"bitcoin" entries

Four short links: 19 December 2014

Four short links: 19 December 2014

Statistical Causality, Clustering Bitcoin, Hardware Security, and A Language for Scripts

  1. Distinguishing Cause and Effect using Observational Data — research paper evaluating effectiveness of the “additive noise” test, a nifty statistical trick to identify causal relationships from observational data. (via Slashdot)
  2. Clustering Bitcoin Accounts Using Heuristics (O’Reilly Radar) — In theory, a user can go by many different pseudonyms. If that user is careful and keeps the activity of those different pseudonyms separate, completely distinct from one another, then they can really maintain a level of, maybe not anonymity, but again, cryptographically it’s called pseudo-anonymity. […] It turns out in reality, though, the way most users and services are using bitcoin, was really not following any of the guidelines that you would need to follow in order to achieve this notion of pseudo-anonymity. So, basically, what we were able to do is develop certain heuristics for clustering together different public keys, or different pseudonyms.
  3. A Primer on Hardware Security: Models, Methods, and Metrics (PDF) — Camouflaging: This is a layout-level technique to hamper image-processing-based extraction of gate-level netlist. In one embodiment of camouflaging, the layouts of standard cells are designed to look alike, resulting in incorrect extraction of the netlist. The layout of nand cell and the layout of nor cell look different and hence their functionality can be extracted. However, the layout of a camouflaged nand cell and the layout of camouflaged nor cell can be made to look identical and hence an attacker cannot unambiguously extract their functionality.
  4. Prompter: A Domain-Specific Language for Versu (PDF) — literally a scripting language (you write theatrical-style scripts, characters, dialogues, and events) for an inference engine that lets you talk to characters and have a different story play out each time.
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Regulation and decentralization: Defending the blockchain

Andreas Antonopoulos urges the Canadian Senate to resist the temptation to centralize bitcoin.

Editor’s note: our O’Reilly Radar Summit: Bitcoin & the Blockchain will take place on January 27, 2015, at Fort Mason in San Francisco. Andreas Antonopoulos, Vitalik Buterin, Naval Ravikant, and Bill Janeway are but a few of the confirmed speakers for the event. Learn more about the event and reserve your ticket here.

We recently announced a Radar summit on present and future applications of cryptocurrencies and blockchain technologies. In a webcast presentation one of our program chairs, Kieren James-Lubin, observed that we’re very much in the early days of these technologies. He also noted that the technologies are complex enough that most users will rely on service providers (like wallets) to securely store, transfer, and receive cryptocurrencies.

As some of these service providers reach a certain scale, they will start coming under the scrutiny of regulators. Certain tenets are likely to remain: currencies require continuous liquidity and large financial institutions need access to the lender of last resort.

There are also cultural norms that take time to change. Take the example of notaries, whose services seem amenable to being replaced by blockchain technologies. Such a wholesale change would entail adjusting rules and norms across localities, which means going up against the lobbying efforts of established incumbents.

One way to sway regulators and skeptics is to point out that the decentralized nature of the (bitcoin) blockchain can unlock innovation in financial services and other industries. Mastering Bitcoin author Andreas Antonopoulos did a masterful job highlighting this in his recent testimony before the Canadian Senate:

“Traditional models for financial payment networks and banking rely on centralized control in order to provide security. The architecture of a traditional financial network is built around a central authority, such as a clearinghouse. As a result, security and authority have to be vested in that central actor. The resulting security model looks like a series of concentric circles with very limited access to the center and increasing access as we move farther away from the center. However, even the most outermost circle cannot afford open access.

Read more…

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Clearing up a few of bitcoin’s misconceptions

Bitcoin is more than just a currency. Here’s a look at what it is and what it isn’t.

Just what is bitcoin, anyway?

Conrad Barski and Chris Wilmer, authors of Bitcoin for the Befuddled, recently hosted a webcast discussing exactly what bitcoin is (and what it isn’t), how it’s used, how businesses can use it, and some of the disruptive opportunities that bitcoin offers entrepreneurs.

How traditional payment systems work vs how bitcoin works

They presented an overview that clears up some of the misconceptions about bitcoin. Read more…

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Blockchain and decentralization hold big implications for society

Chris Clark on the blockchain's potential to disrupt the financial industry, from contracts to mortgages to government taxation.

