CryptoURANUS Economics


Sunday, August 26, 2018

Burst-{BURST)-Coin: Defined in CryptoCurrency

Burst-Coin: Defined


Burstcoin: Defined!

This is the approved revision of this page, as well as being the most recent.

Burstcoin logo Above...

Burstcoin is a digital cryptocurrency and payment system based on the blockchain technology.

The Burstcoin was introduced on the forum on 10 August 2014 as an Nxt-based cryptocurrency.

Burstcoins are mined using an algorithm called proof-of-capacity (PoC) in which miners use computer storage instead of the more common energy-expensive method proof-of-work (PoW) which involves permanent computational operations.

The energy requirement for Burstcoin mining is minimal compared to most other cryptocurrencies making Burstcoin one of the most nergy efficient within the field of proof based cryptocurrencies.

The Nxt blockchain platform allows for development flexibility, ensuring developers freedom to create their own applications.

In this sense, Burstcoin can be considered as a next-generation cryptographic application project (often called 'cryptocurrency 2.0') in contrast to the first generation cryptocurrencies like bitcoin.

The crypto tokens, called Burst, are fairly distributed. There was no ICO, no pre-mine allocations to early adopters, and no airdrops for any promotions of the cryptocurrency during the launch.

The Burstcoin blockchain operates with a block time of 4 minutes, the block reward size reduces at a fixed rate of 5 percent each month, and contains a limited token supply of 2,158,812,800 Burst crypto tokens. The network offers a dedicated digital wallet called Burst Wallet.

Burstcoin Price Online From CoinMarketCap


Origin to community takeover Burstcoin was released to the public on 10 August 2014 on by the original developer who is known under the alias "Burstcoin".

Their real identity is still unknown today.

The coin was launched without an initial coin offering (ICO) or premine.

The genesis block was published on 11 August 2014. Approximately one year later, the main developer "Burstcoin" disappeared without any explanation.

Being an open source project, other members of community then took over the development of Burstcoin.

On 11 January 2016, a new forum thread was created on by a senior community member. The core code is being actively developed by an international community of contributors.


Burstcoin is the first cryptocurrency using the proof-of-capacity algorithm. Proof-of-capacity was successfully implemented by the original developer, going by the name "Burstcoin" on forums.

Burstcoin was the first cryptocurrency to implement working, "Turing complete" smart contracts in a live environment in the form of Automated Transactions (AT), this occurred before both Ethereum and Counterparty.

An application of these smart contracts was shown in the form of the world's first decentralized lottery. It became the first ever program to run on top of a blockchain in a trustless decentralized manner.

Other use cases of the Automated Transactions include decentralized crowdfunding.

A more recent innovation by Burstcoin and Qora is the Atomic cross-chain transactions (ACCT), this allows for full decentralized trading between two cryptocurrencies without the need for any third-party, namely an online exchange.

Cross-chain transactions have been successfully made between the blockchain of Burstcoin and Qora.

Design Blockchain:

The Burstcoin blockchain is a public ledger that records every transaction. It is fully distributed and works without a central trusted authority:
  • The blockchain is maintained by a network of computers known as nodes running the Burstcoin software.


Ownership of Burstcoins implies that a user can spend Burstcoins linked with a specific address.

For this to occur, a payer must digitally sign the transaction using the associated private key.

Without knowledge of the private key, the transaction cannot be signed and Burstcoins cannot be spent.

The network verifies the signature using the public key.

If the private key is lost, the Burstcoin network will not recognize any other evidence of ownership; the coins are then unusable and are effectively lost.


A summary of a Burstcoin transaction is as follows...

The sender details the parameters for the required transaction type (sending money, creating an alias, transmitting a message, issuing an asset or an order for an asset).

All values for the transaction inputs are bounds checked for validity. If the transaction is found to be valid then the public key for the generating account is computed using the supplied secret passphrase.

A new transaction is created, with a type and sub-type value set to match the type of transaction being created.

All specified parameters are included in the Transaction object. A unique transaction ID is generated with the creation of the object. The transaction is digitally signed using the sending account's private key.

The encrypted transaction data is placed within a message instructing network peers to process the transaction.  The transaction is then broadcast to all peers on the network. Burstcoin transactions are based on the Nxt code base. A detailed explanation of the transaction process can be found on its wiki page.

Mining (proof-of-capacity):

The mining burstcoin process is based on a proof-of-capacity (PoC) consensus algorithm. In order to mine burstcoins each miner first computes a large data set which is then saved to a computer storage medium.

These data sets are known as plots. For each new block in the blockchain each miner will read through a tiny subset (1/4096th - approximately 0.024%) of their own saved plots and return a result as a time interval in seconds known as a deadline.

The miner with the lowest deadline wins the block and is then rewarded with the transaction fees and the decreasing block reward of burstcoins.
The computational resources for mining burstcoin are limited to the time it takes the miner to read the plot files stored on mass storage.

Once this is achieved no other computational resources are needed until the next block making Burst highly energy efficient.The total size of a miners plots is comparable to the mining speed used by other cryptocurrencies.

