Bitcoin Unlimited proposal argue that from an ideological standpoint the miners should decide about the scaling solution since they are the ones whose hardware secure the network. == See also == Software development List of bitcoin forks == References ==
Lightning Network	The Lightning Network (LN) is a "layer 2" payment protocol built on the Bitcoin blockchain and those of other cryptocurrencies. It is intended to enable fast transactions among participating nodes (independently run members of the network) and has been proposed as a solution to the bitcoin scalability problem. It is a peer-to-peer system for making micropayments of cryptocurrency through a network of bidirectional payment channels, without delegating custody of funds.Transacting parties use the Lightning Network by opening a payment channel and transferring (committing) funds to the relevant layer-1 blockchain (e.g. Bitcoin) under a smart contract. The parties then make any number of off-chain Lightning Network transactions that update the tentative distribution of the channel's funds, without broadcasting to the blockchain. Whenever the parties have finished their transaction session, they close the payment channel, and the smart contract distributes the committed funds according to the transaction record.To initiate closing, one node first broadcasts the current state of the transaction record to the network, including a proposed settlement, a distribution of the committed funds. If both parties confirm the proposal, the funds are immediately paid on-chain. The other option is uncooperative closure, for example if one node has dropped from the network, or if it is broadcasting an incorrect (possibly fraudulent) transaction state. In this case settlement is delayed during a dispute period, when nodes may contest the proposal. If the second node broadcasts a more up-to-date timestamped distribution, including some transactions omitted by the first proposal, then all committed funds are transferred to the second node: this punitive breach remedy transaction thwarts attempts to defraud the other node by broadcasting out-of-date transactions. == History == Joseph Poon and Thaddeus Dryja published a Lightning Network white paper in February 2015. === 2019 Bitcoin Lightning Torch === On January 19, 2019, pseudonymous Twitter user hodlonaut began a game-like promotional test of the Lightning Network by sending 100,000 satoshis (0.001 bitcoin) to a trusted recipient where each recipient added 10,000 satoshis ($0.34 at the time) to send to the next trusted recipient. The "lightning torch" payment reached notable personalities including Twitter CEO Jack Dorsey, Litecoin Creator Charlie Lee, Lightning Labs CEO Elizabeth Stark, and Binance CEO "CZ" Changpeng Zhao, among others. == Design == Andreas Antonopoulos calls the Lightning Network a second layer routing network. The payment channels allow participants to transfer money to each other without having to make all their transactions public on the blockchain. This is secured by penalizing uncooperative participants. When opening a channel, participants must commit an amount on the blockchain (a funding transaction). Time-based script extensions like CheckSequenceVerify and CheckLockTimeVerify make the penalties possible. == Implementations == Lightning operates under the BOLT (Basis of Lightning Technology) standard specification. Its four major implementations are: Lightning Network Daemon, CoreLightning, Eclair, and Lightning Dev Kit. === Benefits === The Lightning Network claims to provide several advantages over on-chain transactions: Granularity: According to Andreas Antonopoulos, some implementations of the Lightning Network allow for payments that are smaller than a satoshi, the smallest unit on the base layer of bitcoin. Privacy: The details of individual lightning network payments are not publicly recorded on the blockchain. Lightning network payments may be routed through many sequential channels where each node operator will be able to see payments across their channels, but they will not be able to see the source nor destination of those funds if they are non-adjacent. Speed: Settlement time for lightning network transactions is under a minute and can occur in milliseconds. Confirmation time on the bitcoin blockchain, for comparison, occurs every ten minutes, on average. Transaction throughput: There are no fundamental limits to the amount of payments per second that can occur under the protocol. The amount of transactions are only limited by the capacity and speed of each node. === Limitations === The Lightning Network is made up of bidirectional payment channels between two nodes which combined create smart contracts. If at any time either party drops the channel, the channel will close and be settled on the blockchain.Lightning Network's dispute mechanism requires all users to watch the blockchain constantly for fraud. This vigilance can be outsourced to watchtower nodes, trusted providers who are paid to monitor for fraud. A period of 24 hours is allotted to create a bidirectional channel after receiving a request. === Routing === In the event that a bi-directional payment channel is no longer open between the transacting parties, the payment must be routed through network intermediaries via an onion routing technique similar to Tor. This requires that the sender and receiver of the payment have open channels with enough established peer nodes to find a path for the payment.The original whitepaper on routing suggests that "eventually, with optimizations, the network will look a lot like Tier-1 ISPs". == Use cases == Laszlo Hanyecz, famous for paying 10,000 BTC for two pizzas in 2010, bought two more pizzas in 2018 via Lightning Network for 0.00649 BTC. == References == == External links == lightning.network
Silk Road (marketplace)	Silk Road was an online black market and the first modern darknet market. It was launched in 2011 by its American founder Ross Ulbricht under the pseudonym "Dread Pirate Roberts". As part of the dark web, Silk Road operated as a hidden service on the Tor network, allowing users to buy and sell products and services between each other anonymously. All transactions were conducted with bitcoin, a cryptocurrency which aided in protecting user identities. The website was known for its illegal drug marketplace, among other illegal and legal product listings. Between February 2011 and July 2013, the site facilitated sales amounting to 9,519,664 Bitcoins.In October 2013, the Federal Bureau of Investigation (FBI) shut down Silk Road and arrested Ulbricht. Silk Road 2.0 came online the next month, run by former site administrators, but was shut down the following year as part of Operation Onymous. In 2015, Ulbricht was convicted in federal court for multiple charges related to operating Silk Road and was given two life sentences without possibility of parole. == History == === Operations === The website was launched in February 2011; development had begun six months prior. The name "Silk Road" comes from a historical network of trade routes started during the Han Dynasty (206 BCE – 220 CE) between Europe, India, China, and many other countries on the Afro-Eurasian landmass. Silk Road was operated by the pseudonymous "Dread Pirate Roberts" (named after the fictional character from The Princess Bride), who was known for espousing libertarian ideals and criticizing regulation. Two other individuals were also closely involved in the site's growth and success, known as Variety Jones and Smedley.In June 2011, Gawker published an article about the site which led to an increase in notoriety and website traffic. U.S. Senator Charles Schumer asked federal law enforcement authorities to shut it down, including the Drug Enforcement Administration (DEA) and Department of Justice.In May 2013, Silk Road was taken down for a short period of time by a sustained DDoS attack. On 23 June 2013, it was first reported that the DEA seized 11.02 bitcoins, then worth a total of $814, which the media suspected was a result of a Silk Road honeypot sting. The FBI has claimed that the real IP address of the Silk Road server was found via data leaked directly from the site's CAPTCHA and it was located in Reykjavík, Iceland. IT security experts have doubted the FBI's claims because technical evidence suggests that no misconfiguration that could cause the specific leak was present at the time.Henry Farrell, an associate professor of political science and international affairs at George Washington University, analyzed Silk Road in an essay for Aeon in 2015. He noted that Ulbricht created the marketplace to function without government oversight but found it difficult to verify anonymous transactions. To sustain a steady stream of revenue, he started increasing oversight to ensure low transaction costs. To do this, he added measures to ensure trustworthiness with implementation of an automated escrow payment system and automated review system. === Arrest and trial of Ross Ulbricht === Due, in part, to off-duty research conducted by IRS Criminal Investigation Special Agent Gary Alford, Ross Ulbricht was alleged by the FBI to be the founder and owner of Silk Road and the person behind the pseudonym "Dread Pirate Roberts" (DPR). Alford searched for any mentions of the .onion URL or .tor address, stating that someone might have advertised or suggested the marketplace on Google. The first mention of the website was by a user named "altoid." Further searching into this altoid profile led him to a post about an open position that told interested applicants to contact what was Ross Ulbricht's personal email. He was arrested on 2 October 2013 in San Francisco in Glen Park Library, a branch of the San Francisco Public Library. During the arrest, the FBI seized Ulbricht's laptop which he was using to connect to the servers and manage the marketplace. Ulbricht was indicted on charges of engaging in a continuing criminal enterprise, distributing narcotics, distributing narcotics by means of the Internet, and four conspiracy charges related to distribution of narcotics, computer hacking, money laundering, and false identity documents. He was separately indicted for a single murder-for-hire charge. Prosecutors alleged that Ulbricht paid $730,000 to others to commit the murders, although none of the murders actually occurred. Ulbricht ultimately was not prosecuted for any of the alleged