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Tag #Altcoins

Building Ergo: Sigma protocols

Ergo’s smart contracts and DeFi functionality are built on Sigma protocols – a powerful, flexible class of zero-knowledge proofs. Find out more about why they’re so important, and how they put Ergo head and shoulders above the competition.

 

Cryptography is a fascinating area, and one of the most exciting and intriguing concepts it offers are zero-knowledge proofs. In simple terms, a zero-knowledge proof allows someone to prove they know the solution to a problem without actually revealing the solution itself. 

 

Let’s say someone picks up a phone in a bar. You can prove it’s yours by hiding the screen, entering the unlock code and showing the unlocked screen to the person who found it. This is a simple example of a zero-knowledge proof: you have proven you own the phone without giving away any sensitive information.

 

In cryptography, most practical problems are associated with secrets. The most popular application lies in digital signatures, used by millions of people around the world every day. Essentially, these involve saying: ‘This message proves I know the private key associated with this public key – but I’m not revealing the private key itself’. (Not every digital 

signature scheme uses zero-knowledge proofs, but the most popular do.)

 

Sigma protocols

Among the hundreds or even thousands of zero-knowledge protocols, there is a sub-class of efficient and composable proof-of-knowledge protocols called Sigma Protocols. These are also known as Generalized Schnorr Proofs. Sigma protocols can be represented as digital signatures in a straightforward way, so we can effectively think of them as signatures in the context of blockchain.

 

A Schnorr signature is a simple Sigma protocol signature, then. Schnorr signatures have been proposed as an alternative to Bitcoin’s current signatures. (It is one of the most efficient signature schemes, which is why it would be beneficial for Bitcoin.)

 

However, there are dozens of other Sigma protocols. One of the great things about them is that they are composable, using simple AND and OR logic. So you can ask for a signature with the following statement: ‘Prove to me knowledge of either this secret OR that secret’ (this is a one-of-two ring signature). Or you can ask, ‘Prove to me knowledge of any two of these three secrets’ (a two-of-three ring signature). Those are just two simple examples; there are many more, and they can be far more complex and sophisticated.

 

Ergo: Sigma + blockchain

When combined with a blockchain, these composable proofs enable some very powerful use cases. The logic for proofs can include conditions based on blockchain state. For example, ‘If the deadline block height has been reached, Alice can provide knowledge of a secret key for a refund. OR a ring signature from Alice and Bob is required to spend coins.’ Or ‘If this account holds a minimum of 100 ERG, Alice OR Bob can remove funds above that amount.’

 

Thus some very interesting and flexible DeFi applications can be built on Ergo, using secure, straightforward and efficient Sigma protocols.

Three smart contract platforms to watch

Smart contracts are a must-have feature for blockchain platforms. But smart contracts come in many forms. This article compares three different approaches.

 

Bitcoin was the first form of decentralized programmable money. Bitcoin’s built-in scripting language enables users to specify simple conditions attached to transfers – for example, requiring that two of three accounts have signed a transaction.  

 

But blockchain can be used to execute far more complex and powerful logic. Since Ethereum launched in 2015, a slew of smart contract platforms has followed. Different platforms take different approaches – and each has its own benefits and risks.

 

Ethereum

The first and still the largest smart contract platform, Ethereum offers Turing-complete contracts. This means that theoretically any computational operation can be replicated on the Ethereum network. In other words, you can build pretty much anything.

 

Of course, the delays and bottlenecks of the blockchain mean you wouldn’t generally want to do that, but the point stands: Ethereum is an extremely powerful platform. That power is certainly an advantage, but it also brings vulnerabilities.

 

Ethereum is arguably too powerful, and too complex. Ethereum’s history is littered with examples of times when hackers were able to exploit vulnerabilities or features in a smart contract: The DAO, the two Parity wallet hacks, and many more. These were missed because the way Ethereum’s smart contract language, Solidity, operates means ‘edge cases’ are possible and it’s hard to figure out where all the security holes might be. Moreover, the fact that you can execute code of any complexity means it’s possible to write code that executes unpredictably – for example, it may be impossible to know how much it will cost to run.

 

Ethereum, then, is an amazing platform with exceptional innovation – but its power means it can also be risky. When you’re dealing with financial applications that process millions of dollars of users’ funds, that’s not a chance you want to take.

