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Proposal: The Sia Foundation
A common sentiment is brewing online; a shared desire for the internet that might have been. After decades of corporate encroachment, you don't need to be a power user to realize that something has gone very wrong. In the early days of the internet, the future was bright. In that future, when you sent an instant message, it traveled directly to the recipient. When you needed to pay a friend, you announced a transfer of value to their public key. When an app was missing a feature you wanted, you opened up the source code and implemented it. When you took a picture on your phone, it was immediately encrypted and backed up to storage that you controlled. In that future, people would laugh at the idea of having to authenticate themselves to some corporation before doing these things. What did we get instead? Rather than a network of human-sized communities, we have a handful of enormous commons, each controlled by a faceless corporate entity. Hey user, want to send a message? You can, but we'll store a copy of it indefinitely, unencrypted, for our preference-learning algorithms to pore over; how else could we slap targeted ads on every piece of content you see? Want to pay a friend? You can—in our Monopoly money. Want a new feature? Submit a request to our Support Center and we'll totally maybe think about it. Want to backup a photo? You can—inside our walled garden, which only we (and the NSA, of course) can access. Just be careful what you share, because merely locking you out of your account and deleting all your data is far from the worst thing we could do. You rationalize this: "MEGACORP would never do such a thing; it would be bad for business." But we all know, at some level, that this state of affairs, this inversion of power, is not merely "unfortunate" or "suboptimal" – No. It is degrading. Even if MEGACORP were purely benevolent, it is degrading that we must ask its permission to talk to our friends; that we must rely on it to safeguard our treasured memories; that our digital lives are completely beholden to those who seek only to extract value from us. At the root of this issue is the centralization of data. MEGACORP can surveil you—because your emails and video chats flow through their servers. And MEGACORP can control you—because they hold your data hostage. But centralization is a solution to a technical problem: How can we make the user's data accessible from anywhere in the world, on any device? For a long time, no alternative solution to this problem was forthcoming. Today, thanks to a confluence of established techniques and recent innovations, we have solved the accessibility problem without resorting to centralization. Hashing, encryption, and erasure encoding got us most of the way, but one barrier remained: incentives. How do you incentivize an anonymous stranger to store your data? Earlier protocols like BitTorrent worked around this limitation by relying on altruism, tit-for-tat requirements, or "points" – in other words, nothing you could pay your electric bill with. Finally, in 2009, a solution appeared: Bitcoin. Not long after, Sia was born. Cryptography has unleashed the latent power of the internet by enabling interactions between mutually-distrustful parties. Sia harnesses this power to turn the cloud storage market into a proper marketplace, where buyers and sellers can transact directly, with no intermediaries, anywhere in the world. No more silos or walled gardens: your data is encrypted, so it can't be spied on, and it's stored on many servers, so no single entity can hold it hostage. Thanks to projects like Sia, the internet is being re-decentralized. Sia began its life as a startup, which means it has always been subjected to two competing forces: the ideals of its founders, and the profit motive inherent to all businesses. Its founders have taken great pains to never compromise on the former, but this often threatened the company's financial viability. With the establishment of the Sia Foundation, this tension is resolved. The Foundation, freed of the obligation to generate profit, is a pure embodiment of the ideals from which Sia originally sprung. The goals and responsibilities of the Foundation are numerous: to maintain core Sia protocols and consensus code; to support developers building on top of Sia and its protocols; to promote Sia and facilitate partnerships in other spheres and communities; to ensure that users can easily acquire and safely store siacoins; to develop network scalability solutions; to implement hardforks and lead the community through them; and much more. In a broader sense, its mission is to commoditize data storage, making it cheap, ubiquitous, and accessible to all, without compromising privacy or performance. Sia is a perfect example of how we can achieve better living through cryptography. We now begin a new chapter in Sia's history. May our stewardship lead it into a bright future.
Today, we are proposing the creation of the Sia Foundation: a new non-profit entity that builds and supports distributed cloud storage infrastructure, with a specific focus on the Sia storage platform. What follows is an informal overview of the Sia Foundation, covering two major topics: how the Foundation will be funded, and what its funds will be used for.
The Sia Foundation will be structured as a non-profit entity incorporated in the United States, likely a 501(c)(3) organization or similar. The actions of the Foundation will be constrained by its charter, which formalizes the specific obligations and overall mission outlined in this document. The charter will be updated on an annual basis to reflect the current goals of the Sia community. The organization will be operated by a board of directors, initially comprising Luke Champine as President and Eddie Wang as Chairman. Luke Champine will be leaving his position at Nebulous to work at the Foundation full-time, and will seek to divest his shares of Nebulous stock along with other potential conflicts of interest. Neither Luke nor Eddie personally own any siafunds or significant quantities of siacoin.
The primary source of funding for the Foundation will come from a new block subsidy. Following a hardfork, 30 KS per block will be allocated to the "Foundation Fund," continuing in perpetuity. The existing 30 KS per block miner reward is not affected. Additionally, one year's worth of block subsidies (approximately 1.57 GS) will be allocated to the Fund immediately upon activation of the hardfork. As detailed below, the Foundation will provably burn any coins that it cannot meaningfully spend. As such, the 30 KS subsidy should be viewed as a maximum. This allows the Foundation to grow alongside Sia without requiring additional hardforks. The Foundation will not be funded to any degree by the possession or sale of siafunds. Siafunds were originally introduced as a means of incentivizing growth, and we still believe in their effectiveness: a siafund holder wants to increase the amount of storage on Sia as much as possible. While the Foundation obviously wants Sia to succeed, its driving force should be its charter. Deriving significant revenue from siafunds would jeopardize the Foundation's impartiality and focus. Ultimately, we want the Foundation to act in the best interests of Sia, not in growing its own budget.
The Foundation inherits a great number of responsibilities from Nebulous. Each quarter, the Foundation will publish the progress it has made over the past quarter, and list the responsibilities it intends to prioritize over the coming quarter. This will be accompanied by a financial report, detailing each area of expenditure over the past quarter, and forecasting expenditures for the coming quarter. Below, we summarize some of the myriad responsibilities towards which the Foundation is expected to allocate its resources.
Maintain and enhance core Sia software
Arguably, this is the most important responsibility of the Foundation. At the heart of Sia is its consensus algorithm: regardless of other differences, all Sia software must agree upon the content and rules of the blockchain. It is therefore crucial that the algorithm be stewarded by an entity that is accountable to the community, transparent in its decision-making, and has no profit motive or other conflicts of interest. Accordingly, Sia’s consensus functionality will no longer be directly maintained by Nebulous. Instead, the Foundation will release and maintain an implementation of a "minimal Sia full node," comprising the Sia consensus algorithm and P2P networking code. The source code will be available in a public repository, and signed binaries will be published for each release. Other parties may use this code to provide alternative full node software. For example, Nebulous may extend the minimal full node with wallet, renter, and host functionality. The source code of any such implementation may be submitted to the Foundation for review. If the code passes review, the Foundation will provide "endorsement signatures" for the commit hash used and for binaries compiled internally by the Foundation. Specifically, these signatures assert that the Foundation believes the software contains no consensus-breaking changes or other modifications to imported Foundation code. Endorsement signatures and Foundation-compiled binaries may be displayed and distributed by the receiving party, along with an appropriate disclaimer. A minimal full node is not terribly useful on its own; the wallet, renter, host, and other extensions are what make Sia a proper developer platform. Currently, the only implementations of these extensions are maintained by Nebulous. The Foundation will contract Nebulous to ensure that these extensions continue to receive updates and enhancements. Later on, the Foundation intends to develop its own implementations of these extensions and others. As with the minimal node software, these extensions will be open source and available in public repositories for use by any Sia node software. With the consensus code now managed by the Foundation, the task of implementing and orchestrating hardforks becomes its responsibility as well. When the Foundation determines that a hardfork is necessary (whether through internal discussion or via community petition), a formal proposal will be drafted and submitted for public review, during which arguments for and against the proposal may be submitted to a public repository. During this time, the hardfork code will be implemented, either by Foundation employees or by external contributors working closely with the Foundation. Once the implementation is finished, final arguments will be heard. The Foundation board will then vote whether to accept or reject the proposal, and announce their decision along with appropriate justification. Assuming the proposal was accepted, the Foundation will announce the block height at which the hardfork will activate, and will subsequently release source code and signed binaries that incorporate the hardfork code. Regardless of the Foundation's decision, it is the community that ultimately determines whether a fork is accepted or rejected – nothing can change that. Foundation node software will never automatically update, so all forks must be explicitly adopted by users. Furthermore, the Foundation will provide replay and wipeout protection for its hard forks, protecting other chains from unintended or malicious reorgs. Similarly, the Foundation will ensure that any file contracts formed prior to a fork activation will continue to be honored on both chains until they expire. Finally, the Foundation also intends to pursue scalability solutions for the Sia blockchain. In particular, work has already begun on an implementation of Utreexo, which will greatly reduce the space requirements of fully-validating nodes (allowing a full node to be run on a smartphone) while increasing throughput and decreasing initial sync time. A hardfork implementing Utreexo will be submitted to the community as per the process detailed above. As this is the most important responsibility of the Foundation, it will receive a significant portion of the Foundation’s budget, primarily in the form of developer salaries and contracting agreements.
Support community services
We intend to allocate 25% of the Foundation Fund towards the community. This allocation will be held and disbursed in the form of siacoins, and will pay for grants, bounties, hackathons, and other community-driven endeavours. Any community-run service, such as a Skynet portal, explorer or web wallet, may apply to have its costs covered by the Foundation. Upon approval, the Foundation will reimburse expenses incurred by the service, subject to the exact terms agreed to. The intent of these grants is not to provide a source of income, but rather to make such services "break even" for their operators, so that members of the community can enrich the Sia ecosystem without worrying about the impact on their own finances.
Ensure easy acquisition and storage of siacoins
Most users will acquire their siacoins via an exchange. The Foundation will provide support to Sia-compatible exchanges, and pursue relevant integrations at its discretion, such as Coinbase's new Rosetta standard. The Foundation may also release DEX software that enables trading cryptocurrencies without the need for a third party. (The Foundation itself will never operate as a money transmitter.) Increasingly, users are storing their cryptocurrency on hardware wallets. The Foundation will maintain the existing Ledger Nano S integration, and pursue further integrations at its discretion. Of course, all hardware wallets must be paired with software running on a computer or smartphone, so the Foundation will also develop and/or maintain client-side wallet software, including both full-node wallets and "lite" wallets. Community-operated wallet services, i.e. web wallets, may be funded via grants. Like core software maintenance, this responsibility will be funded in the form of developer salaries and contracting agreements.
Protect the ecosystem
When it comes to cryptocurrency security, patching software vulnerabilities is table stakes; there are significant legal and social threats that we must be mindful of as well. As such, the Foundation will earmark a portion of its fund to defend the community from legal action. The Foundation will also safeguard the network from 51% attacks and other threats to network security by implementing softforks and/or hardforks where necessary. The Foundation also intends to assist in the development of a new FOSS software license, and to solicit legal memos on various Sia-related matters, such as hosting in the United States and the EU. In a broader sense, the establishment of the Foundation makes the ecosystem more robust by transferring core development to a more neutral entity. Thanks to its funding structure, the Foundation will be immune to various forms of pressure that for-profit companies are susceptible to.
Drive adoption of Sia
Although the overriding goal of the Foundation is to make Sia the best platform it can be, all that work will be in vain if no one uses the platform. There are a number of ways the Foundation can promote Sia and get it into the hands of potential users and developers. In-person conferences are understandably far less popular now, but the Foundation can sponsor and/or participate in virtual conferences. (In-person conferences may be held in the future, permitting circumstances.) Similarly, the Foundation will provide prizes for hackathons, which may be organized by community members, Nebulous, or the Foundation itself. Lastly, partnerships with other companies in the cryptocurrency space—or the cloud storage space—are a great way to increase awareness of Sia. To handle these responsibilities, one of the early priorities of the Foundation will be to hire a marketing director.
The Foundation Fund will be controlled by a multisig address. Each member of the Foundation's board will control one of the signing keys, with the signature threshold to be determined once the final composition of the board is known. (This threshold may also be increased or decreased if the number of board members changes.) Additionally, one timelocked signing key will be controlled by David Vorick. This key will act as a “dead man’s switch,” to be used in the event of an emergency that prevents Foundation board members from reaching the signature threshold. The timelock ensures that this key cannot be used unless the Foundation fails to sign a transaction for several months. On the 1st of each month, the Foundation will use its keys to transfer all siacoins in the Fund to two new addresses. The first address will be controlled by a high-security hot wallet, and will receive approximately one month's worth of Foundation expenditures. The second address, receiving the remaining siacoins, will be a modified version of the source address: specifically, it will increase the timelock on David Vorick's signing key by one month. Any other changes to the set of signing keys, such as the arrival or departure of board members, will be incorporated into this address as well. The Foundation Fund is allocated in SC, but many of the Foundation's expenditures must be paid in USD or other fiat currency. Accordingly, the Foundation will convert, at its discretion, a portion of its monthly withdrawals to fiat currency. We expect this conversion to be primarily facilitated by private "OTC" sales to accredited investors. The Foundation currently has no plans to speculate in cryptocurrency or other assets. Finally, it is important that the Foundation adds value to the Sia platform well in excess of the inflation introduced by the block subsidy. For this reason, the Foundation intends to provably burn, on a quarterly basis, any coins that it cannot allocate towards any justifiable expense. In other words, coins will be burned whenever doing so provides greater value to the platform than any other use. Furthermore, the Foundation will cap its SC treasury at 5% of the total supply, and will cap its USD treasury at 4 years’ worth of predicted expenses. Addendum: Hardfork Timeline We would like to see this proposal finalized and accepted by the community no later than September 30th. A new version of siad, implementing the hardfork, will be released no later than October 15th. The hardfork will activate at block 293220, which is expected to occur around 12pm EST on January 1st, 2021.
Addendum: Inflation specifics The total supply of siacoins as of January 1st, 2021 will be approximately 45.243 GS. The initial subsidy of 1.57 GS thus increases the supply by 3.47%, and the total annual inflation in 2021 will be at most 10.4% (if zero coins are burned). In 2022, total annual inflation will be at most 6.28%, and will steadily decrease in subsequent years.