murder attempts.The FBI initially seized 26,000 bitcoins from accounts on Silk Road, worth approximately $3.6 million at the time. An FBI spokesperson said that the agency would hold the bitcoins until Ulbricht's trial finished, after which the bitcoins would be liquidated. In October 2013, the FBI reported that it had seized 144,000 bitcoins, worth $28.5 million, and that the bitcoins belonged to Ulbricht. On 27 June 2014, the U.S. Marshals Service sold 29,657 bitcoins in 10 blocks in an online auction, estimated to be worth $18 million at contemporary rates and only about a quarter of the seized bitcoins. Another 144,342 bitcoins were kept which had been found on Ulbricht's computer, roughly $87 million. Tim Draper bought the bitcoins at the auction with an estimated worth of $17 million, to lend them to a bitcoin start-up called Vaurum which is working in developing economies of emerging markets.Ulbricht's trial began on 13 January 2015 in federal court in Manhattan. At the start of the trial, Ulbricht admitted to founding the Silk Road website, but claimed to have transferred control of the site to other people soon after he founded it. Ulbricht's lawyers contended that Dread Pirate Roberts was really Mark Karpelès, and that Karpelès set up Ulbricht as a fall guy. However, Judge Katherine B. Forrest ruled that any speculative statements regarding whether Karpelès or anyone else ran Silk Road would not be allowed, and statements already made would be stricken from the record.In the second week of the trial, prosecutors presented documents and chat logs from Ulbricht's computer that, they said, demonstrated how Ulbricht had administered the site for many months, which contradicted the defense's claim that Ulbricht had relinquished control of Silk Road. Ulbricht's attorney suggested that the documents and chat logs were planted there by way of BitTorrent, which was running on Ulbricht's computer at the time of his arrest.On 4 February 2015, the jury convicted Ulbricht of seven charges, including charges of engaging in a continuing criminal enterprise, narcotics trafficking, money laundering, and computer hacking. The continuing criminal enterprise charge has a minimum sentence of 20 years. The amount of narcotics distributed also triggered an additional 10-year minimum. The government also accused Ulbricht of paying for the murders of at least five people, but there is no evidence that the murders were actually carried out, and the accusations never became formal charges against Ulbricht.During the trial, Judge Forrest received death threats. Users of an underground site called The Hidden Wiki posted her personal information there, including her address and Social Security number. Ulbricht's lawyer Joshua Dratel said that he and his client "obviously, and as strongly as possible, condemn" the anonymous postings against the judge. "They do not in any way have anything to do with Ross Ulbricht or anyone associated with him or reflect his views or those of anyone associated with him", Dratel said.In late March 2015, a criminal complaint issued by the United States District Court for the Northern District of California led to the arrest of two former federal agents who had worked undercover in the Baltimore Silk Road investigation of Ulbricht, former Drug Enforcement Administration agent Carl Mark Force IV and Secret Service agent Shaun Bridges. The agents are alleged to have kept funds that Ulbricht transferred to them in exchange for purported information about the investigation. The agents were charged with wire fraud and money laundering. In late November 2016, Ulbricht's lawyers brought forward a case on a third DEA agent, who they claim was leaking information about the investigation and tampered with evidence to omit chat logs showing conversations with him.In a letter to Judge Forrest before his sentencing, Ulbricht stated that his actions through Silk Road were committed through libertarian idealism and that "Silk Road was supposed to be about giving people the freedom to make their own choices" and admitted that he made a "terrible mistake" that "ruined his life". On 29 May 2015, Ulbricht was given five sentences to be served concurrently, including two of life imprisonment without the possibility of parole. He was also ordered to forfeit $183 million. Ulbricht's lawyer Joshua Dratel said that he would appeal the sentencing and the original guilty verdict. On 31 May 2017, the United States Court of Appeals for the Second Circuit denied Ulbricht's appeal, and affirmed the judgment of conviction and life sentence, in a written opinion authored by Gerard E. Lynch, United States circuit judge. The Supreme Court declined to review the case. === Other trials === In February 2013, an Australian cocaine and MDMA ("ecstasy") dealer became the first person to be convicted of crimes directly related to Silk Road, after authorities intercepted drugs that he was importing through the mail, searched his premises, and discovered his Silk Road alias in an image file on his personal computer. Australian police and the DEA have targeted Silk Road users and made arrests, albeit with limited success at reaching convictions. In December 2013, a New Zealand man was sentenced to two years and four months in jail after being convicted of importing 15 grams of methamphetamine that he had bought on Silk Road.23-year-old Dutch drug dealer Cornelis Jan "Maikel" Slomp pled guilty to large-scale selling of drugs through the Silk Road website, and was sentenced in Chicago to 10 years in prison on 29 May 2015 with his attorney, Paul Petruzzi, present. Dealer Steven Sadler was sentenced to five years in prison. There have been over 130 other arrests connected with Silk Road, although some of these arrests may not be directly related to Silk Road, and may not be public information due to legal reasons. === Later seizures === On 3 November 2020, after years of inactivity, observers of the bitcoin blockchain detected that two transactions totaling 69,370 bitcoin and bitcoin cash, worth approximately $1 billion in total at the time of transfer, had been made from a bitcoin address associated with the Silk Road. At the time of transfer, it was worth 58 times its value in 2015. It was subsequently revealed that the transfer had been made by the United States government in a civil forfeiture action. According to a press release by the U.S. Attorney's Office of the Northern District of California, the bitcoin wallet belonged to an "Individual X" who had originally acquired the bitcoins by hacking the Silk Road. == Products == In March 2013, the site had 10,000 products for sale by vendors, 70% of which were drugs. Drugs were grouped under the headings stimulants, psychedelics, prescription, precursors, other, opioids, ecstasy, dissociatives, and steroids/PEDs. Fake driver's licenses were also offered for sale. The site's terms of service prohibited the sale of certain items. When the Silk Road marketplace first began, the creator and administrators instituted terms of service that prohibited the sale of anything whose purpose was to "harm or defraud". This included child pornography, stolen credit cards, assassinations, and weapons of any type; other darknet markets such as Black Market Reloaded gained user notoriety because they were not as restrictive on these items as the Silk Road incarnations were. There were also legal goods and services for sale, such as apparel, art, books, cigarettes, erotica, jewellery, and writing services. A sister site, called "The Armoury", sold weapons (primarily firearms) during 2012, but was shut down, due to a lack of demand.The Silk Road offers over 24,400 products related to drugs for sale and an infrastructure to make these transactions. The official sellers guide states the prohibition of any sale of goods that are meant for harm or fraud, but allows for prescription drugs, pornography, and counterfeit documents. Only users of Tor can access the Silk Road.Buyers were able to leave reviews of sellers' products on the site and in an associated forum, where crowdsourcing provided information about the best sellers and worst scammers. Most products were delivered through the mail, with the site's seller's guide instructing sellers how to vacuum-seal their products to escape detection. == Sales == Silk Road provided goods and services to over 100,000 buyers. Over the two-and-a-half years in which the website was in operation, it generated $183 million in sales and $13 million in commissions, based on the value of bitcoin at the time of transactions. Due to the significant rise in bitcoin value over that period, the revenue and commission are also sometimes reported as $1.2 billion and $80 million, respectively.Initially there were a limited number of new seller accounts available; new sellers had to purchase an account in an auction. Later, a fixed fee was charged for each new seller account. Buyers and sellers conducted all transactions with bitcoins (BTC), a cryptocurrency that provides a certain degree of anonymity. Silk Road held buyers' bitcoins in escrow until the order had been received and a hedging mechanism allowed sellers to opt for the value of bitcoins held in escrow to be fixed to their value in US$ at the time of the sale to mitigate against Bitcoin's volatility. Any changes in the price of bitcoins during transit were covered by Dread Pirate Roberts.The complaint published when Ulbricht was arrested included information the FBI gained from a system image of the Silk Road server collected on 23 July 2013. It noted that, "From February 6, 2011 to July 23, 2013 there were approximately 1,229,465 transactions completed on the site. The total revenue generated from these sales was 9,519,664 Bitcoins, and the total commissions collected by Silk Road from the sales amounted to 614,305 Bitcoins. According to the government, total sales were equivalent to roughly $1.2 billion and involved 146,946 buyers and 3,877 vendors. According to information users provided upon registering, 30 percent were from the United States, 27 percent chose to be "undeclared", and beyond that, in descending order of prevalence: the United Kingdom, Australia, Germany, Canada, Sweden, France, Russia, Italy, and the Netherlands. During the 60-day period from 24 May to 23 July, there were 1,217,218 messages sent over Silk Road's private messaging system. == Similar sites == The Farmer's Market was