Cryptocurrency and Blockchain News Headline Updated on 31 July 2020 – Cryptocurrency Exchange, Bitcoin Mining, Dogecoin, BIP 148, SegWit2x, Decentralized Autonomous Organization, Soft Fork, Block Size, and more

The headline on 31 July 2020

What does Cryptocurrency Exchange mean?
A cryptocurrency exchange is any system that operates on the basis of trading cryptocurrencies with other assets. Like a traditional financial exchange, the cryptocurrency exchange’s core operation is to allow for the buying and selling of these digital assets, as well as others.

A cryptocurrency exchange is also known as a digital currency exchange (DCE).

To really understand cryptocurrency exchanges, think about the ways that these new types of exchanges are different from traditional financial exchanges. Cryptocurrencies are inherently unstable in terms of value and sourcing. Cryptocurrencies like bitcoin have been associated with major disruptive events where bitcoin value changed dramatically over a short period of time, or where major exchanges went under due to theft, fraud or other problems.

Cryptocurrency exchanges have to build in protections from some of these events. However, these exchanges do serve as a key vehicle for liquid use of cryptocurrency assets.

In other ways, cryptocurrency exchanges work just like traditional exchanges. On many of these platforms, cryptocurrency buyers and sellers can make limit orders or market orders, and the brokering process works like it would for any other kind of asset. The cryptocurrency exchange helps with the transaction and collects the fees. The difference is the underlying asset – bitcoin or Ethereum or some other cryptocurrency that does not have the same valuation properties as a national currency.

What does Bitcoin Mining mean?
Bitcoin mining is the process of creating, or rather discovering, bitcoin currency. Unlike real-world money that is printed when more is needed, bitcoin cannot simply be willed into existence, but has to be mined through mathematical processes. Bitcoin maintains a public ledger that contains past transactions, and mining is the process of adding new transactions to this ledger.

Bitcoin mining is essentially the acquisition and creation of bitcoins as a way to introduce more coins into the system, as rewards for doing computational work. The bitcoin network contains a public ledger of all transactions called the block chain, which serves to confirm all past transactions to the rest of the network that these were all legitimate, so that already spent coins have been transferred accordingly.

The primary role of mining is to allow bitcoin nodes to become secure and tamper-resistant, and it is designed to be resource-intensive and difficult so that the number of blocks discovered by miners each day are kept steady, in order to avoid rapid inflation. Each block in the public ledger block chain must have a proof of work in order to be considered as valid. This proof of work is then verified by all other bitcoin nodes in the network each time they receive a block, and this is called the hashcash proof-of-work-function. Miners are awarded with a number of bitcoins, which is agreed upon by everyone in the network. It started with 25 coins and then halves after every 210,000 blocks are discovered. Sometimes, individual miners can link in a network farm that shares the computing power of all participants, who then get a share of for each discovered block depending on the resource contribution.

Bitcoin mining is called that because it largely resembles the actual mining of other material resources; it requires great effort, and as that effort is accumulated, it slowly creates new currency available at rates that are comparable to mining resources such as gold and silver from the ground.

The headline on 30 July 2020

What does Dogecoin mean?
Dogecoin is a dog-themed cryptocurrency pioneered in 2013, an alternative to more famous choices like bitcoin. Although the value of an individual Dogecoin is very small (often a portion of a cent) the massive number of Dogecoins in circulation correlates to a market capitalization of over $1 billion.

The Dogecoin currency is based on an internet meme featuring a picture of a Shiba Inu, a popular Japanese dog breed. The currency’s faceplate features the Shiba Inu’s head with the letter “D” superimposed.

Like some other cryptocurrencies, the Dogecoin has seen large changes in value and prolific mining. Unlike some of the other cryptocurrencies that get more attention in national media, Dogecoin was created as a “fun” and less controversial type of digital money. Part of its popularity is based on its innocuous origins, since users and miners do not have to deal with the continuous forking and community controversy that has been associated with bitcoin over the years.

The headline on 29 July 2020

What does BIP 148 mean?
BIP 148 is a user-activated soft fork (UASF) in bitcoin that enforces the use of the Segregated Witness or SegWit protocol, which is a change that deals with a bitcoin block size problem by separating the digital signature from the original section of the block. As a soft fork, BIP 148 does not inherently split the network. BIP 148 requires bitcoin miners to signal for SegWit, which means they show that they are ready to use blocks with the SegWit protocol.

Understanding BIP 148 and related efforts mean understanding how bitcoin miners and users work. Miners look for available blocks and have their own incentives. Users may propose a rule that miners do not want to implement. The rest is largely semantic juggling related to trying to build consensus and control the inherent chaos of an unregulated cryptocurrency system.

The headline on 28 July 2020

Digital Euro Moves Ahead. France’s central bank released a press release on digital euro progress. Eight potential partners were presented to help modernize the banking system

Wozniak Sues YouTube. Apple co-founder Steve Wozniak has joined in a legal battle against YouTube, in which the platform is accused of deliberately allowing scammers to host videos that use celebrity identities to run fake promotions involving cryptocurrency.

Telecom Hackers Demand Monero Ransom. Privacy-oriented altcoin Monero (XMR) was at the forefront of an alleged ransomware attack on Argentina’s largest telecom provider.

Intel Sues McAfee. John McAfee, a controversial crypto enthusiast and creator of McAfee Antivirus, claims that Intel has sued him in connection with the Ghost decentralized exchange.

Inside the Twitter Hack. Hackers hijacked the accounts of Elon Musk, Jeff Bezos, Bill Gates, and many others. However, for this huge effort, the monetary yield seems ridiculously small. Could there be more to the story?