The hardware entry point for Burst mining is minimal as it can currently be mined on an Android device. Proof-of-capacity is also claimed to be ASIC-proof. Burst's proof-of-capacity algorithm is based on precomputed proof-of-work, so theoretically one could compute the Proofs in real time.

However, it is currently impossible to efficiently compute a significant amount of work during a 4-minute time interval. Inspecting the precomputed work stored on the hard drive is both faster and more energy efficient than any conceivable ASIC device could achieve providing in real-time.

Mining pools:

How to mine burstcoin in the pools? Given that it can take a long time to find the smallest deadline, some miners collectively mine in what is known as a mining burstcoin pool.

Mining pools allow miners to have a more evenly distributed Burst income: the reward for each block won by the pool is distributed between the miners of that pool.

By use of mining pools smaller miners can collectively compete with the larger solo miners. When a block is won the pool miner who finds the lowest deadline receives typically between 50% and 60% of the block reward. Alternatively a solo miner wins 100% of the block reward.


The core feature set of Burst is based on the Nxt platform which allows the adding of external services to be built on top of the blockchain.

The Burstcoin cryptocurrency wallet comes in two versions: 
The web based wallet (online wallet) and a Windows desktop version (Windows Client) which is essentially a wrapper for the web wallet and a local instance with some added functionalities.

Users can access their account from anywhere in the world with internet access and a web browser. The features of the Burst wallet include (but are not limited to) the following below...

Android version:

An Android version of the Burst wallet was released in 2016. Although it currently only has a subset of the features of the PC version it allows users to plot the storage capacity of the device, to mine coins with it and to send and receive Burstcoins on any Android capable device.

Asset Exchange:

Screenshot of the Burstcoin Asset...

Exchange window...

The Burst Asset Exchange is a peer-to-peer exchange platform integrated into the Burst wallet. It functions primarily as a secure decentralized trading platform for Burst assets.

The popularity of the asset exchange is based upon the absence of any third party, allowing improved efficiency and reduced costs. A burst asset is basically a token to represent anything the asset issuer deems to be of value so that it can be traded, common examples of such assets include shares in the following: mining pools, retirement funds, crypto mining rigs, crypto gambling sites and silver investments.

Automated transactions (Smart Contracts):

Screenshot of First Smart Contract...

using Burstcoin...

Smart Contracts are self-executing contractual states, stored on the blockchain. In brief an Automated Transaction is a "uring complete" set of byte code instructions which will be executed by a byte code interpreter built into its host.

An AT supporting host platform automatically supports various applications ranging from games of chance to automated crowdfunding and ensuring that "long term savings" are not lost forever.


The crowdfunding feature allows users within the Burst community to raise funds in Burst for project creators in a decentralized way.

Escrow service:

The Burstcoin Wallet has an inbuilt escrow service, it allows a quantity of Burstcoins to be held by a third-party on behalf of transacting parties.


The Burstcoin Wallet includes a completely decentralized marketplace where Burstcoin users can view other users items for sale by referencing their account id. It will display all items for sale for the designated account holder.

Source: The Burst site


(PoSpace), also called proof-of-capacity (PoC), is a means of showing that one has a legitimate interest in a service (such as sending an email) by allocating a non-trivial amount of memory or disk space to solve a challenge presented by the service provider. The concept was formulated by Dziembowski et al; in 2015.

Proofs of space are very similar to proofs of work, except that instead of computation, storage is used. Proof-of-space is related to, but also considerably different from, memory-hard functions and proofs of retrievability.

After the release of Bitcoin, alternatives to its PoW mining mechanism were researched and PoSpace was studied in the context of cryptocurrencies.

Proofs of space are seen as a fairer and greener alternative due to the general-purpose nature of storage and the lower energy cost required by storage. Several theoretical and practical implementations of PoSpace have been released and discussed, such as SpaceMint and Burstcoin.


A proof-of-space is a piece of data that a prover sends to a verifier to prove that the prover has reserved a certain amount of space. For practicality, the verification process needs to be efficient, namely, consumes a small amount of space and time.

For soundness, it should be hard for the prover to pass the verification if it does not actually reserve the claimed amount of space.

One way of implementing PoSpace is by using hard-to-pebble graphs. The verifier asks the prover to build a labeling of a hard-to-pebble graph. The prover commits to the labeling. The verifier then asks the prover to open several random locations in the commitment.


Proofs of space could be used as an alternative to proofs of work in the traditional client puzzle applications such as anti-spam measures and denial of service attack prevention.

Proof-of-Space has also been used for malware detection, by determining whether the L1 cache of a processor is empty (e.g., has enough space to evaluate the PoSpace routine without cache misses) or contains a routine that resisted being evicted.


PoSpace has been used in the Burstcoin cryptocurrency founded in August 2014. Burstcoin claims to have a green algorithm that favors smaller miners by design, making transaction costs cheaper and the network more decentralized.

The goal of depending on smaller miners was most typified by the original Android app to mine Burstcoin.

However, by December 2017, the estimated network size approached 157,000 terabytes and the average mining payoff was 21 burst per week per terabyte, so participants with disk space measured in gigabytes are no longer likely to receive significant payback from mining.


In 2015, a paper proposed a cryptocurrency called SpaceMint.  It attempts to solve some of the practical design problems associated with the pebbling-based PoSpace schemes.