a Tor site similar to Silk Road, but which did not use bitcoins. It has been considered a 'proto-Silk Road' but the use of payment services such as PayPal and Western Union allowed law enforcement to trace payments and it was subsequently shut down by the FBI in 2012. Other sites already existed when Silk Road was shut down and The Guardian predicted that these would take over the market that Silk Road previously dominated. Atlantis was founded in March 2013 and closed six months later, while Project Black Flag closed in October 2013; both websites stole their users' bitcoins. In October 2013, Black Market Reloaded closed temporarily after its source code was leaked. The market shares of various Silk Road successor sites were described by The Economist in May 2015. == Book club == Silk Road had a Tor-based book club that continued to operate following the initial site's closure and even following the arrest of one of its members. Reading material included conspiracy theories and computer hacking. Some of the titles included mainstream books as well as books such as The Anarchist Cookbook and Defeating Electromagnetic Door Locks. Most of the titles on this book club were pirated. This book club still exists as a private Tor-based chatroom. == Direct successors == === Silk Road 2.0 === On 6 November 2013, administrators from the closed Silk Road relaunched the site, led by a new pseudonymous Dread Pirate Roberts, and dubbed it "Silk Road 2.0". It recreated the original site's setup and promised improved security. The new DPR took the precaution of distributing encrypted copies of the site's source code to allow the site to be quickly recreated in the event of another shutdown.On 20 December 2013, it was announced that three alleged Silk Road 2.0 administrators had been arrested; two of these suspects, Andrew Michael Jones and Gary Davis, were named as the administrators "Inigo" and "Libertas" who had continued their work on Silk Road 2.0. Around this time, the new Dread Pirate Roberts abruptly surrendered control of the site and froze its activity, including its escrow system. A new temporary administrator under the screenname "Defcon" took over and promised to bring the site back to working order.On 13 February 2014, Defcon announced that Silk Road 2.0's escrow accounts had been compromised through a vulnerability in Bitcoin protocol called "transaction malleability". While the site remained online, all the bitcoins in its escrow accounts, valued at $2.7 million, were reported stolen. It was later reported that the vulnerability was in the site's "Refresh Deposits" function, and that the Silk Road administrators had used their commissions on sales since 15 February to refund users who lost money, with 50 percent of the hack victims being completely repaid as of 8 April.On 6 November 2014, authorities with the Federal Bureau of Investigation, Europol, and Eurojust announced the arrest of Blake Benthall, allegedly the owner and operator of Silk Road 2.0 under the pseudonym "Defcon", the previous day in San Francisco as part of Operation Onymous. The creator of the relaunched website—an English computer programmer named Thomas White—was also arrested in the course of the shutdown, but his arrest was not made public until 2019 after he pled guilty to charges stemming from running the website and was sentenced to five years in prison. Among the charges White admitted to was creating child pornography, and chat logs recovered by police showed White discussing the possibility of launching a website to host such material. === Others === Following the closure of Silk Road 2.0 in November 2014, Diabolus Market renamed itself to 'Silk Road 3 Reloaded' in order to capitalize on the brand. In January 2015, Silk Road Reloaded launched on I2P with multiple cryptocurrency support and similar listing restrictions to the original Silk Road market. This website is also defunct. == Advocates of dark web drug sales & Ulbricht == Meghan Ralston, a former harm reduction manager for the Drug Policy Alliance, was quoted as saying that the Silk Road was "a peaceable alternative to the often deadly violence so commonly associated with the global drug war, and street drug transactions, in particular". Proponents of the Silk Road and similar sites argue that buying illegal narcotics from the safety of your home is better than buying them in person from criminals on the streets. == Media == Deep Web (2015) – A film by director/screenwriter Alex Winter based on Silk Road which gives the inside story of the arrest of Ross Ulbricht Silk Road: Drugs, Death, and the Dark Web. A&E Television, 2018. Casefile True Crime Podcast – Case 76: Silk Road (Parts 1, 2, 3) - aired 10, 17, 24 February 2018 American Kingpin - A New York Times best-selling biography, by Nick Bilton, of Ross Ulbricht's life prior to, during, and after the Silk Road Silk Road – A 2021 film starring Jason Clarke, and Nick Robinson as Ross Ulbricht == See also == Agorism Crypto-anarchism James Zhong OpenBazaar War on drugs == References == "Ross Ulbricht, the Creator and Owner of the Silk Road Website, Found Guilty in Manhattan Federal Court on All Counts — FBI". www.fbi.gov. Retrieved 21 April 2023. Christin, Nicolas (13 May 2013). "Traveling the silk road". Proceedings of the 22nd international conference on World Wide Web. WWW '13. New York, NY, USA: Association for Computing Machinery. pp. 213–224. doi:10.1145/2488388.2488408. ISBN 978-1-4503-2035-1. S2CID 4534396. == External links == "'Silk Road' website called the Amazon of heroin, cocaine". ABC Action News. YouTube. 10 June 2011 "Silk Road: Theory & Practice" "United States of America v. Ross William Ulbricht" Grand Jury Indictment, District of Maryland (1 October 2013) "United States of America v. Ross William Ulbricht" Trial Transcript Archived early advertisement page for Silk Road
BitLicense	A BitLicense is the common term used for a business license for virtual currency activities, issued by the New York State Department of Financial Services (NYSDFS) under regulations designed for companies. The regulations are limited to activities involving the state of New York or a New York resident. People residing in, located in, having a place of business in, or conducting business in the State of New York count as New York Residents under these regulations. The license was introduced and designed by Benjamin Lawsky, New York's first Superintendent of Financial Services, in July 2014. Chartered entities do not require an explicit BitLicense, but may instead proceed with virtual currency activities via limited purpose trust charters approved by the NYDFS. == Overview == The regulations define virtual currency business activity as any one of the following types of activities: receiving virtual currency for Transmission or Transmitting virtual Currency, except where the transaction is undertaken for non-financial purposes and does not involve the transfer of more than a nominal amount of virtual currency; storing, holding, or maintaining custody or control of virtual currency on behalf of others; buying and selling virtual currency as a customer business; performing Exchange Services as a customer business, or; controlling, administering, or issuing a virtual currency.The two following activities are excluded from the definition of virtual currency business activity: development and dissemination of software in and of itself; merchants and consumers that utilize virtual currency solely for the purchase or sale of goods or services or for investment purposes. == History == On July 17, 2014, the department released details on a proposed "BitLicense", which places regulations on any company or person that uses cryptocurrencies residing in New York. The proposed regulations were officially published in the New York State Register on July 23, beginning a 45-day comment period. On February 25, 2015, a revised proposal notice was published, beginning another 30-day comment period.It came into effect on August 8, 2015. At least ten bitcoin companies announced they were stopping all business in New York State because of the new regulations. The New York Business Journal called this the "Great Bitcoin Exodus".In September 2015, Boston-based Circle was granted the first BitLicense, although in December 2016 the company had pivoted away from its bitcoin exchange to focus more on payments.Two virtual currency limited purpose trust company charters were approved by the NYDFS in 2015, the first in May 2015 to itBit, now Paxos Trust Company, and the second charter in October 2015 to Gemini.In October 2015, an article 78 was filed in the Supreme Court of the State of New York challenging the authority of the New York State Department of Financial Services to define virtual currency. Justice St George heard the case on October 10, 2017 and dismissed the case on December 27, 2017. The case is currently on appeal.On June 13, 2016, XRP II, LLC, an affiliate of Ripple Labs, was approved for a BitLicense.On 22 March 2017, Coinbase was awarded the second BitLicense.In November 2017, Tokyo based bitFlyer was awarded the fourth BitLicense and Genesis Global Trading was awarded the fifth BitLicense in May 2018.In June 2018, Hong Kong based Xapo was awarded the sixth BitLicense and Square, Inc. was awarded the seventh BitLicense.BitPay was awarded the eighth BitLicense in July 2018.In November 2018, Texas-based Coinsource, an operator of Bitcoin Teller Machines, was awarded the twelfth virtual currency license or charter.In November 2018, New York-based institutional Bitcoin provider NYDIG was awarded a BitLicense.In January 2019, Robinhood Crypto LLC, a subsidiary of Robinhood Markets Inc., and Moon Inc., dba LibertyX were awarded a BitLicense.On April 9, 2019 Bitstamp USA, Inc., a subsidiary of Bitstamp Ltd. was awarded a BitLicense.One day later, the NYDFS rejected Bittrex's application, citing concerns over capital requirements and lax anti-money laundering controls.On December 3, 2019, SoFi Digital Assets, LLC, a subsidiary of Social Finance, Inc. was awarded a BitLicense as well as a money transmitter license.On December 11, 2019, the NYDFS proposed a revision to BitLicense whereby a licensee can offer any coin from a public list on the NYDFS website. The revision is still pending.In May 2020, Eris Clearing, LLC, a subsidiary of ErisX, secured a Virtual Currency License.On June 24, 2020, DFS proposed a new conditional licensing framework that makes it easier for start-ups to enter the New York market. Under the proposed conditional licensing framework, entities may apply for a conditional license when partnering with an existing entity authorized by DFS to engage in virtual currency business activity.On October, 21, 2020, PayPal was the first entity approved for a conditional license in partnership with Paxos Trust Company. == References == == External links == Virtual Currencies in (Part 200 of Title 23 of) the New York Codes, Rules and Regulations BitLicense Frequently Asked Questions From NYSDFS
