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How SABRE Tech Can Stop Hackers From Splitting Bitcoin Into Two

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If hackers felt love it, they might break up bitcoin in two.

It wouldn’t also be that onerous, in keeping with analysis from 2017. Thanks to insecure generation underpinning the web, any person with the best credentials may exploit the Border Gateway Protocol (BGP) by means of faking their identification and complicated the community into sending floods of knowledge someplace it shouldn’t. “The internet’s biggest security hole,” because it’s been known as, has been used for the whole thing from snooping on government emails to stealing cryptocurrency.

As some distance as splitting bitcoin, the assault is as dangerous because it sounds. If completed effectively, one chew of the community can be totally sliced off from the opposite. No one may keep in touch and ship transactions to people who find themselves part of the “other” community.

That’s the place researchers from the distinguished Swiss college ETH Zurich hope to lend a hand. As described in a new white paper, they’ve invented a relay community known as SABRE that they hope will someday be constructed on best of bitcoin.

With the similar identify because the curved blade commonplace within the Napoleonic technology, SABRE sounds love it can be used to slice bitcoin in part. Instead, it hopes to do the other. Rather, the deliberate community would (metaphorically) wield a saber towards forthcoming attackers, preventing them of their tracks.

Eth Zurich laptop community researcher Maria Apostolaki instructed CoinDesk:

“SABRE is a small relay network whose nodes are strategically located such that they remain connected to each other and connected to as many regular nodes as possible, even in the presence of a AS-level adversary that hijacks traffic.”

This community would “render the partition ineffective,” she mentioned.

When SABRE is used, the chance of a break up is going down, the researchers declare. Without SABRE, it’s conceivable for an ISP to assault and partition bitcoin with just a “small” routing assault. But, in keeping with the researchers’ simulations on a gaggle of 5 nodes, there’s just a 3.1 p.c likelihood likelihood of the attacker may hijack the community and partition it. The likelihood additionally decreases because the selection of nodes will increase.

To be offered at The Network and Distributed System Security Symposium this month, the proposed layer is the results of years of study. Apostolaki has been researching this particular factor since 2016 since “blockchain applications are very common nowadays making research on their routing characteristics very impactful.”

The assault

The assault moves on the root of the web.

Every time you click on a webpage, you’re unknowingly the usage of BGP, an web protocol that is helping get information from Point A to Point B. Say you wish to have to get to CoinDesk.com. Your laptop doesn’t essentially have a right away hyperlink to the server storing that site, saved in, say, New York City.

Rather, millions of nodes make up the web, that are divided into teams known as “autonomous systems” (ASes), every controlled by means of a unmarried entity referred to as an Internet Service Provider (ISP). ISPs then attach firms to the web, akin to Comcast or the like. BGP is helping your request for CoinDesk.com decide which ASes to leap thru to get to get the webpage and pull it up on for your display the quickest. (It seems like so much, however all of this occurs within the blink of an eye fixed.)

The downside is, hackers can trick different nodes the usage of the protocol that they personal positive sources they don’t in point of fact personal to be able to divert web site visitors necessarily anyplace they would like.

That’s why it may be used to access data the attacker isn’t intended with the intention to see – or to thieve cryptocurrency, as hackers have achieved a number of instances prior to now, by means of the usage of BGP to redirect traffic from bitcoin miners to themselves.

ETH Zurich’s researchers say it may well be specifically damaging for bitcoin.

Apostolaki instructed CoinDesk:

“An [AS] level attacker can partition the bitcoin into two disjointed components by first hijacking and then dropping traffic exchanged between them.”

The paper explains that “any” AS-level attacker may isolate part the bitcoin mining energy by means of hijacking simply 100 prefixes.

SABRE to the rescue

But ETH Zurich researchers suppose they may be able to save you the assault with a so-called “relay network.” SABRE is a proposed community that may be controlled by means of one entity, offering bitcoin nodes with an “extra secure channel” for transferring blocks around the community.

This community would include plenty of nodes with IP addresses (an ID quantity that we could different nodes to find and connect with them) which are publicly recognized. That approach, any bitcoin node can connect with them. And a bitcoin node wishes to simply connect with one in all them to make the most of its capacity for holding it attached to different nodes.

So, why can’t the assault simply transfer objectives and idiot the SABRE nodes as an alternative? The researchers suggest just a little hack: They handiest position the SABRE nodes in “cherry-picked” ASes with positive traits that cause them to tougher to hijack.

“So, the [central] idea on their work is that if you run a relay network with nodes on diversely placed /24 announcements, it’s much harder for a route hijacker to disrupt it,” defined long-time Bitcoin Core developer Gregory Maxwell, discussing the speculation within the IRC chat channel “bitcoin wizards.”

The analysis is convincing. Or, a minimum of, reactions from a minimum of one skeptical bitcoin developer had been rosy.

