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July 17, 2018
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blockchain

0x lets any app be the Craigslist of cryptocurrency

in 0x/Apps/blockchain/coinbase/cryptocurrency/Decentralized Exchange/Delhi/ethereum/India/Politics/Startups/talent/TC by

Centralized crypto exchanges like Coinbase are easy but expensive because they introduce a middleman. Not-for-profit project 0x allows any developer to quickly build their own decentralized cryptocurrency exchange and decide their own fees. It acts like Craigslist, connecting traders without ever holding the tokens itself. And instead of having to bootstrap their way to enough users trading tokens on their app alone so that there’s liquidity, 0x offers cross-platform liquidity between users on the different projects it powers.

The problem is the user experience of decentralized apps is often crappy compared to the consumer apps we’re used to across the rest of tech. From sign-in to recovering accounts to conducting transactions, it’s a lot more complicated than Facebook Login, PayPal, or Shopify. Bitcoin and Ethereum prices remain well below half their peaks because it’s difficult to do much with cryptocurrency right now. Until the decentralized infrastructure improves, the dreams of how blockchains can improve the world remain distant.

0x is trying to fix that by ensuring developers all don’t have to reinvent the exchange wheel.

It began as a for-profit exchange before the team recognized the massive usability gap. So instead it became a decentralized exchange protocol, and raised $24 million in an ICO for its ZRX token. That’s how relayers — the apps who use it to build exchanges for ERC20 tokens atop the Ethereum blockchain — can charge fees. It also gives those who collect the most a say in the governance of the protocol.

Some of the top projects on 0x like Augur and Dydx are going strong. Last week Coinbase announced it was exploring whether it might list ZRX and several other currencies for trade on its exchange, helping perk the price up after declines since the new year.

 

0x’s ZRX token price, via CoinMarketCap

Now 0x is putting some of its $24 million to work. It just hired former Facebook designer Chris Kalani to help it improve the usability of its APIs and the products built on top of them. His skills helped Facebook embrace mobile around its 2012 IPO. He then built Wake, raising $3.8 million for the design prototype sharing tool that let teams get instant feedback on their works-in-progress. Kalani sold Wake to design platform InVision in April, and after a few months assisting the transition, he’s joined 0x.

“There are very few designers involved the [blockchain] space” Kalani tells me. “There’s not a lot of people who had worked on anything at a large-scale or from the consumer perspective. We’re focused on making crypto more approachable.”

Sustaining A Crypto Not-For-Profit

After talking to four leaders in different parts of the blockchain industry, the consensus was that 0x was an elegant protocol for spawning decentralized exchanges. But the question kept coming up about whether the project will be sustainable. The company doesn’t have to earn enormous amounts of revenue, but concerns about its longevity could scare away developers. One, who asked to remain anonymous, described 0x saying “the best analogy is trying to monetize Linux.”

0x is open source, so it could be forked so developers can sidestep ZRX. 0x hopes that the shared liquidity feature will keep developers in line. It only works with the unforked version, and is now being used by 0x-powered projects including Radar Relay, ERC dEX, Shark Relay, Bamboo Relay, and LedgerDex.

While some centralized exchanges have suffered security troubles and hacks, those with stronger records like Coinbase continue to thrive while banking off high fees. That in turn lets them offer better liquidity and invest more in the user experience, widening the gap versus decentralized apps. “People trust Coinbase with large amounts of capital but they wouldn’t trust themselves” Kalani admits. But he thinks it’s early in the game, and as users become more knowledgable and comfortable with holding their own tokens for use on decentralized exchanges, 0x and ZRX will thrive.

There’s also competition within the decentralized exchange space from Kyber’s liquidity network, and AirSwap’s peer-to-peer exchange marketplace. But for any of these to thrive, the mainstream crypto owner will have to get better educated. That could fall to 0x.

