Security Reinforcement by Watchtower Nodes in the Lightning Network

Willmen Blanco
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Security Reinforcement by Watchtower Nodes in the Lightning Network

Developer Francisco Calderón explained that these nodes monitor the states of the payment channels. Currently, only Lightning Labs’ LND implementation has incorporated this functionality.

Among the proposals to solve Bitcoin’s scaling problems, one that generates more interest and optimism among ecosystem enthusiasts is the Lightning Network (LN) second-layer solution. However, there is consensus that it is a fast-growing protocol with some aspects still to be developed, such as watchtowers.

The connoisseurs define the Lightning Network as a protocol, integrated by other protocols and technologies, which allows Bitcoin micropayments outside the blockchain. Its design allows peer-to-peer (P2P) non-custodial payments, securely and privately as in Bitcoin, but instantaneous and with minimal fees.

Among the technologies proposed to make Lightning transactions more efficient and secure, there are watchtowers, a concept outlined in the original technical document of the network, launched in early 2016. It can be said that it is a security layer for avoiding fraud by malicious actors.

Watchtowers in the Lightning Network

According to Venezuelan developer Francisco Calderón, an expert in Lightning Network, watchtowers are essentially nodes of the Lightning network whose function is to “monitor the status of transactions associated with a payment channel.” This allows them to identify and penalize malicious participants who attempt to transmit outdated network states to claim funds that do not belong to them.

The Lightning Network contemplates a security mechanism that delays the sending of funds by a certain number of blocks, when one of the actors closes the payment channel forcibly, anticipating hostile or non-cooperative behaviors. For example, if “Bob” closes the channel in a non-cooperative way, the network does not return the money that he claims to have instantly. Therefore, “Bob” must wait until that decrementing timelock is complete so that the funds are delivered.

In that period of time, “Alice” must be opening her wallet. Then, she would notice the closure of the channel and send the actual current status, which would prove that “Bob” has acted in bad faith and all his money would go to “Alice.” In case “Alice” did not open her wallet again, the watchtowers would be responsible for solving the problem.

To avoid permanent monitoring transactions and prevent possible fraud, the user could authorize a watchtower node to monitor the operations on his or her channel 24 hours, 7 days a week. According to official Lightning Network documentation, watchtowers may receive a fee as an incentive to provide this service.

The watchtower has the ability to transmit the current [valid] state of the channel without the need for the two actors to be online. The watchtower would be responsible for penalizing the malicious actor and transfer all his funds to his counterpart, as in the case described above, according to Calderón.

If “Bob” were to control the watchtower used by “Alicia,” he would manage to defraud her, since the watchtower would say that the correct state is the one sent by “Bob.” However, it would be risky as the affected party could reconnect and leave evidence of the fraud attempt. In that case, “Bob would lose all his funds,” as Calderón noted.

For extra protection, Lightning wallets will tend to offer the user the option of using several watchtowers simultaneously. Since its beta release in March 2018, the Lightning Network has grown significantly. Its development is expected to result in fewer congestion events, faster confirmation of transactions and lower network fees in Bitcoin.

By Willmen Blanco

Judges Are Sought to Resolve DAO Conflicts in Aragón Network

Willmen Blanco
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Judges Are Sought to Resolve DAO Conflicts in Aragón Network

The platform will launch a form for interested parties to run for judges. The jury receives their fees for each dispute resolved.

Aragón, a Spanish platform created with the objective of promoting and extending the creation and management of decentralized autonomous organizations (DAO), taking advantage of the tools provided by Ethereum, will launch a form for those who wish to apply as the judges who will help to resolve conflicts and enforce contracts between the organizations operating on the platform.

Luis Cuende, developer and co-founder of Aragón, talked about the work that Aragón is currently doing at the Hackers’ Congress Paralelní Polis (HCPP2019) held in Prague, the Czech Republic. The topic was Aragón Network, a network created with the objective that DAOs can accredit services, among which is a decentralized justice system to resolve conflicts.

This is a decentralized justice system to resolve disputes in the Aragón blockchain. The user can thus have their decentralized urbanization on the platform and then have this system to resolve disputes of any kind. For example, during attacks to steal the DAO Treasury funds and give them to another DAO, those with few tokens are not entitled to vote and so lose their funds.