“At least it’s doing something different that makes sense,” persevered Maxwell, who’s steadily important of proposed adjustments that would possibly have unfavorable penalties for the blockchain.

In an electronic mail to CoinDesk, Braiins and bitcoin mining pool Slush Pool CEO Jan Čapek argued that “[SABRE] is an interesting insight into BGP hijacking issues. It solves the bitcoin network partitioning problem and can be applied to other [peer-to-peer] networks, too.”

However, he’s no longer satisfied a “large-scale” assault could be very most likely, in part as a result of “there are many redundant ways” bitcoin nodes are attached already. “Many nodes shape world clusters interconnected by way of VPN channels. We now have Blockstream satellite that gives another approach of broadcasting blocks by way of a satellite tv for pc hyperlink,” he defined.

He hopes the underlying downside – BGP – will even someday be addressed.

That mentioned, Čapek mentioned Slush Pool would feel free to connect with the SABRE community, will have to it get “industry-wide consensus.”

Since it could be straight away useful for mining swimming pools to undertake, it could save you their miners from shedding mining rewards, Apostolaki instructed CoinDesk, she expects to look some adoption quickly:

“Given the practicality of routing attacks I do believe that SABRE will be at least partially deployed.”

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Crypto exchange BTCNEXT seeking Japan license

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BTCNEXT, an Asian based cryptocurrency exchange, earlier this month announced it received notification from the Japan Financial Services Agency (FSA) that it must suspend services for Japanese residents.

As part of Noah Ark Technologies Ltd., BTCNEXT operates with a Virtual Currency Exchange license issued by the Cagayan special economic zone and Freeport Philippines.

The BTCNEXT team says that its legal department is currently working with the FSA in regards to getting a Japanese license and will take necessary steps to ensure full compliance with all FSA requests.

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NEO Price Prediction: Long-term (NEO) Value Forecast – June 2

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  • The long-term outlook is in a bullish trend.
  • The 1.618 in the fibs at $19.17 is the bulls target in the long-term.

NEO/USD Long-term Trend: Bullish

Supply zone: $20.00, $30.00, $40.00
Demand zone: $2.00, $1.00, $0.50

NEO continues in the uptrend in its long-term outlook. The strong pressure on the cryptocurrency by the bulls’ comeback at the 61.8 on 18th May has kept price up with new high each week. $12.59 and $15.04 in the supply area were the highs on 20th and 30th May respectively.

The new week is started on a bullish note with today’s opening candle at $13.72 higher than last week opening price at $11.45, an indication that the bulls are more in the market.

Price is above the two EMAs that are fanned apart which suggest strength in the trend and in this case the uptrend.

The journey to 1.618 of the fib extension with price at $19.17 in the supply area is the bulls target in the long-term as the bullish momentum increase and more bullish candle open and closed above the two EMAS.

The views and opinion as expressed here do not reflect that of BitcoinExchangeGuide.com and do not constitute financial advice. Always do your own research.

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Why Bitcoin’s ‘Culture War’ Matters

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Michael J. Casey is the chairman of CoinDesk’s advisory board and a senior advisor for blockchain research at MIT’s Digital Currency Initiative.


Let’s talk about bitcoin, toxicity and inclusiveness.

(Boy, my Twitter feed is going to have fun over the next few days.)

To start with, let me take a position: I stand with those people, especially women, who’ve lately been calling out maltreatment from members of the bitcoin community and citing rude and abusive behavior as proof of that community’s lack of inclusiveness. These are people who believe in cryptocurrency technology’s potential but feel discouraged to believe that they belong to the community’s dominant white-male subculture. If this technology is to fulfill its global potential, the community associated with it must confront this problem.

But the real point of this column is not to just defend these critics. It’s to debunk one of the more common positions adopted by those who take issue with their complaints, particularly on Twitter. In doing so, I hope to emphasize just how important the concepts of “community” and “culture” are to the healthy development of crypto technology and the ecosystem growing around it.

Hammer culture?

The line that’s most often thrown back at those calling out incivility is that bitcoin is nothing more than a technology, a tool, and that it’s meaningless to attach to it value judgments relating to human behavior. Bitcoin is amoral, apolitical and a-cultural, the argument goes, and like any technology it is used by good and bad people alike.

These pundits, warning of a political correctness-based threat to free speech, will then advise the injured party to take issue directly with the bad actors but refrain from agitating for community-wide change.

A perfect example of the genre came from outspoken lawyer Preston Byrne.

Clever, yes. But it’s extremely unhelpful, because the examples given do not share equivalent terms of reference.

Byrne’s “hammer” refers solely to the steel implement that tradesmen use. By contrast, people complaining about “bitcoin” are clearly using the word in a much wider context than in merely a reference to the code, to the ones and zeros that comprise the bitcoin protocol. They are inherently talking about the wider ecosystem and community gathered around the idea of bitcoin.