Bitcoin ATM	Bitcoin ATMs (automated teller machine) are kiosks that allow a person to purchase Bitcoin and other cryptocurrencies by using cash or debit card. Some Bitcoin ATMs offer bidirectional functionality, enabling both the purchase of Bitcoin and the sale of Bitcoin for cash. In some cases, Bitcoin ATM providers require users to have an existing account to transact on the machine. == History == On October 29, 2013, a Robocoin machine opened in the Waves coffee shop in downtown Vancouver, Canada. On December 8, 2013, Europe's first Bitcoin ATM was installed in Bratislava, Slovakia. The first machine in the United States went online on February 18, 2014, in a cigar bar in Albuquerque, New Mexico, though it was removed 30 days later. Months later, in May 2014, the first licensed bitcoin ATM in the U.S. was developed by Coinme and installed at the Spitfire Grill in Seattle, WA. === Canada === In 2014, Canada was the first country to approve regulation of cryptocurrencies, although it took some time to enforce. In February 2014, the Finance Minister mentioned plans to introduce anti-money laundering and anti-terrorist financing regulations for virtual currencies such as Bitcoin. In June of that year, the Governor General approved an amendment to Bill C-31 that would treat cryptocurrency businesses as Money Services Businesses (MSBs), and the Department of Finance circulated a draft of the proposed regulations in June 2018. As of July 2020, businesses dealing in virtual currencies are considered MSBs by the Financial Transactions and Reports Analysis Centre of Canada.In 2018, the Canada Revenue Agency (CRA) commissioned an investigation on Bitcoin ATMs to find out if tax laws were being followed by users. From December 2017 to February 2018, the number of Bitcoin ATMs in Canada increased by 20%. In June 2019, Vancouver was considering a ban on the machines due to money-laundering concerns. === Europe === As per Coin ATM Radar, there are 1,026 Bitcoin ATMs across the European Union member area. The nations of the Union with the highest number of Bitcoin ATMs are Spain (174), Austria (133), Poland (114), Romania (87), Czechia (69), Greece (63) and Italy (60). === United States === According to Coin ATM Radar, there were more than 24,700 bitcoin ATMs in the US as of September 2021, up from 2,342 in Jan 2018. Some small shop owners earning a reported $300 a month for rental space.Most US cryptocurrency ATMS charge transaction fees between 6.5% and 20%. Several bitcoin ATM companies, including the two largest bitcoin ATM companies Bitcoin Depot and Coin Cloud, charge this fee as a percentage of an exchange rate that is significantly less favorable to customers than the market rate. This functionally adds an additional 20% fee for using bitcoin ATMs. According to comments made by Bitcoin Depot to its investors, the company specifically targets middle and lower income areas for placement of bitcoin ATMs. The company also attempts to minimize its own exposure to cryptocurrency as a volatile asset.In February 2023, Cash Cloud, the company which operates the Coin Cloud ATMs, filed for bankruptcy. This was due to the company's exposure to Genesis Capital and the cryptocurrency crash which started in 2021. In March 2023, three people were arrested for operating 51 bitcoin ATMS in Northeast Ohio. The trio were charged with multiple violations, including money laundering, licensing violations, and receiving stolen property.Several analysts and regulators have compared US bitcoin ATMs to payday loans, as both are poverty industries which increase the cost of poverty by charging significantly higher fees to people who lack access to mainstream banking.Some bitcoin ATMs operating in the US are imported from other countries; for example, Czech company General Bytes sold thousands of their machines to operators operating in US. Through Coinme, bitcoin can be exchanged in the United States for local currency at ATMs located in select MoneyGram locations and Coinstar machines. === South Africa === In South Africa, ATMs accept the Rand (ZAR) and transactions over 10,000ZAR ($667) require ID verification. These ATMs are mostly found in Cape Town, Durban, Johannesburg and Pretoria. == Compliance == Bitcoin ATM operators need to adjust the limits on deposits and withdrawals according to AML/KYC standards applicable in the jurisdiction where their ATMs are placed. In some countries / states this requires a money transmitter license. In the United States, the Bank Secrecy Act (BSA) requires Bitcoin ATM operators to establish and maintain an effective written AML program reasonably designed to prevent ATM machines from being used to facilitate money laundering and the financing of terrorist activities. Bitcoin ATM operators must be registered as Money Service Businesses and are regulated by the Financial Crimes Enforcement Network.In March 2022, the Financial Conduct Authority (FCA) in the United Kingdom declared that all cryptocurrency ATMs in the country were illegal and would need to be shut down. None of the ATM's operators had successfully registered with the agency. The FCA cited a failure to comply with know your customer laws (KYC), which track and prevent money laundering, as well as the high risk to customers, due to a lack of regulation and protection. At the time, Coin ATM Radar listed 81 such ATMs in the country. == See also == Digital currency Cryptocurrency Cryptocurrencies in Europe == References == == External links == Media related to Bitcoin ATMs at Wikimedia Commons
Bitcoin Foundation	The Bitcoin Foundation is an American organization that was formerly a nonprofit corporation. It was founded in September 2012 in an effort to restore the reputation of Bitcoin after several scandals, and to try to promote its development and uptake. The organization is modeled on the Linux Foundation and was funded mainly through grants made by for-profit companies that depend on the bitcoin technology. == History == The foundation was formed in late 2012, after Bitcoin had earned a reputation for criminality and fraud, and was modeled on the Linux Foundation. The founding chairman of the board was Peter Vessenes.Former lead Bitcoin developer Gavin Andresen was hired by the foundation as "chief scientist." In June 2013, the foundation received a letter from the California Department of Financial Institutions requesting that they "cease and desist from conducting the business of money transmission in this state," and again when it published their detailed response to the regulators. In November 2013, Patrick Murck, general counsel of the foundation, testified before a United States Senate committee convened to assess digital currencies, at which the reception of bitcoin by lawmakers was generally positive.In January 2014, the foundation's vice-chairman, Charlie Shrem, was arrested for aiding and abetting the operation of an unlicensed money-transmitting business related to his role in assisting agents of the online marketplace Silk Road; he resigned later that month and pled guilty in September 2014.In February 2014, Mark Karpeles, then CEO of the Mt. Gox exchange, resigned from the board after Mt. Gox lost 750,000 of its customers' bitcoins and went bankrupt, causing the value of bitcoin to crash; Executive chairman Peter Vessenes' business relationship to Karpeles has been described as inappropriate. Professor and author Mark T. Williams criticized the foundation's priorities, published an editorial in Business Insider that month, and wrote: "A Foundation of 'B' players has no business claiming it is a protector of a system that remains vulnerable and untrustworthy."In March 2014, the foundation hired Jim Harper of the Cato Institute to help it deal with policy issues and the government with the title Global Policy Counsel, and also hired Amy Weiss of Weiss Public Affairs as a media consultant. In July 2014, the foundation retained a lobbying firm, Thorsen French Advocacy, to work for a favorable regulatory environment in the United States for bitcoin. Some libertarian bitcoin advocates have criticized the organization's strategy of political lobbying and participation with federal regulators.In May 2014, BTC China (now BTCC) CEO Bobby Lee and venture capitalist Brock Pierce were appointed to the foundation's board of directors, filling vacancies left by the resignations of Shrem and Karpelès. Ten people resigned from the foundation due to allegations dating from 2000 that Pierce had pressured minors into sex at a company he had founded. Nine members of the foundation resigned following the May election, citing opposition to the appointments and the direction of the organization.After the election, the foundation's directors included chairperson Peter Vessenes, Gavin Andresen, Bobby Lee, Micky Malka, Jon Matonis, Brock Pierce, and Elizabeth Ploshay. In October 2014, Jon Matonis resigned from his position of Executive Director of the Foundation, and at the end of the election cycle on 31 December 2014 stepped down from the group's board of directors.In November 2014, American crypto-anarchist Cody Wilson announced his run for a board seat, stating "I will run on a platform of the complete dissolution of the Bitcoin Foundation and will begin and end every single one of my public statements with that message."In March 2015, Harper and Olivier Janssens, a founder of the Freedom Investment Group, were elected to the board.In April 2015, the board appointed investor and financial consultant Bruce Fenton as Executive Director of the foundation. In July 2016, Fenton was replaced by Llew Claasen.In July 2015, Janssens made a public announcement on both the foundation's online forum and Reddit concerning the near-term insolvency of the organization, which had been kept secret by the board. As a result of this and a lack of cash flow, various staff were terminated. Following disagreement over the future of the organization—Harper and Janssens having both cast votes to dissolve the Foundation—Harper resigned and Janssens was removed from the Board in December 2015.As of June 2022, the organization is active. Its 501(c)(6) tax status was revoked by the IRS on May 15, 2022. == References ==