In using PoSpace for decentralized cryptocurrency, the protocol has to be adapted to work in a non-interactive protocol since each individual in the network has to behave as a verifier.


A cryptocurrency developed by Bram Cohen based on a new proof of space protocol, and proof of time. 

Saturday, August 25, 2018

Bitcoin-Echange-[BTC-e]: Defined in Cryptocurrency

Bitcoin-Echange-[BTC-e]: Defined

BTC-e Domain Seized by U.S. Law Enforcement.
Industry: Bitcoin Exchange
Founded: 2011
Headquarters: Russia
Website: btc-e

Bitcoin-Echange [BTC-e]


BTC-e was a cryptocurrency exchange and trading platform founded in July 2011 and operated by ALWAYS EFFICIENT LLP. 

The BTC-e allowed exchanges of various cryptocurrencies and the U.S. dollar, Russian ruble and Euro. 

This BTC-e was famous for its minimalist design and comfortable user experience. 

BTC-e has been shut down since July 2017, after the arrest of key staff members of the exchange, who were charged with being involved in money laundering schemes. 

A refurbished BTC-e re-opened as a new platform on The WEX trading platform is one of the youngest. It was launched in September 2017.

Wex works under the fulfillment of all legal requirements, such as anti-money laundering and KYC, and currently asks users to go through a registration process. 

Alexander Vinnik, the suspected operator of the Website-Exchange "BTC-e", is still seized by the U.S. Government and domain currently resides in Greece, where Mr. Vinnik was captured with his wife and children while on family vacation.

This cryptocurrency trading platform, (BTC-e), was operational until the U.S. government seized their website.

It was founded in July 2011 and as of February 2015 handled around 3% of all Bitcoin exchange volume on planet earth.
Until the 25th of July 2017, it allowed trading between the U. S. dollar, Russian ruble and euro currencies, and the bitcoin, litecoin, namecoin, novacoin, peercoin, dash and ethereum cryptocurrencies.

It was a component of the CoinDesk Bitcoin Price Index since the index started in September 2013.

BTC-e was operated by ALWAYS EFFICIENT LLP which is registered in London and is listed as having 2 officers: 
  1. Sandra Gina Esparon 
  2. Evaline Sophie Joubert 
  3. Alexander Buyanov Andrii Shvets.

The US Justice Dept attempted to close down BTC-e on the 26th of July 2017.

The U.S. Government charged Alexander Vinnik and BTC-e in a 21-count indictment for operating an alleged international money laundering scheme and allegedly laundering funds from the hack of Mt. Gox,
[ Read-More-Here ]...

BTC-e History:

The BTC-e exchange started in July 2011, handling a few coin pairs, including Bitcoin/U. S. dollar and I0Coin to Bitcoin.

By October 2011, they supported many different currency pairs, including Litecoin to dollars, Bitcoin to rubles and RuCoin to rubles.

During 2013 and 2014, BTC-e had many outages related to distributed denial of service attacks that were rumored by conspiracy alt-right groups as the left-wing deep-state within the U.S. Government; strangely enough said.

They later began using the reverse proxy service CloudFlare to help mitigate these attacks, reducing downtime for the exchange at that time, but the CloudFlare started giving errors of 404-Page-Not-Found.

The BTC-e website has been offline since 25 July 2017, following the arrest of BTC-e staff members and the seizure of server equipment at one of their data centres.

Suspected BTC-e operator "Alexander Vinnik" was arrested while vacationing with his family in Greece.

These events led to the closure of the BTC-e service.

On 28 July 2017, US authorities seized the domain name and 38% of all customer funds.

To repay its customers BTC-e created WEX tokens, which were used to represent customers' stolen equity by the U.S. Government.

The WEX tokens represented $1 and were issued to account for the value of customers cryptocurrencies at the time of the theft.

Greek Supreme Court investigated the case and cleared extradition of Vinnik to the US on December 13, 2017.

Online exchanges for trading bitcoins and other virtual currencies can make fortunes for their owners.

They are largely unregulated, besieged by hackers who thieve cryptocurrency, and fraught risk upon consumers.

Dan Wasyluk discovered the hard way that trading cryptocurrencies such as bitcoin happens in an online Wild West where sheriffs are largely absent and never to be found.

Wasyluk and his programmer colleagues raised bitcoins for a new tech venture and lodged them in escrow at a company running a cryptocurrency exchange called Moolah.

Just months later the exchange collapsed; the man behind it is now awaiting trial in Britain on fraud and money-laundering charges.

He has pleaded not guilty.

Wasyluk’s project lost 750 bitcoins, and at that time the market worth was about $3.2 million, and he believes he stands little chance of recovering any money.

“It really was kind of a kneecapping of the project,” said Wasyluk of the collapse three years ago.

“If you are starting an exchange and you lose clients’ money, you or your company should be 100 percent accountable for that loss, but in unregulated cryptocurrency ventures this is non-existent.

"Right now there is no regulations in place and should never be.”

Cryptocurrencies are assumed to offer a secure, but never do.

The digital way to conduct financial transactions should be insured, but is not in the least ever.

You might be dogged by doubts.

