Cryptocurrency company pushes back against Shadow Brokers' latest claims

The Shadow Brokers say they will be accepting Zcash for subscriptions

to their monthly dumps of leaked NSA files — a decision intended to needle the U.S. government over its role in the cryptocurrency’s creation. But the company that oversees Zcash says that federal agencies have no ties to the cryptocurrency beyond some general connections to its academic roots. In announcing the subscription service, the Shadow Brokers insinuated that Zcash has links to the Defense Advanced Research Projects Agency, other U.S. military agencies and Israel.

“Maybe USG is needing to be sending money outside from banking systems? If USG is hacking and watching banking systems (SWIFT) then adversaries is also hacking and watching banking systems. Maybe is for sending money to deep cover foreign assets? Maybe is being trojan horse with cryptographic flaw or weakness only NSA can exploit? Maybe is not being for money?” the blog post written in broken English reads.

Though the hacking group has claimed Zcash’s privacy model to be unreliable and potentially entwined in U.S. government interests, it said it will continue to use the cryptocurrency at least through June. Researchers and executives at the Zerocoin Electric Coin Company, Zcash’s operator, maintain that the platform offers strong security benefits and is free of U.S. government influence. Users of the Zcash network own about $350 million worth of the currency, the company says.

Government help, but no ties

ZECC says it prides itself on transparency. It discloses investors on its website and offers further financial information in a regularly updated blog. “There’s no other financial backing of the Zcash company other than what’s shown in our blog posts,” Zcash CEO and founder Zooko Wilcox told CyberScoop. Zerocash, the research project that led to Zcash, lists DARPA, the Air Force Research Laboratory, the Office of Naval Research, the Israeli Centers of Research Excellence I-CORE program and the Israeli Ministry of Science and Technology as sponsors, among others.

When Wilcox founded Zcash, however, none of the above institutions invested in or supported the company, he said. “They don’t have any financial stake in the company,” Wilcox said. “They donated money to the research institutions years ago, and none of them are among the investors in the company. On the other hand, all of our scientists are still on good terms with that world. Our scientists still work at the same institutions, still doing new research and still getting grants from those or other grant-making institutions, governments or universities.”

Matthew Green, creator of the Zerocash protocol and a professor at Johns Hopkins University, said the protocol originated in an academic paper meant to address the privacy flaws in cryptocurrency like bitcoin. “We wanted to build basically an experimental currency that would offer at least reasonable privacy, if not more, and so that was kind of why we deployed with Zerocash,” Green said. “We wanted to see people actually using the technology in the real world.”

The paper, he said, lists DARPA, ONR and other organizations as sponsors because he was funded by a variety of ongoing grants through his work at Johns Hopkins. “It wasn’t like anyone specifically, explicitly funded us for that work,” Green said, noting that it is his practice to include thanks to each funder in papers he produces. “DARPA did not fund us to make Zerocash, and neither did the Office of Naval Research and any of those people,” Green said.

DARPA Chief of Media Relations Jared Adams wrote in an email that the contract number listed in the Zerocash paper funded the PROCEED program, which supports research in practical computation on encrypted data. Georgia Tech is recorded as the lead institution on this project, but research that occurred at other institutions, such as Johns Hopkins, could have benefited from this funding. “They did receive funding from FY10 through FY14, so some sub, including Zcash, could have contributed research in that time,” Adams wrote.

As far as connections to Israel, Green said he did collaborate with a “globally spread” team, including contributors from MIT, Tel Aviv University and Technion, the Israel Institute of Technology. “We published the first paper, and we had met them at a conference, and got good discussion about how we could improve it,” Green said. “They had been working on some other technology that was really helpful, and so we basically used some parts of their technology to build a new system.”

Leveling the playing field

Zcash itself was not deployed by Green and fellow researchers. ZECC spawned instead from a collaboration between Wilcox and the researchers in transforming the ideas published in the academic papers into a commercial venture. “We had some input, obviously, as scientists, but basically that was our role, is just to give advice,” Green said.

