The Río Negro Lottery will begin the implementation of a blockchain for the “Quiniela Rionegrina” (Río Negro Pool) in 2020. The authorities hope that this will help them build trust among players, third parties and auditors.

It was reported that the authorities of Río Negro, a province of Argentina, will conduct a pilot test with a blockchain for their lottery. This implementation aims to determine the utility of this type of decentralized networks and to seek other forms of application for the rest of the public administration.

This blockchain technology project would be implemented next year and would initially include the “Quiniela Rionegrina” (Río Negro Pool) and winning coupons for more than 100,000 pesos, the Lottery revealed through the press. Although it was not specified when the tests will begin or what type of blockchain will be used, the institution said that the main objective of adopting this technology is to raise people’s confidence about the information generated and issued by the lottery.

The President of the Rio Negro Lottery of Argentina, Luis Ayestarán, explained during the announcement of the project that this organization needs to venture into the digital world since everyone is already there. He added that they will begin to work jointly with Os City to incorporate blockchain technology into the modernization process that has begun in their province, as an element to provide security to the people to whom they must account.

The company in charge of the project is the local startup Os City, whose representative, Lucas Jolías, said that it will work with a blockchain, but not with cryptocurrencies. In other words, it is not about the Lottery accepting bets with Bitcoin, for example, but about the network being used for audits and internal information analysis.

The executive considers that the application of decentralized networks is something positive for Argentina due to the experiences that have been reported in the country regarding the manipulation of public information.

Blockchain Games

It has been observed in the crypto ecosystem that there are multiple user preferences for playing or betting with decentralized applications. As reported by DappRadar and State of the Dapps, most people choose this type of entertainment, with My Crypto Heroes and EOS Dynasty being just two examples.

Other options that exist for those looking to play online are the casinos that work on public blockchains. Some examples are FunFair, Bitcasino.io or sportsbet.io, in the case of sports betting.

This announcement made by the Río Negro Lottery has a precedent, although it is related to cryptocurrencies, in the Zulia Lottery in Venezuela. The organization reported in August 2019 that they would begin receiving bets on Bitcoin and Petro, the state cryptocurrency driven by the government of the oil-producing country.

At that time, the state’s governor, Omar Prieto, said that they would use the Virtualloto.com portal, which would allow the public to bet with cryptocurrencies on the Millionaire Jungle (animal lottery), Triple Zamorano and Triple Zulia games.

A request for comments sent to the representative of Os City, Lucas Jolías, to learn more technical details about the project did not receive a response. Likewise, a reply is expected from Silvio Castro, Secretary for Modernization and Technological Innovation in the province of Río Negro.

By Willmen Blanco

The “oPoW” proposal proposes a new Proof of Work algorithm adapted for optical hardware. The optical Proof of Work (oPoW) promises to increase Bitcoin scalability from 10 to 100 times.

The optical Proof of Work (oPoW), which promises to significantly reduce electricity consumption in Bitcoin mining, already has a litepaper. It was published in early November by developer Michael Dubrovsky, co-founder of the PoWx startup and one of the promoters of the idea.

The document outlines the basis for using optical hardware in cryptocurrency mining, and the characteristics of the optical Proof of Work (oPoW). When launching the proposal, Dubrovsky argued that it is an alternative to reduce several Bitcoin scalability problems, such as geographic centralization, the monopoly of specialized hardware manufacturers (ASICs) and the growing electricity consumption of the network.

In the litepaper “Optical Proof of Work,” researchers Michael Dubrovsky, Marshall Ball and Bogdan Penkovsky present Haveyhash, a new Hascash model on which the architecture of the PoW algorithm on Bitcoin is currently based. As they note, the prototype is aimed at mimicking the construction of the current PoW, but adapted to optical computing, so they believe that changes to the operation of the protocol would be minimal.

Proof of Work and Electricity Consumption

The oPoW litepaper notes that the Proof of Work scheme, based on Adam Back’s Hascash, consists of imposing verifiable economic costs on miners. These costs translate into the computational power used to solve the computing challenge “cryptopuzzle,” associated with the creation of new blocks in the blockchain. The solution to this challenge constitutes the “Proof of Work,” since it guarantees that a certain computation amount was used to find it.

Current Bitcoin mining algorithm (SHA256) has proven its effectiveness as a consensus mechanism and a tool for issuing coins, as well as for protecting the network from Sybil attacks and double spending. However, Dubrovsky and the other researchers of the optical Proof of Work proposal highlight that Bitcoin’s growth in the last decade has made it clear that electricity consumption is the primary cost of a Bitcoin mining operation.

This trend is said to expose the Bitcoin network to risks such as the geographic centralization of mining activity, since miners tend to concentrate in regions with low energy costs such as Iceland and Western China, generating unique points of failure. Likewise, the increase in the difficulty of the network and the resulting “industrialization” of cryptocurrency mining contributed to the emergence of “mining farms” with a strong environmental impact.

