Block hashing algorithm - Bitcoin Wiki

Searching for the Unicorn Cryptocurrency

Searching for the Unicorn Cryptocurrency
For someone first starting out as a cryptocurrency investor, finding a trustworthy manual for screening a cryptocurrency’s merits is nonexistent as we are still in the early, Wild West days of the cryptocurrency market. One would need to become deeply familiar with the inner workings of blockchain to be able to perform the bare minimum due diligence.
One might believe, over time, that finding the perfect cryptocurrency may be nothing short of futile. If a cryptocurrency purports infinite scalability, then it is probably either lightweight with limited features or it is highly centralized among a limited number of nodes that perform consensus services especially Proof of Stake or Delegated Proof of Stake. Similarly, a cryptocurrency that purports comprehensive privacy may have technical obstacles to overcome if it aims to expand its applications such as in smart contracts. The bottom line is that it is extremely difficult for a cryptocurrency to have all important features jam-packed into itself.
The cryptocurrency space is stuck in the era of the “dial-up internet” in a manner of speaking. Currently blockchain can’t scale – not without certain tradeoffs – and it hasn’t fully resolved certain intractable issues such as user-unfriendly long addresses and how the blockchain size is forever increasing to name two.
In other words, we haven’t found the ultimate cryptocurrency. That is, we haven’t found the mystical unicorn cryptocurrency that ushers the era of decentralization while eschewing all the limitations of traditional blockchain systems.
“But wait – what about Ethereum once it implements sharding?”
“Wouldn’t IOTA be able to scale infinitely with smart contracts through its Qubic offering?”
“Isn’t Dash capable of having privacy, smart contracts, and instantaneous transactions?”
Those thoughts and comments may come from cryptocurrency investors who have done their research. It is natural for the informed investors to invest in projects that are believed to bring cutting edge technological transformation to blockchain. Sooner or later, the sinking realization will hit that any variation of the current blockchain technology will always likely have certain limitations.
Let us pretend that there indeed exists a unicorn cryptocurrency somewhere that may or may not be here yet. What would it look like, exactly? Let us set the 5 criteria of the unicorn cryptocurrency:
Unicorn Criteria
(1) Perfectly solves the blockchain trilemma:
o Infinite scalability
o Full security
o Full decentralization
(2) Zero or minimal transaction fee
(3) Full privacy
(4) Full smart contract capabilities
(5) Fair distribution and fair governance
For each of the above 5 criteria, there would not be any middle ground. For example, a cryptocurrency with just an in-protocol mixer would not be considered as having full privacy. As another example, an Initial Coin Offering (ICO) may possibly violate criterion (5) since with an ICO the distribution and governance are often heavily favored towards an oligarchy – this in turn would defy the spirit of decentralization that Bitcoin was found on.
There is no cryptocurrency currently that fits the above profile of the unicorn cryptocurrency. Let us examine an arbitrary list of highly hyped cryptocurrencies that meet the above list at least partially. The following list is by no means comprehensive but may be a sufficient sampling of various blockchain implementations:
Bitcoin (BTC)
Bitcoin is the very first and the best known cryptocurrency that started it all. While Bitcoin is generally considered extremely secure, it suffers from mining centralization to a degree. Bitcoin is not anonymous, lacks smart contracts, and most worrisomely, can only do about 7 transactions per seconds (TPS). Bitcoin is not the unicorn notwithstanding all the Bitcoin maximalists.
Ethereum (ETH)
Ethereum is widely considered the gold standard of smart contracts aside from its scalability problem. Sharding as part of Casper’s release is generally considered to be the solution to Ethereum’s scalability problem.
The goal of sharding is to split up validating responsibilities among various groups or shards. Ethereum’s sharding comes down to duplicating the existing blockchain architecture and sharing a token. This does not solve the core issue and simply kicks the can further down the road. After all, full nodes still need to exist one way or another.
Ethereum’s blockchain size problem is also an issue as will be explained more later in this article.
As a result, Ethereum is not the unicorn due to its incomplete approach to scalability and, to a degree, security.
Dash
Dash’s masternodes are widely considered to be centralized due to their high funding requirements, and there are accounts of a pre-mine in the beginning. Dash is not the unicorn due to its questionable decentralization.
Nano
Nano boasts rightfully for its instant, free transactions. But it lacks smart contracts and privacy, and it may be exposed to well orchestrated DDOS attacks. Therefore, it goes without saying that Nano is not the unicorn.
EOS
While EOS claims to execute millions of transactions per seconds, a quick glance reveals centralized parameters with 21 nodes and a questionable governance system. Therefore, EOS fails to achieve the unicorn status.
Monero (XMR)
One of the best known and respected privacy coins, Monero lacks smart contracts and may fall short of infinite scalability due to CryptoNote’s design. The unicorn rank is out of Monero’s reach.
IOTA
IOTA’s scalability is based on the number of transactions the network processes, and so its supposedly infinite scalability would fluctuate and is subject to the whims of the underlying transactions. While IOTA’s scalability approach is innovative and may work in the long term, it should be reminded that the unicorn cryptocurrency has no middle ground. The unicorn cryptocurrency would be expected to scale infinitely on a consistent basis from the beginning.
In addition, IOTA’s Masked Authenticated Messaging (MAM) feature does not bring privacy to the masses in a highly convenient manner. Consequently, the unicorn is not found with IOTA.

PascalCoin as a Candidate for the Unicorn Cryptocurrency
Please allow me to present a candidate for the cryptocurrency unicorn: PascalCoin.
According to the website, PascalCoin claims the following:
“PascalCoin is an instant, zero-fee, infinitely scalable, and decentralized cryptocurrency with advanced privacy and smart contract capabilities. Enabled by the SafeBox technology to become the world’s first blockchain independent of historical operations, PascalCoin possesses unlimited potential.”
The above summary is a mouthful to be sure, but let’s take a deep dive on how PascalCoin innovates with the SafeBox and more. Before we do this, I encourage you to first become acquainted with PascalCoin by watching the following video introduction:
https://www.youtube.com/watch?time_continue=4&v=F25UU-0W9Dk
The rest of this section will be split into 10 parts in order to illustrate most of the notable features of PascalCoin. Naturally, let’s start off with the SafeBox.
Part #1: The SafeBox
Unlike traditional UTXO-based cryptocurrencies in which the blockchain records the specifics of each transaction (address, sender address, amount of funds transferred, etc.), the blockchain in PascalCoin is only used to mutate the SafeBox. The SafeBox is a separate but equivalent cryptographic data structure that snapshots account balances. PascalCoin’s blockchain is comparable to a machine that feeds the most important data – namely, the state of an account – into the SafeBox. Any node can still independently compute and verify the cumulative Proof-of-Work required to construct the SafeBox.
The PascalCoin whitepaper elegantly highlights the unique historical independence that the SafeBox possesses:
“While there are approaches that cryptocurrencies could use such as pruning, warp-sync, "finality checkpoints", UTXO-snapshotting, etc, there is a fundamental difference with PascalCoin. Their new nodes can only prove they are on most-work-chain using the infinite history whereas in PascalCoin, new nodes can prove they are on the most-work chain without the infinite history.”
Some cryptocurrency old-timers might instinctively balk at the idea of full nodes eschewing the entire history for security, but such a reaction would showcase a lack of understanding on what the SafeBox really does.
A concrete example would go a long way to best illustrate what the SafeBox does. Let’s say I input the following operations in my calculator:
5 * 5 – 10 / 2 + 5
It does not take a genius to calculate the answer, 25. Now, the expression “5 \ 5 – 10 / 2 + 5”* would be forever imbued on a traditional blockchain’s history. But the SafeBox begs to differ. It says that the expression “5 \ 5 – 10 / 2 + 5”* should instead be simply “25” so as preserve simplicity, time, and space. In other words, the SafeBox simply preserves the account balance.
But some might still be unsatisfied and claim that if one cannot trace the series of operations (transactions) that lead to the final number (balance) of 25, the blockchain is inherently insecure.
Here are four important security aspects of the SafeBox that some people fail to realize:
(1) SafeBox Follows the Longest Chain of Proof-of-Work
The SafeBox mutates itself per 100 blocks. Each new SafeBox mutation must reference both to the previous SafeBox mutation and the preceding 100 blocks in order to be valid, and the resultant hash of the new mutated SafeBox must then be referenced by each of the new subsequent blocks, and the process repeats itself forever.
The fact that each new SafeBox mutation must reference to the previous SafeBox mutation is comparable to relying on the entire history. This is because the previous SafeBox mutation encapsulates the result of cumulative entire history except for the 100 blocks which is why each new SafeBox mutation requires both the previous SafeBox mutation and the preceding 100 blocks.
So in a sense, there is a single interconnected chain of inflows and outflows, supported by Byzantine Proof-of-Work consensus, instead of the entire history of transactions.
More concretely, the SafeBox follows the path of the longest chain of Proof-of-Work simply by design, and is thus cryptographically equivalent to the entire history even without tracing specific operations in the past. If the chain is rolled back with a 51% attack, only the attacker’s own account(s) in the SafeBox can be manipulated as is explained in the next part.
(2) A 51% Attack on PascalCoin Functions the Same as Others
A 51% attack on PascalCoin would work in a similar way as with other Proof-of-Work cryptocurrencies. An attacker cannot modify a transaction in the past without affecting the current SafeBox hash which is accepted by all honest nodes.
Someone might claim that if you roll back all the current blocks plus the 100 blocks prior to the SafeBox’s mutation, one could create a forged SafeBox with different balances for all accounts. This would be incorrect as one would be able to manipulate only his or her own account(s) in the SafeBox with a 51% attack – just as is the case with other UTXO cryptocurrencies. The SafeBox stores the balances of all accounts which are in turn irreversibly linked only to their respective owners’ private keys.
(3) One Could Preserve the Entire History of the PascalCoin Blockchain
No blockchain data in PascalCoin is ever deleted even in the presence of the SafeBox. Since the SafeBox is cryptographically equivalent to a full node with the entire history as explained above, PascalCoin full nodes are not expected to contain infinite history. But for whatever reason(s) one may have, one could still keep all the PascalCoin blockchain history as well along with the SafeBox as an option even though it would be redundant.
Without storing the entire history of the PascalCoin blockchain, you can still trace the specific operations of the 100 blocks prior to when the SafeBox absorbs and reflects the net result (a single balance for each account) from those 100 blocks. But if you’re interested in tracing operations over a longer period in the past – as redundant as that may be – you’d have the option to do so by storing the entire history of the PascalCoin blockchain.
(4) The SafeBox is Equivalent to the Entire Blockchain History
Some skeptics may ask this question: “What if the SafeBox is forever lost? How would you be able to verify your accounts?” Asking this question is tantamount to asking to what would happen to Bitcoin if all of its entire history was erased. The result would be chaos, of course, but the SafeBox is still in line with the general security model of a traditional blockchain with respect to black swans.
Now that we know the security of the SafeBox is not compromised, what are the implications of this new blockchain paradigm? A colorful illustration as follows still wouldn’t do justice to the subtle revolution that the SafeBox ushers. The automobiles we see on the street are the cookie-and-butter representation of traditional blockchain systems. The SafeBox, on the other hand, supercharges those traditional cars to become the Transformers from Michael Bay’s films.
The SafeBox is an entirely different blockchain architecture that is impressive in its simplicity and ingenuity. The SafeBox’s design is only the opening act for PascalCoin’s vast nuclear arsenal. If the above was all that PascalCoin offers, it still wouldn’t come close to achieving the unicorn status but luckily, we have just scratched the surface. Please keep on reading on if you want to learn how PascalCoin is going to shatter the cryptocurrency industry into pieces. Buckle down as this is going to be a long read as we explore further about the SafeBox’s implications.
Part #2: 0-Confirmation Transactions
To begin, 0-confirmation transactions are secure in PascalCoin thanks to the SafeBox.
The following paraphrases an explanation of PascalCoin’s 0-confirmations from the whitepaper:
“Since PascalCoin is not a UTXO-based currency but rather a State-based currency thanks to the SafeBox, the security guarantee of 0-confirmation transactions are much stronger than in UTXO-based currencies. For example, in Bitcoin if a merchant accepts a 0-confirmation transaction for a coffee, the buyer can simply roll that transaction back after receiving the coffee but before the transaction is confirmed in a block. The way the buyer does this is by re-spending those UTXOs to himself in a new transaction (with a higher fee) thus invalidating them for the merchant. In PascalCoin, this is virtually impossible since the buyer's transaction to the merchant is simply a delta-operation to debit/credit a quantity from/to accounts respectively. The buyer is unable to erase or pre-empt this two-sided, debit/credit-based transaction from the network’s pending pool until it either enters a block for confirmation or is discarded with respect to both sender and receiver ends. If the buyer tries to double-spend the coffee funds after receiving the coffee but before they clear, the double-spend transaction will not propagate the network since nodes cannot propagate a double-spending transaction thanks to the debit/credit nature of the transaction. A UTXO-based transaction is initially one-sided before confirmation and therefore is more exposed to one-sided malicious schemes of double spending.”
Phew, that explanation was technical but it had to be done. In summary, PascalCoin possesses the only secure 0-confirmation transactions in the cryptocurrency industry, and it goes without saying that this means PascalCoin is extremely fast. In fact, PascalCoin is capable of 72,000 TPS even prior to any additional extensive optimizations down the road. In other words, PascalCoin is as instant as it gets and gives Nano a run for its money.
Part #3: Zero Fee
Let’s circle back to our discussion of PascalCoin’s 0-confirmation capability. Here’s a little fun magical twist to PascalCoin’s 0-confirmation magic: 0-confirmation transactions are zero-fee. As in you don’t pay a single cent in fee for each 0-confirmation! There is just a tiny downside: if you create a second transaction in a 5-minute block window then you’d need to pay a minimal fee. Imagine using Nano but with a significantly stronger anti-DDOS protection for spam! But there shouldn’t be any complaint as this fee would amount to 0.0001 Pascal or $0.00002 based on the current price of a Pascal at the time of this writing.
So, how come the fee for blazingly fast transactions is nonexistent? This is where the magic of the SafeBox arises in three ways:
(1) PascalCoin possesses the secure 0-confirmation feature as discussed above that enables this speed.
(2) There is no fee bidding competition of transaction priority typical in UTXO cryptocurrencies since, once again, PascalCoin operates on secure 0-confirmations.
(3) There is no fee incentive needed to run full nodes on behalf of the network’s security beyond the consensus rewards.
Part #4: Blockchain Size
Let’s expand more on the third point above, using Ethereum as an example. Since Ethereum’s launch in 2015, its full blockchain size is currently around 2 TB, give or take, but let’s just say its blockchain size is 100 GB for now to avoid offending the Ethereum elitists who insist there are different types of full nodes that are lighter. Whoever runs Ethereum’s full nodes would expect storage fees on top of the typical consensus fees as it takes significant resources to shoulder Ethereum’s full blockchain size and in turn secure the network. What if I told you that PascalCoin’s full blockchain size will never exceed few GBs after thousands of years? That is just what the SafeBox enables PascalCoin to do so. It is estimated that by 2072, PascalCoin’s full nodes will only be 6 GB which is low enough not to warrant any fee incentives for hosting full nodes. Remember, the SafeBox is an ultra-light cryptographic data structure that is cryptographically equivalent to a blockchain with the entire transaction history. In other words, the SafeBox is a compact spreadsheet of all account balances that functions as PascalCoin’s full node!
Not only does the SafeBox’s infinitesimal memory size helps to reduce transaction fees by phasing out any storage fees, but it also paves the way for true decentralization. It would be trivial for every PascalCoin user to opt a full node in the form of a wallet. This is extreme decentralization at its finest since the majority of users of other cryptocurrencies ditch full nodes due to their burdensome sizes. It is naïve to believe that storage costs would reduce enough to the point where hosting full nodes are trivial. Take a look at the following chart outlining the trend of storage cost.