Wilcox had been leading the charge in the crypto-technology industry for years prior to his contact with Green and the researchers, which is what drew the two parties together, Wilcox said. A consistent proponent of internet privacy, Wilcox initially declined the offer to work with the researchers on commodifying Zerocash, he said, because he believed the technology would fail to reach a large audience in the ultra-competitive cryptocurrency market.

The CEO had a change of heart, however, when he woke up the next morning and realized that the increased privacy features that Zcash offers might match up perfectly with the needs of mainstream businesses. “You need a level playing field for everyone in an economy to be safe and have secure transactions, so I thought, ‘Zcash can be the mainstream that all business can rely on for all transactions,’” Wilcox told CyberScoop.

An experiment in privacy

On May 28, the Shadow Brokers emptied a bitcoin wallet previously associated with a bidding war for other outdated NSA hacking tools. The mysterious group’s latest statement attempts to explain its adoption of the cryptocurrency: “Zcash is making claiming bitcoin + privacy.” While the content of the Shadow Brokers’ next supposed data dump in June remains unclear, the group has set the price for access at 100 Zcash, equivalent to approximately $23,000.

The near-anonymity that Zcash offers allows organizations like the Shadow Brokers to receive their payments without fear of discovery or unmasking. While bitcoin allows for transactions to be publicly monitored, and thus traceable, Zcash’s ZeroCoin product hides the identities and transaction data of its users, rendering tracking of the currency impossible.

Despite the technology behind the cryptocurrency, the Shadow Brokers have claimed that Zcash is neither safe nor reliable. That should not matter to the “high rollers, hackers, security companies, OEMs and governments,” who may be interested in the subscription program, the group says. “Playing ‘the game’ is involving risks,” a statement reads. Wilcox likens the Zcash network to other widely accessible digital platforms.

“Zcash is just an open tool, like bitcoin or ethereum, and like a lot of the internet technology that’s out there, like email or Firefox; it’s just an open tool,” Wilcox said. Neither Wilcox, nor any other institution or agency, could lock out the Shadow Brokers from the Zcash network even if they wanted to. “It would be nice if there were somebody who had the ability to ban bad actors from using the network, but on the other hand, since there isn’t anybody who has the ability to ban anyone else from using the network, that makes it like the internet in being a global, human utility that nobody can get locked out of,” Wilcox said.

Chuck Reynolds
Contributor
Please click either Link to Learn more about – TCC-Bitcoin.

Alan Zibluk Markethive Founding Member

The Benefits And Best Practices Of Branding Your Own Cryptocurrency

In 2015, "Minecraft," one of the most popular online games now owned by Microsoft, announced that PlayMC, one of their servers, would be introducing their own cryptocurrency in order to teach children about the digital currency. It’s a pretty smart move since it sets up the potential future for the mass adoption of this new type of currency.

Although the game already has in-game currencies that mimic cryptocurrency,

this is the first of its kind where the players can take their money from the game and then use it in the real world for other things. There still will be the need for these players to convert their money through a bitcoin exchange, which must verify identity and approve transactions, but this is the first of its kind to be available to those under 18.

Other companies have also branded their own cryptocurrency as a move to set themselves apart from the competition, also believing in the ability of the digital currency to change transactions forever. To date, these branded digital currencies have yet to really catch on, but there is a lot to be said for this strategy, seeing that major companies like Microsoft and those behind "Minecraft" are aggressively working toward greater acceptance. Since it is too late to be the first mover in creating your own cryptocurrency, you can still jump on this opportunity as a business owner by creating a niche digital currency that offers features that are attractive to your audience or that illustrates the benefits of using it.

Benefits And Best Practice Of Becoming Your Own Digital Currency

While some refer to it as vanity money creation, it’s an idea that has marketing value — plus, it offers a way to reach an audience that may be looking for a new way to pay for goods or services. You’ll be able to offer significant benefits, including helping users avoid the risk of fraud, enjoying complete anonymity to purchase what they want and not having to worry their currency will be taken away by any government institution.