One alternative path for the not-for-profit would be selling developer services and consulting to those building on top of it. Or it could always do another ICO. But for now, there are a lot of projects out there that don’t want to foot the upfront cost to build their own secure and compliant exchange from scratch. Kalani concludes, “The way Stripe allowed developers and businesses to build on top of it, and not have to worry about regulatory issues and all the infrastructure necessary to take payments, I think 0x is going to do something similar with exchanges for crypto.”

News Source = techcrunch.com

Dirt Protocol raises $3M for a decentralized, blockchain-based approach to information vetting

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The team at Dirt Protocol is using blockchain technology to create a new approach to verify information.

The startup doesn’t plan to launch its platform until later this year, but it announced today that it has raised $3 million in seed funding from General Catalyst, Greylock, Lightspeed, Pantera Capital, Digital Currency Group, SV Angel, Avichal Garg, Elad Gil, Fred Ehrsam Linda Xi and others.

Founder Yin Wu previously created lockscreen startup Echo (acquired by Microsoft in 2015) and laundry startup Prim. She told me that after becoming interested in the cryptocurrency industry, she was concerned about the fear, uncertainty and doubt around coin offerings — after all, we’ve covered several ICOs where companies appear to have disappeared with people’s money.

“The market today is still unregulated, with high incentive for people to spread misinformation for personal gain,” Wu said.

Her solution? Build databases where anyone can contribute information, but where they have “skin in the game,” so there’s a financial penalty if they’re not truthful.

Dirt Protocol isn’t trying to create a single, definitive data repository, but rather to provide the tools for developers to build their own databases. Those databases might focus on things like ICOs (providing information like the team, the investors and the number of tokens in circulation), or online publishers (to help advertisers avoid bots), or professional listings and membership lists.

There will be a single token that works across the Dirt platform. Users will need to stake tokens to add new information to databases, to challenge an entry or to vote in disputes — you’ll be penalized (by losing tokens) for adding misinformation and rewarded for weeding out misinformation.

While that should create an economic incentive for people to not just avoid inaccuracies but also to actively remove them, it doesn’t fully address the question of determining the truth — who, ultimately, gets to decide whether an entry is accurate? Wu said Dirt will support a variety of different “governance structures,” whether that’s centralized moderation, free-for-all voting or a system where votes are weighted by reputation.

Wu also suggested that the system is designed in a way to discourage concerted misinformation campaigns. For one thing, hoaxers will probably want to target the more popular databases, but those are also the ones that should attract more active moderation. Plus, she said, “The more valuable the network, the more people are contributing information, the more expensive [it becomes to contribute].”

A recurring theme in our conversation is the advantage of a “decentralized” approach to data verification. Wu said that isn’t always the right way to go, but she said it makes sense when there’s a big platform with the centralized vetting that works too slowly, or in situations where “you can’t trust the curator” of information, or with data sets that are just proprietary and expensive to access — while you have to buy tokens to contribute information, Wu said that Dirt Protocol datasets should be freely accessible, and “no single party owns that information and can shut off access.”

In a similar vein, she said Dirt Protcool isn’t currently focused on making money. Ultimately, the business model will probably involve some combination of giving the software away for free and charging for additional services.

“We’re focused on creating this open dataset that anyone can use,” Wu said. “If we achieve that goal, I’m confident that some monetization will arise.”

News Source = techcrunch.com

RIP “crypto”

in blockchain/crypto/crypto.com/cryptocurrency/cryptography/Delhi/India/language/Matt Blaze/Politics/Security/TC by

RIP “crypto”. You had a good run.

This week veteran cryptographer Matt Blaze, finally gave in — to what must have been a near-constant, low-level drone of ‘CAn Buy Crypto.com???$$$$!’ spam — and sold the pithy domain name he registered in 1993, in the midst of the PC era crypto wars, to use as an encryption policy resource, to Monaco, a Zug, Switzerland-based payments and cryptocurrency platform startup whose self-styled mission is “accelerating the world’s transition to cryptocurrency”, positioning itself at the nexus of the current crypto craze.