* https://www.backblaze.com/blog/hard-drive-cost-per-gigabyte/
As we can see, storage costs continue to decrease but the descent is slowing down as is the norm with technological improvements. In the meantime, blockchain sizes of other cryptocurrencies are increasing linearly or, in the case of smart contract engines like Ethereum, parabolically. Imagine a cryptocurrency smart contract engine like Ethereum garnering worldwide adoption; how do you think Ethereum’s size would look like in the far future based on the following chart?


https://i.redd.it/k57nimdjmo621.png

Ethereum’s future blockchain size is not looking pretty in terms of sustainable security. Sharding is not a fix for this issue since there still needs to be full nodes but that is a different topic for another time.
It is astonishing that the cryptocurrency community as a whole has passively accepted this forever-expanding-blockchain-size problem as an inescapable fate.
PascalCoin is the only cryptocurrency that has fully escaped the death vortex of forever expanding blockchain size. Its blockchain size wouldn’t exceed 10 GB even after many hundreds of years of worldwide adoption. Ethereum’s blockchain size after hundreds of years of worldwide adoption would make fine comedy.
Part #5: Simple, Short, and Ordinal Addresses
Remember how the SafeBox works by snapshotting all account balances? As it turns out, the account address system is almost as cool as the SafeBox itself.
Imagine yourself in this situation: on a very hot and sunny day, you’re wandering down the street across from your house and ran into a lemonade stand – the old-fashioned kind without any QR code or credit card terminal. The kid across you is selling a lemonade cup for 1 Pascal with a poster outlining the payment address as 5471-55. You flip out your phone and click “Send” with 1 Pascal to the address 5471-55; viola, exactly one second later you’re drinking your lemonade without paying a cent for the transaction fee!
The last thing one wants to do is to figure out how to copy/paste to, say, the following address 1BoatSLRHtKNngkdXEeobR76b53LETtpyT on the spot wouldn’t it? Gone are the obnoxiously long addresses that plague all cryptocurrencies. The days of those unreadable addresses will be long gone – it has to be if blockchain is to innovate itself for the general public. EOS has a similar feature for readable addresses but in a very limited manner in comparison, and nicknames attached to addresses in GUIs don’t count since blockchain-wide compatibility wouldn’t hold.
Not only does PascalCoin has the neat feature of having addresses (called PASAs) that amount to up to 6 or 7 digits, but PascalCoin can also incorporate in-protocol address naming as opposed to GUI address nicknames. Suppose I want to order something from Amazon using Pascal; I simply search the word “Amazon” then the corresponding account number shows up. Pretty neat, right?
The astute reader may gather that PascalCoin’s address system makes it necessary to commoditize addresses, and he/she would be correct. Some view this as a weakness; part #10 later in this segment addresses this incorrect perception.
Part #6: Privacy
As if the above wasn’t enough, here’s another secret that PascalCoin has: it is a full-blown privacy coin. It uses two separate foundations to achieve comprehensive anonymity: in-protocol mixer for transfer amounts and zn-SNARKs for private balances. The former has been implemented and the latter is on the roadmap. Both the 0-confirmation transaction and the negligible transaction fee would make PascalCoin the most scalable privacy coin of any other cryptocurrencies pending the zk-SNARKs implementation.
Part #7: Smart Contracts
Next, PascalCoin will take smart contracts to the next level with a layer-2 overlay consensus system that pioneers sidechains and other smart contract implementations.
In formal terms, this layer-2 architecture will facilitate the transfer of data between PASAs which in turn allows clean enveloping of layer-2 protocols inside layer-1 much in the same way that HTTP lives inside TCP.
To summarize:
· The layer-2 consensus method is separate from the layer-1 Proof-of-Work. This layer-2 consensus method is independent and flexible. A sidechain – based on a single encompassing PASA – could apply Proof-of-Stake (POS), Delegated Proof-of-Stake (DPOS), or Directed Acyclic Graph (DAG) as the consensus system of its choice.
· Such a layer-2 smart contract platform can be written in any languages.
· Layer-2 sidechains will also provide very strong anonymity since funds are all pooled and keys are not used to unlock them.
· This layer-2 architecture is ingenious in which the computation is separate from layer-2 consensus, in effect removing any bottleneck.
· Horizontal scaling exists in this paradigm as there is no interdependence between smart contracts and states are not managed by slow sidechains.
· Speed and scalability are fully independent of PascalCoin.
One would be able to run the entire global financial system on PascalCoin’s infinitely scalable smart contract platform and it would still scale infinitely. In fact, this layer-2 architecture would be exponentially faster than Ethereum even after its sharding is implemented.
All this is the main focus of PascalCoin’s upcoming version 5 in 2019. A whitepaper add-on for this major upgrade will be released in early 2019.
Part #8: RandomHash Algorithm
Surely there must be some tradeoffs to PascalCoin’s impressive capabilities, you might be asking yourself. One might bring up the fact that PascalCoin’s layer-1 is based on Proof-of-Work and is thus susceptible to mining centralization. This would be a fallacy as PascalCoin has pioneered the very first true ASIC, GPU, and dual-mining resistant algorithm known as RandomHash that obliterates anything that is not CPU based and gives all the power back to solo miners.
Here is the official description of RandomHash:
“RandomHash is a high-level cryptographic hash algorithm that combines other well-known hash primitives in a highly serial manner. The distinguishing feature is that calculations for a nonce are dependent on partial calculations of other nonces, selected at random. This allows a serial hasher (CPU) to re-use these partial calculations in subsequent mining saving 50% or more of the work-load. Parallel hashers (GPU) cannot benefit from this optimization since the optimal nonce-set cannot be pre-calculated as it is determined on-the-fly. As a result, parallel hashers (GPU) are required to perform the full workload for every nonce. Also, the algorithm results in 10x memory bloat for a parallel implementation. In addition to its serial nature, it is branch-heavy and recursive making in optimal for CPU-only mining.”
One might be understandably skeptical of any Proof-of-Work algorithm that solves ASIC and GPU centralization once for all because there have been countless proposals being thrown around for various algorithms since the dawn of Bitcoin. Is RandomHash truly the ASIC & GPU killer that it claims to be?
Herman Schoenfeld, the inventor behind RandomHash, described his algorithm in the following:
“RandomHash offers endless ASIC-design breaking surface due to its use of recursion, hash algo selection, memory hardness and random number generation.
For example, changing how round hash selection is made and/or random number generator algo and/or checksum algo and/or their sequencing will totally break an ASIC design. Conceptually if you can significantly change the structure of the output assembly whilst keeping the high-level algorithm as invariant as possible, the ASIC design will necessarily require proportional restructuring. This results from the fact that ASIC designs mirror the ASM of the algorithm rather than the algorithm itself.”
Polyminer1 (pseudonym), one of the members of the PascalCoin core team who developed RHMiner (official software for mining RandomHash), claimed as follows:
“The design of RandomHash is, to my experience, a genuine innovation. I’ve been 30 years in the field. I’ve rarely been surprised by anything. RandomHash was one of my rare surprises. It’s elegant, simple, and achieves resistance in all fronts.”
PascalCoin may have been the first party to achieve the race of what could possibly be described as the “God algorithm” for Proof-of-Work cryptocurrencies. Look no further than one of Monero’s core developers since 2015, Howard Chu. In September 2018, Howard declared that he has found a solution, called RandomJS, to permanently keep ASICs off the network without repetitive algorithm changes. This solution actually closely mirrors RandomHash’s algorithm. Discussing about his algorithm, Howard asserted that “RandomJS is coming at the problem from a direction that nobody else is.”
Link to Howard Chu’s article on RandomJS:
https://www.coindesk.com/one-musicians-creative-solution-to-drive-asics-off-monero
Yet when Herman was asked about Howard’s approach, he responded:
“Yes, looks like it may work although using Javascript was a bit much. They should’ve just used an assembly subset and generated random ASM programs. In a way, RandomHash does this with its repeated use of random mem-transforms during expansion phase.”
In the end, PascalCoin may have successfully implemented the most revolutionary Proof-of-Work algorithm, one that eclipses Howard’s burgeoning vision, to date that almost nobody knows about. To learn more about RandomHash, refer to the following resources:
RandomHash whitepaper:
https://www.pascalcoin.org/storage/whitepapers/RandomHash_Whitepaper.pdf
Technical proposal for RandomHash:
https://github.com/PascalCoin/PascalCoin/blob/mastePIP/PIP-0009.md
Someone might claim that PascalCoin still suffers from mining centralization after RandomHash, and this is somewhat misleading as will be explained in part #10.
Part #9: Fair Distribution and Governance
Not only does PascalCoin rest on superior technology, but it also has its roots in the correct philosophy of decentralized distribution and governance. There was no ICO or pre-mine, and the developer fund exists as a percentage of mining rewards as voted by the community. This developer fund is 100% governed by a decentralized autonomous organization – currently facilitated by the PascalCoin Foundation – that will eventually be transformed into an autonomous smart contract platform. Not only is the developer fund voted upon by the community, but PascalCoin’s development roadmap is also voted upon the community via the Protocol Improvement Proposals (PIPs).