Aragón, the decentralized application (DApp) that allows the creation and administration of a decentralized organization, thus improving governance, accounting, financing and other key areas in the management of these types of communities, is also creating a kind of court that will ensure compliance with contracts and conflict resolution for DAOs.

In this decentralized jurisdiction there is no violence and the court cannot imprison anyone, since there are no prisons. Through crypto-economic incentives, people in general are motivated to have reasons not to harm other people and the existing relationships or contracts. The key factor is the absence of violence, which follows much of the crypto concept.

Digital Court in Aragón

The Aragón Network white paper specifies that judges who wish to intervene in a particular dispute must make a deposit in ANT, the native asset of Aragón. This is done in order to gain the right to perform the conflict resolution service in the DAO, as the judges receive their fees for the resolution of disputes.

Although the dispute resolution system may not be used, the judges continue being paid. It is necessary that they always be there, not only for disputes, because this is the case in the traditional justice system.

The court is activated if an interested party considers that a submitted proposal has violated the terms of an agreement. When submitting, the dissenting party must deposit an equivalent amount of guarantee obligations, together with the initial fees for the dispute, as determined by the Court of Aragón. They can also provide evidence to support their position.

In September 2019, Aragón announced the most recent update of its client, called Camino. This update includes improvements that seek to further simplify user interaction, such as in the case of management of permits and activation of notifications, so users can know when there are new votes, the permits of the organization change or transfers of funds are made.

By Willmen Blanco

The reason Why Exchange Houses Urge Britain Not to Illegalize Crypto-Derivatives

Maria Rodríguez
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The reason Why Exchange Houses Urge Britain Not to Illegalize Crypto-Derivatives

The measure would help retailers to avoid all risk of loss and preserve their capital. In addition, the FCA assured that the amendment to the laws could be announced during the first months of 2020.

Last Monday, October 7th, a group of exchange houses that operate in the United Kingdom urged the authorities of that region not to prohibit the purchase and sale of virtual currencies derivatives, such as Bitcoin and other cryptocurrencies. In this way, they claim that they are prepared to respond and protect the users of these platforms.

The crypto market has become a lucrative activity in different countries of the world, so there are many consumers who come to these exchange houses in order to buy and use these assets to invest in the current changes of the market. They see this activity as a simple and different method of saving money.

As a counterpart to this request, last July, the Financial Conduct Authority of Great Britain (FCA) reported that these cryptocurrency derivatives affect consumers so they are not the most suitable for retailers, according to what the public note explains. This is due that there is no a reliable way to determine their value. This means that the volatility of these assets represents a strong risk for British users, the company considers.

In fact, the document published by the FCA states that it is more convenient to directly ban the sale of these assets to retailers, in order to avoid problems of capital losses in the future. It is known that this decision will mobilize a set of laws that will modify the current economic statutes by the first half of the year 2020.

On the other hand, the World Federation of Exchanges (WFE) recognized that innovation is important in British markets, but nevertheless it indicates that there must be a correct balance between the security and protection of citizens and the inclusion of new alternative technologies in the current economy.

“The WFE recognizes the volatility identified by the FCA in its consultation report and is supportive of ensuring that proper consumer protection is put in place as a priority for any new and relatively untested product on the market”, the organization said recently.

In addition, it is known that compensation exchanges are controlled and regulated in some countries to reduce the risk of all those involved in negotiations with cryptocurrencies.

After this measure, the WFE said that if the prohibition of these assets continues, it will request a reconsideration of the subject, every certain period of time. About this aspect, the institution expressed: “This review is also designed to avoid international market fragmentation, particularly if international standard setters introduce a new global regulatory approach to the regulation of crypto assets”.

With the aim to analyze the market, the FCA said that retailers could benefit greatly if the sums in the market are handled between USD 92 million and USD 289 million to prevent investment losses from the possible ban.

By María Rodríguez

Blockchain ​​Technology Benefits the Art Business

Maria Rodríguez
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Blockchain ​​Technology Benefits the Art Business

Blockchain technology could help artists improve their capabilities in the business of buying and selling their artworks.