It’s also something that sets you apart from your competition and intrigues your target audience, which may be slowly catching on to the idea of digital currency. For example, as a CTO for an online payments platform, the development of our own digital currency can be of benefit to our small business customer base and set us apart from other payment processors. Plus, we’ll have control over the payment process because we will have built the actual currency in use and know everything about it rather than relying on any third-party provider.

However, before you jump right in, there is a certain skill level that is necessary to create your own cryptocurrency brand. You’ll definitely need some technical expertise on your team in the form of a developer that has some working knowledge of how digital currency works and the blockchain technology behind it. Although the code is open source with cryptocurrency, it’s not as simple as writing a few lines of code. More thought and technical know-how are needed to develop your best practices approach to branding a digital currency.

Here are some recommendations:

• Make sure you have a specific benefit for your end user. While it’s great to have a branded digital currency, if it’s just a “vanity” coin like a vanity plate on your vehicle, it’s not worth it. Instead, think about how you could create more value for your customer, such as convenience, more options, greater security, etc.
• Develop the code yourself or with the help of a team or outsourced developer who understands which programming language should be used and how it can work within the existing cryptocurrency environment. This includes its ability to be used with existing cryptocurrency exchanges. You can also use a coin creation service like CoinCreator.net or CryptoLife that takes care of the technical aspects if you don’t have the resources on hand within your own company.
• Weigh the option of creating your own blockchain or using an existing one. You’ll need this as part of constructing your own digital currency because it’s the technological framework. If you want to keep control over the code that makes up your branded currency, then you’ll need to build your own blockchain, which also helps you add any unique features you want to further differentiate you from the digital currency crowd.
• Determine what unique features you want to have, including setting the block reward for miners, how much data is allowed in each transaction, the block size and how much coin supply you want to have out there.
• Decide what services you want to use the coin for, including allowing your customers to check on their wallet balances and transactions as well as providing a way to help your customers accept your coin as payment in a way that integrates with their payment platform.
• Look for any vulnerabilities with your branded cryptocurrency, even employing a friendly hacker to see if they can break into it or find any weak points. This is critical that you have it as secure as possible before putting your name on it and offering it to your audience.

With more stability coming to the overall cryptocurrency environment and larger brands coming on board with offering and accepting digital currency as part of the global transaction environment, the option of branding your own digital coin is an exciting opportunity to stand out and serve your target audience with new options that help them become a part of this digital age.

Chuck Reynolds
Contributor
Please click either Link to Learn more about – TCC-Bitcoin.

Alan Zibluk Markethive Founding Member

Battle Of The Cryptos:
Bitcoin Vs. Ethereum

   

Bitcoin enthusiasts and investors celebrated Bitcoin Pizza Day

This week, bitcoin enthusiasts and investors celebrated Bitcoin Pizza Day, the seven-year anniversary of the day programmer Laszlo Hanyecz spent 10,000 bitcoin on two Papa John’s Int'l, Inc. PZZA 0.55% pizzas. Today, the bitcoin spent on those pizzas would be worth $22 million. The price of bitcoin has skyrocketed in recent years as investors look for protection in an increasingly uncertain global economy and speculators attempt to capitalize on the momentum. However, while bitcoin may be the most popular cryptocurrency out there, it’s certainly not the only game in town.

There's Another Sheriff In Town

In fact, bitcoin isn’t even the top-performing crypocurrency of 2017. While bitcoin has once again doubled in value in 2017, the value of rival currency ether is up 2,000 percent. On the surface, ether and bitcoin share a number of similarities. Both cryptocurrencies utilize blockchain technology, the decentralized public record of all transactions that is the core of the two currencies’ security features. However, digging deeper into the two currencies reveals they are completely different in both design and utilization.

Ethereum, A Different Cryptocurrency

Bitcoin has primarily served as a currency for consumer payment transactions. The Ethereum ether blockchain was designed to include many more features that would appeal to the corporate world. The primary feature of Ethereum that has drawn the interest of corporations is its support of smart contracts. Smart contracts are computer algorithms that automatically execute the terms of a contract as soon as the contract’s conditions are met. For example, Barclays PLC (ADR) BCS 0.28% has used this type of technology for derivatives trading.

