Decentralized Communication Startup New Vector Raises $8.5M

Decentralized Communication Startup New Vector Raises $8.5M

British decentralized communication startup New Vector has raised $8.5 million to promote an alternative messaging protocol.

London-based decentralized communication startup New Vector has raised $8.5 million to drive adoption for Matrix, a major alternative messaging protocol.

Slack rival Riot.IM

The Matrix protocol, which enables secure communication via end-to-end encrypted messaging applications such as Riot.IM, an alternative to WhatsApp, Telegram or Slack, will continue scaling and growing its network with the newly raised funds, New Vector announced on Oct. 10.

Investors of the New Vector’s Series A funding round included London-based European seed fund Firstminute Capital, cloud computing and Software as a service (SaaS)-focused Notion Capital and enterprise software venture firm Dawn Capital, the firm said.

As part of plans to fuel adoption of Matrix, the company will also dedicate funding to Matrix hosting platform Modular.im, the report notes.

U.S. and French governments as clients

The Matrix protocol is an open standard that supports a secure and decentralized global communications network. According to the firm, the protocol enables secure communication via interoperable instant messaging and Voice over Internet Protocol (VoIP) apps while retaining ownership and control of data.

As noted in the announcement, the Matrix network has expanded to more than 11 million users and 40,000 deployments, with high-profile clients such as the United States government, French government, non-profit company educational project Wikimedia as well as software firms KDE and RedHat, among others.

In mid-September, billionaire investor and major crypto bull Tim Draper joined the board of directors of EOS-based decentralized application firm MakeSense Labs. At the time, Draper, who was also an early investor in the firm’s parent company Sensay, emphasized the role of improving human connections by allowing private and seamless messaging provided by Sense.Chat.

Israeli Startup That Allows Offline Crypto Transactions Secures $4M

Israeli Startup That Allows Offline Crypto Transactions Secures $4M

Israeli cybersecurity startup GK8 developed the world’s first internet-free system for transacting cryptocurrencies.

Israeli cybersecurity startup GK8 has reportedly developed the world’s first offline system for transacting cryptocurrencies.

The new system uses GK8’s proprietary cryptographic techniques that enable instant blockchain transactions of digital assets without any need for an internet connection, Israeli business news publication Globes reported on Sept. 18.

The company raised $4 million in a funding round led by Discount Capital, a venture arm of one of Israel’s three largest banks, Discount Bank, and Marius Nacht, a co-founder of cybersecurity giant Checkpoint. Other investors reportedly included EdenBlock, iAngels, IDEAL-HLS, StratX and the Israel Innovation Authority.

As reported by Globes, GK8’s new cryptographic techniques allowed the company to develop a cold wallet with “hot wallet functionalities,” securing user funds from hackers and cyberattacks.

Unidirectional connection 

In a recent interview with Fortune, GK8 CEO Lior Lamesh described GK8’s technology as “ledger agnostic,” hinting that it can be used for Bitcoin (BTC) and other cryptocurrencies. According to Lamesh, G8K is capable of recording transactions on a blockchain in offline mode thanks to “unidirectional connection.” 

GK8’s technology is up and running, and is already being used by digital asset trading platform eToro. 

Fortune reports that GK8 was founded in 2018 by two members of an Israeli special defense unit that specializes in guarding the country’s digital assets.

According to Silicon Valley-based crypto intelligence firm CipherTrace, cryptocurrency thefts reached $1.2 billion in the first quarter of 2019 — $500,000 less than what was stolen throughout the whole of 2018.

NSA Working to Develop Quantum-Resistant Cryptocurrency: Report

NSA Working to Develop Quantum-Resistant Cryptocurrency: Report

The United States’ National Security Agency is allegedly working to develop a quantum-resistant cryptocurrency, a Bloomberg reporter has claimed.

The United States’ National Security Agency (NSA) is allegedly working to develop a quantum-resistant cryptocurrency.

The claim was made in a tweet by Bloomberg Technology reporter William Turton on Sept. 4, who was in attendance at the Billington CyberSecurity 10th annual summit in Washington D.C.

NSA: North Korea “creative” in its use of cryptocurrency

Turton’s tweet gives only a laconic hint at the agency’s apparent plans, with reference to the quantum-resistant cryptocurrency project confined to an aside. He wrote:

“Anne Neuberger, Director of NSA’s new Cybersecurity Directorate says that the agency will propose hardware and software standards again. Also notes agency is working to build quantum resistant crypto.”

Further details of Neuberger’s presentation was provided in coverage by Microsoft News, in a report focusing on the agency’s battle with ransomware threats posed by a host of geopolitical adversaries — including North Korea, Iran, Russia and China.

Neuberger noted that the NSA has identified 4,000 ransomware attacks daily, noting that this prevalence was a “key concern” for the U.S. 2020 presidential elections. 

She said the agency’s newly-established Cybersecurity Directorate, due to start work in October, would focus on mitigating the threat of influence operations by Russia, as well as intellectual property theft and cyberespionage attacks from China. 

Neuberger singled out North Korea as being creative in its cyber warfare strategy, pointing to the rogue state’s use of cryptocurrency to compile funds for President Kim Jong-Un’s regime. 

