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Satoshi Nakamoto

A Closer Look at Satoshi Nakamoto

Satoshi Nakamoto is the alias used by a person or group who authored the Bitcoin whitepaper. Satoshi is the creator of the first release of the Bitcoin protocol and blockchain database. The alias was used in email and forum correspondence from August 2008 through April 2011.

History

Satoshi’s first appearance in the world was the publication of the Bitcoin whitepaper to several mailing lists on October 31, 2008. Beginning in 2007, Satoshi wrote the initial codebase for Bitcoin and released it on Sourceforge on January 9, 2009. On January 3, 2009, Satoshi created the ‘Genesis Block’ of Bitcoin containing the text, “The Times 03/Jan/2009 Chancellor on brink of second bailout for banks.” This text is in reference to the headline of the front page of “The Times” newspaper from England and Satoshi’s dissatisfaction with Fractional Reserve banking.

For two years, Satoshi was very active in creating and promoting Bitcoin, including:

From mining Bitcoin in the early days, addresses belonging to Satoshi have amassed approximately one million Bitcoins.

His last verifiable communication to the world was in April 2011, simply stating:

“I’ve moved on to other things. It’s in good hands with Gavin and everyone.”

Attributed Innovations

Both Bitcoin and the Blockchain Protocol have been attributed to Satoshi Nakamoto, as well as Predicative Script.

Possible Identities of Satoshi Nakamoto

There has not been any verifiable proof as to whom the individual really is. The following individuals have all been thought potential Satoshi Nakamotos at one time or another.

Dorian Nakamoto

A high profile article in Newsweek penned by Leah McGrath Goodman suggested that Dorian was Bitcoin’s creator. He is a Japanese American man with the birth name of Satoshi Namakoto. He was trained as a physicist at Cal Poly Pomona and worked on classified defense projects. He has also done work for Citibank. He was laid off twice in the 1990s and was libertarian. In an interview, he responded to a question 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.”

Later, it was revealed that he had no connection to the cryptocurrency, and he misunderstood the question as relating to his work with Citibank and not Bitcoin. Within twelve hours of the article being released, Satoshi Nakamoto’s account on the P2P Foundation website was hacked and posted the message:

“I am not Dorian Nakamoto.”

This message was posted by the hacker due to the vulnerabilities in GMX’s email system.

>> The Most Common Misconceptions About Bitcoin: Breaking the Mold

Hal Finney

Hal lived a few blocks from Dorian Nakamoto. Between this and a writing analysis, Hal is the closest possible candidate for being Satoshi Nakamoto. However, there is one event that discredits Hal as being Satoshi. In January 2009, when Hal and Satoshi were working on the early versions of Bitcoin, Hal encountered an error and posted a debug log to the mailing list:

“Hi Satoshi – I tried running bitcoin.exe from the 0.1.0 package, and it crashed. I am running on an up to date version of XP, SP3. The debug.log output is attached. There was also a file db.log but it was empty.”

Satoshi acknowledges the bug and releases 0.1.2 with a fix:

“All the problems I’ve been finding are in the code that automatically finds and connects to other nodes, since I wasn’t able to test it in the wild until now.  There are many more ways for connections to get screwed up on the real Internet.”

In the early days of Bitcoin, Bitcoin sent and received transactions directly between clients using IP addresses. The debug log reveals the IP address of three users connected to the IRC channel. On January 10, 2009, there were only two people working on the project at that time. Hal and Satoshi.

Tracing the IPs reveals Hal’s IP address and an IP address out of Van Nuys, California on a DSL connection.

Nick Szabo

Skye Grey, a blogger, linked Nick to the Bitcoin whitepaper using some writing analysis. Nick is a decentralized currency advocate and published a paper on “bit gold.” This is where things get iffy, vis-a-vis Szabo being Satoshi. Based on correspondence between Hal and Satoshi, while Bitcoin was being created, Satoshi was unaware of Bit Gold. Between January 2009 and March 2009, the reference to Bit Gold was added to the Bitcoin.org website.

