Inside the mysterious Bitcoin hash that shook up the cryptocurrency community


You know how geeky the cryptocurrency community is, when this is the trending hashtag on Twitter.

This long sequence is a ‘block hash’ — a cryptographic number that is produced when new transactions are validated and written on the Bitcoin blockchain. This particular hash belongs to block number 528249 created on Tuesday.

Usually, no one is excited about block hashes — but there was something very peculiar about the sequence that threw the whole community into a frenzy.

This was the presence of “21e8” in the middle of the string after the zeros end.

E8 Theory” is a theory in physics that attempts to describe all fundamental interactions in the universe such as gravitational, nuclear and electromagnetic forces. The theory was proposed by Antony Garrett Lisi in his paper “An exceptionally simple theory of everything” in 2007.

The theory is not yet proven — and for the most part was never taken seriously by ‘mainstream’ physicist. But some cryptocurrency enthusiasts are reading between the lines to pitch their own conspiracy theory.

A twitter user Juan Galt, for instance, suggests that the meaning of the name ‘Satoshi Nakamoto’ in Japanese is “one who is enlightened (Satoshi) at the centre of the origin (Nakamoto).” This is supposed to be evidence that Satoshi had some connection with the E8 theory.

The number attached to E8 is “21″ — which coincidentally matches the number of the maximum supply of Bitcoin (21 million). This has led some to conclude that Satoshi might have placed this hash purposefully in Bitcoin to be ‘discovered.’

But this is where the actual drama starts.

If someone purposefully attempted to mine this particular hash, it would take them forever — literally. Not to mention that it will require computing power that existing machines are simply not capable of.

Andrew Desantis, a computer scientist, has a precise answer for how long it takes to mine a predetermined hash.

Aas per nother software engineer on Twitter going by the handle @yungdeleuze on Twitter — it would take about 2,512 years to be able to mine the hash in question. Unless, a functioning quantum computer exists or time travel works.

Clearly, this sci-fi scenario struck a chord with the Twitterverse’s cryptocurrency community – which is also why it went viral.

Here is some of the chatter:

Say what you will, but the idea that Satoshi Nakamoto travelled back from the future to mine this has with his quantum computer is certainly a compelling sci-fi narrative – and I am personally somewhat sold on it. But it appears not everyone else is: some people are taking the route of rationality.

The biggest critic of the idea that this hash is special in anyway is Cornell Professor Emin Gün Sirer.

“There are many other numbers that look significant, though they are not exactly 21e8,” Sirer said in a tweet. “If you add those, chances of spotting special numbers are going to be very high. This is basically numerology on the blockchain.”

Dan Robinson, a programmer at Chain, further pointed out that coincidences like these happen all the time, and there’s no need to turn to ‘cult’ like behaviour.

Robinson shared a list of blocks that all start with “21e8”: 26284, 83434187323, 259695, 304822, 349158, 437039, and 475118. As per data, it seems that “21e8” repeats itself in one string every year.

The programmer also pointed out that there have been other more morbid coincidences than this one — but there is nothing to read into them.

Some users also pointed out the extraordinary number of zeros present in the hash. But scanning for other transactions that took place on the same day, it seems they all have more or less the same number of zeros. This has to do with the fact that how difficult mining has become these days rather than with this particular hash.

As much as I want to entertain the scenario this occurrence is an intricately complex trick concocted by our lord Satoshi Nakamoto, I’m still more inclined to think it is a pure coincidence: and this is a huge letdown to my imagination.

[H/T coop_scoop]

Published June 22, 2018 — 12:09 UTC


Japan watchdog orders improvements at cryptocurrency exchanges

TOKYO (Reuters) – Japan’s financial regulator said on Friday it has ordered cryptocurrency exchanges including bitFlyer, Inc., one of the country’s biggest, to make improvements to lax measures on money laundering.

FILE PHOTO: A man stands near an advertisement of a cryptocurrency exchange in Tokyo, Japan March 30, 2018. Picture taken March 30, 2018. REUTERS/Toru Hanai

The Financial Services Agency (FSA) slapped six exchanges with business improvement orders after it found flaws in their anti-money laundering systems and controls during on-site inspections.