Cryptocurrency in shadow warfare

Cryptocurrencies have become part and parcel of stealth cyber warfare and global intelligence operations, raising the prospect that any state agency who wins the arms race in developing a quantum-resistant cryptocurrency could secure an appreciable geopolitical edge for its country.

In July 2018, the Department of Justice (DoJ) charged twelve individuals from two units of Russia’s Main Intelligence Directorate (GRU) with using cryptocurrency to fuel efforts to hack into computer networks associated with the Democratic Party, Hillary Clinton’s presidential campaign, and U.S. elections-related state boards and technology firms. 

That October, the DoJ charged seven GRU officers with crypto-funded global hacking and related disinformation operations. 

Earlier this month, a leaked confidential report from the United Nations revealed that the U.N. Security Council North Korea sanctions committee believes that North Korean hackers have netted around $2 billion by hacking banks and cryptocurrency exchanges.

The committee claims that hackers form an essential part of the regime’s funding and allegedly raise funds for its WMD (weapons of mass destruction) programs, among other activities.

North Korean hacking group, the Lazarus Group, has achieved particular notoriety for its malign activities, which have affected countries across the world.

Bitcoin Dev Reveals Multisig UI Teaser for Hardware Wallets, Full Nodes

Bitcoin Dev Reveals Multisig UI Teaser for Hardware Wallets, Full Nodes

The organizer of a Bitcoin programming boot camp has published a proof-of-concept for a user interface for multisig protection for Bitcoin hardware wallets and full nodes.

The organizer of a Bitcoin (BTC) programming boot camp has published a multisignature (multisig) user interface (UI) proof-of-concept for both hardware wallets and full nodes.

Justin Moon published a quick guide to using the prototype UI on Twitter on Aug. 28, together with the full software code on GitHub. 

Lowering entry barriers for Bitcoin

Wallets that are protected by multisig technology require more than one private key to access the wallet and are thus thought to be much less vulnerable to security breaches, given that no single party possesses all the information necessary to decrypt them.

Moon’s step-by-step guide to using the software indicates that a user first needs to configure their RPC settings (currently only operating as a testnet version), then create a wallet and decide how many signatures and total signers will be required for its decryption.

When a hardware wallet such as Trezor, Ledger or ColdCard is plugged in, these are recognized by the software and can thus be added as signers. 

Users then generate their first receiving wallet address and generate a test transaction, which will need to be confirmed separately by each separate signer device to be confirmed and broadcasted.

In response to Moon’s code release — which he has warned is still in alpha stage and therefore buggy — self-described Bitcoin evangelist Hass McCook tweeted:

“To be honest —I think this project has the potential to increase #bitcoin‘s utility by billions and billions of dollars. Easy multisig like this knocks down HUGE barriers to entry for normies carrying big balances.”

Unassailable?

Earlier this summer, decentralized identity startup Civic and blockchain security firm BitGo announced their plans to launch a new wallet using BitGo’s multisig technology in Q4 2019. 

The product aims to lower the barrier to entry into the blockchain sphere for consumers and provide the secure infrastructure that can support a new blockchain-based financial and identity ecosystem.

Just last week, BitGo officially added EOS to the list of assets supported by its multisig wallet and custody service.

Back in 2017, Cointelegraph published an analysis of an attack on the multisig wallet designed by Parity Technologies — creator of the Parity Ethereum Client — which was thought to have affected at least 573 wallets at the time.

Firm Accused of Touting ‘Snake Oil Crypto’ Sues Conference Organizers

Firm Accused of Touting ‘Snake Oil Crypto’ Sues Conference Organizers

A cryptocurrency firm heckled at the Black Hat hackers’ conference is suing the event organizers for failing to protect it from the audience’s barbs.

A cryptocurrency firm heckled at the Black Hat hackers’ conference is suing the event organizers for failing to protect it from the audience’s barbs.

Crown Sterling — which some attendees have characterized as “a piece of snake-oil cyber marketing” — filed its complaint with the United States District Court for the Southern District of New York on Aug. 22.

Hackers accuse firm of “suing over booing”

At Black Hat, Crown Sterling had presented its development of what it dubs “quantum AI encryption technology” — a purportedly more robust “five-dimensional encryption” that draws on research into occult numerology and AI-composed music, to name just two of its influences. 

Crown Sterling CEO and founder Robert E. Grant’s presentation was based on a paper he co-authored and published earlier this year with Tal Ghannam; a physicist who self-published a book entitled “The Mystery of Numbers: Revealed through their Digital Root,” as well as a graphic novel, “The Chronicles of Maroof the Knight: The Byzantine.”  

The presentation was met with significant hostility and scepticism by attendees — videos shared on social media reveal audience members heckling, “you shouldn’t be here, you should be ashamed of yourselves!”   

Twitter has since continued to seethe with critics dismissing the presentation as what they would “charitably call a specious snake-oil talk,” jokes about discovering pioneering encryption knitting patterns and jargon-laden parodies

A “defamatory Twitter storm”

In its complaint, Crown Sterling accuses Black Hat’s organizers of having breached its “sponsorship agreement with Crown Sterling and the implied covenant of good faith and fair dealing arising therefrom.” 

In addition, the firm has also filed suit against 10 “Doe” defendants, whom it accuses of orchestrating an allegedly premeditated disruption of its sponsored talk.