What does SegWit2x mean?
SegWit2x is a new policy proposal for the cryptocurrency bitcoin that is now under consideration in the bitcoin community. SegWit2x builds on a prior protocol called Segregated Witness or SegWit. SegWit and SegWit2x can have some long-term ramifications for the use of bitcoin and related technologies in a financial process, as cryptocurrencies rival traditional national currencies.

The original SegWit optimization was attributed to a developer in the “Bitcoin Core,” the center of the open-source bitcoin community. Developer Pieter Wuille created SegWit in 2015 to increase volumes of transactions in each bitcoin block.

By contrast, SegWit2x has not been endorsed by the Bitcoin Core, but is currently in testing – while implementing the original SegWit, SegWit2x would also create a process for increasing block size in order to facilitate even more transactions.

Due to a debate over the use of SegWit2x, its utility is in question. Another proposal called BIP 148 is also competing for attention and allegiance.

The headline on 23 July 2020

What does Decentralized Autonomous Organization (DAO) mean?
A decentralized autonomous organization (DAO) is an entity in a digital system facilitated by smart contracts, involve digital tools and protocols that help support specific transactions or other contract elements. DAO works with popular cryptocurrency and digital ledger operations that many world governments and businesses are moving toward for more transparency and for evolving anti-corruption innovations. DAO utilizes the ledger and cryptocurrency tools through the smart contracts that help to abstract and customize its interactions with stakeholders.

What does Digital Wallet mean?
A digital wallet is a software-based system for making e-commerce transactions or online purchases through computers, tablets or smartphones. In general, bank accounts of individual users are linked with their digital wallet. In a digital wallet system, user credentials are securely stored and verified during transactions. A digital wallet can store complete user information including credentials, transaction history and personal details. Digital wallets can also be used in combination with other mobile payment systems.

A digital wallet has two major components:

  • Software application: Responsible for security, encryption and the actual transaction. The main component which provides UI and transactional capabilities reside on the client-side and compatible with most e-commerce websites.
  • Information storage:  Stores the information in the database containing user information including billing address, shipping address and payment methods.

There is another type of digital wallet available, which is known as a server-side digital wallet. It is generally created by the organizations for users. These types of wallets are gaining popularity as they are more secure, efficient and provide added functionalities.

What does Soft Fork mean?
Soft Fork is where the cryptocurrency chain experiences a divergence. Specifically, soft forks are contrasted with hard forks, which are more expensive and less easy to resolve. Both are described in various ways by experts who understand the ways that the bitcoin system works as a largely unregulated, often chaotic and pretty complex financial model. One of the biggest takeaways is soft forks are easier to resolve in the bitcoin community. Hard forks may cause a permanent split in the chain, where new cryptocurrencies are formed and split off from the main branch. By contrast, soft forks can often be resolved by consensus and will include more cohesive backward-facing activity on the chain.

What does Block Size mean?
Block size in bitcoin refers to the size of a block of code representing a recent chain of bitcoin transactions. At a given point, a bitcoin block is added to other blocks to form a continuous chain, which facilitates the authentication of bitcoin transactions.

The current bitcoin block size is capped at 1 MB. To date, a flurry of new proposals, protocol rollouts, and debates have challenged the idea of keeping the block size at 1 MB, and floated the idea of upping the block size limit to 2 MB or above. A protocol called “Segregated Witness” or SegWit may eventually lead to block size increases. However, any block size increase would necessitate a “hard fork” or forced split in the bitcoin chain, which would break off a new cryptocurrency setup to be strictly delineated by its own participating community of users, miners and developers.

The headline on 21 July 2020

What does Initial Coin Offering (ICO) mean?
Initial Coin Offering (ICO) defines an event by which a community raises funds for a new cryptocurrency project. ICO is like the cryptocurrency version of IPO without much of the regulation and process that accompanies similar efforts within the regulated financial institute.

ICO process starts with design. Startups may circulate white papers and other resources to show potential investors project details. Founders sort out what amount of a currency’s virtual value will be doled out to investors. An ICO involves a threshold of funding by which it succeeds or fails. If it fails, money is returned to its original owners.

PayPal Letter Hints at Crypto Plans. A letter to the EU suggests that PayPal, which was initially a member of the Libra Association, has been working on integrating cryptocurrency into its products for several months.

DeFi Swap Nets $500K+ in Minutes. In less than an hour, a trading bot turned 650 ETH to over 2,680 ETH and 300K BZRX tokens for a clever Uniswap trader.

Thailand Tests Digital Currency. The Central Bank of Thailand (BoT) began testing digital currency with large financial institutions and plans to test together with the Hong Kong Monetary Authority (HKMA) in September.

New Yorker Charged for $4.5M Fraud. The US Federal Bureau of Investigation (FBI) also recently arrested a group of Nigerians who posed as accountants and lured $17.5 million in BTC from two Chicago companies.

What does Bitcoin Lightning Network mean?
The Bitcoin Lightning Network is a cryptocurrency protocol that works with blockchain ledger technology. Bitcoin Lightning Network was created by Joseph Poon and Thaddeus Dryjain in 2017 and is now used to help manage cryptocurrencies.

Experts refer to the Lightning Network as a “second layer” protocol that works with a blockchain to make transactions streamlined between different nodes. Because participants in a transaction do not have to publicize that transaction on the blockchain immediately, this can save some time by using peer-to-peer network design to get around some of the latency in conventional cryptocurrency transactions.

Published by Thomas Apel

, a dynamic and self-motivated information technology architect, with a thorough knowledge of all facets pertaining to system and network infrastructure design, implementation and administration. I enjoy the technical writing process and answering readers' comments included.