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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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Why Is Scalability So Important for Blockchain Solutions?

Scalability of blockchain technology is a requirement for the future of the technology.

Bart Wyatt leads Block.one’s Blockchain Team and is responsible for guiding the development of the company’s strategic vision for EOSIO. Bart came to Block.one as a veteran in the industry with six years dedicated to asset tokenization and decentralized identity. Prior to joining Block.one, Bart oversaw technology teams at several firms that specialized in personal privacy solutions, deniable attestations, and degradable cryptographic proofs, gaming and advertising technology.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.

In the blockchain industry, “scalability” can mean a lot of things. In one debate, you may hear about a technology’s lack of scalability in terms of blockchain’s size over time, conflating the ability to on-board new network participants cheaply with the technology’s ability to survive the test of time. In another discussion, you may hear comparisons to legacy technologies like traditional payment processors and the transaction volume they have on certain holidays as a worthy definition of what is required of a scalable technology. 

Yet another heated conversation may attempt to persuade the listener that there is a fundamental trade-off between scalability and decentralization, and that one or the other is a sacred quality of blockchains. 

Indeed, there is no consensus (pun intended) on what a scalable blockchain is — or should be. What is clear however, is that the mass market has not yet arrived at the promise of blockchain; when that day comes, we will need scalable solutions for every problem that blockchains address.

To underscore the point that scalability is a gating factor for mass market adoption, I offer a simple and generic definition of scalability: Scalability refers to a blockchain’s ability to provide a rich experience for users independent of how many users have this experience. Whether the user’s experience is joining a blockchain’s network, interacting with a decentralized application (DApp) during a prime-time rush, or breaking out from a centralized walled garden, the experience must be excellent to achieve mass market adoption. So, scalability is a key consideration if a technology seeks mainstream adoption, but is mass adoption itself important?

Is mass adoption itself important?

I think it is. Let me explain by using an everyday example. Think about the experience of attending a major sporting event — like the World Cup rather than a regular league match. The dimensions of the field are the same, the rules of the game are the same, the players are the same… you get the idea.  

Yes, the stakes are higher for the teams and therefore the fans, but in isolation, that has a limited effect. Where events like this come alive for fans and players alike is when you reach a critical mass of people in the stadium, moving, chanting, screaming, crying and celebrating together. There is, quite literally, exponential experiential value in the crowd sizes that these events draw, which is impossible to replicate. These kinds of user experiences are only achievable with a critical mass of users. And this, I contend, is the true value of mass market adoption: It is itself a gate — or a ceiling — on the level of user experiences achievable that require a critical mass.

Furthermore, scalability is not only a gate, whose value would drop sharply once it crosses some imagined line for critical mass; it is also a means to more fair and open access of experiences. When a technology can scale in excess of its baseline need for critical mass, it becomes cheaper to operate. This, in turn, lowers the barriers of participation for users. If an experience lacks scalability but has achieved critical mass, it becomes an exclusive experience.  The technology itself may constantly oust “lesser” participants in favor of those with higher perceived value. 

We have avoided many dogmatic arguments around blockchain so far, but this situation seems clearly to be the opposite of what many of us want blockchain to be. This means that a lack of open-access can be considered an existential threat to blockchain technology outright. As a result, scalability of blockchain technology is more than a lofty goal — it is a requirement for future blockchain technology.

Team sport

Scalability is critical in order to achieve the experiences and goals of the blockchain industry. One of the most approachable ways to improve scalability in the industry is to consider a decentralized application not as a resident on a single blockchain technology, but an experience that is provided by coordinating many independent platforms and protocols. Consider how the internet has developed into a fundamental part of our daily lives: collaborative standards, competitive technology providers working together in a stack, a focus on the end-users, and a tide that lifts many boats. Ultimately, I believe it would serve the blockchain industry well to recognize that solving scalability for blockchains is a team sport.

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Coinbase Users Now Have ‘Recharge’ Capabilities With Bitcoin Lightning Network

Bitrefill has brought Bitcoin Lightning services directly to Coinbase exchange accounts before the exchange “could do it themselves.”

Bitrefill has made it possible for users of major American crypto exchange and wallet service Coinbase to access its full suite of Lightning Network (LN) services directly from within their native exchange accounts. The news was revealed in an official tweet from Bitrefill on June 25.

The capability comes as part of Bitrefill’s new Thor API, which allows multiple platform users to instantly open custom channels on the Lightning Network via Bitrefill’s nodes — whether or not those platforms offer native support for LN or not. They can also pay Lightning invoices directly from within their Coinbase account. 

As previously reported, the Lightning Network works to mitigate bitcoin’s scalability limitations by opening state channels between users that keep the majority of transactions off-chain, turning to the underlying blockchain only to record the net results.

Swift on the heels of the service’s launch, users have already demonstrated the checkout process on Bitreill.

This spring, Cointelegraph reported that crypto payments processing startup Moon had launched a web browser extension that allows e-commerce shoppers to use their Lightning bitcoin wallets for purchases on e-commerce sites like Amazon.

Last year, blockchain app Lightning Ramp anticipated Bitrefill’s third-party Lightning integration with Coinbase with an alpha demo release of its own solution.