The firm, as the filing reveals, had paid a steep $115,000 to participate in the event and promote its discoveries. Among its charges, the firm accuses critics of defamation, alleging that:

“Detractors used this staged ‘event’ to initiate a smear campaign on social media during the conference and immediately after. In that campaign, these detractors defamed Crown Sterling, questioning both its integrity and its cryptography solutions.”

Alongside sponsored talks such as Crown Sterling’s, Black Hat this year also hosted presentations including a project investigating the notorious phenomenon of cryptocurrency-related Twitter accounts that advertize fake “giveaways,” which uncovered a network of at least 15,000 scam bots.

What Is the Difference Between Blockchain and DLT?

What Is the Difference Between Blockchain and DLT?

What exactly is the difference between a blockchain and distributed ledgers? Here is a full guide on what each technology does and how…

“Blockchain” and “distributed ledger technology.” Many of us have been guilty of confusing these two terms and using them interchangeably. But even though their meanings overlap in a number of areas, and even though they’ve both reached similar levels of public notoriety since the 2017 cryptocurrency bull market, they aren’t quite identical.

Yes, they both generally refer to a record of information that’s distributed across a network, and yes, they both foster a greater degree of transparency and openness than had been enabled by earlier, centralized databases or digital records. But this is where the analogies end, since blockchains and distributed ledger technology (DLT) each come with their own important distinguishing features.

Openness, decentralization, cryptography

There are two big distinctions, and depending on where you sit on the Bitcoin vs. blockchain spectrum, some qualify Bitcoin-style blockchains as largely superior to and more innovative than their distributed ledger counterparts while others qualify DLT as more useful for everyday commercial purposes. 

The illustration below outlines how the two technologies relate to each other, showing that one way to implement DLT is through a blockchain:

The relationship between blockchain and DLT

Firstly, blockchains are generally public, meaning that anyone can view their transaction histories and that anyone can participate in their operations by becoming a node. They are, as cryptocurrency parlance puts it, “permissionless.” This is the key feature pointed out to Cointelegraph by Marta Piekarska, the director of ecosystem at Hyperledger. According to Piekarska:

“First and foremost: one is permission less, the other is permissioned. This means that in the first case anyone can participate in the network, in the other: only chosen participants have access to it. This also determined the size of the network: Bitcoin wants to grow infinitely, while in a permissioned blockchain space, the number of parties is smaller.”

Put simply, the public aspect of blockchains generally implies three interrelated things: 1) Anyone can use the blockchain, 2) anyone can serve as a validating node of the blockchain, and 3) anyone who becomes a node can, in turn, act as part of that blockchain’s governance mechanism. In theory, this makes blockchains decentralized and democratic structures resistant to undue control or influence from any single party.

By contrast, a distributed ledger generally doesn’t enable any or most of these public features. It restricts who can use and access it (hence the “permissioned” terminology), and it also restricts who can operate as a node. And in many cases, governance decisions are left to a single centralized company or body. Compared to the ideal of a public, decentralized blockchain, it exists solely to serve the interests of a concentrated group of commercial players and interests.

Below is an image detailing how centralized, decentralized and distributed networks are structured:

Different network types

And then there’s the second main difference. As the name implies, blockchains consist in a series of time-stamped “blocks” that record the then-current state of the overall blockchain/cryptocurrency and that need to be cryptographically validated by a majority of the network in order to form the next entry in the chain. As Bitcoin Core developer Kalle Alm explained to Cointelegraph, this ensures a greater level of security for the blockchain, insofar as the need for cryptographic consensus makes it very difficult to fake transactions. Alm went on to say:

“Blockchains alleviate the trust requirement in a shared timestamped database. For a public cryptocurrency, this is obviously necessary or someone might just go and give themselves a million USD, but for a private database, especially when it is not a cryptocurrency but some more abstract form of smart contract platform, it starts to make less and less sense.”

However, while some distributed ledgers aren’t cryptographically validated chains of blocks, it’s worth stressing that some are — or that they still feature cryptographic consensus. For instance, while R3’s Corda ledger doesn’t actually comprise a chain of blocks, it nonetheless relies on its notaries (i.e., nodes) reaching consensus over time-stamped transactions. Because of this, it should be emphasized that there’s really only one essential difference between blockchains and distributed ledgers, which is simply that one is permissionless and the other is permissioned. Michal Zajda, the blockchain architect at Aeternity blockchain, told Cointelegraph:

“The only difference between private and public blockchains is the range of availability. I can easily imagine deploying the Bitcoin protocol in a private cloud serving just a small group of users. The fundamental difference here is between permissionless blockchains — like Bitcoin, and permissioned ones. For permissionless ones, we do not need to trust any third party company to run it fairly and honestly.”

But assuming that a distributed ledger is private and isn’t a time-stamped chain of blocks that results from cryptographic consensus, it often just amounts to a fairly conventional database that just happens to be shared among a select group of participants. This is the point made by Phil Chen, the decentralized chief officer at HTC Exodus. He told Cointelegraph that the difference between public and private blockchains is vast:

“In the enterprise space, people are talking about private blockchains, which technically are not blockchains but a better database management system. Nevertheless, it does have productivity gains; I call it a 9 to 10 innovation, whereas public blockchains like Bitcoin and Ethereum are 0 to 1 innovations that completely change the way we think and use money and computation. Bitcoin is a true public blockchain that is open, neutral, censorship resistant and borderless. And distributed ledgers are simply permissioned databases.”