BitFlyer said in a statement it would voluntarily halt the creation of new customer accounts as it makes efforts to shore up its systems. Others targeted by the FSA included well-known exchanges Quione and Bitbank Inc.

The FSA has cracked down on cryptocurrency exchanges since the $530 million theft of digital money from Coincheck, one of Japan’s biggest, earlier this year. The heist underscored worries over the security of trading cryptocurrencies.

Since the daring heist, the FSA has rejected applications to run exchanges, and ordered others to cease or improve business over weaknesses in customer protection.

Due to chair the G20 in 2020, Japan hopes to take a global lead on the combating money laundering at cryptocurrency exchanges, and is pushing for adoption of new binding rules by 2019.

Reporting by Thomas Wilson; Editing by Jacqueline Wong & Shri Navaratnam


Decentralization Needs a Re-think for Cryptocurrency to Fulfil its Promise

June 22, 2018         By: Arthur Gervais

For some time now, it has been widely considered that blockchain technology will allow for the development of a ‘world without middlemen’, enabling instant transactions for millions of simultaneous users who will pay little to no fees.

Indeed, since the beginning of bitcoin, there has been a proliferation in the number of blockchains offering digital solutions to numerous industries such as finance, health and infrastructure.

Yet, as the demand for effective blockchain based solutions increases, the largest cryptocurrencies have been unable to satisfy the vision of instant, little to no fee transactions. This is due to a few crucial reasons, most notably, the nature of the openness of decentralized blockchains where anyone can join and leave at free will.

Proof-of-Work (PoW): a wasteful legacy

Although PoW is an effective way of reaching consensus in a decentralized network, there are many problems associated with its implementation. Most notably, PoW is expensive. This emanates from the rationale of ‘Higher Cost for Higher Security’.

PoW is designed to use huge amounts of energy and resources to ensure that it would be ‘too expensive’ for a malicious actor to attack the network. This has led to PoW systems being far less efficient than the blockchains that use more centralized mechanisms for reaching consensus.

The ‘slide’ to centralized alternatives

As such, there has been a tendency for some projects to neglect decentralization in favor of more centralized solutions which are deemed to be more efficient. This is concerning as centralized networks act fundamentally against a vision of a world without middlemen.

The issue here is that more centralized blockchains currently have the edge when it comes to performance. Centralized blockchains allow for increased speed and smaller transaction fees as a trade-off for a loss of security and certainty.

Systems like Ripple are centralized and can allegedly secure much better speeds through this trade off. Accenture and IBM have also filed a patent for editable blockchain.

These developments are unsettling as it is only decentralized public blockchains, allowing digital interactions in a trustless and secure environment, which will see cryptocurrency live up to the promise of peer-to-peer digital cash.

The case for decentralization

Here are some key ways in which decentralization guarantees an immutable user interaction:

  1. Resilience: there is no single point of failure in the system – if one part fails then the whole system is not jeopardized as multiple copies of the blockchain are distributed across the world.
  2. Non-custodial financial intermediaries: users remain owner and in possession of their own funds.
  3. Censorship resistance: distributed networks are far less likely to be coerced by a government agency to disclose the information about their user base.

However, there is a compelling case for more centralized aspects of blockchain technology given its increased immediate tangible benefits to users.

So, the question we need to ask ourselves is this: if the centralization of elements of a protocol enable it to outperform a decentralized protocol, is there anything that we can do to build decentralized networks which offer the efficiency of centralized ones? Luckily, the technology is on our side.

The multi-layered approach: a new understanding

Blockchain has been designed to be decentralized and it is made up of ‘layers’. It is the architecture of blockchains themselves which hold the key to our ability to blend aspects of robust decentralized base layers with more flexible second layers.

It is at this point that we need to articulate our redefinition of decentralization. We need to remember the importance of striving for decentralization, while still adapting and enabling some of the benefits which more centralized ‘layers’ can bring to user experience. This in turn will encourage scalability and, eventually, mainstream adoption.

Thus, it is crucial that we keep the base layer of the protocol highly decentralized whilst building layers with more flexible and efficient parameters on top of the base layer.

But how will these developments help cryptocurrency fulfil its promise of peer-to-peer digital cash?