This decentralized governance also serves an important benefit as a powerful deterrent to unseemly fork wars that befall many cryptocurrencies.
Part #10: Common Misconceptions of PascalCoin
“The branding is terrible”
PascalCoin is currently working very hard on its image and is preparing for several branding and marketing initiatives in the short term. For example, two of the core developers of the PascalCoin recently interviewed with the Fox Business Network. A YouTube replay of this interview will be heavily promoted.
Some people object to the name PascalCoin. First, it’s worth noting that PascalCoin is the name of the project while Pascal is the name of the underlying currency. Secondly, Google and YouTube received excessive criticisms back then in the beginning with their name choices. Look at where those companies are nowadays – surely a somewhat similar situation faces PascalCoin until the name’s familiarity percolates into the public.
“The wallet GUI is terrible”
As the team is run by a small yet extremely dedicated developers, multiple priorities can be challenging to juggle. The lack of funding through an ICO or a pre-mine also makes it challenging to accelerate development. The top priority of the core developers is to continue developing full-time on the groundbreaking technology that PascalCoin offers. In the meantime, an updated and user-friendly wallet GUI has been worked upon for some time and will be released in due time. Rome wasn’t built in one day.
“One would need to purchase a PASA in the first place”
This is a complicated topic since PASAs need to be commoditized by the SafeBox’s design, meaning that PASAs cannot be obtained at no charge to prevent systematic abuse. This raises two seemingly valid concerns:
· As a chicken and egg problem, how would one purchase a PASA using Pascal in the first place if one cannot obtain Pascal without a PASA?
· How would the price of PASAs stay low and affordable in the face of significant demand?
With regards to the chicken and egg problem, there are many ways – some finished and some unfinished – to obtain your first PASA as explained on the “Get Started” page on the PascalCoin website:
https://www.pascalcoin.org/get_started
More importantly, however, is the fact that there are few methods that can get your first PASA for free. The team will also release another method soon in which you could obtain your first PASA for free via a single SMS message. This would probably become by far the simplest and the easiest way to obtain your first PASA for free. There will be more new ways to easily obtain your first PASA for free down the road.
What about ensuring the PASA market at large remains inexpensive and affordable following your first (and probably free) PASA acquisition? This would be achieved in two ways:
· Decentralized governance of the PASA economics per the explanation in the FAQ section on the bottom of the PascalCoin website (https://www.pascalcoin.org/)
· Unlimited and free pseudo-PASAs based on layer-2 in the next version release.
“PascalCoin is still centralized after the release of RandomHash”
Did the implementation of RandomHash from version 4 live up to its promise?
The official goals of RandomHash were as follow:
(1) Implement a GPU & ASIC resistant hash algorithm
(2) Eliminate dual mining
The two goals above were achieved by every possible measure.
Yet a mining pool, Nanopool, was able to regain its hash majority after a significant but a temporary dip.
The official conclusion is that, from a probabilistic viewpoint, solo miners are more profitable than pool miners. However, pool mining is enticing for solo miners who 1) have limited hardware as it ensures a steady income instead of highly profitable but probabilistic income via solo mining, and 2) who prefer convenient software and/or GUI.
What is the next step, then? While the barrier of entry for solo miners has successfully been put down, additional work needs to be done. The PascalCoin team and the community are earnestly investigating additional steps to improve mining decentralization with respect to pool mining specifically to add on top of RandomHash’s successful elimination of GPU, ASIC, and dual-mining dominance.
It is likely that the PascalCoin community will promote the following two initiatives in the near future:
(1) Establish a community-driven, nonprofit mining pool with attractive incentives.
(2) Optimize RHMiner, PascalCoin’s official solo mining software, for performance upgrades.
A single pool dominance is likely short lived once more options emerge for individual CPU miners who want to avoid solo mining for whatever reason(s).
Let us use Bitcoin as an example. Bitcoin mining is dominated by ASICs and mining pools but no single pool is – at the time of this writing – even close on obtaining the hash majority. With CPU solo mining being a feasible option in conjunction with ASIC and GPU mining eradication with RandomHash, the future hash rate distribution of PascalCoin would be far more promising than Bitcoin’s hash rate distribution.
PascalCoin is the Unicorn Cryptocurrency
If you’ve read this far, let’s cut straight to the point: PascalCoin IS the unicorn cryptocurrency.
It is worth noting that PascalCoin is still a young cryptocurrency as it was launched at the end of 2016. This means that many features are still work in progress such as zn-SNARKs, smart contracts, and pool decentralization to name few. However, it appears that all of the unicorn criteria are within PascalCoin’s reach once PascalCoin’s technical roadmap is mostly completed.
Based on this expository on PascalCoin’s technology, there is every reason to believe that PascalCoin is the unicorn cryptocurrency. PascalCoin also solves two fundamental blockchain problems beyond the unicorn criteria that were previously considered unsolvable: blockchain size and simple address system. The SafeBox pushes PascalCoin to the forefront of cryptocurrency zeitgeist since it is a superior solution compared to UTXO, Directed Acyclic Graph (DAG), Block Lattice, Tangle, and any other blockchain innovations.


THE UNICORN

Author: Tyler Swob
submitted by Kosass to CryptoCurrency [link] [comments]

Staking — The New Way to Earn Crypto for Free

Staking — The New Way to Earn Crypto for Free

https://preview.redd.it/jpadsinyz3c41.png?width=616&format=png&auto=webp&s=c0dc410484430b863b0488727f92135f218edff2
Airdrops are so 2017, free money was fun while it lasted but now when someone says free money in crypto, the first thoughts are scams and ponzi schemes. But in 2020, there is a way to earn free money, in a legitimate, common practice, and logical manner — staking.
Staking is the core concept behind the Proof-of-Stake (PoS) consensus protocol that is quickly becoming an industry standard throughout blockchain projects. PoS allows blockchains to scale effectively without compromising on security and resource efficiency. Projects that incorporate staking include aelf, Dash, EOS, Cosmos, Cardano, Dfinity and many others.

https://preview.redd.it/luczupo004c41.png?width=616&format=png&auto=webp&s=2a2aba11c35c9962e42d1ea56b9e4f33532750ef

PoW — Why change

First, let’s look at some of the issues facing Proof-of-Work (PoW) consensus that led to the development of PoS.
  1. Excessive energy consumption — In 2017, many concerns were raised over the amount of electricity used by the bitcoin network (Largest PoW blockchain). Since then the energy consumption has increased by over 400%, to the point where 1 single transaction on this network has the same carbon footprint of 736,722 Visa transactions or consumes the same amount of electricity as over 20 U.S. households.
  2. Varying Electricity Costs — The profit of any miner on the network is tied to two costs, the initial startup cost to obtain the hardware and infrastructure, and more critically, the running cost of said equipment in relation to electricity usage. Electricity costs can vary from fractions of a cent per kWh to over 50 cents (USD) and in some cases it is free. When a user may only be earning $0.40 USD per hour then this will clearly rule out certain demographics based purely on electricity costs, reducing the potential for complete decentralization.
  3. Reduced decentralization — Due to the high cost of the mining equipment, those with large financial bases setup mining farms, either for others to rent out individual miners or entirely for personal gains. This results in large demographic hotspots on the network reducing the decentralized aspect to a point where it no longer accomplishes this aspect.
  4. Conflicted interests — The requirements of running miners on the network are purely based on having possession of the hardware, electricity and internet connection. There are no limits to the amount a miner can earn, nor do they need to hold any stake in the network, and thus there is very little incentive for them to vote on upgrades that may benefit the network but reduce their rewards.
I want to take this moment to mention a potential benefit to PoW that I have not seen anyone mention previously. It is a very loose argument so don’t take this to heart too strongly.
Consistent Fiat Injection — The majority of miners will be paying for their electricity in fiat currency. At a conservative rate of $0.1 USD per kWh, the network currently uses 73.12 TWh per year. This equates to an average daily cost of over $20 million USD. This means every day around $20 million of fiat currency is effectively being injected into the bitcoin network. Although this concept is somewhat flawed in the sense that the same amount of bitcoin will be released each day regardless of how much is spent on electricity, I’m looking at this from the eyes of the miners, they are reducing their fiat bags and increasing their bitcoin bags. This change of bags is the essence of this point which will inevitably encourage crypto spending. If the bitcoin bags were increased but fiat bags did not decrease, then there would be less incentive to spend the bitcoin, as would see in a staking ecosystem.

https://preview.redd.it/8dtqt6e204c41.png?width=631&format=png&auto=webp&s=065aedde87b55f0768968307e59e62a35eac949d