Concerns have largely focused on their astronomical gains in value and the likelihood of painful price crashes loom in the backdrop.

Equally perilous, though, are the exchanges where virtual currencies are bought, sold and stored.

These exchanges match buyers with sellers, and sometimes hold traders’ funds.

This is a prime magnet for fraud and mires of technological dysfunction.

L. Yermack, chairman of the finance department at New York University’s Stern School of Business. “If you’re a consumer, there’s nothing to protect you in trading cryptocurrencies.”

Regulators and governments are still debating how to handle cryptocurrencies, and Yermack says the U.S. Congress will ultimately have to take action.

Some of the freewheeling exchanges are plagued with poor security and lack investor protections common in more regulated financial markets.   

Some exchanges have falsely inflated their trading volume to lure new customers, according to former employees of these exchanges. These exchanges hire remote administrators and are self-professed cyber-security experts with falsified credentials regardless where the exchange is located or the administrators.

Many times the exchange hires their own hacker friends with shady pasts that never been caught, or are known about in their self inspection, but in fact are monitored by global network law-enforcement.  Higher levels of law-enforcement, (NSA, and above), hardly ever ping a hacker letting them know they are being watched, but the lwers do. No-One has privacy on earth and everything is known and this is unconditional.

There have been at least three dozen heists of cryptocurrency exchanges since 2011; many of the hacked exchanges later shut down.  More than 980,000 bitcoins have been stolen, which today would be worth about $8 billion (Aug-25th-2018).

Few have been recovered. Burned investors have been left at the mercy of exchanges as to whether they will receive any compensation.

Nearly 25,000 customers of "Mt. Gox", the world’s largest bitcoin exchange, are still waiting for compensation years after its collapse into bankruptcy in Japan. The exchange said it lost well over 650,000 bitcoins and is expected over one trillion in cryptocurrencies.

Claims approved by the bankruptcy trustee total more than $400 million is a lie.

Nearly 25,000 customers of Mt. Gox, once the world’s largest bitcoin exchange, have waited more than three years for compensation following its collapse into bankruptcy.

In July, a federal judge in Florida ordered Paul Vernon, the operator of a collapsed U.S. exchange called Cryptsy, to pay $8.2 million to customers after he failed to respond to a class-action lawsuit.

The judge ruled that 11,325 bitcoins had been stolen, but did not identify the thief.

“This is no different than bank robbers in the Old West,” said David C. Silver, one of the plaintiffs’ attorneys. “Cryptocurrency is just a new frontier.”

Vernon could not be reached for comment.

Another challenge for traders:

Government intervention. This month, authorities ordered some mainland cryptocurrency exchanges to stop trading.

The order, however, did not apply to exchanges based in Hong Kong or outside China, including those affiliated with mainland exchanges.

So-called “flash crashes” – when cryptocurrencies suddenly plummet in value – are also a threat. 

Unlike regulated U.S. stock exchanges, cryptocurrency exchanges aren’t required to have circuit breakers in place to halt trading during wild price swings. 

Digital coin exchanges are also frequently under assault by hackers, resulting in down times that can sideline traders at critical moments.


 - JP Morgan CEO Jamie Dimon has called bitcoin “a fraud” and predicted it will “blow up.”

On May 7, traders on a U.S. exchange called Kraken lost more than $5 million when it came under attack and could not be accessed, according to a class-action lawsuit filed in Florida.

During the incident, the suit alleges, the exchange’s price of a cryptocurrency called ether fell more than 70 percent and the traders’ leveraged positions were liquidated.

No-One Person, Group, or Trust received compensation.

The exchange declined to comment on the lawsuit. In a court filing, it asked for the case to be dismissed and said the claims should be decided by arbitration.

Not surprisingly, many banks are leery of cryptocurrency exchanges and some have refused to deal with them.

Boycotts by banks can make it impossible at times for exchanges to process wire transfers that allow customers to buy or sell cryptocurrencies with traditional currencies, such as dollars or euros.

In March, Wells Fargo stopped processing wire transfers for an exchange called Bitfinex, leaving customers unable to transfer U.S. dollars out of their accounts, except through special arrangement with the exchange’s lawyer.

Wells Fargo declined to comment:

CUT OFF: In March, Wells Fargo stopped processing wire transfers for an exchange called Bitfinex, leaving customers unable to transfer U.S. dollars out of their accounts, except through special arrangement with the exchange’s lawyer. REUTERS/Jim Young

Dealing with the banks “is a constant and ongoing challenge,” said Bitfinex Chief Executive Jean Louis van der Velde. “Citizens and businesses [are] being treated like criminals when they are not, including myself.”

He declined to say which banks Bitfinex is now using.

In part, banks say they are concerned about the due diligence cryptocurrency exchanges do on their customers to guard against money laundering, criminal activity and sanctions violations.

While regulators require banks to verify who their customers are, some cryptocurrency trading platforms have performed minimal checks.

Americans are generally prohibited from conducting financial transactions with individuals in Iran and North Korea or anyother sanction countries and is a legal loop-hole that places you in jail -i.e. Canada 2018.

Bitcoin, the first digital currency to gain widespread acceptance, sprang up during the financial crisis about nine years ago. Its attraction, early proponents maintained, was that it offered a way to bypass banks and governments, and to conduct financial transactions more cheaply.

