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Bitcoin Lightning Nodes Claimed 2.22 BTC in ‘Justice’ Against Thieves: BitMEX

Bitcoin Lightning Network nodes have claimed 2.2 BTC in “justice transactions” to deter potential thieves since Dec. 2017, according to BitMEX Research.

Bitcoin (BTC) Lightning Network nodes have claimed 2.2 BTC in “justice transactions” to deter potential thieves, a BitMex Research analysis revealed on July 15.

A so-dubbed “justice transaction” is a punitive mechanism involving the closure of a lightning channel that is suspected to be attempting theft. As the report outlines:

“… by design, when a thief attempts to steal funds on the lightning network, if caught, they do not only lose the money they tried to steal, they lose all the funds in the relevant channel. This “punishment” is expected to act as a deterrent and is sometimes called “justice”.

BitMEX researchers claim to have potentially identified 241 justice transactions since the second-layer network’s in December 2017 — all the while noting that there is a possibility the data “includes false positives” and that other, more robust tools exist to identify such transactions than the “basic search methodology” used for their report.

BitMEX’s data apparently reveals that the highest number of justice transactions — over 60 apparent instances — occurred in October 2018. April 2018 saw the second-highest number of justice transactions — over 30.

Notably, while the period from February to April 2019 saw a relatively high number of justice transactions — between 20 and 30 instances — it eclipsed both October 2018 and April 2018 in terms of the absolute value in BTC claimed by honest nodes via the mechanism. February 2019 alone represented the absolute peak in terms of monthly total, at roughly 0.67BTC:

BTC reclaimed by honest nodes using justice transactions

BTC reclaimed by honest nodes using justice transactions. Source: BitMEX Research

BitMEX’s report further qualifies the findings by noting that 2.22 BTC does not necessarily indicate that thieves tried and failed to steal that amount — given that potential thieves may have been punished by an amount larger than the value they tried to steal. 

Instead, the figure represents:

“… the total funds claimed by honest non channel closing nodes, part of this value is funds originally owned by the dis-honest nodes and part of the value will be the value they tried to steal.”

In conclusion, the report notes that the total number of justice transactions on Lightning since its inception represent just 0.7% of the number of currently active channels: while an optimal proportion of justice transactions is hard to determine, BitMEX Research notes, this current level appears to be a reasonable figure sufficient to prevent the risk of “large systemic channel thefts” in future.

As reported, Bitrefill has recently made it possible for users of major American crypto exchange Coinbase to access its full suite of Lightning services directly from within their native exchange accounts. 

A couple of crypto payment processors have meanwhile this year released intermediary services to enable Lightning payments for products sold on Amazon.

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Bitstamp’s Commitment to Bitcoin Scalability, Launching a Lightning Network Node

Bitstamp Lightning Network Node

The Lightning Network (LN), Bitcoin’s
most significant off chain scaling protocol is now available to the Bitstamp
community. The European cryptocurrency exchange has announced
the set up of a Lightning Network node.

In the July 8 announcement, the crypto
exchange said:

 “Bitstamp has been supporting the Bitcoin industry since its early days. By running our own Lightning Network node, we want to help the network grow and encourage other companies to start working with this amazing technology as well.”

In addition, the exchange affirmed its
belief in LN, saying:

 “We believe that there are use cases for Lightning in almost any industry. Let’s start discovering them”.

Status of Lightning Network

The Bitcoin [BTC] Lightning Network is
enjoying increased capacity on the back of the current BTC Bull Run.
Consequently, the number of nodes on the protocol now stands at 9,009 with 34,286 channels. As per BitcoinVisuals data, one exact
year ago, the network had 1,526 nodes. Its network’s BTC capacity is at 946.02
BTC a sharp rise from the 21.426 BTC capacity a year ago. The steady growth of
the second layer payment protocol has its enthusiasts very excited and with
good reason.

The protocol is Bitcoin’s most
contentious Layer 2 solution. For BTC bulls that will not entertain any hard
forks or alterations to the BTC blockchain, it is the hope for the digital
asset’s scalability problem. The LN was designed to improve the blockchain’s
performance and halt threats to raise its 1MB capacity to 32MB.

Through it, the otherwise slow and
expensive transactions can assume per second speeds at negligible fees. This
could give the digital asset possibilities beyond the reach of fiat.