PoS Variations

Different approaches have been taken to tackle different issues the PoS protocol faces. Will Little has an excellent article explaining this and more in PoS, but let me take an excerpt from his piece to go through them:
  • Coin-age selection — Blockchains like Peercoin (the first PoS chain), start out with PoW to distribute the coins, use coin age to help prevent monopolization and 51% attacks (by setting a time range when the probability of being selected as a node is greatest), and implement checkpoints initially to prevent NoS problems.
  • Randomized block selection — Chains like NXT and Blackcoin also use checkpoints, but believe that coin-age discourages staking. After an initial distribution period (either via PoW or otherwise), these chains use algorithms to randomly select nodes that can create blocks.
  • Ethereum’s Casper protocol(s) — Being already widely distributed, Ethereum doesn’t have to worry about the initial distribution problem when/if it switches to PoS. Casper takes a more Byzantine Fault Tolerant (BFT) approach and will punish nodes by taking away (“slashing”) their stake if they do devious things. In addition, consensus is formed by a multi-round process where every randomly assigned node votes for a specific block during a round.
  • Delegated Proof-of-Stake (DPoS) — Invented by Dan Larimer and first used in Bitshares (and then in [aelf,] Steem, EOS, and many others), DPoS tackles potential PoS problems by having the community “elect” delegates that will run nodes to create and validate blocks. Bad behavior is then punished by the community simply out-voting the delegated nodes.
  • Delegated Byzantine Fault Tolerance (DBFT) — Similar to DPoS, the NEO community votes for (delegates) nodes, but instead of each node producing blocks and agreeing on consensus, only 2 out of 3 nodes need to agree on what goes in every block (acting more like bookkeepers than validators).
  • Tendermint — As a more sophisticated form of DBFT and a precursor to Casper, Jae Kwon introduced tendermint in 2014, which leverages dynamic validator sets, rotating leader elections, and voting power (i.e. weight) that is proportional to the self-funding and community allocation of tokens to a node (i.e. a “validator”).
  • Masternodes — First introduced by DASH, a masternode PoS system requires nodes to stake a minimum threshold of coins in order to qualify as a node. Often this comes with requirements to provide “service” to a network in the form of governance, special payment protocols, etc…
  • Proof of Importance (POI)NEM takes a slightly different approach by granting an “importance calculation” to masternodes staking at least 10,000 XEM. This POI system then rewards active nodes that act in a positive way over time to impact the community.
  • “Proof-of-X” — And finally, there is no lack of activity in the PoS world to come up with clever approaches and variants of staking (some are more elaborate than others). In addition to BFT protocols such as Honeybadger, Ouroboros, and Tezos, for further reading, also check out “Proof-of-”: Stake Anonymous, Storage, Stake Time, Stake Velocity, Activity, Burn, and Capacity.
https://preview.redd.it/n28a8n5404c41.png?width=604&format=png&auto=webp&s=0ea8827fd0458e768d4eb3a0a1fa88c984ba0a82

Earning Your Stake

In order to understand how one can earn money from these networks, I’ll break them down into 3 categories: Simple staking, Running nodes, and Voting.
Simple Staking - This is the simplest of the 3 methods and requires almost no action by the user. Certain networks will reward users by simply holding tokens in a specified wallet. These rewards are generally minimal but are the easiest way to earn.
Running a node - This method provides the greatest rewards but also requires the greatest action by the user and most likely will require ongoing maintenance. Generally speaking, networks will require nodes to stake a certain amount of tokens often amounting to thousands of dollars. In DPoS systems, these nodes must be voted in by other users on the network and must continue to provide confidence to their supporters. Some companies will setup nodes and allow users to participate by contributing to the minimum staking amount, with a similar concept to PoW mining pools.
Voting - This mechanism works hand in hand with running nodes in relation to DPoS networks. Users are encouraged to vote for their preferred nodes by staking tokens as votes. Each vote will unlock a small amount of rewards for each voter, the nodes are normally the ones to provide these rewards as a portion of their own reward for running a node.

Aelf’s DPoS system

The aelf consensus protocol utilizes a form of DPoS. There are two versions of nodes on the network, active nodes & backup nodes (official names yet to be announced). Active nodes run the network and produce the blocks, while the backup nodes complete minor tasks and are on standby should any active nodes go offline or act maliciously. These nodes are selected based upon their number of votes received. Initially the top 17 nodes will be selected as active nodes, while the next 100 will stand as the backup ones, each voting period each node may change position should they receive more or less votes than the previous period. In order to be considered as a node, one must stake a minimum amount of ELF tokens (yet to be announced).

https://preview.redd.it/47d3wqe604c41.png?width=618&format=png&auto=webp&s=062a6aa6186b826d400a0015d4c91fd1a4ed0b65
In order to participate as a voter, there is no minimum amount of tokens to be staked. When one stakes, their tokens will be locked for a designated amount of time, selected by the voter from the preset periods. If users pull their tokens out before this locked period has expired no rewards are received, but if they leave them locked for the entire time frame they will receive the set reward, and the tokens will be automatically rolled over into the next locked period. As a result, should a voter decide, once their votes are cast, they can continue to receive rewards without any further action needed.
Many projects have tackled with node rewards in order to make them fair, well incentivized but sustainable for everyone involved. Aelf has come up with a reward structure based on multiple variables with a basic income guaranteed for every node. Variables may include the number of re-elections, number of votes received, or other elements.
As the system matures, the number of active nodes will be increased, resulting in a more diverse and secure network.
Staking as a solution is a win-win-win for network creators, users and investors. It is a much more resource efficient and scalable protocol to secure blockchain networks while reducing the entry point for users to earn from the system.
submitted by Floris-Jan to aelfofficial [link] [comments]

Understanding Crypto Mining | And perhaps a way to mitigate its impact on the PC gaming ecosystem

EDIT: Per the moderation staff, I'm adding in to the header what I'm using to make it easier for prospective miners.
  1. Go to https://www.nicehash.com/
  2. Create a login
  3. Download their software and run it (this used to be "????")
  4. Profit
Once you reach 0.002 BTC (about 7-10 days on my GTX 1060 + i7-7700k), you can transfer your earnings to Coinbase for free, and cash out. CB does have fees for conversion to Fiat (cash) and your percentage goes down with higher amounts. So don't cash out just because you can. Cash out when you have enough to buy something.
Also a note on taxes. I'm going to keep this simple.
Hi folks. I just want to thank those of you in advance who trudge through this post. It's going to be long. I will try to have a TLDR at the end, so just scroll down for the bolded text if you want Cliff's Notes.
Disclaimer: I'm a miner, sort of. I casually mine when I sleep/work, using my existing PC. It doesn't make much. I don't buy hardware for mining. But, I still wanted to post this disclaimer in the interest of fairness.
As we all know, cryptocurrency mining has had a devastating impact on the PC gaming ecosystem. The demand for GPUs for mining has lead to scarce availability and sky high prices for relevant hardware. But even hardware that is less desirable for mining relative to their peers (GTX 1050ti, 1080) has been impacted. Why? Because when gamers can't get the 1060 or 1070 that they desire, they gravitate en masse towards something that their finances will allow them to settle for.
But for all that we know about mining, there's still a LOT of myth and misinformation out there. And I blame this on the bigger miners themselves. They have a few tactics they're using to discourage competition. Now, why would they do this? Simply put, the more coins are mined, the harder the algorithms get. That means the same hardware mines a lower rate of cryptocurrency over time. If the mining rates were to get too low before new hardware (Volta/Navi) could be released, it would cause a massive depression in the cryptocurrency market. Most hardware would become unprofitable, and used GPUs would flood the market. Miners want to retain profitability on current hardware until the next generation hardware is out.
So, what tactics are they engaging in? Silence and manipulation. On the former, the bigger miners don't usually participate and contribute to the community (there are exceptions, and they are greatly appreciated). They're sponges, taking whatever the community provides without returning much to the community. On the latter, they post here, in this very sub occasionally. And they continue to push certain types of myth/misinformation to discourage other users from mining.
And why, of all people, would you discourage gamers from mining? It's because of the competition point mentioned above. If a massive number of gamers entered the cryptocurrency mining market, it could trigger a mining apocalypse. There's an estimated 3-4 million current-gen GPUs being used in 24/7 mining operations by dedicated miners. Now, how many current-gen GPUs are used by gamers? I'd bet at least an equal amount. But what about Maxwell and Kepler? Or all those GCN-based GPUs up through Fiji? Bottom line is that when you factor in all available profitable GPUs, gamers drastically outnumber dedicated miners (yes, Kepler and GCN 1.0 are still profitable, barely). And if a large number of those users started casually mining as I am, the following would occur:
  • difficulty would increase, lower output (profitability) for everyone involved
  • Coin creation would initially accelerate, and with no massive change to the market cap, that means per-coin value drops
  • when you factor in slower coin generation for individual miners, coupled with lower coin value, you get...
  • ROI length increase on GPUs, depressing their values, which would lead to lower prices and higher availability
Oh dear, someone just spilled the beans...
So naturally, misinformation needs to be spread. If dedicated miners can keep the uninformed, well, uninformed, they're less likely to join in. And I've seen variations of the following misinformation spread. Here's the common tropes, and my rebuttal.
Mining on your GPU will cause it to die prematurely.
I really wish we had a Blackblaze-equivalent for GPUs used in data centers. NOTHING punishes a GPU like full-time use in a data center. Not mining, not gaming, and not prosumer usage. And these companies pay thousands per GPU. Clearly, they're getting solid ROI for their use.
But let's talk about mining specifically. For my GTX 1060, I limit power to 80% (96W). Fan speed is at a constant 40% (that's in the same ballpark as your blower-style GPU in desktop usage). Temperature is a constant 75°C. That's gentle. Gaming hurts it more (start/stop on the fan, varying temps, quick rise at the start and fall at the end, varying loads, etc.).
And if GPUs did prematurely die from mining? One miner insisted that I'd never see an ROI on my 1060 (which cost me $240) because it would die before I could earn that amount. Yea, GPUs routinely die before hitting their ROI. That's why miners are buying $200 GPUs today for $500, or $400 GPUs today for $900. Because they don't generate enough to cover their MSRP, let alone their current gouged prices. /s
Common sense would dictate that miners are profitable, or they wouldn't mine. Therefore, GPUs are not dying prematurely. So, don't fall for this one. And yes, I've seen those photos of the 20-card Sapphire RMA. Mining data centers have THOUSANDS of cards. Just do an image search for a GPU mining farm. This is well within typical acceptable defect rates.
Power costs are too high for mining to be profitable.
Warning! Danger Will Robinson! Math ahead!
Where I live, electricity ranges from 9.5 cents per kilowatt hour (kw/hr), to 10.1 cents per kw/hr. Let's round to 10 cents. Power measured at the wall from my surge protector, while mining, shows just under 200W. (That's includes my tower, monitor, speakers, a dedicated NAS, a router, and PSU inefficiency). That also includes mining on both CPU and GPU.
At 200W per hour, that's 5 hours to hit 1kw/hr. That's 5kw/hr per 25 hours, so let's call it 5kw/hr per day. That is $0.50 per day total from that outlet (and most of this stuff would be running anyway). That's not even "over my existing costs," that's just out the door.
Bottom line is that electricity is cheap in many areas. The USA national average is currently ~12 cents per kw/hr (RIP Hawaii, at 33 cents). For most of the developed world, power costs are not prohibitive. Don't fall for this. If unsure, check your rates on your bill, and ask someone who can do math if you can't.
Casually mining isn't profitable
There's a big difference between "profit" and "getting rich." I have no expectations of the latter happening from what I'm doing. But "profit" is very much real. It's not power costs that derail profitability. It's all of the hidden fees. Many mining programs take a cut of your output. And then a cut to transfer to a wallet. And then there's a fee to transfer to an exchange. Oh, did you want to then convert to cash? We can...for a fee!
The trick is in finding outlets that allow you to minimize fees. I give up 2% of my output, transfer to my wallet for free, can transfer to an exchange for free, and don't plan to cash out every time I meet the minimum threshold (higher fees!). I instead plan to cash out at extended set intervals to minimize those fees.
NOTE: I am deliberately not listing the provider(s) that I use, because I don't want to be accused of being associated with them and/or driving business to them. I want this post to be about the big picture. But I will answer questions in the comments, provided the moderation staff here has no objections.
Bottom line is that with a mid-range GPU like mine, and without the benefit of CPU mining (it's just not worth it without a modern Core i7, or Ryzen 5/7), my GPU alone could make me ~$60-$75/mo in profit at current rates. Think of how many months/years you go between upgrades. Now, do the math. Needless to say, I'm now regretting not going bigger up front :)
It's too complicated for a casual miner, so don't bother
The old "go big or go home" saying, and it sort of piggy backs off the last one. And there is some truth in this. If you're going to be a big-time miner, you need mining programs (often dedicated to each algorithm and/or currency), multiple wallets, access to multiple exchanges, etc. It's daunting.
But for the casual, you don't need that. There are multiple providers who offer you a one-stop-shop. I have one login right now. That login gives me my mining software, which switches between multiple algorithms/coins, gives me a wallet, and lets me transfer to an outside wallet/exchange. My second login will be the exchange (something that lets me convert my currency to local cash) when my balance justifies it. Given the recent Robin Hood announcement, I'm biding my time to see what happens. This space is getting competitive (lower fees).
Bottom line, it's easier now than it ever was before. As I told someone else, "Once I finally started, I wanted to kick my own ass for waiting so long."
New GPUs are expensive, but if you just wait, there will be a buttload of cheap, used GPUs for you!
Miners learned from the last crash. There were two types of miners in that crash: those who sold their GPUs at a loss, and those who kept mining and made out like bandits on the upswing. Turns out, cryptocurrency really does mimic the stock market (for now).
We're going to look at Bitcoin (BTC) to explain this. No, miners don't mine BTC. But, BTC is commonly what most coins are exchanged for (it makes up roughly one third of the entire cryptocurrency market). And it's the easiest currency to convert to cash. So, when BTC rises or falls in price, the rest of the market goes with it. That includes all of the coins that GPU miners are actually mining.
In January 2017, when the current mining push started, BTC was worth roughly $900 per coin. It's now worth roughly (as of this post) $12,000 per coin, down from a December high of over $20,000 per coin. So yea, the market "crashed." It's also more than 12x the value it was a year ago, when miners dove in. You think they're going to bail at 12x the value? Son, I've got news for you. This market needs to truly crash and burn for them to bail (and that's where you come in!).
So, there's not going to be a flood of used GPUs from a sudden market crash. Again, they've learned from that mistake. Used GPUs will enter the market when they are no longer profitable for mining, and not before. Dedicated miners have lots of room for expansion. When Volta comes out, they're not selling their Pascal GPUs. They're building new Volta mining rigs alongside the Pascal ones, making money off each of them.
Conclusion/TLDR:
  • Mining is subject to diminishing returns. It gets harder over time on the same hardware.
  • PC gamers joining the market en masse could trigger an apocalypse in terms of difficulty
  • Due to this, it benefits pro miners to spread misinformation to discourage gamers from entering the mining game
  • Casually mining on your existing system is safe, easy, could help you pay for your next upgrade(s), and could also hurt the mining market in general (better availability/pricing on GPUs)
  • No, there's no flood of used Pascal/Polaris/Vega GPUs around the corner, as those are HIGHLY profitable even in a depressed market
Second Conclusion - Why do I (jaykresge) personally care?
Simply put, I'm disgusted by this. I was excited about flipping a few friends from consoles to PC gaming. I'm now seeing a reverse trend. One friend is gaming on an RX 560 waiting for prices to hit sanity. He's running out of patience. Others have bailed.
I view our dormant GPUs as the best weapon against cryptocurrency mining. Destroy it from the inside. It's win-win for most of us. Either we earn enough for more upgrades, or we depress pricing. Something's got to give.
In other words, y'all f*ckers better start mining, because I want Volta to be reasonably priced when it launches so I can get an EVGA x80 Hybrid to go with a G-Sync monitor. And if this doesn't happen, I'm going to be cranky!
Seriously though, thanks for reading. Bear with me as I go over this a few more times for typing/grammar. And I look forward to your comments.
submitted by jaykresge to hardware [link] [comments]

