A new wave in crypto has begun and its buzzword is DeFi—which stands for decentralized finance. The idea of decentralized finance is that financial institutions can be created that are run by computers, blockchains and rules that anyone can access free of gaining permission or having to show trust or be trusted, and these cyber financial institutions run on a network of computers anywhere in the world along anarcho-capitalistic lines designed to resist outside interference.
A nice dream (perhaps), now a tangible thing that exists.

https://www.forbes.com/sites/investor/2020/08/14/defi-welcome-to-the-crypto-revolution

"The PoS malware infected point-of-sale terminals at all Landry's owned locations, but, fortunately, due to end-to-end encryption technology used by the company, attackers failed to steal payment card data from cards swiped at its restaurants.

However, Landry's outlets also use "order-entry systems with a card reader attached for waitstaff to enter kitchen and bar orders and to swipe Landry's Select Club reward cards," which allowed attackers to successfully steal customers' payment data "in rare circumstances" when waitstaff mistakenly swiped payment cards on them."

"The restaurant chain did not speculate how many customers may have been affected, but it is "notifying customers" that "in rare circumstances, appear to have been mistakenly swiped by waitstaff on devices used to enter kitchen and bar orders, which are different devices than the point-of-sale terminals used for payment processing," the breach notification says.

The malware searched for track data (which sometimes has the cardholder name in addition to card number, expiration date, and internal verification code) read from a payment card after it was swiped on the order-entry systems. In some instances, the malware only identified the part of the magnetic stripe that contained payment card information without the cardholder name."

​https://thehackernews.com/2020/01/landry-pos-malware-attack.html
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​As Bitcoin and other digital assets continue to grow in adoption and popularity, a common topic for discussion is whether the U.S. government, or any government for that matter, can exert control of its use. 
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There are two core issues that lay the foundation of the Bitcoin regulation debate:
The digital assets pose a macro-economic risk. Bitcoin and other cryptocurrencies can act as surrogates for an international currency, which throws global economics a curveball. For example, countries such as Russia, China, Venezuela, and Iran have all explored using digital currency to circumvent United States sanctions, which puts the US government at risk of losing its global authority.

International politics and economics are a very delicate issue, and often sanctions are used in place of military boots on the ground, arguably making the world a safer place. 

The micro risks enabled by cryptocurrency weigh heavily in aggregate. One of the most attractive features of Bitcoin and other digital assets is that one can send anywhere between a few pennies-worth to billions of dollars of Bitcoin anywhere in the world at any time for a negligible fee (currently around $0.04 to $0.20 depending on the urgency.) 

However, in the hands of malicious parties, this could be very dangerous. The illicit activities inherently supported by a global decentralized currency run the gamut: terrorist funding, selling and buying illegal drugs, ordering assassinations, dodging taxes, laundering money, and so on. 
Can Bitcoin Even Be Regulated? Before diving deeper, it’s worth asking whether Bitcoin can be regulated in the first place. 

The cryptocurrency was built with the primary purpose of being decentralized and distributed– two very important qualities that could make or break Bitcoin’s regulation. 

By being decentralized, Bitcoin doesn’t have a single controlling entity. The control of Bitcoin is shared among several independent entities all over the world, making it nearly impossible for a single entity to wrangle full control over the network and manipulate it as they please. 

 
​By being distributed, Bitcoin exists at many different locations at the same time. This makes it very difficult for a single regulatory power to enforce its will across borders. This means that a government or other third party can’t technically raid an office and shut anything down. 
That being said, there are several chokepoints that could severely hinder Bitcoin’s adoption and use.

1. Targeting centralized entities: exchanges and wallets 
A logical first move is to regulate the fiat onramps (exchanges) , which the United States government has finally been getting around to. In cryptocurrency’s nascent years, cryptocurrency exchanges didn’t require much input or approval from regulatory authorities to run. However, the government started stepping in when cryptocurrency starting hitting the mainstream. 

The SEC, FinCEN (Financial Crimes Enforcement Network), and CFTC have all played a role in pushing Know Your Customer (KYC) protocols and Anti-Money Laundering (AML) policies across all exchanges operating within U.S. borders.  

Cryptocurrency exchanges have no options but to adhere to whatever the U.S. government wants. The vast majority of cryptocurrency users rely on some cryptocurrency exchange to utilize their cryptocurrency, so they will automatically bend to exchange-imposed regulation. 
Regulators might not be able to shut down the underlying technology that powers Bitcoin, but they can completely wreck the user experience for the great majority of cryptocurrency users, which serves as enough of an impediment to diminish the use of cryptocurrency for most.

2. Targeting users.
The government can also target individual cryptocurrency users. Contrary to popular opinion, Bitcoin (and even some privacy coins) aren’t anonymous. An argument can be made that Bitcoin is even easier to track than fiat because of its public, transparent ledger. 