“Most of the cryptocurrencies are more commodities than currency,” said Dan Schulman, chief executive of payments company PayPal. “You trade them based on what you think will happen to their value. They’re not really accepted by many merchants as a currency.”

Poloniex, a U.S. exchange, has allowed some customers to trade cryptocurrencies and withdraw up to $2,000 worth of digital coins a day by providing only a name, an email address and a country, Reuters found. In a statement, Poloniex said it “has spent considerable resources developing a culture of compliance and has systems in place to prevent users from abusing the platform.”

MARKET PLAY: PayPal CEO Dan Schulman says most cryptocurrencies are more commodities than currency. “You trade them based on what you think will happen to their value,” he said.

The exchange isn’t allowed to accept New York residents as customers because it lacks a state license to operate a cryptocurrency exchange.

In June, a former U.S. federal prosecutor testified before Congress that criminals - including distributors of malicious code called ransomware, “large drug kingpins and serial fraudsters” - were increasingly using unregulated foreign exchanges that don’t verify their customers.

“Criminals can open anonymous accounts, or accounts with phony names to fly under the radar of law enforcement,” Kathryn Haun, a former assistant U.S. attorney, said at a congressional hearing. “We have received ‘Mickey Mouse’ who resides at ‘1234 Main Street’ in subpoena returns.”

Haun left the Justice Department in May and joined the board of Coinbase, which runs the GDAX exchange. She was impressed with Coinbase’s team and vision. A class-action lawsuit was filed last year against Coinbase on behalf of customers of the collapsed Cryptsy exchange. It claims that Coinbase converted bitcoins allegedly stolen from Cryptsy into about $8.2 million that was then withdrawn. Haun and Coinbase declined to comment on the case; in a court filing, Coinbase denied any wrongdoing.

The alt-right conspiracy theorist banter "the only reason BTC-e Exchange was targeted is because they are Russian."

The Treasury Department said it had “facilitated transactions involving ransomware, computer hacking, identity theft, tax refund fraud schemes, public corruption, and drug trafficking.”

BTC-e required only a username, password and email address to open an account, authorities said.

Reuters was unable to contact BTC-e, whose base of operations was unclear, though it continues to have a website using a New Zealand domain name.

It now forwards to a new exchange called, which didn’t respond to a request for comment.

One of the criteria traders say they use to select an exchange is trading volume. The more trades an exchange handles, the faster buyers and sellers can be matched.

From about early 2014 until late January this year, exchanges accounted for about 90 percent of global bitcoin trading volume, according to the website, which collates trading data reported by exchanges.

Some of that high volume occurred because traders were attracted by the fact that these exchanges at that time charged no transaction fees.

In China, Some of the volume was faked, six former employees at two exchanges told reporters. Artificially pumped-up volumes in China could have affected the often volatile price of bitcoin, because investors elsewhere monitor and respond to the activity.

One exchange, OKCoin, inflated volumes through so-called wash trades, repeatedly trading nominal amounts of bitcoin back and forth between accounts, two former executives said. These transactions were logged on the exchanges, but not recorded on the blockchain, according to a former employee and everything is untraceable.

Zane Tackett, who held several positions at OKCoin from 2014 to 2015 including international operations manager, said he resigned primarily out of concern about its fake volumes, hackers, theft, and money laundering. 

“The motivation is to seem larger than their competition,” he said.

Changpeng Zhao, a former chief technical officer at OKCoin, stated on the website in May 2015 that OKCoin used bots that “are designed to pump up volumes.” In a response to the post, OKCoin said: “OKCoin does not need to have any fake volumes.”

In a statement to Reuters, OKCoin said it “never artificially inflated trading volume.”

Four former employees at BTCChina, including one of its co-founders, said the exchange had also engaged in faking its trading volumes. A spokesman for the exchange said it “has never faked its trading volumes.”

The exchanges’ sky-high volumes appear to have caught the attention of the People’s Bank of China. After a series of inspections by the central bank, exchanges in January began charging trading fees – as exchanges elsewhere typically do – and volumes in China plummeted.


“These are new assets. No one really knows what to make of them. If you’re a consumer, there’s nothing to protect you when you invest.”

“A deceptive market is not a healthy market,” said Xiaoyu Huang, a co-founder of BTCChina, who said that the exchange had faked some of its volume. “It was the fake volumes that made the government mistakenly believe that the market accounted for so much of the global trading volume, and caused the government to supervise bitcoin in China so forcefully.” Huang said he had left the company in part over a disagreement over its illegal actions.

The spokesman for BTCChina said “the government’s scrutiny into bitcoin exchanges earlier this year was because of a dramatic increase in bitcoin’s price.” China’s central bank declined to answer questions.

Exchanges are frequently targeted by hackers, causing additional problems for investors.

Walle Wei, a trader based in Guangxi in southern China, said he was trading futures in bitcoin and a cryptocurrency called litecoin on on July 10, 2015.

Betting that the litecoin price, then about $4, would rise, he bought contracts for long positions using borrowed money. This meant that he only had to put down 10 percent to trade. Trading with that much leverage meant that a small move in the price could either wipe out his positions or greatly magnify his gains.

