What Is Blockchain?

All of a sudden, blockchain is everywhere.

The technology, which was invented in 2008 to power Bitcoin when it launched a year later, is being used for everything from copyright protection to sexual consent (yes, really).Considering the daily churn of news around blockchain, not to mention the skyrocketing value of Bitcoin and other cryptocurrencies that rely on the technology, you may be wondering what the hell blockchain actually is. It’s actually a pretty simple concept, though things quickly get more complicated the harder you look. With that in mind, here are a few different ways to wrap your head around blockchain, from straightforward definitions to far-reaching metaphors.

How Does Blockchain Work?

To start, here’s the simplest explanation with no metaphors or hyperbole. In the language of cryptocurrency, a block is a record of new transactions (that could mean the location of cryptocurrency, or medical data, or even voting records). Once each block is completed it’s added to the chain, creating a chain of blocks: a blockchain. Because cryptocurrencies are encrypted, processing any transactions means solving complicated math problems (and these problems become more difficult over time as the blockchain grows). People who solve these equations are rewarded with cryptocurrency in a process called “mining.”

If you’ve always wanted to own some cryptocurrency, a new app might be a good way to get your hands.f you own any cryptocurrency, what you really have is the private key (basically just a long password) to its address on the blockchain. With this key you can withdraw currency to spend, but if you lose the key there’s no way to get your money back. Each account also has a public key, which lets other people send cryptocurrency to your account. Information on the blockchain is also publicly available. It’s decentralized, meaning it doesn’t rely on a single computer or server to function. So any transactions are instantly visible to everyone. That brings us to our first metaphor: the public ledger.

Blockchain Is Like a Public Ledger

If you send Bitcoin (or some other cryptocurrency) to a friend, or sell it, that information is publicly available on the blockchain. Other people may not know your identity, but they know exactly how much value has been transferred from one person to another. Many people see blockchain as an alternative to traditional banking. Instead of needing a bank or some other institution to verify the transfer of money, you can use blockchain and eliminate the middle man.

“The Internet of Value”

Building off the idea of a public ledger, another popular way to describe blockchain is as the internet of value. The idea is pretty simple: the internet made it possible to freely distribute data online, blockchain does the same thing for money. Instead of relying on newspapers, television and radio (which are mainly controlled by big corporations), the internet gives everyone a voice—for better or worse. Blockchain and cryptocurrency make it just as easy to transfer money across the world by bypassing traditional middlemen like banks and even governments.So you’re ready to buy some cryptocurrency. Maybe you’ve been reading up on blockchain technology…

Blockchain Is Like Google Docs

Here’s a clever metaphor for blockchain from William Mougayar, the author of The Business Blockchain: blockchain is like Google Docs. Before Google Docs, if you wanted to collaborate on a piece of writing with someone online you had to create a Microsoft Word document, send it to them, and then ask them to edit it. Then you had to wait until they made those changes, saved the document, and sent it back to you.

Google Docs fixed that by making it possible for multiple people to view and edit a document at the same time. However, most databases today still work like Microsoft Word: only one person can make changes at a time, locking everyone else out until their done. Blockchain fixes that by instantly updating any changes for everyone to see. For banking, that means that any money transfers are simultaneously verified on both ends. Blockchain could also be used in the legal business or architecture planning— really any business where people need to collaborate on documents.

Blockchain Is Like a Row of Safes

Here’s another useful explanation from online forum Bitcoin Talk. This one does a really good job of explaining how public and private

keys work:

Imagine there are a bunch of safes lined up in a giant room somewhere. Each safe has a number on it identifying it, and each safe has a slot that allows people to drop money into it. The safes are all made of bulletproof glass, so anybody can see how much is in any given safe, and anybody can put money in any safe. When you open a bitcoin account, you are given an empty safe and the key to that safe. You take note of which number is on your safe, and when somebody wants to send you money, you tell them which safe is yours, and they can go drop money in the slot.