On the other hand, the high electricity consumption of these operations leads miners to require the consent, and even the association with public service companies and the governments controlling them. The report notes that this circumstance implies a potential risk to regulatory attacks, coupled with sensitivity to fluctuations in electricity rates.

Mining with Optical Computing

The researchers propose a model that eliminates electricity as the primary cost of cryptocurrency mining, which would allow Bitcoin to scale 10 to 100 times its current size. The approach seeks to focus the verifiable economic cost of the Proof of Work on capital expenditures (optical computing hardware) rather than on operational expenditures (electricity).

Current advances in the area, driven by the development of artificial intelligence (AI), lead researchers to affirm that the integration of optical processing can significantly increase the processing speed, maintaining very low levels of electricity consumption.

For that reason, they created a prototype of optical hardware based on components used in AI, called silicon coprocessors, which they believe have the greatest potential for high-efficiency cryptocurrency mining. The document states that multiple companies in the IT sector, among which it mentions Luxtera, IBM and Intel, use silicon photonics technology to manufacture transceivers that they use for transmitting data between their servers.

By Willmen Blanco

The model seeks to encourage the authorities to improve the quality of public services. The concept can be applied to other services to track flight or subway delays.

In recent years, the incidence of human defecation on the streets of San Francisco, USA, one of the most populous cities in the world, has tripled to 3,000 incidents per month. This growing health problem led a team of developers of the Universal Market Access (UMA) Protocol to create the Poop Token. This is an asset of the ERC-20 standard, which tracks the amount of waste sighted on the streets, using an official database.

As published, the Poop Token emerged as a response to this problem, mainly caused by the increase in homelessness. The asset was conceived between November 8^th and 10^th at a meeting aimed at encouraging developers to cooperate in the construction of decentralized applications on Ethereum.

Hart Lambur and other developers put into practice the idea of ​​Daniel Que and Tyson Battistella de Coinbase by creating the token project whose prices are based on data recorded in the local service known as SF311, which reported in 2018 more than 28,000 calls on cases of fecal matter being spread on the streets of San Francisco. In any case, when the amount of waste increases, the token price also increases. On the other hand, the price of the asset decreases as the city looks cleaner.

Assuming that the city of San Francisco wants to act as outlined in the initiative and commit to solving the problem, a cryptocurrency could be issued to be sold to residents at USD 10mm per unit, considering a rate of 3,000 sightings per month. If the city can reduce the sighting rate to 1,500 per month, it would get USD 5mm in profits. On the contrary, if the reports double to 6,000 per month, the city would acquire a debt of USD 10mm.

The developers admit that the token could become an economic incentive to encourage defecating in public places, and thus worsen the problem. However, they believe that laws and social customs will prevent this from happening. In fact, Lambur suggests the possibility of using crypto assets to encourage authorities to improve the quality of public services.

The publication also suggests that the concept can be applied to other similar contexts. For example, the Metropolitan Transit Authority, which is responsible for the entire New York Metro system, could issue crypto assets that compensate for subway delays. Likewise, airlines could issue assets that track flight delays and so on.

Applauded Idea

The proposal of the token to track human waste on the streets of San Francisco has been applauded on Twitter by several users, who have expressed their impressions. For example, Stephen Cohen of the Capital Ventures software team noted that he considered this use of a DeFi to be the best that he had seen and suggested reducing it to a neighborhood level.

This proposal to compensate users, customers or citizens when companies or governments do not keep their promises is novel. However, there are similar ideas in which cities would reward their inhabitants for their good behavior to improve the quality of life in those spaces. For example, in the city of Belfast, capital of Northern Ireland, a plan to launch its own cryptocurrency was started. The token, Belfast Coin, allows incentivizing people in exchange for activities such as shopping in local businesses, volunteering, and civic activities, among others.

By Willmen Blanco

The HRF believes that governments can easily adapt against stablecoins. The organization also considers it very risky to concentrate trust in a centralized issuing entity.

The Human Rights Foundation (HRF) recently published a report focused on the privacy of stablecoin users, in which is considered the main risks of using these digital assets. It especially referred to the possibility of tracing the movements of funds and the opportunity to block funds held by issuing entities.

The report focuses mainly on cases where people go to stablecoins to overcome restrictions on foreign currencies in their countries. In those contexts, the text says that governments can equip themselves “with the necessary tools to track and punish offenders.”

In this regard, the HRF refers to cryptocurrency market analysis sites that track the activity of these assets in their respective blockchains. The organization claims that, by using any cryptocurrency that works in a public blockchain, a stablecoin user may be leaving traces about its use, the amount owned, the amounts transferred in the past, and the people with whom transactions have been conducted.

