CryptoURANUS Economics: May 2021

Thursday, May 6, 2021

Moore’s Law: Defined in CryptoCurrency

Moore's law, explained:

According to him, the number of transistors on microchips — the fundamental building blocks of electronic devices — will double roughly every two years while their production costs will stay the same or even go down.

Moore’s Law is an observation that computer technology becomes quicker and smaller with time.

This observation was first made by Gordon Moore in 1965. Gordon, a co-founder of the computer company Intel, found that the number of transistors (an electronic device that controls the flow of electricity) in one square inch doubles every year.

Influence of Moore's law on blockchain technology:

Gordon Moore, the co-founder of Fairchild Semiconductor and Intel, observed that the number of components per electrical integrated circuit would grow by at least a factor of two for every year. Back in 1965, he also projected that this rate of growth would continue for at least another decade. Over the years, he revised the forecast to doubling every two years. This observation was geared toward the number of transistors in a dense integrated circuit, and has been used in the semiconductor industry to set targets for research and development. But it isn't only limited to the chip-manufacturing field; it has also been used to make observations about technological and social change, as well as productivity and economic growth.

Moore's law has been adapted and applied to approximate the rate of change in network capacity, pixels in images, storage device size, and much more. Blockchain is a technology of the future that might have to overcome multiple limitations in order to achieve healthy long-term development. Moore's law would help in deciding the complexity required for any blockchain application so that the application doesn't have to struggle with future scalability issues.

Since every node in the network maintains the complete blockchain ledger, blockchain data keeps increasing in size as time goes on. This raises some concerns regarding scalability, as each node needs to maintain the blockchain locally (such is the nature of the distributed network). Satoshi Nakamoto had mentioned that the growth of the block header size would be around 4.2 MB per year, and Moore's law would guarantee growth of at least 1.2 GB RAM (in 2008) per year, which should not pose any problems for block storage even if they are maintained in node memory.

Public blockchains, such as Bitcoin, have to deal with the hash rate of the hardware for their consensus algorithms. Bitcoin-mining hardware has been able to keep up with Moore's law, providing the required hash rate in accordance with the growing difficulty rate. However, the future of Bitcoin mining relies on Moore's law and the hardware being able to keep up with the difficulty without causing much loss to the miners.

Including Moore’s Law:Its Impact on Cryptography:

In the ever-evolving landscape of technology, few concepts have had as profound an impact as Moore’s Law. Coined by Gordon Moore, the co-founder and emeritus chairman of Intel Corporation in 1965, this fundamental principle predicts the exponential growth of computing power over time.

According to Moore’s Law, the number of transistors on microchips, which serve as the bedrock of electronic devices, will double approximately every two years. Even more intriguing, this growth occurs while the production costs remain constant or even decrease.

In this comprehensive article, we delve into the intricate connection between Moore’s Law and cryptography, exploring the positive and negative impacts it has on this critical field.

Moore’s Law: A Brief Overview:

Moore’s Law is a guiding light in the realm of technology, driving innovation, and shaping the course of digital progress. It provides a roadmap for the remarkable improvements in the computing industry, facilitating the creation of smaller, more powerful, and energy-efficient electronic products.

This monumental growth in processing capacity has far-reaching implications, affecting not only the field of cryptography but also industries such as entertainment and healthcare. Furthermore, it fuels economic growth through innovation, creating new markets and enhancing the effectiveness of existing ones.

Staying at the forefront of technology, in harmony with Moore’s Law, ensures a competitive edge in today’s dynamic marketplace.

Moore’s Law’s Impact on Cryptography:

The influence of Moore’s Law on cryptography is multifaceted, offering both opportunities and challenges to this critical field.

Positive Impact:

Cryptographers harness the increasing processing capabilities enabled by Moore’s Law to craft more advanced and robust encryption methods. This entails the development of encryption algorithms with larger key lengths and intricate mathematical operations, rendering it exceedingly difficult for potential attackers to decrypt data.

The positive consequence of these advancements is not limited to heightened security alone; it also bolsters cyber threat defense, safeguarding sensitive data in an ever-evolving digital landscape.

Negative Impact:

However, the rapid rise in processing power also benefits potential adversaries, reducing the time required to break encryption keys and diminishing data security. Cryptographic techniques once considered secure may become outdated more swiftly, necessitating continuous adaptation and innovation in the field of cryptography to withstand technological advancements.

Moore’s Law and Blockchain Technology:

Blockchain technology, a cornerstone of the digital revolution, is not immune to the profound effects of Moore’s Law. While it brings the promise of scalability, security, and energy efficiency, it also poses challenges that demand attention.

Moore’s Law’s constant doubling of computing power underpins the expansion of blockchain networks, allowing them to support higher transaction volumes and larger data sets. This growth paves the way for more secure cryptographic methods and robust encryption techniques, enhancing blockchain security.

Concurrently, the drive towards energy efficiency, driven by Moore’s Law, holds the potential to reduce the environmental impact of blockchain networks, favoring blockchain stability.

However, Moore’s Law presents challenges such as the potential centralization of blockchain networks. On the flip side, the increasing storage capacity, a direct result of Moore’s Law, empowers blockchain technology to transcend its role as a mere cryptocurrency platform, accommodating complex and multifaceted applications like smart contracts and comprehensive transaction histories.

Moore’s Law and Cloud Computing:

Moore’s Law has played a pivotal role in shaping the landscape of cloud computing, democratizing access to powerful computing resources.

The relentless expansion of server capabilities driven by Moore’s Law has allowed cloud providers to offer increasingly potent virtual machines and cost-effective data storage. This transformation has broadened the scope of cloud computing, making it accessible for a plethora of applications, including data storage, processing, machine learning, and artificial intelligence.

However, this increased processing power has also underscored the critical importance of data security and privacy. More potent hardware has led to more sophisticated cyber threats, necessitating enhanced encryption and security measures to protect sensitive data in the cloud.