After rising from under $1,000 to almost $20,000 in the past year, Bitcoin crashed spectacularly…

Blockchain Is Like DNA

Finally, this one, from Robin Chauhan on Medium, is a little far out, but I like it. Blockchain is a record of transactions, spreading across the internet as more people use cryptocurrencies. Similarly, DNA is a record of genetic transactions and mutations that spread as life expanded across the earth. Both become more complicated over time as our DNA evolves and new blocks are added to the blockchain.

Each blockchain (Bitcoin, Ether, Ripple) is like as a distinct species (human, chimpanzee, etc.). A blockchain can also be forked (like with Bitcoin Cash) to create a competing currency in the same way that two distinct species can share common ancestor. Of course, changes to DNA don’t happen easily—scientists believe it takes about a million years for a genetic mutation to catch on—and building a blockchain isn’t easy, either. The process of evolution and natural selection is a little bit like mining, a complicated series of steps that creates something incredible.

Chuck Reynolds

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New Debit Card Helps to Unlock Your Digital Currency

New Debit Card Helps to Unlock
Your Digital Currency

The common question you hear from any doubter of digital currencies

and their future in our world is “what is the use case?” Often, people look at Bitcoin and see its shortcomings as a medium of transfer, and use that as their justification for being short digital currencies. Spending Bitcoin or any other digital currency is not currently all that easy. It takes time to convert back into fiat currency, and there is often a large fee. A Singapore-based company Paycent aims to make it easier for buyers and sellers to use their digital currency. Right now they are in the process of releasing the integrated debit card which gives customers the capability to unlock their funds instantly.

Bridging the gap between fiat and digital currencies

The overall goal of the company is to make it possible for mobile and cashless payments to be accepted anywhere. Blockchain is the underlying technology that enables this advancement, and the team has worked hard to bridge the gap between fiat and digital currencies. The new Paycent integrated debit card is the key to bringing digital currencies into our day-to-day life. It has no yearly maintenance fees if the card is active and in use. You don’t need to hold a PYN token to get it. A user will pay only one time fees for card activation and delivery with any digital currency.

Pre-registration for the debit card has started on Jan. 15, and only 20,000 cards will be delivered in this first batch. The selling point for many of the early users of this card will be the low fee of 1.5 percent, paid in PYN tokens, which is much superior to the current transaction fees on most digital currencies. The hybrid wallet along with the debit card is planned to be live in the first week of March and it is currently available for registration on the Paycent website. Once operational, the card will work at more than 36 mln points in over 200 countries. Users will be able to convert any digital currency to fiat in real time basis and can use it via Paycent card at online and offline stores and cash withdrawal at ATMs globally.

More money and better transparency

Paycent has set themselves apart in a few ways. One is the manner in which they are conducting their ICO. Rather than releasing all of their tokens at once, the team at Paycent decided to release them in eight phases. The company says, there are two major benefits to this method. First, it helps the protocol by proving the concept along the way, which would then result in more money being earned. It also increases transparency and aligns incentives within the network better. Users are motivated to buy earlier by giving bonus Paycent tokens (PYN) of varying amounts to each phase.

The ICO commenced in November and has proven to be a success. Phase one of the ICO was successful, with 80 percent of tokens distributed to over 14,000 different contributors. Paycent’s end goal is to help users worldwide enter the cashless world. The true potential of a company like this comes from the fact it can create an infrastructure that users who have never had access to banks will be able to engage with. In this regard, it is an inspiring goal with limitless market potential. The original mission of Bitcoin was to create a new financial system that wasn’t dependent upon any single authority, and this might finally be possible with Paycent.

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Gaming Blockchain Platform Helps Investors Find Best Project to Invest in

The gaming industry is experiencing a significant boom

as emerging innovations are causing people to spend more time on gaming platforms especially with multiple gamers systems. These developments and attractions are playing important roles in placing the gaming industry as one of the most advanced markets, with revenue exceeding $116 bln in 2017.