We see the establishment of the Foundation as an important step in the maturation of the Sia project. It provides the ecosystem with a sustainable source of funding that can be exclusively directed towards achieving Sia's ambitious goals. Compared to other projects with far deeper pockets, Sia has always punched above its weight; once we're on equal footing, there's no telling what we'll be able to achieve. Nevertheless, we do not propose this change lightly, and have taken pains to ensure that the Foundation will act in accordance with the ideals that this community shares. It will operate transparently, keep inflation to a minimum, and respect the user's fundamental role in decentralized systems. We hope that everyone in the community will consider this proposal carefully, and look forward to a productive discussion.
*These questions are sourced directly from Telegram Q: When you say RenVM is Trustless, Permissionless, and Decentralized, what does that actually mean? A: Trustless = RenVM is a virtual machine (a network of nodes, that do computations), this means if you ask RenVM to trade an asset via smart contract logic, it will. No trusted intermediary that holds assets or that you need to rely on. Because RenVM is a decentralized network and computes verified information in a secure environment, no single party can prevent users from sending funds in, withdrawing deposited funds, or computing information needed for updating outside ledgers. RenVM is an agnostic and autonomous virtual broker that holds your digital assets as they move between blockchains. Permissionless = RenVM is an open protocol; meaning anyone can use RenVM and any project can build with RenVM. You don't need anyone's permission, just plug RenVM into your dApp and you have interoperability. Decentralized = The nodes that power RenVM ( Darknodes) are scattered throughout the world. RenVM has a peak capacity of up to 10,000 Darknodes (due to REN’s token economics). Realistically, there will probably be 100 - 500 Darknodes run in the initial Mainnet phases, ample decentralized nonetheless. Q: Okay, so how can you prove this? A: The publication of our audit results will help prove the trustlessness piece; permissionless and decentralized can be proven today. Permissionless = https://github.com/renproject/ren-js Decentralized = https://chaosnet.renproject.io/ Q: How does Ren sMPC work? Sharmir's secret sharing? TSS? A: There is some confusion here that keeps arising so I will do my best to clarify.TL;DR: *SSS is just data. It’s what you do with the data that matters. RenVM uses sMPC on SSS to create TSS for ECDSA keys.*SSS and TSS aren’t fundamental different things. It’s kind of like asking: do you use numbers, or equations? Equations often (but not always) use numbers or at some point involve numbers. SSS by itself is just a way of representing secret data (like numbers). sMPC is how to generate and work with that data (like equations). One of the things you can do with that work is produce a form of TSS (this is what RenVM does). However, TSS is slightly different because it can also be done *without* SSS and sMPC. For example, BLS signatures don’t use SSS or sMPC but they are still a form of TSS. So, we say that RenVM uses SSS+sMPC because this is more specific than just saying TSS (and you can also do more with SSS+sMPC than just TSS). Specifically, all viable forms of turning ECDSA (a scheme that isn’t naturally threshold based) into a TSS needs SSS+sMPC. People often get confused about RenVM and claim “SSS can’t be used to sign transactions without making the private key whole again”. That’s a strange statement and shows a fundamental misunderstanding about what SSS is. To come back to our analogy, it’s like saying “numbers can’t be used to write a book”. That’s kind of true in a direct sense, but there are plenty of ways to encode a book as numbers and then it’s up to how you interpret (how you *use*) those numbers. This is exactly how this text I’m writing is appearing on your screen right now. SSS is just secret data. It doesn’t make sense to say that SSS *functions*. RenVM is what does the functioning. RenVM *uses* the SSSs to represent private keys. But these are generated and used and destroyed as part of sMPC. The keys are never whole at any point. Q: Thanks for the explanation. Based on my understanding of SSS, a trusted dealer does need to briefly put the key together. Is this not the case? A: Remember, SSS is just the representation of a secret. How you get from the secret to its representation is something else. There are many ways to do it. The simplest way is to have a “dealer” that knows the secret and gives out the shares. But, there are other ways. For example: we all act as dealers, and all give each other shares of our individual secret. If there are N of us, we now each have N shares (one from every person). Then we all individually add up the shares that we have. We now each have a share of a “global” secret that no one actually knows. We know this global secret is the sum of everyone’s individual secrets, but unless you know every individual’s secret you cannot know the global secret (even though you have all just collectively generates shares for it). This is an example of an sMPC generation of a random number with collusion resistance against all-but-one adversaries. Q: If you borrow Ren, you can profit from the opposite Ren gain. That means you could profit from breaking the network and from falling Ren price (because breaking the network, would cause Ren price to drop) (lower amount to be repaid, when the bond gets slashed) A: Yes, this is why it’s important there has a large number of Darknodes before moving to full decentralisation (large borrowing becomes harder). We’re exploring a few other options too, that should help prevent these kinds of issues. Q: What are RenVM’s Security and Liveliness parameters? A: These are discussed in detail in our Wiki, please check it out here: https://github.com/renproject/ren/wiki/Safety-and-Liveliness#analysis Q: What are the next blockchain under consideration for RenVM? A: These can be found here: https://github.com/renproject/ren/wiki/Supported-Blockchains Q: I've just read that Aztec is going to be live this month and currently tests txs with third parties. Are you going to participate in early access or you just more focused on bringing Ren to Subzero stage? A: At this stage, our entire focus is on Mainnet SubZero. But, we will definitely be following up on integrating with AZTEC once everything is out and stable. Q: So how does RenVM compare to tBTC, Thorchain, WBTC, etc..? A: An easy way to think about it is..RenVM’s functionality is a combination of tBTC (+ WBTC by extension), and Thorchain’s (proposed) capabilities... All wrapped into one. Just depends on what the end-user application wants to do with it. Q1: What are the core technical/security differences between RenVM and tBTC?A1: The algorithm used by tBTC faults if even one node goes offline at the wrong moment (and the whole “keep” of nodes can be penalised for this). RenVM can survive 1/3rd going offline at any point at any time. Advantage for tBTC is that collusion is harder, disadvantage is obviously availability and permissionlessness is lower. tBTC an only mint/burn lots of 1 BTC and requires an on-Ethereum SPV relay for Bitcoin headers (and for any other chain it adds). No real advantage trade-off IMO. tBTC has a liquidation mechanism that means nodes can have their bond liquidated because of ETH/BTC price ratio. Advantage means users can get 1 BTC worth of ETH. Disadvantage is it means tBTC is kind of a synthetic: needs a price feed, needs liquid markets for liquidation, users must accept exposure to ETH even if they only hold tBTC, nodes must stay collateralized or lose lots of ETH. RenVM doesn’t have this, and instead uses fees to prevent becoming under-collateralized. This requires a mature market, and assumed Darknodes will value their REN bonds fairly (based on revenue, not necessarily what they can sell it for at current —potentially manipulated—market value). That can be an advantage or disadvantage depending on how you feel. tBTC focuses more on the idea of a tokenized version of BTC that feels like an ERC20 to the user (and is). RenVM focuses more on letting the user interact with DeFi and use real BTC and real Bitcoin transactions to do so (still an ERC20 under the hood, but the UX is more fluid and integrated). Advantage of tBTC is that it’s probably easier to understand and that might mean better overall experience, disadvantage really comes back to that 1 BTC limit and the need for a more clunky minting/burning experience that might mean worse overall experience. Too early to tell, different projects taking different bets. tBTC supports BTC (I think they have ZEC these days too). RenVM supports BTC, BCH, and ZEC (docs discuss Matic, XRP, and LTC). Q2: This are my assumed differences between tBTC and RenVM, are they correct? Some key comparisons: -Both are vulnerable to oracle attacks -REN federation failure results in loss or theft of all funds -tBTC failures tend to result in frothy markets, but holders of tBTC are made whole -REN quorum rotation is new crypto, and relies on honest deletion of old key shares -tBTC rotates micro-quorums regularly without relying on honest deletion -tBTC relies on an SPV relay -REN relies on federation honesty to fill the relay's purpose -Both are brittle to deep reorgs, so expanding to weaker chains like ZEC is not clearly a good idea -REN may see total system failure as the result of a deep reorg, as it changes federation incentives significantly -tBTC may accidentally punish some honest micro-federations as the result of a deep reorg -REN generally has much more interaction between incentive models, as everything is mixed into the same pot. -tBTC is a large collection of small incentive models, while REN is a single complex incentive model A2: To correct some points: The oracle situation is different with RenVM, because the fee model is what determines the value of REN with respect to the cross-chain asset. This is the asset is what is used to pay the fee, so no external pricing is needed for it (because you only care about the ratio between REN and the cross-chain asset). RenVM does rotate quorums regularly, in fact more regularly than in tBTC (although there are micro-quorums, each deposit doesn’t get rotated as far as I know and sticks around for up to 6 months). This rotation involves rotations of the keys too, so it does not rely on honest deletion of key shares. Federated views of blockchains are easier to expand to support deep re-orgs (just get the nodes to wait for more blocks for that chain). SPV requires longer proofs which begins to scale more poorly. Not sure what you mean by “one big pot”, but there are multiple quorums so the failure of one is isolated from the failures of others. For example, if there are 10 shards supporting BTC and one of them fails, then this is equivalent to a sudden 10% fee being applied. Harsh, yes, but not total failure of the whole system (and doesn’t affect other assets). Would be interesting what RenVM would look like with lots more shards that are smaller. Failure becomes much more isolated and affects the overall network less. Further, the amount of tBTC you can mint is dependent on people who are long ETH and prefer locking it up in Keep for earning a smallish fee instead of putting it in Compound or leveraging with dydx. tBTC is competing for liquidity while RenVM isn't. Q: I understand correctly RenVM (sMPC) can get up to a 50% security threshold, can you tell me more? A: The best you can theoretically do with sMPC is 50-67% of the total value of REN used to bond Darknodes (RenVM will eventually work up to 50% and won’t go for 67% because we care about liveliness just as much as safety). As an example, if there’s $1M of REN currently locked up in bonded Darknodes you could have up to $500K of tokens shifted through RenVM at any one specific moment. You could do more than that in daily volume, but at any one moment this is the limit.Beyond this limit, you can still remain secure but you cannot assume that players are going to be acting to maximize their profit. Under this limit, a colluding group of adversaries has no incentive to subvert safety/liveliness properties because the cost to attack roughly outweighs the gain. Beyond this limit, you need to assume that players are behaving out of commitment to the network (not necessarily a bad assumption, but definitely weaker than the maximizing profits assumption). Q: Why is using ETH as collateral for RenVM a bad idea? A: Using ETH as collateral in this kind of system (like having to deposit say 20 ETH for a bond) would not make any sense because the collateral value would then fluctuate independently of what kind of value RenVM is providing. The REN token on the other hand directly correlates with the usage of RenVM which makes bonding with REN much more appropriate. DAI as a bond would not work as well because then you can't limit attackers with enough funds to launch as many darknodes as they want until they can attack the network. REN is limited in supply and therefore makes it harder to get enough of it without the price shooting up (making it much more expensive to attack as they would lose their bonds as well). A major advantage of Ren's specific usage of sMPC is that security can be regulated economically. All value (that's being interopped at least) passing through RenVM has explicit value. The network can self-regulate to ensure an attack is never worth it. Q: Given the fee model proposal/ceiling, might be a liquidity issue with renBTC. More demand than possible supply?A: I don’t think so. As renBTC is minted, the fees being earned by Darknodes go up, and therefore the value of REN goes up. Imagine that the demand is so great that the amount of renBTC is pushing close to 100% of the limit. This is a very loud and clear message to the Darknodes that they’re going to be earning good fees and that demand is high. Almost by definition, this means REN is worth more. Profits of the Darknodes, and therefore security of the network, is based solely on the use of the network (this is what you want because your network does not make or break on things outside the systems control). In a system like tBTC there are liquidity issues because you need to convince ETH holders to bond ETH and this is an external problem. Maybe ETH is pumping irrespective of tBTC use and people begin leaving tBTC to sell their ETH. Or, that ETH is dumping, and so tBTC nodes are either liquidated or all their profits are eaten by the fact that they have to be long on ETH (and tBTC holders cannot get their BTC back in this case). Feels real bad man. Q: I’m still wondering which asset people will choose: tbtc or renBTC? I’m assuming the fact that all tbtc is backed by eth + btc might make some people more comfortable with it. A: Maybe :) personally I’d rather know that my renBTC can always be turned back into BTC, and that my transactions will always go through. I also think there are many BTC holders that would rather not have to “believe in ETH” as an externality just to maximize use of their BTC. Q: How does the liquidation mechanism work? Can any party, including non-nodes act as liquidators? There needs to be a price feed for liquidation and to determine the minting fee - where does this price feed come from? A: RenVM does not have a liquidation mechanism. Q: I don’t understand how the price feeds for minting fees make sense. You are saying that the inputs for the fee curve depend on the amount of fees derived by the system. This is circular in a sense? A: By evaluating the REN based on the income you can get from bonding it and working. The only thing that drives REN value is the fact that REN can be bonded to allow work to be done to earn revenue. So any price feed (however you define it) is eventually rooted in the fees earned. Q: Who’s doing RenVM’s Security Audit? A: ChainSecurity | https://chainsecurity.com/ Q: Can you explain RenVM’s proposed fee model? A: The proposed fee model can be found here: https://github.com/renproject/ren/wiki/Safety-and-Liveliness#fees Q: Can you explain in more detail the difference between "execution" and "powering P2P Network". I think that these functions are somehow overlapping? Can you define in more detail what is "execution" and "powering P2P Network"? You also said that at later stages semi-core might still exist "as a secondary signature on everything (this can mathematically only increase security, because the fully decentralised signature is still needed)". What power will this secondary signature have? A: By execution we specifically mean signing things with the secret ECDSA keys. The P2P network is how every node communicates with every other node. The semi-core doesn’t have any “special powers”. If it stays, it would literally just be a second signature required (as opposed to the one signature required right now). This cannot affect safety, because the first signature is still required. Any attack you wanted to do would still have to succeed against the “normal” part of the network. This can affect liveliness, because the semi-core could decide not to sign. However, the semi-core follows the same rules as normal shards. The signature is tolerant to 1/3rd for both safety/liveliness. So, 1/3rd+ would have to decide to not sign. Members of the semi-core would be there under governance from the rest of our ecosystem. The idea is that members would be chosen for their external value. We’ve discussed in-depth the idea of L<3. But, if RenVM is used in MakerDAO, Compound, dYdX, Kyber, etc. it would be desirable to capture the value of these ecosystems too, not just the value of REN bonded. The semi-core as a second signature is a way to do this. Imagine if the members for those projects, because those projects want to help secure renBTC, because it’s used in their ecosystems. There is a very strong incentive for them to behave honestly. To attack RenVM you first have to attack the Darknodes “as per usual” (the current design), and then somehow convince 1/3rd of these projects to act dishonestly and collapse their own ecosystems and their own reputations. This is a very difficult thing to do. Worth reminding: the draft for this proposal isn’t finished. It would be great for everyone to give us their thoughts on GitHub when it is proposed, so we can keep a persistent record. Q: Which method or equation is used to calculate REN value based on fees? I'm interested in how REN value is calculated as well, to maintain the L < 3 ratio? A: We haven’t finalized this yet. But, at this stage, the plan is to have a smart contract that is controlled by the Darknodes. We want to wait to see how SubZero and Zero go before committing to a specific formulation, as this will give us a chance to bootstrap the network and field inputs from the Darknodes owners after the earnings they can make have become more apparent.