Craig Wright	Craig Wright may refer to: Craig Wright (cricketer) (born 1974), Scottish cricketer Craig Wright (playwright) (born 1965), American playwright, television writer, and producer Craig M. Wright (born 1944), Henry L. and Lucy G. Moses Professor of Music at Yale University Craig R. Wright (20th Century), American baseball writer and proponent of sabermetrics Craig Steven Wright (born 1970), Australian computer scientist, cryptocurrency investor and businessman == See also == J. Craig Wright (1929–2010), American lawyer and judge, justice of the Ohio Supreme Court
Ross Ulbricht	Ross William Ulbricht (born March 27, 1984) is an American serving life imprisonment for creating and operating the darknet market website Silk Road from 2011 until his arrest in 2013. The site operated as a hidden service on the Tor network and facilitated the sale of narcotics and other illegal products and services. Ulbricht ran the site under the pseudonym "Dread Pirate Roberts", after the fictional character from The Princess Bride. In October 2013, the Federal Bureau of Investigation (FBI) arrested Ulbricht and Silk Road was taken offline. In 2015, he was convicted of engaging in a continuing criminal enterprise, distributing narcotics, distributing narcotics by means of the internet, conspiracy to distribute narcotics, conspiracy to commit money laundering, conspiracy to traffic fraudulent identity documents and conspiracy to commit computer hacking. He was sentenced to life in prison without the possibility of parole. Ulbricht's appeals to the U.S. Court of Appeals for the Second Circuit in 2017 and the U.S. Supreme Court in 2018 were unsuccessful. He is incarcerated at the United States Penitentiary in Tucson. == Early life and education == Ulbricht grew up in Austin, Texas. He was a Boy Scout, attaining the rank of Eagle Scout. He attended West Ridge Middle School and Westlake High School both near Austin, graduating from high school in 2002.Ulbricht attended the University of Texas at Dallas on a full academic scholarship and graduated in 2006 with a bachelor's degree in physics. Ulbricht received an additional scholarship to attend Pennsylvania State University, where he was in a master's degree program in materials science and engineering and studied crystallography. By the time Ulbricht graduated, he had become interested in libertarian economic theory and adhered to the political philosophy of Ludwig von Mises, supported Ron Paul, promoted agorism and participated in college debates to discuss his economic views. Ulbricht graduated from Penn State in 2009 and returned to Austin. He tried day trading and started a video game company but both ventures failed. He eventually partnered with his friend Donny Palmertree to help build an online used book seller, Good Wagon Books. == Silk Road == === Creation and operation of Silk Road === Palmertree, cofounder of Good Wagon Books, eventually moved to Dallas, leaving Ulbricht to run the bookseller by himself. Around this time, Ulbricht began planning Silk Road (initially called Underground Brokers). In his personal diary, he outlined his idea for a website "where people could buy anything anonymously, with no trail whatsoever that could lead back to them." Ulbricht's ex-girlfriend said, "I remember when he had the idea ... He said something about ... the Silk Road in Asia ... and what a big network it was ... And that's what he wanted to create, so he thought it was the perfect name." Ulbricht alluded to Silk Road on his public LinkedIn page, where he discussed his wish to "use economic theory as a means to abolish the use of coercion and aggression amongst mankind" and claimed, "I am creating an economic simulation to give people a first-hand experience of what it would be like to live in a world without the systemic use of force."Silk Road ran as an onion service on the Tor network, which implements data encryption and routes traffic through intermediary servers to anonymize the source and destination Internet Protocol addresses. By hosting his market as a Tor site, Ulbricht could conceal the server's IP address and thus its location. Bitcoin, a cryptocurrency, was used for transactions on the site. While all bitcoin transactions were recorded in a public ledger called the blockchain, users who avoided linking their legal names to their cryptocurrency wallets were able to conduct transactions with considerable anonymity. Ulbricht used the "Dread Pirate Roberts" username for Silk Road, although it is disputed whether only he used that account. He attributed his inspiration for creating the Silk Road marketplace to the novel Alongside Night and the works of Samuel Edward Konkin III. === Arrest === Law enforcement broke Silk Road's cover in a number of ways. A drug agency investigator infiltrated the site and became an admin, thereby gaining inside information about the site operations, and finding Ulbricht's chats showed Pacific time, narrowing down his likely location. Law enforcement seized a Silk Road server in Iceland and gained a trove of chat logs, further enriching their knowledge. Ulbricht was connected to "Dread Pirate Roberts" by Gary Alford, an Internal Revenue Service investigator working with the U.S. Drug Enforcement Administration on the Silk Road case, in mid-2013. The connection was made by linking the username "altoid", used during Silk Road's early days to announce the website, and a forum post in which Ulbricht, posting under the nickname "altoid", asked for programming help and gave his email address, which contained his full name. On October 1, 2013, the Federal Bureau of Investigation arrested Ulbricht at the Glen Park branch of the San Francisco Public Library and accused him of being the "mastermind" behind the site.To prevent Ulbricht from encrypting or deleting files on the laptop he was using to run the site as he was arrested, two agents pretended to be quarreling lovers. When they had sufficiently distracted him, according to Joshuah Bearman of Wired, they quickly moved in to arrest him while a third agent grabbed the laptop and handed it to agent Thomas Kiernan. Kiernan then inserted a flash drive into one of the laptop's USB ports, with software that copied key files.Ulbricht was ordered held without bail. === Trial === On February 4, 2014, Ulbricht was charged with engaging in a continuing criminal enterprise, narcotics conspiracy, conspiracy to commit money laundering, and conspiracy to commit computer hacking. On August 21, 2014, a superseding indictment added three additional charges. On February 4, 2015, Ulbricht was convicted on all counts after a jury trial that had taken place in January 2015. On May 29, 2015, he was sentenced to double life imprisonment plus 40 years, without the possibility of parole. Ulbricht was also ordered to pay about $183 million in restitution, based on the total sales of illegal drugs and counterfeit IDs through Silk Road. === Murder-for-hire allegations === Federal prosecutors alleged that Ulbricht had paid $730,000 in murder-for-hire deals targeting at least five people, allegedly because they threatened to reveal the Silk Road enterprise. Prosecutors believe no contracted killing actually occurred. Ulbricht was not charged in his trial in New York federal court with murder for hire but evidence was introduced at trial supporting the allegations. The district court found by a preponderance of the evidence that Ulbricht did commission the murders. The evidence that Ulbricht had commissioned murders was considered by the judge in sentencing Ulbricht to life and was a factor in the Second Circuit's decision to uphold the sentence.Ulbricht was separately indicted in federal court in Maryland on a single murder-for-hire charge, alleging that he contracted to kill one of his employees (a former Silk Road moderator). Prosecutors moved to drop this indictment after his New York conviction and sentence became final. == Attempts to reverse the trial outcome == === Appeal === Ulbricht appealed his conviction and sentence to the U.S. Court of Appeals for the Second Circuit in January 2016, claiming that the prosecution illegally withheld evidence of DEA agents' malfeasance in the investigation of Silk Road, of which two agents were convicted. Ulbricht also argued his sentence was too harsh. Oral arguments were heard in October 2016, and the Second Circuit issued its decision in May 2017, upholding Ulbricht's conviction and sentence in an opinion by Judge Gerard E. Lynch. In a 139-page opinion, the court affirmed the district court's denial of Ulbricht's motion to suppress certain evidence, affirmed the district court's decisions on discovery and the admission of expert testimony, and rejected Ulbricht's argument that a life sentence was procedurally or substantively unreasonable.In December 2017, Ulbricht filed a petition for certiorari with the United States Supreme Court, asking the Court to hear his appeal on evidentiary and sentencing issues. Ulbricht's petition asked whether the warrantless seizure of an individual's internet traffic information, without probable cause, violated the Fourth Amendment, and whether the Sixth Amendment permits judges to find facts necessary to support an otherwise unreasonable sentence. Twenty-one amici filed five amicus curiae briefs in support of Ulbricht, including the National Lawyers Guild, American Black Cross, Reason Foundation, Drug Policy Alliance, and Downsize DC Foundation. The U.S. government filed a response in opposition to Ulbricht's petition. On June 28, 2018, the Supreme Court denied the petition, declining to consider Ulbricht's appeal. === Plea deal === In a 2020 Vanity Fair article Nick Bilton claimed that Ulbricht had rejected a plea deal that would have potentially given Ulbricht a decade-long sentence. Bilton writes "According to more than a dozen investigators and attorneys involved in the case who I spoke to for the book, Ulbricht’s sentence could have been a lot less severe..." Assistant US Attorney Timothy Howard, who was co-responsible for prosecuting the case, testified