The bigger stage is opening for the industry with the popularity of decentralized technologies. One of the first who saw the opportunity are the creators of Game Machine.The project can be described as a global open platform where gamers, investors and developers can work together, complement each other and help the whole industry to grow faster. While developing the project team considered all the parties. For gamers, they offer in-game items for their favorite titles. As for the developers, the system will provide them an opportunity to focus on the segments of their target audience, raise funds for products and start an ICO. Also, the valuable project search for investors was simplified. Briefly summarizing, Game Machine unites all the participants of the market.

Analytics for investors

Focusing on the investment opportunities within the industry, a new project Game Machine implements Blockchain technology through its Proof-of-Authority (or Proof-of-Gamer) protocol. One of the best advantages for investors is that Game Machine token holders will be able to sell their tokens to gamers and developers for a better price. They also will get a chance to choose only high-quality products to invest as they can see how many users are really interested in the projects which are located on the crowdfunding platform.

Other benefits that accrue to investors within the project includes the opportunity of being invited to the special club with exclusive big discounts and sales for the majority of crowd sales from crowdfunding platform. Top-tier investors will be able to get a part of all tokens, released by every project. Game Machine already boasts of a working product with more than 60,000 registrations, having more than 40,000 in-game items withdrawn and over 500 mln GMC tokens mined. Hence the release of the Open Beta version which was being focused upon by the Game Machine team for several months. The platform consists of a miner and a store of items for popular games such as CS:GO and Dota 2. Gamers all over the world are showing great interest.

App release and token sale

Game Machine team is focused on releasing its first version of the app for advertisers and also for investors. The mobile version of Game Machine Client for Android is already out and the iOS version is in development now and is scheduled for launch in March 2018. Further, we will see the team set up a product for exchanging tokens and also the creation of an API for the third party resources for the platform. As you see, the Game Machine team is planning a serious work during this year. Also, the project is looking for the developers to join the crowdfunding platform and already has some agreements.

In its currently active token sale which runs until Jan. 31 2018. After the end of the tokensale, Game Machine is going to release its tokens on three grand exchanges. On this very moment project has raised $1.5 mln. The main aim of the team is to take a big segment in the growing game industry market and to unite all the participants.

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Tom Lee Says BTC Will Hit $25,000 in 2018, Advises âAggressive’ Buying At Market Low

Tom Lee Says BTC Will Hit $25,000 in 2018, Advises ‘Aggressive’ Buying At Market Low

Co-founder and Fundstat strategist Tom Lee predicted

that Bitcoin (BTC) will hit $25,000 by the end of this year in an interview with CNBC today, Jan. 18. Lee had previously forecasted that BTC would only reach this mark by 2022. The Wall Street strategist told CNBC today that now by 2022 he sees BTC hitting the $125,000 mark. Lee’s predictions comes after a very volatile week in the crypto market, with BTC hitting below $10,000, dipping even lower than it did during the market crash Dec. 22. Just days before the December crash, Bitcoin had hit an all-time high over $20,000. Lee predicts that $9,000, or just below the lows seen this week, will be the price floor for BTC this year. He sees another market dip as an opportunity

for investors:

"We expect bitcoin's major low to be $9,000, and we would be aggressive buyers around that level […] We view this $9,000 as the biggest buying opportunity in 2018."

Lee also offered predictions for several altcoins, forecasting that Ethereum and Ethereum Classic would see about 90 percent growth by the end of the year, and NEO 50 percent. Today, the crypto market began its bounce back, with BTC up almost 15 percent and the top 20 altcoins up as much as 70 percent in the 24 hours to press time.

Bitcoin Backing Firms Feel

the Crypto Crash Pinch

With Bitcoin shedding 50 percent of its value in little under a month,

those firms who vocally rode the wave on the up are now feeling the terrify drop in terms of loss of their own market value. Companies such as Overstock, which has some of its fortunes locked up in the digital currency, as well as Square Payments, which announced plans to allow for some Bitcoin buying and selling, have been hit hard by this crash.