Moore’s Law in 2023 and Beyond:

Even as the world of technology undergoes rapid transformations, Moore’s Law remains a driving force behind innovation. While the original theory has evolved in practice, with some experts suggesting it no longer accurately captures the pace of semiconductor technology advancement, its underlying principles of continuous technical growth and innovation persist.

From the perspective of cryptocurrencies and blockchain technology, Moore’s Law continues to play a pivotal role. It has empowered the development of more robust cryptographic algorithms, lengthier key sizes, and innovative security measures to counteract potential threats.

To maintain data protection and uphold blockchain integrity, cryptocurrencies have adapted to the shifting landscape, embracing advanced encryption standards and longer key lengths.

In conclusion, the relevance of Moore’s Law is contingent on one’s understanding of its original formulation. In a world where technological growth remains paramount, even if the exact doubling of transistor count may have moderated, the pursuit of more potent, energy-efficient, and inventive computing technology endures.

The world of cryptography and blockchain technology, in particular, is poised to embrace the opportunities and address the challenges posed by Moore’s Law as they chart the course for the future of digital security and innovation.

Multisignature: Defined in CryptoCurrency

What is a MultiSig wallet?

A multisig wallet is a wallet that provides users with extra security because it requires multiple unique signatures (hence multi-signature) to authorize and execute a transaction. A traditional — or single-sig — Bitcoin wallet contains a Bitcoin address, each with one associated private key that grants the keyholder complete control over the funds.

With bitcoin multisignature addresses, you can have a Bitcoin address with three or more associated private keys, such that you need any two of them to spend the funds. A wallet’s private key grants access to a user’s funds. It proves ownership of your bitcoin and is necessary to execute transactions in combination with a public key. If a private key is lost, all funds are lost, and there is no way to recover them. Spreading access to a wallet across multiple keys is a safer measure.

Multisig is not native to Bitcoin. The concept has been used in the banking sector for years and previous to that it had been used for thousands of years to protect the security of crypts holding the precious relics of saints. The superior of a monastery would give monks only partial keys for gaining access to the precious relics. Thus, no single monk could gain access to and possibly steal the relics.

Single-key vs Multisig

Most Bitcoin wallets use a single signature setup. This type of setup only requires one signature to sign a transaction. Single-key addresses are easier to manage as access to funds is faster. Still, they also represent a single point of failure increasing risks for your security since hackers and malicious actors could more easily access them.

Single-key wallets are good options for small and faster transactions — like face-to-face payments — but are not recommended for individuals and businesses who need to store considerable amounts of bitcoin. Like with cash, if you lose access to your single-key wallet, your funds are gone and there’s nothing you can do to recover them.

A multisig wallet, on the other hand, is configured in a way that requires a combination of keys from different sources to be operational — for example, 2-of-3, meaning that transactions can only be executed if at least 2 keys out of 3 are used.

Different variations exist, with a combination of signatures required to access funds and execute transactions. Some solutions demand that all the private keys are used to create the signature and authorize a transaction for maximum security.

Multisig solutions are not new to bitcoin. The concept was first pioneered and formalized into the standard Bitcoin protocol as early as 2012 but only started getting traction in 2014 after the shutdown of the Silk Road and the collapse of the bitcoin exchange Mt.Gox. The two adverse events urged developers to promote a better way to obtain maximum security against hacks and confiscation by authorities.

Why use a multisig wallet?

There is an increasing practice among businesses to store their bitcoin as a reserve asset in multisig wallets, as solely relying on one person to preserve the private key could turn out to be a regrettable mistake for the security of the funds. By using a multisig wallet, users can prevent the problems caused by the loss or theft of a private key. So even if one of the keys is compromised, the funds are still safe.

Multiple signatures required to authorize a transaction make it more difficult for someone to steal your bitcoin since they would need access to all of your private keys to get hold of your funds.

Imagine any individual or business entity creating a 2-of-3 multisig address and storing each private key in a different physical place and device, like a mobile phone, a laptop and a tablet. If one of the locations is accessed by malicious actors, the device located there is stolen, and even if the wallet is compromised, the attackers won’t be able to spend the funds using only that one key they found.

In the same way, phishing and malware attacks are more easily prevented because the attackers can’t do much with one single key at their disposal.

Besides malicious attacks of any nature, users can still access their bitcoin using their other 2 keys if they lose their private key. Multisig wallets are indeed a passport to more peace of mind with your funds.

How does a multisig wallet work?

The process to initiate a transaction with a multisig wallet follows the same steps regardless of the type of solution chosen. The user will input the transaction’s details in the wallet and enter their private key to sign it. The transaction will be pending and only finalized — and the funds sent to the correct address — once all the required keys are submitted.

Example:

Step 1: Connect the hardware device to an existing wallet or create a new one;

Step 2: Wait for the wallet to recognize the hardware device and sign;

Connect a second hardware and proceed as above;

Connect the third wallet and sign as with the previous devices.

Step 3: To execute a transaction you will only need two of the 3 setup wallets above.

There’s no hierarchy in the private keys, only the number required to sign the transaction in no particular order matters. There is no expiration date in multisig transactions, which will remain pending until all the required keys are provided.

Types of multi-signature wallets

Depending on the number of private keys and signatures required to authorize a transaction, different types of multisig wallets can serve the purpose, which are highlighted below.

* 1-of-2 Signatures: multisig wallets can be used to share funds among multiple users, with each party able to access the funds without needing another party to authorize the transaction.
* 2-of-3 Signatures: when 2 out of 3 private keys are needed to authorize transactions, the wallet’s security is enhanced. This type of multisig wallet is frequently used by cryptocurrency exchanges to secure their hot wallets. They usually keep one private key online and one offline, with a security company storing the third one.
* 3-of-5 Signatures: this type of custody requires two keys — ideally geographically separated — to be used to access funds and authorize a transaction, with a third party usually being a security company’s key that is also necessary to access the funds.
* Collaborative Custody vs Self Custody: a collaborative custody solution is used when a separate company keeps custody of your funds while leaving you control over your private keys. However, they also possess a different private key to access the funds for enhanced security. A self custody solution that allows you to control all of your private keys, where you can spread the private keys across different devices and locations as you see fit.