Privacy, scalability

But as Chen’s explanation indicates, even though blockchains are arguably superior to distributed ledgers, DLT can still be a useful addition to the global economy’s technological arsenal, particularly in cases in which it would be unwise to harness a truly public and decentralized blockchain. Alm added that: 

“The strongest argument for a private blockchain seems to be when a bunch of banks get together to create a system for transferring money between each other. In this case, no bank would be content letting any of the other banks ‘maintain’ the database on their own, so a shared blockchain controlled by no one would make sense.”

Added to this, the privacy of private ledgers is an obvious benefit for any company protective of its business or customer data. Still, the chief commercial officer at the Energy Web Foundation, Jesse Morris, contends that, even here, the privacy of public blockchains can actually be much stronger than some people realize. He told Cointelegraph that:

“A common criticism of public chains has to do with privacy (e.g., the details of every transaction are known to all). This criticism does not recognize two simple facts: 1) any dApp can shield certain transactional details by only transmitting the bare minimum of information necessary across any blockchain while keeping sensitive data off-chain and 2) even in private networks, privacy-preserving features are applied to protect sensitive information from participants on a private blockchain, and these same privacy preservation measures (e.g. EY Nightfall, other zero knowledge proofs) are beginning to be utilized on public blockchains as well.”

In other words, there is a recognition that public blockchains potentially offer many of the privacy benefits promised by their more private rivals, and then some. Of course, private ledgers still generally have the advantage of being controlled by the companies that use them — and for big multinational banks that want to have control over their processes, this is obviously a big plus.

There’s also the very salient benefit of improved scalability, since, as mentioned above, distributed ledgers are often shared yet largely centralized databases. As such, they can process hundreds — if not thousands — of transactions per second, while decentralized blockchains such as Bitcoin struggle to top seven transactions per second, all the while consuming vast quantities of electricity. This is perhaps the main benefit offered by distributed ledgers, and even if they don’t offer much decentralization and transparency beyond previous database systems, it’s one reason why they’ll continue being used in the future.

Social Innovations and Secret Conversations (on the Blockchain)

Social Innovations and Secret Conversations (on the Blockchain)

New ways to communicate through coded conversations and secret languages are being implemented on blockchains.

There’s a novelty in finding new ways to communicate through coded conversations and secret languages. How is this being implemented for good — or otherwise — on blockchains?

Since its beginnings, blockchain technology has led to many movements, including the formation of a unique crypto community. This blockchain community is forming its own lexicon (including a more formal vocabulary that industry opinion-makers are creating and debating and Twitter-based crypto slang like hashtagging Lambos and Bitcoin whales.) 

There is also another language that has developed, the one in blockchain platforms themselves — developed through a “glitch” in the blockchain system — through a coded instruction that was meant for something else entirely. This is a conversation created through transaction signatures — the method of transfer — with coded messages built into the hash. 

What started this trend? In part, it came from necessity, the need to find an anonymous way to converse with each other — to complete a private transaction. It may also be rooted in psychology. “Groups of people form their own private lexicons because coded language is exclusive, exciting and defiant,” Gary Nunn wrote. An exclusive argot gives ownership, pride and a sense of being part of something greater than oneself.

Private interactions on blockchains

A coded language can be used for harmless activities such as in-jokes or conversations, but they are often developed by a person or people in need of a way to communicate as anonymously as possible. And so, it stands to reason that transaction signature conversations have been used for harmless fun between online friends and also for illicit activities between bad actors.

What are some of the ways that transaction signatures have been used for conversing, for better or for worse? Let’s start first with a description of how a conversation actually works using blockchain technology.

Signed on the dotted line, with a public and private key

A digital signature or transaction (TX) signature is the detail of an electronic document that is used to identify the person transmitting data on a blockchain. The signature acts as a transaction validation, linked to the public key of the entity involved. It’s a confirmation that the transaction has not been tampered with in any way — a trustless transaction. Here’s how it works:

How digital signatures work: signing the message with private key

How digital signatures work: verifying the message with public key

Coded conversations through a “glitch” in the tech

Users of the technology at some point or another realized that it’s possible to add a so-called “OP_Return output” to the transaction — an instruction coded into the Bitcoin blockchain by Bitcoin developers. This output would be nonspendable, the data attached to it, however, would remain on the blockchain forever. And so, coded conversations on the blockchain began.

Some believe that this is an irresponsible use of the technology, as the Bitcoin blockchain was created solely for financial transactions and not a record for arbitrary data. Either way, it has become a function used by transactors, whether it was initially intended as such or not.

Here are some of the more novel ways that the OP_Return output has been used so far:

Rick-rolling

One of the first OP_Return messages that gained notoriety was the use of the lyrics “Never Gonna Give You Up” by Rick Astley (following the theme of the well-known rick-roll meme) to play pranks on users. A hacker, for example, who demanded payment by blackmail was rick-rolled by a prankster who used the first few symbols of addresses to spell out the lyrics of the song and send only tiny amounts of Bitcoin. Each transaction made by the prankster was worth 0.001337 BTC, and was effectuated in homage to leet, a code of modified spelling using numbers in place of letters.