6ix9ine Chaine - An experiment in scarcity powered by the Ethereum Network
When a new monetary asset is created the key problem is a matter of distribution - how to rationally distribute it to a wide number of participants such that anyone can acquire it and all units are distributed at-cost. Bitcoin's entire fixed-supply is being distributed fairly and at-cost, however Ethereum and the tokens created on it have not undergone the same process. As such, the value held by Ethereum and its tokens continually inflate as more are created at various cost with unpredictable distribution. 6ix9ine Chain is designed to return scarcity properties to the Ethereum chain using POL (proof of life), captured in a single fixed-supply asset with deflationary qualities, a fixed amount of tokens will be burned for every week out of prison that 6ix9ine manages to survive, this will create an exponential scarcity within the token and a subsequent equilibrium in value based on 6ix9nine's ability to survive.
Why proof of life over traditional forms of consensus?
This is an experiment in darwinian theory, the aim being to create a consensus method that is more closely aligned with the order of reality, and in doing so, create a distribution method that is rational in regard to nature.
Just finished watching The Weekly (it’s kind of a Vice rip-off by the NYT) on Hulu where they went into detail about their story published this week about a « hacker » named Patrick Kessler who claimed to have tens of thousands of hours of Epstein’s private videos. Turns out, Patrick did not released the videos and there is a lot of questions with his credibility, nonetheless, he clearly exposed two lawyers (Bois and Pottinger) for attempting to profit by offering to reach large settlements in which they would take 40%. The article is here: Jeffrey Epstein, Blackmail, and a Lucrative Hotlist Even though it sounds like this guy Kessler is full of shit, I REALLY wish that he wasn’t and at some point these troves of photos and videos get released and a bunch of rich and powerful people get what they deserve for abusing these women. For those who need access to NYT- it is a long article, but here’s the full text: By Jessica Silver-Greenberg, Emily Steel, Jacob Bernstein and David Enrich Nov. 30, 2019 Soon after the sex criminal Jeffrey Epstein died in August, a mysterious man met with two prominent lawyers. Towering, barrel-chested and wild-bearded, he was a prodigious drinker and often wore flip-flops. He went by a pseudonym, Patrick Kessler — a necessity, he said, given the shadowy, dangerous world that he inhabited. He told the lawyers he had something incendiary: a vast archive of Mr. Epstein’s data, stored on encrypted servers overseas. He said he had years of the financier’s communications and financial records — as well as thousands of hours of footage from hidden cameras in the bedrooms of Mr. Epstein’s properties. The videos, Kessler said, captured some of the world’s richest, most powerful men in compromising sexual situations — even in the act of rape. Kessler said he wanted to expose these men. If he was telling the truth, his trove could answer one of the Epstein saga’s most baffling questions: How did a college dropout and high school math teacher amass a purported nine-figure fortune? One persistent but unproven theory was that he ran a sprawling blackmail operation. That would explain why moguls, scientists, political leaders and a royal stayed loyal to him, in some cases even after he first went to jail. Kessler’s tale was enough to hook the two lawyers, the famed litigator David Boies and his friend John Stanley Pottinger. If Kessler was authentic, his videos would arm them with immense leverage over some very important people. Mr. Boies and Mr. Pottinger discussed a plan. They could use the supposed footage in litigation or to try to reach deals with men who appeared in it, with money flowing into a charitable foundation. In encrypted chats with Kessler, Mr. Pottinger referred to a roster of potential targets as the “hot list.” He described hypothetical plans in which the lawyers would pocket up to 40 percent of the settlements and could extract money from wealthy men by flipping from representing victims to representing their alleged abusers. The possibilities were tantalizing — and extended beyond vindicating victims. Mr. Pottinger saw a chance to supercharge his law practice. For Mr. Boies, there was a shot at redemption, after years of criticism for his work on behalf of Theranos and Harvey Weinstein. In the end, there would be no damning videos, no funds pouring into a new foundation. Mr. Boies and Mr. Pottinger would go from toasting Kessler as their “whistle-blower” and “informant” to torching him as a “fraudster” and a “spy.” Kessler was a liar, and he wouldn’t expose any sexual abuse. But he would reveal something else: The extraordinary, at times deceitful measures elite lawyers deployed in an effort to get evidence that could be used to win lucrative settlements — and keep misconduct hidden, allowing perpetrators to abuse again. Mr. Boies has publicly decried such secret deals as “rich man’s justice,” a way that powerful men buy their way out of legal and reputational jeopardy. This is how it works. 7 men and a headless parrot The man who called himself Kessler first contacted a Florida lawyer, Bradley J. Edwards, who was in the news for representing women with claims against Mr. Epstein. It was late August, about two weeks after the financier killed himself in a jail cell while awaiting trial on federal sex-trafficking charges. Mr. Edwards, who did not respond to interview requests, had a law firm called Edwards Pottinger, and he soon referred Kessler to his New York partner. Silver-haired and 79, Mr. Pottinger had been a senior civil-rights official in the Nixon and Ford administrations, but he also dabbled in investment banking and wrote best-selling medical thrillers. He was perhaps best known for having dated Gloria Steinem and Kathie Lee Gifford. Mr. Pottinger recalled that Mr. Edwards warned him about Kessler, saying that he was “endearing,” “spooky” and “loves to drink like a fish.” After an initial discussion with Kessler in Washington, Mr. Pottinger briefed Mr. Boies — whose firm was also active in representing accusers in the Epstein case — about the sensational claims. He then invited Kessler to his Manhattan apartment. Kessler admired a wall-mounted frame containing a headless stuffed parrot; on TV, the Philadelphia Eagles were mounting a comeback against the Washington Redskins. Mr. Pottinger poured Kessler a glass of WhistlePig whiskey, and the informant began to talk. In his conversations with Mr. Pottinger and, later, Mr. Boies, Kessler said his videos featured numerous powerful men who were already linked to Mr. Epstein: Ehud Barak, the former Israeli prime minister; Alan Dershowitz, a constitutional lawyer; Prince Andrew; three billionaires; and a prominent chief executive. All seven men, or their representatives, told The New York Times they never engaged in sexual activity on Mr. Epstein’s properties. The Times has no reason to believe Kessler’s supposed video footage is real. In his apartment, Mr. Pottinger presented Kessler with a signed copy of “The Boss,” his 2005 novel. “One minute you’re bending the rules,” blares the cover of the paperback version. “The next minute you’re breaking the law.” On the title page, Mr. Pottinger wrote: “Here’s to the great work you are to do. Happy to be part of it.” Mr. Pottinger also gave Kessler a draft contract to bring him on as a client, allowing him to use a fake name. “For reasons revealed to you, I prefer to proceed with this engagement under the name Patrick Kessler,” the agreement said. Despite the enormities of the Epstein scandal, few of his accusers have gotten a sense of justice or resolution. Mr. Pottinger thought Kessler’s files could change everything. This strange man was theatrical and liked his alcohol, but if there was even a chance his claims were true, they were worth pursuing. “Our clients are said to be liars and prostitutes,” Mr. Pottinger later said in an interview with The Times, “and we now have someone who says, ‘I can give you secret photographic proof of abuse that will completely change the entire fabric of your practice and get justice for these girls.’ And you think that we wouldn’t try to get that?” A victim becomes a hacker Mr. Pottinger and Mr. Boies have known each other for years, a friendship forged on bike trips in France and Italy. In legal circles, Mr. Boies was royalty: He was the one who fought for presidential candidate Al Gore before the Supreme Court, took on Microsoft in a landmark antitrust case, and helped obtain the right for gays and lesbians to get married in California. But then Mr. Boies got involved with the blood-testing start-up Theranos. As the company was being revealed as a fraud, he tried to bully whistle-blowers into not speaking to a Wall Street Journal reporter, and he was criticized for possible conflicts of interest when he joined the company’s board in 2015. Two years later, Mr. Boies helped his longtime client Harvey Weinstein hire private investigators who intimidated sources and trailed reporters for The Times and The New Yorker — even though Mr. Boies’s firm had worked for The Times on other matters. (The Times fired his firm.) By 2019, Mr. Boies, 78, was representing a number of Mr. Epstein’s alleged victims. They got his services pro bono, and he got the chance to burnish his legacy. When Mr. Pottinger contacted him about Kessler, he was intrigued. On Sept. 9, Mr. Boies greeted Kessler at the offices of his law firm, Boies Schiller Flexner, in a gleaming new skyscraper at Hudson Yards on Manhattan’s West Side. Kessler unfurled a fantastic story, one he would embroider and alter in later weeks, that began with him growing up somewhere within a three-hour radius of Washington. Kessler said he had been molested as a boy by a Bible school teacher and sought solace on the internet, where he fell in with a group of victims turned hackers, who used their skills to combat pedophilia. Kessler claimed that a technology executive had introduced him to Mr. Epstein, who in 2012 hired Kessler to set up encrypted servers to preserve his extensive digital archives. With Mr. Epstein dead, Kessler boasted to the lawyers, he had unfettered access to the material. He said the volume of videos was overwhelming: more than a decade of round-the-clock footage from dozens of cameras. Kessler displayed some pixelated video stills on his phone. In one, a bearded man with his mouth open appears to be having sex with a naked woman. Kessler said the man was Mr. Barak. In another, a man with black-framed glasses is seen shirtless with a woman on his lap, her breasts exposed. Kessler said it was Mr. Dershowitz. He also said that some of the supposed videos appeared to have been edited and cataloged for the purpose of blackmail. “This was explosive information if true, for lots and lots of people,” Mr. Boies said in an interview. Mr. Boies and Mr. Pottinger had decades of legal experience and considered themselves experts at assessing witnesses’ credibility. While they couldn’t be sure, they thought Kessler was probably legit. A chance to sway the Israeli election Within hours of the Hudson Yards meeting, Mr. Pottinger sent Kessler a series of texts over the encrypted messaging app Signal. According to excerpts viewed by The Times, Mr. Pottinger and Kessler discussed a plan to disseminate some of the informant’s materials — starting with the supposed footage of Mr. Barak. The Israeli election was barely a week away, and Mr. Barak was challenging Prime Minister Benjamin Netanyahu. The purported images of Mr. Barak might be able to sway the election — and fetch a high price. (“Total lie with no basis in reality,” Mr. Barak said when asked about the existence of such videos.) “Can you review your visual evidence to be sure some or all is indisputably him? If so, we can make it work,” Mr. Pottinger wrote. Kessler said he would do so. Mr. Pottinger sent a yellow smiley-face emoji with its tongue sticking out. “Can you share your contact that would be purchasing,” Kessler asked. “Sheldon Adelson,” Mr. Pottinger answered. Mr. Adelson, a billionaire casino magnate in Las Vegas, had founded one of Israel’s largest newspapers, and it was an enthusiastic booster of Mr. Netanyahu. Mr. Pottinger wrote that he and Mr. Boies hoped to fly to Nevada to meet with Mr. Adelson to discuss the images. “Do you believe that adelson has the pull to insure this will hurt his bid for election?” Kessler asked the next morning. Mr. Pottinger reassured him. “There is no question that Adelson has the capacity to air the truth about EB if he wants to,” he said, using Mr. Barak’s initials. He said he planned to discuss the matter with Mr. Boies that evening. Mr. Boies confirmed that they discussed sharing the photo with Mr. Adelson but said the plan was never executed. Boaz Bismuth, the editor in chief of the newspaper, Israel Hayom, said its journalists were approached by an Israeli source who pitched them supposed images of Mr. Barak, but that “we were not interested.” ‘These are wealthy wrongdoers’ The men whom Kessler claimed to have on tape were together worth many billions. Some of their public relations teams had spent months trying to tamp down media coverage of their connections to Mr. Epstein. Imagine how much they might pay to make incriminating videos vanish. You might think that lawyers representing abuse victims would want to publicly expose such information to bolster their clients’ claims. But that is not how the legal industry always works. Often, keeping things quiet is good business. One of the revelations of the #MeToo era has been that victims’ lawyers often brokered secret deals in which alleged abusers paid to keep their accusers quiet and the allegations out of the public sphere. Lawyers can pocket at least a third of such settlements, profiting off a system that masks misconduct and allows men to abuse again. Mr. Boies and Mr. Pottinger said in interviews that they were looking into creating a charity to help victims of sexual abuse. It would be bankrolled by private legal settlements with the men on the videos. Mr. Boies acknowledged that Kessler might get paid. “If we were able to use this to help our victims recover money, we would treat him generously,” he said in September. He said that his firm would not get a cut of any settlements. Such agreements would have made it less likely that videos involving the men became public. “Generally what settlements are about is getting peace,” Mr. Boies said. Mr. Pottinger told Kessler that the charity he was setting up would be called the Astria Foundation — a name he later said his girlfriend came up with, in a nod to Astraea, the Greek goddess of innocence and justice. “We need to get it funded by abusers,” Mr. Pottinger texted, noting in another message that “these are wealthy wrongdoers.” Mr. Pottinger asked Kessler to start compiling incriminating materials on a specific group of men. “I’m way ahead of you,” Kessler responded. He said he had asked his team of fellow hackers to search the files for the three billionaires, the C.E.O. and Prince Andrew. “Yes, that’s exactly how to do this,” Mr. Pottinger said. “Videos for sure, but email traffic, too.” “I call it our hot list,” he added. Image The Grand Sichuan restaurant