Advantages of Multisig Wallets

Besides regular tips on how to protect your money — any money — online, you should use more precaution when it comes to bitcoin because malicious actors will exploit any vulnerability in your system to get hold of it. .

Increased Security

Firstly, multisig solutions prevent a single point of failure from occurring so that if you lose your private key, you won’t lose your funds because you rely on a safe backup of separate private keys stored on different devices and locations for easy access.

Multisig wallets ensure you are more protected from cyber-attacks, making it much harder for malicious actors to break your security that relies on multiple safety points, making them nearly impossible to compromise.

Escrow Transactions

When using a multisig wallet, you’re basically using an arbitrator — a trustless escrow — to finalize transactions. Although this may sound like having an intermediary, in contrast with Bitcoin's true ethos, there are a few differences to consider.

Firstly, this would be a voluntary choice that you make only by personally picking the escrow, which can be changed every time.

Secondly, the trust in the intermediary can be minimal as the chosen security entity cannot access your funds or get hold of them without your private key activation.

Two-Factor Authentication (2FA)

Multiple signatures act as the typical 2FA we use to access different services. Unless at least another signature authorizes the transaction, the funds cannot be accessed and spent. This solution is also recognized as a 2-of-2 multisig protocol, with the private keys kept on two different devices.

Co-operation between two parties

Multisig solutions are ideal for businesses because different individuals or groups can view balances, but to access and transfer the funds, they’ll need at least two sources — two private keys — to authorize the transactions.

Disadvantages of Multisig Wallets

Although multisig wallets represent an improved solution to security issues, they could be better. They have risks and limitations, including a gray area in the parties' legal responsibility in case something goes wrong.

Transaction Speed

Due to the reliance on multiple parties to authorize a transaction, one of the multisig wallets' crucial drawbacks is low transaction speed. Such an issue is easily overcome if a user keeps the funds needed for quick transactions in faster solutions like single-key hot wallets and leaves most of the bitcoin holdings that must be better protected in multisig wallets.

Technical Knowledge

Although there is plenty of educational material online to help you acquire the right skills for a smooth multisig experience, many people are intimidated by the technical knowledge required to configure a multisig solution. Bitcoin custodial companies that offer multisig wallets are usually very proactive in helping their customers set up their solutions quickly and effectively.

Fund Recovery and Custodial

Recovery of funds in multisig wallets might be tedious and intimidating for non-techie bitcoiners, as it requires the import of each recovery phrase on each different device, which may represent a challenge to even the most technically skilled users. However, this shouldn’t discourage people from using multisig as the prospect of losing their funds more easily from a single-key solution is more daunting.

Final Words

While multisig is a great way to protect your bitcoin and provides a greater sense of security and peace of mind, it could be better. You should understand bitcoin and wallets thoroughly before taking this next step of purchasing your own multisig. You may find our best multisig wallets guide helpful in your research.

If you get past the inconvenience of setting up a multisig wallet and the technical learning required, multisig can help you achieve greater peace of mind with your bitcoin by adding an extra layer of security to your holdings.

With an overall figure of roughly 4 million bitcoin forever lost to hacks, malicious attacks and poor personal maintenance, it is more important than ever to protect your funds with the proper tools and knowledge. Despite a few disadvantages, multisig wallets offer reasonable solutions to businesses and individuals by requiring more than one signature to access and transfer funds.

The technology behind multisig has improved massively since its early usage and will likely see an increased application in the future, especially considering that risks of hacks and loss of funds are some of the issues that discourage people from investing in bitcoin. With better security, more adoption is likely to follow.

Whether or not you should be using multisig solutions depends on your needs and preferences. If a little inconvenience, slow transactions and technical requirements put you off, then a multisig wallet might not suit you. However, individuals, groups, companies and institutions that possess funds they can’t afford to lose, should use multisig without hesitation for advanced security.

Mtgox.com: Defined in CryptoCurrency

Mtgox.com: Defined in CryptoCurrency:

Mt. Gox was a cryptocurrency exchange in Tokyo that operated from 2010 to 2014. Jed McCaleb made the website for Mt. Gox exchange. Initially, it was a way for fans of the card game "Magic: The Gathering" to be able to trade cards online. Mt. Gox is an acronym for "Magic: The Gathering Online Exchange." In 2011, the site was bought by Mark Karpeles.

History:Mt. Gox launched in July 2010, and by 2013, it was handling about 70 percent of worldwide bitcoin (BTC) transactions. In February 2014, the platform suspended trading, shut down its website and exchange service, and filed for bankruptcy protection from its creditors. By April 2014, liquidation proceedings began. A week after the exchange suspended all trading and shut down, a document leaked that revealed that 744,408 BTC was taken from customers by hackers. Another 100,000 of the company’s BTC was missing. About 200,000 BTC was later found in an old-format bitcoin wallet.

The CEO of the company, Mark Karpelés, resigned and stepped down from the board of the Bitcoin Foundation. All posts made on the company's Twitter account were deleted. After the company filed for bankruptcy and liquidation, claiming a debt of $63.6 million, Attorney Nobuaki Kobayashi was made the exchange’s bankruptcy trustee entrusted with the administration and disposal of its assets.

The Inside Story of Mt. Gox, Bitcoin's $460 Million Disaster:

From a distance, the world's largest bitcoin exchange looked like a towering example of renegade entrepreneurism. But on the inside, according to some who were there, Mt. Gox was a messy combination of poor management, neglect, and raw inexperience.