Taking a beating

While the numbers being tracked by these Bitcoin-backing firms are nothing compared to the actual losses being suffered by the cryptocurrencies, they are directly correlated. Square showed a loss of five percent or $90 mln, this week as the company which is led by Twitter’s CEO Jack Dorsey ended with a value of $15.1 bln. Overstock, a longtime supporter of Bitcoin going back to 2014, fell 11 percent ending with a value of $1.8 bln thanks to the roughly $200 mln loss. This latest drop in the crypto market has been put down to the uncertainty emanating from Korea with their apparent bank of cryptocurrencies on the cards. This pressure from regulators also adds teeth to the fears in dealing with cryptocurrencies in major firms.

Renaming regrets

There are also instances where companies who have tried to jump on the Bitcoin and Blockchain bandwagon have found that the wagon is currently in the shop for repairs. A number of firms have changed their focus, tact or simply their name, to profit from the hype and mania around cryptocurrencies. However, the other, ugly, side to this ecosystem is the violent volatility that needs to be stomached. Kodak, perhaps better known for their cameras, fell eight percent. The company has announced plans to offer a cryptocurrency known as KodakCoin at the end of the month, initially sending shares up 60 percent on the day of the announcement. Shares of Riot Blockchain, once a biotech firm dubbed Bioptix, shed 17 percent Tuesday, even shares of Long Blockchain, once Long Island Iced Tea, shed two percent.

Lessons up for grabs

While the future, as it always is, is uncertain for the crypto ecosystem, there are lessons to be learned in this latest Bitcoin ‘death.’ Bitcoin has been dead and buried countless times as its volatile nature is too much for some to take, sending them fleeing. However, it has shown stronger and stronger resistance and ability to bounce back over the years and the crashes. Something that companies that are facing unprecedented dips will need to be aware of. Bitcoin believer Max Keiser explains these movements in a graph he tweeted.. This pattern will repeat all the way to Bitcoin $100,000 and beyond..

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Cryptocurrencies Are Doomed to Fail, But There’s Money to be Made, Says an Investor Officer

The traditional diversified portfolio of investments

will have a host of assets in varying risk brackets, but for a traditional investment, officer cryptocurrencies could seem too speculative to be part of any portfolio with a wealth preservation focus. The caveat is that while not all cryptocurrencies are guaranteed to stick around forever, there are still profits to be made by a savvy investor that chooses a long term winner early on.

Money to be made

An investment officer from Credo Wealth, Deon Gouws, is personally interested in digital currencies, but as chief investment officer for a traditional financial institution, is understandably nervous.

He says:

"Most cryptocurrencies we see launching today are likely to fail, but there’s still a lot of money to be made if you can identify the long-term winners successfully and early.”

Mike Novogratz, a well-known investor who has been bullish on Bitcoin for some time now, has made statements indicating agreement. He has called the asset a bubble, but one where there is money to be made.

Novogratz said:

“This is going to be the largest bubble of our lifetimes. Prices are going to get way ahead of where they should be. You can make a whole lot of money on the way up, and we plan on it.”

Technology over profiteering

As the cryptocurrency space has evolved, prices have risen astronomically with the influx of interest from the mainstream market. Those who have joined the space in recent times have seen the likes of Bitcoin build to as high as $20,000. However, those who have joined this space in their droves have clearly done for the profiteering that has taken place, and the promise of more to come. This then means that there is more of a diluted core of users who are in it to see the technology thrive and flourish.

In turn, this not only adds to the speculative nature of the market but also to the bubble-nature that Novogratz refers to. The entire crypto space may not be as prone to a big collapse, or a catastrophic failure like some flimsy ICOs, but there are still concerns for those looking for pure profit.

Bubble territory

The real issue in the market being flooded with people in it to make a quick buck is that the potentially revolutionary technology can be pushed towards bubble technology. It is not the product that is prone to being in a bubble. It is the way in which it is used or perceived that leads to bubbles being formed and popped. The dot-com bubble has shown a lot of similarities to Bitcoin’s rapid growth, but that does not mean dot-com businesses or digital businesses, are always going to be bubbles. And the same applies to Bitcoin.