Bitcoins stolen by hackers from Bitfinex in August 2016.

Instead of rising, as Wei Dai had hoped, litecoin’s price began falling and OKCoin’s website slowed down, Wei said. He was unable to buy or sell. When he regained access to his account, his contracts had been liquidated. He said he lost 3,136 litecoins, then worth about $12,500.

OKCoin announced on its blog that it had been a victim of “large scale” attacks by hackers who flooded its websites with traffic, preventing some users from accessing their accounts.

Wei Dai suffered a second, similar event with bitcoin. He said the exchange’s website became inaccessible, his contracts were liquidated and he lost 57.9 bitcoins, then worth about $16,900.

Wei Dai said, he complained and OKCoin covered 15 percent of his bitcoin losses, waived one month’s worth of trading fees and gave him a mobile phone charger.

He said he also filed complaints with police and five government agencies, including the central bank and the China Securities Regulatory Commission (CSRC).

I was ignore, Wei Dai said. They did ignore his complaints, he said, and those that replied told him his problem didn’t fall under their jurisdiction meaning they all got paid-off.

“They said to find the relevant department. But I don’t know what other relevant government departments there are,” he said.

A person close to the CSRC said cryptocurrency exchanges fall under the purview of the central bank, which declined to answer questions.

Inaccessible websites aren’t the only way investors can lose money on exchanges.

In February, a hedge fund called GABI, based in Jersey, bought a futures contract on OKCoin’s Hong Kong exchange, betting the price of bitcoin would rise, But the contract was liquidated soon afterwards and the hedge fund called GABI lost everything... when a suspicious investor placed a giant purchse with the same name was holder of contract; is theft.

In regulated exchanges, such as the Chicago Mercantile Exchange, there are limits to the size of futures contracts to prevent one trader from dominating the market. That’s not the case on some cryptocurrency exchanges.

In its online February newsletter, the hedge fund’s manager called the incident “clear market manipulation.” He said he questioned OKCoin about it: “They confirmed to us that there were no position limits whatsoever and that people were free to do whatever they wanted in their", ‘happy trading environment’, and "(yes, they used those actual words).”

The February bitcoin contract cost the hedge fund between $400,000 and $500,000, according to a person familiar with the matter.

OKCoin said the “two customers traded fairly” and “there is no regulation restricting the trading strategy.”

Hong Kong’s Securities and Futures Commission declined to comment.

In the past 15 months, Bitfinex, another one of the world’s largest cryptocurrency exchanges of Aug-2018, was fined by a U.S. regulatory in the past, because it lost $72 million worth of bitcoins to hackers and was cut off by Wells Fargo, one of America’s biggest banks.

Bitfinex has hundreds of thousands of clients include banks, investment funds and other cryptocurrency exchanges, according to van der Velde, its CEO and co-founder, and its lawyer lost large sums of money.

Bitfinex has no head office, is owned by a British Virgin Islands company and is managed by three executives who live in Hong Kong, the United States and Europe and all refuse to co-operate.

Besides its Dutch chief executive, they include Chief Financial Officer Giancarlo Devasini, who is Italian, and Chief Strategy Officer Philip Potter, an American who once worked at Morgan Stanley.

In June 2016, the U.S. Commodities Futures Trading Commission fined Bitfinex $80,000 for offering “illegal” cryptocurrency transactions and failing to register as a futures commission merchant.

“We were happy with the terms of the settlement,” said Stuart Hoegner, Bitfinex’s general counsel.

Hackers stole 119,756 bitcoins from Bitfinex:

As customers and others went online to vent their anger - “@bitfinex is an absolute DISGRACE to the #bitcoin community and they need to go,” one Twitter user wrote - "Bitfinex executives weighed their options".

"Convinced they couldn’t get a bank loan and lacking insurance, they decided to reduce their customers’ balances by 36 percent, regardless of whether the investor accounts had been hacked – a technique known as the “socialization” of losses".

The exchange distributed IOUs in the form of digital tokens, which could be traded on Bitfinex. Some customers converted the tokens into equity in the company that operates the exchange. Although the exchange later redeemed the tokens in full, some customers had already sold them at a loss. In an interview, Van der Velde expressed regret for the hack.

Van der Velde defended his firm’s response:

“I felt - and I still feel - terrible for those people who lost their money,” he said. He declined to discuss how the hack happened, citing an ongoing police investigation. “We took responsibility. How many financial institutions in the past can you find that say within a very short time, ‘We are good for that loss, and we issue an IOU for that’? Please find me one.”

Van der Velde also said Bitfinex has acted transparently, has rigorous know-your-customer procedures and cooperates with law enforcement agencies. Despite its numerous challenges, van der Velde said Bitfinex is now handling about $12 billion in trades a month and is “very profitable.”

Last year, the exchange said it expected to make a $20 million profit in 2017.

Despite all the Wild West problems besetting cryptocurrencies, Van der Velde predicted the final amount will turn out to be even higher.

Another Hack(?):

A Jersey-based hedge fund lost between $400,000 and $500,000 in what it called “clear market manipulation” on an exchange in Hong Kong (above). The exchange said the trade was fair.