It is known that in many ways blockchain technology has served some companies and institutions to enhance many areas of daily life, generating direct improvements in health, education or finance. In the same way, blockchain technology could be a powerful ally to artists who seek to publicize their pieces of art, trade them, and even register and store them in a data network protected by a decentralized network.

As it is known, blockchain technology is a decentralized network which serves as a data record for transactions made on the system and on the web. Likewise, it functions as an advanced computer system that allows these operations to be conducted.

This characteristic called blockchain is the one that allows the data to be encoded between different users so that the information is sent to its final receiver. Thus, it gives a higher level of security, since it is not possible to modify the data without leaving traces. The data of each user or of each block is protected. Changing it is something completely complicated to do.

Due to this powerful advantage, it is not necessary to use central servers. In this way, it is decentralized and thus allows a unique transparency level without depending on a provider. It also guarantees high levels of security, with the aim to preserve the immutability of the data.

Blockchain ​​in Business and Distribution of Art

Distributed Ledger Technology (DLT) has also changed the way of making, distributing and negotiating works of art. Nitin Upadhyay explains this process of using the blockchain in the following steps.

Among the biggest benefits is the wide transparency, something that, in this way, allows artists, for example singers, to stop using only YouTube or platforms like Spotify to exchange or send songs. Now, blockchain is another option.

It is possible to create public networks where the artist, by reputation and success, expose their creations and be qualified by the receiving public, turning the network into a public podium where everyone can check their growth, among other things.

Another great advantage of blockchain in the art field is the creation of a micro-payment system where, using blockchain technology and possibly cryptocurrencies, the artist can exhibit his artwork and receive small payments for consumption, making this a possible option to monetize the art they create.

It is also possible to streamline and improve transparency in the recruitment of artists and their multiple ways of billing for their art. This could be possible through the use of smart contracts within a blockchain platform that will help give movements to the payments for consumption of their art and legal terms that artists would need to receive payments for their creations.

Finally, using blockchain technology it is possible to trace and authenticate the origin of the artworks, allowing to determine where the piece of art came from, offering more security to the client and clearly showing the steps that the artist’s creation has taken until reaching the hands of the buyer.

By María Rodríguez

Earning Money while Betting on Cryptocurrency Price Movements

Willmen Blanco
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Earning Money while Betting on Cryptocurrency Price Movements

In the binary option users bet on what the cryptocurrency price trend will be after one hour. CryptoBetting consists of choosing which of 10 cryptocurrencies will have the greatest price increase in 24 hours.

After the recent fall in cryptocurrency prices in the market, some users have sought ways to recover what they lost. Although it is risky, the paragraphs below describe one of the most viable and simple ways to generate new income, without awaiting the next price increase.

Financial or binary options have been an innovative way of understanding investment and making it accessible to a greater number of people. Its simplicity and short expiration period make it one of the most recommended financial derivatives to start investing, although it requires knowing the market well.

Bitexa

Bitexa is a new generation cryptocurrency platform that combines three unique products, namely Crypto-Binary Options, CryptoBetting and the rent of the company’s Trading Robots. These instruments allow absolutely everyone the opportunity to generate active earnings in cryptocurrencies.

The company’s mission is to develop high-quality specialized IT products, which allow keeping and working with cryptocurrencies safely and giving customers the opportunity to generate regular income in cryptocurrencies.

Crypto-Binary Options

The crypto-binary bet option offered by Bitexa is aimed at experienced users and those who are starting in the cryptocurrency world. With this method a bet must be made indicating the tendency of the price of the chosen cryptocurrency in a time period determined by the platform.

Bitexa offers such a simple system that it is not necessary to establish how many points the cryptocurrency price will rise or fall, just the trend. After the established time period has elapsed, the platform will verify in which direction the bet has been made and, if correct, the money won is deposited to the user, payment from all users who have failed to make the prediction.

CryptoBetting

Another method offered by Bitexa to generate income is that of CryptoBetting. To make this type of bet with a greater probability of success, it is necessary to have some knowledge of the cryptocurrency market.