Rickrolling on the blockchain

Ethereum DApps

A relatively slow uptake in decentralized application (DApp) adoption might be due to users having to pay a transaction fee to complete an action — Mahesh Murthy of Zastrin noted the fee as a pain point in a blog post he wrote about a voting DApp he created. He mentions an idea by John Backus as a solution to this bottleneck using a similar function to OP_Return for Ethereum DApps through a private key.

Ethereum DApps

Eternity Wall

Eternity Wall, a service for writing short messages on blockchain, is mostly used for writing proverbs, jokes and love declarations, but it can also be used to reply to a message sent via the service, so conversations may be created. 

Eternity Wall

Ricardo Casatta, creator of Eternity Wall, has also promoted the potential political use case for such a tool as an uncensorable means of communication, having written in a post, now unavailable:

“If you live under a dictatorship, you could use it for saying something that your government would remove or block.” 

Eternity Wall

Blockchain riddles

An entertaining way of using OP_Return is to organize quizzes on a blockchain. The address 1HoTZGKwXY2HM8UBpiBKtBUd8otPpsJ5Pc has sent several riddles via OP_Return messages, for example.

Here’s what was sent by the address:

  1. Five riddles, one-word answers. Start at 1HKGame213Part2xxxxxxxxxxxxzQajrj
  2. What English word has three consecutive double letters?
  3. What disappears as soon as you say its name?
  4. Which word in the dictionary is always spelled incorrectly?
  5. You can hold it without using your hands or arms. What is it?
  6. What word becomes shorter when you add two letters to it?

And probably the answers lead you to some private key, since the last message was:

“PrivateKey=SHA256(tolower({2} {3} {4} {5} {6})). Transfer to prove solution.”

Blockchain riddles

The webpage Bitscribble was created as a simple interface that could be used to write messages on a blockchain via the OP_Return script. 

In January 2019, Parisian-based street artist Pascal Boyart created a mural with a hidden Bitcoin prize, announcing the treasure hunt on Twitter to participants eager to win the coveted reward. The stunt was a celebration of the 10th anniversary of the first mining of a Bitcoin block. If you’re wondering if it’s been solved yet, you can find out here.

Image with a hidden message

There has been everything from marriage proposals to cryptic clues to messages supposedly written by Satoshi encrypted on the Bitcoin blockchain.

If you’d like to learn how to write a blockchain message yourself, here’s a step-by-step guide.

Blockchain messaging used in elevated situations

The OP_Return script may be used to contact a person on the Bitcoin blockchain if you only know their Bitcoin address. There are some incidents in which this tool has proven very useful for transactors: For example, a person may be contacted if they received stolen funds for some reason or if someone accidentally sent them a transaction that needs to be returned.

When communicating with a hacker following a security incident in August 2016, Bitfinex offered the OP_Return instruction as a potential method for anonymous communication, should the hacker wish to get in touch with the exchange and find a compromise in return for a bug bounty.

Going back as far as 2014, the OP_Return script has often been used by spammers

Bitcoin Cash as a messaging service

Messaging on the Bitcoin Cash blockchain is not something done in secret anymore, either. Memopay, for example, is a service that offers its customers advertising opportunities on the Bitcoin Cash (BCH) blockchain. Bitcoin Cash has proven to be more popular for messaging services, likely due to lower blockchain transaction fees.

There is, in fact, a social network called Memo in which all networking actions are recorded to the BCH blockchain. Bitmain co-founder Jihan Wu has publicly tweeted that he has an account on Memo, inviting his Twitter followers to sign up for an account and get in touch with him.

CryptoGraffiti is a solution that allows anyone to easily decode and read arbitrary messages that have been saved to the blockchain. The tool detects transactions that contain either “human-readable text messages or files of known formats” and publishes it under a reader tab.

Social networking on a public, immutable ledger

With the advent of social media as a powerful communication and advertising tool, the conversation has inevitably — and regularly — returned to how a decentralized technology like blockchain can be harnessed to provide enhanced social networking opportunities. Realistically, though, until the user interface and user experience are at the level of major current social networks, the tech won’t appeal to those who already have easy-to-use messaging applications at hand.

Not only that, but the question of whether people want their private (or indeed public) conversations permanently imprinted on a ledger remains to be seen. Transparency is important, but people still want to feel a certain sense of privacy. 

That being said, the world is no longer a private forum, with public data becoming so available as users sign their rights away. Perhaps it’s not such a stretch to envision a decentralized, international social networking platform on a public and permanent ledger.

The article was co-written by Kyrylo Chykhradze and Pavel Mischchenko. 

Kyrylo Chykhradze is the Head of Product at Crystal Blockchain, Bitfury’s analytics tool for blockchain and cryptocurrencies. He joined Bitfury after having worked as an academic researcher for five years, where his areas of focus were graph theory and real-world network analysis. Along with being deeply involved in forming the global product strategy for Crystal Blockchain, Kyrylo is also leading its internal forensic investigation department.

 

Pavel Mishchenko  is the Head of R&D at Crystal Blockchain. He joined Bitfury in 2015 after obtaining a master’s degree in Advanced Mathematics at the Ecole Normale Supérieure de Lyon. His primary areas of interest are statistics, data analysis, and probability theory. Pavel actively participates in mathematics competitions and has been awarded gold medals at the International Mathematical Olympiad. Pavel is the Research & Development Lead at Crystal, and is also heavily involved in the development of algorithms for efficient cryptocurrencies data analysis.