Its collapse into bankruptcy last week -- and the disappearance of $460 million, apparently stolen by hackers, and another $27.4 million missing from its bank accounts -- came as little surprise to people who had knowledge of the Tokyo-based company's inner workings. The company, these insiders say, was largely a reflection of its CEO and majority stakeholder, Mark Karpeles, a man who was more of a computer coder than a chief executive and yet was sometimes distracted even from his technical duties when they were most needed. "Mark liked the idea of being CEO, but the day-to-day reality bored him," says one Mt. Gox insider, who spoke on condition of anonymity.

Last week, after a leaked corporate document said that hackers had raided the Mt. Gox exchange, Karpeles confirmed that a huge portion of the money controlled by the company was gone. "We had weaknesses in our system, and our bitcoins vanished. We've caused trouble and inconvenience to many people, and I feel deeply sorry for what has happened," Karpeles said, speaking at a Tokyo press conference called to announce the company's bankruptcy. This would be the second time the exchange was hacked. In June 2011, attackers lifted the equivalent of $8.75 million.

Bitcoin promises to give a bank account to anyone with a mobile phone, no ID required. It's clearly an amazing and potentially world-changing technology -- the first viable, decentralized, reliable form of digital cash. It could democratize international finance. But it's also a technology that was pushed forward by a community of people who were unprepared or unwilling to deal with even the basics of everyday business. A new wave of entrepreneurs may bring the digital currency a new level of respectability, but over its first several years, bitcoin has been driven largely by computer geeks with little experience in the financial world. The most prominent example is Mark Karpeles.

The Mt. Gox offices is in Tokyo.

The King of Bitcoin:

The 28-year-old Karpeles was born in France, but after spending some time in Israel, he settled down in Japan. There he got married, posted cat videos and became a father. In 2011, he acquired the Mt. Gox exchange in from an American entrepreneur named Jed McCaleb.

McCaleb had registered the Mtgox.com web domain in 2007 with the idea of turning it into a trading site for the wildly popular Magic: The Gathering game cards. He never followed through on that idea, but in late 2010, McCaleb decided to repurpose the domain as a bitcoin exchange. The idea was simple: he'd provide a single place to connect bitcoin buyers and sellers. But soon, McCaleb was getting wires for tens of thousands of dollars and, realizing he was in over his head, he sold the site to Karpeles, an avid programmer, foodie, and bitcoin enthusiast who called himself Magicaltux in online forums.

Karpeles soon set about rewriting the site's back-end software, eventually turning it into the world's most popular bitcoin exchange. A June 2011 hack took the site offline for several days, and according to bitcoin enthusiasts Jesse Powell and Roger Ver, who helped the company respond to the hack, Karpeles was strangely nonchalant about the crisis. But he and Mt. Gox eventually made good on their obligations, earning a reputation as honest players in the bitcoin community. Other bitcoin companies had been hacked and lost customer funds. Most of the time, they simply folded. But Karpeles and Mt. Gox did not.

Dark Web: Defined in CryptoCurrency

Dark Web: Defined in CryptoCurrency

How Bitcoin Funds Criminal Activity: From Murderers-for-Hire to Weapons Trafficking

You’re probably hearing a lot about bitcoin lately. At the end of 2017 the digital currency grabbed attention when its value hit at all-time highs of almost $20,000. Only a month later, its price has dropped 50 percent.

Even with the markets fluctuating, experts say bitcoin isn’t going away any time soon. Investors around the world are scrambling to get involved with the cryptocurrency.

But while many are trading in the virtual currency in the hopes of later cashing out—like they would with stocks—there are many others who spend it as money online. Most notably, they are trading it for goods and services on the illegal marketplaces of the dark web, where the easy, instant flow of bitcoin allows users to tap into their darkest natures…all from the anonymous comfort of their home computers.

The Dark Web: What It Is and How It Works
Much of the internet as we know it exists on the surface web, the portion of the internet that can be accessed using ordinary search engines and viewed using common browsers. Websites that cannot be indexed by search engines are referred to as the deep web: That includes any sites that are password-protected or cannot easily be reached through a search engine.

A fraction of the deep web is comprised of the dark web, the internet’s criminal underworld. This seedy virtual realm can only be accessed through specialized software like Tor, which allows users to browse websites and interact with one another under a cloak of greater anonymity. It’s where people try to buy and sell everything—including murder.

Hitmen for Hire
“Every hitman-for-hire website on the dark web is a scam,” says Eileen Ormsby, investigative journalist and author of the book Darkest Web, to be released March 2018.

That doesn’t stop people from trying to engage them. In Minnesota Stephen Allwine of Cottage Grove is currently on trial for allegedly killing his wife Amy and attempting to make it appear like a suicide. Part of their theory? He purportedly spent thousands of dollars in bitcoin on the dark web and his username, dogdaygod, was listed as contacting to Besa Mafia, an apparent scam website claiming to be run by the Albanian Mafia.

The Besa Mafia offered Mr. Allwine a sliding scale of services: $5,000 to kill her, $6,000 to stage it as a car accident and $12,000 for death by sniper. Mr. Allwine arranged to have her killed at his house. When that didn’t materialize, he began using the dark web to research how he might procure scopolamine, also known as “the devil’s drug,” which causes loss of memory and sleepiness. Investigators found unusually large quantities of the drug in Amy Allwine’s system.

Ormsby says that so-called “white-hat hackers” breached the Besa Mafia site, allowing her to gain access to the list of commissioned hits. But when she brought that list to Australian investigators (her colleague alerted U.S. and U.K. authorities), she said, they were uninterested in the records because no murders had happened at that point.

“We had [evidence of] all these people who paid in bitcoin,” Ormsby says. “We’re talking 20 to 30 people.”

Child Exploitation
While the porous flow of money across international lines is a concern for cybercrimes investigators, there is perhaps no greater issue than the exploitation of children through dark web-arranged sex tourism. The anonymity of the dark web allows users to arrange meet-ups abroad, with payment often provided in bitcoin.

