#Lyra #GRAFT #crypto #payments #blockchain
I just published the plan for Lyra proof of concept, with the current status and description of the next steps. Feel free to send your questions and suggestions to email@example.com. More posts with further details are coming soon!
#Lyra #GRAFT #crypto #payments #blockchain
There is no good reason to trust blockchain technology: a response to Bruce Schneier's article in Wired
I read Bruce Schneier’s article in Wired about Bitcoin and crypto. With all due respect, very disappointed by his ignorance of the reasons for cryptocurrencies existence and misunderstanding of blockchain technologies. I would like to respond to his statements.
There’s also the less intimate, less personal trust—we might not know someone personally, or know their motivations, but we can trust their future actions. Blockchain enables this sort of trust: We don’t know any bitcoin miners, for example, but we trust that they will follow the mining protocol and make the whole system work.
It is very well known fact that no one trust that miners will follow protocols - we simply know that they have to to follow protocol, because otherwise they they will create a fork and fall out of the network!
Financial institutions, merchants, and individuals are all concerned with their reputations, which prevents theft and fraud. The laws and regulations surrounding every aspect of banking keep everyone in line, including backstops that limit risks in the case of fraud.
This is untrue! 1) Regarding financial institutions - just think about the financial crisis of 2008 that caused great recession - banks and other financial institutions failed, and there were no laws and regulations that could protect us. 2) Regarding merchants - let's look at the rich history of security breaches where millions of credit card accounts were stolen from merchants - no laws or regulation prevented those breaches. I also wrote a book, but it's not about trust, rather the opposite - how bad technologies and regulations failed to protect merchants and consumers from credit card fraud. 3) Regarding individuals - since when the reputation concerns prevent theft and fraud?
A good example is the credit card system, which allows untrusting buyers and sellers to engage in commerce. His fourth trust architecture is distributed trust.
I doubt this is a good example, with millions and millions of dollars stolen from merchants and consumer. The whole businesses (such as PayPal) were created just to patch the fundamental problems with credit card system. Blockchain is our only chance to get rid of credit card system and replace it with more secure and private equivalent.
What blockchain does is shift some of the trust in people and institutions to trust in technology. You need to trust the cryptography, the protocols, the software, the computers and the network. ... In many ways, trusting technology is harder than trusting people.
This is matter of personal choice. If you trust governments and corporations that continue promoting 50 years old failing technologies which are perfectly suitable for violating our privacy and breaching our security - continue to trust institutions and use banks and plastic cards.
blockchain trust is also costly; the cost is just hidden. For bitcoin, that's the cost of the additional bitcoin mined, the transaction fees, and the enormous environmental waste.
Bitcoin is not the only crypto, and the wasteful proof-of-work is not the only consensus algorithm.
Credit card fees are still higher than most crypto fees in most cases, but they are invisible for buyers because, unlike crypto, merchants pay the credit cards' fees. There are even cryptos with zero fees, although my personal opinion is the fee-based model is the most sustainable one, if the fees are charged to merchants.
Blockchain doesn’t eliminate the need to trust human institutions. There will always be a big gap that can’t be addressed by technology alone. People still need to be in charge, and there is always a need for governance outside the system.
This is correct, but unlike banks, credit card brands, and other financial institutions - the crypto governance can be democratic, and every stakeholder can vote and promote any changes.
In any distributed trust system, there are backdoor methods for centralization to creep back in. ... There are only a few dominant exchanges.
This is untrue. There are a lot of exchanges, and they are dispersed geographically and by jurisdiction, so if any single government or even several governments decide to crack down on crypto, they won't be able to kill the entire ecosystem. And the number and quality of decentralized exchanges is growing.
Honestly, cryptocurrencies are useless. They're only used by speculators looking for quick riches, people who don't like government-backed currencies, and criminals who want a black-market way to exchange money.
This is very limited view as there are more important aspects of cryptocurrencies. Only crypto can ensure real, full privacy of our finances. Only crypto can ensure that absolutely everyone has permissionless, unconditional access to basic financial services: payments, trading, investment, savings, credit.
Technology makes progress all the time. When the technology is young, the rate of progress is the fastest, with different approaches for applying the technology being tested, learning from what works and what doesn’t, and evolving along various use cases.