The note argues that even careful users who do not publicly disclose their addresses are at risk when making transactions through exchange houses, both to make payments or purchases and to receive payments for their own services.

Likewise, issuing entities of stablecoins such as Tether, USDC, TUSD, PAX or BUSD have the power to freeze addresses to block funds. According to the foundation, focused on freedom of expression and human rights, that is a “particularly useful” capacity in cases of hacking and theft of funds. However, it could represent a great disadvantage, since the trust that must be placed in the issuing entity in order not to act maliciously is much greater.

According to the report, the investigation conducted showed only 16 cases of frozen addresses in the case of Tether. The HRF claims to ignore the reasons why those addresses were frozen but argue that many of these cases occurred shortly after withdrawal from an exchange house. From that, the text concludes that the addresses may have been frozen in response to hacks against users of such exchange houses.

Risks Associated with Price Anchoring

On the method used for a stablecoin to maintain its price with respect to the dollar, the report notes some risks. In particular, these risks could be considered to cause an abrupt fall in the value of certain anchored currencies. Especially, it refers to those whose anchor depends on a reserve fund that supports, in physical funds, the issuance of the cryptocurrency.

According to the organization, this makes the user depend on trust in the issuing entity. In cases such as Tether, USDC, Paxos or the stablecoin of the Binance exchange house, these are centralized issuing entities and processes.

In fact, the lawsuit filed in New York against Bitfinex and Tether (its affiliated firm) led to the disclosure that the company showed a deficit of 850 million physical US dollars from its reserves, which support the USDT anchor, and still have not been recovered. Before the support of the stablecoin was extended with reserves in assets other than the US dollar, there was 1.35 Tether in circulation for every physical US dollar available in the reserve. In other words, the support of 1 Tether at 1 US dollar was not complete, according to HRF.

By Willmen Blanco

Bitriver is a mining farm founded in the city of Bratsk, located in the Siberian region. The data center benefits from the Siberian climate to help keep its equipment refrigerated.

The company Bitriver operates in a building a few kilometers from the Bratsk hydroelectric dam in Siberia, Russia. It is a data center dedicated exclusively to the mining of Bitcoin and other cryptocurrencies. Currently, Bitriver is considered the largest mining farm in all of Russia, due to its excellent geographical location.

Bitriver was founded in 2018 by Oleg Deripaska, a Russian billionaire who chairs one of the most important aluminum companies in the world, RUSAL. According to Bitriver representatives, Deripaska has been planning to build a mining farm for five years, but his project was affected by US sanctions.

The company is not dedicated to mining per se since its representatives are not the ones that mine the blockchain but offer their services to third parties. For this reason, Bitriver is described as a data center that provides access to mining equipment and technical services to third parties. Differentiation is made because cryptocurrencies are not really of legal course in Russia and they were even banned for a time.

Currently, Bitriver has customers in the United States, China, Japan, India, and even Brazil, which primarily mine Bitcoin. The company has stated that it operates with an electric capacity of 30 MW, which it plans to expand to 50MW shortly. For the first quarter of 2020, Bitriver plans to offer a capacity of 100 MW.

Ace in the Hole

Bitriver is a mining farm considered favored due to the conditions in which it was created. Deripaska has a large investment capital and good government connections and its project have a clear objective of positioning itself in the industry. For example, the entrepreneur also launched a parallel Bitriver company that provides structures, known as racks, to store and locate miners.

However, the proper functioning of the Russian mining farm does not depend solely on Oleg Deripaska, but rather on its geographical location. Bitriver is located in the city of Bratsk, in the province of Irkutsk in Siberia. An average annual temperature of -2 degrees Celsius is recorded in this area, which represents a favorable climatic condition for mining activities.

When the mining equipment is working, it releases a lot of heat, so it requires a cooling system to avoid damage. Therefore, some mining farms must invest in the installation of a special system for miners and pay extra electricity to cool the devices. Establishments located in cold places take advantage of the air in the area to keep their equipment refrigerated, thus reducing their operational costs and increasing their profits.

There is a high number of mining farms around the world that prefer cold places to mine cryptocurrencies, such as Iceland, Kazakhstan, Canada, and Russia. Likewise, they also prefer renewable energy such as hydroelectric power, since it is the cheapest. Bitriver also meets this trend, since it feeds on the dam of the city of Bratsk.

The Bratsk Hydroelectric Power Plant, built in the 1960s, is one of the largest in the world, providing Bitriver with up to 100 MW of power for cryptocurrency mining. The company also sells the surplus of monthly energy at cheaper rates, thus reducing the cost of mining. In addition to the low electricity rates, Bitriver benefits because this hydroelectric plant works all year long.

By Willmen Blanco