Craig Wright

On December 8, 2015, Wired magazine wrote that Craig:

“Either invented bitcoin, or is a brilliant hoaxer who very badly wants us to believe he did.”

Craig had established an elaborate scheme of website postings and email correspondences to create the appearance that he and David Kleiman were Satoshi Nakamoto. A very lengthy article written by Sam Biddle and Andy Cush for Gizmodo on December 8, 2015, unpacks Craig Wright’s assertions and business dealings leading to many more questions than answers.

In May of 2016, Craig Wright went on several interviews with the BBC, The Economist, and GQ and claimed to provide technical proof that he is Satoshi. Gavin Andresen originally stated that Craig Wright was Satoshi before retracting his claim.

Despite his assertions, the clearest proof that he is Satoshi has never been provided—none of the original wallets with Bitcoins mined by Satoshi have ever been moved in any way.

Featured image: DepositPhotos © info@crashmedia.fi

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crypto cfd

Trading with Crypto Exchanges and Crypto CFDs

CFD could be a very foreign word for a crypto trader, but for traditional market traders, it is one of the most useful assets to trade with on different markets. CFD is an abbreviation for Contracts for Difference, which are basically assets that help you “buy a price” and not the asset itself. It may sound a bit confusing, but it is still quite easy to understand once you know the basics.

The primary difference between actual cryptos and crypto CFDs is the ownership. Meaning that when you are trading on a crypto exchange, you are using actual cryptocurrencies. But when you are trading crypto CFDs on a CFD broker’s platform, you are trading with the contract, meaning that you don’t actually own cryptos. Immediately it should spark some controversy as to why you should even consider such a trade, so let’s check out the advantages and disadvantages.

Crypto CFD: Advantages

Crypto CFDs are exclusive to CFD or Forex brokers. These companies are able to offer leverage on these assets, which is the primary reason why they are so attractive. For example, if I go to this CFD broker and engage in a $100 trade for BTC CFDs, I can then use a leverage of 1:100. Basically what that leverage does is increase the volume of my trade by 100, meaning I can now trade with $10,000 instead of $100. This, in the end, may earn me more than I would with my own assets. Basically, the broker lends you funds in order to increase your trades and thus your profits as well. Crypto exchanges rarely have this feature, which is why CFDs are not as well known among the crypto community.

Liquidity is also an advantage of crypto CFDs because they can be sold for fiat currencies, making them a lot more valuable.

Another small advantage is the lack of a crypto wallet, as there is no need for one. Therefore traders have all of their assets on one single platform, which helps the logistics. Unfortunately, this is where the advantages end and massive disadvantages begin.

>> How to Become a Bitcoin Trader: A Beginner’s Guide

Crypto CFD: Disadvantages

Leveraging can be a double-edged sword. Although leveraging can offer bigger profits, it can also lead to massive losses, which may cause the trader to fall into debt with the broker. If you ever decide to engage in a crypto CFD trade with leverage, make sure to set a stop-loss on a point where you have half of your initial investment left. So if you invested $100 and got 1:100 leverage, you would have to set the stop loss at somewhere around $9,950 to avoid a complete zero-out of your account.

Another disadvantage is that CFD trades have deadlines. This means that when you place an order, that order will expire in a few days or so. This renders long-term investments completely useless. You could technically still do it, but the over-night fees for maintaining the position would just make it unprofitable. The over-night position is as it sounds, a position that lasts more than 24 hours, and it is usually accompanied by a fee.

Another disadvantage is that you don’t actually own cryptocurrencies, meaning that you cannot allocate them anywhere you like. For example, let’s say that there is a service that is only available in Bitcoin or Ethereum; you would not be able to pay with a Bitcoin or Ethereum CFD, because they are not real cryptos. Furthermore, the allocation may become a problem as a broker’s policies may change about crypto CFDs, which could stick you with the trade or force you to opt-out in an unprofitable position. With crypto exchanges, it’s different as you can immediately allocate the cryptos to another exchange’s account.

Conclusion

We have two very clear paths in front of us. Crypto CFDs come with advantages as well as disadvantages, so deciding how you want to proceed requires extensive research and comprehension. Hopefully this article can be a starting point to both.

