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Senior Official in Russian Parliament Says That Cryptos Can Ruin Governments

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A senior official in Russia’s parliament, the State Duma, has argued that cryptocurrencies have the potential to ruin governments, Russian financial media agency Rambler reported on May 20.

Nikolai Arefiev, a member of the Communist Party of the Russian Federation and vice-chairman of the Duma’s committee on economic policy, innovative development and entrepreneurship, claimed that cryptocurrencies were created in order to hide large offshore assets from the government.

If cryptos such as bitcoin (BTC) had emerged by 1994, Russia would have been “fully destroyed” so far because it would have lost all its capital offshore, Arefiev stated, speaking at a recent press conference of local media agency, National News Service.

The 70-year-old official has further suggested that it is useless for a government to attempt to be involved in cryptocurrencies’ operations, emphasizing that those jurisdictions that decided to ban cryptocurrencies have chosen the easiest way to protect their capital.

Also today, Arefiev warned the public against speculative capital, claiming that it accounts for more than 90% of the global economy. According to the official, bitcoin is a part of those speculative schemes, which create “money from money” and do not actually produce any products.

The cryptocurrency industry is still not regulated in Russia.

Recently, Russia’s largest bank, Sberbank, requested that a client provide information on their income from operations with cryptocurrency. Last week, Russian prime minister and former president Dmitry Medvedev claimed that crypto regulation is not a priority for the Russian government since cryptocurrencies “have lost their popularity.”





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Researchers Discover How To Automate Accountability On The Blockchain

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“The (virtual) gold rush is on, and as in the Wild West of yore, the outlaws are ever present,” wrote blockchain developers and academics in a recent paper, Polygraph: Accountable Byzantine Agreement. Luckily, these researchers have have discovered a way to detect and punish dishonest blockchain users.

The authors — Vincent Gramoli and Pierre Civit of the University of Sydney, and Seth Gilbert of the National University of Singapore — developed the Polygraph protocol, which automates accountability in blockchains to hold participants accountable for double spending, a notoriously knotty issue in cryptography.

Though the double spend problem was supposedly solved by Satoshi’s white paper, published in 2008, the researchers discovered that disagreements caused by blockchain forks can lead to double spending if the resulting branches have conflicting transactions.

They cite a zombie case:

“Byzantine nodes can override the General Polygraph Protocol by proposing directly two conflicting views to two different clients to then perform a double-spending attack. The coalition does not participate to the consensus in order to violate the liveness property…. Note that safety is also violated: When a client invokes the read() primitive, the coalition can answer arbitrary values, despite the non-termination of the legitimate consensus. The client is supposed to trust the coalition, like all the other clients who can forever receive a different output for the read() primitive. Hence, for t ≥ n − t0, the eventual prefix property is violated. This makes the blockchain vulnerable to a double-spending attack.”

Yes, the paper is scholarly, but it also provides pragmatic solutions to real problems in current consensus mechanisms.

The group considers the growing threat of centralization on blockchains, caused by the collectivizing of hashing power. Under traditional Byzantine protocol agreements, if one party amasses more than one-third of total mining output they gain decision making authority. As an aside, the authors note that the largest Bitcoin mining pool today controls approximately 19 percent of total hashing power.

“We need a new sheriff in town to bring the guilty parties to justice. What if, instead of preventing bad behavior by a party that controls too much of the network power, we guarantee accountability,” write the authors.

Much in the way we prevent crime in the real world, we can prevent bad blockchain behavior via “defense-in-depth” — the basic Byzantine agreement protocol that prevents usurpation if the attacker has less than one-third of network control or if the network infrastructure is working to pass messages in time.

“Byzantine agreement protocols act as the locks on the bank doors, preventing the gangs from making off with the loot,” they wrote.

However, when these guarantees fail — and the authors suggest they can and do — the Polygraph protocol will intercept malicious behavior.

The Polygraph’s basic algorithm is based on the Byzantine agreement protocol, but goes further in that proceeds through asynchronous rounds, or a vote that receives democratic imput.

“First, a reliable broadcaster is used to distribute the proposal values. Then, a second phase of communication is used to determine whether enough processes have converged on a single value. Finally the processes decide, if they can; and if not, they update their estimate in an attempt to converge on a single value.”

This Town Isn’t Big Enough

If the process determines that someone is pursuing illegal actions, the consensus can vote them off the network.