The views and opinions expressed here are solely those of the authors and do not necessarily reflect the views of Cointelegraph.

ZenGo Demonstrates Proof-Of-Concept of a Keyless Wallet for Facebook’s Libra

ZenGo Demonstrates Proof-Of-Concept of a Keyless Wallet for Facebook’s Libra

ZenGo reportedly shows that its keyless wallet solution can support Facebook’s announced virtual currency Libra via testnet demonstrations.

The non-custodial crypto wallet solution ZenGo has created an open source project that purportedly provides proof-of-concept (PoC) for its ability to support social media giant Facebook’s virtual currency Libra, according to an official announcement by ZenGo on July 2.

According to the announcement, this proof-of-concept project shows that it is possible to perform Libra transactions on the Libra testnet blockchain. However, the findings are limited, as the report cautions:

“Obviously, this experiment is only based on a testnet and we will have to explore further once Libra makes its mainnet available. Additionally, there is no user interface in this PoC and it goes without saying that a proper UI is required for a usable product.”

The statement also briefly discusses Facebook’s announced native wallet, Calibra. According to the report, ZenGo views Calibra as a good custodial-based solution, but notes that users can’t have full control over their Libra — the slogan goes ’not your keys, not your Bitcoin’ — and are required to undergo a registration process with government-issued ID to use the wallet.

ZenGo, on the other hand, uses a technique called the Threshold Signatures Scheme (TSS) which removes the need for private keys. ZenGo believes private key management is too complicated for the average user, so they developed the TSS to avoid custodial solutions and private keys entirely.

In layman’s terms, this is how ZenGo describes the cryptographic function of TSS:

“TSS removes the burden of the single atomic private key and splits the responsibility between multiple parties. Each of the parties generates its own secret and uses this secret to distributively sign a transaction without revealing the secret to the other parties.”

In April, ZenGo received $4 million in funding from investors, including South Korean tech giant Samsung. 

As previously reported by Cointelegraph, Facebook does not intend to launch Calibra in India, due to its ban on cryptocurrencies. A recently-proposed bill in India called the “Banning Cryptocurrencies and Regulation of Official Digital Currency Bill 2019” suggests a jail sentence of up to 10 years for engagement in cryptocurrency operations within the country.

‘Bitcoin Time’ Moving Faster Than ‘Internet Time,’ Says Hashcash Inventor Adam Back

‘Bitcoin Time’ Moving Faster Than ‘Internet Time,’ Says Hashcash Inventor Adam Back

Blockstream CEO Adam Back — inventor of the hashcash proof-of-work system — says that “bitcoin time” seems to be running faster than the “internet time” of the early dotcom era.

Blockstream CEO Adam Back — inventor of the hashcash proof-of-work (PoW) system later used in bitcoin’s (BTC) mining algorithm —  says that “bitcoin time” seems to be running faster than the so-dubbed “internet time” of the early dotcom era. 

Back made his remarks during a panel at the Bitcoin 2019 conference in San Francisco on June 26. 

Following a discussion of hashcash’s inception as well as various early electronic money inventions such as digicash, Back noted that bitcoin had broken through with Satoshi’s decentralized vision and his solution to counter hyperinflation by fixing the coin’s supply curve. 

“Bitcoin has come much further and much faster than people expected,” he said. “There was a saying in the early dotcom era about “internet time,” and […] bitcoin time […] seems to be moving even faster.”

Back argued that it is pretty challenging — even for the technically adept — to keep up with the pace of new ideas and implementations in the crypto sphere, and that new areas for innovation are yet to be realized:

“Because blockchain and bearer electronic cash is a whole new building block and it has implications with smart contracts. It’s sort of like picking up a new programming language with a new paradigm, and it takes a while for people to natively understand it.”

Alongside smart contracts, Back singled out the fairly recent creation of second layer solutions such as Lightning Network as an area of intense energy and development, as well as state chains — which, he proposed, offer new insight and benefits by allowing for “less implied trust in the operators of a federated chain of some kind.” 

He stressed that for all crypto innovations, trade-offs as regards privacy and security exist, but that incremental improvements — such as Schnorr signatures — continue to be made:

“It strikes me that there are still major discoveries about the implications of the tech being found […] we’re still at early stages for what can be built […] and it’s surprising the number of things you can build on layers above it that retain interesting properties of what’s beneath.”

Back also likened the space of proliferating crypto assets to “TCIP/IP — so that there’s one interoperable standard and it’s a lingua franca for exchanging value.” 

Emphasizing that innovation can be “adopted in layers,” he proposed that developers could, for example, import “bitcoin’s UTXO set” into “a new and innovative data structure if it’s found.”

As reported, Back gave his insights into blockchain and cryptocurrencies at a G20 meeting last month, noting that he doesn’t see electronic cash at present as being “ large enough to affect monetary policies for major currencies like the euro and Japanese yen.”

‘Crypto’ for ‘Cryptography’: How Justified Is the Exuberance Around Apple’s Developer CryptoKit?

‘Crypto’ for ‘Cryptography’: How Justified Is the Exuberance Around Apple’s Developer CryptoKit?

As Apple unveils its new cryptographic framework, experts weigh in on its relevance to the cryptocurrency industry.

