Trusting Blockchain exchange

With every passing week, the world’s interest in Cryptocurrencies is multiplying at a staggering rate. Whether it’s bitcoin, ether, or any any other cryptocurrency on the block – people around the world own and trade cryptocurrencies. To make the trading accessible to the general public, we’ve several cryptocurrency exchanges on the world wide web. Through these exchanges, anyone can buy, sell, or exchange cryptocurrencies either with other digital-based currencies or with traditional currency such as rupee or US dollar.

Types of Exchanges

There are three categories of cryptocurrency exchanges. They’re as follows:

Brokers – Through these brokers, anyone can go and buy the desired cryptocurrency at a preset price. Most of these cryptocurrency brokers are similar in function as foreign currency exchanges.

Platforms for Trading – These platforms specialize in connecting buyers and sellers. For every transaction that takes place through the platform, they charge a fee — which is also how they make money.

Direct Trading – The way direct trading differs from the other two is that there’s no fixed price. The seller decides the amount, and the buyers have to determine if they want to buy or negotiate for any particular cryptocurrency. Direct trading is usually peer-to-peer.

What are the key attributes to look at while deciding to Trust a blockchain exchange?

The meteoric rise of bitcoin has also contributed to a significant increase in con-artists and exchanges which are mostly scams. So, before you decide to put your hard-earned money to buy cryptocurrencies — it is crucial to do your research. Below are the three things to know about an exchange before trusting them.

Reputation: In the age of the Internet, it’s not too hard to find reputable reviews about anything — including blockchain exchanges. Right from forums to commercially reviewed websites, you’ll find loads of information that’ll make it easier for you to decide whether an exchange is a right fit for you or not.

Fees: Before you even think about joining an exchange, do make sure you’re well-aware of all forms of costs that the exchange charges. The fee-model should include comprehensive details regarding withdrawal, deposit, as well as transactional fees. Compare it with other exchanges and then make an informed decision.

Verification systems: Any exchange worth its salt will have strong fortification in the form user verifications and securities. While the exhaustiveness of the verification might seem annoying while registering, it’ll protect your cryptocurrency and money from all sorts of scams.

Some well-known and reputable exchanges

We’ll make it even easier for you. Based on our research and user reviews, we’re going to tell you our favorite two blockchain exchanges that you can trust without worry.

Coinsquare: The first thing you should know about coinsquare is that it’s built on the same technology as the New York Stock Exchange. Yes, that’s right. According to their website, they manage their ledger at least 2346 times in a single day to ensure security. Reputable and secured, Coinsquare is a popular choice for both crypto-veterans and beginners alike.

Coinbase: Not only is Coinbase backed by some of the world’s best investors, but it’s also trusted as an exchange by millions already. One of the key features of coinbase is that coinbase insurance covers the stored currency. So, there’s that added layer of security. There’s a digital wallet also available as a mobile platform through which users purchase bitcoin, ether, and even litecoin.

POI vs POW vs POS

Being involved in the world of blockchain and cryptocurrency means that you’ll regularly come across algorithmic terms. Primarily, there are three types of algorithms used for cryptocurrency projects:
  • POW (Proof-of-Work)
  • POS (Proof-of-Stake)
  • POI (Proof-of-Importance)
While deciding for whether to invest in a cryptocurrency project or not, one of the decisive factors to consider should be the algorithm it’s based on. Below we’ll be mentioning the critical pointers of each of these terms along with what separates one from the other.

Proof-of-Work (POW)

Satoshi Nakamoto, the creator of Bitcoin, pioneered the Proof-of-Work as a mechanism. After which many cryptocurrencies, including Ethereum, based their network on the same algorithm. The computers involved in maintaining the security of the network work to solve a mathematical puzzle known as a hash. Although the task is quite straightforward for a computer, it’s intensely repetitive. Thus, it requires exceptional computation power. Therefore, proving that they’ve done the necessary ‘work’ to register a data block into the network.  In the recent years, the POW algorithm has been criticised because of the high initial investment and the environmental cost attached to it. The POW, theoretically, is also prone to what is known as the 51% attack. It’s a situation wherein a miner controls more 51% of the computational power of a network and thus can change the data within each block.

Proof-of-Stake (POS)

The tremendous amount of computational power required makes POW both expensive and energy-intensive. An alternative algorithm — Proof-of-Stake — has gained popularity in the recent years. Unlike POW, the POS approach requires no specialized hardware in-order to participate in the network. POS takes the path of letting the coin stake of a particular user determine the likelihood of them adding the next block of transactions to the blockchain. To influence the network fraudulently, a person will have to own 50 percent of the coins on the network. An attempt to buy such an amount will exorbitantly push the price up; thus rendering the entire effort futile. NxT pioneered the POS system. Nowadays, this algorithmic approach is often used by crowdsale-funded platforms, wherein tokens are distributed based on investments made.