More Lightning Network Nodes Equal Sustenance

Its critics, however, are skeptical of
the much-vaunted scaling solution’s mass usage. In March, for instance, when
its capacity decreased from a high of 1000 BTC, there was an uproar. The drop
was caused by LNbig’s closure of some channels. The provider had been
responsible for 25 percent of the liquidity on the network. On Reddit, LNbig encouraged more
players to open channels, run more nodes, and increase the liquidity on the
network.

The success of the Bitcoin Lightning Network is, therefore, highly dependent on increased levels of liquidity from more active nodes. At the moment many channels are running on LN as benefactors.

However, the solution cannot scale on
perpetual benevolence. Bitstamp’s nodes are, accordingly, one more positive
development for the scaling solution. 
The nodes are the Lightning Network’s basic building units, which in the
end will increase its capabilities.

LN has also become available to Coinbase through Bitrefill.  Bitfinex also has revealed plans to launch LN support for Tether’s USDT stablecoin. There also have been reports that crypto payments processor startup Moon has a web browser in place to enable Lightning BTC wallets to purchase items on Amazon.

A failed LN would be a victory for Bitcoin hard forks like Bitcoin Cash. BTC users in search of a more scalable digital asset would be tempted to join the speedier digital assets.

The post Bitstamp’s Commitment to Bitcoin Scalability, Launching a Lightning Network Node appeared first on Ethereum World News.

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Bitstamp Commitment to Bitcoin Scalability, Launching a Lightning Network Node

Bitstamp Lightning Network Node

The Lightning Network (LN), Bitcoin’s
most significant off chain scaling protocol is now available to the Bitstamp
community. The European cryptocurrency exchange has announced
the set up of a Lightning Network node.

In the July 8 announcement, the crypto
exchange said:

 “Bitstamp has been supporting the Bitcoin industry since its early days. By running our own Lightning Network node, we want to help the network grow and encourage other companies to start working with this amazing technology as well.”

In addition, the exchange affirmed its
belief in LN, saying:

 “We believe that there are use cases for Lightning in almost any industry. Let’s start discovering them”.

Status of Lightning Network

The Bitcoin [BTC] Lightning Network is
enjoying increased capacity on the back of the current BTC Bull Run.
Consequently, the number of nodes on the protocol now stands at 9,009 with 34,286 channels. As per BitcoinVisuals data, one exact
year ago, the network had 1,526 nodes. Its network’s BTC capacity is at 946.02
BTC a sharp rise from the 21.426 BTC capacity a year ago. The steady growth of
the second layer payment protocol has its enthusiasts very excited and with
good reason.

The protocol is Bitcoin’s most
contentious Layer 2 solution. For BTC bulls that will not entertain any hard
forks or alterations to the BTC blockchain, it is the hope for the digital
asset’s scalability problem. The LN was designed to improve the blockchain’s
performance and halt threats to raise its 1MB capacity to 32MB.

Through it, the otherwise slow and
expensive transactions can assume per second speeds at negligible fees. This
could give the digital asset possibilities beyond the reach of fiat.

More Lightning Network Nodes Equal Sustenance

Its critics, however, are skeptical of
the much-vaunted scaling solution’s mass usage. In March, for instance, when
its capacity decreased from a high of 1000 BTC, there was an uproar. The drop
was caused by LNbig’s closure of some channels. The provider had been
responsible for 25 percent of the liquidity on the network. On Reddit, LNbig encouraged more
players to open channels, run more nodes, and increase the liquidity on the
network.

The success of the Bitcoin Lightning Network is, therefore, highly dependent on increased levels of liquidity from more active nodes. At the moment many channels are running on LN as benefactors.

However, the solution cannot scale on
perpetual benevolence. Bitstamp’s nodes are, accordingly, one more positive
development for the scaling solution. 
The nodes are the Lightning Network’s basic building units, which in the
end will increase its capabilities.

LN has also become available to Coinbase through Bitrefill.  Bitfinex also has revealed plans to launch LN support for Tether’s USDT stablecoin. There also have been reports that crypto payments processor startup Moon has a web browser in place to enable Lightning BTC wallets to purchase items on Amazon.