in Manhattan. The Grand Sichuan restaurant in Manhattan.Credit...Stephanie Diani for The New York Times A quiet table at the back of Grand Sichuan In mid-September, Mr. Boies and Mr. Pottinger invited reporters from The Times to the Boies Schiller offices to meet Kessler. The threat of a major news organization writing about the videos — and confirming the existence of an extensive surveillance apparatus — could greatly enhance the lawyers’ leverage over the wealthy men. Before the session, Mr. Pottinger encouraged Kessler to focus on certain men, like Mr. Barak, while avoiding others. Referring to the reporters, he added, “Let them drink from a fountain instead of a water hose. They and the readers will follow that better.” The meeting took place on a cloudy Saturday morning. After agreeing to leave their phones and laptops outside, the reporters entered a 20th-floor conference room. Kessler was huge: more than 6 feet tall, pushing 300 pounds, balding, his temples speckled with gray. He told his story and presented images that he said were of Mr. Epstein, Mr. Barak and Mr. Dershowitz having sex with women. Barely an hour after the session ended, the Times reporters received an email from Kessler: “Are you free?” He said he wanted to meet — alone. “Tell no one else.” That afternoon, they met at Grand Sichuan, an iconic Chinese restaurant in Manhattan’s Chelsea neighborhood. The lunch rush was over, and the trio sat at a quiet table in the back. A small group of women huddled nearby, speaking Mandarin and snipping the ends off string beans. Kessler complained that Mr. Boies and Mr. Pottinger were more interested in making money than in exposing wrongdoers. He pulled out his phone, warned the reporters not to touch it, and showed more of what he had. There was a color photo of a bare-chested, gray-haired man with a slight smile. Kessler said it was a billionaire. He also showed blurry, black-and-white images of a dark-haired man receiving oral sex. He said it was a prominent C.E.O. Soup dumplings and Gui Zhou chicken arrived, and Kessler kept talking. He said he had found financial ledgers on Mr. Epstein’s servers that showed he had vast amounts of Bitcoin and cash in the Middle East and Bangkok, and hundreds of millions of dollars’ worth of gold, silver and diamonds. He presented no proof. But it is common for whistle-blowers to be erratic and slow to produce their evidence, and The Times thought it was worth investigating Kessler’s claims. The conversation continued in a conference room at a Washington hotel five days later, after a text exchange in which Kessler noted his enthusiasm for Japanese whiskey. Both parties brought bottles to the hotel, and Kessler spent nearly eight hours downing glass after glass. He veered from telling tales about the dark web to professing love for “Little House on the Prairie.” He asserted that he had evidence Mr. Epstein had derived his wealth through illicit means. At one point, he showed what he said were classified C.I.A. documents. Kessler said he had no idea who the women in the videos were or how the lawyers might go about identifying them to act on their behalf. From his perspective, he said, it seemed like Mr. Boies and Mr. Pottinger were plotting to use his footage to demand huge sums from billionaires. He said it looked like blackmail — and that he could prove it. ‘We keep it. We keep everything’ Was Kessler’s story plausible? Did America’s best-connected sexual predator accumulate incriminating videos of powerful men? Two women who spent time in Mr. Epstein’s homes said the answer was yes. In an unpublished memoir, Virginia Giuffre, who accused Mr. Epstein of making her a “sex slave,” wrote that she discovered a room in his New York mansion where monitors displayed real-time surveillance footage. And Maria Farmer, an artist who accused Mr. Epstein of sexually assaulting her when she worked for him in the 1990s, said that Mr. Epstein once walked her through the mansion, pointing out pin-sized cameras that he said were in every room. “I said, ‘Are you recording all this?’” Ms. Farmer said in an interview. “He said, ‘Yes. We keep it. We keep everything.’” During a 2005 search of Mr. Epstein’s Palm Beach, Fla., estate, the police found two cameras hidden in clocks — one in the garage and the other next to his desk, according to police reports. But no other cameras were found. Kessler claimed to have been an early investor in a North Carolina coffee company, whose sticker was affixed to his laptop. But its founder said no one matching Kessler’s description had ever been affiliated with the company. Kessler insisted that he invested in 2009, but the company wasn’t founded until 2011. The contents of Kessler’s supposed C.I.A. documents turned out to be easily findable using Google. At one point, Kessler said that one of his associates had been missing and was found dead; later, Kessler said the man was alive and in the southern United States. He said that his mother had died when he was young — and that he had recently given her a hug. A photo he sent from what he said was a Washington-area hospital featured a distinctive blanket, but when The Times called local hospitals, they didn’t recognize the pattern. After months of effort, The Times could not learn Kessler’s identity or confirm any element of his back story. “I am very often being purposefully inconsistent,” Kessler said, when pressed. A Weinstein cameo On the last Friday in September, Mr. Boies and Mr. Pottinger sat on a blue leather couch in the corner of a members-only dining room at the Harvard Club in Midtown Manhattan. Antlered animal heads and oil paintings hung from the dark wooden walls. The lawyers were there to make a deal with The Times. Tired of waiting for Kessler’s motherlode, Mr. Pottinger said they planned to send a team overseas to download the material from his servers. He said he had alerted the F.B.I. and a prosecutor in the United States attorney’s office in Manhattan. Mr. Boies told an editor for The Times that they would be willing to share everything, on one condition: They would have discretion over which men could be written about, and when. He explained that if compromising videos about particular men became public, that could torpedo litigation or attempts to negotiate settlements. The Times editor didn’t commit. Mr. Boies and Mr. Pottinger later said those plans had hinged on verifying the videos’ authenticity and on having clients with legitimate legal claims against the men. Otherwise, legal experts said, it might have crossed the line into extortion. The meeting was briefly interrupted when Bob Weinstein, the brother of Harvey Weinstein, bounded up to the table and plopped onto the couch next to Mr. Boies. The two men spent several minutes talking, laughing and slapping each other on the back. While Mr. Boies and Mr. Weinstein chatted, Mr. Pottinger furtively displayed the black-and-white shot of a man in glasses having sex. Both lawyers said it looked like Mr. Dershowitz. ‘You don’t keep your glasses on when you’re doing that’ One day in late September, Mr. Dershowitz’s secretary relayed a message: Someone named Patrick Kessler wanted to speak to him about Mr. Boies. “The problem is that they don’t want to move forward with any of these people legally,” Kessler said. “They’re just interested in trying to settle and take a cut.” “Who are these people that you have on videotape?” Mr. Dershowitz asked. “There’s a lot of people,” Kessler said, naming a few powerful men. He added, “There’s a long list of people that they want me to have that I don’t have.” “Who?” Mr. Dershowitz asked. “Did they ask about me?” “Of course they asked about you. You know that, sir.” “And you don’t have anything on me, right?” “I do not, no,” Kessler said. “Because I never, I never had sex with anybody,” Mr. Dershowitz said. Later in the call, he added, “I am completely clean. I was at Jeffrey’s house. I stayed there. But I didn’t have any sex with anybody.” What was the purpose of Kessler’s phone call? Why did he tell Mr. Dershowitz that he wasn’t on the supposed surveillance tapes, contradicting what he had said and showed to Mr. Boies, Mr. Pottinger and The Times? Did the call sound a little rehearsed? Mr. Dershowitz said that he didn’t know why Kessler contacted him, and that the phone call was the only time the two men ever spoke. When The Times showed him one of Kessler’s photos, in which a bespectacled man resembling Mr. Dershowitz appears to be having sex, Mr. Dershowitz laughed and said the man wasn’t him. His wife, Carolyn Cohen, peeked at the photo, too. “You don’t keep your glasses on when you’re doing that,” she said. Data set (supposedly) to self-destruct In early October, Kessler said he was ready to produce the Epstein files. He told The Times that he had created duplicate versions of Mr. Epstein’s servers. He laid out detailed logistical plans for them to be shipped by boat to the United States and for one of his associates — a very short Icelandic man named Steven — to deliver them to The Times headquarters at 11 a.m. on Oct. 3. Kessler warned that he was erecting a maze of security systems. First, a Times employee would need to use a special thumb drive to access a proprietary communications system. Then Kessler’s colleague would transmit a code to decrypt the files. If his instructions weren’t followed precisely, Kessler said, the information would self-destruct. Specialists at The Times set up a number of “air-gapped” laptops — disconnected from the internet — in a windowless, padlocked meeting room. Reporters cleared their schedules to sift through thousands of hours of surveillance footage. On the morning of the scheduled delivery, Kessler sent a series of frantic texts. Disaster had struck. A fire was burning. The duplicate servers were destroyed. One of his team members was missing. He was fleeing to Kyiv. Two hours later, Kessler was in touch with Mr. Pottinger and didn’t mention any emergency. Kessler said he hoped that the footage would help pry $1 billion in settlements out of their targets, and asked him to detail how the lawyers could extract the money. “Could you put together a hypothetical situation,” Kessler wrote, not something “set in stone but close to what your thinking.” In one, which he called a “standard model” for legal settlements, Mr. Pottinger said the money would be split among his clients, the Astria Foundation, Kessler and the lawyers, who would get up to 40 percent. In the second hypothetical, Mr. Pottinger wrote, the lawyers would approach the videotaped men. The men would then hire the lawyers, ensuring that they would not get sued, and “make a contribution to a nonprofit as part of the retainer.” “No client is actually involved in this structure,” Mr. Pottinger said, noting that the arrangement would have to be “consistent with and subject to rules of ethics.” “Thank you very much,” Kessler responded. Mr. Pottinger later said that the scenario would have involved him representing a victim, settling a case and then representing the victim’s alleged abuser. He said it was within legal boundaries. (He also said he had meant to type “No client lawsuit is actually involved.”) Such legal arrangements are not unheard-of. Lawyers representing a former Fox News producer who had accused Bill O’Reilly of sexual harassment reached a settlement in which her lawyers agreed to work for Mr. O’Reilly after the dispute. But legal experts generally consider such setups to be unethical because they can create conflicts between the interests of the lawyers and their original clients. ‘I just pulled it out of my behind’ The lawyers held out hope of getting Kessler’s materials. But weeks passed, and nothing arrived. At one point, Mr. Pottinger volunteered to meet Kessler anywhere — including Ljubljana, the capital of Slovenia. “I still believe he is what he purported to be,” Mr. Boies wrote in an email on Nov. 7. “I have to evaluate people for my day job, and he seemed too genuine to be a fake, and I very much want him to be real.” He added, “I am not unconscious of the danger of wanting to believe something too much.” Ten days later, Mr. Boies arrived at The Times for an on-camera interview. It was a bright, chilly Sunday, and Mr. Boies had just flown in from Ecuador, where he said he was doing work for the finance ministry. Reporters wanted to ask him plainly if his and Mr. Pottinger’s conduct with Kessler crossed ethical lines. Would they have brokered secret settlements that buried evidence of wrongdoing? Did the notion of extracting huge sums from men in exchange for keeping sex tapes hidden meet the definition of extortion? Mr. Boies said the answer to both questions was no. He said he and Mr. Pottinger operated well within the law. They only intended to pursue legal action on behalf of their clients — in other words, that they were a long way from extortion. In any case, he said, he and Mr. Pottinger had never authenticated any of the imagery or identified any of the supposed victims, much less contacted any of the men on the “hot list.” Then The Times showed Mr. Boies some of the text exchanges between Mr. Pottinger and Kessler. Mr. Boies showed a flash of anger and said it was the first time he was seeing them. By the end of the nearly four-hour interview, Mr. Boies had concluded that Kessler was probably a con man: “I think that he was a fraudster who was just trying to set things up.” And he argued that Kessler had baited Mr. Pottinger into writing things that looked more nefarious than they really were. He acknowledged that Mr. Pottinger had used “loose language” in some of his messages that risked creating the impression that the lawyers were plotting to monetize evidence of abuse. Several days later, Mr. Boies returned for another interview and was more critical of Mr. Pottinger, especially the hypothetical plans that he had described to Kessler. “Having looked at all that stuff in context, I would not have said that,” he said. How did Mr. Boies feel about Mr. Pottinger invoking his name in messages to Kessler? “I don’t like it,” he said. But Mr. Boies stopped short of blaming Mr. Pottinger for the whole mess. “I’m being cautious not to throw him under the bus more than I believe is accurate,” he said. His longtime P.R. adviser, Dawn Schneider, who had been pushing for a more forceful denunciation, dropped her pen, threw up her arms and buried her head in her hands. In a separate interview, The Times asked Mr. Pottinger about his correspondence with Kessler. The lawyer said that his messages shouldn’t be taken at face value because, in reality, he had been deceiving Kessler all along — “misleading him deliberately in order to get the servers.” The draft retention agreement that Mr. Pottinger had given to Kessler in September was unsigned and never meant to be honored, Mr. Pottinger said. And he never intended to sell photos of Mr. Barak to Mr. Adelson. “I just pulled it out of my behind,” he said, describing it as an act to impress Kessler. As for the two hypotheticals about how to get money out of the men on the list, Mr. Pottinger said, he never planned to do what he carefully articulated. “I didn’t owe Patrick honesty about this,” he said. Mr. Pottinger said that he had only one regret — that “we did not get the information that this liar said he had.” He added, “I’m building legal cases here. I’m trying not to engage too much in shenanigans. I wish I didn’t, but this guy was very unusual.”