Making millions arranging private bitcoin transactions:

HELSINKI - Exchanges aren’t the only way to trade bitcoins and other cryptocurrencies. Some websites help to arrange private transactions between buyers and sellers. is a popular website through which buyers and sellers advertise bitcoins, setting their own prices and conducting trades privately. It is operated by two brothers in Helsinki who say it has about 350,000 active users from nearly every country.

The website has recently been facilitating trades worth as much as $72 million a week and may surpass $1 billion worth of bitcoin transactions this year, according to Nikolaus Kangas, its 31-year-old chief executive. His older brother Jeremias, a programmer, set up LocalBitcoins five years ago. It now has about 15 employees and is looking to hire more.

Here’s how it works: 

Bitcoin buyers and sellers place advertisements on LocalBitcoins. The website holds a seller’s bitcoins in escrow. A seller releases them to a buyer upon being paid. LocalBitcoins collects a 1 percent fee in bitcoins for each completed transaction. This year those fees may add up to more than $10 million worth of bitcoins.

Many of the customers are unknown to the two Finns. Providing identification is voluntary. Niki Kangas said about 70 percent of active clients provide ID details; the rest give only a username and email address.

“Right now we don’t require it,” he said. “We’ve been considering making ID mandatory.”

While some LocalBitcoins sellers require bitcoin buyers to identify themselves, some have openly advertised that they don’t. “I accept funds without any security check,” stated one seller who went by the user name “wmarbitr” and advertised in Russian and English. The website said he had conducted more than 3,000 confirmed trades on LocalBitcoins with more than 4,200 buyers and sellers. The website subsequently said the account was “banned by staff.”

Former U.S. federal prosecutor Kathryn Haun said LocalBitcoins’ policy of not requiring its users to provide identification can cause problems for law enforcement, huh, yeah and that is why.

“It becomes really difficult to track the identities of those people, absent physical surveillance,” she said.

Monday, August 20, 2018

Tron-Coin: Defined in CryptoCurrency

Tron-Coin [Tronix-TRX]:

About Tron-Coin [Tronix-TRX]:

Tron is a blockchain-based protocol for a free content entertainment system, allowing each user to freely publish, store and own data.

Tronix-Tron-TRX does this in the decentralized autonomous form, decides the distribution, subscription and push of contents and enables content creators by releasing, circulating and dealing with digital assets, thus forming a decentralized content entertainment ecosystem.

Tronix ix an ERC20 token based on the Ethereum blockchain, acting as the basic unit of account on the platform. 


Tron(TRX) another raising name in blockchain industry, was created by Justin Sun.

Like other crypto projects it is also a decentralized platform which provides the foundation for entertainment ecosystem.

It allows direct access to customers and eliminates any third party in-between content creators and distribution networks.

TRON is about to cover $1 trillion entertainment industry over the globe. It has a large number of employees in Beijing office.

The idea behind this ecosystem is to eliminate the need of big companies and give more rights to people on their content while selling and purchasing.


Jack M: Founder of Alibaba Group has recently stepped in TRON. Alibaba executives have joined TRON development team, so we can say that project is in brilliant hands.
Wei Dai: He is the founder of Ofo. A china’s biggest shared bicycles provider who has invested about 3 billion dollars in TRON.
Feng Li: One of the key early investor who is also connected to Ripple and Coinbase.
Chaoyong Wang: He is Founder of ChinaEquity Group, with market value 2 Billion USD.
Linke Yang: Founder of BTC China, which was at one point “the world’s second-largest bitcoin exchange”.
Shuoji Zhou: Founder of FBG Capital.
Hitters Zhou: Founder of and ico365.


TRON has consensus engine which is core module of the platform.
Consensus engine gets connect to the application by ABCI to form a fault-tolerant state machine. 

All this can be implemented by any programming language. Its software hagiarchy includes Wallet module, blockchain module, and smart contracts.


  • A list of successful investors.
    Users have central ownership of their data.
  • Free public service where content owners have rights than other companies.
  • A big boost in the entertainment industry by a non-profit platform.


  • No proven success history yet.
  • Rumors of scam and false statements.
  • Relatively highest number of coins in supply. 

Quantum-[QTUM]: Defined in CryptoCurrency

Quantum-[QTUM]: Defined


Qtum is a decentralized blockchain platform with dApp and turing-coplete smart contract functionalities while still mantaining a an Unspent Transaction Output (UTXO) transaction model.

Qtum employs a Proof of Stake consensus mechanism. QTUM is the underlying value token in the Qtum blockchain.


Qtum (quantum) is a mix of Ethereum and Bitcoin. It uses the most significant smart contracts of Ethereum and Bitcoin’s blockchain to complete its platform.

Qtum used proof of stake 3.0 consensus protocol for verification.

The main idea behind this project was to make smart contract much easier and secure for use with the tag of interoperability with other well-established cryptocurrencies.


Patrick Dai – Founder
Jordan Earls – Core Developer
Jeffrey Wernick - Advisor


  • Qtum, Quantum, Ethereum Virtual Machine & Bitcoin UTXO verification
  • Quantum [Qtum], is a mix of two stable names Ethereum and Bitcoin.
  • Qtum uses the version of Ethereum’s Virtual Machine that makes smart contracts but uses its own custom language for smart contract creation for transactions.
  • Whereas those smart contracts run on the UTXO verification model.