 

EOS

Funded by a year-long, $4 billion ICO, EOS has been called the ‘Ethereum killer’ – though it hasn’t yet delivered on this title. EOS is more like a blockchain operating system that enables a wide range of use cases. It’s massively more scalable than Ethereum, and doesn’t have transaction fees (removing that element of Ethereum’s vulnerability by default). But it’s also far more centralized, with just 21 Block Producers, and concerns that they could collude or be coerced to falsify blockchain data.

 

For its smart contracts, EOS uses WebAssembly (WASM), which enables developers to code in C++ and compile to WASM for use on EOS. It solves many of the issues of Solidity; as EOS’s GitHub explains, ‘In the world of blockchain, any non-deterministic behavior, unbounded computation, or unbounded use of RAM can take down the blockchain for everyone, not just a single user’s web browser. Single-threaded performance, fast compilation/validation of Wasm, and low-overhead calls to native code are critical to blockchains.’ It’s worth noting that C++ wasn’t designed for blockchains, and its standard can be messy, with implications for edge cases.

 

Ergo

Ergo’s approach is similar in many ways, avoiding the most common issues that have plagued Ethereum. ErgoScript, which is based on Scala and designed specifically for execution in a blockchain environment, supports formal verification. it is always known in advance that a script will execute properly, and how much it will cost. 

 

Ergo’s key difference is the use of Sigma Protocols, a powerful class of zero-knowledge protocols that enable very flexible use cases off the peg. In short, while you can do anything with Ethereum, trying to is often a bad idea. It’s either expensive, complex or risky. Ergo enables developers to implement use cases – including ring and threshold signatures, as well as other specialist cryptographic operations, for greater privacy and multi-party computation – easily and safely.

 

In itself, ErgoScript isn’t Turing complete. This is an intentional design choice taken to avoid the exploits that have seen tens of millions of dollars stolen from Ethereum applications or locked in its smart contracts. However, the Ergo platform can be used to create Turing-complete applications, but iterating operations over multiple blocks. This offers the best of both worlds: the safety provided by preventing unrestricted functionality, but nonetheless enabling complex dApps on the blockchain.

Five undervalued crypto coins

Bitcoin is looking both technically and fundamentally strong after its six-month correction, as the Halvening approaches. The last leg up in 2019 saw altcoins brutally sold off as traders positioned for BTC’s parabolic move. This time, the alts are showing some signs of rising with the tide. With prices still near the bottom after a brutal crypto winter, we look at five altcoin projects we view as interesting – and potentially significantly undervalued.

 

1) Waves

Waves Platform launched with great fanfare back in 2016 after raising 30,000 BTC. Since then the team have diligently – but relatively quietly – worked away on a host of DeFi features. Waves is now an extensive and powerful ecosystem that includes user-friendly mobile and desktop wallets; easy token creation; a decentralised exchange that combines speed, security and privacy; safe and accessible smart contracts; an algorithmically-backed stablecoin, Neutrino; and many other products and services. It contains everything needed to launch scalable dApps, and the LPoS network and community-run monetary policy provide a great way to earn on your holdings. With its core tech in place, Waves is now looking to expand globally. Neutrino dollars (USDN) are very promising: there is huge demand for stablecoins (Total Value Locked for the Maker Protocol alone is $600 million), and TVL for Neutrino is almost $4 million after just a few weeks of operation. It’s growing fast, and the more WAVES are locked to generate USDN, the more net demand there will be on the market. Add to that the fact that Waves’ corporate arm, Waves Enterprise, has already established some impressive industry partnerships – if the same success follows for the open Waves platform, it’s going to start looking very underpriced.

 

2) Ergo

In terms of fundamentals, it’s hard to find a coin stronger than Ergo. Ergo has taken a different approach to smart contracts and DeFi, using Sigma protocols to enable use cases that are either impossible or risky on other platforms. Sigma protocols allow for very flexible and elegant coding of functionality, enabling developers to implement dApps that would be very expensive or horribly messy on Ethereum. Think of it like this: it’s possible to build a rudimentary jet engine with junk from your garage. But it wouldn’t be efficient or safe, because you don’t have the right tools or materials. With Ergo, you do. Ergo’s team have been involved with several other crypto platforms, and have drawn on this experience to create something unique. The issue – and the opportunity – is that they’ve focused on development and not marketing. It’s not easy to mine and beginners will be better off with the lite wallets rather than running a full node. This is now changing. The first mining pools are coming, and at a $5 million market cap, Ergo could easily outperform many other alts in the short-to-medium term.