Proof-of-Importance (POI)

With POI, the dependency is neither on the amount of ‘work’ nor the amount of ‘stake’ you hold. POI, as an algorithm, takes a more holistic approach to considering the overall productivity of a user in the network. The reward, as per POI approach, should be based on the contribution of a user to the network in all capacities. The staking of the block, therefore, is based on multiple factors including reputation, overall balance, and the number of transactions done through or from a particular address. Through these factors, the network determines how ‘useful’ the member is to the network. NEM was the first cryptocurrency project to implement POI as an algorithm to its platform. Increasingly, people are finding ways and combinations of both POS and POW with POI to create an algorithm that makes it tremendously expensive to attack the network but rewards those who protect it generously.

Password Strategies for your Crypto Wallet

The digital nature of the cryptocurrencies and crypto wallets is such that it can leave you open to security risks and vulnerabilities if you’re not cautious enough.

On Internet forums, you’ll find stories by people who’ve lost their money because they didn’t adequately secure their cryptocurrency wallet.

The first thing, of course, that everyone does right after creating a crypto-wallet is to set-up a password. Setting a password that is strong is the first layer of protection that you provide to your cryptocurrency wallet. So, set a password which can’t be exploited.

Password choice is a security measure that is 100% in the control of the user. An excellent approach to password-creation is making it close to impossible to guess. A user can use a healthy combination of letters, numerals, and symbols to create a secure, unguessable, password. Another critical point to remember is to avoid using anything personal (like name, birthdate, current identification markers) in a password to protect it from any form of social hacking.

Another way and one that has become popular in the recent times, to secure cryptocurrencies is through 2-Factor Authentication (2FA). If you haven’t yet activated 2FA on your crypto wallet, then you are at a security risk.

What is 2-Factor Authentication?

Along with the login details, 2FA is an added layer of security authenticated via an independent source. When 2FA is activated, it’ll require a code for accessing the wallet in addition to the username and the password.

People often end up not setting strong passwords. And if that’s the only security measure in place, then it creates a security loophole. Not to forget, the password can also be stolen via multiple methods including but not limited to phishing attacks, keylogging, and network sniffing. With 2FA activated, you create an independent mode of authentication. The combination of secure password along with 2FA is a robust strategy to amplify your crypto wallet security.

What Authenticator to use?

The traditional usage is, of course, through getting an SMS on your number. This method is frowned upon by experts because it’s risky and vulnerable regarding security. The ideal approach is to set-up 2FA through an independent, third-party authenticator, such as Google Authenticator.

Some people even prefer email 2FA, because they’re concern about losing their phone.

Types of 2FA Set-up

A lot of crypto wallets platform will ask to choose the type of OTP you want while setting up your 2FA. Technically speaking, there are two forms of set-ups. The first one is called HMAC-based One Time Password (HOTP), and the second one is called Time-based One-Time Password (TOTP). The key difference is that HOTP is valid for an unknown period while TOTP changes in every 30 seconds.

As you can tell, the TOTP approach is safer than HOTP since it doesn’t give the space for the OTP to be copied or stolen in any way. The appropriate change in TOTP ensures security.

TOTP occurs through an authenticator app (such as Google Authenticator). The way this app work is that it synchronizes your smartphone with their app server; thus, providing for that extra layer of secureness in the form of a variable OTP in a 2FA set-up.

What if I lost my phone?

Since the entire idea was to strengthen the security of your crypto wallet, you won’t be able to log into your account. However, there are always a set of private keys, which you should keep as a secure backup. Otherwise, the process of acquiring your account back can be a time-consuming and be taxing.

If you’re using Google Authenticator, you can quickly restore that account by scanning the saved QR code into your new device.

Conclusion:

The holistic approach to password strategy for cryptocurrency involves setting a secure password as a first measure. However, to adequately secure the wallet, one must enable 2-Factor Authentication with a trusted authenticator such as the one that Google provides.

Bitcoin versus Multichain versus Ethereum

Do you know what is common in Bitcoin, Multichain, and Ethereum? Its Blockchain, one of the most popular trends of 2017 was Blockchain, and it continues to be rising high in 2018. In this blog, I will be focusing on various Blockchain platform which has become a basis for ensuring quick, fast and safe transactions. The blockchain is a distributed digital ledger which has all the information related to transactions in the form of blocks. Decentralization, immutability, safety, transparency are the key features of it which make it a versatile technology finding use in almost all the business niches.