Yannick Sierra, security engineering and architecture manager for Apple, opened up the cryptography session at the 2019 Apple Worldwide Developers Conference and presented the CryptoKit with these words:

Welcome to the bitcoin session! (Laughter in the room). Kidding — welcome to Cryptography and Your Apps session!

This opening quote ended up being the only reference to cryptocurrencies or blockchain throughout the entire presentation of CryptoKit — Apple’s new framework for app developers designed to simplify building security-enhancing cryptographic functionality. Sierra’s joke was likely in recognition of how eagerly the crypto community anticipated the event, as well as the launch of the new toolkit in general.

Despite the heightened expectations that many cryptocurrency enthusiasts harbored, the presentation itself was hardly a ringing announcement of Apple’s newfound openness to blockchain. It turned out to be what it was always meant to be: a hands-on rundown of the new developer tool — with use cases, implementation tips and chunks of code on the slides. Still, what can the crypto industry make of this new release, and does it have anything to do with Apple’s stance on cryptocurrencies?

Great expectations

In the electrified air of the allegedly unfolding blockchain arms race between the world’s major tech powerhouses, cryptocurrency aficionados are hanging on every word these companies say that could be interpreted as endorsement of blockchain technology and its applications. With the 2019 Worldwide Developers Conference underway, vigilant inhabitants of crypto Twitter spotted an unannounced addition to SF Symbols, Apple’s native icon set. Among 1,500 configurable symbols, developers can now leverage four different versions of the bitcoin icon:

Needless to say, the move has been interpreted as an instance of mainstream validation, which followed a similar symbol-ic step by Microsoft. And then, crypto media went abuzz over yet another promising development, as it became known that Apple is poised to present a set of cryptographic developer tools.

For a wishful eye, there was little doubt that all the recent tidbits were pieces of the same puzzle: The company is ready to embrace crypto! After years of contentious relationships, marked by two occasions of Coinbase being dropped from App Store and an effective ban on mining on Apple devices, even small steps were seen as welcomed news.

Bullish comments on CryptoKit’s significance for the cryptocurrency space began to surface. Alejandro Machado, co-founder of Open Money Initiative, told The Block that cryptocurrency developers will capitalize on the new feature that CryptoKit offers: the capacity to leverage iPhone’s secure enclave — a hardware pocket disconnected from the processor — to reach the level of security comparable to that of hardware wallets. TrustWallet founder Viktor Radchenko concurred in a widely circulated tweet:

Forbes’ Billy Bambrough summarized the enthusiastic vibe by calling CryptoKit’s rollout “Apple’s first carefully measured steps into bitcoin and crypto.”

“Duct tape solution”

As it happens, not everyone was immediately ready to hop on the bandwagon. Blockchain developer Ronald Mannak countered the growing bullish sentiment with a series of tweets, deconstructing what CryptoKit is and what it is not. Mannak argued that the new tool is about cryptography, not cryptocurrency, and as such, it has nothing to do with Apple’s stance on crypto and blockchain.

With some improved functionality, CryptoKit is good news for developers but not “the game changer” for the broader crypto space, as compatibility of its affordances with Ethereum and other blockchains remains limited.

Blockchain video blogger Ivan Liljeqvist (Ivan on Tech) projected the same narrative when he spent the first few minutes of his recent stream dwelling on the difference between “cryptography” and “cryptocurrency” and suggesting that “hodlers” should not get overly excited about everything that has “crypto” in it.

He contended that CryptoKit doesn’t look like “how most cryptocurrencies are laid out today,” and it is “not designed for crypto, not having crypto use cases in mind,” citing potential issues with key retrieval and backup from the secure enclave. However, he admitted that one could still build a cryptocurrency on CryptoKit, although it would require a “duct tape solution.”

The basics of what we have

Which of these two perspectives better reflects reality? To answer this question, having a cold-eyed look at CryptoKit and the context of its emergence wouldn’t go amiss.

Apple CryptoKit is a framework that comes with the iOS 13 update. It is built on top of CoreCrypto — Apple’s native cryptographic library. Previously, iOS developers who wished to implement cryptographic operations had to rely on the library called Common Crypto, written in the language Objective-C. As much of the software development on iOS these days occurs in a different language, Swift, this discrepancy proved inconvenient: Unable to use the library directly in Swift, programmers had to spend time on writing wrapper frameworks to make use of it.

CryptoKit, written in Swift, takes care of the issue. It will allow a hassle-free implementation of cryptographic operations such as using public-key cryptography to create and evaluate digital signatures, perform key exchange and use generated symmetric keys to authenticate and encrypt messages. As per Apple’s documentation, the new framework “automatically handles tasks that make your app more secure.”

At the “Cryptography and Your Apps” session, Apple engineers presented major types of prospective use cases: protecting data on a device, protecting credentials and keys, sharing data across devices and users, securing network connections, and verifying remote parties. Sounds like a great privacy-enhancing tool for smartphone users — but where are cryptocurrencies in this picture?

For one, there is potential room for wallet functionality, as many blockchain experts already observed. Sergey Bolshedvorsky, senior iOS developer with Voxpopme, explained:

“The new framework will provide easy-to-use and efficient options for hashing, key generation, key exchange and encryption for developers. All these operations are essential for building cryptocurrency wallets. […] CryptoKit allows to store private keys in the secure enclave which will hugely increase the protection of these keys and allow for secure public-key cryptography. Current documentation suggests that developers will not have direct access to private keys, therefore these are going to be securely protected and stored on a device.”