 

3) MakerDAO

With a half-billion-dollar market cap, this is by far the largest project on the list. But it’s an excellent one, and given the interest in DeFi – in which Maker is a leader – it’s likely undervalued. Maker’s strength comes from several sources. A very solid economic model, a highly professional development and marketing team, and full decentralisation. MakerDAO, for those who don’t know, is the protocol that underpins the Dai stablecoin, which is backed by crypto collateral and smart contract-enforced algorithms. There are no middlemen at all. Best of all, every time users issue Dai against ETH and other collateral, they start accruing fees – some of which is used to buy and burn MKR. $600 billion is currently locked in Maker Vaults and DeFi is growing fast, so you can see where this is going.

 

4) Beam

Along with Grin, Beam is one of two very exciting projects based on Mimblewimble – an impressive new privacy protocol that offers significant advantages over existing approaches. While coins like Dash and Monero seek to obscure the flow of money on the blockchain, Mimblewimble enables users to avoid putting critical information on the blockchain in the first place. That makes it both more private and scalable. Of the two, we’ve chosen Beam because it has a well-funded development team and limited coin supply – plus it’s just passed its first halving, so there’s a good chance the reduced block rewards will have an effect on price in the coming months. At $40 million market cap, it has a long way to go.

 

5) Sentinel

Sentinel is another micro-cap ($3 million) and another privacy project, but this one’s a dVPN – decentralised Virtual Private Network provider. Sentinel Network is a decentralised VPN that cryptographically guarantees the safety of your personal information, maintained by a collection of nodes around the world. It’s built on Tendermint, which is a solid technical choice. We’re interested because it’s tiny, but there are a lot of people who use VPNs. A lot. And after a spate of VPN hacks (including NordVPN), a large proportion of those users must be wondering how safe their ‘private’ data really is when surfing the web…

 

These are just five of the many, many interesting and attractive altcoin projects out there – we couldn’t include all the ones we’d want in our portfolio. Are you involved with any of these five? Are there others you think should be on the list? Retweet and let us know why!

You know you’ve been in crypto too long when…

How long have you been in crypto? A year? Two? Five? If it’s too long, you’ll recognise some of these warning signs.

 

  1. Checking the price of bitcoin is the first thing you do in the morning. Not grab a coffee. Not say ‘Good morning’ to your beloved. Not feed the cat. It’s grab your phone while you’re still half asleep and see which way BTC went in the night.
  2. Your thumb has RSI, from swiping down to refresh Blockfolio so many times.
  3. That’s Repetitive Strain Injury, by the way. If you read RSI and assumed it meant Relative Strength Index, you’re probably obsessed with chart indicators.
  4. You can’t look at a city skyline without seeing volume bars. You can’t look at a mountain range without seeing price spikes.
  5. Somehow, you got really good at mental math. You can do complicated sums in your head – but only if they involve exchange rates for bitcoin and altcoins.
  6. You feel an overwhelming urge to draw lines on things as a means of predicting the future. If you were in hospital, you’d probably be drawing support and resistance levels on your heart-rate monitor to figure out if you’ll survive.
  7. Your F5 key is blank. There’s a dip where it’s worn away from refreshing CoinMarketCap.
  8. You only have online friends. You stopped seeing half your real-world friends when they laughed at you for buying crypto. The other half stopped seeing you when it turned out you were right.
  9. You haven’t had 8 hours sleep since… well, since crypto.
  10. You’re still kicking yourself for buying that beer/mining rig/sunglasses for BTC back in 2015. It seemed so cool and smart at the time. Now it’s the most expensive thing you ever bought.

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Sunday Inferno round-up

Here it is, folks: our regular Sunday summary of Inferno news, articles and market insights. Here’s what’s been going on this week:

We’ll be back with more tomorrow, so enjoy what remains of your weekend and stay tuned!

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Are permissioned ledgers the future of blockchain for business?

Corporations and governments won’t work with open platforms. Permissioned ledgers are likely to play a key role in the adoption of blockchain technology.

 

Bitcoin, the original blockchain, is an open network. Anyone can join it, use it, run a full node, or start a mining node. There are no restrictions of who gets to be a part of the network.

 

That’s great for transparency and trust, but it has its drawbacks. Since anyone can use the network, malicious activities are possible, from DDoS to 51% attacks. And of course, bitcoin can be used for criminal purposes; no one can stop you sending bitcoin to anyone else.