First, I'd like to apologies for how long this is going to be, but I believe context is everything. I'd like to apologize to the Nano community. Since before the re brand I've always cracked jokes about the project, primarily because I can't stand moonbois.. but I digress. I guess you could say I was early on the Bitcoin chain. I was blown away by the white paper and mined coins before ASICs we're even a discussion. Never got rid of them or anything, just thought it was an amazing concept to me since I had been repeatedly jacked around by a few banks. However, as a recurring theme life happened and I fell out of it completely. A few years went by when someone brought it up to me and when I asked how much it was worth, I almost had a heart attack. Probably shouldn't have spilled beer on the laptop holding my address and key. It didn't even cross my mind when I threw it out.. So I was back, other projects were on the come up and I took interest. Thought they were great, still do.. But I couldn't wrap my head around a lot of it. I'm familiar with code like I am around the block of an engine, but I'm not a mechanic. I couldn't fathom having to use a calculator to figure out how much gas I needed to send 100 coins of X. Thought I did it right and boom... Dust. The rage. Made some good strides and learned from previous mistakes, but I was still somewhat upset with decisions made within these projects. Who would think that was okay? Life happened again and I dropped out for quite awhile again to return back to a colleague at work mentioning BTC at around 9K. I quietly (I don't mention to many people about how involved I've been) checked out my addresses and was blown away. So I was back. Yeah I made gains (lost a lot too), but I was already well on my way in life and career and didn't need the rocket in some dream of a lambo (Masi's are better). I just wanted all of this to work. Again, it seemed like it was too hard to do anything, move things around... Dust here, dust there.. None the less, I learned more. Taught myself some code just so I could understand the githubs.. No desire to code, just wanted to learn. The dream I saw a few years ago was growing and I felt optimistic. Stuck around for a long run and then life happened again. Came back at probably the best time in late summer 2017. You want to talk about diversification... I just (today) burned a stack of papers with private keys written down to projects I forgot even existed. The mayhem! Anyway, won some lost some yeah yeah everyone has those stories.... I was still frustrated because that image I had in my head when I was a bit younger was not really fulfilled. Man, these moonbois, let me tell you. At the time and shortly after cracking jokes and having fun was basically my MO (I'm very sarcastic, still am). But yet again, life happened and I let everything just sit where the chips were.. With the exception of those burned out GPUs and the S9's. They went into the trash. Life gave me a nice little easy path more recently and I've been poking my head around again. The moonboi epidemic is definitely at an ATH. But where the hell was this image I had years back and now and why did it seem like it died? Too many scams? Too many hacks? Too much smoke and mirrors? The founding idea is/was so perfect? But I wanted that image. The past couple weeks I've been being my sarcastic ass and ripping a bit on Nano. I saw an actual well thought out post on Reddit and thought “Alright, that's pretty well said. Let me hear this out.” So I took a look. Thought it was better put together than other projects so I lurked around. Today in the daily general I asked for a laymen's approach. I didn't need it, but I wanted to see what would be thrown at me. I was impressed. I saw on another thread about Natrium and a faucet... DAMN, that was fast. Alright I thought, let's dabble. So I did what I always do.. Took a little BTC to the exchange, picked up some nano, set up the ledger and mobile app and tested some stuff out. Do you know the feeling after everything I just said to send 10 Nano from the exchange (including fee) to a mobile wallet, to the ledger, back to the mobile wallet and then back to the exchange and in the end... still have 10 Nano? In under less than I don't even know.. as fast as I could copy and paste it?! I called for my wife took her phone and sent myself 10 Nano back and forth. Man am I an asshole. I'm not “In” so to speak, because honestly, at this point. I don't care about prices. I just want to use the shit. Life happens, I want to be able to continue down life and use this shit. The last time I actually used BTC for anything was in 2014. BTC is digital gold for me.. Yeah, Yeah, Yeah... Sounds like some WSJ headline, I know. But it's been a good hedge against inflation for what's it worth. But during that second to last time I was back.. the Tx fees were unbelievable. Store of value, all the way, buying a snickers bar? No thanks mate. I'm actually late to meet a friend at the bar for our weekly pint, was gonna just send this, but he's a moonboi. One sec. Lol --- 45 min later --- Alright, at the pub. Got him to download Natrium. We're now gonna just buy eac hother drinks for the next few hours. I have some questions regarding decentralization.. bottle necking, spam transactions, but I can ask them in discord I guess. My only fear is that this could be replicated by Chase/BofA etc, but then again, I kind of left them years ago for a reason. I'm sorry, okay. I'm sorry I was a sarcastic asshole. This is by far the closest thing I've wanted in a very long time. Send 1 Nano.. Get 1 Nano. Who would have thought. I'm going back to darts, but before I go... - Can someone send me something on how to set up a node? Walk through maybe? - Mods should pin this. I don't care about worthless internet points. Truth is I'm on my 9th or 10th Reddit account. So, I'll retire this one as soon as I hit send. But I think there is a valuable lesson from my time in this crazy town. I'm not getting rid of my BTC and “going all in for the moonbois”. But I'll definitely be using my Nano. Whenever or wherever I can. Thank you.
3 It explains our intuition that human beings, but not lower animals, have free will. Lower animals lack free will because they lack the second-order volitions which are constitutive of free will. (This item is unnecessary and probably not true; how do we know animals have no "second-order volitions"? Having no other language than "body", we can only surmise (guess) what their volitions are. Volitions come before actions, we cannot see them or interpret them in any way. Brain conditions might be interpreted with MRI scanning, but to put a subject in a scanning device is to prevent any other actions. Such measuring ruins the connection between mental state and volition being measured, except we can safely assume that every measurement of animals must default to the volition to escape the measuring device.)
That's the first-order, highlighted deviation from compatibility theory. Clarification of "second-order volition": a path from choice to action has an intermediate "middle-way" tunneling mode, contracting (taking on) a desire to make a choice, prior to making the choice. In order to prove freedom, one must establish the mental preference for an imagined outcome in order to prove that preference did come from within the person and was not forced by other external deciding factors (genetic factors are pre-determined). incompatibilism Note: the approach is wrong by the universal assumption, IOW that the intersection of determined and free is zero. It's a supremacy position, or superposition principle (LoL), the error is in over-simplification. The Logic Argument (p.5) is not representative of reality, which is more nuanced. Therefore, Frankfurt's thesis is good (denial of incompatibilism), but not due to the case presented (superposition). Take Frankfurt's case (p.4) of Black vs Jones4 to be analogy for State vs Individual. Silent Weapons for Quiet Wars (other sources exist, search for yourself) The (myusername) determinism/free-will duality hypothesis (denial of incompatibilism due to non-zero intersection):
Most choices, including the choice of desires, are determined by contingencies of which one is the natural desire of the actor to optimize his/her outcomes ("best wishes"). Is a person always compelled to have best wishes? What is best depends on a person's mental state, which is usually determined by external factors, but those can vary in cogency (impact on behavior). Consider the choice to commit suicide, certainly not a trivial choice. (The Chosen means of execution (puns intended) is somewhat more trivial, but again, partly determined by external conditions.)
Some choices, nearly all trivial, are free because no interfering contingencies are apparent during the choosing interlude. It may happen in hindsight, that a past choice is observed to be a mistake, usually because some contingency was overlooked or unknown during the choosing. This observation should be remembered so as to avoid repeating a future choice like that mistake. Choices always have risks, including the choice to do nothing. Different day, slightly different approach... parsing choice. 1 important choices that have many deep effects later, for instances a marriage partner, a new job, a new residence; 2 trivial choices which have minor effects, risks or physical involvement, for instances a choice of toothpaste at the market, to like or not a web-link or museum exhibit. According to (myusername)'s determined/free paradigm, type 1 choices are nearly all determined by pre-existing conditions (not free). Type 2 choice is the arena of freedom. I suppose a person's low risk-aversion parameter could expand the envelope of freedom, but that's a characteristic that develops during maturation, one's history of choices and ensuing responses. Successful responses lead to more freedom, failures to less. So even when freedom exists, it accumulates a history (habits) which become a determinant. Contracting the Social Construct Disorder (it's contagious) Take 1: How does an actor (person in question who comes to an internal state, or inner-construct) interact with a community or society? Must it be IRL, or can virtual interaction suffice to construct internal states? And more to my point, must the interaction be two-way (containing feedback), or simply via broadcast medium? (broadcast includes published books, articles, records, radio, TV or Internet A/V shows, etc.) Interaction with broadcast media can be summarized by: a choice, a degree of attention and focus (time spent on and attention given to item), a like/dislike or more complex reaction to item, having future behavior influenced by item, to continue a stream of behaviors (especially sequential item choices) as consequence of influence of item, to develop a complex of attitudes built upon stream of items (eg. just mentioned 'risk aversion parameter and habit). Before going on, I notice that broadcast media is like Sunshine, Rain, and Grace. It is made available by participation in a community, and falls without curse or blessing, it's all there for the choosing (or ignoring), depending on the contingencies. Mind control theory? (because mind is the inner source of volition... behavior, control the mind (easy), hence control the behaviors (difficult otherwise)) Mind control courtesy Tavistock Inst. Construction of Favor (or any knowledge) upon Familiarity What is Social Construction? (cntrlZ)
"For instance, trees are only differentiated from other plants by virtue of the fact that we have all learned to see them as "trees."
But we don't all know about trees to an equal degree. I know rather much about trees from my interaction with them: living among them, planting them, sawing them, moving them, burning them, etc., not from reading or talking about them. No doubt, there are many persons all over the world who have very little experience of trees, and cannot 'construct' treeness as well as me. Direct experience is more realistic and developed than social constructs. Favor and Familiarity are interwoven by choice I chose to live alone with trees and not alone with sea, or desert (for examples), because it was easier to go with trees. Was the choice free? I could have chosen city or suburb with even more ease than forest, so ease of choice was not the deciding factor, it was my preference of lonely forest over crowded urb that decided me. So maybe it wasn't really about trees, it was about independence or something else like that. When we choose, we may not understand the contingencies, but our decision (choice) may be due to habits or patterns that have developed in the maturity process. Habits are strong determinants, and they develop, according to Ian Plowman, 4 ways. The cntrlZ article makes the case for 'Strong Social Construction' based on that 'knowing' which is all about language, certainly a social construct.
Within the social construction of language is the game. Outside the social construction is reality, the real world. (a list of social constructs follows)
That makes it clear. Experiences (direct ones) without resort to language are NOT social constructs. That observation makes another distinction clear: gender may be a social construct, as it's a language issue, but sex is not a social construct, it is a direct experience issue that develops in the maturation process: birth, infant, child, puberty, sexy adolescent, sexy adult, old (unsexy) adult, death. Prior to puberty, sex is incipient in its development, but comes to life, (like a flower blooms) after a decade or so. Knowing about sex as a child is by observation from outside (thru the looking glass), after puberty, it's direct experience, and much later, it's a fading memory. Regarding Looking-glass self theory the notion of socially constructed identity (defining the self by differences/ affinities to others),
... the outcome of "taking the role of the other", the premise for which the self is actualized. Through interaction with others, we begin to develop an identity of our own as well as developing a capacity to empathize with others... Therefore, the concept of self-identity may be considered an example of a social construction.
... makes a spurious expansion of identity formation to include everyone (a unity), or nearly so. According to Reisman's Lonely Crowd, there is a triality of social nature, expounded by parsing people into tradition, inner, and other directed personalities. This theme was a scholar's response to the US trend toward consumerism and conformity to "norms", (local traditions, eg. "keeping up with the Joneses") mid-20th century. The social construct crowd would be Reisman's Other directed personality, which may truly be the majority, in USA certainly. However, the tradition-following and inner-directed personalities are a significant minority. Let's not ignore them (I'm in there.) What is “Mob Mentality?” Herd mentality | wkpd Are All Personality Descriptions Social Constructions? Sep.2019 | psytdy
... that objective reality does not directly reveal itself to us, is true beyond a doubt.
The preceding statement author, JA Johnson, is way off (and his article is full of falseness). Objective reality IS direct experience, no more revealing modality exists. Denial of this obvious fact (just lied about above) is a redefinition of the term (a social construct). Experience is beyond language, thus beyond 'description'. However the following is a true reveal about (((Yews))) (the like of whom Dr. Johnson seems):
It is true that when we describe someone with socially undesirable traits... we are constructing for them a social reputation that might decrease their chance of success in life. This is precisely one of the concerns of (((social constructivists, like Dr. Johnson))), that certain categorizations (eg. a separate race) reduce power and status.
Favor-Goodness-Beauty paradigm Favor is not favored in prior art, Truth takes Favor's place in the Transcendental Spectrum: Transcendentals 5pg.pdf We have already seen the idea in part 1 that Truth is a disputed transcendental in the social-constructionism academic universe. Academics use the "universal fallacy" that their favored item is part of an incompatible pair, which by logic excludes everything not in their favor. They want to ignore the nuances in order to push an ideology toward a supremacy of thinking, just like in a totalitarian state. Whereas the (myusername) principle of Truth, it has a dual nature, 1 relative to a society (democratic consensus); and 2 absolute to reality (math/science/technology). So 'Favor' is a better term because objective proof (no contest) is not required (except the meaning of objective that says 'objection!', meaning 'contest'). 'Favor' implies bias which is the subjective reaction that matches Goodness and Beauty better than 'Truth'. Apply Truth-Goodness-Beauty paradigm to social construction
because the aim of constructionists is to justify a collective "truth" of their own construction. A social construct is not absolute, it's anything a society wants it to be ("social proof"). That's a good description of tyranny... The Empowered Female Parasite 2014 (that's a surprising result, here is one not-surprising.) Social Proof: established by culture media (mind control, a monopoly 2012 (scroll down long graphic), of the Juice 2015), go back to part 1, macrosocial constructs. Does Appreciation of Beauty have any innate sources? (otherwise it's all a social construct) Neuroscience of Beauty; How does the brain appreciate art? 2011 | sciam (in brain) Onward (Dis)-Favor Readers... Investigation of (Dis-)Favor 3\3, House of Not-Friends Contracting the Social Construct Disorder Take 2 Living outside the 'Normitory" (away from Dreamland (everybody's asleep), to where Nessun Dorma (nobody sleeps)) It so happens that an ethnic group which originated in eastern Mediterranean Middle-East evolved to specialize in intelligence, commerce, morally corrupt enterprises, and crime. Essential to their success was eugenic traditions that applied artificial selection to just those same specialties, which makes this ethnic group a formidable enemy. They have developed a very strong sense of in-groupness, and a vested interest in social construct studies. A unified collective is a more effective competitor than an inchoate population of diverse individuals. This group has as ethnic traits: global dispersion (aka Diaspora), preference for urban environments (aka Cosmopolitan, or Globalist), covert inter-group rivalry (aka InfoWar), and deception (aka MOSSAD). This cosmopolitan group must operate covertly and deceptively, because those are effective tactics, and they are a small minority (2% of USA), therefore weak in the democratic sense. Immoral Social Constructs enforced by 5th column subversives
There is no universal morality. Morality is much like Beauty, in the mind of beholder (actor who holds to a specific moral code). Morality is a social construct, and varies between societies. (I think a fair definition of morality is a code of ethics which is community-specific.) For a society to sustain, it needs to be isolate from conflicting societies. If different societies, with different moralities must coexist, the natural tendency for actors in the same niche toward dominance will destroy or remake the subordinate societies, which reduces the conflicts. Status Hierarchies: Do We Need Them? blog 2012 | psytd
a need for 'virtue signaling'? It's natural, and likely unavoidable, evidence pride displays.