The promise of off-chain payment hubs

Off-Chain Payment Hubs offer the benefits of centralized and decentralized blockchains alike. As a second layer solution, Off-Chain Payment Hubs would be built on a public, permission less blockchain like ethereum, but offer benefits of more centralized alternatives.

Crucially, Off-Chain Payment Hubs enable decentralized blockchains to scale to the integration of millions of users. The debate over scaling for projects like ethereum and bitcoin is well documented and has presented itself as a major hurdle against the mainstream adoption of cryptocurrency.

Off-Chain Payment Hubs offer a solution to the problem by:

  1. Enabling the scaling of decentralized blockchains to allow the efficient participation of millions of users.
  2. Allowing users to transact with little to no fees.
  3. Giving strong assurances that only a decentralized system can bring.

What next?

This vision can only be achieved if we are to accept the notion of a multi-layered system. We need to continue to strive for the creation of a decentralized blockchain ecosystem, whilst acknowledging the need to give users the functionality of more centralized systems.

However, we also need to be aware that if there is an increased demand for more centralized blockchains, then the technology will lose its reason for existing as a public network. We would be left with just another set of centralized networks which resemble the ones we are already familiar with today. If we are ever to satisfy Satoshi’s original vision of a truly peer-to-peer digital cash world, it falls to us developers to bring it to fruition.

Liquidity.Network is a new scalable off-chain payment system which allows Ethereum users to make payments without costly transaction fees. By utilising payment hubs, Liquidity.Network allows multiple users to send cost efficient Ethereum micropayments for the very first time via a mobile-friendly app.

Arthur Gervais’s bio

Dr. Arthur Gervais is a blockchain, security and payment expert. He is an assistant professor at the Imperial College in London and the co-founder of Liquidity.Network – a third-generation, off-chain payment solution that resolves and improves ethereum scalability issues.

Dr. Gervais is also a regular speaker at industry events, such as the upcoming Crypto Valley Conference, (where he also serves as the event organizer) and the Blockchain Developer Conference.


5 Reasons Why Bitcoin Is Crashing Right Now

Despite lightning network developments, Tether’s recent audit and the Bithumb exchange responding well to a malicious attack, Bitcoin is still struggling to gain traction in today’s market. Let’s look at a few reasons why that is.

1. Market Manipulation

BTC market manipulation has been a highly contentious area that always arises when questioning Bitcoin’s price activity. Whether traders choose to accept it or not, evidence supplied by a University of Texas finance professor recently, along with investigations by the United States Justice Department the Commodity Futures Trading Commission, are beginning to prove that this ‘conspiracy theory’ actually exists in the market.

If you looked at Bitcoin’s chart this morning you would have seen that BTC was actually heading towards a bullish breakout from an ascending triangle pattern. Admittedly technical analysis is not a definitive tool for establishing price movements, but it does seem strange that BTC was able to climb out from the Bithumb hacked unscathed yesterday, show rising support through last night and then suddenly breakout bearish for no obvious reason.

Information presented in ‘Uncovering The Real Cartel In Bitcoin’ outlines the shady relationship between Tether and Bitfinex using evidence from the ‘Paradise Papers’, showing that USDT has been used to artificially inflate not just BTC markets, but other alt-coin trading pairs as well. Professor John Griffiths of the aforementioned University of Texas also wrote an extensive 66 page thesis recently highlighting this same suspicion. Though Tether has recently passed an independent audit which confirms that Tether has sufficient US dollar supplies to back each issued USDT token, some belief that this could have been achieved in a number of ways; including borrowing money to temporarily ‘window dress’ their bank accounts to artificially back their issued token supply at the time of the audit.

2. Market Supply Outweighs Current Demand

In a twitter post earlier today, Ronnie Moas touched on this issue in the current crypto market, that after the over-inflated Q4 surge last year crypto investors are beginning to lose faith that those figures will not be reached again.

“Supply hanging over the market like a dark cloud. Will be a challenge to blow that out”

Charlie Lee also commented on this lack of faith in a CNBC Fast Money interview yesterday, saying that the prices of Bitcoin, Litecoin and other alt-coins are ‘disjointed’ from the new developments that each project is rolling out this year. This is true, especially when you look at Tron and Vechain at the moment. Both projects have, or are about to, launch their mainnets and have both made significant partnerships with industry leaders, yet neither have experienced any notable rise in value. Instead, the market remains fixated on selling off and are afraid to HODL or invest against the falling market.