So, let’s equalize the terms, shall we? We can turn each of these nouns into a modifier of the word “community.”

While it might sound silly to talk about a “hammer community,” there may well be groups of hammer-obsessed souls who debate questions of design and ease of use at meetups and in chat rooms. If so, I’m going to guess that that community would probably also be predominantly male.

But the real issue is that such a hammer community is going to be far less important to the future design and evolution of hammer technology than bitcoin’s community is to its. I’m no expert, but I don’t see a great deal of change in hammer technology having occurred over the centuries and I’m not sure people expect much in the future. As such, we don’t see much jockeying among users to ensure that proposals for hammer upgrades are implemented and standardized to their preferred design.

By contrast, the open-source technology behind bitcoin is in a constant state of evolution. It is, by definition, under development, which is why we talk about the engineers who work on it as “developers,” not “custodians.” As such, there is a constant battle of interests over who gets to modify the code. Exhibit A: the block-size debate.

Counter-arguing that those who don’t like the process can just fork the code, as the large-blockers did, and set up their own new community, doesn’t cut it for me. Bitcoin is the brand that matters. Any newcomer will struggle to achieve the same network effects. Secession just isn’t viable for anyone who likes its current design but doesn’t like how its future is being defined.

Also, is there a “hammer ecosystem?” Maybe. But beyond producers of nails, and perhaps steel and rubber or wood suppliers, you can hardly call it a complex ecosystem.

Bitcoin, by contrast, which purports to reinvent the global system of money, has attracted an inherently vast array of different technology providers, all of whom have competing interests in how it is designed, managed and marketed to the world. I’m not just talking about businesses applications built on top of it, but also the developers of related encryption, payment channel, smart contract and other vitally important technologies, all of which are themselves in a constant state of flux.

(I’m guessing that the exhibition halls at hammer conventions don’t have quite the same spread of offerings as cryptocurrency events such as Consensus.)

Saying that bitcoin is nothing but a tool, is like saying that music is nothing but a system for ordering different audible tones.

Money = community

When Paul Vigna and I wrote The Age of Cryptocurrency, we spent a lot of time chronicling the emergence of the community that had formed around bitcoin, which we saw as fundamental to its success. It struck us that the notion of a bitcoin community was so prominent — the “c” word was always being bandied about — because bitcoin embodied a profound and sweeping social idea. It offered nothing less than a reinvention of money, a revolution in the entire system for coordinating human value exchange.

Money only works to the extent that there is widespread belief in it, that people buy into its core myth. Money, Felix Martin says, is a social technology, by which he means that its functionality and usability depend far less on the physical qualities of the token that represents it than on the collective agreement among large communities of people that their token captures, represents and communicates transferable value. This is true whether we’re talking about gold, dollar bills, entries in a bank account, or cryptocurrency.

By extension, then, for any form of money to succeed, it must sustain a vibrant, growing community.

Communities = culture

The thing about communities is that they inevitably develop cultures. In self-defining their boundaries of belonging, they develop shared ways of seeing and language — akin to a kind of social protocol – that regulate (in a very unofficial, and quite subconscious way) their members’ behavior.

As they evolve, cultures can become more or less open, more or less inclusive, more or less abrasive in their treatment of outsiders. And inevitably, these cultural features will either encourage or impede the growth of the community.

All this should hardly be a revelation. Anthropology, the study of culture, is a globally widespread and influential field (one that is now appropriately turning its attention to cryptocurrency communities.)

Studies of U.S. culture, from Alexis de Tocqueville down, have rightly pointed to the inclusiveness of the founding fathers’ ideas as a key driver of its economic expansion. In fact, American culture is arguably its most important ingredient for success, a social manifestation of Joseph Nye’s notion of the United States’ “soft power.”

So, yes, bitcoin culture really, really matters. If the compelling ideas behind permissionless, peer-to-peer exchange and censorship-resistant money that attract people of all stripes to it are to retain those people’s interest and grow in influence, the bitcoin community needs to evolve a more inclusive culture.

The only way to do that is to spur the kind of open debates that have always driven the progress of human culture — those which shifted norms and mores to the point that it became unacceptable to own slaves, to spit in public, or to jump a queue.

So, listen up, bitcoin. It’s time to confront your toxicity.

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Holiday Spending up 14.6% as E-Commerce Beats Brick-and-Mortar

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E-commerce sales hit record highs this year as Americans continue to move their holiday shopping online.

According to Mastercard’s SpendingPulse report, online retail grew 18.8% over last year’s holiday season. That’s enough to make online sales a record 14.6% of holiday shoppers total spend, the report says.

Online consumers this year spent 17% more on apparel, 8.8% more on jewelry, 10.7% more on electronics, and 6.9% more at department stores. 