Understanding Crypto Mining | And perhaps a way to mitigate its impact on the PC gaming ecosystem

This is a crosspost from /hardware, but I will be editing this independently based on community feedback and guidelines. Prior to posting here, I reached out to your local mod staff to ensure that I wasn't stepping on any toes, given the nature of its content. I hope you find this useful.
Hi folks. I just want to thank those of you in advance who trudge through this post. It's going to be long. I will try to have a TLDR at the end, so just scroll down for the bolded text if you want Cliff's Notes.
Disclaimer: I'm a miner, sort of. I casually mine when I sleep/work, using my existing PC. It doesn't make much. I don't buy hardware for mining. But, I still wanted to post this disclaimer in the interest of fairness.
As we all know, cryptocurrency mining has had a devastating impact on the PC gaming ecosystem. The demand for GPUs for mining has lead to scarce availability and sky high prices for relevant hardware. But even hardware that is less desirable for mining relative to their peers (GTX 1050ti, 1080) has been impacted. Why? Because when gamers can't get the 1060 or 1070 that they desire, they gravitate en masse towards something that their finances will allow them to settle for.
But for all that we know about mining, there's still a LOT of myth and misinformation out there. And I blame this on the bigger miners themselves. They have a few tactics they're using to discourage competition. Now, why would they do this? Simply put, the more coins are mined, the harder the algorithms get. That means the same hardware mines a lower rate of cryptocurrency over time. If the mining rates were to get too low before new hardware (Volta/Navi) could be released, it would cause a massive depression in the cryptocurrency market. Most hardware would become unprofitable, and used GPUs would flood the market. Miners want to retain profitability on current hardware until the next generation hardware is out.
So, what tactics are they engaging in? Silence and manipulation. On the former, the bigger miners don't usually participate and contribute to the community (there are exceptions, and they are greatly appreciated). They're sponges, taking whatever the community provides without returning much to the community. On the latter, they post here, in this very sub occasionally. And they continue to push certain types of myth/misinformation to discourage other users from mining.
And why, of all people, would you discourage gamers from mining? It's because of the competition point mentioned above. If a massive number of gamers entered the cryptocurrency mining market, it could trigger a mining apocalypse. There's an estimated 3-4 million current-gen GPUs being used in 24/7 mining operations by dedicated miners. Now, how many current-gen GPUs are used by gamers? I'd bet at least an equal amount. But what about Maxwell and Kepler? Or all those GCN-based GPUs up through Fiji? Bottom line is that when you factor in all available profitable GPUs, gamers drastically outnumber dedicated miners (yes, Kepler and GCN 1.0 are still profitable, barely). And if a large number of those users started casually mining as I am, the following would occur:
  • difficulty would increase, lower output (profitability) for everyone involved
  • Coin creation would initially accelerate, and with no massive change to the market cap, that means per-coin value drops
  • when you factor in slower coin generation for individual miners, coupled with lower coin value, you get...
  • ROI length increase on GPUs, depressing their values, which would lead to lower prices and higher availability
Oh dear, someone just spilled the beans...
So naturally, misinformation needs to be spread. If dedicated miners can keep the uninformed, well, uninformed, they're less likely to join in. And I've seen variations of the following misinformation spread. Here's the common tropes, and my rebuttal.
Mining on your GPU will cause it to die prematurely.
I really wish we had a Blackblaze-equivalent for GPUs used in data centers. NOTHING punishes a GPU like full-time use in a data center. Not mining, not gaming, and not prosumer usage. And these companies pay thousands per GPU. Clearly, they're getting solid ROI for their use.
But let's talk about mining specifically. For my GTX 1060, I limit power to 80% (96W). Fan speed is at a constant 40% (that's in the same ballpark as your blower-style GPU in desktop usage). Temperature is a constant 75°C. That's gentle. Gaming hurts it more (start/stop on the fan, varying temps, quick rise at the start and fall at the end, varying loads, etc.).
And if GPUs did prematurely die from mining? One miner insisted that I'd never see an ROI on my 1060 (which cost me $240) because it would die before I could earn that amount. Yea, GPUs routinely die before hitting their ROI. That's why miners are buying $200 GPUs today for $500, or $400 GPUs today for $900. Because they don't generate enough to cover their MSRP, let alone their current gouged prices. /s
Common sense would dictate that miners are profitable, or they wouldn't mine. Therefore, GPUs are not dying prematurely. So, don't fall for this one. And yes, I've seen those photos of the 20-card Sapphire RMA. Mining data centers have THOUSANDS of cards. Just do an image search for a GPU mining farm. This is well within typical acceptable defect rates.
Power costs are too high for mining to be profitable.
Warning! Danger Will Robinson! Math ahead!
Where I live, electricity ranges from 9.5 cents per kilowatt hour (kw/hr), to 10.1 cents per kw/hr. Let's round to 10 cents. Power measured at the wall from my surge protector, while mining, shows just under 200W. (That's includes my tower, monitor, speakers, a dedicated NAS, a router, and PSU inefficiency). That also includes mining on both CPU and GPU.
At 200W per hour, that's 5 hours to hit 1kw/hr. That's 5kw/hr per 25 hours, so let's call it 5kw/hr per day. That is $0.50 per day total from that outlet (and most of this stuff would be running anyway). That's not even "over my existing costs," that's just out the door.
Bottom line is that electricity is cheap in many areas. The USA national average is currently ~12 cents per kw/hr (RIP Hawaii, at 33 cents). For most of the developed world, power costs are not prohibitive. Don't fall for this. If unsure, check your rates on your bill, and ask someone who can do math if you can't.
Casually mining isn't profitable
There's a big difference between "profit" and "getting rich." I have no expectations of the latter happening from what I'm doing. But "profit" is very much real. It's not power costs that derail profitability. It's all of the hidden fees. Many mining programs take a cut of your output. And then a cut to transfer to a wallet. And then there's a fee to transfer to an exchange. Oh, did you want to then convert to cash? We can...for a fee!
The trick is in finding outlets that allow you to minimize fees. I give up 2% of my output, transfer to my wallet for free, can transfer to an exchange for free, and don't plan to cash out every time I meet the minimum threshold (higher fees!). I instead plan to cash out at extended set intervals to minimize those fees.
NOTE: I am deliberately not listing the provider(s) that I use, because I don't want to be accused of being associated with them and/or driving business to them. I want this post to be about the big picture. But I will answer questions in the comments, provided the moderation staff here has no objections.
Bottom line is that with a mid-range GPU like mine, and without the benefit of CPU mining (it's just not worth it without a modern Core i7, or Ryzen 5/7), my GPU alone could make me ~$60-$75/mo in profit at current rates. Think of how many months/years you go between upgrades. Now, do the math. Needless to say, I'm now regretting not going bigger up front :)
It's too complicated for a casual miner, so don't bother
The old "go big or go home" saying, and it sort of piggy backs off the last one. And there is some truth in this. If you're going to be a big-time miner, you need mining programs (often dedicated to each algorithm and/or currency), multiple wallets, access to multiple exchanges, etc. It's daunting.
But for the casual, you don't need that. There are multiple providers who offer you a one-stop-shop. I have one login right now. That login gives me my mining software, which switches between multiple algorithms/coins, gives me a wallet, and lets me transfer to an outside wallet/exchange. My second login will be the exchange (something that lets me convert my currency to local cash) when my balance justifies it. Given the recent Robin Hood announcement, I'm biding my time to see what happens. This space is getting competitive (lower fees).
Bottom line, it's easier now than it ever was before. As I told someone else, "Once I finally started, I wanted to kick my own ass for waiting so long."
New GPUs are expensive, but if you just wait, there will be a buttload of cheap, used GPUs for you!
Miners learned from the last crash. There were two types of miners in that crash: those who sold their GPUs at a loss, and those who kept mining and made out like bandits on the upswing. Turns out, cryptocurrency really does mimic the stock market (for now).
We're going to look at Bitcoin (BTC) to explain this. No, miners don't mine BTC. But, BTC is commonly what most coins are exchanged for (it makes up roughly one third of the entire cryptocurrency market). And it's the easiest currency to convert to cash. So, when BTC rises or falls in price, the rest of the market goes with it. That includes all of the coins that GPU miners are actually mining.
In January 2017, when the current mining push started, BTC was worth roughly $900 per coin. It's now worth roughly (as of this post) $12,000 per coin, down from a December high of over $20,000 per coin. So yea, the market "crashed." It's also more than 12x the value it was a year ago, when miners dove in. You think they're going to bail at 12x the value? Son, I've got news for you. This market needs to truly crash and burn for them to bail (and that's where you come in!).
So, there's not going to be a flood of used GPUs from a sudden market crash. Again, they've learned from that mistake. Used GPUs will enter the market when they are no longer profitable for mining, and not before. Dedicated miners have lots of room for expansion. When Volta comes out, they're not selling their Pascal GPUs. They're building new Volta mining rigs alongside the Pascal ones, making money off each of them.
Conclusion/TLDR:
  • Mining is subject to diminishing returns. It gets harder over time on the same hardware.
  • PC gamers joining the market en masse could trigger an apocalypse in terms of difficulty
  • Due to this, it benefits pro miners to spread misinformation to discourage gamers from entering the mining game
  • Casually mining on your existing system is safe, easy, could help you pay for your next upgrade(s), and could also hurt the mining market in general (better availability/pricing on GPUs)
  • No, there's no flood of used Pascal/Polaris/Vega GPUs around the corner, as those are HIGHLY profitable even in a depressed market
Second Conclusion - Why do I (jaykresge) personally care?
Simply put, I'm disgusted by this. I was excited about flipping a few friends from consoles to PC gaming. I'm now seeing a reverse trend. One friend is gaming on an RX 560 waiting for prices to hit sanity. He's running out of patience. Others have bailed.
I view our dormant GPUs as the best weapon against cryptocurrency mining. Destroy it from the inside. It's win-win for most of us. Either we earn enough for more upgrades, or we depress pricing. Something's got to give.
In other words, y'all f*ckers better start mining, because I want Volta to be reasonably priced when it launches so I can get an EVGA x80 Hybrid to go with a G-Sync monitor. And if this doesn't happen, I'm going to be cranky!
Seriously though, thanks for reading.
submitted by jaykresge to pcgaming [link] [comments]