In the dot-com boom, people were entering the market to make money, and they were throwing money at anything with .com on the end. It is happening today too, with Bitcoin and Blockchain, but that does not mean a bubble is a definite. If people continue to flood the cryptocurrency market intent on only making money off it, rather than appreciating it as a new wave of technology, then Gouws’ opinion may be spot on. People will enter have a direct say in which way something like this moves, with their speculative investing. There needs to be a concerted push to appreciate the technology, and adopt it for mainstream uses if Bitcoin, and other cryptocurrencies, are to be a long term success.

Chuck Reynolds

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US Treasury Secretary Addresses Anonymity, Sanctions And Digital Currencies

US Treasury Secretary Addresses Anonymity, Sanctions And Digital Currencies

The US Secretary of the Treasury, Steven Mnuchin,

made a number of statements regarding the international use of digital currencies at a meeting of the Economic Club of Washington on Friday. The Secretary expressed his concern that Bitcoin wallets could potentially become the modern equivalent of the anonymous Swiss bank account. He intends to work with the G20 nations to offer US tracking abilities in order to prevent such misuse from occurring.

He said:

“If you have a wallet to own Bitcoins, that company has the same obligation as a bank to know [you]. We can track those activities. The rest of the world doesn’t have that, so one of the things we will be working very closely with the G-20 is making sure that this doesn’t become the Swiss bank account.”

Mnuchin doesn’t seem to understand that not all wallets are hosted by “companies.”

Industry opinion

Cryptocurrency industry experts, however, aren’t so thrilled about the idea of more regulations. For example, Sergei Sevriugin, CEO and Founder of risk-sharing platform REGA,

told Cointelegraph:

“I think the regulation already exists for cryptocurrency but, regulation by the community not central authorities, which is the best type of regulation that can ever exist. Centralized regulation will kill the idea of crypto currencies; and, without any control from the community, this type of regulation will lead to several problems, including corruption. We can all remember the last crisis, including the mortgage system collapse in 2008, was under full control and regulation. To put cryptocurrency under full control, the authorities must first put the Internet under control.”

Skirting sanctions

Mnuchin also addressed the potential that countries may use digital currencies to skirt existing financial sanctions. He expressed a belief that there’s little risk of such activities, saying that he is ‘not at all’ worried that countries such as Russia and Venezuela would be able to function in that way.

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Blockchain in Logistics Industry Will Improve Transparency, Enhance Process Accountability

Communication flow and logistics is an essential aspect of human existence

which forms the backbone of the transfer of goods, services and value. As international trade and logistics continues to expand, more efficient methods are being developed to enable effective service delivery and value transfer. However, Blockchain technology is bringing another dimension to disrupt the logistics industry in areas such as transparency and efficient tracking.

A globally significant industry

John Monarch, CEO at Shipchain, notes that the logistics sector employs the most people in the world. He explains that as this sector expanded over millennia, it has required innovation to scale and sustain practicality for the growing human population. This is happening again at the time of writing, with the fourth industrial revolution.

Monarch tells Cointelegraph:

“Connected devices revolving around the Internet of Everything (IoE) need a higher level of security. Blockchain technology is a matchless solution in this regard because it provides the best protection through distributed ledgers, advanced encryption, smart-contracts and reduced intermediaries. As a result, this will tackle corruption, ransomware, theft, premium-fees and tracking issues.”

He concludes that once Blockchain networks begin taking their first steps on a mass-market level, they will save the international trade industry at least $50 billion per year. And upon maturity, Blockchain technology could save the logistics industry a whopping $500 billion annually.

The actual role of Blockchain

Blockchain professional Aleksandar Matanovic tells Cointelegraph that Blockchain technology will indeed work as a tool to improve processes by bringing inherent properties into the industry.

Matanovic says:

“As in many other industries, I don't see Blockchain as a tool to increase efficiency, there are much more efficient systems than Blockchain-based ones. I see it as a way to make systems more transparent, more robust and less dependent on intermediaries.”

The importance of effective tracking

The COO of BitLand, Christopher Bates, explains that one of the main issues with chain of custody is knowing when property changes ownership or custodianship. Bates uses a car’s history

as an example:

“It is pretty important to know if a car has been in a major accident and has frame/structural damage, he says. “If there was an immutable accessible record that kept track of the car history, there would be no way a car salesman could sell a car that had been extremely damaged.”