A_Star_is_Born_Steve_Corey_Flickr

Bitcoin has come a long way from initially being perceived as a pipe dream or fake money. In a recent interview, Chris Clark, a software developer, entrepreneur, physicist, and author of Bitcoin Internals, recalled a story of one of the first bitcoin transactions: someone was congratulated on their “free pizza” after paying in the neighborhood of 10,000 bitcoins for two pizzas. “Now that would be worth, I don’t know, like millions of dollars,” noted Clark.

While Clark said he regrets not getting involved in bitcoin back in 2010-2011, when “bitcoins were super cheap,” he has since researched and written a technical guide to bitcoin, Bitcoin Internals, and expanded his research into the blockchain, looking at the value of blockchain technology for businesses and the potential impacts of decentralization. In our conversation, he described the early evolution direction:

“Right now, we can see that people are kind of looking at bitcoin mostly as just a regular payment system. While I do think that’s definitely a very important innovation, what we’re seeing is a lot of new technologies coming out that are more about things like smart contracts and decentralized organizations, which are right now really in their infancy. I think that those are actually going to be much bigger in overall impact than the payment system itself.”

Read more…

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Decoding bitcoin and the blockchain

Introducing Bitcoin & the Blockchain: An O’Reilly Radar Summit

Untitled_Martin_Flickr

When the creators of bitcoin solved the “double spend” problem in a decentralized manner, they introduced techniques that have implications far beyond digital currency. Our newly announced one-day event — Bitcoin & the Blockchain: An O’Reilly Radar Summit — is in line with our tradition of highlighting applications of developments in computer science. Financial services have long relied on centralized solutions, so in many ways, products from this sector have become canonical examples of the developments we plan to cover over the next few months. But many problems that require an intermediary are being reexamined with techniques developed for bitcoin.

How do you get multiple parties in a transaction to trust each other without an intermediary? In the case of a digital currency like bitcoin, decentralization means reaching consensus over an insecure network. As Mastering Bitcoin author Andreas Antonopoulos noted in an earlier post, several innovations lie at the heart of what makes bitcoin disruptive:

“Bitcoin is a combination of several innovations, arranged in a novel way: a peer-to-peer network, a proof-of-work algorithm, a distributed timestamped accounting ledger, and an elliptic-curve cryptography and key infrastructure. Each of these parts is novel on its own, but the combination and specific arrangement was revolutionary for its time and is beginning to show up in more innovations outside bitcoin itself.”

Read more…

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Bitcoin and blockchain use cases won’t be sexy, but will be essential

Tim Swanson on the blockchain's potential and what the future of crypto-coins might bring.

bitcoin_Antana_Flickr

Researcher and author Tim Swanson originally built bitcoin mining equipment in China a couple of years ago, but as he explained in a recent interview, he’s moved beyond the trading aspects of bitcoin and now focuses on research and use cases. Swanson, who also works in business development at Melotic, a digital asset exchange, expressed some skepticism about the future of bitcoin as a currency and noted that the greatest potential in the technology lies in the blockchain:

“I’m fairly skeptical that what [bitcoin] can and will do is probably either overstated or overhyped. I think most of the actual use cases, especially with blockchains in general, will be very mundane and will be related to proof of existence, so things like notary services.

“If anyone’s looking for a particular use case, I’d probably talk about one called CAT, Consolidated Audit Trail. It’s related to the SEC requiring traders to put together a way to find out when trades take place. On any given day, there’s about 48 billion trades that take place under their purview, and putting together a system for this, they want to make it centralized. Maybe you can use blockchains in some kind of decentralized fashion for this, but the idea — it’s not a very sexy, headline-getting use case — but it’s something that’s particularly needed to ensure their transparency within the trading aspect of these different financial instruments globally.”

Swanson will host a free webcast — The Continued Existence of Bitcoin, Altcoins, Appcoins, and Commodity Coins — on Tuesday, December 2, to talk about the various coins being created and the legal and technical challenges facing the developer community. Read more…

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Four short links: 7 November 2014