3. Market Maturity

Another reason to explain why Bitcoin is falling right now is market maturity. Despite Bitcoin being created back in 2009, the crypto market itself didn’t really start to gain traction until 2014/2015 when Ethereum, Dash and other early coin projects were starting to emerge from the wake of Bitcoin’s innovation. When crypto investing exploded late last year, the market was still in its infancy and largely speculative. Even now many projects are only just starting to release minimal viable products (MVPs), testnets, platforms etc off the back of their ICOs.

The premature surge of money in Q4 last year was never going to last for long and now we’re experiencing a harsh correction back to where the market should really be at this time in its development.

4. Mainstream Media FUD

Another crippling factor that always holds Bitcoin’s price back is bad press and the torrent of misguided information that is passed down to the general public.

As the traditional financial system comes under threat, mainstream media has played its role in misrepresenting the industry to potential new investors in this space, by downplaying its technological utility and over emphasizing bearish market movements. According to German Philosopher Arthur Schopenhauer though, all truths travel through 3 stages of acceptance,

(1) Ridicule
(2) Violently Opposed
(3) Accepted As Self Evident

The crypto market here is no different. Right now the mainstream does not recognise the potential in this industry and is choosing to ignore it’s inevitable advance. Eventually however, it will become as widely accepted as mobile phones and the internet which also had to pass through those same 3 stages.

5. National Regulatory Intervention

Regulatory opposition was always going to fight against the crypto market because it is an unregulated and decentralized financial system born into a centralized, heavily regulated world. In some ways regulatory intervention has proved beneficial in this space, like the self-regulated Japanese exchange association which aims at improving user security across exchanges, to better the nation’s crypto ecosystem.

In the US however, government institutions such as the Securities and Exchange Commission (SEC) and the New York State Department of Financial Services (NYDFS) have both smothered digital asset trading in regulations; imposing licensing and registration requirements on any crypto exchange or broker company wishing to operate in the US. This has led to a lot companies moving overseas and has restricted many US citizens from participating freely in the market.

Chinese Police Arrest Bitcoin Miner Who 'Stole' 150 MW of Electricity

A Chinese man has found himself in police custody after attempting to steal electricity to fund his unprofitable Bitcoin mining operation, local media outlet Xinhua reports June 22.

The suspect, known only by his surname Ma, allegedly mined Bitcoin and Ethereum on two hundred computers in the country’s Anhui province, all of which have been confiscated by the police upon the miner’s arrest. In total, Ma had stolen 150 megawatt (MW) of electricity, according to Xinhua.

According to the sources, Ma had no idea about the power costs for running the considerable mining operation when he purchased the hardware in April, which subsequently turned out to be over 6000 yuan ($930) per day.

Police were alerted to Ma when the local grid “reported abnormal electricity usage.”

“…Police found that the electricity meter for the suspected cryptocurrency mining operation had been short-circuited, which was likely an attempt to dodge the power bill,” Xinhua adds.

China has sought to crack down on its mining industry in recent months, which had previously involved a proliferation of operators in areas which had over-supply of power.

Various cases involving the practice have surfaced in the media, including a case in April when a Taiwanese miner was shot by gangsters after a mismanaged deal.

Worldwide, Bitcoin mining is expected to consume 0.5% of total electricity output as soon as the end of this year, Cointelegraph reported in May.

Bitcoin is getting smoked as the crypto market eyes its lowest level of the year

Markets Insider

Bitcoin was eyeing its lowest level of the year Friday morning, according to Markets Insider data.

The coin, which soared close to $20,000 at the end of 2017, was trading down 8.6% at $6,144 as all of the major cryptos were under pressure. Ethereum was trading down 11% at $467 a token while bitcoin cash, a spin-off of the original bitcoin, was trading down 13% at $751 a coin.

As for bitcoin, it hit its 2018 low of $5,922 in February. In total, the entire crypto market has shed half of its value since the beginning of the year, according to CoinMarketCap data. In April it hit its lowest point of 2018, falling below $250 billion.