Proof of Work based blockchains were a great first implementation of the permission-less paradigm, and are still and will likely remain a good vehicle for “storing value” given their emission properties; similar to gold.
What they are not good at however is handling high-volume, time-critical transactions (transactions on these PoW blockchains are very slow, expensive, and not user friendly).
There are two main ways that exist right now that can enable these high-volume, time-critical transactions that can stand the test of real point-of-sale environments:
We know that second approach will win out in the end, so while we’re starting with the first one, we have to make sure we don’t get left behind by missing the opportunity to “skate where the puck is going”. With that we’d like to lift up the curtain a little bit around our thinking regarding the next generation of GRAFT.
Primary Objectives of the LYRA
Read Full White Paper
Amazon recently opened its first "no checkout" store in Seattle, now followed by Sainsbury's opened similar "till-free" store in the UK. Such environment, where there is no cashier or even point of sale per se, is ideal for cryptocurrency payments. Till-free/no checkout stores are obviously unsuited for cash payments (or vice versa?), so the only option (besides crypto) is plastic card, or the card linked to your mobile phone app (i.e. Apple Pay). But what if you need some privacy and don't want to use plastic card? Maybe privacy is not that important for some people in grocery stores, but there will be other kinds of till-free stores... Or you simply don't have a bank account and plastic card, or your card is not accepted by Apple Pay? Here crypto goes on stage, because it combines the best features of two words: cash (it's anonymous and secure) and plastic cards (it's virtual and can be used on mobile phone).
How corporations want to put Bitcoin into centralized proprietary box so they could take control over majority of cryptocurrency transactions
Here is more details about Bakkt - a Microsoft/ICE/Starbucks plan to centralize Bitcoin (and I guess other cryptocurrencies in the future) trading.
Imagine that dozens of mutual funds, pension funds, and endowments hold Bitcoin in the Bakkt warehouse. If Asset Manager A buys $200 million in Bitcoin from Asset Manager B, the Bitcoin tokens simply move from B’s account at Bakkt to A’s account at Bakkt, via a trade on the ICE exchange. The total number of Bitcoins held at Bakkt doesn’t change. Let’s assume that millions of those transactions happen every day, all inside the Bakkt ecosystem. Bakkt simply keeps a ledger of those offsetting Bitcoin debit and credits. The individual purchases and sales don’t need to be broadcast to the blockchain.
Basically, Bakkt warehouse is going to be another centralized exchange with private version of Bitcoin Lightning, a singleton proprietary off-chain settlement machine where all fees associated with transactions are paid to the single owner of the warehouse. Such approach obviously contradicts the principle of cryptocurrency decentralization. Although unlike credit card payments system banks are not part of this scheme, corporations are still going to set the rules of the game. You will have to have an account in this system in order to pay or get paid, which means there is still someone who decides whether you are or you are not eligible (not to mention privacy and security concerns associated with any centralized system).
The topic of my presentation:
CRYPTO IS UNDER SIEGE. POINT-OF-SALE MIGHT BE THE ANSWER, BUT ONLY IF DONE RIGHT
Despite the fact everyone is discussing cryptocurrency, its potential and its progression, it still remains niche and cluttered: crypto in real estate, crypto in gaming or crypto in transportation.
What about the average crypto owner? In the end, it will be these people that will be responsible for the mainstreaming of cryptocurrency. The everyday crypto owner isn’t going to buy a house with Bitcoin, for example, but would relish the opportunity to pay for a dinner with crypto. Yet as long as crypto remains niche and inaccessible, cryptocurrencies will not proliferate like once imagined.
That’s why our mission at GRAFT is to create a self-spreading network, where crypto is welcome in SME retail and easy for merchants and consumers. Only then will we be able to call cryptocurrencies “mainstream”.
All Internet service in Algeria, both mobile and fixed line, will go off for an hour after the start of each high school diploma exam to stop any leaks. I am trying to imagine what would happen if something like this was done in the US...
Argentina raises interest rates to 40%. The rises are aimed at supporting the peso, which has lost a quarter of its value over the past year.
It's time for Argentina to move to cryptocurrencies!