So crypto.com now points to cryptocurrencies.

Which seems a fitting moment to say RIP “crypto” as shorthand terminology for an entire domain of cryptographic work that underpins so many more things than just Bitcoin or Ether or Ripple or Litecoin or Zcash — or any of the myriad digital coins that have winked (and more recently minted) into virtual existence over the last decade or so, hoping to hit the crypto jackpot.

Frankly this is not at all fair. But, linguistically, so it goes. Languages live or they die. And to live in linguistic terms means to shift your meaning as word usage ebbs and flows.

The sale of crypto.com tells us not so much that money talks, though clearly there’s that too — domain sellers were speculating that the price for crypto.com could have been a cool $5M-$10M, per this Verge report from March; though the actual price-tag paid by Monaco has not been disclosed.

Mostly it underlines that trying to push as an individual against a surging tide is hopeless. Principled, one-man-stands of linguistic resistance against the crypto(currency) craze are futile at this particular juncture of its technological development. Spam with no end in sight would worry the will of anyone.

So apologies also to the few folks who have written to complain about incorrect use of “crypto” in TC headlines. Using “cryptocurrency” is indeed more accurate if that’s what the story is about. But as a term it’s headline-unfriendly as well as being really quite a horrible mouthful.

And, well, “coin” is too generic unless you’re coin trade press.

Alternative linguistic confections — anyone for ‘cryptoc’? — were never going to fly. So cryptocurrency colloquially colonizing “crypto” was really only a matter of time, given how many joules of attention-energy are being claimed and drained in its name.

Turns out language change can have plenty to do with the price of Bitcoin.

On the flip side, any craze can be a fleeting thing, and it’s entirely possible that, in time, “crypto” could revert to its proper meaning of cryptography should the cryptocurrency hype die back, as hype is wont to do when people get bored — because something that was new and novel becomes properly understood and adopted (and thus less of a conversation starter).

Sustained acceptance can make tongue-tripping nicknames less necessary, and reset the linguistic order.

Equally, though, a nickname can stubbornly stick around for ages — outlasting any nonprofessional understanding of the logic underlying its coinage.

Or at least until evolving usage causes another terminology shift. Think, for example, of the rhythmic swings of “telephone” -> “phone” -> “mobile phone” -> “mobile”.

Crypto(currency) could ultimately even lose the ‘crypto’ prefix should the technology end up becoming so ubiquitous as to be considered synonymous with the generic term “currency”, and usurp/displace that word, sinking back into the accepted conceptual morass that envelopes the idea of money.

Of course the crypto(graphy) community have not been at all happy about the linguistic sands shifting treacherously under their foundational field.

And they do have a point, given that without their founding crypto there could be no, er, ‘crypto’…

“”Crypto” could mean encryption, cryptography, or cryptology, but never cryptocurrency,” one computing academic tells us, adding: “I’ve heard plenty of whinging about the changed meaning of “crypto” and I don’t expect a dignified fall-back.”

“Normal usage says “encryption” is only one application of “cryptography” (building schemes for encryption and similar apps) which together with “cryptanalysis” (trying to break such schemes) makes up “cryptology”,” he adds.

Certainly, don’t expect the original crypto community to migrate to alternative terminology — not willingly, and not anytime soon. Which will probably make for some confused messaging at times. But technology applying pressure points to human communications is just par for the course.

As recently as last month the content on Blaze’s (now former) website included the express declaration that: “This site does not trade in or provide services related to cryptocurrencies. It is concerned with cryptography, computer and network security, and technology policy research.”

It further capped that caveat with an explicit disclaimer — writing: “Warning: Many cryptocurrencies are scams, and I strongly advise against their use as investment vehicles.”

Visitors to crypto.com now will not encounter any such caveats. But most of these folks probably weren’t headed there looking for cautionary tales. Nor seeking Blaze’s contact details. So you really can’t blame him for moving with the times.