Overall, holiday spending jumped 3.4% compared to 2018.

The strong numbers came in spite of 2019’s unusually short holiday season, commonly defined as the period between Thanksgiving and Christmas. Shoppers had six days fewer than they had in 2018.

Steve Sadove, an advisor for MasterCard, said in a press release that retailers adapted to the shortened season. 

“Due to a later than usual Thanksgiving holiday, we saw retailers offering omnichannel sales earlier in the season, meeting consumers’ demand for the best deals across all channels and devices.”

Interestingly – or ominously – retailers who accepted crypto or managed crypto payments were slow to respond when we asked them how their holiday shopping season went. eGifter, a gift card trading service, noted that it had not yet “crunched the numbers” on holiday sales but that “We saw growth in overall crypto sales,” said Bill Egan, the site’s VP of Marketing.

“We saw more gifting with crypto in 2019, compared to buy-for-self use cases in prior years,” he said.

Payment processor BitPay found the holidays quite inspiring as well.

“We saw twice our daily averages of processed volume leading up to the holiday,” said BitPay’s CMO, Bill Zielke.

It will be interesting to see what kind of statistics surface over the next few seasons as e-commerce becomes king and crypto payments come to the fore.

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The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.

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Crypto Custodians Grapple With Germany’s New Rules

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Crypto firms in Germany are getting ready to exist under a new regime. 

Under a law going into effect Jan. 1 requiring digital asset custodians to be licensed, each company that currently custodies crypto and targets German clients must announce to Germany’s Financial Supervisory Authority (BaFin) its intention to get a license before April 1 and submit an application before Nov. 1.  

A clause allows current crypto custodians to keep serving German customers without being penalized if they declare their intent to apply, but those same companies are waiting on BaFin to release final regulations around the law.

“As long as the legislation is not in place, BaFin is not going to think about how to cope or how to deal with the legislation,” said BaFin press officer Norbert Pieper. The regulator declined further comment and Germany’s Federal Ministry of Finance did not respond to request for comment by press time.

Pieper added: “There is no date foreseeable [yet] by which we’ll be able to communicate the results of our assessment. We will certainly communicate that on our website.” 

While the final regulations haven’t been set yet, the new license requirement may not produce the same kind of exodus of crypto firms that New York saw after the BitLicense requirement, said Miha Grčar, head of business development at Bitstamp.

London-based Bitstamp, one of Europe’s largest crypto exchanges, plans to continue operating in Germany but declined to say whether it would apply for a license, said Grčar. Crypto firms could also use a white-labeled custody service to operate in Germany. 

Because the law is an “updated version of the existing banking regulation,” banks will likely have the most to gain from it, Grčar added. Companies that get the license will be German financial institutions, but not classified as banks.

The law also means that German regulators now see crypto as a “legitimate” industry, he said. 

Ulli Spankowski, chief digital officer and managing director of the crypto custody subsidiary of German stock exchange Boerse Stuttgart, called Blocknox, sees the license as a step forward for “the professionalism of the industry.” The subsidiary has already advised BaFin that it plans to apply.  

“There are other countries that won’t go for a full-fledged license,” he said. “If you want to get traditional, established players from the banking side, you need to give them this environment to feel safe.” 

DLC group is taking advantage of the new regulatory framework by offering consulting services for firms interested in applying, and its own white-labeled crypto custody service. 

Sven Hildebrandt, head of Distributed Ledger Consulting Group, is concerned some exchanges won’t understand the nuances of the new law.

“The law is only in German and no English translation of the law is out there,” he said. “What’s going to happen to exchanges? [Operating without a licence] is actually a felony and not a misdemeanor so that’s jail time.”

Hildebrandt predicts the costs of licensing will be similar to other German financial services licenses where firms will need two managing directors, an established German entity and 125,000 euros of starting capital. He also estimates installation will cost 250,000 to 350,000 euros and recurring yearly costs will be 350,000 euros. 

Switzerland-based Crypto Storage AG, a subsidiary of Crypto Finance AG, is opening a branch in Germany to offer crypto custody to banks and then financial technology startups. 

“Large banking houses will do custody business in the future,” Stijn Vander Straeten, CEO of Crypto Storage AG, said. “They are moving slowly, though. We’ll build it up now for a premium.” 

Berlin-based solarisBank this month opened a subsidiary called solaris Digital Assets to offer crypto custody as a service. So far, the bank has a handful of customers testing the service with more than 40 companies in the pipeline, said Alexis Hamel, managing director of solaris Digital Assets.

In addition to waiting for details from BaFin, crypto firms are also waiting to see if the law can be passported to other European Union states. 

“Germany is definitely at the forefront with the clearer regulation,” Hamel said. “We still need to see how other European countries level up.”

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The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.

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