Battle of Consensus Protocols

Battle of Consensus Protocols
https://preview.redd.it/anvkvzy5wtx11.png?width=600&format=png&auto=webp&s=6140150a56a7cc11010c19a7627e254547cea627
In the recent years, blockchain community has been bombarded with new projects every day. No matter how much you think you are familiar with the latest technology, there is always something brand new on this market; and it is extremely difficult to keep up. Most blockchain technologies differ in one principal thing, Consensus Algorithm. So let’s dive into what consensus algorithms actually are, followed by why and how they were assembled.

https://preview.redd.it/gppnhn8gwtx11.png?width=115&format=png&auto=webp&s=384b64f3ac7c9aec12be9c0e76a745c30af20ffb
As we all know, it all started in 2008, when bitcoin was born. The term “Proof of Work” or PoW was first coined an formalized in a 1999 paper by Markus and Ari. Bitcoin used Proof of Work (PoW) which is, by the way, older than bitcoin. Proof of Work (PoW) might not be the most “perfect” consensus algorithms out there, but it paved a way for all other protocols. It made people think about all the possible ways there could be for transaction of money on a public ledger without involving a third party.
PoW (Proof of Work)
  • It works on the sole idea of competition between the miners to gain rewards. Who doesn’t want to take part in a competition, right? But, there is a little catch i.e. it needs a lot of power consumption.
  • Miners have to solve complicated mathematical problems that require a brute force method.
  • Once a miner solves it, he announces his win to everyone in the system, and is rewarded.
Types of Mathematical Puzzles:
There are several examples of the mathematical puzzles, some of them are:
  1. Hash function:
This puzzle, once solved, gives the input of a function if the output was
known.
  1. Integer factorization:
This gives a number as a multiplication of two numbers.
  1. Guided tour puzzle protocol:
This requires solving hash functions for nodes in a defined manner if a server suspects a DoS attack.
Used by:
Bitcoin, Litecoin, Ethereum, Bitcoin Cash, Monero, Bitcoin Gold.
There was a big uproar about the power consumption of this algorithm, which leads to different variations of it that tries to solve the biggest con of the PoW.

https://preview.redd.it/okcy8j4jwtx11.jpg?width=450&format=pjpg&auto=webp&s=45116064ae2094f0e2da9b422d3cb3ec12b52712
PoB (Proof of Burn):
  • Proof of Burn is usually known as Proof of Work minus the energy waste.
  • It works on the simple principle of burning virtual tokens which helps the miners to build a block.
Process:
The process is as follows:
  1. This is done when miners send their coins to an address known as eater address that consumes the coins. Note that the burned coins are the only consumed resources in this process.
  2. Once coins (they could be thought as mining rigs) are burned, the miners are granted their mining rights.
  3. More the coins burns, more the miner will have his rights. This characteristic of PoB resembles Proof of Stake to some extent.
Used by:
Slimcoin, TGCoin.
PoET (Proof of Elapsed time):
  • PoET is the consensus algorithm that is used by permission based blockchains.
  • This consensus is based on the fair lottery problem meaning every single node has a fair chance of winning the mining rights.
  • The process is as follows:
  1. The nodes have to wait for certain time (thus the name) to gain mining rights.
  2. The time is chosen on the basis of the random numbers generated by the nodes themselves.
  3. The node with the shortest wait time wakes up and commits a new block to the blockchain.
Used by:
HyperLedger, Sawtooth.
PoS (Proof of Stake)
  • PoW has been a ground breaking algorithm with some of the best implementations up-till now but it has a lot of shortcomings, the most prominent and controversial to be the high energy consumption. Hence, the need to evolve arised and that’s where PoS comes in!
  • How it differs?
  1. Stake based.
  2. No mining rewards.
  3. Lesser energy consumption.
  • It is simply a stake based system. This actually assigns mining power based on the number of stakes owned by any individual node in the network. The stakes are based on the amount of coins owned by the nodes. The more coins someone holds, the more is their stake in the network. The ones with the maximum stake can mine and verify the blocks and transactions.
  • PoS is not reward based, so removes the competition between the miners. In return of mining a block, the block producer gets the transaction fee in return for their services.
  • Everybody gets to verify transactions directly proportional to their stake in the network. The problem that arises here is that those who hold the most stakes will always be the first ones to get a chance for verifying a transaction.; hence the ones with the least stake may never get a chance to verify any transaction...
  • To solve the issues existing in PoS the following protocols are built with different systems to reach consensus.
Used by:
BitShares, Stratis, PIVX, NavCoin (NAV), Cardano (ADA)

https://preview.redd.it/po90uw9lwtx11.jpg?width=525&format=pjpg&auto=webp&s=f83ede1715c3ab51cfac44a546f20461510c3b19
DPoS (Delegated Proof of Stake):
  • For achieving consensus in the network it uses repute of the nodes and an actual voting structure in a democratic way.
Process:
The process is as follows:
  1. Everyone who has a stake in the system takes part in virtual voting to select the delegates.
  2. These delegates then secure the network and verify the transactions for the new block. It focuses highly on scalability, efficiency and speed.
Though, DPoS might be forgoing decentralization for scalability.
Used by:
EOS Lisk, ARK, BitShares.
LPoS (Leased Proof of Stake):
  • The problem with normal PoS is that small-holders with minimum balances cannot stake a block.
Process:
Leased Proof of Stake gives a solution for in this way:
  1. As by its basics, the smaller miners will lease their balances to the staking nodes.
  2. The funds generated by lease are in control of the holder. They can spend it or move it as per their wish. Once the holder moves the leased balance, the lease ends.
  3. The leased coins increase the stake of the staking node which increases its chance of being selected for the verification of blocks.
  4. The rewards received are then divided among the leasers proportionally.
Used by:
Waves platform.
PoWeight (Proof of Weight):
  • PoWeight tries to solve the same problem (holders with more tokens have more stakes in the system) PoS possess.
  • Proof of Weight tries to overcome it in this way:
  1. Instead of using the system of stakes, a system of defined weights is used in order to identifying the nodes that will verify the blocks in the network.
  2. The weighting criteria might differ for different blockchain networks.
  3. It focuses on customizability and scalability.
  4. Every user has a weight assigns to them. Most probably the weights are assigned based on the amount of money which the users hold.
  5. It is not designed to generate passive revenues for the nodes.
Used by:
Algorand, Filecoin, Chia.
PoC (Proof of Capacity):
  • Instead of changing numbers in block headers and hashing, PoC introduces a new mechanism.
Process:
The process is as follows:
  1. It works by plotting hard drives of all the interested nodes. They compute and store multiple solutions on every willing node’s hard drive. This is done before the mining game starts. This works like a lottery system.
  2. Every solution has a different speed. If your hard drive has the fastest solution to the present block’s problem then you will win and get the right to verify that block. Same happens for every block.
  3. It is all based on luck. The greater number of plotted solutions on hard drive means a greater chance to win block verification.
Used by:
Burstcoin, Spacemint.
POW+POS

https://preview.redd.it/g2qtc5jowtx11.jpg?width=1200&format=pjpg&auto=webp&s=58a83c92318f850afb750bb2038fce251cbd68d1

PoA (Proof of Activity):

  • Proof of Activity starts like PoW with miners trying to solve the mathematical calculations to get rewards.
Process:
The difference is explained through this process:
  1. The mined block doesn’t contain transactions, just the header and mining rewards address.
  2. Once this process is over, the system switch back to PoS. Header helps in selection of random group of validators to sign the blocks.
  3. These validators are the coin holders. More the coins a validator has, more will be the chances that he will be selected to sign a new block.
  4. Once all the validators sign the block, it will be considered as the new block in the blockchain system.
Used by:
Decred.
PoI (Proof of Importance):
  • PoI recognizes that the how much tokens one have shouldn’t be the only determining factor for the value of the nodes.
Process:
The process of this algorithm has these characteristics:
  1. How much activity one node does is the better judge of who should have the most stake of the system.
  2. This algorithm uses PoW in combination with PoS, with PoW coming first followed by PoS.
Used by:
NEM.
BFT (Byzantine Fault Tolerance)
Byzantine Fault Tolerance is the characteristic of fault-tolerant system that tolerates the class of failures that belongs to the Byzantine Generals’ problem.
There are several consensus algorithms based on this dependency:
PBFT (Practical Byzantine Fault Tolerance):
  • The pBFT tolerates malicious nodes by providing a Byzantine state machine replication by assuming that there always be the nodes failures and those nodes can spread manipulated messages.
  • The algorithm is devised to work in asynchronous systems. It is optimized to be high-performance with an impressive overhead runtime and only a slight increase in latency.
  • For this algorithm to work, an assumption is made that the malicious nodes cannot exceed one third of the total nodes. If the total number of the nodes is large, it will be highly unlikely for the malicious nodes to reach one third of that amount.
Process:
The process goes like this:
  1. Client asks the main (leader) node to invoke an operation.
  2. The leader asks the other (backup) nodes to execute the request; which they do and then send reply to client.
  3. The client awaits almost one more than the total faulty nodes’ reply and expects the same result.’
For this process to occur, it is agreed upon that all nodes are deterministic, and they start at the same state. The final results depend on what all honest nodes agreed on.
Used by:
Zilliqa, HyperLedger.