Bates also explains that ownership of land has many problems affecting it around the world. One of the most consistent problems is when a parcel of land is double or triple sold, meaning a person will sell land to multiple people with only one of the sales (if any) actually being legitimate. In some places, land titles are kept on paper or are tracked by only a single individual. In these cases, it’s often impossible to truly know the proper chain of custody, and individuals manipulate ownership records for personal gain.

Blockchain will enable accountability

Given that shipping anything is a sequence of custody handovers, having an immutable record of chain of custody transaction makes it impossible to lose track of who is responsible for a piece of property during each handover. Existing courier services often track packages along their route, but such methods are imperfect.

Bates says:

“The issue therein is that since they are mutable, shipment records can be hidden or erased completely to the detriment of the people at large. Governments are able to hide their black budget spending by erasing shipping records or preventing records from being issued at all. On the one hand, governments will argue this is for national security, but on the other hand, the taxpayers that are sponsoring these budgets deserve transparency in spending.”

Blockchain technology combines chain of custody control with the transparency of immutable record-keeping. This creates an ecosystem that deters malicious actors, as they will eventually become known due to system transparency. Bates concludes by noting that anyone who claims to be in the decentralization movement should be extremely happy any time a government decides to implement Blockchain tech of any sort. It means that government is moving towards transparency whether they know it or not.

Chuck Reynolds

Marketing Dept
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Kraken Down Nearly 48 Hours, Gives Engineers Time to âRest’ Before Resuming Service

Kraken Down Nearly 48 Hours, Gives Engineers Time to ‘Rest' Before Resuming Service

Cryptocurrency exchange Kraken is still down nearly 48 hours

after the site initiated a system upgrade. Kraken engineers had estimated the downtime would only be two hours. Much like Gilligan’s three-hour cruise that went horribly wrong, Kraken users all over the Internet are raging over the downtime and asking difficult questions.

Beset by problems

Nearly all digital currency exchanges have faced significant growing pains in the last year, as the interest in cryptocurrencies has grown exponentially. Coinbase and Bitstamp have been overwhelmed with user traffic, leading to delays. Bitfinex has been hit by DDOS attacks and recently had to stop registration for new users because of overwhelming demand. Binance and Bittrex have also halted new user signups.

Still, Kraken has arguably suffered the most problems of all major exchanges. Users, including myself, have experienced multiple connection errors and extraordinary difficulties placing and cancelling orders. It’s sometimes necessary to refresh Kraken’s page 10-15 times before being able to execute an action. Numerous users have complained that Kraken posted their orders multiple times (after telling them their order failed initially), in some cases costing them thousands of dollars.

Upgrade to fix it all?

While many have encouraged users of Kraken to go elsewhere, it’s not always that easy. US users are particularly limited in the exchanges they can use, particularly with Bitfinex ditching them earlier last year. For certain altcoins, US traders may only be able to use Kraken to trade them against fiat. Likewise, Kraken is one of the only markets where US residents can long or short Bitcoin. Such users were delighted when, on December 15, Kraken announced a major upgrade to fix the site’s

usability problems:

“Kraken.com performance is extremely degraded and unreliable. Clients can expect severe latency and difficulty interacting with all web and API services. Requests will frequently timeout and fail. At the moment, the only solution is to wait and try again later.

Next week we will be rolling out a major systems upgrade which should resolve these scaling and load issues. The upgrade is long overdue and has been substantially delayed by the diversion of resources toward the protracted fire fighting effort required to deal with the last several months of unrelenting growth.”

Two hours, possibly longer

The upgrade scheduled for the third week of December was rescheduled twice, before finally commencing January 10 at 9 PM PST. The status page Kraken set up for the
upgrade stated:

“We are performing a system upgrade on Thursday, January 11 at approximately 5:00 UTC (Wednesday January 10 at 9 pm PT). Kraken services will be offline for about 2 hours during the upgrade, possibly longer.”