A failed LN would be a victory for Bitcoin hard forks like Bitcoin Cash. BTC users in search of a more scalable digital asset would be tempted to join the speedier digital assets.

The post Bitstamp Commitment to Bitcoin Scalability, Launching a Lightning Network Node appeared first on Ethereum World News.

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Bitcoin Startup Brings Lightning Network Payments to Amazon, Whole Foods

U.S.-based payments startup Fold has made Lightning Network payments possible at Amazon, Starbucks, Uber and other big name retailers.

United States-based payments startup Fold has made Lightning Network (LN) payments possible at Amazon, Starbucks, Uber and other big name retailers. The news was revealed in an official blog post published on July 10.

As previously reported, the Bitcoin (BTC) Lightning Network is a second-layer solution to bitcoin’s scalability limitations, opening payment channels between users that keep the majority of transactions off-chain, turning to the underlying blockchain only to record the net results.

In its announcement, Fold reveals that participating selected retailers will settle users’ LN payments — denominated in satoshis, or one hundred millionth of one Bitcoin — via their prepaid access programs in a currency of their choice. 

LN payments are thus processed via the Fold site, where users can select a retailer and pay the relevant invoice using their Lightning wallet. Once paid, this provides them with a gift card — at a maximum value of $25 — that is redeemable either in-store using a barcode or online via alphanumeric code. 

Beyond the evident scalability and accessibility benefits of providing LN support at major retailers, Fold underscores that its services more broadly aim to keep faith with the cornerstone principles of crypto: meaning no Know-Your-Customer (KYC) checks, a non-custodial system and — in an outburst of Bitcoin maximalism — no support for altcoins.

Beyond the aforementioned Amazon, Starbucks, and Uber, Fold’s Lightning payment service is also available for REI, Home Depot, Southwest Airlines, Target, AMC, Whole Foods, and others. 

Fold follows other third-party crypto payment processors aiming to provide ways for users to use Lightning at major e-commerce and retail locations. 

This April, fellow startup Moon launched a web browser extension allowing online shoppers to use their Lightning wallets for purchases on Amazon and similar sites. As Fold, Moon serves as an intermediary — meaning that household names like Amazon are for now still not handling or processing the crypto directly.

As reported, Fold had rolled out its Bitcoin payments service — this time explicitly designed as a gift card — that was available for use at retailers such as Starbucks as early as 2015.

This March, blockchain development firm Lightning Labs announced the initial release of the Lightning offramp Lightning Loop, providing a non-custodial way to receive funds via the network.

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20K Addresses Hold $1 of Bitcoin and More, Use In Micropayments Far From Reality

Bitcoin BTC Addresses

Despite recent weakness, Bitcoin is trending
higher. Encouragingly, there are predictions that this could Bull Run could
push it to the $100,000 mark. The excitement over its value aside, crypto users
on Reddit are taking on a rather unpleasant facet of the digital asset.

As posted on Reddit, there are now 20,000,000+ addresses holding $1 or more of Bitcoin. The wallets holding the $1 are considered dead because it costs more to move the cash in terms of fees. If Bitcoin micropayments were affordable though, there would be fewer accounts holding money that could be used for retail purchases.

Affordable Bitcoin Micropayments Still A Dream

Bitcoin has miles to go before it can
fulfill the cypherpunk
vision
of anonymous digital cash. Posted on activism.net it asks
like-minded people to:

 “Come together and create systems which allow anonymous transactions to take place. People have been defending their own privacy for centuries with whispers, darkness, envelopes, closed doors, secret handshakes, and couriers. The technologies of the past did not allow for strong privacy, but electronic technologies do”. 

The decree further adds:

 “Cypherpunks are dedicated to building anonymous systems. We are defending our privacy with cryptography, with anonymous mail forwarding systems, with digital signatures, and with electronic money”.

It is nevertheless, impossible to fulfill this mandate when the reality on the ground does not enable actual adoption.  Vitalik Buterin has in the past decried the clamor for Bitcoin ETFs saying that they will not make it easier for crypto users to buy minim amounts of crypto. Vitalik says that ETFs can pump crypto prices, but crypto micro-purchases and payments are better for mass adoption.