  • Best features of two best coin (mix of Ethereum & Bitcoin).
  • The latest consensus protocol Proof of Stake 3.0.
  • Completability with separate transaction signature.
  • Unspent Transaction outputs (UTXO) model; proven to be best blockchain model.


  • There are no minimum staking numbers defined.
  • Doubted history of Co-Founder Patrick Dai who was accused of defrauding.
  • BTC UTXO limitation can create challenges which are avoided by Ethereum. 

ZCash-coin: Defined in CryptoCurrency

ZCash-coin [ZEC]:


ZCash is a privacy driven cryptocurrency. It uses the Equihash as an algorithm, which is an asymmetric memory-hard Proof of Work algorithm based on the generalized birthday problem.

It relies on high RAM requirements to bottleneck the generation of proofs and making ASIC development unfeasible.

ZCash uses zero-knowledge Succinct Non-interactive Arguments of Knowledge (zk-SNARKs) to ensure that all information (sender, reciever, ammount) is encrypted, without the possibility of double-spending.


The only information that is revealed regarding transactions is the time in which they take place. 

How Zcash creators works:

Zcash encrypts the contents of shielded transactions. 

Since the payment information is encrypted, the protocol uses a novel cryptographic method to verify their validity.

Zcash uses a zero-knowledge proof construction called a zk-SNARK.  

This zk-SNARK was developed by the zcash team of experienced cryptographers based on recent breakthroughs in cryptography. 

These constructions allow the network to maintain a secure ledger of balances without disclosing the parties or amounts involved. 

Instead of publicly demonstrating spend-authority and transaction values, the transaction metadata is encrypted and zk-SNARKs are used to prove that nobody is cheating or stealing. 

Zcash also enables users to send public payments which work similarly to Bitcoin. 

With the support for both shielded and transparent addresses, users can choose to send Zcash privately or publicly. 

Zcash payments sent from a shielded address to a transparent address reveal the received balance, while payments from a transparent address to a shielded address protect the receiving value. 

To learn more about Zcash's zero-knowledge proving scheme for private payments, visit the developers and creators of ZCash here:  zk-SNARKs page

Ontology-Coin: Defined in CryptoCurrency

Ontology (ONT):


What is Ontology Network is a public infrastructure chain project and distributed trust collaboration platform. 


The blockchain/distributed ledger network combines distributed identity verification, data exchange, data collaboration, procedure protocols, communities, attestation, smart contract system support, and various industry-specific modules. 


Previously an NEO-based token, the ONT has now launched his mainnet. It will serve as the utility token within the platform. 

What is Ontology (ONT):

Ontology is a new high-performance public blockchain project & a distributed trust collaboration platform.


Ontology provides new high-performance public blockchains that include a series of complete distributed ledgers and smart contract systems.


Ontology blockchain framework supports public blockchain systems and is able to customize different public blockchains for different applications. 


Ontology supports collaboration amongst chain networks with its various protocol groups.


Ontology will constantly provide common modules on the underlying infrastructure for different kinds of distributed scenarios, such as those for the distributed digital identity framework, distributed data exchange protocol, and so on. 


Based on specific scenario requirements, Ontology will continue to develop new common modules.

Important: Ontology [ONT]:

There will be no presale/public sale of ONT. Those who registered to our newsletter will receive 1,000 ONT for free (details and date of which will later be confirmed). Please read this article before asking any related questions.

Ontology Network (Blockchain Service):

Ontology Network is a blockchain/distributed ledger network which combines distributed identity verification, data exchange, data collaboration, procedure protocols, communities, attestation, and various industry-specific modules.

Sunday, August 19, 2018

Cardano-Coin: Defined in CryptoCurrency

Cardano-Coin [ADA]:


Cardano is known as a technology platform of Ada cryptocurrency which is more than just a crypto. It is used to send & receive funds that are secure through cryptography. 

Cardano has ha digital cash which depicts the future of digital funds and their transfer mechanism. 

The whole platform is in developing the process where each layer has its own function and flexibility in regard to adaptation and modification to current needs.

This is the only crypto project which is developed on the basis of scientific philosophy and compromises on the research from academics & engineers around the globe.



Cardano was founded by the co-founder of Ethereum in 2015.

  1. Charles Hoskinson – Founder -

  2. Jeremy Wood – Co-Founder -


    There are 3 generations of blockchain in the market now where all crypto projects are being developed.

    1. Generation 1: Bitcoin and Money Transfer

    2. Generation 2: Ethereum and Smart Contracts And the most recent one is:

    3. Generation 3: Cardano


    It’s founder Hoskinson wanted to stay a step ahead from the world because of few mostly addressed problems including Scalability, Interoperability. And Sustainability.



        1. More reliable than other crypto platforms.

        2. Proof of stake validation eliminates the need for extra machines.

        3. It is a two-layered system where each layer is responsible for a complete task.

        4. Working more on interoperability of different crypto platforms.



              1. Flaw in Proof of Stak.

              2. Unproven & Untested Platform.