Four short links: 7 November 2014

Twitter Emoji, Immersive Cinema, Bitcoin Regulation, and Internet Sovereignty

  1. Twitter Open Sources Their Emoji Library — Emoji are the sparklines of sentiment.
  2. Interactive 360-degree Films. From Google (Medium) — you move the camera through a movie shot in 360 degrees, and can choose what you’re looking at through the scene. I can’t wait to try this, it sounds brilliant.
  3. Bitcoin Crackdown — everyone who started exchanges and mutual funds thinking Bitcoin wouldn’t be regulated like a currency is getting an SEC headache.
  4. Connected Choices: How the Internet is Challenging Sovereign Decisions (PDF) — Ultimately, the Internet remains both a global commons and part of each nation’s sovereign infrastructure, and thus activities in cyberspace must continue to navigate two sets of demands: national interests and global interests. […] Political leaders are responsible for articulating a vision and establishing general principles and policies to achieve their goals and, accordingly, are constantly trying to advance their agendas using policy, law, market mechanisms, regulation, standards, and other initiatives. The evidence is clear; you just have to look for it.
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Four short links: 1 October 2014

Four short links: 1 October 2014

Robot Learning, Internet Confidentiality, Bootstrap Material Design, and Bitcoin Adoption

  1. Robotics Has Too Many Dreamers, Needs More Practical People (IEEE) — Grishin said that while looking for business opportunities, he saw too may entrepreneurs proposing cool new robots and concepts but with no business cases to support them. The robotics industry, he added, needs more startups to fail to allow entrepreneurs to learn from past mistakes and come up with more enduring plans. A reminder that first to found rarely correlates to biggest exit.
  2. Fixing the Internet for Confidentiality and Security (Mark Shuttleworth) — Every society, even today’s modern Western society, is prone to abusive governance. We should fear our own darknesses more than we fear others. I like the frame of “confidentiality” vs “privacy”.
  3. Bootstrap Material Design — a material design theme for Bootstrap. Material design (Google’s new design metaphor/language for interactive UIs) is important, to mobile and web what HIG was to MacOS, and it specifically tackles the noisy surprises that are app and web interfaces today.
  4. Simon Wardley on BitcoinWhy I think US will adopt bitcoin … it is currently backed by $284m in venture capital, you’re going to get it whether you like it or not.
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Four short links: 28 May 2014

Four short links: 28 May 2014

Targeted Breakage, Driverless Cars, BitCoin Bigness, and IoT Approaching

  1. Maciej Ceglowski on Our Internet — If you haven’t already read this because someone pushed it into your hands, read it now. If these vast databases are valuable enough, it doesn’t matter who they belong to. The government will always find a way to query them. Who pays for the servers is just an implementation detail.
  2. Design Changes Possible With Robot Cars (Brad Templeton) — While a nice windshield may be good for visibility for forward-facing passengers, there is no need to have a large unobstructed view for safety. The windshield can be reinforced with bars, for example, allowing it to be much stronger in the case of impacts, notably impacts with animals. Other than for passenger comfort, the windshield barely has to be there at all. On behalf of everyone who has ever driven in Australia at dusk … I for one welcome our new robot chauffeurs. (via The Atlantic)
  3. Bitcoin Set to Overtake Paypal Transaction Volumes“In the next one or two years, Bitcoin can surpass the dollar transaction volumes of other established payment companies including Discover, and even American Express, MasterCard, and Visa,” said SmartMetric CEO Chaya Hendrick. (via Hamish McEwan)
  4. 1 in 5 Americans Has Their Physical Environment on the Internet (Quartz) — One in five adult American internet users already has a device at home that connects the physical environment to the internet, according to a Forrester Research report (paywall) out last week.
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Bitcoin: what happens when the miners pack up their gear?

When the mining subsidies end, will the bitcoin network centralize into a bank?

Radar has a backchannel, and sometimes we have interesting conversations on it. Mike Loukides and I recently had a long chat about bitcoin. Both of us were thinking out loud and learning as we went along, and on re-reading the thread I’m astonished by our advanced level of ignorance. I would like to publish it because it hints at just how hard it is to understand the bitcoin network. The founding papers that describe the system leave a lot of implementation to the imagination, and the level of mis(dis?)information around the web is staggering. It’s no small thing to get the basics right. But beyond the basics, the bitcoin network has that property of an inside-out onion, where the harder you look, the more (and bigger slices of) complexity you find.

Anyway, we’re not going to publish it. I don’t mind looking stupid, but I don’t want to look that stupid — also, the comments would be torture.

However, some of the things we were wondering about are worth wondering about publicly. Especially this: what happens when the mining subsidies end? Will transaction fees pick up the slack? I think ultimately the answer is yes, but maybe not in the way a lot of people expect. Read more…

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