Over the next two days, Kraken has continued to update the status page, complaining of late starts and the upgrade progressing more slowly than expected. Finally, they announced that the upgrade was in its final stages, before then posting that “a number of issues” came up in their “final testing.” Kraken is not clear on why this “final testing” was apparently done on production servers. About one day after the two hour upgrade began,

Kraken posted:

“We are making progress on the few remaining issues but don't have a definite launch time yet. We intend to cancel stale (and possibly all) orders and pause liquidations upon resuming service. More details to follow soon. Thank you for your patience.”

It’s unclear exactly how this will work. The price of Bitcoin and altcoins has of course changed over the last two days, and nobody is quite sure how Kraken will keep people from losing money on long and short positions that might have been closed had the exchange been working properly. Most astonishing of all, about 36 hours after the upgrade began, Kraken apparently sent their engineers home to take a nap!

Kraken writes:

“We are close but rather than launch immediately ahead of the team passing out, we will push off a bit to get some rest and be able to better monitor systems and react to problems following launch. Unfortunately, this means several more hours of delay.”

At press time, Kraken is still down with no ETA for resumption of trading, and the exchange has not responded to our requests for comment.

Chuck Reynolds

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Florida Bill Would Legally Recognize Blockchain Signatures, Smart Contracts

Florida Bill Would Legally Recognize Blockchain Signatures, Smart Contracts

A lawmaker in Florida has introduced a bill

that, if passed, would create a legal foundation for blockchain data and smart contracts in the U.S. state. House Bill 1357 introduces multiple stipulations that blockchain ledgers and smart contracts be treated as legally-binding methods of data storage – provided that such measures do not break any pre-existing laws or regulations.

Notably, the bill states that a "record or contract that is secured through blockchain technology is in an electronic form and is an electronic record," and confirms that a signature recorded through a blockchain also qualifies as a valid electronic signature. As a result of these qualifications, the bill outlines that, if a person uses a blockchain to secure interstate or foreign commercial ventures, it would not impact ownership rights. In other words, if someone used a blockchain ledger to store information, the bill would legally recognize that person's rights to that information.

Similarly, the bill states:

"A contract may not be denied legal effect or enforceability solely because: 1. An electronic record was used in the formation of the contract [and] 2. The contract contains a smart contract term."

If signed into law, the bill would make Florida the latest state to recognize blockchain records and smart contracts. Last year, Arizona passed a similar measure, with identical notes on confirming blockchain records as electronic records, as well as giving smart contracts legal force. A slightly different bill in Vermont, when passed in 2016, allowed for the use of blockchain-based data as evidence in court.

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Atomic Action: Will 2018 Be the Year of the Cross-Blockchain Swap?

Atomic Action:
Will 2018 Be the Year of the Cross-Blockchain Swap?

What if there were no exchanges to hack?

As a new generation of crypto users begin to invest in the technology, developers are growing concerned about its infrastructure. They've seen this happen before – new users enter the space attracted by big gains, then suddenly, a catastrophic failure, usually at the very exchanges designed to hold and custody those funds.

But out of adversity, inspiration is taking hold, with high-profile coders turning their focus to atomic swaps, a concept that claims to allow for the direct, peer-to-peer transfer of cryptocurrencies across different blockchains. In the place of the vulnerable exchanges we use today, the idea behind atomic swaps is that these large repositories of customer money could be rendered obsolete by code. And seasoned blockchain developers like Alex Bosworth believe this is all too necessary, especially given that users today need to effectively give up custody of their assets if they choose to hold funds on exchanges.

He siad:

"Putting users in control of their own private keys has the best aggregate track record for security despite individual cases of loss. Funds under centralized control on exchanges have led to the most massive security failures we've seen."

Andrew Gazdecki, CEO and co-founder of Altcoin.io, which recently launched a beta wallet for atomic swapping between crypto tokens, describes the problem in similar terms, arguing that users should be empowered to hold their own private keys (the alphanumeric strings that allow users to unlock, access and spend their funds) without relying on others.