With this method, users will be given 10 cryptocurrency options among which they should choose the one that could have the highest price increase in the next 24 hours, a time period established for this type of bet. As is the case in the crypto-binary bet, those users who have succeeded will receive the money of all the users who have lost.

Bitexa makes payments to the winning users once every 24 hours. Additionally, the platform has an intelligent particularity for this type of bets. In a scenario where all cryptocurrencies record a price drop, those who bet on the cryptocurrency that has lost the least value will win.

Renting Trading Robots

Bitexa considers that the fact that not all users are willing to risk losing money is very important. For that reason, the platform offers one of the most comfortable services in the market to generate passive income: trading robots.

The robot offered by the platform is designed to analyze the cryptocurrencies that will give the user greater performance and then trade the cryptocurrencies to achieve its objective. Besides being highly accurate, the robot is connected to some of the most popular exchanges in the market, such as Binance and HitBTC, which allows it to analyze in real time the operations conducted and, thus, trade at the most appropriate time.

Acquiring the robot, which costs 0.003 BTC, will initially allow users to generate yields between 0.5% and 1.5%. As described by the robot’s creative team, it will be active until 200% of users’ initial investment is available for withdrawal, that is, 100% net profit.

The possibilities offered by Bitexa services are exciting and are consistent with many users’ needs or financial capabilities in the growing cryptocurrency market. If there is excitement about the idea of betting using knowledge of the cryptocurrency market, or desire to rent a robot, it is recommended to assess the possibility of opting for these innovative services.

By Willmen Blanco

Germany Supports the Idea of Creating a Cryptocurrency for Europe

Willmen Blanco
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0
Germany Supports the Idea of Creating a Cryptocurrency for Europe

The German Minister of Finance speaks in favor of creating a virtual currency for that continent.

With the announcement of the official launch of Libra by Facebook, many people, institutions and governments have rejected its use, creating a clear negative towards this digital active.

For this reason, the idea has emerged, in some countries of the world, to regulate these assets and complement the regulation with the launch of a virtual currency that is supported by local government departments and belongs to the country as one more official currency.

Recently the German Minister of Finance supported the idea of ​​developing a cryptocurrency for the countries that make up the European Union (EU).

Governments Against Cryptoactive

For some governments of the world, the idea of ​​a decentralized virtual currency represents a strong opposition to the control of assets in the nation. In this way, they would be against a currency that does not contribute taxes and stands out from monetary controls.

Despite these characteristics, most governments had not taken strong measures against these assets until the announcement of Libra activated the alarms, due to what Facebook represents for the global economy.

The lack of trust that Facebook generated after the scandal about the mishandling of sensitive user information has meant a disadvantage for many government representatives and their economies. This is because governments assume that they could lose control over key sectors of the economy due to the entry of a virtual currency managed by the social network and a group of private companies which support the project.

But, after the announcement related to Libra, governments had to determine two positions in this regard. The first one is based on the total prohibition of cryptocurrencies in their countries, as well as the illegality of the development of Libra in their territory. This is something that supposes a clear change to the laws to avoid the cryptocurrencies to alter their economic conditions.

The second position is to execute efforts with the aim to know the technology, modify the laws to regulate the use of these assets, and promote the development of virtual assets of their own, in order to compete, in a new market, which was unknown to the State.

A Possibility

In this way, cryptocurrency development ideas have emerged in countries like China, for example. Likewise, these issues have entered into discussion in the European Union and within the legal agencies of the United States.

Among the significant advances, it is detailed that some meetings to discuss the issue of cryptocurrencies in the European Union have led to the majority of representatives reaching a consensus.

Although governments mostly disagree with the idea of ​​allowing Libra access in their countries, however, it was determined, among some members, to support the idea of ​​creating a virtual currency for Europe. This asset would be controlled by governments of these countries and can be used for the crypto-market, assuming its inclusion in fiscal parameters throughout Europe.

In this way, the German Finance Minister Olaf Scholz commented, during an interview, that this kind of “payment system would be good for the (European) financial center and its integration into the financial market world. We must not leave the field for China, Russia, the United States, or any other private provider”, he said.

This action could allow these governments to join a new market unknown for them and which is generating millions of dollars in transactions around the world and every year.

By María Rodríguez

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