The market for cryptocurrencies has been under pressure throughout much of 2018 following a massive bull-run last year, which was triggered by the launch of bitcoin futures, a derivatives product. Many thought those products would legitimize the nascent market and precipitate the entrance of institutional money into the space. For the most part, asset managers and other large investors have stayed away from the volatile market, which is not for the faint of heart.

Still, the market has attracted major Wall Street trading firms and high-frequency traders such as DRW and Jump Trading. Goldman Sachs is working on a crypto trading desk.

Fur Real? Businesses Test CryptoKitties-Inspired Ethereum Tech

Sure the cypherpunks love CryptoKitties, but turns out luxury fashion brands are also taking a shine to the digital fluffballs.

Or at least, they’re into the technology behind the ethereum-based decentralized application that captured the hearts and minds of crypto enthusiasts in December of last year.

According to French startup Arianee, which boasts former employees and advisors from luxury brands such as Tiffany’s, Omega, Balenciaga and the Richemont group, the same technology can be used to help these firms create unique identities for bespoke handbags and expensive watches.

What Arianee did to test that theory was create a new blockchain – a copy of ethereum which combines both permissioned and permissionless elements through its use of a consensus mechanism it’s calling “proof-of-authority.” It’s permissionless in the sense that users who want to sell products to one another can interact with the blockchain, but the verifying of the ledger and issuance of new tokens is controlled by the participating businesses.

“The consensus that seals blocks and adds blocks is not fully accessible. You have to register your identity within our governance to become one of those nodes, and in our case, that’s really the brands or third-party experts,” explained Luc Jodet, head of business architecture at Arianee.

The crypto tokens running over the blockchain are based on ethereum’s ERC-721 standard for non-fungible tokens.

The ERC-721 standard is all about scarcity (non-fungible tokens are unique and distinguishable entities) and that makes for a logical solution to import from the gaming and digital collectible world to use for tokenizing luxury goods.

Jodet could not talk openly at this stage about which brands might be running nodes on the Arianee blockchain, but pointed to the startup’s advisors at Richemont – a Switzerland-based holding company that owns Cartier, Dunhill, Jaeger-LeCoultre, Montblanc, Purdey, Vacheron Constantin, and Van Cleef & Arpels – as logical candidates.

Commenting on the appropriation of these types of tokens for luxury goods tracking, Courtney Brock, co-founder and COO at Blockade Games, who’s been an advocate for the use of ERC-721 tokens for multiple business verticals, said one of the benefits of this token type is that a single contract could work for all goods and include all the information for each product line, season, production number, etc.   

“The thing that 721s are really good for is tracking a unique asset,” she said, adding: 

“If you were to use an ERC-20 or just a regular blockchain, you would actually have to create a new protocol for each line, like if you wanted to distinguish between lines.”

Handbags and glad rags

And with that, Arianee’s team sees two main benefits to high-end businesses from its smart assets technology.

First, there’s what it calls “post-production traceability,” which provides a readily verifiable authenticity stamp for each item. This can also carry details about the item’s provenance or its service history (expensive watches have to be serviced every two years) and this information can then easily be transferred if the item is resold.  

The second, more subtle application is how the token connects the owner with the brand itself, as opposed to the intermediate retailer (again, useful for reselling luxury goods).

“Because it’s a token it can be transferred from one owner to another and can record information about the item’s history, with the smart asset there remains a connection, a communication channel, that is always open between the current owner and the brand,” Jodet said. 

Arianee has built three prototypes: one for watches, one for handbags and high fashion items, and a third for champagne bottles.

In the case of champagne, post-production traceability becomes extremely important to track the bottle once it leaves the vineyard, making sure it was kept in a cellar and which shop actually sold or resold it, said Jodet.

And these three tests aren’t the only ones on Jodet’s mind.

He told CoinDesk:

“This works for any luxury products you could imagine, such as jewelry. We have something with musical instruments we are exploring, and art as well.”

Lavish users

All blockchain technology needs a network effect and certainly one of Arianee’s strengths is its heavyweight advisory board which could help create the adoption. 

One of those advisors is Guillaume Boilot, chief operating officer at Vacheron Constantin, which has been creating paper “passports” for the last 260 years to go with its rather high-end watches (owners of Vacheron Constantin watches have included Napoleon Bonapart, Pope Pius XI and Harry Truman).