Announcing BitcoinSOS (Soul Of Satoshi) Client - The most Satoshi client out there! Don't believe us? You're a socialist!
We are excited to announce the arrival of our new Bitcoin Cash client BitcoinSOS (Soul Of Satoshi). BitcoinSOS has 128 Petabyte blocks. None of this socialist 128MB crap! 128MB is for pussies who don't want to compete. We have the biggest blocks! BitcoinSOS is the truest vision of Satoshi out there. We actually codified Satoshi's soul into this client. It is so Satoshi that you don't need to even listen to anyone else any more. Just listen to BitcoinSOS and don't think. We are going to lock the protocol down. Since there is nothing you can do about it we might as well explain our strategy:
Build a media company to control the conversation both online and in-person at conferences. Our new media company will be called CoinNerd.
Hire some paid shills. Blockstream's tactics worked like a charm, so we thought, why not adopt their strategy. Anytime an discussion comes up concerning our interests we'll ramp up the rhetoric in favour so it seems like there is natural support in the community for us.
Build an echochamber. We aren't lucky enough to control our own bitcoin so we'll need to build one. We'll install a head mod that seems 'independent' but really serves our interests to a T. We know how well it worked on bitcoin so all we need to do is copy that and people will fall inline. Whoever doesn't will likely leave anyway, and those who don't leave we can just kick out. This will be the perfect place to organise attacks against our enemies Dragon's Den style.
We'll try and get the BCH developers to sign a contract swearing allegiance to BitcoinSOS.
If that fails we'll say that BitcoinSOS is the only client that represents Bitcoin and Satoshi's will. Anyone who does not agree with Satoshi Vision is welcome to fork off to their own new path. Any forks from the Satoshi Vision path will not be Bitcoin and will have to come up with some other name for their fork.
We'll hire a Satoshi front man. He'll study the one area of the subject matter very closely, just enough to stand on a stage and sound like he knows what he is taking about. Then we'll put him on display at every single opportunity imaginable. He'll build up a cult of unquestioning followers in that echochamber we created. In almost every sentence he will allude to the fact he is Satoshi, but of course he won't prove it. But that won't matter since we will encourage a culture of ignorance and loyalty within the cult. We'll make sure he talks in absolutes and applies strongman psychology tactics to pull more members into the cult. He'll post pictures of how rich and successful he is to signal people should follow him.
We will fully patented anything you could possibly think of building on top, and anything that has already been built on top of BCH. If anyone wants to fork off they can fuck off because we own BCH now. Bitcoin has always been about using state power to enforce your will on people. If anyone tries to fork Bitcoin and devalue our patent portfolio we will attack them with our followers and lawyers.
We will splash a bit of money on a few key pieces of infrastructure in the BCH ecosystem so that we look great to the community, but more importantly so that we can gag the people who built these tools. Then if anyone tried to fork we will go without the apps using our code, our IP etc. Without the companies we have invested in.
If anyone who matters in the community questions us, we will call them 'socialists', 'enemies of the people'. We will create stories about them and how they are attacking Bitcoin and how they actually hate BCH. We'll burn them at the stake. All we need is for them to give up.
We'll tell everyone that ONLY miners matter. We'll tell them not even economic non-mining nodes matter. Then we'll buy mining contracts to show how much hashrate we have so that we can push people to go along with us.
You think we're joking? Compete! Fuck the community! We have more money than Rwanda! We only speak 3 word sentences for dummies to follow And before you get any ideas, don't be like Peter and Emin and Amaury and Jihan and Haipo, all enemies of the people! Socialists! Segwit lovers! They want small blocks! They hate capitalism. [Insert final virtue signal] Edit: We are extremely proud of our shills' vote manipulation skills today. Even though this post got over 150 upvotes they managed to keep it down at a total of 30 for the day. Absolutely great value for money! No one will find out about our plans now.
14th Jan 2018: 1 ETH = $1,384, “The peak of ETH and hype of ICO.”
Chris, who I knew for over 10 years, the founder of a Shenzhen-based software company approached me for the second time, persuading me to join him to transform his company from a software development house to a SaaS-based company underpinned by a self-developed Blockchain platform. Given my vested interests in Blockchain and being an entrepreneur; and knowing Chris had received a pre-A round investment of around $3M; seeing 30 odds software developers rolling days and nights competing for next sprint and batch of feature release; I accept his invitation and took a role with strategic focus on the International market development and fundraising. https://preview.redd.it/y58zpuo1s5j21.png?width=587&format=png&auto=webp&s=13c4511e8ece493fc458dae5e9bfdea8d2f4820e We were working tirelessly to launch the first commercialized blockchain platform in China in the real estate sector and providing KYC and asset tokenization services to financial service providers and real estate companies. The Platform finally went online on May 2018 and we were able to register a number of clients in the first week of launching the platform. On the flip side, the business required more money to continue, to support the expansion and platform operation and development. We started with a rather traditional approach, i.e. going after VCs with the aim of raising an additional $4M at company pre-money valuation of $16M and, it was not going to conclude in time, and soon enough we were introduced to what’s was new to me at the time — Initial coin offerings (ICO). ICO just had its Epic year 2017 as ETH peaked at Jan 2018 with a straggling price of $1,384. 97% of ICO was able to reach its soft cap (typically $1M~3M), and many of them reached its hard cap, i.e. $30M if not more in 2017. Given we are one of few “reversed-ICO,” i.e. having a working platform ahead of ICO and with real clients who were actually paying for the use of our services; Our 30 odd software developer made us look like an army competing with other Blockchain startups. It seems to be a very logical thing to start our own ICO at the time. The only question is — how?
5th March 2018, 1 ETH = $865, “Whoever told you doing ICO was easy simply haven’t done one.”
Raising money via ICO was told to be easy or at least pre 2018. It looked like a few geeks who can write a whitepaper will be able to walk away with millions of dollars. That perhaps was the case before 2018. The gust of wind started turning from late 2017, when China took the shot on ICO and banned it completely on Sep 4th 2017. The ICO market reacted rapidly and converted from public sale driven in 2017 to private sale driven in early 2018. This resulted in an influx of crypto-funds — a new sector who benchmarks themselves as investment bank of the crypto-world. Meanwhile, a counter-servicing consulting industry was born — ICO advisory. In essence, the ICO advisory firms provide service over four different phases. 1. Due diligence phase — essentially develop a set of documentation supporting your ICO campaign. i.e. a. The Whitepaper that highlights your solution, Token economy that underpinned your project, ICO plan, your team etc. b. An Investor deck for private sale c. Legal opinion d. Sales & purchase agreement 2. PR & Marketing phase a. Online channels i.e. ICO website b. Social media marketing i.e. Linkedin, facebook c. ICO listings, KOL review d. Press coverage i.e. Forbes, medium e. Roadshows 3. Fundraising phase a. private sale stage 1 — typical 5%- 10% of your hard cap b. Private sale stage 2–80% — 85% of your hard cap c. Public sale — 10% of your hard cap 4. Post ICO phase a. Public listing on an Crypto exchange b. Market making c. OTC (over-the-counter) trading
5th April 2018, 1 ETH = $381, “Personas of Crypto world.”
ETH hit the bottom early April 2018, but Crypto world continued to evolve, and a few personas emerged, and some of them made buck loads, i.e. Crypto exchange, lots of them eventually pulled out of the crypto world. ICO companies — they are your typical startups but with a mixture of intents. Very few of them stuck to the calling of setting up a DAO (decentralized autonomous organization) and kept on developing and growing the platform and business in 2018. The way I see it — if you had no real collateral and equity invested in a business but managed to raise $30M to develop a platform, but all of a sudden your company value declined 70% as ETH priced dropped down to $381 from $1,384 in less than three month, what are you going to do? Mind you, most of ICO Company’s valuation based on ETH or BTC, and most of them kept Crypto tokens instead of converting them to Fiat-currency. So most of them panicked and started selling ETH, the snowball started to roll in June 2018. Crypto investors (professional crypto funds) — they are early bitcoin / ETH miners and investors, some family offices. They are typically investing in ICO companies during the private sale phase. Depends on which stage that they invested in, it is common to get somewhere around 20–50% discount of the listed public sale price. The offer comes with a lock-down period, i.e. 3–6 month when these token will be unlocked and open for sale. Considering most of ICO listed in exchange were getting 2x to 10x of growth in the first 3 months of ICO public listing, this is definitely a lucrative business to invest in. Crypto investors (public individuals) — they are an individual, i.e. crypto enthusiast, speculators and ordinary individuals who have no clue of what ICO/Cryptocurrency is but sold with the belief that they are buying the next Bitcoin. Lowest trophic level of the food chain and many of them lost a fortune in investing in the cryptocurrency in 2018. ICO advisory firms — these are the most chaotic yet sophistic persona of them all. They are early ICO practitioners, marketing companies, legal and law firms, financial companies and play a role throughout the ICO phase. Many of them are well equipped with content knowledge and expertise in their corresponding areas, i.e. in trading, digital marketing, legal and regulatory practice but remarkably few of them had actual ICO experience. Considering there were less than 1,000 ICO launched by the end of 2017 globally (909 to be exact according to icodata), there are just not enough experts with the end-to-end experience. Despite all that, in the age of gold rush, you will take whatever tools you can get to succeed in the competition. Who made most of the money in California gold rush (1848–1855), I won’t know for sure, but I am certain Levi Strauss — founder of Levi Jeans definitely made the most successful business out of the gold rush by selling a pair of blue jeans to the working man — “For men who toil.”
5th May 2018, 1 ETH = $806, “how much it costs to run an ICO.”
Media likes to report on how much money startups fundraised via an ICO, but you rarely see anyone talk about the cost of doing ICO. So how much does it cost from planning to the closure of an ICO? It is a rather large amount, which also depends on many factors, i.e. your project and solution maturity, country of your ICO, the advisors you are working with, timing. Our ICO were conducted mostly in Hong Kong, if I decouple direct cost, i.e. cost of staff with the indirect cost of doing ICO, i.e. money that you need to pay to external service providers, the indirectly cost alone is in the range of $500K and $3M. What the heck! Yup, that was the cold hard reality, which is why most of the startups just can’t afford it. · The single biggest cost item is to pay for listing on a Crypto exchange. Large exchanges, i.e. Huobi, Bittrex can charge you a million dollar to be listed. · Advisory service during the due-diligence phase can be in between $30K to $300K · Legal fee is another small fortune, i.e. $50K — $80K to get a legal opinion to certify and vouch that the ICO token is not a security token. · Cost of running a marketing campaign can burn $100K per month subjects to the media platform and scale of your campaign. Many successful ICO fundraised somewhere of $15M to $50M in 2017 and Q1 2018. 55% of ICO failed to complete in Q2 of 2018, i.e. reaching the soft cap. Ones who completed ICO are only getting a fraction of what’s in 2017, i.e. $1 ~ $5M. That’s one of the fundamental reason of why the majority of ICO cease to exist towards to the end of 2018, as the cost of doing ICO is almost level up to the amount that the company can fundraise.
5th Sep 2018, 1 ETH = $264, “Scams and gags.”
ETH rose up to its last peak in May 2018, i.e. $806 and it has since been experiencing a steady decline. By Q3 of 2018, the cost of doing ICO was no longer economical for most companies who are still in ICO. The party had finally come to an end. No one wants to talk about it; blockchain companies no longer want to associate themselves with ICO as this whole thing was a scam and gags. But was it? ICO started well as it offered an alternative path to startups to raise sizable funding without substantial business at early stage, which was not possible before it. The issue has been germinating since people had a false expectation on the underlying technology, as Blockchain is not the panacea for everything; “Greed and speculation” spoiled young startups like giving excessive amount cash to a 10-year-old before he knows what to do with it.
5th Feb 2019, 1 ETH = $107, “Party is over, what then now?”
I am not a cryptocurrency investor, and I don’t know enough about this market to see where it will go. However, I am a believer in history always holds signs to the future if you know where to look. Behind any ICO and any crypto token, there is a common ground — someone like to call it Blockchain, industry experts like to call it Distributed Ledger Technology. Regardless of its name, you need to understand the fundamental problem that technology resolves that others cannot, and know to how to identify a DApp powered by a viable use case to make an informed investment decision. Where you will likely find the successful use cases, we are yet to see a killer DApp in the B2C world, and I think it will continue to be the case. Is Bitcoin the one? I don’t think so, it is not user-friendly, same goes with most of the common Cryptocurrency. I am skeptical about B2C Blockchain Apps and ICO companies as I see they are trapped in the paradox between being efficient and user-friendly with being is autonomous and trustless. Can you imagine if Uber will work as efficiently and user-centric as it is now, if it was built on the decentralized and autonomous model? Who is going to pay the developers that work towards a unified goal? On the same token, Linux is an open source OS which hasn’t been widely accepted like windows, not because of the technology but its design principles. I am in favor of Blockchain companies who focus on the B2B space as well as on the protocol level, where they gaze on enterprise problems and interests underpinned by 6 intrinsic features of blockchain with long term potential for disruption and transformation. 1. Distributed shared data over peer-to-peer (P2P) networks reduce single points of failure; 2. Consensus-driven trust cuts out the intermediaries; 3. Immutable transactions ensure trust 4. Hashing-based data ensures integrity and security 5. Automated smart contracts promote touchless interactions across process and value chains 6. Permissioned and permissionless flavors give enterprise users flexibility These six blockchain features are changing the way we think about business transactions, data storage, and even industry value chains and associated revenue models. Thanks to hackernoon!