“It’s easy, it’s instantaneous, it’s global,” said a Department of Homeland Security (DHS) official, when asked why perpetrators of child-sexual abuse and assault would lean on bitcoin. (The official requested anonymity due to their ongoing involvement in cyber-crimes investigations.)

Because bitcoin can be spent so easily, the official says that child exploitation is growing around the world today.

Some dark-web sites list themselves as “hurtcore”: where users can watch and share videos of children being tortured. In 2015, a 22-year-old Australian named Matthew David Graham admitted in court that he launched and administered an empire of dark-net websites that provided access to videos of child sex abuse and torture.

“They’re reviled by the rest of the world,” Ormsby says. “The dark web has provided them with a meeting place, without that sort of judgment.”

Terrorism, Weapons and Chemical Warfare
The free flow of bitcoin on the dark web also means that previously unheard-of weapons are available to the public.

In 2014, 19-year-old Florida man Jesse Korff was arrested for selling ricin on Black Market Reloaded, a dark-web marketplace. Ricin is a highly toxic chemical that the U.S. military developed for biological warfare in World War I. For producing and selling potentially deadly toxins ricin and abrin for use as weapons and conspiring to kill a woman in the U.K., Korff received a prison sentence of 110 months.

In addition to facilitating those who wish to assemble do-it-yourself terrorism kits, bitcoin is also a means to channel money to dangerous criminal outfits.

Chainalysis, a private security firm that helps international law-enforcement agencies track cybercriminals, has worked directly with investigators to track bitcoin that’s being funneled to ISIS.

“We had a support group for ISIS that tried to raise funds by bitcoin donations. They were doing a campaign,” explains Michael Gronager, CEO and co-founder of Chainalysis. Using advanced software, Gronager says, his company was able to find the origins of the funds. Still, he adds, illegal international money laundering continues to be a challenge facing investigators of bitcoin-related crime.

Drug Trafficking
For all the illegal uses of bitcoin on the dark web, none is more commonplace than drug trafficking.

In 2013, the FBI shut down the Silk Road, the dark web’s biggest online drug marketplace. A year later, they shut down a new iteration of the website. According to the DHS, the site’s owners were making $8 million per month at the time of the second (and final) seizure.

In its stead, numerous other marketplaces, such as Alphabay and Hansa, popped up. These too were shut down.

Despite this, the online drug market is bigger today than ever before. According to a 2017 report from the London School of Economics and Political Science, drug users in America are twice as likely today to buy illicit substances online than they were three years ago.

“You could argue it’s sort of whack-a-mole right now,” said the DHS official in describing the seizure and proliferation of online markets, adding that increased user traffic further grows the problem.

“People are just understanding [the dark web] for the first time. They don’t know how dangerous it is.”

Source Article URL:

https://www.aetv.com/shows/silk-road-drugs-death-and-the-dark-web/real-crime/how-bitcoin-funds-criminal-activity-from-murderers-for-hire-to-weapons-trafficking

Digital Asset: Defined in CryptoCurrency

A digital asset is defined as any electronic file (text, picture, audio, etc) that you have the rights to use.

If you do not have the rights to using that file, it is not a digital asset.

Digital assets can be transported or accessed on many types of technology including CDs, computers, USB drives, blockchain, etc.

Digital Signature: Defined in CryptoCurrency

A digital signature is permission and proof done through a computer that an authorized person has agreed to something.

When a signer authorizes something, they use their private key known only to them, to encrypt information along with a stamp of the time of signing. If the information is somehow modified, the time stamp will be altered and the digital signature becomes void and invalid.

The person receiving or verifying the signed and encrypted information uses the signer’s public key to verify the information came from the signer.

Digital signatures are used by cryptocurrency systems to allow the owner to send and receive money.

Dildo: Defined in CryptoCurrency

A dildo is a long green or red bar found on a graph showing the changes in price of a cryptocurrency.

Green and red bars of any size are known as candles.

Dip: Defined in CryptoCurrency

Dip is defined as a drop in the price of an asset such as a stock or cryptocurrency.

Directed Acyclic Graph [DAG]: Defined in CryptoCurrency

A directed acyclic graph or DAG is a structure that is built out in one single direction and in such a way that it never repeats. Here a “graph” is simply a structure of units.

“Directed” describes the connection between each unit in the structure, and that they all flow the same way. And “acyclic” means describing something that is not circular or repeating.

A good example of a directed acyclic graph is a checklist. In order to do step 10, you must have done step 9, and before you can do step 8, you must have done step 7 and so on.

If you were to list out these steps on a graph, you would see the flow from 1-10 and that it never repeats itself going back to 1. If it did repeat, it would not be a directed acyclic graph.

Another example of a DAG is a family tree. Your grandparents had your mom and her brother. Your mom met your dad and had you. Your mom’s brother met his wife and had their kids. In no way does your grandpa or grandma ever show up again beneath you.

Distributed: Defined in CryptoCurrency

Distributed is defined as a type of computer system that is run simultaneously by many computers but run as a single system.

There are 3 separate goals a distributed computing system may be designed for:

Performance: Be able to do a lot of intense computing in a short time.
Scalability: Be able to service many people, in many locations at the same time.
Reliability: Be able to service people even if one fails or is unavailable.

Distributed Ledger [DLT]: Defined in CryptoCurrency

Distributed ledger is defined as a system of independent computers all simultaneously recording data. With distributed ledger technology, identical copies of the recording are kept by each computer.

We can define a distributed system, as one where all computers work independently toward the same goal as one large system. We can define a ledger as a book used to record transactions (money in, money out).

However, distributed ledger technology has evolved beyond recording transactions so that it can record any data. With distributed ledger technology, there is no central authority maintaining the system.

Instead, updates to the ledger are independently created and then voted on. Once an agreement regarding the update has been reached, a recording is made in the ledger.