“Accountability has been overlooked in blockchains but it is actually key to security,” said Gramoli, who also serves as Red Belly Blockchain CEO. “The industry cannot accept blockchain to be a simple distributed system where valuable assets vanish as soon as a third of the participants form a coalition.”

Red Belly Blockchain has been funded by the Australian Research Council and developed by researchers of the Concurrent Systems Research Group at the University of Sydney and Data61-CSIRO.

Photo by Xiang Gao on Unsplash

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A New Bitcoin Exchange Point On the Colombian-Venezuelan Border Will Help Refugees

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A new cryptocurrency exchange service is available on the border between Colombia and Venezuela and its aim is to help refugees traveling across the Simon Bolivar International Bridge.

Visitors are now able to use the point-of-sale service with cryptocurrencies to buy goods. The POS is located in Santander, Colombia, just across the border from Venezuela. Panda Group created the payment alternative with refugees in mind. The group, a Columbian-Venezuela joint venture, announced the implementation of the new service through their Twitter account.

According to the data published by Coinatmradar.com, the service lets users exchange using bitcoin (BTC), bitcoin cash (BCH) and dai (DAI), and converts them into to Colombian Pesos (COP).

At the physical location – a small phone service provider in a mall called La Parada – customers can buy bitcoin with prices based on the Localbitcoins rate in pesos. The service will charge 10 percent above the market price and those who sell their bitcoins will do so for 5 percent more than the established market value.

This is not the first cryptocurrency service in the country. The Panda Group has already installed another five cryptocurrency exchanges in Colombia, most of them in the Colombian capital, Bogotá.

According to Panda CEO, Arley Lozano Jaramillo, their solutions are focused on helping the Venezuelan users and they announced the addition of a new service called Xpay.Cash to encourage adoption.

“This service is for all our brothers to pay directly in Cucuta with their cryptoassets and mitigate the loss of exchanging from BTC to COP, which represents a loss of at least 20%,” Jaramillo said.

Colombia has the highest rate of cryptocurrency investors in South America, next to Brazil. There are reportedly over 20 businesses accepting bitcoin payments in the country. The establishments are mainly focused in tourism, food and digital services.

Bitcoin At The Border

The ATM installed in Villa del Rosario City is connected to the Venezuelan border by the state of Tachira. The states are only separated by the Simon Bolivar International Bridge, one of the most heavily traveled borders used by Venezuelan refugees.

The refugee situation has also sparked a focus on the cryptocurrency, mainly for humanitarian aid purposes.

On the other hand, the last point of sale with cryptocurrency was implemented in Cúcuta, another border location with an growing Venezuelan population. The state also has a Bitcoin ATM, one of forty-two in the country.

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Fidelity-Backed Crypto Analytics Firm to Integrate Twitter-Based Crypto Sentiment Feed

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Crypto analytics firm Coin Metrics partnered with Social Market Analytics (SMA) to collaborate on a feed of real-time sentiment towards cryptocurrency based on social media data, according to a press release on June 17.

The new partnership intends to collect and analyze data posted by crypto community on social media in order to provide a new tool to help crypto traders to track social media sentiment data to build their portfolio strategies.

The new product will initially target sentiment data solely on social media giant Twitter, Coin Metrics CEO Tim Rice confirmed to Cointelegraph, adding that the firms are currently not considering integration of the service into Facebook.

Specifically,Coin Metrics will incorporate the product into market data platform, called the SMA cryptocurrency Sentiment Feed, providing calculated metrics of data on Twitter, according to a report by crypto media outlet The Block. In the report, Rice said that the calculation algorithms would include relevant tweets and calculate “19 different aggregate sentiment metrics down to snapshots of one minute.”

Social Market Analytics is providing social media-powered predictive data analytics to traditional capital markets participants in various markets, including stocks, forex, Exchange-Traded Funds (ETFs), futures, among others. Since its establishment in 2012, SMA has been a Twitter Finance partner, the firm’s CEO Joe Gits stated in an email to Cointelegraph.

Meanwhile, Coin Metrics is backed by major American investment management company Fidelity in February 2019, which participated in a $1.9 million funding round in February 2019.

Earlier today, social media giant Facebook released the white paper for its long-anticipated cryptocurrency and blockchain-powered financial project known as Libra stablecoin.





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