At the same time, Bolshedvorsky admits, the tool is not perfectly cut out for cryptocurrency-related applications beyond wallets, yet offers a wide array of uses beyond crypto:

“The current implementation of CryptoKit does not support secp2561k1 curve used by Ethereum and other blockchains, therefore it has a limited applicability for cryptocurrency applications at the moment. Support for these algorithms can be added in future updates, but it is not clear when it will happen. CryptoKit brings easy-to-use cryptography to all applications and it does not limit itself to crypto-related applications.”

Founder and CEO of Zerocracy, the creator of cryptocurrency zold, echoes this idea but points to some of CryptoKit’s less obvious implications for the crypto space. Yegor Bugayenko said:  

“Despite the expected market reaction that connected CryptoKit with blockchain and bitcoin, it has nothing to do specifically with those cryptocurrencies. CryptoKit will simplify data encryption and decryption operations, which are used in many other areas, including backups, secure emailing and messages, password generation, and many others. However, natively implemented data encryption algorithms will definitely boost the development of mobile nodes for new lightweight and non-PoW cryptocurrencies, providing millions of iPhone and iPad users with mobile access to microtransactions in the future.”

Industry reaction

Overall, blockchain experts outside of the developer community view CryptoKit’s arrival as welcomed news. While some consider it a manifestation of Apple’s long-anticipated turn toward crypto, others celebrate increased data security and privacy that the new tool is expected to bring about.

Dave Hodgson, director and co-founder of NEM Ventures, the venture capital and investments arm of the NEM blockchain ecosystem, believes that CryptoKit will add to the momentum of mainstream adoption:

“The latest move by Apple is further evidence that blockchain is gaining more mainstream adoption, and it follows a similar release by Samsung and other key players in the space. CryptoKit will allow developers to focus on building a greater user experience without having to divert resources to highly technical areas. An analogy would be GPS on smart phones – allowing Uber to focus on its Consumer app. If you couple CryptoKit with the Apple Sign In announcement, several interesting use cases present themselves and we hope to see other vendors offering similar tools for Android and Windows in due time.”

Matt Branton, chief technology officer of a stablecoin project called Neutral, is largely on board with this optimistic view:

“The increasing interest in blockchain technology and cryptocurrencies among large enterprises signals wider mainstream adoption, in which traditional and emerging industries will continue to overlap. Apple’s plans to unveil the new tool, CryptoKit, which will feature in iOS 13, reveals a promising mission from a traditional tech giant to support growing consumer demand for higher security standards through cryptography. This trend of consumers striving for higher security standards has extended to the digital asset realm, with more and more market participants demanding higher levels of stability and reliability.”

Mateusz Tilewski, co-founder and CTO of blockchain network company Concordium Group, prefers to think of the new cryptographic developer package as a response to the need for higher-quality cryptography in consumer-oriented apps:

“The majority of hacks can be attributed to faulty cryptography design and implementations, so access to quality crypto-utilities is directly correlated to the security of an app. As one of the biggest companies in the world, it is no surprise to see Apple implement proven and stable standards in their kit.”

Overall, while the community’s initial enthusiasm with regard to CryptoKit may be somewhat overblown, in the long run, however, it should further the cryptocurrency movement’s strategic objectives. Although its capacity right now to usher a tidal wave of mobile hard wallets remains controversial, it is upon the developers to test whether it could be an efficient way to move forward. In addition, wider implementation of cryptographic data security solutions means not just better data protection for consumers, but also potential collateral systemic benefits for crypto, including but not limited to the potential rise of mobile-based cryptocurrency nodes.

Apple to Unveil ‘CryptoKit’ Cryptographic Developer Package at Upcoming Conference

Apple to Unveil ‘CryptoKit’ Cryptographic Developer Package at Upcoming Conference

The tech giant is eyeing making its apps more cryptographically secure at the behest of developers.

Apple will target cryptographic developer tools at this year’s Worldwide Developers Conference (WWDC) 2019, the company revealed in the event program for June 5.

During a session scheduled for Wednesday at the ongoing event, titled “Cryptography and your Apps,” Apple will unveil a new tool dubbed “CryptoKit,” which will debut as an update in iOS 13.

CryptoKit will focus primarily on developers, allowing them to build in more security functionality for apps with better support.

“System frameworks encrypt both data at rest and data in transit in a transparent way for you. This functionality is available by simply setting an attribute. However you may want to do more to protect your users’ data,” the event description reads. It continues:

“CryptoKit is a new Swift framework that makes it easier and safer than ever to perform cryptographic operations, whether you simply need to compute a hash or are implementing a more advanced authentication protocol.”

The ongoing WWDC comes as social media users keep an increasing eye out for any hint Apple is changing its somewhat hands-off approach to the cryptocurrency industry itself.

Small moves, such as in-app SF symbols — those compatible with Apple’s San Francisco font — now including a bitcoin (BTC) logo, did not go unnoticed by commentators this week.

Last month, meanwhile, cryptocurrency wallet Spend integrated Apple Pay functionality, allowing users to fund contactless mobile payments with any one of around 20 cryptocurrencies.

Apple co-founder Steve Wozniak himself started a dedicated blockchain VC fund last year.