While bitcoin’s grassroots support continues to swell, a group of corporate powerhouses, including JPMorgan Chase & Co. JPM 0.51%, Microsoft Corporation MSFT 2.37% and Intel Corporation INTC 0.55%, have formed the Enterprise Ethereum Alliance (EEA), a network to connect large companies to work on projects involving the Ethereum blockchain.

Bitcoin’s current market cap of nearly $40 billion is more than double that of ether, but investors see the power of the corporate involvement with Ethereum and the appeal of the smart contract capabilities. For investors who want to make a big bet on Ethereum, investment options are limited at this point. The EtherIndex Ether Trust filed for NYSE listing in July 2016, but has yet to gain SEC approval. The SEC recently said it was planning to review a previously rejected bitcoin ETF created by Cameron and Tyler Winklevoss. For now, investors can set up an account on Coinbase to trade bitcoin and ether directly.

Chuck Reynolds
Contributor
Please click either Link to Learn more about – TCC-Bitcoin.

Alan Zibluk Markethive Founding Member

From 4Chan Meme to Real Currency: ‘Rare Pepes’
are Innovating Cryptocurrency

As the value of cryptocurrencies like Ethereum and Bitcoin surge to all-time highs,

a new project in crypto space promises to innovate the scene with tradable cards based on the 4chan meme, Pepe the Frog, which rose to popularity during the 2016 US election. Amid the civil crisis in Venezuela and the plummeting of the Bolívar, some of its more enterprising startups were among the first to hop onboard the cryptocurrency bandwagon to secure their financial safety through the “Rare Pepe” digital currency.

So what is the tradable Rare Pepe, exactly? Unlike Dogecoin or other joke  cryptocurrencies that hold next to no value, the tradable Rare Pepe is built around the concept of tokens and digital asset collection. The 4channers who first popularized the Rare Pepe meme designed variations of Pepe—a comic strip character by artist Matt Furie—came up with the idea that each of these Pepes was one-of-a-kind, and therefore “rare.” In 2011, an eBay prank submission collecting 1,200 Rare Pepes received a $99,166 bid before being removed from the platform.

The tradable Rare Pepe builds on this concept and turns the joke into a reality. Issued as tokens on the bitcoin blockchain through Counterparty, user generated Rare Pepe collectible cards hold monetary value and are listed on a directory after inspection by administrators. The assigned tokens tied to Rare Pepe cards are locked on the blockchain,  meaning it isn’t possible to alter their Bitcoin value. Each card is a one-of-a-kind digital asset.

In addition to their scarcity, tokens issued on Counterparty are tradable on the service’s Bitcoin exchange, so users who possess these tokens can trade the Rare Pepe cards directly without anyone else holding the cards. A variety of wallets are compatible with the tokens, allowing users to amass a collection of Rare Pepe cards. The Venezuela-based game developer of Rare Pepe Party even assigned scores and RPG elements to each Rare Pepe card, incentivizing gamers to build decks of Rare Pepe cards to play online.

It draws from a similar cryptocurrency-based game, Spells of Genesis, a mobile game that gamifies digital assets. Prior to the rise of Rare Pepes, a rare Spells of Genesis card called the Satoshicard, sold for over 6 bitcoins in 2016. At the time, it was worth $3,700. It’s now worth $14,100. Rare Pepe Party and Spells of Genesis aren’t the only platform to make innovative use of cryptocurrency. The Book of Orbs was designed a collection book and wallet for Rare Pepe owners to collect and trade them on their phones.

As the players of Pokemon Trading Cards and Magic the Gathering grow up, tradeable Rare Pepes provide nerdy cryptocurrency traders actual reason to collect cards, make money, and have fun while they’re doing it. And unlike the paper-based cards, they can’t be damaged or destroyed. Rare Pepes may still seem like a joke in the mainstream, but as Coin and Peace argues on his Medium article, they have the potential to reinvent the concept of currency by providing them with additional, if only entertaining utility.

Chuck Reynolds
Contributor
Please click either Link to Learn more about – TCC-Bitcoin.