Popular Blockchain Platforms:

Here I will be highlighting on some of the most popular platforms of this technology which include the following :

  • Multichain
  • Ethereum

Bitcoin- If it about Blockchain then how can we miss Bitcoin. Blockchain came into the picture because of Bitcoin. It is the cryptocurrency which is entirely decentralized, open-source and censorship-resistant. 2008-2209 is the year that marks the surge of Bitcoin. Soon after the launch Bitcoin became a popular alternative medium for the peer-to-peer transaction.

Bitcoin’s mining is done on Bitcoin’s Blockchain. When we are talking about Bitcoin Blockchain, then there are thousands of bitcoin nodes on the Blockchain which equally participate in verification of the legitimacy of the payment. All these nodes work independently and don’t need third-party interference.

It is an open network. It is the pioneer of Blockchain which has further given rise to many other open-source platforms that I will be highlighting further.

 

Ethereum- Ethereum is a cryptocurrency and also offers an open-source platform. Similar to Bitcoin Blockchain, it is also a decentralized platform which runs smart contracts. It was in July 2014 when Ethereum came into existence. Many people claim that Etehreum is just vaporware where everything still exists in theoretical format. However, its supports claim differently.

It allows developers to create stored registries of markets, debts, move funds as per the instructions gave in the past.

Well, if you think that Ethereum is just digital money, then you must know that it not only handles accounts and transactions but at the same time it also stores the information of new programming logic.

Let me explain the programming logic with this example:

Let’s say that on July 10th A transfers some money to B’s account if only Account A has more than $y. If not then don’t transfer $y to B.

Such programming logic is written, stored and executed on Ethereum Blockchain which is not the case with Bitcoin Blockchain. Hence, Etehreum is also known as a programmable cryptocurrency. Once this programming logic gets stored on Ethereum, it can be used for future reference.

So, we can say that with Ethereum you can not only transfer the money but also execute smart contracts and make DApps. All this takes place on EVM or Ethereum Virtual Machine with the help of Solidity. Solidity is Ethereum’s native programming language which is inbuilt.

Ethereum’s key features include:

  • Ethereum Wallet — it facilitates crypto-assets holding, writing and such smart contracts
  • Can be used for creation of cryptocurrencies
  • Creation of DApps
  • Creation of democratic autonomous organizations or DAOs
  • Supported languages- Python, Go, C++
  • Consensus mechanism: Ethash, proof of work but now planning to move to a proof-of-stake.

 

Multichain

It is a platform for the creation and deployment of private Blockchains. It can be within the organization or between the organizations. Multichain is an open source Blockchain platform which is based on Bitcoin’s Blockchain but is an enhanced version of the same. In case of Bitcoin, anyone can connect and transfer the assets on the chain; however, if we talk about Multichain then first you need to configure multichain at every node. Only after this, you can transfer the asset.

Key Features :

  • Native multi-currency support.
  • Expected to be faster than Bitcoin
  • Permissioned management
  • Quick deployments
  • Supported languages- Python, C#, JavaScript, PHP, Ruby

The Difference

We know that Bitcoin is a pioneer in digital currency and it has its own sets of benefits. But, at the same time, we cannot ignore the fact that its uses are yet to reach the masses. There is sluggish growth in the Bitcoin does the presence of easy-to-use wallets and the fact that bitcoin can now be used at many mainstream businesses like Microsoft, Overstock, and Dell.

The reason for slow adoption:

  • End-user satisfaction
  • Difficulty in purchasing the Bitcoin
  • The security issues related to Bitcoin
  • The volatility of Bitcoin’s value as compared to government-issued currencies
  • Limited capacity of Bitcoin blockchain, it can only handle 300,000 transactions every day with a block size o maximum 1 MB
  • The Bitcoin blockchain is too open, anybody with the internet connection can connect to the Bitcoin network and transact. There is no screening of the participants.

Multichain, forked from Bitcoin Blockchain lays emphasis n end-user choice allowing the customer to control whether the chain is private or public, who can connect to the network, the target time for blocks, the screening of people who can connect to the network, maximum block size, and metadata. All these features are covered in Multichain and are a solution to the problems which currently exists with the Bitcoin Blockchain.

Apart from function and operational benefits which Multichain has to offer, it covers most use cases for blockchain. Furthermore, it has an easy-to-interact API; there is no need to learn a new programming language. When it comes to hosting solutions Multichain blockchain is cheaper and better than Ethereum. Thus if you are willing to develop DApps, then Multichain is better than Ethereum.