The latest version of the ledger, with the new recording, is then saved to each computing system and the process repeats itself. The first type of distributed ledger technology is called the blockchain.

Diversification: Defined in CryptoCurrency

Diversification is defined as a strategy where you buy many different investments as a way to increase your chances of becoming profitable and minimize your chances of losing everything.

Many investors are big fans of diversification, but like anything it can be overdone. By spreading yourself too thin across many different investments, you have a low risk of losing everything, but you also will not make huge profits.

If at the beginning of Facebook, Mark Zuckerberg, the founder had asked you for $5.000 as an investment, would you do it? Of course you would.

As a diversified investor, you might only want to give him $100-500 so you could avoid risking all of your money.
In other words, diversification works well with investments that you have little knowledge or understanding in.

Double Spending: Defined in CryptoCurrency

Double spending is defined as the action of spending digital money twice. It is meant to cheat the first person out of their money before they’ve received it.

Bitcoin was the first digital money to provide a good solution to prevent double spending. Bitcoin prevents double spending with a permanent, public and digital book of records known as the blockchain.

This blockchain can record any information. Each page in that book can be considered to be a block.

Because the blockchain public, many people are simultaneously verifying and recording information on it using their computers. After enough users in this network confirm your transaction, the guy who wants double spend cannot.

Dust Transactions: Defined in CryptoCurrency

Dust transactions describes a purchase or sale using a tiny amount of cryptocurrency.

DYOR: Defined in CryptoCurrency

DYOR short for Do Your Own Research and is defined as doing research before making an investment.

There are many manipulating people who urge others to buy a cryptocurrency so the price will rise and they can sell it for a profit.

DYOR is advice to do research studying websites, Reddit, forums, and more before making an investment.

Enterprise Ethereum Alliance [EEA]: Defined in CryptoCurrency

Enterprise Ethereum Alliance also EEA are a group of organizations all working together to learn better ways to grow and build the cryptocurrency known as ethereum.

J.P. Morgan, Microsoft, Intel, Accenture, BP, and Credit Suisse were the founding members creating the Enterprise Ethereum Alliance (EEA) in February 2017.

In July 2017, the number of organizations in the EEA surpassed 150, pushing the EEA into the largest open-source blockchain initiative in the world. Newcomers included Cisco Systems and MasterCard among others.

EEA Specification 1.0 Document (Download Now)

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Introducing Enterprise Ethereum Alliance:

The Enterprise Ethereum Alliance (EEA) is the industry’s first global standards organization to deliver an open, standards-based architecture and specification to accelerate the adoption of Enterprise Ethereum.

The EEA’s world-class Enterprise Ethereum Client Specification and forth-coming testing and certification programs will ensure interoperability, multiple vendors of choice, and lower costs for its members - the world’s largest enterprises and most innovative startups.

For additional information about joining the EEA, please reach out to: membership@entethalliance.org.

Trust, Privacy & Performance:

Ethereum's intrinsically trusted system is the most promising solution for enterprise Blockchain adoption, given its maturity and multi-purpose design. Privacy and Performance improvements will be mandatory to achieve enterprise-ready status and will be the focus of Enterprise Ethereum’s roadmap.

Community & Resources:

In partnership with the dedicated and robust Ethereum community, Enterprises are coming together to produce the industry standard, open source, free to use blockchain solutions that will be the foundation for businesses going forward.

Electrum Wallet: Defined in CryptoCurrency

The electrum wallet is a secure and free wallet that allows people to store bitcoin more quickly and easily. Bitcoin transactions are kept on a digital record, known as the blockchain, and is maintained by thousands of people around the world.

This digital record is growing larger every day and in 2016, it exceeded 100 gigabytes. A wallet is software that interacts with the network of recordings (blockchain) and lets users receive, store, and send their digital money.

The benefit of an electrum wallet is that it doesn’t have to download and maintain the entire massive blockchain file.

Emission: Defined in CryptoCurrency

Emission, also known as Emission Curve, Emission Rate, and Emission Schedule is the speed at which new cryptocurrency coins are created and released.

Many cryptocurrencies are set up so that new coins are created on a regular basis, this can be measured by an emission rate. Sometimes a limit is placed on how many coins will ever be created, this is known as the max supply.

Some cryptocurrencies have no limit and so a small emission will continue, forever.

Encryption: Defined in CryptoCurrency

Encryption is the process of locking information in an unreadable form so it can be kept secret. Encryption has existed for thousands of years.

With the use of computers, encryption has become much more difficult to break without the code.

Escrow: Defined in CryptoCurrency

Escrow is a part of the transaction process where the buyer and seller store money or other valuables with a third-party to minimize risk.

The escrow service holds onto the valuables and won’t release it until the agreement has been met.

Ethereum-[ETH]

Ethereum [ETH]:

Ethereum is the second largest cryptocurrency. Ethereum is built with publicly available software that developers can use to build their own cryptocurrency and software.

Some cryptocurrencies built with it include: OMG, Qtum, EOS, and BAT.

Some of the apps built from it include games, social networks, and marketplaces.

Introduction:

Work on Ethereum started in 2013, when its creator Vitalik Buterin failed to get enough support for his proposal to start application development on top of Bitcoin’s blockchain.

Ethereum is above all a platform for decentralized software development.

The value of its associated currency Ether is based on its utility – it is also used as a fuel that powers the decentralized apps (daps) and other functionality (smart contracts).

Ethereum has its own Turing complete or computationally universal internal code – meaning that any software application can be built on top of it, giving the technology a very broad range of use.

Smart contracts are ones allowing to program a contract which executes when given variables are met.

Finally, blocks are mined in a matter of seconds allowing quick transaction times.

The utility of Ethereum goes beyond digital cash and therefore has garnered a lot of attention from investors and institutions.

Its development team is covered by the Ethereum Foundation, a Swiss non-profit organization.