Alan Zibluk Markethive Founding Member

Amid Bitcoin Trading Resurgence,
Chinese Miners Shut Down Without Warning

    

A strange phenomenon is unfolding in China

as Bitcoin miners mysteriously close down or relocate their operations. Mines in the country’s Sichuan province were “reluctant” to discuss the reasons for withdrawal, major news resource People.cn reports. Bitcoin has recently continued its expanding price as Chinese exchanges get the green light to allow Bitcoin withdrawals. As traders delight in the new possibilities for sanctioned exchange use, however, a lack of corresponding regulation for miners is causing problems.

“A local official said the closure of the Bajiaoxi Mining Company aims at cracking down on illegal cash operations and on controlling systemic risks,” People reports, while no party was directly cited giving an explanation for the upset. Sichuan’s hydroelectric power is among the world’s cheapest, but the departure of miners is set to cost one power station $147,000 per month in lost billing. At a time when Bitcoin fees are higher than ever, the effect on miners themselves is also significant. “The southwestern region has abundant hydropower resources,” an “insider” source told fellow publication YiCai Global. “So electricity costs about half the price during the wet season. It’s hard to imagine why any mine would want to relocate now.”

Chuck Reynolds
Contributor
Please click either Link to Learn more about – TCC-Bitcoin.

Alan Zibluk Markethive Founding Member

    

A Greek lawyer has made the Financial Times’ list

of top legal innovators in Europe for his use of Bitcoin during the country’s financial

crisis.

"Panos Giannissis came second on a list of eight finalists shortlisted by the publication, which praised his use of the virtual currency when capital controls appeared in Greece two years ago."

“When capital controls were imposed during the Greek financial crisis last year, Panos Giannissis helped clients to stay in business by converting some of their working capital to Bitcoin, the virtual currency,” it writes. “He also led the development and implementation of the information systems at his firm.”

Giannissis’ triumph is conspicuous for mainstream press’ continued treatment of Bitcoin as a bonafide “innovation.” “…He negotiated a deal with his clients’ suppliers from abroad to accept Bitcoin as collateral to back importation of supplies in case his clients would not be able to make payments in fiat money,” an accompanying press release further explains.

“After the Capital Controls were imposed, the deal was activated and his clients continued to receive their supplies as usually, while their suppliers were covered by the Bitcoin collateral.” The broader international media tone has shifted away from Bitcoin as a highly volatile, insincere investment towards one full of potential with valid use cases. As Cointelegraph reported earlier this week, however, a lot of the latest supportive comments appear tied solely to Bitcoin’s price.

Chuck Reynolds
Contributor
Please click either Link to Learn more about – TCC-Bitcoin.

Alan Zibluk Markethive Founding Member

    

Sberbank CEO Herman Gref has “agreed” on the development of a Russian national cryptocurrency

with the country’s central bank. Sberbank is Russia’s major state-controlled bank. In unofficial reports from local news aggregators, the so-called “Russian Bitcoin” will use Sberbank as its base and will be “the only cryptocurrency freely available for sale and purchase” in the country. “All other [cryptocurrencies] will only be available via exchanges or trading platforms,” the Telegram news channel DeСenter reports Friday.

The news comes amid the ongoing economic forum in St. Petersburg, where the central bank deputy Olga Skorobogatova announced work had “already begun” on developing the national cryptocurrency. Skorobogatova had previously outlined plans to regulate Bitcoin and its like in 2018, on the basis that an outright ban was no longer feasible. On the topic of Blockchain, she told forum members that it “is without a doubt necessary to buy into” such “revolutionary technology,” yet understanding the associated risks was essential.

Fully-controlled integration would require “ seven to 10 years,” she added and continued: “In the coming years we will be concentrating on digital letters of credit, custodian accounting and digital bank guarantees using the Blockchain.” Gref had also been encouraging on Blockchain, estimating initial implementations by 2019. “Two to two-and-a-half years is the timeframe in which we could be talking about seeing Blockchain technology commercially operating,” he said in February.

Chuck Reynolds
Contributor
Please click either Link to Learn more about – TCC-Bitcoin.

Alan Zibluk Markethive Founding Member