Here is a tabular representation of different between Bitcoin, Ethereum, and Multichain :

Bitcoin Ethereum Multichain
Release Date 2008-2009 July and August 2014. The system went live on 30 July 2015 First alpha release of MultiChain in June 2015
Founder Satoshi Nakamoto Vitalik Buterin

Dr. Gideon Greenspan

 

Type of Network Open Network Public, Smart Contract based Private, Permissioned
Supported languages C++ Python, Go, C++ Python,  C#, JavaScript, PHP, Ruby
Consensus mechanism Proof of Work Ethash, proof of work but now planning to move to a proof of stake.

 

 

The distributed consensus among identified block validators.

 

I hope that this post would have given you a better insight into, Bitcoin, Multichain, and Ethereum. Similar to any new theology, this is also at a nascent stage where we are witnessing new changes every day.

Understanding of Bitcoin & Blockchain

You might be hearing a lot about Blockchain lately. Lets explore what is Blockchain & Bitcoin.

One calls Blockchain as a blockchain because you have millions or billions of blocks forming a chain of blocks connected using the signature (Digest) of the previous block. Each block is a record of one or more transactions that took place between two people or computers. Blockchain technology forms the base of the cryptocurrency Bitcoin. The latter is a sort of digital currency that is virtual and electronic. An anonymous Satoshi Nakamoto was the one who invented bitcoin.

Understanding Bitcoin—What is a bitcoin?

On October 31, 2008, Satoshi published the white paper “Bitcoin: A Peer-to-Peer Electronic Cash System”, which became an open source code in January 2009. Since then, internet users have been using Bitcoins to perform peer-to-peer transactions.

Use of Bitcoins

Bitcoin eliminates the need for any sort of intermediary like banks or centralized governments. Thus, the transaction between two individuals or companies happens using bitcoins and each transaction forms a block. And all the transactions between X and Y that happen all over the world form the blockchain.

Understanding Blockchain—What is a blockchain?

The blockchain is a public ledger, which all users who carry out bitcoin transactions across the world can see. Each node (computer or user) verifies and confirms the transaction using a consensus algorithm. That is, all the billion Bitcoin users in the world will confirm and verify the transaction.

Benefits of a Blockchain

While users will know that a transaction has taken place, the identity of the two individuals who performed the transaction will remain anonymous. The owners of the block or transaction can then claim the transaction as theirs. Only then will other users come to know of the parties of the transaction.

So, with both Bitcoin and Blockchain, companies need not go through intermediaries as banking channels to perform a transaction. They can carry out the transaction through, and in the form of, bitcoins. It is open source and is available for all.

Some believe that just like the internet revolutionized the 90s and became a huge entity in the next twenty years, both Bitcoin and Blockchain too will. They are far more likely to become an inseparable part of human lives across the world.

Just like money is today inseparable from each individual, Blockchain is also likely to become an inseparable part of human lives in the next few years. Some of the leading financial institutions across the world have already begun testing Blockchain technology via distributed ledgers.

The primary benefits of using Blockchain technology are the elimination of intermediaries and centralized authority. Ease of use, ease in verification of transactions, improved security and transparency with the lower cost.

Record keeping is one of the strong use case of Blockchain. Record keeping solution built on top of Blockchain can help businesses in:

  • Maintaining the same copy of records/docs throughout the business
  • Verifying the authenticity of the records/docs within seconds with more confidence
  • Creating Immutability of records/docs at low cost
  • Managing the structure of records/docs in a very strict way
  • Incorporating a decentralized trust mechanism while sharing the data

Please try RecordsKeeper to know how it works.

What is a Blockchain?

Blockchain is a distributed list of public or private ledger recorded in the blocks. It is a foundational technology of most of the cryptocurrencies on the Internet. Most famous among all is Bitcoin.

You can virtually imagine it as a long list of memory blocks connected to each other sequentially in a very very knit manner. Where these blocks are stored redundantly in multiple computers spread all over the world making it highly available & fast. Everything in those memory blocks is stored as a transaction.  Those transactions are confirmed by the participating computers through some consensus algorithms making it highly difficult to forge, delete or modify the transactions. Though transactions are visible to every connected computer but yet no one can trace that who are the parties associated with those transactions. Until unless those parties declare it by themselves.

Data stored in Blockchain is highly secure & immutable. In short, it means it is very very difficult as well as expensive to forge or modify a transaction and it is extremely easy to detect the inconsistency & forged data/transaction/stored information.