For the original crypto community, playing the long game and waiting for the upstart crypto usurper to get linguistically cut back down to size seems the best option.

Sure, they’ve lost this “crypto” war — but many more important crypto wars remain to be fought and (hopefully) won.

And of course, in the far-flung future, who knows how 2018’s crypto craze will be viewed? Perhaps as the pinnacle of a hype-cycle that didn’t end in the wholesale reconfiguration of business and society that the crypto oracles promise, even if they managed to shift the conversation of a certain IT crowd for a while.

On another level, given rising levels of tech-fueled disruptive uncertainty crisscrossing so many facets of life, perhaps it’s fitting for “crypto” to become something of a cipher itself, devoid of fixed meaning.

“Encryption technology is the key to the future of the information revolution,” wrote Blaze in 1996. “It allows businesses and individuals to communicate securely over any inexpensive communication platform without fear of eavesdropping.”

That sentiment at least remains constant.

News Source = techcrunch.com

Coinbase CTO says the company is like a mullet

in blockchain/coinbase/cryptocurrency/Delhi/India/Politics/TC Sessions: Blockchain 2018 by

Cryptocurrency exchange Coinbase is the go-to place for buying and exchanging cryptocurrencies — as long as you’re fine sticking to Bitcoin, Litecoin, Ethereum and Bitcoin Cash. But Coinbase is actively looking at adding support for additional cryptocurrencies, Coinbase CTO Balaji Srinivasan said at TechCrunch Sessions: Blockchain today in Zug, Switzerland.

In June, Coinbase announced it would expand its support for just four cryptocurrencies to five, to include Ethereum Classic (ETC) “in the coming months.” Earlier this year, Coinbase also announced its intent to add some ERC 20 tokens. 

And more is coming. While Srinivasan wouldn’t say which other cryptocurrency support is on Coinbase’s horizon, he said to “look for a lot of announcements over the months to come.”

Srinivasan also compared Coinbase to the mullet hairstyle — business in the front, party in the back.

“Coinbase is a mullet in the sense we interface with banks and governments and then there’s the crypto space,” Srinivasan said.

Coinbase’s general strategy with adding new cryptocurrencies to its platform is to maintain good relationships with banks, governments and those in the crypto and blockchain spaces. In a sentence, Srinivasan said, Coinbase’s goal is “to mainstream cryptocurrency, to mainstream blockchain.”

In order to achieve that, he said, requires maintaining good relationships on all sides. So before Coinbase begins support for a new cryptocurrency, he said, there needs to be notable growth and adoption.

“We’ll never be the earliest adopter, but we will be early adopters,” he said.

Ultimately, Srinivasan envisions Coinbase operating more algorithmically so that it will be easier to duplicate its processes for adding additional cryptocurrencies.

Srinivasan joined Coinbase in April as the cryptocurrency exchange’s first CTO following Coinbase’s $120 million+ acquisition of Earn.com, a blockchain-based paid email service co-founded by Srinivasan. Srinivasan is also a board member at Andreessen Horowitz.

Before selling to Coinbase, Srinivasan led Earn.com to profitability after turning it into a service that rewards people for answering emails and completing tasks. At the time of the acquisition, Earn.com was profitable with revenues at an eight-digit annual run rate.

As CTO, Srinivasan is also focused on educating the masses about cryptocurrencies and blockchain technology. That’s because there’s no formal K-12 or undergraduate education around this space that’s totally revolutionary, he said.

In terms of core fundamentals, Srinivasan said, he’s very bullish on blockchain technology. He noted how it’s 10 times better than gold, international wire transfer and crowdfunding, and 10 times better for the incorporation of a company and more.

“Combine all of those 10xes and you’ve improved these fundamental primitives and made them programmable and automatable.”