 

For regular individuals, this is a price worth paying. Having a blockchain and form of money that is free from interference is hugely important. And form of control by companies or governments increases the risk of intervention, and that could mean users not being able to access their funds. So open blockchains are here to stay: they’re just too valuable to expect them to go away, and it’s not possible for regulators to shut them down. Similarly, small businesses are happy with open blockchains, which offer greater transparency and auditability than their current centralised providers.

 

But corporations and government aren’t happy with that. They need greater reliability and network stability, higher throughput, and predictability for fees and other properties.

 

Permissioned blockchains can deliver this by keeping the network tight and only allowing approved actors to use it. By running a small number of approved nodes, it’s possibly to avoid most of the uncertainty of open blockchains, ensure greater network stability, and avoid the need for fees. Depending on how the network is structured, you can also prevent bad actors from using it, or kick them off for serious offences.

 

There are already various permissioned ledger solutions out there, many of them based on existing blockchain technology. We can expect more of these to arise as governments and corporations look for infrastructure partners. 

 

In most cases, the regular crypto community won’t benefit from these – there won’t be ICOs, and the tokens won’t be designed to increase in value. But there may be other ways in which it’s good for the crypto sector.

 

Overall, it could be good for crypto just as a way of raising awareness – just like Facebook’s Libra has brought Bitcoin into front and centre for Congress. There may also be open blockchain platforms that launch permissioned functionality. Waves Enterprise, for example, will allow entities to launch permissioned networks of their own, securing them on the main Waves chain and bringing additional demand to the WAVES token that powers the open blockchain.

 

Then there are initiatives like VPLedger, which is designed from the ground up for businesses use. This includes KYC as a mandatory condition of entry for every user, and a network of a couple of dozen nodes. However, the project still has a commitment to decentralise its governance completely, meaning it could prove a valuable addition to a future decentralised economy and become a host for many interesting projects.

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The Periodic Table of Crypto

Bitcoin is known as ‘Digital Gold’ due to its scarcity and high value. It’s the safe haven and reserve currency of the crypto world. What about other cryptos, though…?

 

Bitcoin: Digital Gold. It’s the original form of digital wealth. A store of value that crypto traders seek in times of uncertainty. The ultimate scarce digital asset: don’t be without it.

 

Litecoin: Digital Silver. Still a scarce asset, though not so scarce as digital gold. It’s more volatile, just like physical silver. It’s more useful as a transactional currency than a store of value, but it has good network effect and isn’t going out of fashion. Totally manipulated, of course.

 

Ethereum: Digital Plutonium. Really cool. Powerful when handled carefully. Nuclear-scale disaster if you don’t know what you’re doing. Make sure you store it safely. Some wallets are like leaky reactor cores. Yes, Parity. I’m looking at you.

 

Ripple: Digital Chromium. Shiny shiny shiny!! Look at this, it must be super valuable! I’m so smart for buying a ton of it while it’s so cheap!! Shiny!! Wait, what? There’s 144,633 trillion more tons of this stuff in the ground? Dammit.

 

BCash: Digital Lead. It’s vaguely shiny, but rather dull. Isn’t worth much, though even lead has its value. But it is rather toxic and frankly you could do a lot better. A bag of this can feel heavy.

 

Libra: Digital Iron. Utilitarian. Serves a purpose, gets the job done. Useful for making weapons to beat the US government with, though you’d better believe they’re going to beat you back. Nothing particularly special or different, there’s going to be a lot of it, but it’s handy as far as it goes.

 

Tether: Digital rust. Seems so good, strong, useful. But then you realise that what was once so good is a flaking pile of dirty crap.

BSV: Digital Turds. You can gold plate a turd but it’s still a turd. Just like real turds, there will always be people who have a nasty fascination with digital turds and can’t help playing with them. But they still stink and normal people will avoid them like the plague they are.

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Green alts and ham

When Sam-I-am persists in pestering a grumpy grouch to buy a bag of alts, the grouch turns abusive and violent – teaching us all that we should buy and hold only bitcoin!

 

I am Sam

Sam I am

Do you like green eggs and ham?

 

I do not like green eggs and ham

I do not like them, Sam I am

 

Then… would you like to buy my alts?

They’re nice and tasty with some salt.

 

I’m already salty, Sam. 

Your altcoin shilling is a scam.

I’ve bought enough of all your alts,

The fact I have them is your fault!

 

Hmmm. But how about some XRP?