Bitrefill’s services come amid continuing uncertainty as to when and whether Coinbase will eventually launch native Lighting support, as apparently implied — but not committed to — by CEO Brian Armstrong, who remarked in January 2019:

“Bitcoin remains the most popular asset on Coinbase among new customers and longtime hodlers alike. It’s great to see steady progress continue, including lightning network adoption and more.”

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Firm Behind Zcash to Introduce New Version of Protocol With Sharding

The Electric Coin Company, the firm behind second-biggest anoncoin zcash, is building a new scalable zcash blockchain.

The Electric Coin Company (ECC), the firm behind second-biggest anoncoin zcash (ZEC), intends to build a new scalable zcash blockchain, cryptocurrency news outlet Forklog reports on June 22.

Per the report, chief engineer at ECC Nathan Wilcox said that the firm should “make Zcash usable by 10 billion people by 2050” if it can. Still, Decrypt notes that achieving this would require zcash’s blockchain to be able to manage thousands — or millions — of transactions per second.

Forklog states that ECC is considering implementing sharding, a scalability solution that Ethereum devs also plan to integrate into that network in the near future.

Still, ECC engineer and product designer Daira Hopwood noted that, to obtain the desired features, ZEC would need a completely new blockchain.

The firm would ensure that coins would be transferred onto the new chain, resulting in a conservation of users’ wealth. The new chain would also process all transactions privately, in contrast with the current chain where under 2% of the transactions are anonymous.

Zcash — with a total network value of $744 million —  is the 24th largest coin by market capitalization. ZEC has seen its value decrease by over 0.40% over the last 24 hours, trading at $113.09 at press time, according to Coin360 data.

As Cointelegraph reported earlier this month, the nonprofit Zcash Foundation has partnered with blockchain company Parity Technologies to release a new, open source software client for zcash.

News broke last month that biggest privacy coin and zcash competitor, monero (XMR), plans to switch to a new proof-of-work (PoW) algorithm in October.

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Crypto Platform Says It Aims to Solve Bitcoin Scalability Issue

Crypto platform says it is developing a “modern alternative to bitcoin” without scalability issues.

Crypto platform ILCoin says it is developing a “modern alternative to bitcoin” without scalability issues by using “pioneering technology” called command chain protocol (C2P).

The protocol of C2P, created by ILCoin, is supposed to solve the main problem of the Bitcoin blockchain — the lack of scalability — by enlarging the block size. The startup says that it has already managed to increase its limit to 25 MB. This enables its users to have a higher transaction amount: Instead of the current maximum for Bitcoin of seven transactions per second, the team says they hit 170.000 transactions per block or 15 million transactions per day (whereas Bitcoin can handle 375.000).

The project notes that C2P is the first blockchain protocol that is synchronized with the network, which is possible because of the new protocol consensus that works with tree forms of nodes: The first node syncs with the community — it produces wallets — the validator node verifies transactions, and the admiral node controls the monitoring of transaction confirmation and digital signatures.

Moreover, the company emphasizes that, unlike Bitcoin, where the control of the core code belongs to 95% of the users and any modification requires their approval, the ILCoin blockchain is fully controlled by the development team, which can make the necessary adjustments.

The startup also says that the created protocol is dedicated to solving another main Bitcoin issue — i.e., the security challenge commonly known as a 51% attack of the network. C2P provides a safe environment for its users, as it consists of three different security layers. The “hack-proof vest” placed on the top of ILCoin’s SHA-256 algorithm allows blocking different types of activities and prevents blockchain corruption, such as double spending and rollbacks.

The project notes that C2P is certified by a third party, an official partner of cybersecurity company Palo Alto Networks.

ILCoin is available here

From the past to the future

The project was launched in January 2015, before the rise of bitcoin. During the next two years, the team worked on the source code, improving its security and developing online crypto wallets.

The major progress has been made during the last year and a half. Since November 2017, the company released a new version of its Android wallet, web wallet and block explorer, which enables ILCoin holders to monitor their transactions. The startup also launched its own digital currency, ILC, which the startup positions as a “modern alternative to bitcoin.” Now, ILC is listed on 15 international exchanges, as well as CoinMarketCap.

In 2019, ILCoin says its platform will be the “first SHA-256 blockchain implementing smart contracts.” Smart contracts will work in tandem with the “unique” audit protocol, which constantly checks the code for potential vulnerabilities or malicious changes made by bad actors. If such a change is detected, the smart contracts won’t be executed until all values get back to normal.

In Q4 of 2019, there will be five different types of customized smart contracts available in five business areas, the project says. Each type will have its own rules and penalties. Currently, the SHA-256 proof-of-work (PoW) encryption protocol is already used for mining ILC.  

At the end of 2019, ILCoin is also planning to upgrade all its online wallets and increase their security and connectivity. Moreover, the team wants to launch a new module, “Buy ILC with BTC.” The company says that users will be able to find and pair different buy and sell orders from various exchanges.