that "...no such plea offer was ever extended to Ross William Ulbricht, or conveyed to his then-counsel..." before Ulbricht's indictment. Howard stated that a plea deal with a mandatory minimum of 10 years was, "...discussed at the final pretrial conference on December 17, 2014...", but that the maximum sentence of life imprisonment was strongly recommended based on the sentencing guideline. == After the conviction == === Incarceration === During his trial, Ulbricht was incarcerated at the Metropolitan Correctional Center, New York. Starting in July 2017, he was held at USP Florence High. His mother, Lyn, moved to Colorado so she could visit him regularly. Ulbricht has since been transferred to USP Tucson. === Restitution paid from seized assets === In 2021, Ulbricht's prosecutors and defense agreed that Ulbricht would relinquish any ownership of a newly discovered fund of 50,676 Bitcoin (worth nearly $3.4 billion in 2021) seized from a hacker in November 2021. The Bitcoins had been stolen from Silk Road in 2013. Ulbricht had been unsuccessful in getting them back. The U.S. government traced and seized the stolen bitcoin. Ulbricht and the government agreed the fund would be used to pay off Ulbricht's $183 million debt in his criminal case, while the Department of Justice would take custody of the bitcoins. === Documentaries and films === Deep Web is a 2015 documentary film chronicling events surrounding Silk Road, bitcoin, and the politics of the dark web, including Ulbricht's trial. Silk Road—Drugs, Death and the Dark Web is a documentary covering the FBI operation to track down Ulbricht and close Silk Road. The documentary was shown on UK television in 2017 in the BBC Storyville documentary series.The film Silk Road was released on February 19, 2021. Directed by Tiller Russell, it follows Ulbricht's creation of the website and the FBI and DEA investigations. Ulbricht is portrayed by American actor Nick Robinson. === NFT sale === Ulbricht's family raised money for efforts to release him from jail via the decentralized autonomous organization FreeRossDAO, which accepted donations from the public. In December 2021 the family auctioned a collection of his writings and artwork as an NFT, which FreeRossDAO bought for 1,442 Ethereum, worth about $6.27 million at the time. === Calls for commutation === Ulbricht's conviction became a cause célèbre in libertarian circles. In May 2022, Congressman Thomas Massie called for a commutation of Ulbricht's conviction. The libertarian-oriented Reason Foundation attempted to raise funds, citing Ulbricht's case without taking any legal action, and 2020 Libertarian presidential candidate Jo Jorgensen made a campaign pledge to pardon Ulbricht. == See also == Variety Jones and Smedley: pseudonyms of people reported to have been closely involved with Silk Road's founding USBKill: kill-switch software created in response to the circumstances of Ulbricht's arrest Kevin Mitnick == References == == Further reading == Greenberg, Andy. "Meet The Dread Pirate Roberts, The Man Behind Booming Black Market Drug Website Silk Road". Forbes. August 14, 2013. Greenberg, Andy. "An Interview With A Digital Drug Lord: The Silk Road's Dread Pirate Roberts (Q&A)". Forbes. August 14, 2013. Howell O’Neill, Patrick. "The mystery of the disappearing Silk Road murder charges". The Daily Dot. October 22, 2014. Bertrand, Natasha. "Eerie diary entries written by the Silk Road founder who just got a life sentence". Business Insider. May 29, 2015. Mullin, Joe. "Sunk: How Ross Ulbricht ended up in prison for life". Ars Technica. May 29, 2015. Bearman, Joshuah. "Silk Road: The Untold Story" Wired Magazine. April/May 2015. Bilton, Nick (2017). American Kingpin: The Epic Hunt for the Criminal Mastermind Behind the Silk Road. Portfolio/Penguin. ISBN 9781591848141. Doherty, Brian. "Ross Ulbricht's Murder-for-Hire Charges Dropped by U.S. Attorney". Reason. July 25, 2018.
Bitcoin protocol	The Bitcoin protocol is the set of rules that govern the functioning of Bitcoin. Its key components and principles are: a peer-to-peer decentralized network with no central oversight; the blockchain technology, a public ledger that records all Bitcoin transactions; mining and proof of work, the process to create new bitcoins and verify transactions; and cryptographic security. Users broadcast cryptographically signed messages to the network using Bitcoin cryptocurrency wallet software. These messages are proposed transactions, changes to be made in the ledger. Each node has a copy of the ledger's entire transaction history. If a transaction violates the rules of the Bitcoin protocol, it is ignored, as transactions only occur when the entire network reaches a consensus that they should take place. This "full network consensus" is achieved when each node on the network verifies the results of a proof-of-work operation called mining. Mining packages groups of transactions into blocks, and produces a hash code that follows the rules of the Bitcoin protocol. Creating this hash requires expensive energy, but a network node can verify the hash is valid using very little energy. If a miner proposes a block to the network, and its hash is valid, the block and its ledger changes are added to the blockchain, and the network moves on to yet unprocessed transactions. In case there is a dispute, then the longest chain is considered to be correct. A new block is created every 10 minutes, on average. Changes to the Bitcoin protocol require consensus among the network participants. The Bitcoin protocol has inspired the creation of numerous other digital currencies and blockchain-based technologies, making it a foundational technology in the field of cryptocurrencies. == Blockchain == Blockchain technology is a decentralized and secure digital ledger that records transactions across a network of computers. It ensures transparency, immutability, and tamper resistance, making data manipulation difficult. Blockchain is the underlying technology for cryptocurrencies like Bitcoin and has applications beyond finance, such as supply chain management and smart contracts. === Transactions === The network requires minimal structure to share transactions. An ad hoc decentralized network of volunteers is sufficient. Messages are broadcast on a best-effort basis, and nodes can leave and rejoin the network at will. Upon reconnection, a node downloads and verifies new blocks from other nodes to complete its local copy of the blockchain. == Mining == To form a distributed timestamp server as a peer-to-peer network, bitcoin uses a proof-of-work system. This work is often called bitcoin mining. During mining, practically the entire computing power of the Bitcoin network is used to solve cryptographic tasks, the proof of work. Their purpose is to ensure that the generation of valid blocks involves a certain amount of effort, so that subsequent modification of the block chain, such as in the 51% attack scenario, can be practically ruled out. Because of the difficulty, miners form "mining pools" to get payouts despite these high power requirements, costly hardware deployments, and/or hardware under their own control. As a result of the Chinese ban on Bitcoin mining in 2021, the United States currently holds the largest share of Bitcoin mining pools.Requiring a proof of work to accept a new block to the blockchain was Satoshi Nakamoto's key innovation. The mining process involves identifying a block that, when hashed twice with SHA-256, yields a number smaller than the given difficulty target. While the average work required increases in inverse proportion to the difficulty target, a hash can always be verified by executing a single round of double SHA-256. For the bitcoin timestamp network, a valid proof of work is found by incrementing a nonce until a value is found that gives the block's hash the required number of leading zero bits. Once the hashing has produced a valid result, the block cannot be changed without redoing the work. As later blocks are chained after it, the work to change the block would include redoing the work for each subsequent block. If there is a deviation in consensus then a blockchain fork can occur. Majority consensus in bitcoin is represented by the longest chain, which required the greatest amount of effort to produce. If a majority of computing power is controlled by honest nodes, the honest chain will grow fastest and outpace any competing chains. To modify a past block, an attacker would have to redo the proof-of-work of that block and all blocks after it and then surpass the work of the honest nodes. The probability of a slower attacker catching up diminishes exponentially as subsequent blocks are added. To compensate for increasing hardware speed and varying interest in running nodes over time, the difficulty of finding a valid hash is adjusted roughly every two weeks. If blocks are generated too quickly, the difficulty increases and more hashes are required to make a block and to generate new bitcoins. === Difficulty and mining pools === Bitcoin mining is a competitive endeavor. An "arms race" has been observed through the various hashing technologies that have been used to mine bitcoins: basic central processing units (CPUs), high-end graphics processing units (GPUs), field-programmable gate arrays (FPGAs) and application-specific integrated circuits (ASICs) all have been used, each reducing the profitability of the less-specialized technology. Bitcoin-specific ASICs are now the primary method of mining bitcoin and have surpassed GPU speed by as much as 300-fold. The difficulty of the mining process is periodically adjusted to the mining power active on the network. As bitcoins have become more difficult to mine, computer hardware manufacturing companies have seen an increase in sales of high-end ASIC products.Computing power is often bundled together or "pooled" to reduce variance in miner income. Individual mining rigs often have to wait for long periods to confirm a block of transactions and receive payment. In a pool, all participating miners get paid every time a participating server solves a block. This payment depends on the amount of work an individual miner contributed to help find that block, and the payment system used by the pool. === Environmental effects === === Mined bitcoins === By convention, the first transaction in a block is a special transaction that produces new bitcoins owned by