It’s oversold as it can be!

 

Sam. I do not want your XRP,

It’s going to crash as you can see.

And I already have a ton

Of worthless alts and that is one!

 

Well how about some Bitcoin Cash?

Some EOS, TRON, IOTA, DASH?

I know your bags are heavy, sir,

But take whichever you prefer!

 

Sam. I have them all (no BTC).

My bags are heavy as can be.

In fact you are the very reason.

You told me it would be alts season!

 

Ah yes, the alts will soon explode!

Back the truck up! Buy a load!

Don’t miss the train, it’s leaving soon.

And we’ll be going to the moon!

 

Your altcoins suck, you stupid clown

The only road they’re on is down.

And every time they try to climb,

Bitcoin spikes another time!

 

The perfect time to buy more cheap!

I really think you’d love a heap. 

I’ll do a deal on Doge or BAT

What would you say to one like that?

 

I think I have a better plan,

For where to put your altcoins, Sam.

Now turn around; this might feel wrong:

I’ll shove them back where they belong!

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Hayek predicted Bitcoin’s promise decades ago

TL;DR governments won’t give up control of money voluntarily, so we’re going to have to do it the sneaky way.

 

Anyone can make predictions about the future based on what they see around them, but it’s a rare mind that can take the temperature of the times and accurately understand the signs. Friedrich Hayek, the famous economist, was one such person.

 

Hayek was an Austrian economist who wrote The Denationalization of Money, which argued for different forms of private money instead of state-backed currencies. These different private currencies would compete on the market, just like any other stock or business, and the best and most reliable ones would rise to the top. It should be a free market for currencies.

 

He recognised that when the state took control of printing money, it opened the way to lots of abuses – exactly the ones we see now. More and more money is being created, and it’s being used to prop up markets and economies that are failing. Ultimately, this only defers and makes worse the inevitable crash.

 

Take a look at what Hayek said back in 1984, in this short video clip.

 

‘I don’t believe that we can ever have good money again before we take the thing out of the hands of government. And since we can’t take it violently out of the hands of government, all we can do is by some sly, roundabout way introduce something they can’t stop.’

 

Hayek was talking before the advent of the internet, let alone blockchain. This was the 1980s, when barely anyone even owned a cellphone. But he grasped the essence of the problem: whatever form of good money was created would need to be structured in such a way as to be unstoppable.

 

Bitcoin launched a quarter of a century after Hayek spoke those words and over 15 years since he died. But it’s about the best shot we have at honest money, outside the control of the state.

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Swissborg: trading fun without the risk

TL;DR Swissborg have created a beautifully gamified price prediction app and an active community around it.

 

Buy low, sell high. Easy right? The thrill of trading, the adrenaline surge of calling the market right and winning millions in the comfort of your own pajamas. Just fire up BitMex, max leverage and – 

 

Yep, rekt. Back to that spare room in your parents’ house and a minimum-wage job at MacDonalds. So much for retiring at 30.

 

Thing is, trading is harder than it looks, at least if you want to come out of it with more money than you had when you went in. But it’s so FUN. 

 

Swissborg have taken the fun of trading and left behind the agony of getting wiped out with an awesome little community app. It’s actually part of a wider bitcoin price prediction service that uses machine learning and community insights to forecast where BTC is heading. That’s yet to launch, but this app is a first step and absolutely worth a look in its own right.

 

They have reduced the complexities of trading to a straightforward UX in which you simply predict whether the price of bitcoin will be higher or lower in 24 hours’ time. You can stake different amounts on your hunch, depending on how many points you have already (which depends on how successful you’ve been in the past). Get it right and you double your stake, get it wrong and you lose it. Keep winning and you unlock new limits and earn badges for different qualities (accuracy, risk taking, loyalty, etc). The better you do, the higher up the Hall of Fame you move, with the chance to win a share of a prize pool of up to $500,000.

 

Overall, it’s a beautifully gamified price prediction tool. The simple UX makes it instantly accessible to anyone, and the company has worked hard to maximise that little dopamine hit you get from calling the market right. Refer new users with your code and win more points, helping grow the already active community. It’s all very well designed.

 

Data from the app will ultimately be integrated into the price prediction tool. As well as machine learning, it will take insights from the most successful and reliable community members – the ones who are best at forecasting price movements. In all, it’s a lot of fun and a great idea.

If you want to download the app, feel free to use referral code J7NG5HI as a little thank you for putting you onto this.

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