Every aspect of Ethereum is well documented and openly discussed and there is a lot of effort to promote Ethereum’s functionality to software developers and businesses.

Ethereum is well on its way to storm the industry and become the number one platform for decentralized software application.
What are Smart Contracts?

Imagine you want to bet someone a 1000 ETH on who wins the presidential elections.

You both put 1000 ETH on the smart contract, you agree on the data feed for the election results.

Once the president is elected, the winner is automatically rewarded with 2000 ETH from the escrow contract.

This is a very simple example of a smart contract, but many inputs and conditions can be defined so that, automatically executed smart-contracts can be used for will settlement, trust funds, work-contracts, industrial-grade agreements without the need for intermediaries.

Once agreed upon, the smart contracts cannot be altered by one of the parties or a third party. They can’t be hacked or nullified.

Influencers:

Vitalik Buterin:

The main driving force behind Ethereum. On the cryptocurrency scene since its beginning, Buterin proposed and described Ethereum in his 2013 whitepaper when he was seventeen. After seeing the shortcomings of Bitcoin. Ethereum’s co-founder who openly discussed and presented the technical and strategic choices for Ethereum.

Vlad Zamfir:

A long-term member of the Ethereum R&D team, very voiced and often sharing all his findings without sugarcoating them. Very valuable source of information from Ethereum’s development.

Ming Chan:

The Executive Director of the Ethereum Foundation who is paving the way for the blockchain technology by working on legal and regulatory matters and cooperating with key industry players.

Jeffrey Wilcke:

One of the founders and the creator of Ethereum - as in the one who coded it to existence using the Go programming language. Wilcke has been the head developer of the Ethereum platform ever since.

Investors:

International Private-Banking Institutions and Large Corporations, such-as, J.P. Morgan, Microsoft, Intel, Accenture, BP, and Credit Suisse were the founding members creating the Enterprise Ethereum Alliance (EEA) in February 2017.

In July 2017, the number of organizations in the EEA surpassed 150, pushing the EEA into the largest open-source blockchain initiative in the world.

Newcomers included Cisco Systems and MasterCard among others.

Roadmap:

The development of Ethereum was originally divided into 4 stages.

Frontier was the beta stage, which called for user caution; Homestead is the current version launched in March 2016, considered stable;

Metropolis, which is being tested since September 2017, its main focus is to make dap development and the whole EVM environment more user-friendly to promote steep adoption;

Serenity is the final (for now) stage. It aims to improve scalability by adding sharding, offer more privacy for users and to switch from Proof of Work to Proof of Stake; the so-called “virtual mining” which consumes less resources while keeping the network secure and agreeing on a single sequence of blocks.

The Serenity stage is to make the protocol.

“industry-ready”, deadline for Serenity has not been set yet.

Conclusion:

Since Ethereum is a decentralized businesses can create their business logic and thrive with Ethereum. The potential of Ethereum has been recognized by many Fortune 500 companies who participate in its development.

These include J.P. Morgan, the biggest US bank, Microsoft, Intel, BP, Thomson Reuters, the Russian Development Bank, and Russian Bank System. The development of Ethereum is not stopping, and its use is growing.

WEBSITE-SOURCE

Exchange: Defined in CryptoCurrency

An exchange is defined as a place where something of value can be traded. One of the purposes of an exchange is to ensure fair trades are conducted.

Traditionally, stocks were a common item traded on exchanges. Now with exchanges for cryptocurrencies, many new exchanges are being built in countries around the world.

Faucet: Defined in CryptoCurrency

A faucet is a website or application that provides small, free amounts of new cryptocurrencies to help increase awareness.

Financial Crimes Enforcement Network: Defined in CryptoCurrency

Financial Crimes Enforcement network or FinCEN is a part of the US government that analyzes financial information so they can protect the US financial system.

FOMO: Defined in CryptoCurrency

FOMO is short for Fear of Missing Out. FOMO is often felt when you see a coin start to increase in value and you don’t yet own it.

FUD: Defined in CryptoCurrency

FUD is short for Fear, Uncertainty and Doubt. FUD is any information that is supposed to create feelings of fear, uncertainy, doubt and other negative emotions.

FUDster: Defined in CryptoCurrency

A FUDster is someone who spreads FUD and FUD is short for Fear, Uncertainty and Doubt. FUD is any information that is supposed to create feelings of fear, uncertainy, doubt and other negative emotions.

Full Node: Defined in CryptoCurrency

A full node is defined as a computer that has a complete, current copy of the blockchain software.

A node is defined as any computing device (computer, phone, etc.) that is maintaining a network. Cryptocurrencies are supported by a network of computers each keeping a digital record of the data known as a blockchain.

A computer, a phone, or any other computing device that can receive, transmit, and/or contribute to the blockchain is a node.

When talking about blockchain technology, we have two types of full nodes:

A full node that maintains an entire copy of the blockchain program and also receives, records, verifies, and transmits transactions on the blockchain. This process is known as “mining”.
A full node that only receives and transmits transactions on the blockchain program. This process is passive and relies on a mining full node for updates.

Gains: Defined in CryptoCurrency

Gains are defined as increases in value. When used to describe cryptocurrency, it is an increase in value and profit.

Gas: Defined in CryptoCurrency

Gas is a small amount of ethereum paid to people who use their computers to record transactions and do other software actions.

Gas is calculated by multiplying a very small amount of ethereum, known as gas price or gwei, and multplying that by how much gwei you want to spend known as gas limit.

Because 1 ethereum = 1 billion (1,000,000,000) gwei, gas costs are usually very small, around several dollars. If the amount of gas is insufficent to complete the work, the work will fail. On the other hand, you can pay a bit more gas and expect the computers to complete your task sooner.

Gas Price: Defined in CryptoCurrency

Gas price is a very small amount of ethereum and it is multiplied by an amount known as gas limit to pay people to record transactions and do other software actions.