These watch passports pertain to three individual numbers: one on the case; another buried inside the watch; and a third issued by third party, Hallmark of Geneva, which would be a potential candidate to run a node on the Arianee blockchain should Vacheron Constantin decide to tokenize their products. 

Boilot stressed that his company is presently at the testing stage with this technology, but added, as a brand under the Richemont holding company, that his parent company would be the most likely to run a node for all the brands under its umbrella.

Anything that enhances authenticity in a transparent and verifiable way is a win for luxury products, Boilot told CoinDesk, adding:

“All our watches have alligator straps, for example, and we think that in the coming years our clients would like to know where does the skin come from.”

Interestingly, he said, much of the demand for his company’s rare and collectible watches comes from the Chinese market, and this realization has also has been a motivation to explore blockchain, since China is one of the countries where people are taking a significant interest in the nascent technology. 

“We really think our clients, many of whom are Asian, will want to have the digital asset [representing their watch] in their wallet,” Boilot said. “We see that many of them know about bitcoin mining and trading and are familiar with blockchain.”

Cat admiring necklace image via Shutterstock

The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.


Japan Crypto Crack Down: FSA Flags 6 Native Cryptocurrency Exchanges

Japan has also been a crypto-forward and friendly country, but it seems Japan’s top financial regulator is putting its foot down on cryptocurrency exchanges. Just this morning, the Financial Services Agency (FSA) issued six new business improvements to the list of 16 cryptocurrency exchanges it previously approved.

The list of Japenese crypto exchanges receiving administrative punishment include:

  • bitFlyer
  • Bit Bank
  • BTC Box
  • Bit Point Japan
  • Tech Bureau

>> Bithumb Hack

bitFlyer In Hot Water

Among the list is Japan’s largest cryptocurrency exchange by trade volume, bitFlyer.

The press release on bitFlyer’s penalties states:

“Because problems were recognized in the internal control system such as money laundering and countermeasures against terrorism funds, separation of user property separately, management of books documents, prevention of illegal outflow of virtual currency due to unauthorized access, Today, based on the provisions of Article 63-16 of the Law, we issued business improvement orders.”

Due to the recent orders, bitFlyer has apologized to its customers and states they will work to immediately comply with the regulators. The crypto exchange has decided to stop all new account registrations at the time, and are going to re-check their status of approval.

“If defects and deficiencies are confirmed within a customer’s registration information by any chance, it will be necessary to re-implement the person’s confirmation process. Therefore, in some cases, we ask visitors to re-present their identity confirmation documents, so we are sorry for any inconvenience,” Bitflyer emphasized.

The other five cryptocurrency exchanges listed received very similar orders. Tech Bureau was the first of the list of 16 to receive improvement orders, and after today, this would be its second.

FSA CrackDown

An employee at Japan’s FSA told that at least one of the six cryptocurrency exchanges flagged was found to have some sort of involvement with an organized crime group. This employee did not specify which cryptocurrency exchange was at fault, but did reveal the crime group was Yakuza.

As the cryptocurrency industry continues to expand within Japan; the FSA will continue to tighten its belt to ensure the cryptocurrency exchanges comply with its in-place regulations.

Featured Image: Cryptoca


Blockchain-platform MoviesChain refused ICO

The blockchain-platform MoviesChain belongs to the online cinema Tvzavr. With her help, it was planned to create a decentralized distribution of the cinema. According to the idea of ​​the company, the copyright holders with the help of the blockchain platform MoviesChain could independently publish the content. This would reduce the chain and cut costs.

Initially, the platform was planned to collect investments through ICO, however, the developers rejected this idea. In their opinion, now the market has a mixed opinion about ICO because of a large amount of scum and other fraudulent schemes.

It was planned to attract $ 5 million via ICO. But currently, the online cinema Tvzavr intends to invest its own funds in the amount of $ 3 million for the development of the platform and, possibly, to bring to ICO a working version of MoviesChain.

The release of the desktop version of the blockchain platform MoviesChain is scheduled for October-November.

By the way, the online cinema TVzavr was opened in 2010. Monthly, 25 million people use the service.