the creator of the block. This is the incentive for nodes to support the network. It provides the way to move new bitcoins into circulation. The reward for mining halves every 210,000 blocks. It started at 50 bitcoin, dropped to 25 in late 2012 and to 12.5 bitcoin in 2016. The most recent halving, which occurred in May 2020 (with block number 630,000), reduced the block reward to 6.25 bitcoin. This halving process is programmed to continue a maximum 64 times before new coin creation ceases. == Payment verification == Each miner can choose which transactions are included in or exempted from a block. A greater number of transactions in a block does not equate to greater computational power required to solve that block.As noted in Nakamoto's whitepaper, it is possible to verify bitcoin payments without running a full network node (simplified payment verification, SPV). A user only needs a copy of the block headers of the longest chain, which are available by querying network nodes until it is apparent that the longest chain has been obtained; then, get the Merkle tree branch linking the transaction to its block. Linking the transaction to a place in the chain demonstrates that a network node has accepted it, and blocks added after it further establish the confirmation. == Protocol features == === Decentralization === === Security === Various potential attacks on the bitcoin network and its use as a payment system, real or theoretical, have been considered. The bitcoin protocol includes several features that protect it against some of those attacks, such as unauthorized spending, double spending, forging bitcoins, and tampering with the blockchain. Other attacks, such as theft of private keys, require due care by users. ==== Unauthorized spending ==== Unauthorized spending is mitigated by bitcoin's implementation of public-private key cryptography. For example, when Alice sends a bitcoin to Bob, Bob becomes the new owner of the bitcoin. Eve, observing the transaction, might want to spend the bitcoin Bob just received, but she cannot sign the transaction without the knowledge of Bob's private key. ==== Double spending ==== A specific problem that an internet payment system must solve is double-spending, whereby a user pays the same coin to two or more different recipients. An example of such a problem would be if Eve sent a bitcoin to Alice and later sent the same bitcoin to Bob. The bitcoin network guards against double-spending by recording all bitcoin transfers in a ledger (the blockchain) that is visible to all users, and ensuring for all transferred bitcoins that they have not been previously spent.: 4 ==== Race attack ==== If Eve offers to pay Alice a bitcoin in exchange for goods and signs a corresponding transaction, it is still possible that she also creates a different transaction at the same time sending the same bitcoin to Bob. By the rules, the network accepts only one of the transactions. This is called a race attack, since there is a race between the recipients to accept the transaction first. Alice can reduce the risk of race attack stipulating that she will not deliver the goods until Eve's payment to Alice appears in the blockchain.A variant race attack (which has been called a Finney attack by reference to Hal Finney) requires the participation of a miner. Instead of sending both payment requests (to pay Bob and Alice with the same coins) to the network, Eve issues only Alice's payment request to the network, while the accomplice tries to mine a block that includes the payment to Bob instead of Alice. There is a positive probability that the rogue miner will succeed before the network, in which case the payment to Alice will be rejected. As with the plain race attack, Alice can reduce the risk of a Finney attack by waiting for the payment to be included in the blockchain. ==== History modification ==== Each block that is added to the blockchain, starting with the block containing a given transaction, is called a confirmation of that transaction. Ideally, merchants and services that receive payment in bitcoin should wait for at least a few confirmations to be distributed over the network before assuming that the payment was done. The more confirmations that the merchant waits for, the more difficult it is for an attacker to successfully reverse the transaction—unless the attacker controls more than half the total network power, in which case it is called a 51% attack, or a majority attack. Although more difficult for attackers of a smaller size, there may be financial incentives that make history modification attacks profitable. === Scalability === === Privacy === ==== Deanonymisation of clients ==== Deanonymisation is a strategy in data mining in which anonymous data is cross-referenced with other sources of data to re-identify the anonymous data source. Along with transaction graph analysis, which may reveal connections between bitcoin addresses (pseudonyms), there is a possible attack which links a user's pseudonym to its IP address. If the peer is using Tor, the attack includes a method to separate the peer from the Tor network, forcing them to use their real IP address for any further transactions. The cost of the attack on the full bitcoin network was estimated to be under €1500 per month, as of 2014. == Consensus mechanism and upgrades == == Impact and influence == == See also == Lists of network protocols Web3 == References == === Works cited === de Vries, Alex; Gallersdörfer, Ulrich; Klaaßen, Lena; Stoll, Christian (16 March 2022). "Revisiting Bitcoin's carbon footprint". Joule. 6 (3): 498–502. doi:10.1016/j.joule.2022.02.005. ISSN 2542-4351. S2CID 247143939.
Cryptocurrency wallet	A cryptocurrency wallet is a device, physical medium, program or an online service which stores the public and/or private keys for cryptocurrency transactions. In addition to this basic function of storing the keys, a cryptocurrency wallet more often offers the functionality of encrypting and/or signing information. Signing can for example result in executing a smart contract, a cryptocurrency transaction (see "bitcoin transaction" image), identification, or legally signing a 'document' (see "application form" image). == History == In 2008 bitcoin was introduced as the first cryptocurrency following the principle outlined by Satoshi Nakamoto in the paper “Bitcoin: A Peer-to-Peer Electronic Cash System.” The project was described as an electronic payment system using cryptographic proof instead of trust. It also mentioned using cryptographic proof to verify and record transactions on a blockchain.Starting in 2022, Forbes reported 60 large crypto exchanges trading above USD 100 billion.In March 2022, approximately 600 crypto exchanges globally facilitated digital asset trading, including Binance, Coinbase, Crypto.com, Gemini, GMO Coin, Huobi, eToro, Kraken, Robinhood. Asside from cryptocurrency exchanges, consumers had an option to utilize cryptocurrency wallets such as Ledger, Trezor, MetaMask and others for the secure storage and management of digital assets. === Software wallets === The first wallet program, simply named Bitcoin, and sometimes referred to as the Satoshi client, was released in 2009 by Satoshi Nakamoto as open-source software. In version 0.5 the client moved from the wxWidgets user interface toolkit to Qt, and the whole bundle was referred to as Bitcoin-Qt. After the release of version 0.9, the software bundle was renamed Bitcoin Core to distinguish itself from the underlying network. Bitcoin Core is, perhaps, the best known implementation or client. Forks of Bitcoin Core exist, such as Bitcoin XT, Bitcoin Unlimited, and Parity Bitcoin.There are several modes in which wallets can operate. They have an inverse relationship with regard to trustlessness and computational requirements. Full clients verify transactions directly by downloading a full copy of the blockchain (over 150 GB as of January 2018). They do not require trust in any external parties. Full clients check the validity of mined blocks, preventing them from transacting on a chain that breaks or alters network rules.: ch. 1 Because of its size and complexity, downloading and verifying the entire blockchain is not suitable for all computing devices. Lightweight clients consult full nodes to send and receive transactions without requiring a local copy of the entire blockchain (see simplified payment verification – SPV). This makes lightweight clients much faster to set up and allows them to be used on low-power, low-bandwidth devices such as smartphones. When using a lightweight wallet, however, the user must trust full nodes, as it can report faulty values back to the user. Lightweight clients follow the longest blockchain and do not ensure it is valid, requiring trust in full nodes.Third-party internet services called online wallets or webwallets offer similar functionality but may be easier to use. In this case, credentials to access funds are stored with the online wallet provider rather than on the user's hardware. As a result, the user must have complete trust in the online wallet provider. A malicious provider or a breach in server security may cause entrusted bitcoins to be stolen. An example of such a security breach occurred with Mt. Gox in 2011. === Cold storage === Wallet software is targeted by hackers because of the lucrative potential for stealing bitcoins. A technique called "cold storage" keeps private keys out of reach of hackers; this is accomplished by keeping private keys offline at all times: ch. 4 by generating them on a device that is not connected to the internet.: 39 The credentials necessary to spend bitcoins can be stored offline in a number of different ways, from specialized hardware wallets to simple paper printouts of the private key.: ch. 10 ==== Paper wallets ==== A paper wallet is created with a keypair generated on a computer with no internet connection; the private key is written or printed onto the paper and then erased from the computer.: ch. 4 The paper wallet can then be stored in a safe physical location for later retrieval.: 39 Physical wallets can also take the form of metal token coins with a private key accessible under a security hologram in a recess struck on the reverse side.: 38 The security hologram self-destructs when removed from the token, showing that the private key has been accessed. Originally, these tokens were struck in brass and other base