A decade down the line it is still
easier to purchase your beer with a credit card or fiat than in crypto. In
sharp contrast, crypto micropayments were once touted as cheaper alternatives
to credit cards. Bitcoin payments were going to revolutionize the industry, but
P2P fees have hit various speed bumps. 

Off-Chain Bitcoin Micropayments Solutions

The massive amounts of transaction
fees are the most significant deterrent. These costs have in the past doubled
those that come from low-value card transactions. This has been the cost to the
high-level of censorship resistance of the Bitcoin network. The prices of running
nodes increase as the number of transaction rise too. 

To help crypto compete with traditional payment methods such as MasterCard, Visa or PayPal, off-chain solutions have been fielded. Solutions such as the Lighting Network will, for instance, add a layer to the Bitcoin blockchain that will enhance micro-payments speeds. The fees will also be lower.

The Blockstream Lightning Network will not only support high of volumes of micro transactions but real-time payment as well. The Raiden Network will complement ETH payments as well as other ERC20 Token payments. It is creating a global payment network for all crypto users worldwide. Besides, Plasma and Sharding could also address the crypto scaling problems.

These are indications that Bitcoin will one day fulfill the cypherpunk vision of anonymous digital cash. Crypto users and developers have a lot of work to left to do. Challenges from world governments over regulation and control make the process much harder. However, off chain solutions are maturing by the day and sensible crypto micropayments could soon become a reality.

The post 20K Addresses Hold $1 of Bitcoin and More, Use In Micropayments Far From Reality appeared first on Ethereum World News.

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Bitstamp Crypto Exchange Sets Up Lightning Network Node

Bitstamp cryptocurrency exchange set up its own node for the Lightning Network, encouraging more participation from the industry.

European crypto exchange Bitstamp has set up its own Lightning Network (LN) node to boost the network’s capabilities, the company tweeted on July 8.

As a second layer over the blockchain of the biggest cryptocurrency, bitcoin (BTC), the LN is designed to enable fast and zero-fee transactions by creating payment channels between users. Specifically, the network aims to address bitcoin’s scalability problem by keeping the majority of transactions off-chain.

By launching its own LN node, Bitstamp aims to promote the growth of the network, as well as encourage the crypto industry to adopt the technology, the firm wrote in an official announcement.

Bitstamp said that bringing more nodes to the LN will keep the network active, describing the nodes as its basic building units. As more nodes generate payment channels, the total network liquidity increases, which in turn increases the transactions capabilities on the network, Bitstamp explained.

Most recently, LN services became available on major American crypto exchange and wallet service Coinbase through payment crypto recharge provider Bitrefill. In late May, Bitfinex crypto exchange revealed its plans to launch LN support for the USDT stablecoin operated by its sister company Tether.

At press time, Bitstamp is the 39th largest cryptocurrency exchange according to its adjusted daily trading volume of around $175 million, according to data from CoinMarketCap.

In May, Cointelegraph reported that Bitstamp launched an investigation after a large bitcoin sell order strongly affected its order book.

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Electrum Will Support Bitcoin Lightning Network, Wallet’s Creator Reveals

Thomas Voegtlin revealed the feature will come in an impending update at the ongoing BIP001 conference in Ukraine.

Bitcoin (BTC) wallet Electrum will soon host support for the Lightning Network (LN), Russian cryptocurrency news outlet Forklog reported on Telegram July 5.

In a social media update, the publication said founder Thomas Voegtlin had revealed the upcoming release at the ongoing BIP001 conference in Odessa, Ukraine

Electrum, one of the oldest bitcoin wallets on the market since 2011, said LN functionality would come as part of an impending major upgrade.

The most recent version of the wallet came earlier this week.

Electrum will be one of the first major wallets to bring LN to the mainstream, the technology itself still remaining in an experimental phase. 

A so-called ‘off-chain’ scaling mechanism, Lightning allows users to send each other bitcoin almost instantaneously, paying hardly any transaction fee. 

The technology gained considerable publicity in 2019 thanks to promotional soundbites by the likes of Twitter CEO Jack Dorsey, but is still broadly too technical for the average user.

Various products have emerged attempting to simplify the user experience, while Lightning developers themselves frequently release improvements of their own. 

Last month, crypto payments startup Bitrefill rolled out LN features on behalf of U.S. wallet provider Coinbase.