We are almost caught up now. In the homestretch folks! Here’s your week at Parachute (19 Apr – 25 Apr’19): This has been a fairly relaxed week. This post will be relatively shorter compared to earlier ones. The Charity Parena went on to raise over USD 700 and Gian won the Parena to take home a one-of-a-kind D&D themed Parachute shirt designed by Clinton. Chris turned 30 this week. Belated wishes to ya medicine man! Rene’s been a super trooper throughout the week for Wysker trying to get word out on the project. He’s been hosting giveaways and treasure hunts with WYS prizes from his own stack. Way to go bud! Remember Cryzen moved to Bangkok last week? Here’s a few pics from their office: An Office with a View Spanish fans of 2gether are in for a treat this week. CEO Ramon’s article “The rise of neobanks” was published in Forbes Spain. Expansion’s review of 2gether’s Visa card also came out this week. Woot! Blockchain Economia also reviewed the card in a brief article. This was week 17 of aXpire’s weekly burn for 2019 that went on as usual. CEO Gary was in the final shortlist to become a Board Member to the prestigious Hedge Fund Association (HFA). More updates on this in a future update. BOMB became the second most traded token on DDEX this week. Sweet! Bounty0x CMO Pascal sat down for an interview with Scott Cunningham where he talked about all things Bounty0x. Check it out, if you want to know the direction that the platform will be taking in the near future. After joining the Binance transparency initiative, Fantom followed it up with induction to Messari’s disclosures database. FTM supply curve. Metrics for Apr’19 Hydro partnered with Ferrum Network this week. Ferrum will be using Hydro’s Snowflake protocol for identity management in their financial applications. TD Bank Group (which entered into a relationship with Microsoft recently) did a small shoutout to Hydro in their PR announcement. The Hydro developer update covers a range of news including Snowflake protocol moving to mainnet, Hydro bounties for community developers etc. Lenny’s article talks about blockchain use-cases in healthcare and how various HYDRO applications could be useful this space. If you’re looking for a job in crypto/blockchain, check out Hydro’s latest career page. Opacity announced two giveaways this week. 500TB of storage was given away 500 new members in their Telegram channel. There’s also a Ledger Nano S up for grabs for their Twitter followers. Check out the rules here. Mike continues to make improvement tweaks to the WednesdayClub app. Lenny explains through this schematic how Hydro could play a part throughout the value chain In this article, Voyager CEO Stephen Ehrlich explains how the partnership with ETHOS is helping reduce the gap between digital and traditional finance. There’s also some sneak peeks into ETHOS development. Plus, here’s a quick technical explanation of SmartKeys used by ETHOS. Birdchain’s BTC event was announced this week. As part of this, the first 200 participants can trade their BIRD tokens for a bitcoin coupon. Here’s a tutorial on how to go about it. Content creators who want to make a living from podcasts or videos, have a read of Birdchain’s article on this. What next for BIrdchain? Check out this video on future updates. District0x’s District Weekly covers their favorite publications and latest proposals (none for this week). If you own a .eth domain, there’s an important announcement regarding domain migration. Make sure not to miss it. The District Roundup Live stream can be rewatched here. DNT is now listed on SwitchDEX. Neat! Switch is working on some updates for the coming months (new trading pairs, ESH listings etc.). Read more about these in their Medium post. And with that, it’s a wrap for this week. See you again soon. Ciao!
Ether Thief Remains Mystery Year After $55 Million Digital Heist
Ether Thief Remains Mystery Year After $55 Million Digital Heist 2017-06-13 08:00:18.224 GMT By Matthew Leising (Bloomberg Markets) -- Summer colds are the worst, and Emin Gün Sirer had caught a wicked bug from his 1-year-old son. So it was with watering eyes and a stuffy nose that the associate professor of computer science at Cornell found himself working from his sickbed on Monday, June 13, 2016. Gün—everyone calls him Gün—couldn’t tear himself away from his laptop. He had another type of bug in his sights, a flaw in a line of computer code he feared put $250 million at risk of being stolen. It wasn’t just any code. It was the guts of the newest breakthrough in software design related to blockchain, the novel combination of decentralized computing and cryptography that gave life to the virtual currency bitcoin in 2009. Since then, the promise of blockchain to transform industries from finance to health care has captured imaginations in corporate boardrooms and governments alike. Yet what the Turkish-born professor was exploring that Monday was the next leap forward from bitcoin, what’s known as the ethereum blockchain. Rather than moving bitcoin from one user to another, the ethereum blockchain hosts fully functioning computer programs called smart contracts—essentially agreements that enforce themselves by means of code rather than courts. That means they can automate the life cycle of bond payments, say, or ensure that pharmaceutical companies can authenticate the sources of their drugs. Yet smart contracts are also new and mostly untested. Like all software, they are only as reliable as their coding—and Gün was pretty sure he’d found a big problem. In an email sent to one of his graduate students, Philip Daian, at 7:30 p.m., Gün noted that the smart contract he was looking at might have a problem—on line 666. (They say the devil is in the details.) Gün feared the bug could allow a hacker to make unlimited ATM-like withdrawals from the millions, even if the attacker, who’d have needed to be an investor, had only $10 in his account. This staggering amount of money lived inside a program called a decentralized autonomous organization, or DAO. Dreamed up less than a year earlier and governed by a smart contract, the DAO was intended to democratize how ethereum projects are funded. Thousands of dreamers and schemers and developers who populate the cutting edge of computer science, most of them young, had invested in the DAO. This was real money, a quarter of a billion dollars, their money, meant to build a better version of the world, and every cent was at risk. Gün, who wears his dark hair short and looks a decade younger than his 45 years, had already been tracking and publicizing flaws in the DAO’s design. A few weeks earlier, on May 27, along with two colleagues, he’d urged investors to stop buying into the DAO until security issues could be fixed. It had been too late, however, and the program went live the next day. Smart contracts such as the DAO are built to be entirely reliant on their code once released on the ethereum blockchain. That meant the DAO code couldn’t be fixed. Other blockchain experts—including Peter Vessenes, co-founder of the Bitcoin Foundation—had also pointed out security flaws in the smart contract, but Gün appears to be the first to pinpoint the flaw that put the money in jeopardy. The problem was the code was so new that no one knew what to expect—or even if there was actually a problem in the first place. Gün had his doubts, too. This wasn’t even his job. He does this for fun. Daian didn’t think they’d found anything either. Over email, he said, “We might be up the creek ;).” Later, when Gün pointed to the error in line 666, Daian replied, “Don’t think so.” Gün says, “We don’t sound the alarm bell every time we find a bug that seems suspicious.” Instead, he went to bed to try to kill his cold—the one bug he knew to be real. “I was too miserable to sort it out,” he says. Four days later, Christoph Jentzsch lay on the floor of his home office, taking deep breaths, trying not to panic. It was Friday morning, and software developers all over the Western world were waking up to the news that the DAO, which Jentzsch had created, was being attacked. Gün had been right. Jentzsch, who has dark hair and a perpetual five o’clock shadow, lives with his family in the Mittweida region of Germany, a rural spot not far from the Czech border. Mornings in the Jentzsch household are a whirlwind as he and his wife get their five children—age 2 to 9—fed and off to school. Yet today, after his brother Simon woke him with a call that the DAO was being hacked, Jentzsch had to ignore his familial duties. “You’ve got the kids,” he told his wife. “I have an emergency.” This is the story of one of the largest digital heists in history. And while you may have heard last year that hackers breached Swift, the bank-to-bank messaging system, and stole $81 million from Bangladesh’s central bank, the DAO attack is in a different category altogether. It played out in front of anyone who cared to watch and couldn’t be stopped. Just as the global WannaCry ransomware attack in May laid bare weaknesses in computer operating systems, the DAO hack exposed the early frailties of smart-contract security and left many in the community shaken because they hadn’t found the bug in time. The aftermath would eventually pit good hackers against bad ones—the white hats vs. the black hats—in the strange and futuristic- sounding DAO Wars. The roots of the DAO belong to an idea Jentzsch borrowed from another internet-fueled phenomenon: crowdfunding. The 32- year-old Jentzsch, a theoretical physicist by training, and a few colleagues started Slock.it in 2015. As they considered how to fund the company, Jentzsch approached it as many had—sell a digital currency, effectively a token, to raise cash. But why should each new startup have to program its own initial coin offering? Jentzsch wondered. What if one huge fund ruled them all? He introduced his idea to the world at DevCon 1 in London in November 2015. “What is the blockchain way of creating a company?” Jentzsch asked his audience. “Of course, it has to be a DAO.” It would work like this: Ether, a virtual currency like bitcoin, would be used to fund and develop applications on the ethereum blockchain—things such as making a music app similar to iTunes or a ride-sharing service along the lines of Uber. Investors would buy DAO tokens with their ether; the tokens would allow them to vote to fund projects they liked. If the app they backed made money, the token holder shared in the profit. In the six months he spent creating the DAO, Jentzsch thought it would raise $5 million. From April 30 to May 28, the DAO crowdfunding pulled in $150 million. That’s when ether traded just below $12. As the price of ether rose in the following weeks to $20.75 the day before the attack, so too did the value of the DAO, putting a $250 million target on this thing Jentzsch had unknowingly brought into the world with a fatal, original sin. “Our hope was it would be the center of a decentralized sharing economy,” says Jentzsch, who now regrets not capping the amount raised. “For such a big experiment, it was way too early.” In the weeks after the attack, Jentzsch and the rest of the ethereum community would come to grips with their own crisis that, writ small, echoed the bank bailouts and government rescues of 2008. “It became too big to fail,” he says. But why would anyone invest in the DAO in the first place? It has something to do with the strain of digital libertarianism at the heart of the ethereum community, much like the set of beliefs that led to the birth of bitcoin. Think of bitcoin as the first global currency whose use can’t be stopped by governments or corporations; on top of that, bitcoin is almost impossible to hack. Ethereum, then, is another level beyond. It’s an uncensorable global computer. As amazing and unprecedented as that is, it’s also a bit terrifying. Brought to life, the DAO ended up staggering off the table and turning on the community that wanted it so badly. Accustomed to working into the night to stay in touch with colleagues in North America, Jentzsch blows off steam by jogging or kayaking on the nearby Zschopau River. Yet on that Friday morning, he had the more pressing task of pulling himself up off the floor and dealing with the attack. “I went into emergency mode: Don’t try to save the DAO,” he says. “No, it’s over.” It was far from over. Several hours later and half a world away from the Jentzsch household in Mittweida, Alex Van de Sande was waking up in his apartment in the Copacabana neighborhood of Rio de Janeiro. The baby-faced ethereum developer had been born in the small fishing village of Santa Cruz Cabrália in the Bahia region of Brazil and moved with his parents to Rio when he was about 3 years old. These days he’s known as “avsa” on Reddit and Twitter. After reaching for his phone to see why it was blowing up with Skype messages, he turned to his wife and said, “Remember when I was telling you about that huge unhackable pile of money?” She nodded. “It’s been hacked,” he told her. His first thought was to get his DAO tokens out. He owned about 100,000 of them, valued at about $15,000 at the time. He’s the lead designer of the Ethereum Wallet app, a program that allows him and anyone else to interact with the blockchain. Van de Sande scrambled to log in to it, but his password didn’t work. It was glitching, and as he worked to fix it, his panic subsided. He realized he shouldn’t be bailing on the DAO but trying to save it. And to do that, he needed Griff. Griff Green, who’s worked variously as a massage therapist in Los Angeles and a community organizer in Seattle, is one of only a handful of people in the world who holds a master’s degree in digital currencies. He got it online, natch, from the University of Nicosia. A self-described “dreamer,” the 32-year- old is the closest thing Ethereumville has to a mayor. Green knows everybody; in fact, he’d been the first to relay word of the attack to Simon, Jentzsch’s brother and a co-founder of Slock.it. Green had been working for Slock.it for about six months by then and woke up that morning in the house belonging to Jentzsch’s mom in Mittweida. Jentzsch is one of nine children, so his mother had a spare bedroom where she could put Green up for a few days. Using his extensive contacts, Green started identifying as many people as he could who were interacting with the DAO—going so far as to ask strangers to send pictures or scans of their IDs—in an attempt to sort friend from foe. And then something strange happened: The attack stopped working. In the six hours since the attack began, the thief had managed to steal 30 percent of the DAO’s 12 million ether—which that day equaled about $55 million. “We don’t even understand why the guy had stopped,” says Van de Sande. Now Green raced to protect the remaining 70 percent of the DAO the attacker hadn’t stolen. Once Van de Sande got in touch with Green in Germany, along with two or three others, the foundation was laid for what would become known as the Robin Hood group—white hat hackers who’d devise a bold good-guy plan to drain the remaining DAO. To save the DAO, they’d have to steal the remaining ether, then give it back to its rightful owners. And yet as they scrambled that Friday, qualms emerged within the group. “What does it even mean to hack something?” Van de Sande asks. No one knew if what they were about to do was legal. Also, wouldn’t their hack look just as bad as the theft they were trying to stop? Then there were the practical issues. “Who pushes the button?” he remembers wondering. Doing so would initiate their counterattack and alert the community. “Someone has to push the button.” The price of ether the night before the attack had hit an all-time high of just above $20. News of the hack sent it tumbling to $15 by the end of Friday, wiping out almost a half- billion dollars in market value. At that price, the DAO still held $125 million, and the Robin Hood group worried the attack would resume. They might be the only line of defense if it did, so Van de Sande agreed to use his DAO tokens to fuel their counterattack, thereby becoming a public face of the group. At this point, it might help to think of the DAO as the spacecraft in Alien after Ripley initiates the self-destruct sequence. To flee, she’s forced to use an escape pod. DAO investors had to initiate a similar sequence to deploy escape pods that would allow them to get their ether out of the DAO. The code that dictated the escape pods’ behavior is where the bug lived, so to steal the remaining DAO funds the Robin Hood group would have to be in a pod to exploit the flaw—and because of the way Jentzsch wrote the DAO, they had only a short window of time and just a few pods to choose from. A few minutes before launching the attack, Van de Sande joked on the group’s Skype chat, “Let’s go rob a bank!” No one laughed. “Not everyone really appreciated the humor,” he says. In his Copacabana apartment, Van de Sande readied to push the button on his laptop. Then, suddenly, he lost his internet connection. His router was down. “I was like, What the f--- is going on here?” he says. He had less than 30 minutes left to execute the Robin Hood hack. He frantically called NET, his Brazilian internet service provider, but couldn’t get past the automated customer service experience. He says the robotic voice told him, “We see there’s an internet issue in your neighborhood.” The irony was not lost on him: Here he was trying to steal millions of dollars from a robot but was being waylaid by another robot. “Then we missed,” he says. The window closed. He went from the high of feeling like they were about to come to the rescue of the vulnerable DAO to the crushing low of having their international connection severed by NET’s breakdown. He took his dog, Sapic—named after the one in Pedro