Featured image: Pixabay

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stablecoin

3 Stablecoins Everyone Should Know

You may be familiar with the term stablecoin. But because it is a relatively new type of cryptocurrency, you may not be familiar with what it is.

So what is it? Why is there so much fuss surrounding these coins and what are the stablecoins you should know about?

Let’s dig in!

Stablecoins: What On Earth are They?

In its most simple terms, a stablecoin is a cryptocurrency that is pegged to a tangible, or stable, asset. Examples of a stable asset include gold or the US dollar. The idea of backing a cryptocurrency with a tangible asset is to reduce the price volatility associated with standard cryptocurrency. In doing so, digital coins become far more practical for everyday use, and it may encourage global adoption.

Cryptocurrency Volatility

Standard cryptocurrencies such as Bitcoin have high volatility. On any given day, the value can suddenly increase or decrease (often by significant percentages) for no apparent reason other than market hearsay or fear mongering. This is because the value of Bitcoin, and other cryptocurrencies, depends on what value is given to it by investors. It does not depend on a physical asset to determine its worth. Because of this, Bitcoin and most cryptocurrencies are inconvenient for daily transactions.

Imagine this: You are a vendor, and you sell a dress in exchange for 300 RPX. At the time of the transaction, 300 RPX could be worth $35 USD. However, the next day that same amount of RPX could now equal $23 USD. You wouldn’t be a very happy vendor. Further, you would be consistently aware of the ever-changing value to which your wares are a victim too.

Price changes like this are shocking for merchants and consumers alike. But the adoption of stablecoins may be a catalyst to the decentralized cryptocurrency system working mainstream.

>> Are Stablecoins the Future? The Winklevoss Twins Seem to Think So!

Stablecoins Offer an Optimal Currency

The goal is to create an optimal currency.

According to Forbes“an optimal cryptocurrency should have the following four traits: price stability, scalability, privacy, and decentralization.”

Price stability is the key trait, and this is what a stablecoin aims to achieve. As Forbes explains further, “Short-term stability is important for transactions and long-term stability is important for holding.”

So let’s look at some examples of stablecoin projects aiming to create the optimal cryptocurrency.

Tether: The Pioneer

You can’t talk about stablecoins without giving a nod to the pioneer. Tether is notable because it’s widely considered the first stablecoin.

1-to-1 USD

Tether claims it is 100% backed by fiat currency held in a reserve bank account. It is said to be backed 1-for-1 to the US dollar, with 1 Tether being equal to $1 USD. It will remain fully backed once all Tethers in circulation are less than or equal to all the fiat held in the reserve.

stablecoin

Most Established but Controversial

As it is the pioneering stablecoin, Tether is the most established and is well-integrated. However, Tether has faced controversy in the past, as its claims have not been legitimately proven. The company’s terms and conditions state that “Tether reserves the right to refuse to issue or redeem Tether Tokens.”

Some fear this statement gives the company credence to not redeem the currency at the 1-to-1 value it claims.

uBUCK: The All-in-One Convenience

uBUCK is a digital currency wallet that has fiat capabilities.

According to its website, uBUCK enables you to “pay people with uBUCK cash with lightning speed, make purchases online at approved merchants or withdraw cash at the ATM.”

With the ability to buy uBUCK Cash using either Bitcoin or Ethereum cryptocurrencies, a user is effectively “storing” their cryptocurrency in a stablecoin that is tied to the US dollar.

>> Circle and Coinbase Launch Their Joint Stablecoin USDC

How Does It Work?

It works like this: A user buys a prepaid uBUCK voucher from the uBUCK mobile application. As stated, you can use BTC or ETH to buy, but regular fiat credit and debit purchases are also accepted.

stablecoin

Users then load the uBUCK Debit MasterCard (linked to the uBUCK wallet) with their voucher credit, effectively converting the uBUCK Cash into dollars by doing so. This then means ATM withdrawals and regular shopping around the globe is possible with the uBUCK MasterCard.