https://preview.redd.it/e13wi6rqwtx11.jpg?width=1200&format=pjpg&auto=webp&s=41753643dfc38955ea5bbfe6dd66b542b24f0655
DBFT (Delegated Byzantine Fault Tolerance):
  • Delegated Byzantine Fault Tolerance works in the same way as the country’s governance system.
  • This method is similar to PoS rather than PoW, by utilizing voting system to choose delegates.
Process:
DBFT works like this:
  1. Citizen votes for delegates which do not depend on the number of tokens one hold.
  2. One of the chosen delegates is selected at random to be a speaker.
  3. Their job is to keep track of all the transactions that are being made on the system which is then recorded on the public ledger.
  4. After that, the speaker proposes his own block ,which he sends to all other delegates for confirmation
  5. At least ⅔ of the delegates should approve that block to be added on the public ledger.
Used by:
NEO.
SBFT (Simplified Byzantine Fault Tolerance):
  • In simplified Byzantine Fault Tolerance (SBFT), there is only one block generator that collects and verifies the transaction into a new-block proposal.
Process:
The process goes like this:
  1. The generator applies rules that have been agreed upon by all the nodes to the blocks and all the blocks signers.
  2. Other block signers then verify that proposed block by signing on it.
  3. All members of the system knows the identity of these signors, so they only accept those blocks that have been signed by them.
One important thing about Simplified Byzantine Fault Tolerance is that nodes and the signers could be deleted at any time, thus ensuring a layer of security to deal with the malicious nodes.
Used by:
Chain
DAG (Directed Acyclic Graph)
  • A DAG is an information or data structure which can be utilized to demonstrate diverse problems.
  • It is not a part of blockchain but it offers a solution existing in the current blockchain frameworks.

https://preview.redd.it/x9qfbvhtwtx11.png?width=504&format=png&auto=webp&s=01967a32d4e41b0a7c64c3a79c206b3af7055510
Process:
Its process is given below:
  1. It is a directed,acyclic and graphic algorithm that runs in linear time.
  2. It follows topological ordering.
  3. This algorithm finds the shortest paths form the source nodes to other vertices.
  4. Every DAG starts from a parent node and has multiple following nodes in it. The last node is supposed to have no kids.
  5. These graphs are never cyclic and cannot refer back to themselves hence are uni-directional.
Used by:
Iota, HashGraph, Byteball, RaiBlocks/Nano.
.
submitted by rnssol to u/rnssol [link] [comments]

[BTH] BITHUMAN Coin - secure, private, untraceable - start 05/08/2017

BITHUMAN (BTH) is a cryptocurrency "Open Source" started on August 5, 2017. BitHuman is not a fork Bitcoin and uses the unique algorithm CryptoNight. Based on CryptoNote technology
SourceCode: 05/08/2017
Linux Gui Wallet: 05/08/2017
Linux Command Line: 05/08/2017
Windows: not available, but you can build
iOS: not available, but you can build
Solo Mining: available
Mining Pool: not available for the moment
Exchange: not available for the moment
Specifications
Algorithm: CryptoNight Block time: 120 seconds (2 minutes) Difficulty retargets each block Block reward decreases each block according to the formula: BaseReward = (MSupply - A)/218, where MSupply = (264 - 1) atomic units and 'A' is amount of already generated coins One coin is divisible down to 8 decimal places (divisible up to 108) Total coins: 184467440737.00000000 (= 184.46 billion BTH) Roughly 90% mined in 5 years Premined: 1% to improve the currency
Features
True anonymity & data protection Untraceable payments use ring signature Unlinkable transactions with random data by the sender Blockchain analysis resistant Only CPU-mining & ASIC-resistant POW mechanism is a voting system for users
What is CryptoNote?
CryptoNote is an application layer protocol that powers several decentralized privacy oriented digital currencies. Conceptually, it is an evolution of ideas behind bitcoin: both are similar in some ways yet different in many others.
The main difference between the two technologies is that bitcoin (and most digital currencies) is less opaque than CryptoNote-based currencies due to the latter's blockchain being almost anonymous, contrary to non-Cryptonote blockchains.CryptoNote currencies use a distributed public ledger that records all balances and transactions of its in-built currency like bitcoin. Unlike bitcoin, CryptoNote's transactions cannot be followed through the blockchain in a way that reveals who sent or received coins. The approximate amount of a transaction can be known, but the origin, destination, or actual amount cannot be learned. The only information available is that the actual amount was lower than the displayed amount. The only people with access to the whole set of data about a transaction are the sender or receiver of the transaction and the person who possesses one or both secret keys.
Another significant difference is hash-based proof-of-work algorithm. Bitcoin uses SHA256, which is CPU-bound function. That means that participants (miners) are only limited by their calculation speeds, and it is relatively cheap to create an application-specific integrated circuit (ASIC) device, which will surpass an ordinary computer in hashes per unit of money.[5] CryptoNote uses memory bound function CryptoNight, which cannot be easily pipelined.
CryptoNote code was not forked from bitcoin's, so it also has other different inner algorithms, like recalculating new difficulty level or new block size.
Untraceable payments CryptoNote provides users with a completely anonymous payment scheme. CryptoNote implements the ring signature technology which allows you to sign a message on behalf of a group. The signature only proves the message was created by someone from the group, but all the possible signers are indistinguishable from each other.
Unlinkable transactions Even if outgoing transactions are untraceable, everyone may still be able to see the payments you have received and thus determine your income. However, by using a variation of the Diffie-Hellman exchange protocol, a receiver has multiple unique one-time addresses derived from his single public key. After funds are sent to these addresses they can only be redeemed by the receiver; and it would be impossible to cross-link these payments.
Double-spending proof Nobody is able to spend the same money twice — even if all his signatures are anonymous. Every signature contains a key image — a kind of fingerprint of the secret key. It is based on a one-way cryptographic function; this implies that given only the key image it is impossible to restore the corresponding secret key. These key images are used to prevent double-spending.
Blockchain analysisresistance Non-repeating one-time addresses and mixed keys in ring signatures make the whole blockchain resistant to analysis. Each future transaction will only increase the entropy and create additional obstacles for an analyst.
Egalitarian proof of work The proof of work mechanism acts as a voting system. Thus, it is crucial that during the voting process all the participants have equal voting privileges. CryptoNote brings this equality with its egalitarian proof of work, utilizing built-in CPU instructions, which are very hard and too expensive to implement in special purpose devices, but perfectly suitable for ordinary PCs.
Adaptive parameters A decentralized payment system must not depend on a single person's decisions, even if this person is a developer. CryptoNote has no hard-coded constants; magic numbers in the code are designed to be re-calculated based on the previous state of the network. Thus, they always change adaptively and independently, allowing the network to develop on its own.
Ring signatures are explained below. Reproduced from CryptoNote:
A normal signature looks like this. There's only one participant, which allows one-to-one mapping.
https://ip.bitcointalk.org/?u=http%3A%2F%2Fi.imgur.com%2FdcbDq05.png&t=578&c=HLRqRc1qfKqayw
A ring signature obscures identities because it only proves that a signer belongs to a group.
https://ip.bitcointalk.org/?u=http%3A%2F%2Fi.imgur.com%2FavTQPnT.png&t=579&c=5ncjEKTCKCYMzA
This allows a high level of anonymity in cryptocurrency transactions. You can think of it as decentralized and trustless mixing.
https://ip.bitcointalk.org/?u=http%3A%2F%2Fi.imgur.com%2FioewLSY.png&t=579&c=3tpzhuKkxAQhWw
submitted by BitHumanCoin to u/BitHumanCoin [link] [comments]

In Case you Haven't Read the 2nd Community Interview with Sunny King Because you Haven't Signed up at the Forum yet, Here it is...