metals, but later used precious metals as bitcoin grew in value and popularity.: 80 Coins with stored face value as high as ₿1,000 have been struck in gold.: 102–104 The British Museum's coin collection includes four specimens from the earliest series: 83 of funded bitcoin tokens; one is currently on display in the museum's money gallery. In 2013, a Utah manufacturer of these tokens was ordered by the Financial Crimes Enforcement Network (FinCEN) to register as a money services business before producing any more funded bitcoin tokens.: 80 ==== Hardware wallets ==== A hardware wallet is a computer peripheral that signs transactions as requested by the user. These devices store private keys and carry out signing and encryption internally, and do not share any sensitive information with the host computer except already signed (and thus unalterable) transactions. Because hardware wallets never expose their private keys, even computers that may be compromised by malware do not have a vector to access or steal them.: 42–45 The user sets a passcode when setting up a hardware wallet. As hardware wallets are tamper-resistant,: ch. 10 the passcode will be needed to extract any money. == Technology == === Private and public key generation === A cryptocurrency wallet works by a theoretical or random number being generated and used with a length that depends on the algorithm size of the cryptocurrency's technology requirements. The number is converted to a private key using the specific requirements of the cryptocurrency cryptography algorithm requirement. A public key is then generated from the private key using whichever cryptographic algorithm is required. The private key is used by the owner to access and send cryptocurrency and is private to the owner, whereas the public key is to be shared to any third party to receive cryptocurrency.Up to this stage no computer or electronic device is required and all key pairs can be mathematically derived and written down by hand. The private key and public key pair (known as an address) are not known by the blockchain or anyone else. The blockchain will only record the transaction of the public address when cryptocurrency is sent to it, thus recording in the blockchain ledger the transaction of the public address. === Duplicate private keys === Collision (two or more wallets having the same private key) is theoretically possible, since keys can be generated without being used for transactions, and are therefore offline until recorded in the blockchain ledger. However, this possibility is effectively negated because the theoretical probability of two or more private keys being the same is extremely low. The number of possible wallets and thus private keys is extremely high, so duplicating or hacking a certain key would be inconceivable. === Seed phrases === In modern convention a seed phrase is now utilised which is a random 12 to 24 (or even greater) list of dictionary words which is an unencrypted form of the private key. (Words are easier to memorize than numerals). When online, exchange and hardware wallets are generated using random numbers, and the user is asked to supply a seed phrase. If the wallet is misplaced, damaged or compromised, the seed phrase can be used to re-access the wallet and associated keys and cryptocurrency in toto. === Wallets === A number of technologies known as wallets exist that store the key value pair of private and public key known as wallets. A wallet hosts the details of the key pair making cryptocurrency transactions possible. Multiple methods exist for storing keys or seeds in a wallet.A brainwallet or brain wallet is a type of wallet in which one memorizes a passcode (a private key or seed phrase). Brainwallets may be attractive due to plausible deniability or protection against governmental seizure, but are vulnerable to password guessing (especially large-scale offline guessing). Several hundred brainwallets exist on the Bitcoin blockchain, but most of them have been drained, sometimes repeatedly. === Crypto wallets vis-à-vis DApp browsers === DApp browsers are specialized software that supports decentralized applications. DApp browsers are considered to be the browsers of Web3 and are the gateway to access the decentralized applications which are based on blockchain technology. That means all DApp browsers must have a unique code system to unify all the different codes of the DApps. While crypto wallets are focused on the exchange, purchase, sale of digital assets and support narrowly targeted applications, the browsers support different kinds of applications of various formats, including exchange, games, NFTs marketplaces, etc. == Characteristics == In addition to the basic function of storing the keys, a cryptocurrency wallet may also have one or more of the following characteristics. === Simple cryptocurrency wallet === A simple cryptocurrency wallet contains pairs of public and private cryptographic keys. The keys can be used to track ownership, receipt or spend cryptocurrencies. A public key allows others to make payments to the address derived from it, whereas a private key enables the spending of cryptocurrency from that address.The cryptocurrency itself is not in the wallet. In the case of bitcoin and cryptocurrencies derived from it, the cryptocurrency is decentrally stored and maintained in a publicly available distributed ledger called the blockchain. === eID wallet === Some wallets are specifically designed to be compatible with a framework. The European Union is creating an eIDAS compatible European Self-Sovereign Identity Framework (ESSIF) which runs on the European Blockchain Services Infrastructure (EBSI). The EBSI wallet is designed to (securely) provide information, an eID and to sign 'transactions'. === Multisignature wallet === In contrast to simple cryptocurrency wallets requiring just one party to sign a transaction, multi-sig wallets require multiple parties to sign a transaction. Multisignature wallets are designed for increased security. Usually, a multisignature algorithm produces a joint signature that is more compact than a collection of distinct signatures from all users. === Smart contract === In the cryptocurrency space, smart contracts are digitally signed in the same way a cryptocurrency transaction is signed. The signing keys are held in a cryptocurrency wallet. === Key derivation === ==== Sequential deterministic wallet ==== A sequential deterministic wallet utilizes a simple method of generating addresses from a known starting string or "seed". This would utilize a cryptographic hash function, e.g. SHA-256 (seed + n), where n is an ASCII-coded number that starts from 1 and increments as additional keys are needed. ==== Hierarchical deterministic wallet ==== The hierarchical deterministic (HD) wallet was publicly described in BIP32. As a deterministic wallet, it also derives keys from a single master root seed, but instead of having a single "chain" of keypairs, an HD wallet supports multiple key pair chains. This allows a single key string to be used to generate an entire tree of key pairs with a stratified structure.BIP39 proposed the use of a set of human-readable words to derive the master private key of a wallet. This mnemonic phrase allows for easier wallet backup and recovery, due to all the keys of a wallet being derivable from a single plaintext string. ==== Non-deterministic wallet ==== In a non-deterministic wallet, each key is randomly generated on its own accord, and they are not seeded from a common key. Therefore, any backups of the wallet must store each and every single private key used as an address, as well as a buffer of 100 or so future keys that may have already been given out as addresses but not received payments yet.: 94 == Concerns == When choosing a wallet, the owner must keep in mind who is supposed to have access to (a copy of) the private keys and thus potentially has signing capabilities. In case of cryptocurrency the user needs to trust the provider to keep the cryptocurrency safe, just like with a bank. Trust was misplaced in the case of the Mt. Gox exchange, which 'lost' most of their clients' bitcoins. Downloading a cryptocurrency wallet from a wallet provider to a computer or phone does not automatically mean that the owner is the only one who has a copy of the private keys.A wallet can also have known or unknown vulnerabilities. A supply chain attack or side-channel attack are ways of introducing vulnerabilities. In extreme cases even a computer which is not connected to any network can be hacked.To mitigate the risk of crypto wallet hacking, one can choose for a cold wallet, which remains offline and disconnected from the internet. A cold wallet refers to a physical device, such as a pen drive, that is utilized as a secure storage medium for transferring money from a hot wallet. == Security == Digital wallets provide similar security and benefits as traditional currency. When using a digital wallet, consumers don't need to fill out order forms on each site because their information is stored and automatically updated and inserted into merchant sites' order fields. Electronic wallets safeguard consumers' data with a private software code, while retailers get fraud protection, faster payment acceptance, lower transaction costs, and less theft loss.Digital wallets are free and simple to get. When using a merchant site that accepts server-side digital wallets, customers enter their name, payment, and delivery information. Following the purchase, the customer is requested to register for a wallet with a user name and password for future purchases. Sites selling wallets can also be visited.Digital wallets can be dedicated to a single cryptocurrency (examples: Bitcoin , Etherium, Ripple, Litecoin), or they can be multi-currency (Coinomi, CoinSpot, CoinVault, Cryptonator multi-cryptocurrency wallet, Exodus, Gatehub, Holy Transaction, Jaxx Wallet , UberPay Wallet, AnCrypto Wallet. Wallets are free for consumers but cost retailers. Wallet sellers may receive a portion of merchant purchases made through their wallets. In other circumstances, digital wallet vendors conduct cardholder-merchant transactions for a set fee. == See also == Cryptocurrency Cryptocurrency exchange Bitcoin List of bitcoin companies Cryptography Cryptocurrency and security Medium of exchange Private and Public key cryptography Mobile payment Digital gold currency == References ==