News Source = techcrunch.com

Vitalik Buterin: “I definitely hope centralized exchanges go burn in hell as much as possible”

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Ethereum creator Vitalik Buterin talked about a wide range of topics during an interview with Jon Evans at TechCrunch Sessions: Blockchain. He was surprisingly balanced and stated multiple times that everyone has different needs and it’s hard to live in a world where everything is centralized or decentralized.

“Back in 2013, when GHash had 51 percent everybody freaked out. It’s happening a second time and people aren’t really talking about it this much,” Buterin said. And it’s true that if you look at Bitmain alone, the company is edging toward 51 percent of network hash rate.

In addition to potential 51 percent attacks, it causes issues due to concentration. Buterin mentioned the Sichuan flood that are potentially affecting mining operations over there.

So it’s clear that Buterin wants to make Ethereum as decentralized as possible by design. But what he wants and what the community wants might be different. Buterin is fine with that.

“The Ethereum Foundation tries very hard to be a decentralized organization,” he said. “We try very hard not to have a very hard divide, such as you’re on the inside and you’re on the outside.”

One of the big challenges to overcome to make Ethereum truly decentralized comes down to user authentication. Sure, it’s possible to generate a private key and a public key to manage your wallet yourself. Sending ETH is all about signing a transaction so it’s not that complicated.

But what happens if you lose the keys? What happens if you lose your password? “If all user authentication methods end up failing it’s going to be hard to reach mainstream adoption,” Buterin said.

“I’m interested in social recovery, multi-key schemes,” he added. Buterin then explained WeChat’s social recovery system. If you lose your password, WeChat asks you to select people in your contact list within a big list of names. You can also imagine some sort of offline validation.

“If all fails we’ll all use Coinbase — that’ll be less fun,” he said. That remark led to a bigger discussion about decentralized exchanges.

“I definitely hope centralized exchanges go burn in hell as much as possible,” Buterin said. In particular, he thinks there’s no reason some projects need to pay $10 to $15 million in listing fees to let people trade their tokens on centralized exchanges.

According to him, centralized exchanges exist because they serve as an interface between the fiat world and the cryptocurrencies. “And the fiat world only has centralized gateways,” he said.

As for crypto-to-crypto exchanges, Buterin says that it’s still early days. But there are already clear advantage from a user’s point of view. For instance, you don’t need to sign up or login. You can send money to a wallet and define an output address. This way, exchanges only act as input/output tunnels, transferring tokens from one address to another in two different currencies.

It also means that we make a culture that is hostile to people who take themselves to seriously Vitalik Buterin

Buterin also talked about private blockchains and other projects inspired by Ethereum. “A lot of these projects ended up not going very far. Some of them ended up being not decentralized at all,” he said.

For instance, some companies spun up 7 nodes, but they were all controlled by the same company. So it’s not exactly decentralized. “With the public network, you have a network of 16,000 computers,” Buterin said.

Once again, Buterin also said that he can’t blame them entirely. “In a lot of industries, I understand that it comes down to compromises,” he said. Sometimes you have regulatory obligations that force you to centralize at least a bit.

“Even Plasma chains are a better way to make that compromise,” Buterin said. “You get the efficiency of a centralized server, almost the same code of a centralized server, but a public blockchain fallback in case the centralized server ends up failing.”

At some point, Buterin also made fun of Bitcoin’s endless disagreements. The issue is that you have multiple groups of people who truly believe they’re right and that you should do something to ‘move forward’.

During a previous panel, Karl Floersch from the Ethereum Foundation said that Buterin was pretty good at compromising. And Buterin has a say in the culture of the Ethereum community.

“Growth of the communities definitely depends on what the earliest members believe. I think it is something where we do make a deliberate effort to basically promote the right values and attract the right people both in an inclusive sense and in an exclusive sense,” he said.

“It also means that we make a culture that is hostile to people who take themselves to seriously.”

Watch my panel on scaling Ethereum:

News Source = techcrunch.com

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