Some people have not signed up at PeercoinTalk.org yet and don't have access to Sunny's interview, so here it is...
Sunny King: hi all
JustaBitofTime: Hey Sunny, nice to have you with us. Are you ready to get started?
Sunny King: Yes John I'm ready.
JustaBitofTime: Coolbeans94 wanted to know about Peercoin's long term approach, he asks "27. Is its design more for long-term security and sustainability? How does that relate to Bitcoin’s longterm vision?(Coolbeans94)"
Sunny King: @Coolbeans 94. Both PPC and XPM are designed to last. PPC is designed with energy efficiency, XPM is designed with energy multiuse. Bitcoin has a long term uncertainty as to whether transaction fees can sustain good enough level of security. Before that the main concern is how to balance transaction volume and transaction fee levels. Currently I get the feeling that bitcoin developers favor very low transaction fees and very high transaction volume, to be competitive against centralized systems (paypal, visa, mastercard etc) in terms of transaction volume, to the point of sacrificing decentralization. This also brings major uncertainties to bitcoin's future.
Sunny King: @Coolbeans 94. From my point of view, I think the cryptocurrency movement needs at least one 'backbone' currency, or more, that maintains high degree of decentralization, maintains high level of security, but not necessarily providing high volume of transactions. Thinking of savings accounts and gold coins, you don't transact them at high velocity but they form the backbone of the monetary systems.
Sunny King: @Coolbeans 94. Pure proof-of-work systems such as bitcoin is not 100% suitable for this task. This is because transaction fee is not a reliable incentive to sustain network security. If the mining generation amount is kept constant (there have been several such attempts in altcoins) it would work better security-wise but then it would also significantly weaken the scarcity property of the currency. XPM's inflation model is designed in such a way that it could serve as backbone currency better than bitcoin if needed, because it could maintain high security reliably for longer, with reasonably good scarcity property as well. Of course that's only from architect's point of view, whether or not it would be chosen by the market is a whole different matter.
JustaBitofTime: Along those lines the community wanted to know ""If the tax fees are to remain fixed at 0.01 and Peercoin becomes widely adopted, (Thus a sharp rise in value) the fees could become too much for microtransactions. What would happen in this case? What solutions do you imagine to get around the microtransaction issue?"
Sunny King: @Coolbeans 94. PPC is designed to serve even better as a backbone currency. The proof-of-stake technology in PPC is not only energy efficient; it also maintains high level of security without relying on transaction fee. Thus PPC could be safely designed with strong scarcity property yet serving well as backbone currency.
Sunny King: @Coolbeans 94. Both PPC and XPM use protocol enforced transaction fees, which reflects my preference that high transaction volume is discouraged in favor of serving as backbone currencies.
JustaBitofTime: Speaking of security, there's often quite a bit of debate surrounding the PPC vs XPM checkpointing. 27.5 Will checkpoints be optional like they are in XPM in the next client version?
Sunny King: @transaction fees: Right now if we are talking about micropayments in the US$1 range, both PPC and XPM still handle them with much lower overhead than credit card network. In the long term micropayments should be provided by centralized providers, or a less decentralized network optimized for high capacity transaction processing.
Sunny King: @transaction fees: On the other hand there is no promise that minimum transaction fee wouldn't be adjusted. If processing capacity of personal computers continues to advance at the current pace, both max block size and minimum transaction fee could very well be adjusted at some point. However I do take a very cautious approach to adjusting transaction fees, as opposed to bitcoin devs. The impact to the fitness of the currency as a backbone currency is of great concerns to me.
Sunny King: @checkpoint: Decentralization of PPC checkpoint is currently planned to begin in v0.5. It would be a gradual process.
JustaBitofTime: I can tell you from my own Libertarian leaning, being able to add some layer of anonymous transactions is important to me. 47. Can you tell us more about 'sendtoaddressfrom' and Avatar mode? Will this be released in the next client version? (JustaBitofTime)
Sunny King: @JustaBitofTime Yeah this is still at conceptual stage. It shares some similarity to coin control. However from user point of view I'd like them to think in terms of avatars instead of addresses and coins, it's simpler and better for privacy.
Sunny King: The main rule is that in avatar mode the client doesn't automatically assemble coins from different avatars into the same transaction but it can still do so within an avatar
JustaBitofTime: One of the challenges the Peercoin community faces is breaking down all the technical nuances of the coin. Alertness asks "60. Could you please explain exactly how the level of PoW and PoS difficulty is calculated? (Alertness)"
Sunny King: so you probably need to specify which avatar the money should come from in a send
Sunny King: I would wait to see how coin control is introduced in bitcoin first. If bitcoin implements similar concepts first that would be nice too.
Sunny King: @Alertness For simplicity we can think of the difficulty adjustment of PoW and PoS blocks independent of each other. Basically it uses some technique called 'exponential moving' to keep the block spacing relatively constant. It adjusts on every block and smoother than bitcoin's adjustment, responding to change of network hash rate much faster than bitcoin, but at the same time not too fast to make difficulty manipulation exploits difficult.
Sunny King: @Alertness PoS blocks have a constant 10-minute spacing target. PoW blocks have a variable spacing target, between 10-minute and 2-hour, but on average it's about 30-minute when PoS block spacing is close to the 10-minute target. This serves to reduce the variation of block spacing.
JustaBitofTime: Along those lines, 60.5 Could you please spend some time talking about the environmental impact of Bitcoin vs Peercoin now and then in the future? (JustaBitofTime)
Sunny King: @JustaBitofTime I don't like to paint bitcoin in a negative picture because it's indeed a brilliant system with high integrity and reasonably good inflation design. High energy consumption is only a minor blemish. To say that it's gold 2.0 I think is quite reasonable.
Sunny King: But if we can solve one of the issues with gold and gold 2.0, their environmental impact, that would be very nice, wouldn't it? We all want to live on a cleaner and happier earth, right? So we should take this task more seriously and PPC provides a possible solution.
Sunny King: On the other hand we should also respect other people's free will. For example we should not force other people to not mine bitcoin or participate in distributed computing projects, because of the environmental cost. So XPM complements the goal here as it produces additional scientific value from the consumed energy. So people who like to mine cryptocurrency for whatever reason have a better choice to mine, to get more benefit out of the mining activity and environmental cost.
JustaBitofTime: For our non-technical users, how does PoS factor into the environmental impact? In other words, 1 friend is mining Bitcoin and the other is mining Peercoin. How does that look now and how does it look in 1 year?
Sunny King: Currently PPC market cap is still small, so the effect is still small. If PPC becomes as successful as BTC, then the energy saving would be significant, and more and more so as difficulty rises
JustaBitofTime: As difficulty rises, what is the net effect? I feel this is an area that many new to the coin have trouble making the connection.
Sunny King: A caveat here is that the energy consumption on bitcoin mining might drop in the long term as well, due to lack of incentive in mining. However this would drop bitcoin's security level
JustaBitofTime: You spoke about producing additional scientific value from consumed energy with XPM. 55. What are your thoughts about [email protected]? Do you see a place for it in crypto coins?
Sunny King: Difficulty increase in PPC reduces inflation rate, which also reduces the energy consumption. This is assuming market capitalization stays the same
Sunny King: It's hard to say, I am not an expert in protein folding algorithms but I can imagine it would be hard to completely decentralize. There has been a proposal of a less decentralized solution whereas traditional hashing provides network security and half of the minting, whereas folding computation provides the other half of the minting using the existing centralized distributed computing network. This approach is not limited to [email protected] though, people are also thinking about other networks such as BOINC.
Sunny King: The problem with this system is whether trust is required on the centralized distributed computing network to not abuse the system and counterfeit. Without solving such problems it's not a serious currency system in my opinion, but on the other hand we do see existing systems in operation with centralized minting, such as DVC and FRC. So this type of systems definitely has some niche in the market.
JustaBitofTime: Shifting gears here, Jimmy asks "Q1 New: When will the development team release the official ppcoin specification? (Jimmy) Clarification “We got the paper last year, but we need a protocol specification detail similar to https://en.bitcoin.it/wiki/Protocol_specification , especially for POS and the integration of POW with POS. The specification is important to developers and the general users who are interested in ppcoin.”
Sunny King: @Jimmy There is no set plans for this yet. If the demand is strong I could look into getting a summary of difference between bitcoin protocol spec and ppcoin protocol spec.
JustaBitofTime: Between 2 different coins, you obviously have your hands full. Romerun asks "Last interview sunny say if he somehow disappears Scott will fill in. But up till now we don't really know who he is, or how much commitment of him to the project / etc. There could be the issue of impostor too, so it would be benefit to the community to clear this up. And wouldn't it be better to have a few more key devs to PPC."
JustaBitofTime: My understanding was Scott was capable of filling in, however, has not worked on PPC recently?
Sunny King: That's right. For some reason Scott isn't as motivated as I am. I also look forward to having more developers with ppc, right now I think xpm team is in good shape, quite a number of people are working on xpm miners which requires a good understanding of the innerworkings of primecoin.
Sunny King: So I think as our community grows there will be more talents showing up. I am still pounding scott to be actively involved as well
JustaBitofTime: As your development team expands for XPM, Muto asks "35. Do you plan to release another currency? (Muto)"
Sunny King: @Muto 35. No such plan right now. I have recently turned down a few invitations to work on other currency projects due to my responsibility in PPC and XPM. I am committed to further improve PPC and XPM's competitiveness in the market.
JustaBitofTime: Speaking of competitiveness in the market, Romerun would like to know "What are the development priorities/future features of PPC/XMP in Sunny's mind? online wallet? ppc-blockchain.info? etc."
JustaBitofTime: I understand marketing and overall community development/involvement is a big part of the overall plan.
Sunny King: I have touched a few things last week I think, there are other things I have in mind but don't wish to talk about yet. I am constantly evaluating market situation to figure out what's the best features to compete in the market
JustaBitofTime: Let's change it up again 8. Who are your business and personal heroes? (MeBeingAwesome)
Sunny King: As to services and apps I usually leave those to the market to support. If I were to be involved in a service somehow I think it needs to have profit potential
Sunny King: and not divert too much of my resources and time
Sunny King: @MeBEingAwesome Right now I am in the business of cryptocurrency As to my heroes, I think Satoshi qualifies as one. We know that before bitcoin came into existence, several pioneers in the digital currency world have made sacrifices, such as Douglass Jackson the founder of e-gold, Bernard von NotHaus the founder of Liberty Dollar, among many others. These efforts are part of the same movement to decentralize the control of money, from potentially rising oppressive governments. Gold was demonetized to mainly facilitate centralized power, that gives governments power to do a lot more damage, to do whatever they want. Through history we can see the corruption of morality of governments, for example, in the 1860's US governement still had the integrity to return to gold standard after civil war, while in the 1930's it no longer had such integrity after an economic depression. Not only that, it developed audacity to blame the depression on gold. It's very difficult to restore morality of governments.
Sunny King: The cryptocurrency movement, arising from the lessons of e-gold and liberty dollar, gives people a powerful tool to peacefully return to the principle of limited government. We all thank Satoshi whose brilliant mind and effort enabled this movement. Of course there are a lot more things going on in the societies outside cryptocurrency world, to preserve mankind's freedom, to elevate mankind's morality and spirituality, so there are many heroes around us.
JustaBitofTime: I completely respect your desire to remain anonymous. If the code is open, that should speak for itself. With that being said, there are people that claim you might be someone involved with the Satoshi team early on. Can you speak to that rumor? Also, did you have any involvement with Satoshi directly?
Sunny King: I wish I were as that would have made me very rich I am also curious to who Satoshi really is, what led him to such great achievement. But on the other hand I also wish him a peaceful life not having to endure such hardships like NotHaus
JustaBitofTime: For those not familiar with NotHaus, please look into Liberty Dollar.
Look in the comments for the rest...
submitted by Sentinelrv to peercoin [link] [comments]

Probability in Bitcoin Mining: The Hashing Function Noob's Guide To Bitcoin Mining - Super Easy & Simple - YouTube How To Mine 1 Bitcoin in 10 Minutes - Blockchain BTC Miner ... what is SHA-256 Algorithm  mining Algorithm Cryptocurrency Mining Algorithms

This item has been corrected.. If you clicked the button above, then you are currently mining bitcoin, the math-based digital currency that recently topped $1,000 on exchanges. If you’ve never learned about Bitcoin before or you’ve tried to learn about it only to get discouraged by how complex it is, you’re not alone. In fact, many of the wealthiest and most influential people in the cryptocurrency world today have told stories about how they initially dismissed Bitcoin as a short-term fad, nerd money, criminal money, or otherwise something less interesting ... Additionally, variation in the actual average costs of mining may occur due to price behavior. When the price of Bitcoin falls mining revenues are squeezed while the associated costs remain the same, causing their average costs to go up. Likewise, a (strongly) increasing price might lead to mining requiring some time to “catch up”. It, however, doesn’t change the fact that the calculate ... The success of the bitcoin however, poses an important problem concerning the use of the algorithm SHA-256. As we have already seen, each new bitcoin created returns to the miner who has carried out and submitted to the network the “Proof of work” the first. However, the likelihood for a minor to provide the “Proof of work” in the first position is directly proportional to the capacity ... When mining bitcoin, the hashcash algorithm repeatedly hashes the block header while incrementing the counter & extraNonce fields. Incrementing the extraNonce field entails recomputing the merkle tree, as the coinbase transaction is the left most leaf node. The block is also occasionally updated as you are working on it.

[index] [13331] [39721] [434] [49323] [37948] [22495] [13328] [30081] [25458] [49207]

Probability in Bitcoin Mining: The Hashing Function

This video of Cryptocurrency Mining Algorithms gives an idea of algorithms requires for mining cryptocurrencies. It helps you to learn about mining algorithms. The video shows topics like: 1. What ... Bitcoins are mined using a cryptographic algorithm called SHA-256. This algorithm is simple enough to be done with pencil and paper, as I show in this video.... What it really takes to mine a Bitcoin in 10 Minutes. Firstly I'll show you a special free method to mine Bitcoin and send funds directly to your wallet in 1... The SHA-256 algorithm is used to mine bitcoin, ... In the early days of bitcoin mining, it was feasible to use a powerful CPU. Once the mining software was modified to support graphic cards, GPUs ... Ist Mining in Deutschland wieder profitabel? Durch die neue Hardfork von Bitcoin Gold zum neuen ASIC-resistenten Algorithmus Equihash 144,5 und der damit verbundenen geringeren Difficulty ergeben ...

#