Wallets

uBUCK comes with four secure wallets. These are the uBUCK Cash Wallet, a Bitcoin wallet, Ethereum wallet, and the USD Debit card. By having a multi-functional wallet, a user can manage their digital and fiat currency in one convenient place. Then, as stated, by using the uBUCK app, the wallet enables users to store, convert, and spend their fiat and cryptocurrencies.

Free Money Transfer

Another interesting feature of this platform is that users can send uBUCK vouchers to other recipients anywhere around the world for free. Essentially, the service allows free money transfers in only a few minutes.

MakerDao: Complex but Transparent

Maker is a decentralized autonomous organization, and its stablecoin is called Dai. Pegged against the US dollar, Dai operates on the Ethereum blockchain and, as such, it is transparent.

Asset Collateral

Each Dai is worth $1 USD, and the website states that “Every Dai is backed in excess by collateral at all times, so you never have to worry about its value moving up or down.

Further:

“Every Dai is backed by another asset of value. Our collateral portfolio is diversified, allowing multiple assets to guarantee the value of each Dai.”

stablecoin

Ethereum Blockchain

The system is said to be quite complex. To receive Dai, you have to first send your ETH tokens to the Maker platform where they will be “locked up.” Then using the Ethereum blockchain, Maker maintains stability by an autonomous system of smart contracts.

According to its website, Dai offers freedom from volatility:

“Dai stands to transform the financial industry by creating a stable and decentralized currency that will allow businesses to realize the future of money.”

>> Facebook Cryptocurrency: Is the Tech Giant Developing a Stablecoin?

The Takeaway

Stablecoins can bring stability to the crypto world and offer real potential for global adoption. The key is to create the optimal cryptocurrency inclusive of price stability, decentralization, scalability, and privacy.

The technology is still relatively young and will continually evolve, but it is clear that demand is there. People are looking for the balance between a decentralized payment network and stable value.

Everybody wants to feel secure in their transactions and know that they won’t lose value on their assets for no reason other than market hype.

We’ve mentioned only a few stablecoins here. There are more out there! Do you have any favorites? Do believe the technology will work and bring us towards that optimal currency?

Let us know below!

Featured image: DepositPhotos © zim90

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What Is XBT and How Does It Relate To Bitcoin?

XBT and BTC – How Were these Acronyms Adopted?

XBT or Bitcoin was created by Satoshi Nakamoto in 2009. Satoshi Nakamoto did not specify any abbreviation for Bitcoin and BC was the acronym originally adopted. Exchanges specified Bitcoin as BTC, and it caught on. ISO 4217 standard is a non-governmental organization that specifies currency codes and non-governmental assets like gold (XAU) and silver (XAG). The organization is independent of any national agenda and mainly works as a voluntary group that approves three-character codes for countries and non-governmental units.

xbt bitcoin logo

ISO 4217 Standard

According to the ISO 4217 standard, there are a set of rules that define the nomenclatures of national currencies and non-governmental assets (like gold and silver). The first two letters of each acronym must specify the country code, and the last letter of the acronym must denote the first letter of the national currency of the country in question.

The country code for China is ‘CN’, and its currency is Yen, of which the first letter is ‘Y’. According to the ISO 4217 standard, the acronym for the Chinese currency is listed as CNY. Similarly, the country codes for Japan, USA, and India are JPY, USD, and INR respectively.

XBT blocks

Why Do We Use the Acronym ‘XBT’?

Bitcoin is decentralized in nature and there is no standard or authority that can force the use of the acronym XBT. The problem with the acronym ‘BTC’ is that it has already been listed under the ISO 4217 standard, and clashes with Bhutan’s currency, which is Bhutanese Ngultrum (BTN). This is why the alternative ticker name, ‘XBT’ is used.

Kraken became the first exchange to make the switch from BTC to XBT in 2013. Several other exchanges like BitMEX use the acronym XBT for Bitcoin as well. Credit and debit card payment networks like MasterCard, VISA, and American Express make use of these acronyms for currency conversions and international transactions. These payment networks will revert back to the ISO listing as soon as affiliated banks request settlement in the form of Bitcoin.

So that’s how XBT came about! Learn more about the history of Bitcoin 

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