Almodóvar’s All About My Mother—for a walk, then crawled into bed, defeated. The next morning was Saturday, and Van de Sande tried to reconvene the Robin Hood group to infiltrate another escape pod. But folks were busy and couldn’t get together. “We felt like the worst hackers in history,” Van de Sande says. “We were foiled by bad internet and family commitments.” Who, exactly, were they at war with? No one really knows, but there are some clues. One address the attacker used is 0xF35e2cC8E6523d683eD44870f5B7c C785051a77D. Got that? Like everything else in a blockchain, a user’s address is an anonymous string of characters. But every address leaves behind a history on the blockchain that’s open for examination. Not that it makes sense to 99.9 percent of humankind, but Green gets it. To pull off his heist, the attacker needed to create a contract that would interact with the DAO. He did so on June 15 and deployed it in the early morning hours two days later, according to Green. Once activated, the attack contract started sending about $4,000 worth of ether through the attacker’s account every three or four minutes to drain the DAO. But where did the original money to fund the attack come from? To interact with the ethereum blockchain, every contract must be funded by an amount of ether. This attack contract was funded by two addresses, but tracing it further back becomes tricky. That’s because the second address used an exchange called ShapeShift to send 52 ether into its account on June 14. ShapeShift doesn’t collect any information on its users and says it turns one virtual currency, such as bitcoin, into another, like ether, in less than 10 seconds. While there are valid reasons for using ShapeShift, it’s also a great way to launder digital assets and cover your tracks. After the attack contract stopped working, the thief needed to deploy it again, says Green. He tried but failed, and after a few more transactions, the hack whimpered to an end. (One possible reason the attack stopped, Green says, is that the hacker’s tokens became corrupted, which means he had no way to exploit the bug.) We know this limited amount of one-sided information from the blockchain’s public record. Digital asset exchanges see both sides. An internal investigation by one such exchange concluded that the DAO attacker was likely part of a group, not a lone wolf, based in Switzerland, according to an executive there who wouldn’t speak on the record or allow the company’s name to be used. Exchanges are in the unique position of being able to analyze the trading activity of their customers because they know who they are, even if they’re anonymous on the blockchain. The executive says the exchange shared the analysis with the Boston office of the FBI, though there’s been no further contact since October of last year. Cornell’s Gün says he also spoke to the Boston office of the FBI—and to agents in the New York office and to the New York State Attorney General’s Office. “It’s very difficult to coordinate an attack of this kind without leaving breadcrumbs behind,” Gün says. He encouraged the FBI to look at the ethereum testnet, where programmers can run their code in a safe environment to work out kinks. The attacker wouldn’t just launch such a complicated hack without testing it, Gün says he told federal officials, and the feds might be able to get clues to his identity there. Gün says he also pointed them to addresses linked to the attacker, such as the one described above, that were listed by his grad student Daian on his blog. (The FBI declined to comment.) “I’m absolutely amazed. Why has no one traced this back and found out who did it?” asks Stephan Tual, the third co-founder of Slock.it. “It still bugs me to this day, because what that person has done is incredibly unethical.” On Tuesday, four days after the initial attack, the hacker returned and somehow resumed the heist. The Robin Hood group had feared this moment would come and was ready. Early Sunday morning they’d finally managed to convene online and successfully infiltrate an escape pod, but had held off their counterattack. Now they had no choice. One strike against the group was their distance from one another—one in Rio, others scattered about Europe. (Some of the group’s members didn’t want to be identified for this story.) It was important that they coordinate their activities because, like in Charlie’s Angels, they all had different specialties: Green the community organizer, Van de Sande the public face, others who wrote the Robin Hood group attack contracts. So Van de Sande needed to be walked through the step-by-step hacking process they were about to unleash, because that wasn’t his area of expertise. “I’ll be honest, I was excited,” Green says. “This is the craziest thing that’s ever happened to me. This is the craziest thing that’s almost ever happened to anyone.” Whether it was legal remains an unanswered question. “You literally have cyber ninjas warring on the blockchain,” says Vessenes, the programming expert. “What they’re doing is almost certainly illegal, but they’re claiming it’s for the greater good.” And now it was Van de Sande’s job to let the community know that the Robin Hood group counterattack was benign. He took to Twitter, where he wrote “DAO IS BEING SECURELY DRAINED. DO NOT PANIC.” A nod to the classic Hitchhiker’s Guide to the Galaxy, his plea to not panic was met with all the snark and real-life concern Twitter can handle. “NOTHING SAYS DO NOT PANIC LIKE ALL CAPS,” one user responded. “#RealLife is more exciting than
MrRobot !!” tweeted another. Yet as the Robin Hood group attack
gained steam, they noticed something strange and worrisome—the attacker was with them in every escape pod. “We escaped the mother ship, but now we’re alone in space with the alien we were trying to escape,” says Van de Sande. This was a big problem. Because of how Jentzsch wrote his code, the Robin Hood group would have to wait several weeks before they could secure the ether they recovered. Yet if the attacker was in that escape pod with the group, he could just follow them—what’s known as a stalking attack. If the hacker stalked the Robin Hood group, the ether wasn’t really safe after all. “The game only ends when one of these parties doesn’t show up to fight,” Van de Sande says. This, in essence, is the heart of the DAO Wars, the never-ending battle that would have to be waged to keep the recovered ether safe. If only there were a way to reverse the theft once and for all. What happened next is one of the strangest and most contentious episodes in blockchain’s early history. The morning of July 20 dawned cool and clear in Ithaca, N.Y., the home of Cornell. A weeklong ethereum boot camp on campus had brought developers and programmers from all over the world to town. The mood was anxious, but not because the workshops were about to begin. This was the day the ethereum community would decide to rewrite the past. The weeks since the DAO hack had been filled with acrimonious debate as developers, coders, investors, and other community members considered their options to undo the theft. As the Robin Hood group battled the attacker mostly in private, a public debate was raging. The white hat hackers weren’t the only ones trying to save the DAO. Jentzsch worked almost around the clock, fielding hundreds of requests from DAO investors on what they should do. Vitalik Buterin, 23, who created the ethereum blockchain before he was 20, became a focal point as he led the community through their options. In short, what they could do was change the ethereum blockchain to fix the DAO, but only if they got a majority of computers running the network to agree to a software update. Pull that off, and it’s as though the attack never happened. This is known as a hard fork. The decision stirred such strong reactions that it remains controversial a year later, both within the ethereum community and with bitcoin users who insist a blockchain’s history is never to be tampered with. In an interview in October, Buterin was unapologetic about pushing for the change. “Some bitcoin users see the hard fork as in some ways violating their most fundamental values,” said Buterin, who didn’t respond to requests to speak specifically about this story. “I personally think these fundamental values, pushed to such extremes, are silly.” Within the ethereum community, at least, Buterin’s views won the day, and computer nodes all over the world accepted the fork. Contained in block 1,920,000, the fix to the DAO was simple and did only one thing—if you had ether invested in it, you could now get it out. But why hadn’t the attacker made off with his money? It had been more than a month. The same code that exposed the DAO to the theft, in the end, enabled the ether to be returned. Everything to do with the DAO is a parameter: rules, if-then statements, and more rules that are all finalized before the program is set loose. One of these parameters stated that anyone wanting to get their ether out of the DAO had to wait a certain amount of time—27 days after the initial request, then another seven days. This fail-safe, written by Jentzsch, applied to the attacker as well. So even though somebody had effectively robbed a bank, he then had to wait 34 days before crossing the street to make his getaway. While he was waiting, the money was stolen back. A month after the original heist, the ether thief now had nothing to show for his caper. Back on the Cornell campus, ethereum boot camp attendees celebrated. The next day, Gün brought Champagne to the session he was teaching. He’d pasted makeshift labels on the Chandon bottles with a picture of the utensil that said, “Congratulations on the successful fork.” Then something else unexpected happened. The original ethereum blockchain, the one with the DAO attack in it, kept growing. Imagine a hard fork is a branch of a tree that sprouts in a different direction at the end of the main limb. The end of that limb is supposed to wither after a hard fork, but here it continued to grow as a small group of users continued to process transactions on that version of the blockchain. Instead of dying, this became a second form of ethereum, quickly dubbed ethereum classic, complete with a digital currency that now had value. Even in the science fiction world of blockchain, this was an unprecedented turn of events. It meant the DAO attacker suddenly had about 3.6 million ethereum classic coins in his DAO account, known as the DarkDAO, which were slowly gaining in value. The Robin Hood group held about 8.4 million, because in this parallel universe they still controlled 70 percent of the DAO funds they had recovered. The Robin Hood group couldn’t believe it. “We did everything to avoid this, but now we’re being dragged back into this fight,” Van de Sande says. Now, the bitcoin supporters who viewed the hard fork as a violation of the core values of blockchain could back up their belief by buying ethereum classic. That’s exactly what entrepreneur Barry Silbert, a heavyweight in bitcoin circles, did. “Keep in mind, the original chain is ethereum classic,” he says. “The fork is ethereum.” Putting his money where his mouth is, Silbert’s firm, Grayscale Investments, recently issued an investment thesis outlining the benefits to ethereum classic over ethereum. A section heading sums up the rationale: “The DAO and the Death of Principles.” Alexis Roussel, co-founder of Bity.com, a digital currency broker in Switzerland, still marvels at the aftereffects of the hard fork and the wild world of the blockchain. “This is something that doesn’t happen in traditional finance,” he says. “If something happens with Apple, you don’t suddenly have a clone of Apple.” It’s been about a year since the DAO attack, enough time to take stock of what went wrong. Van de Sande is eager to move on. “It was really just a blip,” he says. “We are ready to move past it and leave the DAO story behind us.” Green, who’s organizing an ethereum conference at this summer’s Burning Man festival in the Nevada desert, has kept a sense of humor about it. “The Robin Hood group was just a s--- show,” he says with a laugh. “I hope the movie portrays it better than it actually was.” As for the bug itself, apparently many smart people looked at the code before Gün but missed one major flaw. The order of commands in the code allowed DAO token holders to withdraw any profit they’d made from their investments. It reads “withdrawRewardFor(msg.sender)” and adds, almost improbably, a note to anyone reading the code that says, “be nice, and get his rewards.” That’s line 667—let’s call it “The Neighbor of the Beast Bug.” If the withdraw line had come after these lines: totalSupply -= balances[msg.sender]; balances[msg.sender] = 0; paidOut[msg.sender] = 0; return true; the attack wouldn’t have been possible, Jentzsch says. But if the code had been in the correct order, the reward parameter wouldn’t have worked. As for the note, this line of code was meant to allow investors to withdraw any profit—“Reward”—their investments had earned. Instead it became one of the biggest backdoors in hacking history. It would have been better to not pay rewards during the split function from the DAO, what we’ve been referring to here as the escape pods, according to Jentzsch. Another decision he made when he had no idea of the bug shows how quirky and unforgiving code can be. “If the capital ‘T’ in line 666 had been a small ‘t,’ that would also have prevented the hack,” he says. Jentzsch has many regrets but insists no one was aware of the specific problems in lines 666-667 (other observers had pointed to flaws in other lines, just not here). Had more people looked, “it would have made no difference at all,” he says. “If you don’t know what to look for in a security audit, you won’t find it.” Even Gün, who had it in his grasp, let it go. “I still missed it,” he says. Green’s emotions are still raw related to Gün. “I actually got really pissed at him about this,” Green says. “He started bragging about how he found the bug.” He adds that it was “very irresponsible of him to not tell anyone of his inkling.” Still, Green “respects the hell out of Gün” and says they’ve since made amends. Asked to recount that night last June as he lay sick in bed, Gün says, “I came away from this thinking there’s potentially an issue.” But he’d consulted Daian, his grad student (“whom I trust”). Daian had said it’s “not exploitable.” Gün says that had he been certain of the danger, “I would have told people.” In a blog post that explained the mechanics of the DAO heist Daian published the night of the attack, he gave a shoutout to his professor in the acknowledgments. “Gün, we were so damn close—sorry it wasn’t quite enough this time :),” Daian wrote. As for the attacker (whoever he or she or they are) and the ethereum classic booty, Gün says, “Great, wonderful, he should cash out.” The hard fork proved it wasn’t just the DAO that needed to be fixed, but the ethereum blockchain itself. He says: “The fault lies somewhere on the system side as well.” But the fear that smart contracts are too clever by half and that by extension so is the ethereum blockchain itself—prevalent in the days following the DAO attack—has dissipated. At least that’s the market’s verdict, judging by the price of ether. After the attack, it traded from $10 to $12 for about nine months. Then in March it took off; it’s valued at $341.19 as of June 12. (That would have valued the DAO at $4.1 billion, but let’s not even go there.) Ethereum classic has risen as well, and it now trades for $18.71. Both versions of ether remain viable, in other words. The thief holds one; the revisionists, the other. Going forward, the choice is really: Whom would you rather believe? Since the hard fork, the attacker ended up making off with his ethereum classic. That means he got away with about $67.4 million, assuming the stash hasn’t been sold. Not too shabby, 0xF35e2cC8E6523d683eD44870f5B7cC785051a77D. Leising covers market structure at Bloomberg News in New York. To contact the author of this story: Matthew Leising inNew York at [email protected] To contact the editor responsible for this story: Joel Weber at [email protected]
Posted in r/BurningMan by u/leo_restoration • 0 points and 1 comment Fundstrat co-founder Tom Lee claims this week’s bitcoin price nosedived because the crypto-sphere is distracted by the Burning Man festival. Moreover, Lee predicts the Federal Reserve will cut interest rates 75 basis points by the spring of 2020. Lee, a bitcoin perma-bull, made the remarks to Fox Business News.During a segment with UBS Managing Director Jason Katz, Lee discussed bitcoin, the ... Getting started: When making a donation from the Burning Man donation page, Bitcoin is included as one of the options for making a payment. After selecting a donation amount and the option to use Bitcoin, you’ll be presented with options to donate directly from your Bitcoin wallet, donating from a Coinbase account or scanning a QR code that allows for donating via mobile Bitcoin apps ... Bitcoin at Burning Man Bitcoin a Decommodified currency. 46 comments. share. save hide report. 90% Upvoted. This thread is archived . New comments cannot be posted and votes cannot be cast. Sort by. best. level 1. 30 points · 1 year ago. You keep using that word. I do not think it means what you think it means. level 2. Original Poster 1 point · 1 year ago. It’s not a real word ... From Bitcoin to Burning Man and Beyond: The Quest for Identity and Autonomy in a Digital Society From Bitcoin to Burning Man and Beyond The Quest for Identity and Autonomy in a Digital Society Edited by John H. Clippinger and David Bollier Published by ID3 in cooperation with Off the Common Books 2014
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