Learn more about ILCoin

Disclaimer. Cointelegraph does not endorse any content or product on this page. While we aim at providing you all important information that we could obtain, readers should do their own research before taking any actions related to the company and carry full responsibility for their decisions, nor this article can be considered as an investment advice.

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Bitfinex Plans to Launch Lightning Network Support for Stablecoin Tether: Report

Major cryptocurrency exchange Bitfinex is reportedly looking to launch Lightning Network support for the tether stablecoin.

Major cryptocurrency exchange Bitfinex is looking to launch the USDT stablecoin operated by sister firm Tether on the Lightning Network (LN), crypto news outlet The Block reported on May 31.

Per the report, Bitfinex’s chief technology officer Paolo Ardoino told the outlet that the company plans to launch USDT on LN later this year. To pursue this objective, the firm reportedly joined the RGB open source development project.

According to its GitHub repository, the RGB project is “a completely free, open-source, non-profit and community-oriented effort, promoted by the BHB Network and aimed at the development of standards and best practices to issue, transmit and store ‘Bitcoin-based non-bitcoin assets.’” The Block also cited Ardoino commenting on the development, saying it is “one of the coolest things” the firm has participated in thus far.

The company’s CTO further noted  Bitfinex wants to contribute to the LN’s development. A post released by Tether in April 2017 shows that the company already had such plans for the stablecoin at the time.

As Cointelegraph reported earlier this week, Tether has announced that it is partnering with EOS parent company Block.one to release its stablecoin on the EOS blockchain.

Recently news broke that social media giant Facebook has reportedly held talks with major United States-based crypto exchanges about the issuance of its long-rumored stablecoin dubbed Globalcoin.

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Blockchain Infrastructure Firm Blockstream Launches Security Token Platform

Blockchain infrastructure firm Blockstream announced the launch of its security token platform.

Blockchain infrastructure firm Blockstream announced the launch of its security token platform in a press release shared with Cointelegraph on May 15.

Per the announcement, the new Liquid Securities platform is a solution for businesses to issue security tokens on the Liquid Network.

Blockstream Chief Security Officer Samson Mow claims that while businesses are willing to issue tokenized securities, platforms such as Ethereum are not the right choice because of their scalability, privacy and reliability limitations. Blockstream claims that its platform is more suitable for such use:

“Now, with the launch of Liquid Securities, businesses can quickly issue Liquid-based security tokens with the click of a button,and establish sophisticated rulesets to conform with their regulatory requirements…”

The platform will reportedly launch with four partners: investment platform BnkToTheFuture, multi-blockchain issuance platform TokenSoft, United States-based bank Zenus Bank, and game development studio Pixelmatic.

The announcement explains that the Liquid Network is a settlement network connecting cryptocurrency exchanges, market makers, brokers, and other financial institutions.

In March, Blockstream released a new version of its bitcoin (BTC) scalability software, c-lightning. The release included performance enhancements, bug fixes and augmented privacy.

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RIF Labs Launches 3rd-Layer Scalability Solution Capable of Processing Up to 5K TPS

RIF Labs — the organization behind behind off-chain bitcoin infrastructure layer RIF OS — has launched a third-layer scalability solution.

RIF Labs — owner of bitcoin-based smart contract sidechain Rootstock (RSK) developer RSK Labs — has launched a third-layer scalability solution capable of processing up to 5,000 transactions per second. The news was revealed in a press release from RIF News on May 14.

As reported, RSK Labs and its decentralized app (DApp) infrastructure protocols RIF OS began as a spin-off from Rootstock, having been initially launched by several senior executives from the latter’s creator — the startup RSK Labs. The two structures became fully integrated when RIF Labs acquired RSK Labs in November 2018.

Originally conceived by Bitcoin Core developer Sergio Lerner, the Rootstock sidechain saw several years’ development before its initial mainnet release in January 2018. As blockchain engineer Albert Szmigielski outlined during the project’s early days:

“Essentially Rootstock aims to be what Ethereum is, a decentralized, Turing-complete smart contract platform. However, Rootstock aims to utilize the Bitcoin ecosystem rather than creating a new one from scratch.”

RIF Labs’ new offering is a third-layer scalability solution dubbed Lumino, now officially live, which supports processing 5,000 TPS on the RSK sidechain.

In its ambitions, the solution is close to the Lightning Network, which works to mitigate scalability limitations by opening state channels between users that keep the majority of transactions off-chain, turning to the underlying blockchain only to record the net results.

With Rootstock reportedly capable of processing up to 100 transactions per second, Lumino aims to provide an off-chain solution that will facilitate near-instant transaction processing levels regardless of the increasing weight of the bitcoin blockchain.

As revealed earlier this week, RIF Labs will now soon be rebranding as IOV Labs, in a bid to differentiate the organization from both the open-source RSK and RIF OS protocols.

Lumino is also further reportedly compatible with the Name Services component of RIF OS, which enables users of state and payment channels to use aliases rather than complex hexadecimal addresses.

In recent remarks to Cointelegraph, Ethereum (ETH) co-founder Joseph Lubin claimed that the Ethereum blockchain will become about 1,000 times more scalable within 18 to 24 months, once it completes its transition to Ethereum 2.0 (also known as Serenity).