Ep. 18 Szabo's Law VS Zamfir's Hubris
In this episode of The Unhashed Podcast: Vlad Zamfir of the Ethereum Foundation is taking Nick Szabo to task for what he calls “Szabo’s Law”. Is this just a PR stunt for a new coin in 2019 or is Vlad just clueless about the point of a blockchain? Bitcoin volume in Venezuela hits a near all-time high as Maduro faces increasing pressure at home and abroad. But is Bitcoin all it’s Caracased up to be in the country? And...friend of the show Sanket Kanjalkar along with andrew Miller has released a new academic paper attacking vulnerabilities in many Proof of Stake blockchains. Are the issues outlined within the paper just specific to those chains or is there something more critically wrong with POS altogether?
Weekly News Wrap Up:
I (Bryan) have started getting emails from Coinbase stating that it has integrated with TurboTax. Quick aside for our non-US customers, TurboTax is the most prevalent software to help you compute and file your US income tax return. Is this good or bad for Bitcoin as a whole?
A report by Messari, a crypto data startup, took aim at our favorite whipping-crypto XRP/Ripple. The report stated that the market cap of XRP may be overstated by as much as $6B. As depicted on data providers like CoinMarketCap as well as Ripple – its circulating supply is pegged at roughly 41 billion tokens. But in its report, Messari posits that of that figure, 19.2 billion XRP “may be illiquid or subject to significant selling restrictions” tied to daily trading volume, including “at least 6.7 billion XRP” held by Ripple co-founder Jed McCaleb that are subject to an agreement between him and Ripple. In addition, Messari said that it believes that the circulation figure includes 5.9 billion XRP pledged by Ripple co-founder to a nonprofit entity called RippleWorks, an amount that it contended hasn’t been delivered. As well, Messari identified 2.5 billion XRP held by RippleWorks that are also subject to daily selling restrictions.
(Ruben) Vlad Zamfir, one of the main Ethereum Proof-of-Stake researchers, published an article where he stated his position against immutable blockchains, or what he calls “Szabo’s Law”, in favor of a “crypto legal system”. He called the inability to resolve disputes under “Szabo’s Law” insecure and aggressive, and argued that blockchains won’t reach social scalability unless they become more “friendly” to the law. (Tweet)
Data from monitoring resource Coin Dance, which began tracking Localbitcoins volumes again this week after a short hiatus, confirmed the new weekly record for Venezuela. In Bitcoin terms, the week ending January 26 did not set a new high for trade volumes, pointing to the continued weakness of Venezuela’s six-month-old Sovereign Bolivar, however 1,782 BTC went through Localbitcoins over the past seven days, still constituting the second-highest amount on record. The allure of financial self-control was compounded this week amid the ongoing political crisis after the Bank of England denied Maduro’s demands to withdraw the country’s own gold supplies which it stores – supplies worth $1.2 billion, and with the united state’s backing of the pro-Bitcoin Juan Guaido as the “interim president”.
Somewhat unrelated to bitcoin: what do you guys think about this potential ousting of Maduro?
(Ruben) Students from the University of Illinois, among which is Sanket Kanjalkar, friend of Ruben and Mario and an ex-organizer of the Seoul Bitcoin Meetup, published a paper and article about “Fake Stake” attacks on Proof-of-Stake together with Andrew Miller. It showed over 26 cryptocurrencies were vulnerable to Denial-of-Service attacks, crashing the nodes. The problem originates from the fact that it’s difficulty to determine if blocks in a potential longer chain are valid or not. Proof-of-Work doesn’t have this problem, because blocks are expensive to make, even if they are invalid. (Tweet)
We are all aware of the security issues traders must face when they hold their coins on an exchange, however a new startup names Arwen seeks to provide a solution to these problems by allowing traders to maintain control of their keys while still being able to trade on centralized exchanges. The technology is sort of like a lightning network for traders. In a situation where an exchange is hacked, the hackers will not be able to access the crypto assets held by those who are using Arwen’s software. Arwen users can simply broadcast a special transaction on the blockchain, which would allow them to regain full access to their digital assets, similar to lightning revocation transactions. Currently margin traders are out of luck as those options are yet supported. Additionally, there is a requirement for the exchange to lock up an equal amount of the crypto assets that their users wish to trade in blockchain-controlled escrow, which means these trades will cost more to make. “In Arwen all trades are fully collateralized,” said Ethan Heilman, Arwen’s CTO. “For this reason the user must pay a prorated fee for the exchange to collateralize a payment channel. Users who are less interested in security may not want to bother with paying this fee.”
ICO My God, They’re Serious:
Bryan: Radio Lab episode: The Punchline about NHL All-Star John Scott
Mario: The Unhashed Podcast Episode Smile!
One Final Note:
Make sure you are storing your crypto on something secure like a Ledger and backing it up on something sturdy like a Billfodl. If you buy these items through the links above, we do take a cut of the profits but it also helps support the show - a win/win for all involved.