"There are literally billions of dollars being held within these digital honeypots, and it's nearly impossible to find the perpetrators," he said. Early examples of atomic swaps technology emerged in various stages in 2017, and while there's disagreement as to the timeline they'll be available to the public, some believe 2018 will be their year. As Jameson Lopp, a BitGo software engineer,

recently tweeted:

"Nearly instant atomic swaps … are coming sooner than everyone thinks. Definitely not a year away, but mere months."

Atomic swaps already?

In some ways, atomic swaps are already here – depending on the kind of atomic swap you're looking to make. For instance, last year saw swaps between different blockchains built on similar code – the cryptocurrencies decred, litecoin and bitcoin – executed. Meanwhile, atomic swaps between cryptocurrency tokens on the same blockchain became more commonplace, with decentralized exchanges such as 0x and, as mentioned above, Altcoin.io, adding instant trades between tokens on ethereum compatible protocols.

Cryptocurrencies running on blockchains with much different codebases, though, must rely on purpose-built tools to facilitate these kinds of transfers today. Toward this goal, a tool for exchanging zcash for bitcoin called ZBXCAT was developed last year. Described by co-developer Jay Graber as the "walkie-talkie of payments," the tool will soon be accompanied by a simplified web interface.

Indeed, atomic swaps "could always be done manually," Graber said. However, because this requires a degree of technical skill, before atomic swaps see mainstream use, easier to use platforms will need to be developed. At the same time, Lightning Labs, a company devoted to promoting bitcoin's Lightning Network, recently conducted its first off-chain atomic swap on its test blockchain. Completed in November, the transaction saw litecoin and bitcoin swapped on an off-chain payment channel.

Off-chain hurdles

Off-chain atomic swaps of this type are highly anticipated since trading would be automatic, not reliant on the processing times of different blockchains, but the technology needed to implement off-chain atomic swaps – things like the Lightning Network and Raiden Network on ethereum – are still under development. Which is why some, like Lightning Labs CEO Elizabeth Stark, are less optimistic about cross-blockchain atomic swaps. Stark recently discounted the hype, writing on a development channel, "Anyone telling people that Lightning swaps will be ready in months doesn't know what they're talking about."

And in interview with CoinDesk, Stark said:

"There's still a good amount of infrastructure to build."

One website, swapready.net, provides a breakdown of how close each cryptocurrency is to supporting cross-chain atomic swap capabilities – and to date, there's very few that can interoperate. Mirroring Stark's sentiments, Philippe Castonguay, developer relations manager at 0x, which offers on-chain atomic swaps of tokens on ethereum, told CoinDesk that developers looking to create atomic swaps between vastly different protocols are faced with "a lot of challenges." The infrastructure needed to interface between bitcoin and ethereum, for example, is still in development, and "to make it even worse, these cross-chain platforms also need to solve some of the main problems other blockchains are trying to solve, such as scalability," Castonguay said.

Still optimistic

Yet, even with a lot a work still to do, many remain assured advances are close. Bosworth, whose work has focused mostly on developing applications for bitcoin's Lightning Network, for one, made his excitement about a new era public, tweeting: "The atomic age is coming, what cannot be swapped will be left behind." And Castonguay, whose work focuses on ethereum, also remains encouraged by the development happening within that ecosystem. Even if swaps between blockchains with different code bases prove cumbersome, he believes the blockchain could yield other solutions given the expansive capabilities of its code.

"Eventually the ethereum blockchain will be able to communicate with other blockchains," he said. "Once this happens, all the different coins from different blockchains will be representable on the ethereum blockchain." For example, if bitcoin and ethereum blockchains can communicate with each other in a trustless way, then users could have an ERC-20 bitcoin on the ethereum blockchain, pegged one to one with bitcoin on the bitcoin blockchain, he posited. Such short-term solutions, he thinks, could help advance the atomic swaps concept overhaul.

Castonguay concluded:

"I do believe it is possible that some blockchains might be able to interact with one another this year, but I think 2019 through 2021 would be a safer bet."

Chuck Reynolds

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