If the amount of gas is insufficent to complete the work, the work will fail. On the other hand, you can pay a bit more gas and expect the computers to complete your task sooner.

Gas is calculated by multiplying a very small amount of ethereum, known as “gwei” and “gas price”, and multplying that by how much you want to spend, known as the “gas limit”.

The very small amounts of ethereum used in gas price are known as gwei. 1 ethereum = 1 billion (1,000,000,000) gwei. A typical gas price is 20 gwei, but it can go as high as 50 during peak usage and as low as 2 gwei for a slower transaction.

Gdax.com: Defined in CryptoCurrency

Gdax or GDAX is short for General Digital Asset Exchange, it is a cryptocurrency exchange company owned by Coinbase. Gdax provides more advanced tools than Coinbase for people who want to regularly trade cryptocurrencies.

Genesis Block: Defined in CryptoCurrency

A blockchain is a digital book of records where each new page made in that book is what is known as a “block”. Those blocks are connected in one group known as the blockchain. The first block in a blockchain is known as the genesis block.

Graphical Processing Unit [GPU]: Defined in CryptoCurrency

A Graphical Processing Unit or GPU, is defined as a computer chip that creates 3D images on computers. GPUs are often called graphics cards.

Blockchains require people receive, record, verify, and transmit information. That process is known as “mining”. Because mining requires computer power, people do this work in return for money. GPUs were one of the first tools used to mine.

Green or Red: Defined in CryptoCurrency

Green or red is defined as, the color of pricing charts used to show the change in value of an asset like cryptocurrencies or stocks.

A green color on charts means the price is increasing in value. While a read color on charts means the price is decreasing.

When you are “seeing green” that means overall, the charts are displaying a green color and the price has been increasing. Compared that with “seeing red” where the charts are mostly displaying a red color and the price has been decreasing.

Gwei: Defined in CryptoCurrency

Gwei is a very small amount of ethereum coin used to calculate transaction fees for sending ethereum to another. One ethereum coin is worth 1 billion (1,000,000,000) gwei.

Hacking: Defined in CryptoCurrency

Hacking is the process of using a computer to manipulate another computer or computer system in an unauthorized and unapproved way.

Halving: Defined in CryptoCurrency

Halving comes from an Old English word meaning “half”. In cryptocurrencies, mining is a computer process of recording and verifying information on the digital record known as the blockchain.

In bitcoin and other currencies, mining also requires computers compete with each other to solve a complicated math problem.

Once solved, a new block is discovered that can be added to the chain of blocks and a reward of brand new bitcoin is given to the computer that solved the math problem first. Halving is the reduction of the bitcoin mining reward issued by half.

Hard Cap: Defined in CryptoCurrency

Hard cap is defined as the maximum amount of money a cryptocurrency can receive from investors in its Initial Coin Offering (ICO).

An ICO is the limited-time process by which new cryptocurrencies make their coins publicly known and begin selling them directly to people.

People invest their money in these coins in the hopes that they will later be worth many times more that what was paid. A hard cap is the major financial goal and is always larger than the small cap.

Hard Fork: Defined in CryptoCurrency

Hard fork is defined as a decision to make a permanent change to the technology used by a cryptocurrency.

This change makes all new recordings (blocks) very different from the original blocks.

They are changed so much that new blocks are seen as invalid to anyone who didn’t upgrade their technology. Which means, any computer that is not updated with the new technology, will find these new blocks appear invalid.

This process can cause a lot of trouble which is why, for a hard fork to go smoothly, it is important everyone agrees to the change. Any new fork in the blockchain can fail and if it does, all users will return to the original recording.

Hardware Wallet: Defined in CryptoCurrency

A hardware wallet is a specially designed device to lock away access to your cryptocurrency.

The device is extra secure because it is disconnected from the Internet and other computers and is virtually virus-proof.

A cryptocurency wallet is software that interacts with the network of recordings (blockchain) and lets users receive, store, and send their digital money.

Hash Function: Defined in CryptoCurrency

A hash function is defined as a computer program that takes information and turns it into letters and numbers of a certain length.

For example, “I like bitcoin” can be hashed and will equal: ad3e58f21b94f32dcadca6b71df4c31a18179f38011551a17a80d0ff065d22c5

If I were to capitalize the “b” in bitcoin, so it says, “I like Bitcoin” the hash will be completely different: d988ca30eaa88c0410ad6e48a5297c0d505dcee572f9884f1a6fa2cbc8dedc86

Hashing is used to make storing and finding information quicker because hashes are usually shorter and easier to find. Hashes also make information unreadable and so the original data becomes a secret.

Hash Rate: Defined in CryptoCurrency

Hash rate is defined as the speed that a computer can take any set of information and turn it into letters and numbers of a certain length. Hash rate is also the combined hash speed of every computer in the network. Hash rate is calculated at hashes per second (h/s).

Hash rate is important for computers that mine. Mining is the process of recording and verifying information on the digital record known as the blockchain. The blockchain is made up of a sequence of single recordings known as a block.

To keep the blockchain network running smoothly, only one block can be created at a time. To control when blocks are created, users are required to make their computers solve a math problem involving hashing. The first computer to solve this problem can create a new block and record information on the blockchain.

Miners often purchase very expensive specially designed computers that have higher hash rates to increase their chances of solving the math problem first. These mining computers use tons of electricity to power their computers. This expensive process earns miners a reward in brand crypto plus fees paid by each user for their transactions.

Similar to memory size, hash rate is counted like this:

1 kilo hash per second is one thousand (1,000) hashes per second
1 mega hash per second is one million (1,000,000) hashes per second.
1 giga hash per second is one billion (1,000,000,000) hashes per second.
1 tera hash per second is one trillion (1,000,000,000,000) hashes per second.
1 peta hash per second is one quadrillion (1,000,000,000,000,000) hashes per second.
1 exa hash per second is one quintillion (1,000,000,000,000,000,000) hashes per second.

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