Combined with every cryptocurrency exchange’s willingness to work with U.S. authorities, a federal task force could easily track money sent and received from certain addresses and pinpoint the actual individual with it. Companies such as Elliptic and Chainalysis have already created solid partnerships with law enforcement in many countries to track down illicit cryptocurrency uses and reveals the identities behind the transactions. 

Beyond that, we dive into the dark web and more professional illicit cryptocurrency usage. Although trickier, the government likely has enough cyber firepower to snipe out the majority of cryptocurrency-related cybercrime. In fact, coin mixers (cryptoMixer.io), coin swap services (ShapeShift) and P2P bitcoin transactions (localbitcoins.com) have been investigated for several years now and most of them have had to add KYC and adhere to strict AML laws. 
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Final Thoughts
Ultimately, it’s going to take a lot to enforce any sort of significant global regulation on Bitcoin, with the most important factor being a centralization and consensus of opinion. The majority of the U.S. regulatory alphabet agencies fall into the same camp of “protect the good guys, stop the bad guys”, but there isn’t really a single individual piece of guidance to follow. Currently, cryptocurrencies are regulated in the US by several institutions: CFTC, SEC, IRS, making it difficult to create overarching regulatory guidelines.  

In short, yes– Bitcoin can be regulated. In fact, its regulation has already started with the fiat onramps and adherence to strict KYC & AML laws. While in countries such as Ecuador, Bolivia, Egypt and Morocco Bitcoin ownership is illegal, in the US, it would take some bending of the moral fabric of the Constitution in order for cryptocurrency ownership rights to be infringed.

However, it cannot be shut down. There are still ways to buy, sell, and trade Bitcoin P2P, without a centralized exchange. It would take an enormous effort by any government to completely uproot something as decentralized as Bitcoin, but that future seems more dystopian than tangible.

This article first appeared on albaronventures.com

Since Lyra ledger design (which we also call blocklist) is based on block lattice concept invented by Nano, I am often asked about the difference between Lyra and Nano. Although most info can be found on Lyra website, I tried to summarize it in a single article.

• Nano uses so-called Open Representative Voting (ORV), where consensus is achieved by voting on conflicting transactions. While most of the time the approval is instantaneous, the approval does not provide a 100% confirmation because it can be “disputed”. In case of double spending attempt, for example, the special voting will be initiated to resolve the conflict. Lyra secures its ledger via its unique implementation of Distributed Proof of Stake (DPOS). Each Lyra transaction is instantly approved by a group of authorizer nodes elected through a voting process, and the approval is instant and final, which allows to use Lyra transaction in real-time payment applications. 

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• While all Nano transactions are free, Lyra uses “traditional” payment networks’ approach requiring fees for most transaction types, so authorizer nodes are paid for their work and can share their income with stakeholders and voters. While the motivation of the Nano nodes’ owners is not clear, Lyra authorizers are paid to secure, promote, and develop the network. However, there will be some basic transaction types with zero fees to help adoption (freemium model).   

 

• Lyra uses a ledger based on “block lattice” concept invented by Nano, which we also call “chain collection”, or “blocklist”, where each user account maintains its own blockchain. However, unlike Nano which is ”mono cryptocurrency”, Lyra can carry an unlimited number of custom tokens created by users. For example, any merchant can create its own tokens representing their unique loyalty reward points, gift cards, promotion coupons, etc. 

 

• Since Lyra requires transaction fee, it does not have a DDoS problem which is partially mitigated in Nano by requiring a client to do PoW to send a new transaction. Therefore, unlike Nano, Lyra clients can “shoot” uninterrupted large batches of transactions within a short time, which is required in many situations, especially in large retail and banking  applications. Removing the PoW requirement also enables super light clients such as IoT microdevices and smartcards.

 

• Finally, Lyra block lattice implementation is designed to support privacy transactions. The sender, the recipient, the transaction amount, and the account balances are hidden from public view. In permissioned network, privacy is achieved through access control to authorizer nodes (just like in payment card networks and banks). In permissioness (decentralized) network, privacy will be implemented using cryptographic techniques based on CryptoNote, Monero, and other technologies.

We just officially launched Lyra Blocklist project. Shopify is the first deployment. Lyra is the next generation blockchain which allows merchants, governments, and individuals to create custom tokens that can be accepted by others in a closed-loop environments, or at the point of sale together with cryptocurrencies and fiat methods of payment. Live demo is coming soon. More details here: https://lyra.live


#lyra #blocklist #lyrablocklist #shopify #lyratokens #blockchain #pointofsale #livedemo #merchants #cryptocurrencies

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!   

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? 

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.
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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. 
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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. 
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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. 
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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. 
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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. ​

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). 

Here is more details about Bakkt - a Microsoft/ICE/Starbucks plan to centralize Bitcoin (and I guess other cryptocurrencies in the future) trading. 

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.